As we emerge from the crises of the past eighteen months, history has lessons for us — offering insights into how to use trying times to transform companies into places that are more adaptable, effective, and human-centered when it comes to creating economic and social value.
My organization has much to offer when it comes to tapping teachings from the past century and pointing to wise ways forward. Decades ago, the Innovation Resource Center for Human Resources (IRC4HR) proposed a stakeholder model of business and is currently funding research projects that promise to shape how we work and live now and into the future.
Our legacy inspires our ongoing work, pointing to a central theme: organizations have an opportunity and an obligation to address the pressing issues of the day.
Balancing Worker Safety and Business Productivity
Today, we’re starting to put the COVID-19 pandemic behind us and return to various kinds of work locations, at least in the United States. But debate about how to protect workers and balance safety needs against business productivity continue. These conversations began last spring as a number of organizations allegedly put profits ahead of the health of employees. The meatpacking industry was at the center of these concerns—with roughly 250 workers having died from COVID.
These deaths are reminiscent of the labor dispute that gave rise to IRC4HR. A coal miners’ strike in Colorado during 1913-1914 culminated in a battle between state militia and strikers, resulting in the strikers’ tent colony being burned to the ground and the death of a dozen women and children. Commonly known as the Ludlow Massacre, it led to widespread condemnation of the Rockefeller family—the primary shareholder of one of the three main companies involved in the strike.
That experience led to a change of heart for John D. Rockefeller Jr. Having been blasted for autocratic management and inhumane working conditions, the industrial titan became a lifelong advocate for more effective and harmonious employment relations.
“The soundest industrial policy is that which has constantly in mind the welfare of the employees as well as the making of profits and, which, when human considerations demand it, subordinates profits to welfare,” Rockefeller said, 100 years ago. “Industrial relations are essentially human relations.”
In 1926, Rockefeller established Industrial Relations Counselors, Inc. (IRC) — the forerunner of IRC4HR. It had a mission to advance the knowledge and practice of human relationships in the workplace.
Today, there’s a call to business leaders, much like the one heard by Rockefeller. That contemporary call is to turn tragedy and newfound appreciation for the contributions of “essential” workers like food service employees, nurses, and delivery drivers into a better “employment deal” – one in which we value all workers, and we make decisions about work more human-centered, even as we apply technology and automation to the design of work.
During the past 18 months, many companies recognized employees as people as never before. Along with the challenges of COVID and the rapid pivot to remote work arrangements, we suddenly saw into the homes and family lives of co-workers. Leaders grew more sensitive to the range of challenges their employees faced – from grief to anxiety to caregiving burdens – while more workers felt empowered to request the kinds of accommodations that previously might have been rejected or stigmatizing.
“Wellbeing” has become a corporate watchword—a welcome focus on employees’ holistic needs that promises to enhance business performance even as it offers a better life for people.
“The soundest industrial policy is that which has constantly in mind the welfare of the employees as well as the making of profits and, which, when human considerations demand it, subordinates profits to welfare. Industrial relations are essentially human relations.”
John D. Rockefeller Jr.
Forward-Thinking Research, Practical Applications
Skeptical readers might write off Rockefeller’s words above and the IRC mission as empty rhetoric. But over the past century, the organization and its members have been at the forefront of ideas that challenged conventional business wisdom.
For example, IRC’s first consulting report for the Ohio Oil Company, in 1926, reveals many themes that are still gaining traction today. These include the importance of the workforce to organizational effectiveness and competitive advantage, as well as adoption of what is now known as a “stakeholder” view of the employment relationship. That is, effective management acknowledges the interests of employees, suppliers, the community, and shareholders.
Regarding this last point, it was only in 2019 that the Business Roundtable came back around to a similar declaration as this group of leading executives formally moved away from “shareholder primacy” and made a “commitment to all stakeholders.”
Or consider the way that IRC researchers joined public discussions during the Great Depression about how to protect the dignity of all Americans during hard times and old age. IRC’s Bryce Stewart and Murray Latimer contributed to the formation of the U.S. Social Security and unemployment compensation systems. These programs helped undergird economic expansion and shared prosperity in America for much of the latter 20th century.
Those early IRC researchers paved the way for business leaders today to get off the sidelines and help solve pressing economic and social problems, including threats to public health, financial stability, and civil rights. Given the intense polarization and gridlock that have gripped United States politics in recent years, one can argue that business leaders have an even larger role to play in tackling societal challenges – and their workforces are looking to them to do that.
During the past year (and prior) there have been multiple examples of forward-thinking, socially minded companies stepping up along these lines. For instance, CHROs from Accenture, Lincoln Financial, Verizon, and Procore created a platform connecting displaced workers and available jobs at more than 280 companies from 94 countries to get people back to work amid the pandemic.
During the pandemic, leaders have grown more sensitive to the range of challenges their employees faced – from grief to anxiety to caregiving burdens – while more workers felt empowered to request the kinds of accommodations that previously might have been rejected or stigmatizing.
And, while progress has been slow, many companies made pledges to address racial justice and equity issues in their organizations and communities following last summer’s reckoning with racial injustice. Both commitments and actions are being tracked by JUST Capital in its Corporate Racial Equity Tracker.
On the topic of racial justice, IRC put a stake in the ground on this issue back in the 1950s. Following a two-year study funded by the Ford Foundation and the National Urban League, IRC’s 1959 publication “Employing the Negro in American Industry,” became a guide to management as it sought to establish nondiscriminatory employment practices in the 1960s. Although the report used a now outdated term, its message was a forward-looking one of better business results and a more harmonious society when companies actively championed equal opportunity.
A Systems View of Business Challenges and Opportunities
Today, our organization is continuing the research and advocacy legacy of IRC. Renamed IRC4HR (Innovation Resource Center for Human Resources) in 2015 to convey our focus on innovation and applied research, we sponsor a variety of studies and events designed to advance the mutually beneficial interests of organizations, workers, and society. IRC4HR grantees produce practical, actionable insights in the form of white papers, tools, and other learning materials to help organizations, leaders, and workers succeed together through the profound business and social challenges of the 21st-century workplace.
Among the topics we explore today are the impact of automation on the workplace, the digital transformation of work and organization models, the role of social networks and relationships on workforce performance and wellbeing, and the design of more inclusive workplaces.
Some recent research and events funded by IRC4HR include:
- Organizing for Business Ecosystem Leadership.
- How the Most Successful Leaders Drive Team Agility and Collaboration
- Work for Humanity
- Work for Tomorrow: Innovating for an Aging Workforce
- Inclusion by Design
A common thread among IRC4HR’s research areas today is a systems view of business challenges and opportunities. We have learned over the past 100 years that a narrow view of complex, interrelated problems doesn’t lead to sustainable solutions. The events of the past eighteen months have reinforced those lessons.
We no longer can afford to see ourselves and our organizations as discrete entities, operating in a vacuum. We must recognize that we’re all connected. We must recognize that, as Rockefeller put it, human welfare cannot take a back seat to profits.
As we move through today’s challenges, let’s build a future where human relationships are at the center of work, and work works for all.
Jodi Starkman is Executive Director of the Innovation Resource Center for Human Resources.