Tech managers lay off workers, throw lavish events. What do 200 billionaires do?
Do we expect morality from technology giants? This question was asked by Irit Hommsi (an admin of a Facebook group discussing the future of work matters) referring to a number of examples in which huge companies fired hundreds or even thousands of employees and held a flamboyant event next without blinking.
My answer to her question was very comprehensive, and Irit asked me to publish it separately.
If you missed Irit’s post, here is the summary, and if you already happen to read it, skip this paragraph: the latest example of this happened this month: Microsoft announces the layoffs of 11,000 employees, and at the same time Sting gave a private performance to Microsoft executives at a conference in Davos.
Against the examples of the managements living in the ivory towers, she gave the example of the owner of Zoglubek (Israeli sausages manufacturer), who had to fire many workers, and since he lived among his people, he also downgraded his car to a less flashy one.
Irit ended the post by saying that this Israeliness is something she is very lacking in the way the world looks today. There is no expectation of solidarity at all, the inherent expectation is detachment from the need for leadership that is starting to see people as human beings, and that one thing is certain – what is happening now is very damaging employee connectedness (employer’s brand) when things are published.
My response: To answer your question, we need to understand the process we went through: for several decades, people in organizations have been referred to as “human resources”, and resources, as we know, need to be managed, not led. Accordingly, many workshops and courses in management appeared, because this was the skill needed in the market.
This thing caused a growing disconnection in feelings towards the employees (sorry, towards the resources) and the more the disconnection grows, the easier it is for the managers to fire overnight, and without even blinking – to do eye-popping events in close proximity.
One hand washes the other – the workers “were not left indebted”, they understood the reality that came upon them, that the managements see them as nothing more than a replaceable screw in the system, and they lost their loyalty and connection to the organization, and are ready in exchange for an even a small raise, to happily jump to the next place (because the only thing left for them after that job stability has disappeared, is profit maximization).
A note about generation Z – this is a generation that comes sober and sees very well where it is getting into (and may I add to this the “breach of promise” of the equation that on the one hand there is hard work and in return, there is the possibility of social mobility), therefore it has no loyalty, and this is unfathomable to generation X who today are in higher ranks in companies and refuse to see the change that has taken place and just keep reciting slogans such as “when I entered the labor market we didn’t behave like this” when they forget that today they are already part of what makes this snowball keep rolling…
Now, who are those disconnected managers? Unlike the owners of Zoglubek (the sausages manufacturer) the vast majority of them are employees, who have no “skin in the game“. That is to say – if tomorrow someone offers them a better salary and improved conditions, they too will switch companies without blinking, and more importantly, without bearing the responsibility of “managerial” decisions they took while in the current company (such as over-recruitment, popular layoffs in the spirit of the times, and spilling money on flashy events ).
In order to better understand the term “skin in the game”, you should familiarize yourself with Prof. Nassim Nicholas Taleb’s book (best known for his book “Black Swan”) bearing the same name, and I am quoting from the book’s description:
How is it that we have more slaves today than in Roman times? Why does imposing democracy on other countries never work?
The answer: too many people running the world don’t have skin in the game. In his inimitable, pugnacious style, Nassim Nicholas Taleb shows that skin in the game applies to all aspects of our lives. It’s about having something to lose and taking a risk. Citizens, lab experimenters, artisans, political activists and hedge fund traders all have skin in the game. Policy wonks, corporate executives, theoreticians, bankers and most journalists don’t.
As Taleb says, “The symmetry of skin in the game is a simple rule that’s necessary for fairness and justice and the ultimate BS-buster,” and “Never trust anyone who doesn’t have skin in the game. Without it, fools and crooks will benefit, and their mistakes will never come back to haunt them”.
One of his insights is:
For social justice, focus on symmetry and risk sharing. You cannot make profits and transfer the risks to others, as bankers and large corporations do. You cannot get rich without owning your own risk and paying for your own losses. Forcing skin in the game corrects this asymmetry better than thousands of laws and regulations.
I jump back in time for a moment to the World Economic Forum conference in Davos in 2019, to which the Dutch historian Rutger Bregman was invited and “dared” to tell the world’s top executives that it was time to raise taxes on the rich. Of course, this music did not please them and the organizers of the conference, and since then he has not been invited there again.
Back to the present – the World Economic Forum convened again this January in Davos, a part of which a letter was published from about 200 of the world’s richest (those who have “skin in the game”), calling on governments to impose higher taxes on them and their friends in order to fight the extreme inequality created in the world. They show an act of leadership with the understanding that if the world continues as usual, we will reach a crisis (it is possible to argue that this could have been done a long time ago, but better late than never).
And what were the managers without the skin in the game doing in the meantime in Davos: Microsoft executives were watching a private performance by Sting (after a layoff announcement of 11,000 of the company’s resources).
And what will they do after Davos?
Sign up for leadership courses (which are now replacing management courses) and hang the certificate on the wall in the office.
In the video: Rutger Bregman at the World Economic Forum 2019
(image is taken from The Guardian YouTube link above)