Hacking History (Part 2) The Internet’s Third Power Shift

In the previous post, we considered how mega change happens and pointed to the thought-leaders, technologies and demographics that worked in combination to shift power from companies to consumers. That’s not news, or shouldn’t be, for most of you. What might be news, however, is the fact that we are about to see an equivalent shift in the relationship between corporations and employees and the emergence of far more fluid organisational structures to get work done. I am not confident that the current industrial structure supporting mass tourism can reverse an opposing trend – i.e., declining wages, deteriorating working conditions, less security… Hence the need to focus on an alternative.

 

follow-your-blissThe workforce has divided into two camps – those holding onto a job (employees) and those who, by choice or necessity, broke free or were pushed into becoming self-employed, free lancers, sole traders and volunteers or who joined or started social enterprises, collectives, NGOs, not-for-profits and worker-directed companies. The Internet has been awash with sites encouraging and showing people how to “follow their bliss,” “make a difference”, find “meaning and purpose” and “financial freedom” by running their own business. It’s also become clear that anyone with a smartphone can potentially execute a bright idea by pulling together creative, talented but virtual teams, deploying software rented from the cloud and crowd fund it from micro investors.

The internet initially shifted power in the marketplace and is now enabling a major political shift. Social media is being used to mobilise people on an unprecedented scale with a degree of spontaneity and surprise unseen before. Occupy Wall Street was spawned by the Egyptian uprising and within two-three years we witnessed expressions of public dissatisfaction in Iceland, Ukraine, Brazil etc. Less visible but more impactful was the explosive growth in online petitioning and crowd funding. Now the shift is moving into the third arena: the workplace and the Millennials are the push force. The 2015 Deloitte Millennial survey, is a must read for all employers and it will be a subject of a later post. Right now, two paragraphs from the front page summarise the core message:

Millennials overwhelmingly believe that business needs a reset in terms of paying as much attention to people and purpose as it does products and profit. 75% believe businesses are too fixated on their own agendas and not focused enough on helping to improve society.

The message is clear: when looking at their career goals, today’s Millennials are just as interested in how a business develops its people and its contribution to society as they are in its profits. These findings should be viewed as a valuable alarm to the business community, particularly in developed markets, that they need to change the way they engage Millennial talent or risk being left behind.

key sources of economic valueIBM’s annual survey of CEOs around the world, Leading Through Connections, the corporate world appeared to have recognised that human capital had become its most important source of economic value but do they really understand the full nature of change going within their workforce? They spend hundreds of millions measuring “engagement” but from the company’s point of view.

Preoccupation with developing meaningful conversations with consumers has blinded many companies to the plain truth that customers and employees share one thing in common – they are human beings!

If companies are having to become customer centric, then why won’t they be required to become employer centric too?

Failure to recognise this power shift constitutes a huge opportunity cost and will soon become the factor that separates success from failure. The Manpower Group’s talent survey shows that 36% of companies are having trouble filling staff shortages now – the highest proportion since the pre-recession boom year of 2007. Bill Jensen in Hack the Science of Engagement! cogently argues that companies need to ruthlessly examine just how self centred (as in employer centric) they really are and how out of synch with the motivations and aspirations of today’s workforce. Just look again at how engagement is defined:

“the extent to which employees are motivated to contribute to organizational success, and are willing to apply discretionary effort to accomplish tasks important to achieve organizational goals.” (Source: 2014 IBM Smarter Workforce Study.)

Jensen’s team asked several truly employee centric questions. First of all they assessed the degree to which employees were optimistic, happy , hopeful and harbouring dreams for personal growth and success. Despite all the challenges of making a living as a “worker” the results were remarkably upbeat. 79 per cent happy

The workforce is NOT disengaged from working on what matters to them… They are very engaged in their hopes and dreams!

 

9.8 dreamsBUT – and it’s a big but, they are extremely frustrated with businesses’s lack of caring, desire and willingness to be a vehicle for achieving their dreams and goals. Only 29% said they thought they could achieve their goals where they currently worked. But it’s worse than that. When you subtract from the total those workers in executive or entrepreneurial positions and environments, the 29% figure drops to 9.8%!

That means that 9 in 10 employees have dreams that they don’t expect to fulfil by staying with their current employer!!

So what does all this have to do with tourism and hospitality? It is no coincidence that when you look at the Conscious Travel compass of its eight principles and practices, the foundational four are Purpose, People, Place and Power. They work with the principles of Protection, Proximity, Pace, and Pull  to support the goal of building a visitor economy that enables all its stakeholder to flourish – to fulfil their potential as passionate, fully alive human beings.

PEOPLE is positioned as the second most important Principle and Practice in the Conscious Travel Model to remind us that for, a visitor economy to survive and flourish through the next decade, we must shift our focus from moving “product” to growing people. That’s because consumers are not mere consumption units (passenger nights, revenues per room) but people and people that talk to one another, and try to help each other. Consumers are also employees, shareholders, voters, investors, association members, family members, lovers, friends and, in short, human beings – all steadily, uniquely, consciously or unconsciously engaged in a lifelong journey of experience and self-discovery as described in the 1950’s by Maslow as a Hierarchy of Needs from survival to self-actualisation.

Companies that help individuals – be they customers or employees – move up that hierarchy, regardless of where their customer sits on it, will be the winners regardless of the sector in which they operate.

We have examples of both worst and best practices to learn from. The revenue battering trend of commoditisation  has caused many instances of poor labor practices, labour unrest, low wages, high turnover, zero hour contracts and pitiful levels of engagement. Some parts of the industry have grown by deploying an extractive approache more suited to mining. This comment was made by an industry analyst within the airline sector:

What we have is a race to the bottom in the mass market segment – ever restrictive ticketing conditions; customers forced to pay for anything extra; the slow and inexorable reduction in in-flight catering…This has been dubbed the “Gotcha” economy – that successful companies go out of their way to create conditions in the fine print that lead to consumers paying extra fees and penalties. (1) (2)

peak bookBut the good news is that there are many excellent examples of leaders who have put their employees welfare first and as a consequence enjoyed higher profits and greater resilience. Pioneering leaders like Kelleher at Southwest Airlines, Chip Conley founder of Joie de Vivre and PEAK, Mike Dapatie formerly CEO of Kimpton Hotels, Danny Meyer successful New York restauranteur and creator of Hospitality Quotient, Ritz Carlton, Four Seasons and Fairmont are all examples of live up to the definition of a Conscious Host – a host who cares.

Conscious hosts create places that care simply because the people at each place (be it a B& B, a boutique hotel, the site of an activity, tour or event) genuinely CARE about their guest, the environment on which they depend and each other. They also care about the vitality of the local economy; the culture of the host community, the viability and responsibility of suppliers, and the needs of shareholders to see a return on their investment. So yes, Bill Jensen, Chip Conley, Danny Meyer I am with you – let’s Hack the Science of Engagement and talk about Passion instead.

When all the stakeholders associated with a place share a common purpose and can express their passion for their place through their work, profits will follow.

PS. An economist I really admire is Robert Reich who offers a more jaundiced view on employee prospects here. Why Wages Won’t Rise. I think he hasn’t fully appreciated the change that is occurring in the creative economy. The jury is out as to whether or when progress there will spill into traditional manufacturing. Another analyst is Jeremy Rifkin whose Zero Marginal Cost Society is a must read and far more optimistic. The three of us are boomers so what do we really know – it’s those of you born after 1980 like the founders of Airbnb who will surprise and delight us all.

PPS Breaking News: The B Team and Virgin Unite have weighed into the debate by publishing a synthesis of latest thinking on the topic New Ways of Working. It provided authoritative evidence that Conscious Travel is on the right track.

See also: Conscious Hosts Create Place That Care

(1) http://airlineanalysts.com/2012/09/19/a-race-to-the-bottom-low-cost-carriers-and-the- gotcha-economy/ (2) http://redtape.nbcnews.com/_news/2012/09/07/13710824-the-truth-comes-out-ceo-says- stupid-consumers-deserve-hefty-fees?lite

2 Responses to “Hacking History (Part 2) The Internet’s Third Power Shift”

  1. Thanks Nancy – I am, as you know, a great fan of your work and that of Celes Devar and the Gross Morne Institute in Canada. You are pioneers in the field of customer engagement and showing how to develop rich experiences delivered by a passionate set of hosts.

  2. As always Anna, most thought provoking and fully aligned with what I’m seeing in Canada and its destination development challenges with enhancing the visitor experience and ensuring a qualified, passionate, forward thinking workforce. Thanks for the post.

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