February 9, 2025 • 33 mins
Segment 1 with Josh Drean starts at 0:00.
Since COVID 19, we have seen a drastic redefinition of how people define work and employment - and a redefinition of how they want to make a living. As my first guest says in the title of his book – Is employment dead?
Josh Drean is cofounder of the Work3 Institute. He is also a Web3 and Workforce Advisor at the Harvard Innovation Labs and cofounder of DreanMedia. Josh is an HR transformation expert who connects emerging technologies with workplace strategies. His work has been featured in Harvard Business Review, Forbes, Fast Company, and MIT Technology Review, and his YouTube channel has garnered millions of views. His new book declares "Employment is Dead".
Segment 2 with Mijntje Luckerath starts at 20:22.
What is the role of a board of directors and do most of them lack a moral compass?
Mijntje Lückerath-Rovers is a full Professor in Corporate Governance at TIAS Business School, Tilburg University, the Netherlands. She holds a PhD in financial economics and is also a labour and organisational psychologist.
Become a supporter of this podcast: https://www.spreaker.com/podcast/the-small-business-radio-show--3306444/support.
Listen to all the episodes of The Small Business Radio Show at www.barrymoltz.com
Since COVID 19, we have seen a drastic redefinition of how people define work and employment - and a redefinition of how they want to make a living. As my first guest says in the title of his book – Is employment dead?
Josh Drean is cofounder of the Work3 Institute. He is also a Web3 and Workforce Advisor at the Harvard Innovation Labs and cofounder of DreanMedia. Josh is an HR transformation expert who connects emerging technologies with workplace strategies. His work has been featured in Harvard Business Review, Forbes, Fast Company, and MIT Technology Review, and his YouTube channel has garnered millions of views. His new book declares "Employment is Dead".
Segment 2 with Mijntje Luckerath starts at 20:22.
What is the role of a board of directors and do most of them lack a moral compass?
Mijntje Lückerath-Rovers is a full Professor in Corporate Governance at TIAS Business School, Tilburg University, the Netherlands. She holds a PhD in financial economics and is also a labour and organisational psychologist.
Become a supporter of this podcast: https://www.spreaker.com/podcast/the-small-business-radio-show--3306444/support.
Listen to all the episodes of The Small Business Radio Show at www.barrymoltz.com
Mark as Played
Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Speaker 1 (00:04):
Get ready for all the craziness of small business. It's
exactly that craziness that makes it exciting and totally unbelievable.
Small Business Radio is now on the air with your host,
Barry Maultz.
Speaker 2 (00:18):
Well, thanks for joining this week's radio show. Remember this
is the final word in small business. For those keeping
track of this is show number eight hundred and twenty one. Well,
since COVID nineteen, we've seen a lot of drastic redefinition
of how people define work and employment, a redefinition of
(00:40):
how people want to make a living. As my first
guest says in the title of his book, is Employment Dead.
Josh Dreen is a co founder of the Work three Institute.
He's also a Web three and workforce advisor at Harvard
Innovation Labs and co founder of dream Media. Justin hr
transformation expert who connects emerging technologies with worksplace strategies. His
(01:03):
work has been featured in the Harvard Business Review, Forbes,
Fast Company, and the MIT Technology Review, and his YouTube
channel has guardered millions of views. Josh, welcome to the show.
I got to take you off from mute. Josh, welcome
to the show.
Speaker 3 (01:19):
Thank you for having me.
Speaker 2 (01:21):
So the Tyler book is called Employment Is Dead? Is
employment dead?
Speaker 3 (01:26):
It is on its way out if it isn't dead already.
Speaker 4 (01:29):
So what do you mean by that?
Speaker 3 (01:31):
Yeah, So, essentially the premise of the book is that
traditional models of employment are failing to adapt to the
needs of the modern workforce, and that we are still
kind of running on this industrial age vision for what
work should be when we needed to complete tasks and
push buttons and the manager needed to tell us exactly
what we needed to do and keep us in line.
(01:52):
And there's so much more that we need to be
thinking about and focusing on in terms of letting employees
be creative, allowing them to make decisions as it pertains
to the job that they're doing, and also cut them
into the deal a little bit, give them ownership over
the work that they complete so that they can do
the best work of their lives.
Speaker 2 (02:11):
You know, it's so interesting to me because I think
for a long time, this is even before COVID nineteen,
I think too many small business owners were still to stuck,
as you said, in the factory or the assembly line model, right.
I want the person in the office from nine to five,
I want to see their button, a seat and if
I see their button the seat, then I know they're
working for the company. If I don't see their button
a seat, then it's a problem. And I think that
(02:33):
a lot of small business owners have a heart if
I had a hard time evolving, especially to the remote
work model.
Speaker 3 (02:40):
That's very true. The pandemic forced us all to go remote,
and now we're seeing, you know, a lot of employers
are telling you to come back to the office, and
to me, it feels like a step backwards. We kind
of got to this place where you could work on
your own time, you could pick the kids up from
school and also do your job. You're working late into
the night, dealing with clients after hours. And so if
(03:04):
we live in a twenty four to seven, always on world,
why do we need to have a nine to five
office job. Why not give us a little bit more
flexibility to be able to work on our own circadian rhythm.
Speaker 2 (03:14):
But it's really innesting because I think a lot of
small business owners feel that when people work from home,
they're actually cheating, or they're time cheating, they're not working
as hard, rather than focusing on a principles around for
a long time, Josh called Row results oriented work. Why
can't we Why is it such a hard leap for
small business owners to focus on the value that someone
(03:37):
brings the organization rather than the time they spend in
the organization.
Speaker 3 (03:41):
Yeah, I think it comes down to control. I think
it's hard to see what employees are doing from home.
Are they taking a nap or are they actually working?
Speaker 2 (03:48):
Is the question, But doesn't matter as long as you
get the value, right, I mean to.
Speaker 3 (03:54):
Make a point, right, Yeah, that is exactly the point is.
We are spending too much time measuring these arbitrary numbers
of time spent in the office, how long has you
button your seat? Even sentimental analysis of how many emails
did you send? How many clicks did you have? Like,
those companies who are looking to measure down to the
click are going to fail because they're not allowing employees
(04:18):
to They're not trusting their employees. Right, So as a
balance between trust and control, we need to trust our
employees and just measure the outcomes, right, measure the value
that they generate for the company.
Speaker 2 (04:28):
Well, does trust come with time? So I understand a
new employee, but someone's been working with you for several years,
five years, ten years, and they've shown that they add
value to the company. I think in that case it's
a lot easier to quote unquote trust them, But still
some people don't.
Speaker 3 (04:45):
Well, trust comes from building relationships, Yeah, And are we
building relationships at work or are we just focused on
the contractual amount of work that we're supposed to complete,
the button we're supposed to push a certain amount of
times a day in order to drive value for the company.
There are a lot of companies who are just they're
purely profit driven. And that's how companies work, that's how
(05:07):
the economy works, that's how capitalism works. So we get that.
But if you don't build any sort of relationship with employees,
how can you expect them to trust you, especially when
we're seeing now a lot of really shady practices to
lay off employees. We're putting them on pips or performance
improvement plan to let them know that they will soon
be fired, or we're forcing them to come back to
(05:29):
the office hoping that those who don't want to come
back will leave the company naturally, so they save face
in a way, you know.
Speaker 2 (05:36):
And then you have those horrible examples that a lot
of people put up where during the pandemic, some people
working two or three jobs at the same time remotely,
you know, So those things just don't don't help well.
Speaker 3 (05:47):
And to that point, right, a lot of people are
still working two to three jobs just to make ends meet. Right.
It is it's not just oh, I want to work
a lot so I can make a ton of money.
It's I can't survive on one income anymore, and so
I need to find additional ways to you know, provide
for my lifestyle. And so it's an interesting dichotomy that
(06:07):
we find ourselves in.
Speaker 2 (06:08):
So in your book you talk about kind of like
ten operating principles of you know, the new work work
three right to take potential, to take full potential of
your workforce. A couple I want to focus in on.
One is autonomy and decision making. Talk about those two principles.
Speaker 3 (06:25):
Yeah, the work three principles. We call them the non
negotiables of the modern workforce. I speak with people leaders
all over the world and I simply ask, can you
provide any of this to your employees? And if the
answer is no, then it's likely that they don't want
to work for you. And so specifically, when we talk
about autonomy, right now, we are operating under a centralized
hierarchy in the workplace, which means there are a few
(06:47):
shareholders at the top who are making decisions and those
decisions trickle down to the frontline. It's rare that employees
on the frontline get to make meaningful decisions as it
relates to their job. To improve the process. They might
be able to make suggestions which will be considered. But
the autonomy piece is saying, let's give them that ability
(07:09):
to make decisions, and so a decentralized version of work
makes it possible. This is kind of when we start
getting too web three technologies where you know, we work
with a few companies who have distributed tokens to their employees,
which is essentially just voting power at the organization. They
use a tool called snapshot where anyone can ask a
(07:30):
question and everyone can vote on which direction the company
needs to go, and a smart contract executes immediately when
a decision is made. And so that might have been
a lot all at once. But the idea is that
we can give autonomy to the frontline workers based on
trusts knowing that they were hired to do a specific
job and that they have the ability to do it.
Speaker 2 (07:50):
So are you suggesting that companies should be a democracy
where everyone gets a vote in the majority of designs
or you're such insactly different.
Speaker 3 (07:58):
You know that this could be considered the democratization of work. Right.
The idea is that everyone gets a voice. I don't
see why not, right, We've been a democracy here in
America for a long time and that's kind of how
things have worked. But we're talking about micro decisions that
can help you be more agile. Right, what is the
end result here? It's more agility, more innovation, more creativity,
(08:21):
you know.
Speaker 2 (08:21):
See, I keep, Josh, I keep thinking that you've got
to give people autonomy and decision making power where you
sit down with them, you joinly decide what has to
be done, the goal, and then you let them decide
how it should be done, right, the execution of it.
Speaker 4 (08:35):
And what do you think of that idea?
Speaker 3 (08:37):
I think that's it, you know, I mean, because if
you don't start with an end goal in mind, then
you might not get there. But the idea is that
in a typical work situation, right, traditional employment is I
am paying you X amount of dollars for X amount
of hours. You come in and you do exactly what
I tell you, to do and you don't ask any questions.
(08:57):
Gen Z doesn't like that model. They want to be
an ax the participant. They want purpose, they want to
be a part of what you're building. And so this
decentralized model essentially is kind of what you said, let's
figure out where we want to go. But now you've
got like passionate individuals working on a project that excites
them and they're making decisions together.
Speaker 2 (09:17):
One of the principles you mentioned of the ten is community,
and I think that's always really important because I think
that you know, it's a lot of the reason that
people leave the other businesses is because they leave the
other people. They don't necessarily leave the company, right. They
want community, they want to feel belonged.
Speaker 3 (09:33):
What do you think, Yeah, I mean that's the age
old adage. Right. People don't quit their jobs, they quit
their boss.
Speaker 2 (09:39):
Right.
Speaker 3 (09:41):
The bold claim that we make is well management was
a tool that we designed in the industrial age to
oversee very specialized projects getting done in an effective manner.
We don't need that in the age of AI and
the age of information. What we need is agility and speed.
And if you are expecting the mana to oversee everything,
(10:01):
that's happening and tell everyone what to do and how
to do it. You're not going to be able to
move as fast as you want. So our bold claim
is you don't need as much middle management as you think.
In fact, we encourage you to have a very flat
organization where information flows across silos, where trust is and
transparency is preferred. It is a primary part of the organization.
Speaker 2 (10:25):
And I think a lot of times, unfortunately, business owners
put middle managers in place because they don't want to
talk to the first line employees. They want someone else
to deal with all those issues, and it's kind of
a shame.
Speaker 3 (10:36):
Yeah, I mean it's interesting, right because the boss upon
the boss upon the boss. When you look at AI
and the ability that it has to set boundaries but
also allow flexibility, you could essentially replace your mid level
management with AI. And we don't suggest that necessarily in
the book, like hey, let's get rid of our people
in favor of AI, but we're saying, let's use AI
(10:59):
to help your people do better, work, more productively, and
bring back some of that fulfillment back to the workplace.
Speaker 2 (11:05):
So what do you think, Josh, is really going to
be the impact of AI on you know, the everyday
employee in their job is just another tool? Or is
it going to replace host seal, replace jobs that are
out there.
Speaker 3 (11:20):
I mean, yeah, it is. It is both right, It
is just another tool. It is also going to replace
a lot of these autonomous jobs that we've been doing.
Right again, the button pushers, those people who left the
farm to go into the factory to do their very
specialized work, right, that was a huge shift. We're seeing
a very similar shift where we don't need as many copywriters,
(11:41):
we don't need as much you know, accountants to do
all of the calculations when we can be supercharged with AI.
And so I know that like AI will not replace us,
but it will also those people who are using AI
will be able to have a competitive advantage.
Speaker 4 (11:58):
But we do have to be afraid of the term
or in sky net and we do. Yeah, of course,
of course, because he loves the too.
Speaker 2 (12:04):
Right, So you know we've entered that even before you know,
COVID nineteen we had this. You know, gig economy is
the age of full time employment working for one person,
one person, one company. Is that going away because people
want a different kind of so to tell us about.
Speaker 3 (12:22):
That, Yeah, yeah. So if you look at the gig
economy today, right, it's powerful and it's strong, But the
reason that doesn't work for everybody is because it is
still centralized, right, and you still have to hustle so
very hard to find work. For instance, if you want
to be a freelancer, you get on upwork or a
like tool, and you tell people that you're here. You
(12:42):
have to spend a lot of time building up a
client base, doing projects that probably don't make a lot
of money, earning reviews, and before you know it, you
start to get into like the three percent of upwork
and get a great job. AI and web through technologies
are going to supercharge that model to the fact, to
the point where instead of working for a traditional company
nine to five making income, you get to mix and
(13:05):
mat several streams of income. You get to be an
active participant in finding the work. I like to say
that going to work in the future is going to
be as easy as opening up an app and getting
started on your own preferences.
Speaker 2 (13:19):
So one of the things I think really holds back
the gig economy or us doing a bunch of different things,
is the way that healthcare is really offered in this country, Right,
the most beneficial healthcare, the less most inexpensive, the one
that covers you the most is really still through company
group plans. Do you think that's an you know, that's
a barrier to us really shifting the economy.
Speaker 3 (13:40):
It is right, and strategically that decision was made for
exactly that point is to keep workers in full time
employment roles. Right, But when you look at the strain
on the employee employer relationship, it is hence right. Disengagement
is at an all time high. Half of employee right
(14:00):
now are looking for a job. It's not working, and
there's going to be a moment where you know that
leverage that employers had eventually will dissipate. I mean, imagine
a world where it's like, hey, you could go work
a full time job at this one company, or you
could work for these four companies doing a very specific project,
(14:23):
a very specific skill that you have and that you enjoy,
and you get paid just as much, if not more.
Speaker 2 (14:28):
And you don't need to worry about getting health care
from any of them. You can get at someplace where
it's inexpensive and effective.
Speaker 3 (14:34):
Yeah, imagine that that company coming out and offering that
to freelancers, which there are companies already doing that. Once
you start to get some of that monopoly pulled back,
you will start to see a mass. I mean, I say,
a great resignation two point zero isn't jumping from job
to job, it's jumping to more attractive alternatives for work.
Speaker 5 (14:54):
Yeah.
Speaker 2 (14:55):
I remember, as probably I don't know, twenty five years
ago my wife went back to work only be caught
to get health insurance for us. And then when Obamacare
finally passed and you know it wasn't voted down whatever,
she quit her job and then we went Obamacare. Now, Obamacare,
in my opinion, hasn't fulfilled the promise of the cost
versus the benefit, but it's certainly I think would change
(15:16):
the way, you know, people really work. Josh, what do
you really think the role A lot of organizations have
an HR professional in them, Right, what is their role
really in the new future of work?
Speaker 3 (15:28):
It is evolving just as it has evolved over the years. Right.
HR was originally personnel and your job was to make
sure that you didn't get sued. Then it became human resource.
Speaker 4 (15:38):
Up here in California, Yeah, exactly right.
Speaker 3 (15:41):
There's a lot of HR red tape that you got
to cut through there, and you know, you just look
at the stereotype that HR has. Now it's like, oh,
they're not actually my friend. If I'm talking to HR,
I'm in trouble or I'm getting fired. But it's starting
to shift to where they are taking on more responsibility.
You saw this during the pandemic, where they are helping
with the people. Operations is a term that a lot
(16:02):
of HR professionals like to call themselves. Now it's not
just what's the paper, what's the payroll, what's all the
stuff that can already be automated through AI. Let's kind
of move away from that model and focus more on
learning and development, on upscaling our people, on providing an
employee experience that matters, that thrills our people, focusing on
an employer brand, so they're having more and more of
(16:24):
a seat at the table and they will continue to
have that.
Speaker 2 (16:27):
Yeah, it's so interesting to me because my younger son,
what he's been doing over the last ten years, have
been involved with different companies actually working inside the company
on their employee culture right, making it a better place
to work op a place that people want to work right.
Speaker 4 (16:42):
So I think that's really important.
Speaker 2 (16:44):
Actually, I always sell small business owners let's have a
revolution idea, Josh.
Speaker 4 (16:47):
Let's not just say.
Speaker 2 (16:48):
We care about the people, let's actually care about them.
Speaker 3 (16:52):
I mean, you highlight something very interesting that is a
non negotiable for gen Z. Like if I'm going to
join your workforce and you're going to tell you without
telling me why it's being completed, or expect me just
to do it just because that's what you said, Like,
that model has already been fractured. And so when you
hear lazy, they're entitled, they don't want to work. I
(17:14):
think what we're really saying is jen Z is pushing
against these traditional narratives that don't work for them anymore,
and so you're gonna have to evolve to attract the
younger generation.
Speaker 2 (17:25):
Yeah. Absolutely, Well, tell a book is called Employment is Dead.
Where can people get a copy of it? And where
can people catch up with your work? Josh?
Speaker 3 (17:32):
Yeah, any of your favorite book retailers, Amazon, Barnes, and
Noble Targets. You can find it there. We'd love for
you to stay connected with the Work three Institute, and
I'm highly active on my socials at Josh Dream. If
you find me on TikTok or LinkedIn or Instagram. Send
me a direct message. I'm happy to respond. I'd love
to keep the conversation going.
Speaker 2 (17:53):
Josh, thanks for me on the show. This is the
Small Business Radio Show.
Speaker 4 (17:56):
We'll be right back.
Speaker 2 (17:58):
My work with thousands of small business owners over the
last twenty years inspired me to write my next book
on how to make changes.
Speaker 4 (18:07):
Well, that's not exactly true.
Speaker 2 (18:08):
More accurately, my frustration and the resulting challenges working with
small business owners forced me to write this new book.
Speaker 4 (18:17):
Let me explain.
Speaker 2 (18:18):
I'm often asked by companies and small business owners that
I don't know to help them. Typically, they're feeling stuck
by a problem and their companies can't move forward. After
analyze the situation, we mutually decide on a go forward strategy.
I help them assemble a detailed plan to make any
changes and the critical sess factors and actions that need
to be completed. They agree that taking these actions will
(18:41):
help them solve their issue for their company and make
them more money, and then almost nothing happens. Unfortunately, most
small business owners implement a few easy steps but never
take the critical or difficult ones that could make a difference.
This has long frustrated me since we worked really hard
(19:02):
putting together this plan and at the beginning we were
both excited about the result. I wrote my new book,
change Masters, How to Actually Make the changes you already
know need to make to figure out why small business
owners do not make the changes or take the actions
that they.
Speaker 4 (19:19):
Know will help them reach their goals.
Speaker 2 (19:21):
Where is the gap between sincere intent to make these
changes and the actions to actually do it? What holds
most people back and keeps them stuck on the same
path over and over again. Why are they still so
comfortable and not making these changes and staying on a
path that.
Speaker 4 (19:38):
Clearly doesn't work for them?
Speaker 2 (19:41):
One thing is it's not adding to their happiness, and
it's not adding to their feelings success. What steps do
they need to take to slowly break free and start
to make those changes today.
Speaker 4 (19:51):
That will help them in the long run.
Speaker 2 (19:54):
In my new book, I reveal much of the psychological
research around why change is just so hard for so
many people, and real life strategies that every small business
owner can employ right now to make the changes they
need to make in their companies to grow. So get
my new book, Change Masters. Remember I'm not trying to
convince you to make a change, but rather help you
(20:15):
make the changes you already know you need to take.
Speaker 1 (20:24):
Stick around to get your small business unstuck. More of
Small Business Radio with Barry Moles.
Speaker 2 (20:31):
Well, what is the role of a board of directors?
Do most of them actually lack a moral compass? My
next guest is Minscha Lukarad, who's the full professor in
corporate governance at TIAS Business School, Tilburg University in the Netherlands.
She holds a PhD in financial economics and also a
labor and organizational psychologist. Her research focused on the role
(20:55):
of the board of directors, board diversity, corporate governance and
creating long term value. Minshew, welcome to the show.
Speaker 5 (21:03):
Thank you very much, thank you for having me.
Speaker 2 (21:05):
So what is the role of a board directors? Isn't
it just to make the most money they possibly can
for their shareholders?
Speaker 5 (21:13):
Ah, that's a good question. Immediately, Well, the board of
directors normally exist of non executive directors, so they are
the directors that monitor and give advice to the executive directors,
and the executive directors are, for example, the CEO. They
are part of the board. And indeed, in the United States,
(21:35):
you prefer the shareholder model, so they should do everything
in the benefits of the shareholder. And I think we
in Europe and the Netherlands we more focused on a
stakeholder model where we have to weigh the different interests
of different stakeholders.
Speaker 2 (21:50):
But from more Again, I'm not familiar to say with
the miles in the Netherlands, but listen, in the US,
the role for the company is they're supposed to make
money for their shareholders. And if it and there comes
to be a conflict, if it's in if it's in
direct opposition to what may be.
Speaker 4 (22:04):
Good for a stakeholder.
Speaker 2 (22:06):
Right, yes, So for example, I could run a nuclear
power plant. Right, it may not be good for the environment,
but it's great for producing energy and charging my customers
and making money for my stakeholder, my shareholders.
Speaker 5 (22:18):
Yes, that's right. I think in the US directors and
executives they are seen as stewards of the shareholders investment,
so their decisions are also guided by the goal of
increasing profitability or share price or dividends. And I think
in Europe and an Atlans we be more focused on
the stakeholder model where we have to weigh indeed, a
wider range of stakeholders including employees, customer, suppliers, and the community.
(22:43):
And I think both models sorry, yeah, go ahead, go ahead. Well,
I think both models have their strength and their weaknesses.
I think the US shareholder model is often praised for
driving innovation and efficiency, while the stakeholder model is valued
for promoting stability and long term value creation. And I
think the real challenge is to find the right balance
(23:05):
between these two approaches.
Speaker 2 (23:07):
I think that the key word really is balanced. So
how do Dutch companies find the balance? They're saying, well, no, no, wait,
we're going to consider the stakeholders. We're going consider you know,
the customers, employees, because it's going to be better, it's
going to prove what's going to produce more value in
the long run.
Speaker 5 (23:24):
Yeah. I think they have a legal obligation as well
to way there is different balance interests. But I think
in the US the same occuras. It's not that directors
in the United States will not take into account the
interest of the employees or the customers, etc. But the
ultimate goal is the shareholder and I think that's that's
(23:44):
the main difference. But all directors, if they are based
in the United States or in the Netherlands are in Europe.
They have to weigh the different interests of the different stakeholders.
Speaker 2 (23:56):
And so one of the questions you ask in your
work is that do the border do members of the
board's directors?
Speaker 4 (24:02):
Do they lack a moral compass? What is your answer?
Speaker 5 (24:06):
Well, I don't think that they lack a moral compass.
I think that the outside world often tell in the
newspaper or politicians they say, well, they lack a moral
compass because they made the wrong decision from an outsider perspective,
like they are making the wrong ethical decision. But I
think that directors, executives and non executive directors, they really
(24:29):
carry an enormous responsibility. They are constantly waiting those different
competing interests of the employees, the customers, the shareholders, the financiers,
society at large, and these interests they are often in conflict.
And I think that in my book, I try to
make visible that if you take into account those different interests,
(24:51):
it's not really a moral compass, but it's a moral
scale because you have to look at different moral norms,
You have to look at different interests of different stakeholders,
and then you have to decide what is best for
the company, what is best for all those different stakeholders.
And that's more moral skill than a moral compass with
(25:11):
only one right direction.
Speaker 2 (25:13):
But give us I didn't mention the title of the book.
Give us mention that now for us, sorry mentioned the
title book.
Speaker 5 (25:20):
Now, yeah, the book is called Moral of the Lemmas
in the boardroom.
Speaker 4 (25:25):
So they're they're interesting. Moral of the Lemma that's really
come up.
Speaker 2 (25:27):
And there's there's people that are critical of this, people
are praising it. I'm sure you've seen announcements from Facebook
where you know, they made a you know, a decision.
They're not going to track, they're not going to fact
track what people post.
Speaker 4 (25:40):
They've all.
Speaker 2 (25:42):
UFC, the Wrestling Association to join their board. They definitely
seem to be shifting in a right direction. Are we
as as consumers of Facebook? Are we should we judge
them or not judge them? They can do whatever they want.
Speaker 5 (25:58):
No, I really think that you and judge a company
and the directors of the decisions they are making. But
I think we all should take into account that it's
not as easy as it looks because because of those
different interests and also because of different moral norms like honesty, justice, loyalty,
good citizenship. They might be in conflict with each other. So,
(26:19):
for example, the dilemma between should I be honest or
should I be loyal? Or should I prefer now the
short term or the long term, or should I choose
between an individual or society at large. All those kinds
of different choices that directors have to make, they are
difficult to make. And what we see in the boardroom
(26:41):
as well, but also in other places, is when we
are confronted with a moral dilemma. We can choose whether
we want to stick with a moral principle. Something is
not good, something is not fair, something is not just,
and that is more the ontological approach. So we prefer
the moral principle, but you also have utilitarian ethics, and
(27:04):
that is faced on the consequences of your decision. So
what are the consequences for different people? And then you
could decide to go against a moral norm because it
favors an otter moral norm, and that is a real
moral dilemma. Yeah, you feel it in a comic that
you have to make a decision between two good moral
(27:24):
norms and you cannot do both. That's the problem, the difficulty.
Speaker 2 (27:28):
Yeah, I think for most conservative in the US or
shareholders expect the board directors to tilt towards the money.
I mean, I think that's what we're seeing with Mark
Zuckerberg and Facebook, with Trump being elected. He's tilting towards,
you know, the money. But then we've seen other companies
really tilt towards a cause, right, you have like Patagonia
and Whole Foods and some of these other places that
(27:51):
you are trying to balance the profit with you know,
the cause. And I think they are consumers that get
behind that as well, saying hey, we're glad they're into
your cause. They're just not to the money, and so
we want to patronize them long term. So I think
there is a benefit.
Speaker 5 (28:06):
Yeah, absolutely, And I think also proponents of the shareholder
model sometimes things like that because it even if those
following that the cause even makes your customer base grow
and you make more money, it's a win win situation.
But that's of course not always the case. And maybe
you have heard of Michael Jensen. He's in my field
(28:26):
corporate governance, one of the most cited authors of articles
about what should directors do, and he says it is
not possible to maximize multiple interests at the same time,
so you have to make a decision. And he is
a firm believer in the shareholder model, so he thinks
you have to choose for the share price. But sometimes
(28:49):
even if you go for the money. So even if
you decide, we want to make a profit, and that's
also in the benefit of your employees. Because for example,
the situation with bit light and their profit or their
decreased enormously after they had a deal with the transgender influencer,
(29:12):
you can say that they backed up on that decision
because they wanted to have their employees that they hold
their jobs, that they could get their jobs because well,
the turnover was decreased with thirty percent, So then you
can see it as it's only about money, which can
also see No, it's also because their employees would otherwise
(29:32):
lose their jobs, and that makes it difficult.
Speaker 2 (29:35):
Are there other examples of recent cases of moral dilemmas
that you think that would be beneficial to share. Yeah.
Speaker 5 (29:43):
I think what is a powerful example and what we
I think all can understand is when we are faced
with a ransomware attack. Imagine that a university falls victim
to such an attack and the hackers have the encrypted
critical data, and then the board will be faced with
an almost impossible decision because on the one hand, there's
(30:04):
the moral principle that you shouldn't pay criminals. I think
we all agree about that paying a ransom will well
be in favor of the business model of these hackers.
So that's why experts says say never pay. But then
on the other side, if you don't pay, the consequences
might be devastating. In the case of the university, it
(30:26):
could mean loss of decades of research, including a project
with potentially huge societal impacts. So then a board might
decide we are going to pay, even if we don't
want to pay, even if it's it's morally wrong to
pay criminals. And I think that's the heart of such
a dilemma, that the board has to choose between upholding
(30:47):
an ethical principle and favor the consequences for their different
stakeholds in this case, for example, the employees or the researchers.
Speaker 2 (30:58):
Are the choices different if you're the board directors of
a privately held company versus a publicly traded company.
Speaker 5 (31:07):
I think a little bit, because I think the legal
environment has changed is different because you have the legal
duty to make money for your shavels, etc. You see,
for example that a family owned business they can focus
more on the long term, they can make different decisions,
(31:28):
and we see lots of examples of that as well.
Speaker 2 (31:31):
So in the end, after all your research, what advice
would you give to those board directors that are really
struggling with their role they're struggling.
Speaker 4 (31:40):
With these kind of decisions.
Speaker 5 (31:42):
Well, I think when you start, a question was about
the moral compass, and I think that indeed the outside
world often says directors lack their moral compass. But I
think my advice to the directors would be improve the
decision making process on these kinds of moral dilemma and
make it more transparent and defensible, because often the decisions
(32:05):
made in the boardroom are while they are like a
black box to those outside of the organization, and I
think this lack of visibility that leads to the misunderstandings
or even accusations that the decisions are an ethical or
harmful to the stakeholders. And I think that's why in
my book I emphasize the importers of a transparent and
(32:28):
thorough decision making process.
Speaker 2 (32:31):
Mitch I appreciate joining the show at a time for
this segment, where can people catch up with you in
the Netherlands and online?
Speaker 5 (32:38):
Well, I think if they just fill in my name
on Google, they will find my LinkedIn and the book
is available at paul Grave Macmillan.
Speaker 2 (32:47):
Okay, And I'm going to spell it because I think
for the American audience more difficults m I j ntje
and your last name is l U c K E
r A t H. I just want to spell it
out so people can Actually you could actually do the search.
Speaker 5 (33:02):
And there's only one book that is called Moral Dilemmas
in the borsroom, so that would be.
Speaker 4 (33:06):
Excellent, excellent.
Speaker 2 (33:08):
Well, thanks for joining us, and I want to thank
everyone for joining this week's radio show. I got to
thank our great staff, our booking producer Sarah Shafferan, our
video and sound editor Ethan Moltz. If you are serious
about being more successful in twenty twenty five, you've got
to give me a call. I set up a private
line for you at seven seven three eight three seven
eight two five zero or email me at Barry at
(33:30):
molts dot com. Remember, love everyone, trust a few, and
pale your own canoe.
Speaker 4 (33:35):
I have a proper mull and Passionate week.
Speaker 1 (33:39):
You can find Barrymoltz on the web at Barrymolts dot com,
or more episodes of Small Business Radio at small Business
Radio Show dot com.
Get ready for all the craziness of small business. It's
exactly that craziness that makes it exciting and totally unbelievable.
Small Business Radio is now on the air with your host,
Barry Maultz.
Speaker 2 (00:18):
Well, thanks for joining this week's radio show. Remember this
is the final word in small business. For those keeping
track of this is show number eight hundred and twenty one. Well,
since COVID nineteen, we've seen a lot of drastic redefinition
of how people define work and employment, a redefinition of
(00:40):
how people want to make a living. As my first
guest says in the title of his book, is Employment Dead.
Josh Dreen is a co founder of the Work three Institute.
He's also a Web three and workforce advisor at Harvard
Innovation Labs and co founder of dream Media. Justin hr
transformation expert who connects emerging technologies with worksplace strategies. His
(01:03):
work has been featured in the Harvard Business Review, Forbes,
Fast Company, and the MIT Technology Review, and his YouTube
channel has guardered millions of views. Josh, welcome to the show.
I got to take you off from mute. Josh, welcome
to the show.
Speaker 3 (01:19):
Thank you for having me.
Speaker 2 (01:21):
So the Tyler book is called Employment Is Dead? Is
employment dead?
Speaker 3 (01:26):
It is on its way out if it isn't dead already.
Speaker 4 (01:29):
So what do you mean by that?
Speaker 3 (01:31):
Yeah, So, essentially the premise of the book is that
traditional models of employment are failing to adapt to the
needs of the modern workforce, and that we are still
kind of running on this industrial age vision for what
work should be when we needed to complete tasks and
push buttons and the manager needed to tell us exactly
what we needed to do and keep us in line.
(01:52):
And there's so much more that we need to be
thinking about and focusing on in terms of letting employees
be creative, allowing them to make decisions as it pertains
to the job that they're doing, and also cut them
into the deal a little bit, give them ownership over
the work that they complete so that they can do
the best work of their lives.
Speaker 2 (02:11):
You know, it's so interesting to me because I think
for a long time, this is even before COVID nineteen,
I think too many small business owners were still to stuck,
as you said, in the factory or the assembly line model, right.
I want the person in the office from nine to five,
I want to see their button, a seat and if
I see their button the seat, then I know they're
working for the company. If I don't see their button
a seat, then it's a problem. And I think that
(02:33):
a lot of small business owners have a heart if
I had a hard time evolving, especially to the remote
work model.
Speaker 3 (02:40):
That's very true. The pandemic forced us all to go remote,
and now we're seeing, you know, a lot of employers
are telling you to come back to the office, and
to me, it feels like a step backwards. We kind
of got to this place where you could work on
your own time, you could pick the kids up from
school and also do your job. You're working late into
the night, dealing with clients after hours. And so if
(03:04):
we live in a twenty four to seven, always on world,
why do we need to have a nine to five
office job. Why not give us a little bit more
flexibility to be able to work on our own circadian rhythm.
Speaker 2 (03:14):
But it's really innesting because I think a lot of
small business owners feel that when people work from home,
they're actually cheating, or they're time cheating, they're not working
as hard, rather than focusing on a principles around for
a long time, Josh called Row results oriented work. Why
can't we Why is it such a hard leap for
small business owners to focus on the value that someone
(03:37):
brings the organization rather than the time they spend in
the organization.
Speaker 3 (03:41):
Yeah, I think it comes down to control. I think
it's hard to see what employees are doing from home.
Are they taking a nap or are they actually working?
Speaker 2 (03:48):
Is the question, But doesn't matter as long as you
get the value, right, I mean to.
Speaker 3 (03:54):
Make a point, right, Yeah, that is exactly the point is.
We are spending too much time measuring these arbitrary numbers
of time spent in the office, how long has you
button your seat? Even sentimental analysis of how many emails
did you send? How many clicks did you have? Like,
those companies who are looking to measure down to the
click are going to fail because they're not allowing employees
(04:18):
to They're not trusting their employees. Right, So as a
balance between trust and control, we need to trust our
employees and just measure the outcomes, right, measure the value
that they generate for the company.
Speaker 2 (04:28):
Well, does trust come with time? So I understand a
new employee, but someone's been working with you for several years,
five years, ten years, and they've shown that they add
value to the company. I think in that case it's
a lot easier to quote unquote trust them, But still
some people don't.
Speaker 3 (04:45):
Well, trust comes from building relationships, Yeah, And are we
building relationships at work or are we just focused on
the contractual amount of work that we're supposed to complete,
the button we're supposed to push a certain amount of
times a day in order to drive value for the company.
There are a lot of companies who are just they're
purely profit driven. And that's how companies work, that's how
(05:07):
the economy works, that's how capitalism works. So we get that.
But if you don't build any sort of relationship with employees,
how can you expect them to trust you, especially when
we're seeing now a lot of really shady practices to
lay off employees. We're putting them on pips or performance
improvement plan to let them know that they will soon
be fired, or we're forcing them to come back to
(05:29):
the office hoping that those who don't want to come
back will leave the company naturally, so they save face
in a way, you know.
Speaker 2 (05:36):
And then you have those horrible examples that a lot
of people put up where during the pandemic, some people
working two or three jobs at the same time remotely,
you know, So those things just don't don't help well.
Speaker 3 (05:47):
And to that point, right, a lot of people are
still working two to three jobs just to make ends meet. Right.
It is it's not just oh, I want to work
a lot so I can make a ton of money.
It's I can't survive on one income anymore, and so
I need to find additional ways to you know, provide
for my lifestyle. And so it's an interesting dichotomy that
(06:07):
we find ourselves in.
Speaker 2 (06:08):
So in your book you talk about kind of like
ten operating principles of you know, the new work work
three right to take potential, to take full potential of
your workforce. A couple I want to focus in on.
One is autonomy and decision making. Talk about those two principles.
Speaker 3 (06:25):
Yeah, the work three principles. We call them the non
negotiables of the modern workforce. I speak with people leaders
all over the world and I simply ask, can you
provide any of this to your employees? And if the
answer is no, then it's likely that they don't want
to work for you. And so specifically, when we talk
about autonomy, right now, we are operating under a centralized
hierarchy in the workplace, which means there are a few
(06:47):
shareholders at the top who are making decisions and those
decisions trickle down to the frontline. It's rare that employees
on the frontline get to make meaningful decisions as it
relates to their job. To improve the process. They might
be able to make suggestions which will be considered. But
the autonomy piece is saying, let's give them that ability
(07:09):
to make decisions, and so a decentralized version of work
makes it possible. This is kind of when we start
getting too web three technologies where you know, we work
with a few companies who have distributed tokens to their employees,
which is essentially just voting power at the organization. They
use a tool called snapshot where anyone can ask a
(07:30):
question and everyone can vote on which direction the company
needs to go, and a smart contract executes immediately when
a decision is made. And so that might have been
a lot all at once. But the idea is that
we can give autonomy to the frontline workers based on
trusts knowing that they were hired to do a specific
job and that they have the ability to do it.
Speaker 2 (07:50):
So are you suggesting that companies should be a democracy
where everyone gets a vote in the majority of designs
or you're such insactly different.
Speaker 3 (07:58):
You know that this could be considered the democratization of work. Right.
The idea is that everyone gets a voice. I don't
see why not, right, We've been a democracy here in
America for a long time and that's kind of how
things have worked. But we're talking about micro decisions that
can help you be more agile. Right, what is the
end result here? It's more agility, more innovation, more creativity,
(08:21):
you know.
Speaker 2 (08:21):
See, I keep, Josh, I keep thinking that you've got
to give people autonomy and decision making power where you
sit down with them, you joinly decide what has to
be done, the goal, and then you let them decide
how it should be done, right, the execution of it.
Speaker 4 (08:35):
And what do you think of that idea?
Speaker 3 (08:37):
I think that's it, you know, I mean, because if
you don't start with an end goal in mind, then
you might not get there. But the idea is that
in a typical work situation, right, traditional employment is I
am paying you X amount of dollars for X amount
of hours. You come in and you do exactly what
I tell you, to do and you don't ask any questions.
(08:57):
Gen Z doesn't like that model. They want to be
an ax the participant. They want purpose, they want to
be a part of what you're building. And so this
decentralized model essentially is kind of what you said, let's
figure out where we want to go. But now you've
got like passionate individuals working on a project that excites
them and they're making decisions together.
Speaker 2 (09:17):
One of the principles you mentioned of the ten is community,
and I think that's always really important because I think
that you know, it's a lot of the reason that
people leave the other businesses is because they leave the
other people. They don't necessarily leave the company, right. They
want community, they want to feel belonged.
Speaker 3 (09:33):
What do you think, Yeah, I mean that's the age
old adage. Right. People don't quit their jobs, they quit
their boss.
Speaker 2 (09:39):
Right.
Speaker 3 (09:41):
The bold claim that we make is well management was
a tool that we designed in the industrial age to
oversee very specialized projects getting done in an effective manner.
We don't need that in the age of AI and
the age of information. What we need is agility and speed.
And if you are expecting the mana to oversee everything,
(10:01):
that's happening and tell everyone what to do and how
to do it. You're not going to be able to
move as fast as you want. So our bold claim
is you don't need as much middle management as you think.
In fact, we encourage you to have a very flat
organization where information flows across silos, where trust is and
transparency is preferred. It is a primary part of the organization.
Speaker 2 (10:25):
And I think a lot of times, unfortunately, business owners
put middle managers in place because they don't want to
talk to the first line employees. They want someone else
to deal with all those issues, and it's kind of
a shame.
Speaker 3 (10:36):
Yeah, I mean it's interesting, right because the boss upon
the boss upon the boss. When you look at AI
and the ability that it has to set boundaries but
also allow flexibility, you could essentially replace your mid level
management with AI. And we don't suggest that necessarily in
the book, like hey, let's get rid of our people
in favor of AI, but we're saying, let's use AI
(10:59):
to help your people do better, work, more productively, and
bring back some of that fulfillment back to the workplace.
Speaker 2 (11:05):
So what do you think, Josh, is really going to
be the impact of AI on you know, the everyday
employee in their job is just another tool? Or is
it going to replace host seal, replace jobs that are
out there.
Speaker 3 (11:20):
I mean, yeah, it is. It is both right, It
is just another tool. It is also going to replace
a lot of these autonomous jobs that we've been doing.
Right again, the button pushers, those people who left the
farm to go into the factory to do their very
specialized work, right, that was a huge shift. We're seeing
a very similar shift where we don't need as many copywriters,
(11:41):
we don't need as much you know, accountants to do
all of the calculations when we can be supercharged with AI.
And so I know that like AI will not replace us,
but it will also those people who are using AI
will be able to have a competitive advantage.
Speaker 4 (11:58):
But we do have to be afraid of the term
or in sky net and we do. Yeah, of course,
of course, because he loves the too.
Speaker 2 (12:04):
Right, So you know we've entered that even before you know,
COVID nineteen we had this. You know, gig economy is
the age of full time employment working for one person,
one person, one company. Is that going away because people
want a different kind of so to tell us about.
Speaker 3 (12:22):
That, Yeah, yeah. So if you look at the gig
economy today, right, it's powerful and it's strong, But the
reason that doesn't work for everybody is because it is
still centralized, right, and you still have to hustle so
very hard to find work. For instance, if you want
to be a freelancer, you get on upwork or a
like tool, and you tell people that you're here. You
(12:42):
have to spend a lot of time building up a
client base, doing projects that probably don't make a lot
of money, earning reviews, and before you know it, you
start to get into like the three percent of upwork
and get a great job. AI and web through technologies
are going to supercharge that model to the fact, to
the point where instead of working for a traditional company
nine to five making income, you get to mix and
(13:05):
mat several streams of income. You get to be an
active participant in finding the work. I like to say
that going to work in the future is going to
be as easy as opening up an app and getting
started on your own preferences.
Speaker 2 (13:19):
So one of the things I think really holds back
the gig economy or us doing a bunch of different things,
is the way that healthcare is really offered in this country, Right,
the most beneficial healthcare, the less most inexpensive, the one
that covers you the most is really still through company
group plans. Do you think that's an you know, that's
a barrier to us really shifting the economy.
Speaker 3 (13:40):
It is right, and strategically that decision was made for
exactly that point is to keep workers in full time
employment roles. Right, But when you look at the strain
on the employee employer relationship, it is hence right. Disengagement
is at an all time high. Half of employee right
(14:00):
now are looking for a job. It's not working, and
there's going to be a moment where you know that
leverage that employers had eventually will dissipate. I mean, imagine
a world where it's like, hey, you could go work
a full time job at this one company, or you
could work for these four companies doing a very specific project,
(14:23):
a very specific skill that you have and that you enjoy,
and you get paid just as much, if not more.
Speaker 2 (14:28):
And you don't need to worry about getting health care
from any of them. You can get at someplace where
it's inexpensive and effective.
Speaker 3 (14:34):
Yeah, imagine that that company coming out and offering that
to freelancers, which there are companies already doing that. Once
you start to get some of that monopoly pulled back,
you will start to see a mass. I mean, I say,
a great resignation two point zero isn't jumping from job
to job, it's jumping to more attractive alternatives for work.
Speaker 5 (14:54):
Yeah.
Speaker 2 (14:55):
I remember, as probably I don't know, twenty five years
ago my wife went back to work only be caught
to get health insurance for us. And then when Obamacare
finally passed and you know it wasn't voted down whatever,
she quit her job and then we went Obamacare. Now, Obamacare,
in my opinion, hasn't fulfilled the promise of the cost
versus the benefit, but it's certainly I think would change
(15:16):
the way, you know, people really work. Josh, what do
you really think the role A lot of organizations have
an HR professional in them, Right, what is their role
really in the new future of work?
Speaker 3 (15:28):
It is evolving just as it has evolved over the years. Right.
HR was originally personnel and your job was to make
sure that you didn't get sued. Then it became human resource.
Speaker 4 (15:38):
Up here in California, Yeah, exactly right.
Speaker 3 (15:41):
There's a lot of HR red tape that you got
to cut through there, and you know, you just look
at the stereotype that HR has. Now it's like, oh,
they're not actually my friend. If I'm talking to HR,
I'm in trouble or I'm getting fired. But it's starting
to shift to where they are taking on more responsibility.
You saw this during the pandemic, where they are helping
with the people. Operations is a term that a lot
(16:02):
of HR professionals like to call themselves. Now it's not
just what's the paper, what's the payroll, what's all the
stuff that can already be automated through AI. Let's kind
of move away from that model and focus more on
learning and development, on upscaling our people, on providing an
employee experience that matters, that thrills our people, focusing on
an employer brand, so they're having more and more of
(16:24):
a seat at the table and they will continue to
have that.
Speaker 2 (16:27):
Yeah, it's so interesting to me because my younger son,
what he's been doing over the last ten years, have
been involved with different companies actually working inside the company
on their employee culture right, making it a better place
to work op a place that people want to work right.
Speaker 4 (16:42):
So I think that's really important.
Speaker 2 (16:44):
Actually, I always sell small business owners let's have a
revolution idea, Josh.
Speaker 4 (16:47):
Let's not just say.
Speaker 2 (16:48):
We care about the people, let's actually care about them.
Speaker 3 (16:52):
I mean, you highlight something very interesting that is a
non negotiable for gen Z. Like if I'm going to
join your workforce and you're going to tell you without
telling me why it's being completed, or expect me just
to do it just because that's what you said, Like,
that model has already been fractured. And so when you
hear lazy, they're entitled, they don't want to work. I
(17:14):
think what we're really saying is jen Z is pushing
against these traditional narratives that don't work for them anymore,
and so you're gonna have to evolve to attract the
younger generation.
Speaker 2 (17:25):
Yeah. Absolutely, Well, tell a book is called Employment is Dead.
Where can people get a copy of it? And where
can people catch up with your work? Josh?
Speaker 3 (17:32):
Yeah, any of your favorite book retailers, Amazon, Barnes, and
Noble Targets. You can find it there. We'd love for
you to stay connected with the Work three Institute, and
I'm highly active on my socials at Josh Dream. If
you find me on TikTok or LinkedIn or Instagram. Send
me a direct message. I'm happy to respond. I'd love
to keep the conversation going.
Speaker 2 (17:53):
Josh, thanks for me on the show. This is the
Small Business Radio Show.
Speaker 4 (17:56):
We'll be right back.
Speaker 2 (17:58):
My work with thousands of small business owners over the
last twenty years inspired me to write my next book
on how to make changes.
Speaker 4 (18:07):
Well, that's not exactly true.
Speaker 2 (18:08):
More accurately, my frustration and the resulting challenges working with
small business owners forced me to write this new book.
Speaker 4 (18:17):
Let me explain.
Speaker 2 (18:18):
I'm often asked by companies and small business owners that
I don't know to help them. Typically, they're feeling stuck
by a problem and their companies can't move forward. After
analyze the situation, we mutually decide on a go forward strategy.
I help them assemble a detailed plan to make any
changes and the critical sess factors and actions that need
to be completed. They agree that taking these actions will
(18:41):
help them solve their issue for their company and make
them more money, and then almost nothing happens. Unfortunately, most
small business owners implement a few easy steps but never
take the critical or difficult ones that could make a difference.
This has long frustrated me since we worked really hard
(19:02):
putting together this plan and at the beginning we were
both excited about the result. I wrote my new book,
change Masters, How to Actually Make the changes you already
know need to make to figure out why small business
owners do not make the changes or take the actions
that they.
Speaker 4 (19:19):
Know will help them reach their goals.
Speaker 2 (19:21):
Where is the gap between sincere intent to make these
changes and the actions to actually do it? What holds
most people back and keeps them stuck on the same
path over and over again. Why are they still so
comfortable and not making these changes and staying on a
path that.
Speaker 4 (19:38):
Clearly doesn't work for them?
Speaker 2 (19:41):
One thing is it's not adding to their happiness, and
it's not adding to their feelings success. What steps do
they need to take to slowly break free and start
to make those changes today.
Speaker 4 (19:51):
That will help them in the long run.
Speaker 2 (19:54):
In my new book, I reveal much of the psychological
research around why change is just so hard for so
many people, and real life strategies that every small business
owner can employ right now to make the changes they
need to make in their companies to grow. So get
my new book, Change Masters. Remember I'm not trying to
convince you to make a change, but rather help you
(20:15):
make the changes you already know you need to take.
Speaker 1 (20:24):
Stick around to get your small business unstuck. More of
Small Business Radio with Barry Moles.
Speaker 2 (20:31):
Well, what is the role of a board of directors?
Do most of them actually lack a moral compass? My
next guest is Minscha Lukarad, who's the full professor in
corporate governance at TIAS Business School, Tilburg University in the Netherlands.
She holds a PhD in financial economics and also a
labor and organizational psychologist. Her research focused on the role
(20:55):
of the board of directors, board diversity, corporate governance and
creating long term value. Minshew, welcome to the show.
Speaker 5 (21:03):
Thank you very much, thank you for having me.
Speaker 2 (21:05):
So what is the role of a board directors? Isn't
it just to make the most money they possibly can
for their shareholders?
Speaker 5 (21:13):
Ah, that's a good question. Immediately, Well, the board of
directors normally exist of non executive directors, so they are
the directors that monitor and give advice to the executive directors,
and the executive directors are, for example, the CEO. They
are part of the board. And indeed, in the United States,
(21:35):
you prefer the shareholder model, so they should do everything
in the benefits of the shareholder. And I think we
in Europe and the Netherlands we more focused on a
stakeholder model where we have to weigh the different interests
of different stakeholders.
Speaker 2 (21:50):
But from more Again, I'm not familiar to say with
the miles in the Netherlands, but listen, in the US,
the role for the company is they're supposed to make
money for their shareholders. And if it and there comes
to be a conflict, if it's in if it's in
direct opposition to what may be.
Speaker 4 (22:04):
Good for a stakeholder.
Speaker 2 (22:06):
Right, yes, So for example, I could run a nuclear
power plant. Right, it may not be good for the environment,
but it's great for producing energy and charging my customers
and making money for my stakeholder, my shareholders.
Speaker 5 (22:18):
Yes, that's right. I think in the US directors and
executives they are seen as stewards of the shareholders investment,
so their decisions are also guided by the goal of
increasing profitability or share price or dividends. And I think
in Europe and an Atlans we be more focused on
the stakeholder model where we have to weigh indeed, a
wider range of stakeholders including employees, customer, suppliers, and the community.
(22:43):
And I think both models sorry, yeah, go ahead, go ahead. Well,
I think both models have their strength and their weaknesses.
I think the US shareholder model is often praised for
driving innovation and efficiency, while the stakeholder model is valued
for promoting stability and long term value creation. And I
think the real challenge is to find the right balance
(23:05):
between these two approaches.
Speaker 2 (23:07):
I think that the key word really is balanced. So
how do Dutch companies find the balance? They're saying, well, no, no, wait,
we're going to consider the stakeholders. We're going consider you know,
the customers, employees, because it's going to be better, it's
going to prove what's going to produce more value in
the long run.
Speaker 5 (23:24):
Yeah. I think they have a legal obligation as well
to way there is different balance interests. But I think
in the US the same occuras. It's not that directors
in the United States will not take into account the
interest of the employees or the customers, etc. But the
ultimate goal is the shareholder and I think that's that's
(23:44):
the main difference. But all directors, if they are based
in the United States or in the Netherlands are in Europe.
They have to weigh the different interests of the different stakeholders.
Speaker 2 (23:56):
And so one of the questions you ask in your
work is that do the border do members of the
board's directors?
Speaker 4 (24:02):
Do they lack a moral compass? What is your answer?
Speaker 5 (24:06):
Well, I don't think that they lack a moral compass.
I think that the outside world often tell in the
newspaper or politicians they say, well, they lack a moral
compass because they made the wrong decision from an outsider perspective,
like they are making the wrong ethical decision. But I
think that directors, executives and non executive directors, they really
(24:29):
carry an enormous responsibility. They are constantly waiting those different
competing interests of the employees, the customers, the shareholders, the financiers,
society at large, and these interests they are often in conflict.
And I think that in my book, I try to
make visible that if you take into account those different interests,
(24:51):
it's not really a moral compass, but it's a moral
scale because you have to look at different moral norms,
You have to look at different interests of different stakeholders,
and then you have to decide what is best for
the company, what is best for all those different stakeholders.
And that's more moral skill than a moral compass with
(25:11):
only one right direction.
Speaker 2 (25:13):
But give us I didn't mention the title of the book.
Give us mention that now for us, sorry mentioned the
title book.
Speaker 5 (25:20):
Now, yeah, the book is called Moral of the Lemmas
in the boardroom.
Speaker 4 (25:25):
So they're they're interesting. Moral of the Lemma that's really
come up.
Speaker 2 (25:27):
And there's there's people that are critical of this, people
are praising it. I'm sure you've seen announcements from Facebook
where you know, they made a you know, a decision.
They're not going to track, they're not going to fact
track what people post.
Speaker 4 (25:40):
They've all.
Speaker 2 (25:42):
UFC, the Wrestling Association to join their board. They definitely
seem to be shifting in a right direction. Are we
as as consumers of Facebook? Are we should we judge
them or not judge them? They can do whatever they want.
Speaker 5 (25:58):
No, I really think that you and judge a company
and the directors of the decisions they are making. But
I think we all should take into account that it's
not as easy as it looks because because of those
different interests and also because of different moral norms like honesty, justice, loyalty,
good citizenship. They might be in conflict with each other. So,
(26:19):
for example, the dilemma between should I be honest or
should I be loyal? Or should I prefer now the
short term or the long term, or should I choose
between an individual or society at large. All those kinds
of different choices that directors have to make, they are
difficult to make. And what we see in the boardroom
(26:41):
as well, but also in other places, is when we
are confronted with a moral dilemma. We can choose whether
we want to stick with a moral principle. Something is
not good, something is not fair, something is not just,
and that is more the ontological approach. So we prefer
the moral principle, but you also have utilitarian ethics, and
(27:04):
that is faced on the consequences of your decision. So
what are the consequences for different people? And then you
could decide to go against a moral norm because it
favors an otter moral norm, and that is a real
moral dilemma. Yeah, you feel it in a comic that
you have to make a decision between two good moral
(27:24):
norms and you cannot do both. That's the problem, the difficulty.
Speaker 2 (27:28):
Yeah, I think for most conservative in the US or
shareholders expect the board directors to tilt towards the money.
I mean, I think that's what we're seeing with Mark
Zuckerberg and Facebook, with Trump being elected. He's tilting towards,
you know, the money. But then we've seen other companies
really tilt towards a cause, right, you have like Patagonia
and Whole Foods and some of these other places that
(27:51):
you are trying to balance the profit with you know,
the cause. And I think they are consumers that get
behind that as well, saying hey, we're glad they're into
your cause. They're just not to the money, and so
we want to patronize them long term. So I think
there is a benefit.
Speaker 5 (28:06):
Yeah, absolutely, And I think also proponents of the shareholder
model sometimes things like that because it even if those
following that the cause even makes your customer base grow
and you make more money, it's a win win situation.
But that's of course not always the case. And maybe
you have heard of Michael Jensen. He's in my field
(28:26):
corporate governance, one of the most cited authors of articles
about what should directors do, and he says it is
not possible to maximize multiple interests at the same time,
so you have to make a decision. And he is
a firm believer in the shareholder model, so he thinks
you have to choose for the share price. But sometimes
(28:49):
even if you go for the money. So even if
you decide, we want to make a profit, and that's
also in the benefit of your employees. Because for example,
the situation with bit light and their profit or their
decreased enormously after they had a deal with the transgender influencer,
(29:12):
you can say that they backed up on that decision
because they wanted to have their employees that they hold
their jobs, that they could get their jobs because well,
the turnover was decreased with thirty percent, So then you
can see it as it's only about money, which can
also see No, it's also because their employees would otherwise
(29:32):
lose their jobs, and that makes it difficult.
Speaker 2 (29:35):
Are there other examples of recent cases of moral dilemmas
that you think that would be beneficial to share. Yeah.
Speaker 5 (29:43):
I think what is a powerful example and what we
I think all can understand is when we are faced
with a ransomware attack. Imagine that a university falls victim
to such an attack and the hackers have the encrypted
critical data, and then the board will be faced with
an almost impossible decision because on the one hand, there's
(30:04):
the moral principle that you shouldn't pay criminals. I think
we all agree about that paying a ransom will well
be in favor of the business model of these hackers.
So that's why experts says say never pay. But then
on the other side, if you don't pay, the consequences
might be devastating. In the case of the university, it
(30:26):
could mean loss of decades of research, including a project
with potentially huge societal impacts. So then a board might
decide we are going to pay, even if we don't
want to pay, even if it's it's morally wrong to
pay criminals. And I think that's the heart of such
a dilemma, that the board has to choose between upholding
(30:47):
an ethical principle and favor the consequences for their different
stakeholds in this case, for example, the employees or the researchers.
Speaker 2 (30:58):
Are the choices different if you're the board directors of
a privately held company versus a publicly traded company.
Speaker 5 (31:07):
I think a little bit, because I think the legal
environment has changed is different because you have the legal
duty to make money for your shavels, etc. You see,
for example that a family owned business they can focus
more on the long term, they can make different decisions,
(31:28):
and we see lots of examples of that as well.
Speaker 2 (31:31):
So in the end, after all your research, what advice
would you give to those board directors that are really
struggling with their role they're struggling.
Speaker 4 (31:40):
With these kind of decisions.
Speaker 5 (31:42):
Well, I think when you start, a question was about
the moral compass, and I think that indeed the outside
world often says directors lack their moral compass. But I
think my advice to the directors would be improve the
decision making process on these kinds of moral dilemma and
make it more transparent and defensible, because often the decisions
(32:05):
made in the boardroom are while they are like a
black box to those outside of the organization, and I
think this lack of visibility that leads to the misunderstandings
or even accusations that the decisions are an ethical or
harmful to the stakeholders. And I think that's why in
my book I emphasize the importers of a transparent and
(32:28):
thorough decision making process.
Speaker 2 (32:31):
Mitch I appreciate joining the show at a time for
this segment, where can people catch up with you in
the Netherlands and online?
Speaker 5 (32:38):
Well, I think if they just fill in my name
on Google, they will find my LinkedIn and the book
is available at paul Grave Macmillan.
Speaker 2 (32:47):
Okay, And I'm going to spell it because I think
for the American audience more difficults m I j ntje
and your last name is l U c K E
r A t H. I just want to spell it
out so people can Actually you could actually do the search.
Speaker 5 (33:02):
And there's only one book that is called Moral Dilemmas
in the borsroom, so that would be.
Speaker 4 (33:06):
Excellent, excellent.
Speaker 2 (33:08):
Well, thanks for joining us, and I want to thank
everyone for joining this week's radio show. I got to
thank our great staff, our booking producer Sarah Shafferan, our
video and sound editor Ethan Moltz. If you are serious
about being more successful in twenty twenty five, you've got
to give me a call. I set up a private
line for you at seven seven three eight three seven
eight two five zero or email me at Barry at
(33:30):
molts dot com. Remember, love everyone, trust a few, and
pale your own canoe.
Speaker 4 (33:35):
I have a proper mull and Passionate week.
Speaker 1 (33:39):
You can find Barrymoltz on the web at Barrymolts dot com,
or more episodes of Small Business Radio at small Business
Radio Show dot com.
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