The Rising Tide of Employee Activism: Why and Why… | Gagen MacDonald

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The Rising Tide of Employee Activism: Why and Why Now?

Jan 23, 2020

A decade ago, if you asked a group of executives of large companies to list the greatest risks to their business, you would have heard words like regulatory action, product recall, ethical lapse, or missed financial target. If you got those same executives together today, I’m nearly certain a new term would enter the conversation: employee activism.

Thumb through your news alerts or Twitter feed on any given day and you’ll see examples of employees collectively exerting pressure on their employers to revise corporate policies, change strategic direction or take clear positions on broad social issues (even ones with no direct link to the company’s core business). As signatures pile up on petitions, walk-outs are organized and intra-company drama become external PR fiascos, business leaders find themselves struggling to balance the competing interests of employees, customers and shareholders.

At its core, any episode of employee activism is the result of some lack of alignment between executive management and broader employee populations. As someone who has spent my career helping companies build strategic alignment – often amid fear, uncertainty, and resistance – the roots of employee activism are familiar terrain. Based on my experience, over the course of several blog posts, I want to share my perspective on activism, where it comes from, how it can be avoided, and best practices to address it on the occasions it arises. My goal with these posts is to not just offer the phenomenon of employee activism a deeper examination, but really to inspire a dialogue. If you’re seeing employee activism in your organization, please let me know how these observations do or don’t resonate with you. I hope we can learn from each other!

So first, what is employee activism and why is it on the rise?

In my view, employee activism as we see it today is actually just a new expression of an age-old dynamic. As all labor movements show, throughout history, when employees feel overpowered by their employers, they come together to take collective action. Unions are fundamentally representative of this concept. However, due to several concurrent trends, employee activism is not only showing up more frequently recently, it’s showing up in some powerful and potentially very damaging new ways. The primary trends I see driving today’s employee activism are:

  • The talent shortage. According to Gartner’s quarterly Emerging Risks Survey, “talent shortage” ranked as executives’ top emerging risk for the first time earlier this year. Attracting employees with advanced skills is already difficult. Losing employees with advanced skills is a double blow. It’s no wonder, then, that companies like Google, Amazon, and Microsoft, with a high proportion of precious technical talent, have become the poster children for employee activism. Yet make no mistake: this phenomenon is not limited to large, West Coast tech businesses; digital transformation is affecting every sector of society, and because of it, the talent shortage is forecast to widen.
  • Social media and self-publishing capabilities. A growing proportion of the workforce is made up of Millennials – a generation with an intimate understanding of the power of social media to upend long-standing power structures. While periodic tension between executive management and frontline employees has always been a feature of corporate life, employees’ ability to circumvent traditional channels and draw external attention to their position has changed the dynamics forever.
  • The politicization of everything. Until recently, companies were seen as relatively apolitical; today, nothing and no one exists outside of the lines of politics. In this “with us or against us” environment, many employees feel a strong desire for their employers to use their platforms to act as an extension of their political interests. For example , according to the 2019 Edelman Trust Barometer, 76 percent of the general population wants CEOs to provide leadership on social issues, an 11-point increase in just a year.
  • Collapsing trust in institutions and shifting societal expectations of companies. As trust in government and other institutions has plummeted, employees increasingly expect to work for organizations that are not only profitable and provide job security, but whose purpose addresses a clear societal need. In fact, according to Edelman’s 2019 Trust Barometer, 25% of employees today say they’d “never work for an employer that does not have a greater purpose,” and another 42% say they strongly expect their employer to deliver a meaningful societal impact. That means two-thirds of our workforce is looking to their employer to do more than just make money.
  • The upstarts have become the establishment. While employee activism is a national and cross-industry phenomenon, leading West Coast companies have provided the earliest and most intense examples of it. This makes sense. Many of these companies were founded by “renegades” from large, established businesses – people who sought to create a haven from what they saw as stifling bureaucracy and staid business practices. Many of these havens became enormously successful, to the point where today, the disruptors have become not just part of the establishment, but its most famous names. Now those organizations must contend with the unintended consequences of iconoclastic business cultures operating at scale.

While this isn’t an exhaustive list, it helps explain why every company in every sector must, sooner or later, confront the risk of employee activism.

Over the next two posts, I’ll outline steps that I believe are necessary for companies to minimize the risk of activist campaigns, and ways to relieve tensions between employees and executives when seeds of activism begins to surface.

In the meantime, I’d like to know what you see as the forces driving employee activism. What’s missing from my list?

Read the rest of the series:

/ Jan 21, 2020

The Case for Culture: Behaviors

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/ Jan 28, 2020

The Case for Culture: Symbols

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