Venture business launches. There have been roughly 100,000 venture-funded launches over the last decade and somewhere between 20,000 and 25,000 exits. If we assume the same number of failures as exits — and that is a guess — there are around 50,000 privately-funded growth businesses that will adapt, innovate, and invent new ways of working.
When it comes to designing the future of work, one size fits none. Discovering success isn’t about a hybrid model or offering remote work options. Individuals and organizations are looking for more freedom. The freedom to choose the work model that makes the most sense. The freedom to choose their own values. And the freedom to pursue what matters most. We reached out to successful leaders and thought leaders across all industries to glean their insights and predictions about how to create a future that works.
As a part of our interview series called “How Employers and Employees are Reworking Work Together,” we had the pleasure to interview Douglas Haynes.
After over twenty years at McKinsey & Company and four years running one of the world’s leading hedge funds, Douglas Haynes founded The Council, now part of Council Advisors, a firm that provides advice and counsel to CEOs and top executive teams. He has lived and worked around the world for over thirty years.
Thank you for making time to visit with us about the topic of our time. Our readers would like to get to know you a bit better. Can you please tell us about one or two life experiences that most shaped who you are today.
I was born and raised in West Virginia, with my childhood in the 1970s. While I did not appreciate the difference between life in Appalachia and the rest country at that time — there was no internet and social media to remind me of what others had that I did not — I realized that things were tough for most of our community. My father was a professor for the state university and my mother worked in the Head Start program. Most of my friends’ families dealt with unemployment, substance issues, divorce, and other difficulties. My parents put a huge emphasis on personal discipline, though they didn’t use words for it, and education. I owe them every iota of the success that I have enjoyed.
Let’s zoom out. What do you predict will be the same about work, the workforce and the workplace 10–15 years from now? What do you predict will be different?
In Ecclesiastes, it says “what has been will be again, what has been done will be done again.” Mark Twain’s spin on this wisdom was that “history does not repeat, but it does rhyme.” I think that many things we see in the workplace today were common before the era of global corporations and many things we see now will be here in 10 to 15 years. The notion of lifetime employment, corporate pensions, and single-company careers did not exist prior to the post- World War Two mega-corporations. As technology lowers the costs of forming new companies, reaching customers, and providing infrastructure, we will see more and more employment in smaller, privately-owned businesses. As a result, careers will be defined by constant learning and adaptation, not dues-paying and loyalty.
What advice would you offer to employers who want to future-proof their organizations?
Dick Foster’s formative book, “Creative Destruction” shows that the forces that drive the rise, maturation, and decline of companies are neither new nor avoidable. If one were to boil down the lessons of the book to their essence, it would be to attack yourself before you are attacked. I think that extends beyond competition for customers. Employers should think through how they must win every stakeholder — investors, customers, employees, communities — over attackers.
What do you predict will be the biggest gaps between what employers are willing to offer and what employees expect as we move forward? And what strategies would you offer about how to reconcile those gaps?
I would prefer to focus on areas of alignment. There are several things that are good for employees and employers — mutually beneficial interests. Those include: professional development, opportunity creation through growth, and elimination of waste. Almost everything else falls into one of the win-lose categories. For example, I saw a confidential employee survey that asked employees whether they thought they were underpaid, paid appropriately, or overpaid. No surprise, around 95% of employees thought they were underpaid, 5% thought they were paid appropriately, and no one thought they were overpaid. The same company had conducted extensive internal and external benchmarking on compensation that showed they paid, on average, at the 80th percentile of the industry and had many employees at over above the reported 99th percentile. These gaps will never go away. Finding new ways to develop the areas of mutual benefit is the productive path.
We simultaneously joined a global experiment together last year called “Working From Home.” How will this experience influence the future of work?
We should remember that there are many jobs that will not be affected at all — manufacturing, hospitality, aspects of healthcare provision, and most traditional trades require physical delivery of value. Other jobs have been mostly remote, or hybrid, for a long time, such as sales, consulting, and other forms of service. Our response to Covid-19 affected everybody — and put many categories of employees temporarily out of work. What will change most are white collar jobs with predominantly solo delivery, such as contact and support centers, accounting and finance, and computer programming. I think the biggest change will not be dissolution of the workplace — it will be how the workplace is used. Those who deliver their work in a solo fashion still need mentorship, camaraderie, and inspiration. Human relationships matter now and will continue to matter.
We’ve all read the headlines about how the pandemic reshaped the workforce. What societal changes do you foresee as necessary to support a future of work that works for everyone?
I believe that history shows that work adapts to deliver what customers need and society adapts to deliver that work. Urbanization, expansion of higher education, and increasing IT literacy all reflect this phenomenon. If one looks at the traditional public education curriculum in the U.S., it was designed to prepare the general population to work productively in a manufacturing-based economy. This is probably the single biggest area for societal change — making sure that our public education capabilities match the nature of work as it evolves. There are plenty of sources of resistance to the necessary changes, but we must overcome them for the benefit of society.
What is your greatest source of optimism about the future of work?
Free market capitalism. The facts are clear that free markets have improved the general living conditions of the world more than any other force. Capitalism moves resources to the highest and best opportunities. Matthew Ridley’s book, “The Rational Optimist”, offers a clear and fact-based observation of how much better life is than it was historically, and that trade, specialization of skills, and competition have driven the improvement. I am optimistic that free market capitalism will continue to work if we let it.
Our collective mental health and wellbeing are now considered collateral as we consider the future of work. What innovative strategies do you see employers offering to help improve and optimize their employee’s mental health and wellbeing?
I think the shifts in the nature of work have little to do with the apparent decline in our collective mental health. I believe that pervasive media and entertainment are the source of feelings of inadequacy and insignificance that lead to anxiety and depression. During the Covid-19 restriction period, the consumption of media, social media, and digital entertainment increased for everyone — as did reported anxiety, depression, and substance abuse. I think employers should offer programs for the people in their organizations who are suffering — but I think they can do more by giving their people alternatives to allowing their digital devices to be their only source of stimulation.
It seems like there’s a new headline every day. ‘The Great Resignation’. ‘The Great Reconfiguration’. And now the ‘Great Reevaluation’. What are the most important messages leaders need to hear from these headlines? How do company cultures need to evolve?
Enterprise leaders need to realize that motivation comes from several sources and compensation is amongst the least powerful and sustainable. Need Doshi and Lindsay McGregor’s bestseller, “Primed to Perform”, offers the best-researched summary of professional motivation and satisfaction you can find. It shows that certain non-financial aspects of work and belonging to a team and company are far more motivating and retentive than cash or other perks. While I think that these headlines sensationalize the situation, it is clear that a larger number of employees are not getting the non-financial nourishment they need from employers.
Let’s get more specific. What are your “Top 5 Trends To Track In the Future of Work?”
- Venture business launches. There have been roughly 100,000 venture-funded launches over the last decade and somewhere between 20,000 and 25,000 exits. If we assume the same number of failures as exits — and that is a guess — there are around 50,000 privately-funded growth businesses that will adapt, innovate, and invent new ways of working.
- Gig worker regulation. For flexible work formats — “gig” working — to be sustainable, there will need to be some form of taxing companies that use flexible workforces to provide benefits for those employees. If not, gig working risks drifting into exploitation of workers or an arbitrage of publicly funded benefits to private enterprise. If gig working is more regulated and employers appropriately taxed, this form of flexible work format could thrive.
- Gallup’s index on optimism. Gallup is a household name for general population trends — what is less well-known are their insights on social trends as predictors of unrest. Their proprietary take on optimism has proven to be a great predictor of whether or not societal changes are “working” for the broad population.
- Policies of highest performing companies. At some point, it became common knowledge that Amazon uses vertical memos to frame issues and propose solutions or ideas. I have seen this practice — sometimes employed well, sometimes badly — surface in dozens of other companies. Large companies with rising share prices have a disproportionate effect on adoption of new ideas and practices. Watch the winners to see what becomes mainstream next.
- Unemployment/not seeking employment. The impact of AI and automation will affect “white collar” work significantly over the next ten years. If the remote and hybrid work phenomenon is most relevant to solo delivery of non-physical tasks, as I mentioned earlier, what becomes of it if those tasks are replaced by AI?
I keep quotes on my desk and on scraps of paper to stay inspired. What’s your favorite “Life Lesson Quote”? And how has this quote shaped your perspective?
“Those who would give up essential liberty to purchase a little temporary safety, deserve neither liberty nor safety.” Ben Franklin wrote this in a letter on behalf of the Pennsylvania General Assembly following the French and Indian War. It turned out to be prescient regarding the catalysts of the American revolution. The life lesson version might be “Every compromise made based on fear will result in the loss of integrity and the realization of the fear.” Every good decision I made in my career has come from doing the right thing, for the right reason, no matter what the near-term risk or loss appeared to be. Every bad decision has come from taking the easy way out when I was fearful of losing something.
We are very blessed that some of the biggest names in Business, VC funding, Sports, and Entertainment read this column. Is there a person in the world, or in the US, with whom you would love to have a private breakfast or lunch, and why? He, she, or they might just see this if we tag them.
There are too many to list! I would like to have breakfast with Bill Maher — I find his perspectives on issues thoughtful and his way of describing them highly engaging.
Our readers often like to continue the conversation with our featured interviewees. How can they best connect with you and stay current on what you’re discovering?
The Council Advisors website — counciladvisors.com — is the easiest way. I don’t tweet — as you can tell from this interview, I can’t express myself coherently in 280 characters.
Thank you for sharing your insights and predictions. We appreciate the gift of your time and wish you continued success and good health.