I’ve just finished reading the book Lab Rats. Oooh, it’s a belter. It has properly reignited a voice in my head that had been squashed and told to ‘shhhh’ many times over my career. It has given me a real boost to push forward with my mission to make work a more human, fulfilling and inspiring experience for us all.
It is written by Dan Lyons who at the age of 52 was laid off from his job in journalism at Newsweek. This happened with no warning. He had 7 year old twins. Getting fired sent him into a tailspin. He ended up making a career change and landing a job at a start-up in Silicon Valley. He hated every moment of the two years he was there. When he left, he wrote a book called Disrupted which he thought was simply a funny memoir about a fifty-something journalist trying (and failing) to reinvent himself. When the book came out, however, his inbox filled with stories from people who shared the same feelings of disillusion towards work. The volume of emails, from all around the world, from all genders and all industries painted a picture of people enduring a soul-destroying experience of work. So Lyons started researching and exploring and digging. Lab Rats is his view on why modern work makes people miserable.
The book is brilliant and touches on many compelling and emotive points. But the common thread that runs through it is that the model of shareholder capitalism has been pushed too far. It’s gone off the rails and is the driver of much of our work misery.
"Everyone is obsessed with growth, but nobody knows why"
A miserable model
Shareholder capitalism has been the model of business for the last half century. It was born in 1970 when the economist Milton Friedman published an essay in the New York Times magazine where he argued that people who manage companies should have only one goal; to make as much money as possible for their investors. In the era before this essay, stakeholder capitalism was seen as the best way to succeed, where companies serve all stakeholders - employees, customers, society and investors. Yet Freidman’s doctrine was quickly accepted as the correct way to run a business and the balance tipped away from stakeholders to a model that put investor returns above all else.
What Lyons discovered is that the arrival of the Internet and the dotcom boom pushed the gospel of shareholder capitalism to new extremes with companies taking the grow-at-all-costs, investors-take-all business model to new heights. Since 2000, the game has changed and has created a huge gap with a few winners at the top and many losers left behind. Lyons shares two data sets that demonstrate this shift:
The gap between workers and CEOs
In 1980, the average big-company CEO earned 42 times as much as the average worker, according to the Institute for Policy Studies. But by 2000, CEOs were making 525 times as much as workers. The ratio dropped a bit after the bubble burst, but never returned to pre-2000 levels. As of 2016, big-company CEOs were still making 347 times as much as regular workers. Apparently, this is the new normal. Somehow, after the Internet came along, the world decided that CEOs should get paid a great deal more than in the past.
The gap between haves and have-nots
The economy has been growing, but almost all of the benefits of that growth go to the highest-income earners, leaving the rest with scraps. In 1970, middle-income households reaped 62% of aggregate household income. By 2014, their share had fallen to 43%. The share going to the upper-income households grew from 29% to 49% over the same period. The middle is disappearing, leaving a big gap. (2015 Pew Research Center report.)
The reality is that the vast majority of us are grafting each day to ensure that someone else gets richer. This is pretty demoralising in itself, but add to this the fact that we are all being pushed to achieve more and more. We are grafting within the model of ‘grow-at-all-costs’. Facing crazy growth targets for no real reason other than greed. The aim isn’t for sustainable, long term growth, but fast growth where the minority at the top get rich quick and then leg it, leaving behind a workforce who are pushed beyond their limits and completely burnt out. As Jason Fried, founder and CEO of Basecamps puts it, “Everyone is talking about working longer hours but getting less done. Expectations are out of control. Everyone is obsessed with growth, but nobody knows why.”
Sorry for the bleak picture. But fear not. What I loved most about reading Lab Rats is that the tide is turning. More people are figuring out that shareholder capitalism can only lead to a dead end. A new model is needed, one that can do something other than just help rich people get richer. A model of capitalism that is a force for good, that is still pro-business, pro-growth, pro-profit but rooted firmly in humanity, fairness and decency.
My fun relationship with shareholder capitalism
Reading this took me right back to the influential early years of my career. Without really knowing it, I took on shareholder capitalism (and lost).
Fresh out of uni, I headed for the Big Smoke, excited to start my career on a Graduate Programme in a media agency owned by WPP. The starting salary was a pitiful £16k but with an immediate promise of a structured 2 year programme with rises along the way. I jumped in and accepted that you had to start at the bottom and climb. Years of studious graft for good grades in GCSEs, A-Levels and Degree had got me to this ladder. I’d made it right? Time to climb and soar!
I threw myself into the experience. I was a professional woman living it up in London!
Except I wasn’t living it up at all. I was living in a pretty miserable flat that overlooked Clapham Junction train station. My view when I stood washing my mug in the kitchen sink was this glorious sign. A strapline earned through having a train departing every 30 seconds, about 110 trains an hour. Didn’t I know it!
But I accepted the deal and worked hard. The hours were long from the beginning. Some days I would be in the office for 7.30am and finish work about 14 hours later. I’d often end the day heading down to the bar in the office basement with the other Grads as it was subsidised and so was pretty much the only place we could afford to socialise. I could literally go days without seeing sunlight (I was a Grad so clearly didn’t have a window desk!).
I grafted hard in my first year, passed all the challenges thrown at me, put in the hours, ticked all the boxes and got a glowing report. The first £1,000 rise was within touching distance. And then the news. There was a pay freeze. It was never verbalised but there was the constant understanding that there was a line of willing Grads desperate for my job and that I should be grateful for this opportunity. So I clocked this one down to bad timing and carried on. I only lasted a few years in London. For my two and a half years graft, my salary stuttered up but remained below £20k.
In that same period of time, the then-WPP Chief Executive enjoyed an 80% jump in his salary to £1.6m. Well done him. (https://www.campaignlive.co.uk/article/wpp-chiefs-salary-jumps-80-16m-bonus/181232)
The pay freeze felt like a bitter pill to swallow. I’d been sold the structure of the Graduate Programme. It felt like a clear deal; You work stupid hours and jump through all the hoops we set you for 12 months, and we will pay you £1,000 more. I’d held my side of the deal, it felt wrong that WPP weren’t prepared to honour their side. So I challenged it. It just didn’t feel right to me that all the thousands of people working crazy long hours across the WPP network were being told there was no money. Not even for rises in line with inflation. And yet there was money for the top dog. A lot of money. The response I got was that I was naive. That “this is how business works”. That the shareholders come first above all else. Pipe down and crack on. And I did. I fully accepted that it was naivety on my part and over the years that followed, I shushed the voice that occasionally chirped up in my head about the unfairness of the system. Shhhh, naive one. This is business, it doesn’t have to be fair.
So to read Lab Rats and see that there are other people who believe we can, and must, do better feels really, really good! I feel cross with myself that I accepted something that is so obviously off-balance for so long. But I also feel motivated and inspired to finally try to do something about it.
Making the world a better place
My favourite bit of Lab Rats is the stories of people doing incredible things to push back against the greed-is-good story and demand that workers should share in the wealth their labour creates and stand on equal footing with investors.
People are out there creating a new ideology, a new form of capitalism. At the core of this new ideology is simply a sense of humanity. A sense of doing the right thing, of treating everyone with respect and wanting to use your time and energy to make the world a better place.
Changing the entire system on which the business world is built does feel a little intimidating. But through reading the stories in Lab Rats you start to see how it’s just about individuals standing up and doing what they can. It’s about chipping away at the foundations of shareholder capitalism by doing things a different way.
There are some big stories, such as Dennis Shaughnessy, a wealthy corporate lawyer who decided after 9/11 to try to bridge the gap between “raging capitalism and sloppy, inefficient nonprofits” by creating a program teaching business students about social entrepreneurship (the notion that companies could both turn a profit and be a force for social good.) Hundreds of similar programs now exist at universities around the world, sending thousands of young people into the world believing that capitalism can and should be used to elevate humanity.
But there are also some smaller (but equally brilliant) stories, such as Ali Kothari, who runs a Boston-based start-up called Eat Your Coffee. Kothari chooses to buy his coffee from Grounds for Change, a roaster that passes part of its revenues to nonprofits. That means Kothari’s company has paid for kids in Nicaragua to go to school.
We can all do our bit to drive positive change. Lyon captures it brilliantly, saying:
But you don’t have to touch millions of lives or makes billions of dollars to change the world. If you employ 10 people, and they all get good benefits and a decent wage and feel happy at work - then you just made the world a better place. If you pay taxes and help build schools and feed kids, you just made the world a better place.
We can all do our bit. Even if we aren’t the boss. Think about suppliers you use and see if there are changes you can make to use businesses who aspire to make positive change in the world.
And we should all feel a bit more confident in pushing back against the lazy excuse of “that’s just the way business is”. We all deserve to feel like we are getting a fair deal. Strip away the business bollocks and it comes down to common sense and basic humanity. It’s not naivety. Sure, a business needs to make money, no one is questioning that. Sure, the top dog rightfully earns more than me. But is the deal a fair one in which all parties are treated with dignity and respect? Surely that can’t be too much to ask of our leaders?