Leaders have an obligation to the middle. Obligation, as described by Paul Collier in his book The Future of Capitalism, is what we ought to do, based on our values – not our wants. Obligation embraces fairness and loyalty, two of the six values Jonathan Haidt documented in his book and research. We need to renew our leadership obligation. Today, our ideologies and greediness have zapped it. Obligation can center leaders in our greater responsibilities and create a better community within business and society.
Losing Our Sense of Obligation
Too many have lost their sense of obligation. The result is a disappearing middle and a growing gap. In business, CEO pay in 2017 stood at 312-to-1 when compared to worker compensation, a stark difference from 1989 when it was 58-to-1. The disparity extends to pay increases, too. While CEO pay rose 17.6 percent in 2017, worker pay remained relatively flat with only a .3 percent. The pay gap extends to society. Middle-class family income levels in 2016 were comparable to 1989 levels. Income growth was faster for the top 20 percent, experiencing a 95 percent growth compared to 28 percent for the middle households.
What is our obligation to maintain a meaningful middle? Just as organizations cannot survive without a good middle, society cannot either. Whether we want to recognize it or not, there is a moral obligation to capitalism. Adam Smith recognized this, too, but we seem to ignore this element. Instead of creating and maintaining a level playing field, we have tilted it to two extremes, and the middle and lower levels have suffered.
A Leader’s Obligation to the Middle
As a good leader, we have an obligation to fairness. Instead of being good leaders, maybe we need to embrace Dr. Dolly Chugh’s concept of being “goodish” so that we strive to be better humans and leaders. I believe the middle is ready to rise, so leaders have a choice of whether to renew the middle or face greater regulation. Our obligation to the middle extends to organizations, society, and compromise.
Organization – Middle Management
Maybe middle management is an outdated term, but it still exists, just in a different form. Middle managers are what make work work. Middle managers are the managers of projects, products, accounting, sales, human resources, and other key functions. The middle coordinates, facilitates, schedules, measures, adapts, implements, encourages, listens, and makes progress. Without these individuals within an organization, little would get done.
Leaders need to recognize the importance of the middle. By doing so, they treat them fairly, and they give them the resources that they need. The middle knows when a leader is self-centered and self-serving. Leaders need to drop their self-importance and realize the importance of the people who design, produce, market, sell, bill, and support products and services.
When there is a respectful alignment between the leaders and workers, loyalty happens along with results. The leadership imperative is fairness to the middle and a focus on the bigger purpose of the business.
Society – Middle Class
Just as organizations need a sound middle, society does too. Movement between classes is a part of the American dream and pursuit, and this should not change. What has changed is a lack of respect for the middle and, really, a renewed respect that translates into fairness. Instead of rhetoric to the middle, results matter.
The Securities and Exchange Commission adopted a rule in which public companies had to report median compensation of employees along with CEO compensation, and 104 of the companies have median compensation for employees below the federal poverty level. Add to this the fact that gender pay equity does not exist yet. In a Pew Research Center study, women earned 82% of what men earned in 2017. Neither can continue if we want an equitable society.
Some changes are underway. Intel reached gender pay equity worldwide, and Salesforce is working toward the same goal. Pay equity is not a one-time event; it is a continuous assessment to ensure equity through time. Leaders need to be proactive in delivering pay equity and equitable opportunity. Leaders who respect the individual and their talents understand what fairness means and their obligation to it.
Compromise – Middle Solutions
Why did compromise ever get a bad name? It needs to stop. Ideology has taken over, and it has pushed many citizens into opposite corners. What is lost is the middle – the people who want to see progress and a better society. Betterment is a mission that more leaders need to adopt. Pure ideology only serves a select few. Citizens need to wake up to this fact, as do leaders. Good compromise leads to good solutions. Good solutions lead to good progress. Goodish leaders know that growth comes from learning, adjusting, and becoming better in thought and action.
Even the U.S. Chamber of Commerce is beginning to realize that extremes do not equal progress. The Chamber is changing their legislator rating system to recognize those who reach across political party. A small step being taken, but it is a needed first step. Maybe the business leaders who are a part of the Chamber will follow suit and start supporting political leaders who have the will to do what is best for the country rather than their self-interested re-election.
Leaders: Rise for the Middle
I am a product of my upbringing. I am in the middle of four siblings, and I grew up on a farm in South Dakota. Being the middle child, keeping everyone together made sense. Being a farmer’s son, opportunity was just a summer away. My career spanned from politics in Washington, D.C., to business in Austin and Dallas, Texas. I don’t believe that I lost the spirit of the middle, and I believe leaders need to recapture the spirit and obligation to respect the middle and enliven the middle path forward.
Are you ready to lead for (and with) the middle and more?