The Power of Investing in the Immutables – Especially During Times of Uncertainty
By Chetan Bagga, CEO Archetype
Check any business news today, and you’ll find lots of chatter about recession. Are we already in a recession? If not, when will it happen? How low will the market go – and for how long?
Uncertainty has always been a part of the business landscape.
And it’s human nature to try to sniff out as much certainty as possible in order to make smart investment decisions that pay off – ideally in the short term, but even more importantly, in the long term.
It is likely that a significant number of high risk, speculative businesses will disappear as market uncertainty increases. Why? Because they lack the fundamentals for resilient growth – the solid business cases that deliver the kinds of real, tangible value that customers will find a way to pay for regardless of market conditions.
What about the rest? What will ultimately determine which solid, nonspeculative companies will survive – and ultimately thrive – through the next downturn? I believe a critical success factor will be the quality of their people and how management chooses to invest in them to help them be effective, happy, and satisfied with their jobs. The importance a company places on the immutable value of its employees will make all the difference in the longevity of its business and its employees.
It’s hard to overstate the importance of investing in employees today – especially in an uncertain, post-COVID world.
With so many people retiring early, leaving jobs altogether, and job–hopping for more money and greater job satisfaction over the past two years, hiring and retaining top talent has become a tremendous challenge. Moreover, we’re seeing these trends persist despite growing market uncertainty. This suggests how deeply – and most likely permanently – the pandemic has transformed worker expectations regarding pay, employee experience, and overall job satisfaction. People have emerged from the pandemic with a whole new perspective on the importance of work-life balance, flexibility, and job satisfaction, which is a function of being both effective at work and feeling happy with where you work and what you do.
At Archetype, we’ve always understood the importance of investing in our people by:
- Augmenting human capacity with technology – because it results in more effective, productive humans who innovate and drive businesses forward. At Archetype, we have always approached this in a way that gives our people a say in identifying the tools they need to deliver great work for our partners.
- Augmenting the human experience with innovative benefits, educational opportunities, and more – because it results in happier and more engaged humans
- Augmenting the traditional career path – because employees need more of a say in the projects they contribute to, their professional development, and opportunities to learn what they are passionate about.
When you invest in these, you cultivate happy, productive, effective employees focused on keeping your business functioning, thriving, and growing. This enables you to do well in any market – especially complex ones where businesses are fighting over talent and trying to save money. Why? Because you’ve created foundational resilience. Like a well-built, resilient boat, your business can stay afloat as the tide goes up or down – and even weather a bad storm.
The companies doing well five years from now will be the ones with happy humans empowered and motivated to do extraordinary things.
This is true regardless of whatever economic downturn may come our way.
To illustrate, consider companies that have found ways to thrive during times of austerity, like the 2008 recession, as well as the post-pandemic world as a result of their employee-focused company culture. Starbucks, during the 2008 recession, chose to invest in its people in order achieve its end goal: improving customer service. To this end, Starbucks hosted a conference where management explained to store managers how they contribute to the Starbucks business and how to “give them a voice and sense of ownership of the brand.” Though its end goal was to improve customer experience, it did so in a way that valued the employees.
Similarly, during the economic stresses of the post-pandemic period in 2020-2021, Starbucks invested in its partners – specifically by strengthening the partner experience. To achieve this, they implemented a ‘Training Store’ concept in locations in the U.S. and increased referral bonuses for store partners. They also introduced new behind-the-bar equipment and technology, including a new Cold Beverage Station that makes it easier to handcraft beverages and connect with customers. Corporate also engaged retail and support partners in innovating and improving the partner and customer experience by bringing them to Starbucks’ 20,000 sq. foot Tryer Lab in Seattle. Why? Because Starbucks believes that success is best when it’s shared with its people.
Multibillion-dollar Airbnb provides other proof points for investing in the immutables during a recession. Airbnb began in August 2008 as a simple online platform so that the founders could rent out an air mattress in their apartment in high-rent San Francisco. When the Great Recession hit later in 2008, there was an explosion in demand for short-term, low-commitment living quarters – and by first quarter 2009, the site had over 10,000 users, 2,500 listings, and a list of big-name investors. The rest is history.
Bur the secret to its success has been its investment in corporate culture. Management has focused on creating a culture of belonging – one that inspires every single employee and helps them naturally thrive and produce. To this end, Airbnb is very intentional in how it cultivates its day-to-day work culture so that it’s reflected in everyone’s daily behavior. The company’s 2021 financial results are proof that Airbnb’s investments in people during the height of the pandemic paid off – Q4 in 2021 was Airbnb’s strongest quarter ever.
Where should you focus your people investments?
This is the “art” part – because investing in the immutables, meaning your people, can mean different things for different organizations. Archetype is on a mission to make work better for 50 million people. Driven by our values, we enable businesses to put employee growth and health at the center of the organization by harnessing the best of consulting and investing. Reach out to learn more about how we create solutions that elevate workplace benefits and people development.