Humanized companies are more profitable

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Text by Pyr Marcondes, Senior Partner at Pipeline Capital Tech.

Research shows that with an administration focused on the well-being of employees, profitability can reach twice the conventional level, in addition to generating more engagement among employees

The humanization and well-being of employees have gained considerable relevance in recent years. In a study entitled Humanized Companies in Brazil, carried out by researchers from the University of São Paulo (USP), São Carlos campus, and released in 2019, it was revealed that companies that follow this more humanized line, that is, companies that have a purpose that goes beyond profit, are concerned with meeting the needs of all stakeholders, in addition to having a conscious culture and leadership. And this results in a higher profit compared to conventional management companies.

The survey analyzed the companies in a period between 4 and 16 years of humanized management and concluded that they increased their profitability. In this interval, the Humanized Companies achieve profitability two or more times greater than the average of the 500 largest companies in the country. Still according to the survey, these companies manage to have a 240% higher satisfaction with their customers and a 225% increase in well-being among their employees.

One of the points that help in this more humane culture is involving the employee in decision-making, which means having a more horizontal management, with less hierarchy. An example of a company that has this type of management is Netflix. Consultant Omarson Costa, who helped structure the streaming company’s operation in Latin America, says that Netflix works responsibly on the issue of freedom. “It takes as much as possible out of people and that is what makes the company different from the others”, says Costa. And he adds: “the Netflix culture delegates a lot of power to executives and employees. So people could actually lead and show the best options and paths”.

Omarson points out that in companies that have more hierarchical cultures, the employee who arrives with different ideas tends to be mocked and slaughtered. “What is his best, is treated as his worst, and then you will lose that talent, organizations end up killing these talents”, explains the consultant.

For Omarson Costa, this type of organization limits people’s potential, and causes professionals with initiative to leave the company. “You end up losing the good talent and keeping the average talent. You stay with that professional who gets a 7 to pass, but that professional who gets a 10, he doesn’t usually stay in this kind of very rigid environment, “he recalls.

According to Omarson, companies that have this type of less hierarchical management tend to keep more talent on their team. “Human talent is going to make an increasing difference in the 21st century and in these new organizations”, emphasizes Omarson. The executive also adds that for companies to maintain the freshness of when they were founded, they must be constantly reinventing and questioning themselves.

The advancement of technology in companies, driven by the Covid-19 Pandemic, has also changed the way companies are managed. For Pyr Marcondes, Senior Partner at Pipeline Capital Tech, technology has put managers against the wall. “Technology imposes new management logics, formats and dynamics on managers. Managers are hostages of technology in this sense, since it is what transforms and managers have to run after it”, concludes Marcondes.

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