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The pioneering “Good Jobs Strategy” is heading mainstream

Zeynep Ton,                MIT Sloan Professor

After MIT Sloan Professor Zeynep Ton published The Good Jobs Strategy: How the Smartest Companies Invest in Employees to Lower Costs and Boost Profits in 2014, executives en masse began reaching out to her for guidance in implementing the concepts in their own organizations. A subsequent TEDx talk, celebrated presentation at the Aspen Institute, cover story in Harvard Business Review (“The Good Jobs Solution”), and numerous reviews and interviews in major publications only boosted the number of leaders who wanted to learn more about the Good Jobs model. In response, Ton co-founded the nonprofit think tank Good Jobs Institute  with Roger Martin, Director of the Martin Prosperity Institute at the University of Toronto. The goal: to help companies thrive by giving them the tools to create something completely counter to the presiding corporate standard—great jobs.

What is the Good Jobs Strategy (GJS)? Why did it go viral? And why is it fast becoming the best practice for a happy, productive workplace? At the root of the GJS is a relatively straightforward philosophy: mutual appreciation. Companies raise their expectations about the potential of their employees, and employees raise their expectations about the potential of their company—and their ability to add to that potential. Companies that adhere to the GJS, according to Ton, put their customers first, and they value their employees as their most important resource for putting customers first.

The smartest investment of all
The GJS is all about investing in people. That means recruiting, training, establishing career paths, creating high performance standards, and offering fair wages and predictable schedules. “It’s time to end the myth that bad jobs are good for the bottom line,” Ton says. “People are finally coming around to the realization that the traditional corporate model is not sustainable, especially when it comes to low-wage jobs (less than $15 an hour)—and a stunning 47 million Americans are working in low-wage jobs.”

Ton adds that among the losing propositions for low-wage workers is an unpredictable schedule. “What I’ve found over 15 years of research into the plight of low-wage workers is that instability in their schedules can make it impossible for them to earn a living wage.” Often, she says, employees are not making enough money at a low-wage part-time job but can’t take on another because their work hours are unpredictable at the first job, limiting their ability to make other commitments. Employers, wanting to stay lean and mean, wish to keep their options open on who works when.

So, what makes a good job? According to the GJS, a good job is work that provides basic needs (fair pay, benefits, job security, predictable schedule, ascendant career trajectory) but also less tangible needs. The work should be meaningful and give the employee enough responsibility to derive a sense of achievement. It should include paths for personal growth, learning, and advancement, and it should engender team spirit and a sense of pride and belonging.

How it works
Ton and GJI executive director Sarah Kalloch, MBA ’16, have gone to considerable lengths to make the Good Jobs Strategy accessible to all. The GJS website includes a diagnostic tool that managers can use to measure their company against four core principles:

1. Focus and simplify
Don’t try to be all things to all customers. Ton points to the pet supply website Chewy and the grocery chain Trader Joe’s as examples of enterprises that know who they are and what their customers want. They have worked to become the best in their particular niches by focusing on narrow product offerings within their specific realms. This model also allows employees to become truly knowledgeable about the limited number of products or services they sell, thus providing greater value to customers. And greater value to customers means repeat customers and, eventually, loyal customers.

2. Standardize and empower
Standardize routine processes and empower employees to shape those standards. Employees should be tasked with making decisions that improve customer service and reduce costs. Shouldering that responsibility gives them a sense of ownership and pride. Once again, having too many products or services is a detriment to this practice. “Too much self-inflicted variability,” Ton says, “means that there are necessarily too fewer standards, because standards become unwieldy when you sell 100 different brands of toothpaste, 20 different varieties of motor oil, and trips to Cancun.”

3. Cross training
Prepare employees to perform a variety of tasks so that they can pivot according to needs. Cross-training gives workers a greater repertoire of skills—valuable both to the company and to the worker. It means that employees are able to respond to customer needs more quickly and more broadly. And if workers are skilled in many different areas, companies are more inclined to give them regular schedules because they are less likely to prove superfluous during their work hours. Cross-training also improves employees’ motivation because they feel more integral to the success of the company. At Costco, a GJS success story, Todd Minor worked for more than a decade in the meat department of another supermarket without advancing. At Costco, he was paid more at the outset, trained in all areas of the unit, then promoted to a more challenging position within six months.

4. Operate with slack
The GJS maintains that if you staff your unit with more labor hours than you expect, your customers will get better service and your employees will make fewer errors. When employees have the skills and the time necessary to solve a customer’s problem, they feel a sense of satisfaction and pride. Just as important, they have strengthened the company’s relationship with the customer. In addition, operating with slack relieves managers from having to continually intervene when overstretched workers don’t have the skills or the bandwidth to handle anything other than rote assignments. This model also results in employees working to more regular schedules, allowing them to make plans in their personal lives without the worry that they may end up forfeiting potential work hours.

But do good jobs pay off?
The Good Jobs Strategy purports to create superior value for employees, customers, and investors by combining investment in employees with operational choices that increase employee productivity, contribution, and motivation. But does it work? Anticipating the question, Ton and Kalloch offer detailed case studies outlining successes at companies like Quest Diagnostics, Mud Bay, and Toyota.

Ton notes that higher-wage jobs are already improving, but she is optimistic that lower-wage jobs will follow suit. She points out that the financial incentives (greater customer loyalty, greater employee retention) and competitive advantage (better service and reputation scores) will eventually prove to resistant companies that the more human-centric approach is actually the less risky way to proceed.

Ton believes that more and more companies are looking beyond the bottom line. “To my delight, I see more corporate leaders thinking about the moral implications of their business models. They want to offer more humane working conditions and provide a living wage so that people can afford to feed their families. And they’re motivated by ethics—their moral compasses are pointing them in the right direction.” And that, she says, is definitely a win for the Good Jobs movement.

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