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What Happened to Loyalty?

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By Patzer
March 9, 2009

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Sometime down the road, the historians and business analysts will write a lot of books about what happened and why. There will be a lot of studies done to figure this out. Without the benefit of any such studies, I'll make a wild guess that the consensus will include among the major causes something like this:

In an era when people went to work for the same corporation for life, employees identified with the company. They came to believe that the company's successes were their successes, and the companies failures were their failures. They promoted the company's best interests and public image on their own time, and the men on top managed the company to behave as they believed a moral member of society would behave.

That ethic was undercut as corporate culture changed. Company loyalty went out of fashion, and layoffs became just another tool to improve earnings per share. The prevailing career model shifted to hopping from one company to another, with top people spending perhaps 5 to 10 years with one employer before moving on. While this had the benefit of allowing recovery specialists, it also necessarily changed employee's viewpoints. The company is no longer an extension of self; it is a means of support for however long the employee is there. At the top, the senior executives are always looking to the next major bonus for signing somewhere else. Further down the food chain, lesser employees are either concerned with polishing a resume for a better job, or concerned with how to find as good a job if the company chooses to let them go. With senior leadership routinely being hired from outside the company and making changes when installed, the employee base as a whole will see the company not as an extension of themselves but as an external force that acts on their lives.

The demise of company loyalty to employees had, as an inevitable consequence, the demise of employee loyalty to the company. The disengagement of employees' emotional identity from the corporate identity that resulted from this bilateral elimination of loyalty had, as one of its consequences, an undermining of companies' ability to act in their own best interest.

When a company is run by employees with no emotional stake in its long term future, we should not be surprised by actions described as "looting the store before the cops show up."

It was the banks that blew up, but the underlying issue is bigger than just banks.