Jeffrey Pfeffer is the Thomas D. Dee II Professor of Organizational Behavior at Stanford’s Graduate School of Business. Pfeffer’s recent works, particularly his last two books, The Human Equation (Harvard Business School Press, 1998; reviewed in LiNE Zine, Summer 2000) and Hidden Value (Harvard Business School Press, 2000; co-authored with Charles O’Reilly), have taken a strong stance in support of truly “people-centric” companies—the organizations whose cultures, processes, and ways of working get the best from often ordinary people. Pfeffer has challenged much of the current vogue for the “war for talent,” with its implications that success necessarily depends on plugging the best people you can buy into a predetermined strategy and organizational structure. The Stanford professor instead highlights the “traditional paradigm upside down”—letting strategy and performance emerge from the development and alignment of people.

In a recent conversation at his home in California, we ranged far and wide over his research and its many themes relevant to the human capital revolution. Ebullient, erudite, and jumping from point to point with often dizzying pace, Pfeffer sketched a vision of those companies who really do put people—their abilities, passions, and values—at the core of what the organization creates and sells. Not surprisingly, our discussion touched several times on the question of work/life balance and the integration of learning; relevant excerpts are published below.

Manville: The SAS Institute is the “poster child” of the company that creates an environment that respects and even protects the personal life of its employees. But what about some of the other people-centric companies you have studied—Southwest Airlines, The Men’s Wearhouse and the like—where a big part of the idea is to create an atmosphere of passion, engagement and enthusiasm for work—as much off the job as on the job, or so it would seem. How do those companies think about work/life balance? And learning?

Pfeffer: I don’t think organizations need to tell people when to go home; the problem occurs in those organizations where people are compelled to not go home, whether formally or informally. You know, even at SAS, during periods of big projects, people stay late. I’ve been there many times, after 6:00 p.m., and it’s not like you never see people working late. However, it’s not expected or encouraged.

The real question is how to help people understand what they want for themselves, and then make it easy for them to do the right thing, both for themselves and the company.

One of my favorite stories is about AES (originally Applied Energy Services), which Bob Waterman rightly called one of the best managed companies in the world. A woman I know who worked there became pregnant, and began to wonder whether and how much time she should take off. She went to her boss and said, “What’s the AES policy on pregnancy and leave?” He thought about it, looked around on his shelf and then said, “Well of course, we don’t really have a policy.” AES has almost no policies about anything. The boss then initiated something that would be considered very new in a lot of organizations; he said, “Let’s actually think about it together.” He told the woman, “Look, you know your obligations to the big project you’re doing, and you know your case is different than various other people. You know what you want out of taking some time off; you’re in a different life stage maybe, have a different situation. It’s not for some policy to decide…you should decide. You should do it in consultation with your husband and family, co-workers, your project team, and me. There will be alternatives to cover for you. Think and do the right thing, but do so, of course, consistent with the needs and performance requirements of this company.”

Volkswagen is another company with this kind of outlook. It’s about creating an environment of thinking together about the right answer for each person working there, within the framework of what the business needs to accomplish.

Manville: Let’s add into the discussion the question of learning. Amidst all the work/life balance, there are the other convergences of learning and work and learning and personal life—so-called lifelong learning. What’s the right answer for the post-modern organization? Should it encourage workers to take learning home with them? Is that a good thing?

Pfeffer:  They ought to encourage you to do what you need to develop yourself in whatever way you want; and they ought to make things easier so you can do so.

There’s a great story about British Rover in the days before it was purchased by BMW. At one point a new CEO came in and saw that they needed to change the culture in the factory. He wanted to upskill the workforce so it could compete better with the Japanese. People asked him, “How are you going to do that?” He said, “First, we’re going to give everybody a 100 pound allowance for learning.” And somebody came to him, and said, “I’d like to take a course at a cooking school.” And executives asked the CEO, “Did you allow that? Why should he be able to take a cooking class?”  “Because,” said the CEO, “I don’t want to do anything to discourage this guy from learning—anything. Once he gets into the habit of opening his mind, exploring new things, who knows what he might discover and want to learn about things related to the job?”

Manville: A great story, indeed. How do other companies think about these kinds of issues?

Pfeffer: At AES, the energy company I mentioned, they don’t have formal training programs, they don’t have AES University, they don’t have HR people to go out and make people learn. It’s in the culture to just make people responsible for what they need to do. They simply say, “We’ll make you responsible for all you’re willing to take on.” 

At their Thames, Connecticut plant on one occasion, they had $8-10 million of debt reserves. Somebody asked about it, and the people in Maintenance—people without college degrees—stepped up and said, “We want to learn how to do manage the reserves.” They were given the OK and went out and learned everything they needed to, they talked to financial people, took courses, everything. You know what? They ended up doing better than the people in Treasury in managing the reserves. Those people had done it for a hundred years and they were bored. Of course the new people did it better!

The lesson here is about demand-driven training, personal motivation, not push. And accountability for their own learning. The manager said it all: “Once people know they have responsibility and have to make decisions, they’ll go out and learn what they need to know—if you give them the freedom to do it.”

Manville: But let’s push a little harder about learning in versus out of the workplace. How does that play out in the companies you have studied? People at Amazon tell me that they actually discourage people from learning at home; part of the value proposition is that “We don’t want you to bring work home;” we therefore provide it and expect you to do it in the workplace.”

Pfeffer:  SAS Institute training is all done on the job, and I’m pretty sure New United Motors (the GM/Toyota joint venture, NUMMI) is the same; it’s unionized and in line with the Japanese model. At The Men’s Wearhouse they have Suits University, and it’s also part of the job. Southwest Airlines also expects its employees to learn on the job.

But the question misses a key dimension of learning we need to understand. It’s about the secondary effects of learning beyond just knowledge, and very much related to the workplace itself. For example, take Suits University at The Men’s Wearhouse. There are three effects of the training, but the first two are the least important. First they learn about fabrics, fit, fashion, style, and the tactical stuff of men’s clothing. Second, they learn about sales techniques. But third, and this is the biggest effect, they learn about professional self-confidence—something very different for the downtrodden retail worker of America. They go through four days, and already at the end of the first day, they have been treated like professionals. This is a huge boost for their self-respect. The company, taking them into this training, has demonstrated to them that they are honored, worthy, and something more than the typical worker—they don’t just open the store, close the store, run the cash register. It has an amazing effect on people when they feel like professionals.

Companies don’t understand this; if you cut training in the workplace, what’s the message? It’s sending a signal that people don’t matter.

Manville: And presumably once this sense of professionalism has been built up, they are more motivated to learn more and follow up their learning on their own time?

Pfeffer: Absolutely. It expands the horizons. Learning and training is about so much more than just transferring knowledge. And the social context really matters. We can’t forget that.

Manville: Absolutely. We don’t, after all, operate in a vacuum. Thanks for your time—and your great stories.

Jeffrey Pfeffer is the Thomas D. Dee II Professor of Organizational Behavior in the Graduate School of Business at Stanford University. As the author or co-author of ten books and over 100 articles and book chapters, he is a prolific contributor to the marketplace of ideas around the future of organizations and the people who work within them.

Brook Manville, publisher of LiNE Zine and Chief Learning Officer of Saba, enjoys engaging (and debating!) leading thinkers on the human issues surrounding learning, performance, and organizational and people development. Reach him at brook@linezine.com.

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