This article attempts to put together a summary - a coherent basis for a modern-day organization to reassess the full value of its human capital. Businesses that restructure to foster happy and healthy employees always outperform the traditionally dispassionate and inflexible configurations.

Part One: Dark Ages

In one possible future, books will be written, and courses will be taught, all trying to intellectualize how it was at all possible for reasonable people to be so beguiled and betrayed by their own emotions as to run any business in the backwards format that we consider normal today.

We will look back in astonishment and horror at the time when unnecessary personal sacrifices that broke up families, and shortened lives by decades were the norm, and we will be grateful that those dark times are in the past. Alas, at the moment of this writing, these times are now.

Industrialized countries possess technological infrastructure that makes 95% of all labour heuristic i.e. requiring a degree of creativity and independent thought, while the continuously dwindling 5% of jobs are algorithmic, where tasks are repetitive and require little ingenuity or individuality. There exist, however, hardly an occupation where tasks cannot be improved upon with ingenuity or creative thought, and the only capacity in which human participation is needed is strength or dexterity. Since we tend to be better at things we like doing, we gravitate towards occupations where our personal dispositions are best met and reciprocated, where we are free to practice and expand our skill set.

It appears logical that when a person spends most of their alert time in an environment where expression of originality is suppressed, he may become less innovative, and perhaps less independent in his thinking. Because this impersonal comportment is the source of the worker's sustenance, it is only natural that by way of this reward feedback loop, the worker would learn to avoid self-expression, and frown upon originality in other areas of life.

As social animals, we have evolved to depend on meaningful relationships and interactions with others. When these are lacking, people become physically and mentally unwell. Here is a short list of our natural dispositions and needs -

• Autonomy
• Mastery
• Sense of Purpose
• Safety
• Recognition

These are the ingredients for a passionate, motivated and healthy working environment. It is my contention that with any one of these lacking, the worker and the work will suffer. It is surprising then to realize that most modern businesses limit their employees in precisely these areas. A common example, for many, the lack of autonomy brought on by distrusting and/or micromanaging superiors robs them of the chance to own up to their achievements, and to feel pride and recognition for their hard work. Distrust of employees, which is the hallmark of the need-to-know culture of many modern technology businesses, erodes the feeling of safety and belonging resulting in elevated levels of stress and a constrained ability to plan for the long term. Organizations with disempowering practices like these are guaranteed to perform worse and be less competitive. What is especially troubling is that due to the accumulated apathy, resentment and stress most employees may be developing chronic health problems from the effects of their workplaces.

Elephant in the Room

How can we quantify these health problems? Well, one could start with comparing the number of burnouts/divorces/hospitalizations across different occupational fields, and there is a number of authoritative studies tackling the issue of biological stress at the workplace. Daniel Goleman describes two interesting studies: Unhealthy Societies: The Afflictions of Inequality by R.G. Wlkinson and Acute Stressors and Cortisol Responses: A Theoretical Integration and Synthesis of Laboratory Research by Sally Dickerson and Margaret Kemeny in his book titled Social Intelligence -

When a volunteer felt that the other person had made them an unfair offer, [they] were more likely to reject not just this offer but the next one too, whatever it might be. …The social brain makes a crucial distinction between accidental and intentional harm, and it reacts more strongly if it seems malevolent.

These and many other studies clearly demonstrate how emotions influence our professional behaviour, and how the quality of interactions at work dramatically impacts blood pressure and cortisol levels, frequency of infections, immune response, heart disease and other factors that can markedly reduce a worker's life expectancy.

Workers who feel unfairly criticized …have a rate of coronary heart disease 30 percent higher. …In rigid hierarchies bosses …more freely express contempt for their subordinates, who in turn naturally feel a messy mix of hostility, fear, and insecurity. …[B]ecause their salary and very job security depend on the boss, workers tend to obsess over their interactions, reading even mildly negative exchanges as ominous. …[J]ust about any conversation with someone of higher status at work elevates a person’s blood pressure more than does a similar conversation with a coworker.

The inefficient and unscientific way our businesses are run is killing us, causing countless personal tragedies and untold suffering on the global scale. Just to drive this home: most people are dying years younger because of the unhealthy lifestyles imposed by their jobs.

Dehumanization & Desensitization

The pyramid structure of the modern company emerges naturally, and is the result of leadership applied to the field of market forces. This structure is commonly seen in the military, in developing countries' governments, and in most short term organizational arrangements engaged in straightforward, clear tasks. Many if not most businesses are started this way, however few ever mature beyond the scaffolding of the short term configuration that eventually turns into a handicap rendering the organization grotesquely deformed. In such companies it's common to discover bizarre rules, forbidden conversation topics, and misunderstood cargo-cult-like gamification implementations alongside with empty rituals, all of which contribute to the toxic climate at work, and are indicative of the underlying lack of trust and communication.

Although such structuring is favourable in implementing a more accurate centralized control, in complex or long-term projects it shows its ugly side: selective perception bias along the chain, and lack of hands-on expertise at the top result in decision making flaws and the inability to react promptly, all of which hampers the optimal development of the enterprise. This might make one recall the capricious and unscientific policies that led to the Great Famine in China. Here is a poignant quote:

In Xinyang, people starved at the doors of the grain warehouses. As they died, they shouted, "Communist Party, Chairman Mao, save us". If the granaries of Henan and Hebei had been opened, no one need have died. As people were dying in large numbers around them, officials did not think to save them. Their only concern was how to fulfill the delivery of grain.

Because the pyramid shaped hierarchies motivate workers to be promoted, it introduces competitiveness as an inherent attribute of interactions between colleagues. This adversarial aspect of the workplace reduces cooperation and mutual trust, replacing them with apathy, contempt, oneupmanship and schadenfreude. It hinders proper flow of information within the organization, distorting its relevance and significance. All the more disconcerting to see some organizations encourage such feelings by setting up various competitions within. Here is an interesting example of a seemingly benign gamification implementation by Disney gone wrong:

In the basement floors of the Disneyland hotels, large flat screens showed leaderboards pitching the working speeds of the laundry workers against each other. However, instead of the device spurring fun competition – as standard gamification logic would suggest – workers reported that they felt pressured and controlled by this “electronic whip” of their management.

So, despite it's motivational potential, competition between coworkers may distort communication, leaving decision makers with incomplete or skewed data. This compounding lack of reliable data may lead to unsound choices and risky, abrupt course changes dictated by personal preferences and volatile factors like the time of day or the decision-maker's mood.

Role vs Value Orientation

Even when working on the same project, knowledge workers are separated from each other by chains of command and by distrust of each other. Very often different layers in the pyramid do not share the same values and objectives. As such, the middle managers' objective may be to deliver a component on time, not the success of the overall product. Even worse, a regular knowledge worker views himself, and is viewed by others, as a unit, a replaceable cog in the machine. Each workers' role defines the scope of his interest and involvement in the organization. Thus, insulated from business objectives, we orient ourselves by our limited roles: it's not "our job" to care about the big picture.

The notion that employees are "replaceable" hinges on the role-based view of workers in the pyramid shaped organization, and is a necessary factor for its emergence. It contributes to the following:

• lack of trust
• poor communication within the organization
• illusion of infallibility & higher competence of the higher ranks
• motivation by fear
• higher levels of stress

It is important to note that treating employees as replaceable parts in a machine depends on poor communication and a very tangible bias on the part of the officers within the pyramid structure. It makes it necessary to assume that there is no value in a well gelled, experienced team, and no meaning in the interactions between the team members. It also mistakenly assumes that individuals with the same level of experience are always compatible to work together, and perform comparably on different teams.

Replacing an employee may not affect the balance sheet at all, and the costs associated with every team member having to readjust his social hierarchies, and the cost of the "unlearning" of the unique set of perspectives and moral principles that each individual contributes to create a smoothly functioning and coherent team, aren't considered substantial. In reality, these costs pose a critical threat to the accuracy of planning, stability of the schedule, direction of development, and employee health. A departure or replacement of a knowledge worker certainly impacts the projects that he is working or not working on, but because access (not merit) is used as currency, the good old pyramid, where all kinds of useful information is withheld or secretized, is damaged even more: it takes fewer employees to depart for some projects to fail.

Dark Side of the Force

Seeing as the above is a fact of life, easily observable in most modern businesses, we must ask - what force is it that blinds otherwise rational people to gross inefficiencies and negligence, damaging their business, and making their employees less productive? Why do we so consistently underevaluate and damage the human capital at enormous costs to the business?

A revealing contrast presents when we compare how scientific and business objectives are realized. When the same person whom you would have to disagree with, is also the one signing paycheques, there is an obvious conflict of interest. This compromises the process of peer review, which is one of the cornerstones of scientific inquiry, and by its definition not compatible with the pyramid structure. Critical thinking and scientific dissent are referred to as "scientists' obligations" in their search for truth, yet in the business setting these are often grounds for dismissal.

Psychologists have observed that having evolved depending on the people around us, we would rather commit a logical fallacy, bend the truth or knowingly err than disagree with our ingroup. Such tendencies, while often serving to preserve the integrity of the group (e.g. overlooking the leader's flaws), can lead to irrational and counterproductive behaviour. In some extreme cases the narcissistic organization anti-pattern is revealed. In the words of Daniel Goleman:

Shared illusions flourish in direct proportion to the suppression of truth. When narcissism spreads within a company, then those who challenge the self-flattery - even with crucial information - threaten all those who count on the narcissistic high… The knee-jerk response to such threat is rage.

To make the matters worse, the modern business turns out to be calibrated to reward the antisocial behaviour of narcissists, Machiavellians and psychopaths. It shouldn't be a surprise then that antisocial attitudes and behaviour are learned at work, and practiced elsewhere in private lives as depravity and callousness become the major rewarded traits of this society. Sociologists point out that the Dark Ages, the period that saw the technological progress going backwards along with cultural and economic decline, may have been brought on by the high concentration of people with psychopathic traits in positions of leadership. Could it be that we are living in the Modern Dark Age, and most of us do not even realize it? The Dark Ages were marked by frivolous wars and infantile politics as well as immense human suffering. Are we observing a miniature version of a dysfunctional kingdom from the Middle Ages at the workplace?

Part Two will look at the proposed solution to this veritable crisis, and analyze obstacles in the way of its implementation.