Secrets to successful teamwork

23 May 2025 · 50 min

Ask about this episode

Ask anything about it. ChatGPT or Claude reads this page and answers with the times it was said.

Connect VO and ask about every podcast you hear, including the moments you saved. Add to ChatGPT · Add to Claude

In short

TED Radio Hour: Secrets to Successful Teamwork

Episode Overview In this episode of TED Radio Hour, host Manoush Zomorodi explores the secrets to successful teamwork through the experiences and insights of various TED speakers. The episode features guest speakers Hajer Sharief, Amy Edmondson, and Pete Stavros, who share their perspectives on teamwork dynamics, communication, and innovative strategies for enhancing collaboration across different environments.

Original Broadcast Date

September 20, 2024

---

Key Themes and Discussions

  1. The Foundation of Teamwork: Family Meetings
  2. Hajer Sharief's Experience:
  3. Grew up in Libya, where her family held formal "Friday democracy meetings."
  4. These meetings allowed all family members to voice opinions on various household matters, fostering equality and collaboration.
  5. The meetings served as a safe space to discuss disagreements and assign responsibilities.

Key Takeaway

  • Empowering members to participate equally in discussions can nurture a sense of agency and responsibility, leading to healthier relationships and collaboration.
  1. The Importance of Voice and Trust
  2. Cultural Context:
  3. Hajer highlighted that in many cultures, particularly under authoritarian regimes, traditional roles can limit voices, especially women's.
  4. Encouraging open dialogue creates trust and helps facilitate change even in challenging environments.

Key Takeaway

  • Listening to and valuing diverse perspectives within any team can lead to more equitable solutions.
  1. Team Communication in High-Stakes Environments
  2. Amy Edmondson's Research:
  3. Focused on communication in hospitals, noting that effective teamwork correlates with higher error reporting, not fewer errors.
  4. Emphasized the necessity of psychological safety where team members feel safe to admit mistakes and speak up.

Key Takeaway

  • Cultivating an environment where mistakes can be discussed openly enhances learning and improves overall team performance.
  1. Building Psychological Safety
  2. Guidelines for Leaders:
  3. Frame work as a learning opportunity rather than an execution challenge.
  4. Acknowledge your own fallibility and model curiosity by asking questions.

Key Takeaway

  • Fostering a culture of open communication and continuous learning can lead to better decision-making and innovation.
  1. Employee Ownership and Engagement
  2. Pete Stavros's Approach:
  3. Shared his experience with transforming CHI, a garage door factory, through employee ownership.
  4. Highlighted that giving employees a stake in the company significantly improved morale, engagement, and productivity.

Key Takeaway

  • Employee ownership can lead to remarkable financial and personal transformations for workers, promoting a sense of responsibility and investment in the company’s success.
  1. The Role of Leadership in Team Dynamics
  2. Insights on Leadership:
  3. Good leaders are those who facilitate inclusive discussions, encourage feedback, and help navigate challenges collaboratively.
  4. The difference between being kind and being nice: True kindness involves providing constructive feedback, even if it’s uncomfortable.

Key Takeaway

  • Effective leaders create a culture that balances accountability with support, allowing teams to thrive.

---

Conclusion This TED Radio Hour episode emphasizes the critical role that communication, trust, and shared ownership play in successful teamwork. By fostering environments where all members feel valued and heard, teams can innovate and collaborate more effectively. The insights from Hajer Sharief, Amy Edmondson, and Pete Stavros provide a roadmap for individuals and organizations seeking to enhance their teamwork strategies.

---

Listening Experience For listeners interested in further exploring the ideas presented, full talks by the featured speakers can be found on TED's website. The discussion highlights the evolving nature of teamwork and its importance in various contexts, from families to corporations.

Written by AI. May contain mistakes. Listen to the episode to check what was said.

Hear the part that matters, and keep it.Open this episode in VO. Double tap your headphones to save a moment as you listen.
Get VO free

Transcript

Automatic transcript. May contain errors.

0:00This message comes from AT &T. Staying connected matters. That's why AT &T has connectivity you can count on, or they'll proactively make it right. That's the AT &T &T guarantee. Terms and conditions apply. Visit AT &T.com. Guaranteed. for details. This is the TED Radio Hour. Each week, groundbreaking TED Talks. Our job now is to dream big. Delivered at TED conferences. To bring about the future we want to see. Around the world. To understand who we are. From those talks, we bring you speakers and ideas that will surprise you. You just don't know what you're going to find. Challenge you. We truly have to ask ourselves, like, why is it noteworthy?

0:43And even change you. I literally feel like I'm a different person. Yes. Do you feel that way? Ideas worth spreading. From TED and NPR, I'm Manoush Zomorodi. On the show today, teamwork. So I grew up in Tripoli, Libya. This is Hajar Sharif. And when she was a kid, her parents would gather her and her siblings together every Friday night. We've all heard of family meetings, but these were a little more intense. This was a very formal process. People think like, yeah, it's a family, you come together like sometimes, you know, and I'm like, no, you don't understand. They were called Friday democracy meetings.

1:31At 7 p.m., everyone would convene on the floor in the living room. So we would be sitting down on mattresses. There was a formal agenda, an appointed secretary. My mom would likely be the one taking notes. And of course, there were snacks. Like we would always have like fruits and like nuts. So like, you know, the meeting would start, there was like a proper structure. The point was to bring all of the family's issues to the meeting and decide collectively how to proceed. Topics ran the gamut from negotiating bedtimes to what food to have in the house. Like, we need more Nutella at home, you know?

2:18Navigating sibling disputes. Yeah. So this is about solving a disagreement before it escalates to a fight. And how each member of the family could pull their weight, including when her youngest brother was a toddler. That he should tidy his toys every time he plays. And if he forgets, we need to remind him. So these meetings were fair and collaborative. But outside, it was Libya in the 1990s. The country was under the authoritarian rule of Muammar Gaddafi, and gender roles were very traditional. The woman is still the one that has to like cook and clean the house, even if she works, you know. So there is like gender inequality to a very great extent.

3:06And we didn't have a democracy. So my dad wanted to have that for my family. So inside Hajir's home, things were different. Everyone had a voice. I still very clearly remember him saying, this is like a safe space for you. And if you say anything to us as a form of criticism, we're not going to like hold this against you outside of this meeting. What happens at Friday democracy meetings stays at Friday democracy meetings. I love it. Yes, yes, yes, yes. I mean, what we discussed in these meetings were family affairs. But this system really challenged the traditional family structure. There were no power dynamics of like parents and kids.

4:02And that really made us understand every problem also have a solution if everyone comes together on equal basis. And if it's a safe space where there is trust, then we can really solve these issues. Even in a country whose citizens had no voice, those family Friday democracy meetings made Hajer feel like she had a say in her life. Which brings us to today's show. How teams work. Ideas about changing group dynamics and building trust in families, between colleagues, and even in entire institutions. When Hajer became a teenager, she realized there was one topic that had never come up in those family meetings.

4:58The fact that every night, as the only girl in the family, she had to do the family dishes. I was always the only one who was asked to wash the dishes while my brothers didn't have to do anything about it. Here's Hajar Sharif on the TED stage. I felt this was unjust and fair and discriminatory, so I wanted to discuss it in the meeting. As you know, the idea that it's a woman or a girl's role to do household work is a rule that has been carried out by many societies for so long. So in order for a 13-year-old me to challenge it, I needed a platform. In the meeting, my brothers argued that none of the other boys we know are washing the dishes, so why our family should be any different.

5:45But my parents agreed with me and decided that my brothers should assist me. However, they could not force them, so the problem continued. Seeing no solution to my problem, I decided to attend another meeting and propose a new system that would be fair to everyone. So I suggested instead of one person washing all the dishes used by all the family members, each family member should wash their own dishes. This way, my brothers can no longer argue that it's not within their responsibility as boys or men to wash the dishes and clean after the family, because the system I proposed was about every member of the family cleaning after themselves and taking care of themselves.

6:32Everyone agreed to my proposal, and for years, that was our washing the dishes system. After my TED Talk, you can't believe the number of messages and emails I got from all around the world of women who said, that story about the dishes, you have no idea how it resonated with us. And every time I talk about this story, I feel like one important thing to say is that, you know, this is not about who's washing the dishes. This is like an example of like how a structural issue would make someone not as equal to others. And like, I understood where they came from. my brothers because it's true because like in Libya like it is the woman and the girls who does the dishes now maybe things has changed a bit but like 24 years ago like this was like a no-brainer right so why out of the thousands and thousands of young boys and the thousands and thousands of young girls who accept to do the dishes every day why am I the only one who's challenging this, right?

7:53So this is the structural issue I was talking about. What strikes me about that, though, is in some ways, your parents were very clever in that they stopped you from being a rebellious teenager, because you were given parameters, you were motivated to change the system from within because you had some power. Yeah, very true. And you know, also about this like childhood experience, how it impacted me and my siblings growing up, you know, once we became also like young adults and wanted to experiment with life as well, right? Like, we had this trust relationship with our parents, that we would literally tell them everything.

8:42So I want to understand the cultural difference right now, because here in the United States, we we talk a lot about how young people are more politically motivated than ever. You know, not all young people, obviously, but there is a sense of wanting to have your voice heard. But we have to recognize that is not necessarily the case in many countries around the world. What is it that you feel a lot of young people need to hear in order to feel more motivated? Yeah. You know, I think regardless of where it is geographically around the world, I think the one thing that anyone who wants their voice to be heard should be willing to hear someone else's voice as well.

9:44especially when this other voice is not aligned with your political thinking and maybe even not aligned with with one's values and principles you know it also means to have a system in place that would treat everyone's voices equally and at least in terms of like having an opportunity to be heard without being judged, but also having a safe space to be heard. And I think in our societies now, especially now with social media and everything, you know, it's becoming more and more difficult for people to hear each other. So if someone listening to this conversation, a parent, is thinking, I want to do this, I want to have democracy meetings with my family.

10:45How should they go about doing it? How should they get started? I think a first thing is really to believe in it, because it's a foundation that's going to help the kids when they grow up, you know. So there is also an aspect of self-development there. And I see this a lot in me and all my siblings, where we're never afraid of confrontation. But it's also about how you ask questions. It's also about how you discuss things that bothers you or even point out to things that you disagree with in a way where you're not judging the other person or the other group, but you're really trying to understand.

11:36Right. And I think this is a skill that we need in life. Every family is its own mini-political system that is usually not democratic, because parents make decisions that affect all members of the family, while the kids have very little to say. Similarly, politicians make decisions that affect the whole nation, while the people have very little to say in them. We need to change this, and in order to achieve this change systematically, we need to teach people that political, national, and global affairs are as relevant to them as personal and family affairs. So if we want to achieve this, my proposal and advice is try out the family democracy meeting system because that will enable your kids to exercise their agency in decision-making from a very early age.

12:32Politics is about having conversations. including difficult conversations that lead to decisions. And in order to have a conversation, you need to participate. If you include your kids and family conversations, they will grow up and know how to participate in political conversations. And most importantly, most importantly, they will help others engage. Thank you. That was Hajar Sharif. She's a human rights activist and the co-founder of the Together We Build It Foundation. You can see her full talk at TED.com. On the show today, how teams work. I'm Manoush Zomorodi, and you're listening to the TED Radio Hour from NPR.

13:18We'll be right back.

13:31This message comes from NPR sponsor UKG. Nothing feels as good as a great place to work, and a great place to work is very good for business. UKG is the only partner that delivers the HR, pay, time, and culture solutions needed to create a great workplace, which gives employees everything they need to succeed, no matter who they are, where they work, or what they do. See what UKG can do for your business and your people at ukg.com slash great. UKG, our purpose is people. This message comes from the Michael J. Fox Foundation. Did you know that every six minutes, someone in the U.S. is diagnosed with Parkinson's?

14:11It's the fastest growing brain disease in the world. Chances are, you or someone you know is impacted by Parkinson's. The Michael J. Fox Foundation is on a mission to find a cure. Now is a critical time for Parkinson's research, and your support will help drive progress toward a cure. Get involved today. Visit michaeljfox.org slash get involved. Support for NPR and the following message come from Edward Jones. What does it mean to live a rich life? It means brave first leaps, tearful goodbyes, and everything in between. With over 100 years of experience navigating the ups and downs of the market and of life, your Edward Jones Financial Advisor will be there to help you move ahead with confidence.

14:54because with all you've done to find your rich, they'll do all they can to help you keep enjoying it. Edward Jones, member SIPC. This message comes from Charles Schwab with their original podcast, Choiceology. Choiceology is a show about the psychology and economics behind people's decisions. Download the latest episode and subscribe at schwab.com slash podcast. It's the TED Radio Hour from NPR. I'm Manoush Zomorodi. On the show today, what makes teams work when the stakes are low or incredibly high? In a hospital setting, care is provided 24-7. And there are shifts of people coming and going.

15:41So communication is critical. Julie Marath worked in hospitals for 40 years. First as a nurse and then as a hospital administrator. And different disciplines that are involved in the care of patients have different vocabularies. So it's learning to talk to one another. Physicians, nurses, pharmacists, there's surgeon and anesthesia. And so the ability to listen, respect, talk to one another, and not around each other, is absolutely critical. And while that kind of open back and forth between colleagues might sound obvious and very much expected now, Julie says when she got her first nursing job in the 70s, that kind of communication just didn't exist.

16:34She didn't even know it was possible. And she found her job very isolating. Doctors talked to doctors, nurses to nurses, and people interacted around tasks, but not as a cohesive team. So asking questions, raising concerns, speaking up about mistakes, it didn't really happen. Each person was kind of on their own. It was lonely, you know. There's a lot of responsibility when you're caring for people. And I think that was the predominant feeling, that if a mistake was made, if an error occurred, people went underground. They didn't talk about it. They didn't learn from it, but rather saw errors and failure as an inevitable part of providing highly complex interdependent care.

17:39She soon learned that this culture could lead to catastrophic results. And a warning here, Julie's story includes details that are upsetting. A really early experience that I had was a child going for an operation, and the child died. and the nurse caring for the child never came back to work. Julie says that maybe there had been an accident, maybe an issue with anesthesia. There were rumors, but only rumors. No one knew for sure what happened. And no one ever communicated what happened to the child or to the nurse. It's haunting even after all this time that secrecy is so damaging. What Julie saw was actually indicative of what was going on in hospitals all over the country.

18:45Widespread medical errors. But it wasn't until the 90s that researchers began looking into why these mistakes were happening. One Harvard researcher in particular. I mean, if you really stop to think about it, we're dealing with very vulnerable people in very complex situations. So, of course, things go wrong. You know, the only question is, do we catch and correct them quickly enough to save lives? This is Harvard Business School professor Amy Edmondson. Back when Amy was a graduate student in the 90s, she was studying organizational behavior, specifically teams and how they work. And her first project was to pinpoint why hospital errors happen, the kind of errors that Julie had seen.

19:31I was invited to go into a couple of our teaching hospitals here at Harvard to study as part of a larger study of coordination breakdowns. And so I was, as a budding social psychologist, I was going in, observing patient care units, joining meetings where people were talking about how they worked together, what worked, what didn't work, and all the rest. She wanted to understand why some teams seem to make more mistakes than others. And my hypothesis is, I think this is obvious, I meant it to be obvious, was that the better teams, better coordination, you know, better leadership would have, ta-da, fewer error rates.

20:17But that is not what the data were saying. I had a reverse result. The data were saying that better teamwork was associated with higher error rates, not lower. That must have seemed really strange to you, that the strongest, most motivated teams had the most errors? Oh, yes. And my thinking starts literally spiraling out to, what will my next career move be now that I'm going to have to drop out of graduate school? So I calmed myself down and I thought about it. Well, what might explain this result? And of course, one possibility is that good teamwork really is problematic, but I just couldn't get my head around that explanation.

21:08And the more I thought about it, I was suddenly struck by a possibility. And the possibility was maybe the better teams don't make more mistakes. Maybe they're more willing and able to report the mistakes that happen. You know, most of us don't like admitting mistakes, and I don't think they did either. But they were more committed to the idea that only by their willingness to admit mistakes could patients get the best possible care. And later I was able to show some evidence that this was likely the case, you know, that they were more open, they were more honest, they were more sensitive to the nature of the work that they did.

21:54Amy didn't end up failing graduate school. She actually went on to do decades of research and is now one of the world's foremost experts on teamwork. Her research is perhaps one of the main reasons why workplace culture has shifted its focus from individuals to teams. And decades after her first hospital study, Amy still says good teams talk openly about their mistakes, even if it goes against our natural instincts. It turns out that no one wakes up in the morning and jumps out of bed because they can't wait to get to work today to look ignorant, incompetent, intrusive or negative. No. Here's Amy Edmondson on the TED stage.

22:38No, on average, we'd prefer to look smart and helpful and, you know, positive and helpful. So the good news about all this is that it's very easy to manage. Right. Don't want to look ignorant. Don't ask questions. Don't want to look incompetent, don't admit weakness or mistake. Don't want to look intrusive, don't offer ideas. And if you don't want to look negative, by all means, don't criticize the status quo. Now, this strategy, the good news about this very successful strategy is that it works for self-protection. The psychologists call this impression management. And there's a great deal of evidence that we're quite good at it.

23:18We learn how to do this sometime in grade school. By the time we're working adults, it's all but second nature. Have you ever had a question and you look around and you don't ask it? No one else seems to be asking. Maybe you're supposed to know. You think, I'll figure it out later, right? So why does this matter? It matters because every one of these moments, every time we withhold, we rob ourselves and our colleagues of small moments of learning. And we don't innovate. We don't come up with new ideas. We are so busy, unconsciously for the most part, managing impressions that we don't contribute to creating a better organization.

24:04Nurses don't call. The pilot doesn't speak up. The executive doesn't say anything. So the good news is that not every workplace is in fact this way. There are some workplaces where people absolutely wake up in the morning, if not eager, at least willing and ready to take the interpersonal risks of learning. I call these special workplaces ones that have psychological safety. Now, I'll define psychological safety as a belief that it's absolutely okay. In fact, it's expected to speak up with concerns, with questions, with ideas, with mistakes. So can you tell me more about psychological safety? You know, radical candor was in vogue for a little while where you said whatever comes to mind, you put it out there.

24:53Yes. Kind of. Sort of. Yep. But are there some sort of real basics that you think are crucial to creating that psychological safety in a team? Yes. And in defense of radical candor. OK. I think Kim Scott is very clear that she's not talking about brutal candor. Like what makes it radical is how unusual it is, but it matters to the quality of our interactions and ultimately the quality of our work. Now, part of the way you build it is you call attention to attributes of the work that require us to be this way. Like if you're in a healthcare context, you say, you know, the complex interdependent nature of the work we do means that we are vulnerable.

25:39You know, breakdowns will happen. If you're a team leader, medical director in a setting like that, you are frequently making reference to the vulnerability of our processes to break down, not because we're not any good, but because it's literally the nature of the work we do. If you're an innovator in a tech company, you're saying, you know what? No one has ever done anything like this before. So we're trying something new here. All ideas welcome. and all critiques and concerns are doubly welcome. Let me just suggest three simple things you can do so that that nurse does make the call, the pilot does speak up, the executive even reveals his concern about the takeover.

26:25First, frame the work as a learning problem, not an execution problem. Recognize, make explicit that there is enormous uncertainty ahead and enormous interdependence. We can't know what will happen. We've got to have everybody's brains and voices in the game. That creates the rationale for speaking up. Second, acknowledge your own fallibility. You know you're fallible. Say simple things like, I may miss something I need to hear from you. This goes, by the way, for subordinates and colleagues, peers alike. That creates more safety for speaking up. And third, model curiosity. Ask a lot of questions.

27:13That actually creates a necessity for voice. And so these three simple things can go a long way toward creating the kind of workplace where we can avoid the catastrophes you saw coming. So that is how to approach a high-stakes project. But what about when things go wrong? What is the best way to give feedback to maintain that psychological safety? You write in your latest book that leaders should be kind, but not nice. Please explain. What is the difference there? Right. You know, when we say we're being nice, I'm not going to criticize you because it wouldn't be nice. I'm going to say, oh, that's, you know, really very good work when I actually don't think so.

27:56And the point I'm trying to make is that's not necessarily kind, or at least it's certainly not caring. Because if I cared enough about you and your future, I'd care enough to give you more honest and constructive feedback. And nice is the easy way out. And nice takes care of me, makes me comfortable in the moment. But it doesn't take care of you and it doesn't take care of the future. I mean, that kind of stunned me a little bit. In your new book, you talk about one way of diagnosing a healthy failure culture. You say, how much of this do you usually hear? And the list is, do you usually hear good news?

28:32Do you usually hear progress? Do you usually hear agreement? Do you usually hear all's well? And then you say, if you do, that's terrible. Yeah. And again, context matters, right? Because if you're on the Toyota production line, that's probably okay, right? Because 99.9 % of the time, it is all going according to plan. But if you're in a scientific laboratory, and you're hearing, yeah, every single experiment is working just great. And I agree with you, boss, on every idea you had, you should be disappointed at that because that's not what a good lab looks like. Now, most of us are neither on the assembly line nor in the scientific laboratory.

29:13We're somewhere in between. And yet, even in the middle, I would argue that if you're only hearing the green and no red, it's probably suboptimal. It's probably a sign that people don't feel comfortable enough to say what's really going on. Now, at this point in describing and teaching about these things, most managers I talk to start to get a little nervous, right? They say, I get it. I understand how this could really help people learn. I understand, and I want to hear about errors. But are you saying I have to dial back a little on excellence? Is it no longer possible to hold people accountable for great results, to hold their feet close to the fire?

30:01And I say no. In fact, when I'm talking about psychological safety, I'm essentially talking about letting up on the brakes. I'm not talking about the gas. I'm not talking about motivation. There's a lot out there on motivation, and it's really important, and it's important to understand it. But it's equally important to free people up to really engage and not be afraid of each other. If you're only talking about people's accountability for excellence and not making sure they're not afraid to talk to each other, then they're in the anxiety zone. And that's a very dangerous place to be. Yeah. And some people might say, well, you know, I've got college tuitions to pay.

30:47I just want a job. I don't really care about the end product. I'm fine with this. I'm fine with phoning it in. It's fine. Yes. And I think that's a shame for two reasons. If I'm a customer, I'm thinking, this product's fine, but maybe it could have been even better. And organizationally, it's a real shame because what that points to is a leadership and management deficit where the organization's leaders or managers have failed to inspire you enough for you to want to give it your all. And they have failed to clarify that that's what good looks like, right? That there is almost no such thing as just play it safe around here.

31:33We're more disappointed in you if you're someone who never has a failure than if you're someone who has intelligent failures and learns from them and helps other people learn from them also. Right. So it's, you know, it's, it's, you know, I think it's kind of a profound thing that is often not communicated. I want to make sure I ask you, you know, somebody listening is thinking, am I doing this right? Am I running my family, my work team, my pickup softball team? Well, what are some questions they should ask themselves when it comes to taking the team forward for the win, you know, for the joyful win?

Read the full transcript

32:13Yeah, I think the way you do that in your team or in your family is you articulate as best you can a sort of compelling aspiration for us as a family, as a team. And then you sort of raise with a curious mindset the questions of like, what will it take for us to do this? Well, you make it a team problem solving opportunity. You invite everyone in to be thinking about and co-creating the journey that lies ahead. That's Amy Edmondson. She's a professor at Harvard Business School. Her most recent book is called The Right Kind of Wrong. You can watch her talks at ted.npr.org. In a minute, more about what motivates employees and brings together teams from the perspective of an investor who wants to change how companies incentivize their workforce.

33:15When it works, this is the most amazing thing that can happen inside of a business, not only for the business, but for the people, for the community. We talk so much about inclusive capitalism. It drives me crazy. And this is it. Like, you want inclusive capitalism? Well, then people need to be included in ownership. That's it. On the show today, what makes teams work? I'm Manusha Zomorodi, and you're listening to the TED Radio Hour from NPR. Stick with us.

33:53This message comes from Charles Schwab. When it comes to managing your wealth, Schwab gives you more choices, like full-service wealth management and advice when you need it. You can also invest on your own and trade on Think or Swim. Visit schwab.com to learn more. This message comes from Greenlight. Greenlight is a debit card for kids, family finance, and safety app used by millions of families, helping kids learn how to save, invest, and spend wisely. Start your risk-free Greenlight trial today at greenlight.com slash NPR. This message comes from ServiceNow.

34:51This message comes from Schwab. Everyone has moments when they could have done better. Same goes for where you invest. Level up and invest smarter with Schwab. Get market insights, education, and human help when you need it. It's the TED Radio Hour from NPR. I'm Manoush Zomorodi. On the show today, what makes teams work? And how worker satisfaction can be crucial to a company's bottom line. Can I just talk about how much I hate my frickin' job? There has been some disheartening news about how employees are feeling these days. Take the TikTok genre of people complaining about their jobs. I hate working!

35:41I hate it! I hate it! Hating on work isn't new, but it has become more acute. A recent Gallup poll found that 70 % of American workers don't like their jobs. And between 15 to 20 percent are actively disengaged, meaning they're phoning it in or even planning to leave. Today is my last day. I want to put my job so bad. But why? Amazing effort, great effort, OK effort, piss poor effort. I'm getting paid the same. Well, it's often because workers feel like the boss doesn't even notice whether they're working hard or hardly working. If you just feel like a number somewhere, you're probably just going to go punch a clock and get their numbers and move out.

36:29And I'll be honest with you, I've worked for some pretty big companies before where I've been there a year, two, three, and never even met the CEO. That last voice was Josh Ryan. Josh works at a company in Arthur, Illinois, called CHI, where people used to feel like the C-suite didn't care. Back in 2015, the garage door factory had a serious morale problem. Working in a factory is sometimes a miserable experience, right? Like, most people come here and they have to do the same thing over and over and over again. This wasn't helped when the company was bought by a private equity firm. They'd gone from, you know, a guy who started in the backyard of someone's house here in Arthur to a group of owners from New York.

37:17Like, people were a little skeptical, and that's one of the major reasons why. If you're not familiar with how private equity works, investors buy a company that's not living up to its potential, and within a certain number of years, they try to turn the company around with the goal of either selling it or taking the company public. It's a high-risk, high-reward strategy. If it works, the company survives. People may keep their jobs and the investors make a lot of money. If it doesn't, sometimes investors decide to cut costs, cut jobs and shut down parts of the company so the rest can be sold off at a profit.

38:00Or they go through all of that to eventually file for bankruptcy. So being bought by private equity can be very stressful for employees and make bad workforce morale even worse. But that's not what happened at CHI. Instead... Business basically tripled. Our investors made 10 times their investment. So it was the best investment we had made since the 1980s in a company that makes garage doors. This is Pete Stavros. I co-head global private equity for a firm called KKR. Pete has told the story of how he turned CHI around a lot. He saw what the problem was right away. Unhappy employees were dragging down the company.

38:50So imagine you're working in the factory. Your daily work you really have no control over. You know, it's just that old line manufacturing mindset of kind of do what you're told, keep your mouth shut, do your part and go home. Safety in the plant was a disaster. So, you know, if we just ran out our, if we're going to own the business for five, six, seven, eight years, the data would have said pretty much everyone in the plant at some point is going to get hurt. It was that bad. But you saw something in it. What? So the manufacturing model was like kind of brilliant. You looked inside and, wow, this company could take even more market share, could grow even faster.

39:33But we've got to get the workforce engaged if we're going to improve quality, improve lead times further, customer satisfaction, reduce waste, reduce inventory. That's going to only happen with the entirety of the workforce in the company. It's not going to come from a dictate from the office of the CEO. So to get those workers engaged in their jobs, Pete used a tactic that's considered very unusual and by some even antithetical to private equity, employee ownership. Meaning each employee is given a stake in the company, which turns into a cash bonus if things go well. It's a free incremental benefit meant to be retentive and motivational, just like for a CEO.

40:20Now, if you give someone stock, their expectations of you as a company just went up. Because if I'm an owner, I want to know what's going on. I'd like my suggestions heard. And I'd like information on how I'm doing. How does what I'm doing every day tie into the big picture? Where are we headed as a business? How can I help? What are the big things that the leadership team's looking at? I'd like to look at that stuff. So that's what the model is. It's an ethos. And what's the promise then at the end? Or is there an exit plan? Because that's usually the deal, right, with private equity. So up front, what we communicate is very conservative.

40:58This is equity. You're not paying for it, but there's no guaranteed payoff. But what we communicate, we say, if we hit our plan, and that means we all need to perform and do our jobs, but if we do, you'll earn around a year's worth of your income. So if you make$75 ,000, if we do our job, you'll get another$75 ,000 when we sell the company or take it public. So what ended up happening with CHI? So it took eight years, but everything went way beyond our expectations. And that spans from how employees felt, what happened to engagement scores and quit rates and worker safety. And what they yielded financially was way beyond our expectations and their expectations.

41:42So, you know, we had, on average, frontline employees make about$175 ,000. But many of those, you know, were not the long-tenured folks. So the folks who had really been there earned six and a half times their annual income. So we had factory floor workers make half a million dollars. Truck drivers make$800 ,000. Life-changing money. Life-impacting amounts of money. And so many stories of people getting out of debt and really turning their lives around financially. Like Josh Ryan, whom we heard from earlier. So we got enough money that I put money away for all four of our kids to go to college.

42:23I started a college fund for all of them that has a decent amount of money in it. We upgraded our house. We put a large chunk of money down on our house. So people around here still talk about it like it's the greatest day in their life because it might have been the greatest day in their life. Here's Pete Stavros on the TED stage in 2024. Today, I'm going to try to convince you that broadening employee stock ownership is the single most important thing that we can do to lift up workers and to make companies stronger too. Only a tiny percentage of workers are granted stock ownership in their companies and most workers have no wealth.

43:00and it is in fact stock ownership or the lack of it that is by a mile the biggest driver of wealth inequality. It could give us a form of capitalism that is actually inclusive and I believe it could literally change the economy. I've been pursuing this idea most of my adult life. 25 years ago, as a graduate school student, I dove into the history of employee ownership and I published a paper on the topic in 2002. Then a handful of years later, I got my first real leadership position at the company I still work for, KKR. And I was put in charge of investing in and improving industrial companies, mostly manufacturing businesses.

43:43And that was a great opportunity to start experimenting with different ways of sharing stock ownership with all employees. In our early efforts, the most important thing we got right was making sure that stock ownership was free and incremental for workers, not a trade for wages or other benefits. But we got plenty of things wrong. We didn't communicate well. So if I said something like, we'd hope to sell a business in five years, that often led to employees literally counting the days or growing suspicious if things took longer. We didn't share our financial information, so people didn't know how the business was doing.

44:17You see, ownership is about a lot more than just giving out stock. It's about trying to create a whole different type of culture, an ownership culture. I mean, we talked about CHI, but do you have the data to know whether there will be many more CHIs that that company wasn't just a one-off? So we've done this 50 times over 15 years, and we've done this in the United States, Western Europe, Vietnam, Japan. We've done this all over the world. Of the 50, we've exited something around 15, and they're among the best deals we've done. And we've had third parties look at the performance and have said, these are outliers to the positive.

45:05Like, this is from a financial perspective working. And then the impact on the workers is indisputable. I mean, I'm trying to put myself in the headspace of someone who works for a company that you've bought. And let's say, I've been there a long time, and I like the changes you're making. And then, you know, it turns out, OK, KKR is ready to sell and I get a big check and that's great. But then I'd be terrified. I'd be like, what happens now? This was a fun experiment. But I guess what responsibility do you feel to the long term well-being of the people whose lives you've improved in the short term?

45:46There's a bunch of components to that. So one is a responsibility to make sure people are prepared for a financial return like that. And we take a lot of care to offer financial coaching both along the way and then at the end. And then in terms of the company that may be coming in to acquire it, in our experience, it is attracting a different type of buyer. And even if it's a similar buyer we would have had 10 years ago, they're thinking differently. Like, oh, my goodness, look at this culture that's been created. How do we retain it? How do we replicate it? You know, because it's hard to take away.

46:26So once we get this into these companies, my hope is this becomes a self-perpetuating system. And it just grows exponentially over time. What if a company had offered to buy it that didn't provide employee financial support and sharing and profits and those sorts of things? Would you have sold the company anyway? We are fiduciaries, and most of our money is where it comes from is people's retirement funds. So we manage a lot of like teacher pension money, for example. And our obligation to them is to maximize their returns. So, yes, that is what we have to do. Now, having said that, the types of buyers who are attracted to a business like this, they tend to be very values aligned.

47:20So I think that this is not a silver bullet. It's not like if we could just do this, the economy is going to be OK. And, you know, the social contract, which is so broken with frontline workers, is all going to be fine. But we got to start somewhere. And this is certainly, in my mind, an unequivocally positive step. Pete, this has been such an interesting interview because you've gotten a lot of press over the last year. And frankly, the only good things people have to say about private equity these days are often related to you and this idea of bringing employee ownership into companies. And I guess I'm wondering why you decided to do this strategy through private equity.

48:05Why not use another means? Because there are other ways. There are cooperatives, there are paying people higher wages, so many other ways to make sure people feel valued at work. Well, this is the tool that I have access to. And yeah, there's lots of different ideas out there, you know, with respect to cooperatives. And I don't mean this in any kind of a derogatory sense whatsoever. I think anything that gives workers a stake is amazing. Cooperatives have not scaled. It's just the fact. The aggregate revenue of all the cooperatives, you know, adds up in total, adds up to, you know, one decently sized public company, one.

48:43So the opportunity with private equity is scale. KKR, if you add up the employee base for all of our companies, we employ like 800 ,000 people. So, you know, one public company that I worked with, not related to my KKR duties, but Harley Davidson, I spent time with the CEO thinking through how we could implement broad-based employee ownership with their union. We ended up doing it. It took a while. And it impacted, again, not minimizing it, but impacted maybe, I think, 4 ,000 workers, which is great. But if we could get one additional major private equity firm to say, you know what, we're going to do this everywhere, that could be a million people.

49:24I want to just use the last few minutes that we have together to talk about a moment on stage. I just kept looking around at all the people around me thinking how much this is going to be. You played a video. It was a PR video about some of the employees who've received cash payouts. This is what we did. Every cent that we get back, we earn. You know, employee ownership models that you've brought to them. They deserve to be applauded because they earned it. And you got pretty emotional up there, Pete. You teared up. All right. Try and explain that again. And, you know, we've just talked about strategies and capitalism and turnaround ways of getting companies off the ground, blah, blah, blah.

50:13But what you're getting out of this other than financial gain, it feels like it's really close to your heart. Yeah, part of the emotion for me is my dad. You know, my dad was a frontline worker, felt very mistreated. His union was constantly fighting with the company. He operated a road grader for 40 plus years in suburban Chicago and never felt listened to, never felt respected, never felt like he had any stake in the outcome. he used to talk all the time about how as an hourly employee you have these really weird incentives where you don't want to work too hard or be too productive because your hours go down and your paycheck follows.

51:02And so my dad always dreamt of giving him and his colleagues a chance to build wealth. So, you know, part of the emotional impact for me is thinking about my dad.

51:16and you know a lot of times frontline workers at companies they have never been recognized ever in their career like ever forget about getting asked for suggestions they've never been recognized and so they become an owner in the business and they're moved to tears just upon the grant of the stock when it works this is like this is the most amazing thing that can happen inside of a business not only for the business, but for the people, for the community. We talk so much about inclusive capitalism, it drives me crazy. And this is it. Like, you want inclusive capitalism? Well, then people need to be included in ownership.

51:57That's it. That was Pete Stavros. He's the co-head of global private equity at KKR. He's also the founder and chairman of the nonprofit Ownership Works. You can see his full talk at TED.com. Thank you so much for listening to our show about how teams work. This episode was produced by Katie Monteleone, Matthew Cloutier, Chloe Weiner, and James De La Housie. This episode was edited by Sanaz Meshkinpour, Rachel Faulkner-White, and me. Our production staff at NPR also includes Fiona Guerin and Harsha Nahada. Irene Noguchi is our executive producer. Our audio engineers were Robert Rodriguez and Gilly Moon.

52:42Our theme music was written by Ramteen Arablewe. Our partners at TED are Chris Anderson, Roxanne Hilash, Alejandra Salazar, and Daniela Ballarezzo. I'm Manoush Zomorodi, and you've been listening to the TED Radio Hour from NPR. This message comes from Jerry. Car insurance shopping used to be a nightmare. endless forms hold music and mysteriously rising rates thankfully there's jerry jerry handles the entire insurance shopping process from comparing quotes side by side to purchasing your policy and even helping you cancel your old coverage all in one app in just minutes jerry can check for quotes from up to 50 top insurers so before you renew your policy download the jerry app or head to jerry.ai slash npr.

53:31Support for NPR and the following message come from Rosetta Stone, the perfect app to achieve your language learning goals no matter how busy your schedule gets. It's designed to maximize study time with immersive 10-minute lessons and audio practice for your commute. Plus, tailor your learning plan for specific objectives like travel. Get Rosetta Stone's lifetime membership for 50 % off and unlimited access to 25 language courses. Learn more at RosettaStone.com slash NPR.

From the publisher
We all work in teams, from families, to companies, and everything in between. So what's the secret to doing it better? This hour, TED speakers share surprising strategies for successful teamwork. Guests include activist Hajer Sharief, social psychologist Amy Edmondson and private equity investor Pete Stavros.

Original broadcast date: September 20, 2024.

TED Radio Hour+ subscribers now get access to bonus episodes, with more ideas from TED speakers and a behind the scenes look with our producers. A Plus subscription also lets you listen to regular episodes (like this one!) without sponsors. Sign-up at: plus.npr.org/ted

Learn more about sponsor message choices: podcastchoices.com/adchoices

NPR Privacy Policy

More from TED Radio Hour

All 191 episodes
Secrets to successful teamworkTED Radio Hour · 50 min
Listen in VO