Defining Loyalty

At Shibuya Station in Tokyo there’s a wonderful monument to loyalty. Hachiko was a dog owned by a university professor in the 1920s, and each day the dog would wait for his master’s return at the Shibuya Station. One day, his owner died while at work, but for the next 10 years Hachiko was there every day, awaiting his return. Years after the dog died, local residents erected a statue to honor his loyalty, and the statue remains today outside the station, where it is a convenient meeting place because EVERYONE knows the story.



This respect for loyalty is probably no surprise to anyone familiar with Japanese culture. Prior to Japan’s economic problems that started in the 1990s, the concept of Japanese business loyalty was famous around the world: workers would stay with a company for life, and in return the firm offered lifetime employment. Sure, there were exceptions, but that was the common theme. When the economy turned sour, however, many firms addressed their new realities by adjusting their lifetime employment policies, which really threw workers for a loop, especially since they had not really prepped their resumes and worked on interviewing skills, since they did not expect to move.

While this concept of lifetime employment is often attributed to the Japanese, it’s not like it is all that uncommon in Western business history. Even into the 1970s it was not uncommon for people in the US to start with one firm upon leaving school and retire from it decades later. That really started shifting in the 1980s, and today we expect people to have many different jobs…in some cases, many different jobs within only a few years.

This leads to lots of changes. For example, retirement programs have in many cases shifted from “defined benefit” packages with a guaranteed income after retirement, to “defined contribution,” wherein the employee and the company put a set amount into a retirement account, since many people no longer stay with a firm long enough to qualify for retirement under the old rules. We have also seen an expansion of the recruiting industry, and go look at books on CVs and interviewing…they are not just for soon-to-be graduates anymore.

So, among these changes, has the concept of “loyalty” disappeared from business?

No…but the definition has changed.

We viewed loyalty as relating to an overall career: you do good work for the company, and the company will take care of you in the end. There would be ups and downs in that relationship, and with a virtual guarantee of work, the employee might sometimes slack off, or the company might be a little slow with raises, with everyone secure in the knowledge that it would all even out in the end.

Now, though, the concept of loyalty often has more of a day-to-day mindset. If I am one of your employees, I should give you my best work now, and you should compensate me well and take care of me now. In 2 years I might take another job, or you might have to reorganize the firm, but for today I should work hard for you and you should take care of me. Loyalty is more about the immediate work we do, not so much about long-term care and feeding.

The lack of permanence in the employee-firm relationship is nothing new for those who lead today’s employees, especially in knowledge work or tech-focused industries. We have certainly gotten used to the idea of employees moving between jobs, especially in Asia, and the upsizing and downsizing of knowledge-based firms has always meant volatility for the workforce. Some of this is due to younger generations seeing the evolution of corporate loyalty, some is due to the portability of many creative skills, but whatever the reason, this certainly is not news.

However, as a leader, a corporate culture that includes this modern concept of “loyalty for today” offers you some advantages, and you should explore them. It means you get good work from your employees now, and if you don’t, then you are under no obligation to hang on to them for years and years. It also means you can bring in new employees at different levels in your firm as your business plans evolve, without worrying that you must promote from within. For your employees, it means they will be compensated fairly, and even though you may have to let them go at some point, you will not do it in an arbitrary manner, but only as circumstances demand. You take care of your employees, they take care of you…but with rewards coming now rather than over the course of a 30- or 40-year career.

Hachiko might not have understood this idea of loyalty, but today’s workforce most likely will.