The Great Resignation Should be No Surprise

Find a Strategy for Tackling it or it will Tackle You!

Source: Roger L. Martin, 2022

The Great Resignation is a real and major phenomenon. But it is being treated too much as a random, unpredictable outcome of a random, (maybe) unpredictable pandemic. There is a more powerful and actionable way to think about it, and that is the subject of my 16th Year II Playing to Win/Practitioner Insights (PTW/PI) piece, The Great Resignation Should be No Surprise: Find a Strategy for Tackling it or it will Tackle You! You can find all previous PTW/PI here.

A Bit of Context

We don’t have to rehash the numbers: there has been an unprecedented and sustained level of voluntary separations across the economy since early 2021. Some commentators focus on the fact that the biggest chunk is in low wage service jobs, but in the modern US economy the biggest chunk of jobs is low wage service jobs (as I have written about here and here). The Great Resignation is not just about low-wage workers who got used to receiving $600/week for not choosing to go back to work. The Great Resignation is happening across the US economy with low, medium, and high-wage jobs.

The Power of Habit

The key to understanding the Great Resignation is the power of habit. I wrote about Covid and habits in Medium very early in the pandemic (July 2020 when I was experimenting with Medium before I started the PTW/PI series) and more generally about the power of habits in a 2017 HBR article.

The key point relative to the Great Resignation is that the mind is wired to love automaticity. It makes sense. If we can do many things without thinking — driven by unconcious habit — we can save the mind’s available energy for times when we really need to think. If we had to think very hard about how to drive from home to the office — thinking about every turn, thinking about how much we should turn the steering wheel at each corner — we would be exhausted by the time we get to work. But most of that driving is done unconsciously — driven by habits that enable us to save brain energy.

The mind does not want to waste energy on whether to buy another tube of Crest or another Starbucks latte. No. It would much rather be guided by our subconscious, which whispers to our conscious: “Just do the thing that we know works and is most comfortable. For heaven’s sake don’t make us think consciously about this choice, please.”

Our minds want us to save all the thinking energy for the times when we truly must think — when a car runs a red light crossing ahead of us on our morning drive to the office, or when we have to decide whether to counter a competitor’s action or ignore it. These decisions take lots of physical energy because our brain is the biggest user of energy in our bodies. Hence, our minds have evolved to favor not thinking over thinking whenever we can get away with it. It is the evolutionarily optimal way to operate.

The Great Disruptor

In that context, Covid has been the greatest forced interrupter of habits since at least WWII (80 years) and maybe since the terrible combination of WWI/Spanish Flu over a century ago. But if we just take WWII, there was huge habit interruption. For the US, 16 million men went to war and one million were killed or wounded. Women famously started riveting together planes and tanks (Rosie the Riveter) taking jobs that they would have never contemplated before. There was widespread rationing of food items and personal goods as well as elaborate systems of price controls. Habits were snapped. And new ones formed — including the habit of women participating in the labor force. Though female participation dipped from wartime highs as the soldiers came back home, female participation quickly reestablished an upward trend that grew it from about one quarter of adult women prior to the war to almost 60% by 1990. Women working outside the home was the new and transformational habit.

In the current disruption, what was interrupted by Covid? Going to the movies, going out to dinner, going to the gym — and for tens of millions of American adults: going to their place of work. That broke an important and largely unthinking habit. For Americans living in and around big cities the habit involved getting up early, battling traffic, buying your Starbucks, getting to your desk, working all day, wrapping up, battling traffic and returning home. For others, it might have involved getting up early to pack a lunch, help a child get dressed, making the drop-off at daycare, and heading to work, etc.

Lots of those habits were not particularly pleasant, including, for many, annoying aspects of the job once you got there. But it was habit and as such it had privilege above every other possible alternative — driven by the subconscious. Tens of millions of American workers were largely on autopilot with respect to their jobs when Covid hit. All along, their subconscious had been telling them: Don’t think about it; this is what we do!

But when a habit is broken — in the case of Covid, forcibly broken — its privileged position disappears. And a new habit takes shape — in this case working from home. And pretty quickly, the subconscious gives privilege to that new habit. It might be a happy habit — I like this a lot more. It might be a mixed habit — I like the lifestyle but don’t enjoy the remote work as much. It might be a fully unhappy habit — I don’t like this at all. But it is the new default habit.

Yet, the general narrative in business is one of ‘going back.’ I.e., now that Covid is under some semblance of control (fingers crossed) employees can go back to their normal place of work — whether an office or factory. But that is a logical fallacy. For the workers’ subconscious, it isn’t going back. It is doing a completely new thing. It is breaking a now well-established habit in order to do something new. And that new thing is not an obvious winner.

Part of the conscious act of changing behavior — which may eventually result in a new habit — is a more intense evaluation of the choice. When you have a habit, there is typically no conscious evaluation. You just do it. But being faced with a new choice — working at the office rather than working from home — will cause all sorts of consideration and deliberation. Do I actually like my job, my colleagues, etc.? Might I like something else a lot better? Lots of things get thrown into the mix when considering the adoption of a new habit.

Instead of framing it as ‘going back,’ the thinking for employers needs to be that we are faced with the task of competing against an entrenched competitor (working from home) and doing so with a new offering (working on site). It is not as though the new offering is getting crushed by the entrenched competitor. Lots of workers are returning to work at company sites. But an unprecedented number are not taking up the new offering and instead are choosing to be part of the Great Resignation. And a still bigger group is not happily adapting to the new offering. Maintaining employee morale shows up as the second biggest management concern, after recruiting and retaining employees, in recent management surveys of management challenges post-Covid.

Practitioner Insights

To understand and deal productively with the Great Resignation, you have to understand habits. In particular, you must understand the habits of your employees right now — their current work habit. Forget about their prior old habit. It is gone — and was gone within months of the first rollout of Covid measures. Employees don’t think they are working remotely. And their subconscious thinks that what you are suggesting by coming back to the office is, in fact working the ‘new remotely.’ The subconscious says I am currently working at work (which is a place I call ‘home’) and my employer is attempting to encourage or force me to do something radically different, to work remotely (which is a place they call ‘the office).

If you really need employees to be working in the office but they are perfectly happy with their current habit, then let them go. Don’t fire them but recognize that you are going to lose to their new habit, and they will find some other employer that will embrace them continuing their current habit instead of being forced to work the new remotely.

If they hate their current habit, welcome them to the new remotely. You don’t have to do much. Just recognize that it will take some time to entrench the new habit. Don’t get worried if they complain about some aspects of the new remotely and express longing for some aspects of their previous habit. Just allow the new remotely habit to slowly push working from home into the mists of time.

The trickiest employees are those who have mixed feelings. While the current habit might feel comfortable, some of it is both comfortable but unpleasant — just like commuting was comfortable, but also unpleasant. The new remotely has some features that are attractive, but not all. For this segment of employees, you are going to have to listen and adjust in order for them to develop a new habit that is a hybrid, if you want to have happy and motivated employees. It is very unlikely that telling them how it is going to be will work. Think as if you were attempting to win a new customer that has been with another supplier for at least a couple of years. You are unlikely to cause them to break their current habit and convert to you as their habit by telling them what your offer is. You will need to listen carefully to them, ask them what would make the transition easiest and most beneficial, and then customize your approach accordingly.

My bet is that many companies simply informed their employees of the way it was going to be post-Covid, and many employees, influenced by their current habit, simply rejected the new remotely as a potential new habit. And I suspect that more companies and their employees will continue to follow suit.

This reminds me so much of a phenomenon I lived through during my time as Dean of the Rotman School of Management. In the 1980s and 1990s as Executive MBA programs (EMBA) surged in popularity, most students in them had their tuition sponsored fully by their employer, who felt it was a great investment in making their rising managerial talent more capable and valuable. But by the early 2000s, that practice had disappeared almost entirely. The reason was that companies found that a huge proportion of EMBA graduates left them for a job elsewhere soon after graduation.

My view from having taught and gotten to know many of the students is that the EMBA was a transformational experience — working full time, plus doing all of the EMBA classes and assignments, while becoming part of an exciting cohort of fellow-students and professors became their new normal over the one-two years of their program. When they got back to their sponsor company, they were treated as if they were simply going back — to the same job and the same expectations.

But to themselves, they were a new person. And they rejected going back to something that didn’t fit the current them — just as so many in the Great Resignation. My advice to EMBA sponsors then and to employers today is that if you want to establish a new habit, you better work on making it very attractive or you will have a different challenge: finding a new worker to fill the hole you helped to create by ignoring the power of habit.

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Professor Roger Martin is a writer, strategy advisor and in 2017 was named the #1 management thinker in world. He is also former Dean of the Rotman School.

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Roger Martin

Roger Martin

Professor Roger Martin is a writer, strategy advisor and in 2017 was named the #1 management thinker in world. He is also former Dean of the Rotman School.

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