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This is what corporate loyalty looked like, back when corporate loyalty was a real thing




In 1911, George Eastman, founder of Eastman Kodak, established the Kodak Welfare Fund. The fund helped employees who were no longer able to work due to an accident, illness or retirement.

One year later, Eastman introduced a program known as "payroll," which was one of the most progressive and widespread profit-sharing programs in US history. Seven years later, in 1919, Eastman employees offered nearly a third of their personal stock at a price below market rates. Eastman used the proceeds to strengthen the welfare fund.

Eastman also conducted paid sick leave, life insurance, disability insurance, a retirement pension, paid college tuition, access to corporate-funded health homes and corporate housing.

George Eastman was loyal to his employees, and in turn, they were loyal to him. Kodak never connected and its employees were known for their longevity ̵

1; and for their tendency to remain involved in the Kodak community long after they stopped punching their time cards.

Kodak is one of four companies mentioned in Rick Watzman's book, The End of Loyalty: The Rise and Fall of Good Jobs in America . The other three are Coca-Cola, General Electric (GE) and General Motors (GM). Each of these companies – including Kodak – saw the relationship with employees change over time, especially as shareholder values ​​became the sole measure of the company's success after the 1970s.

Loyalty gets too little attention.

How many unemployed middle managers do you know who have inexplicably decided to re-label themselves as "loyalty coaches"? No one, right?

It is no secret to promote loyalty. George Eastman created one of the world's most loyal workforces because he was loyal. You don't have to create a sophisticated internal branding campaign to convince employees to be loyal when defining leadership the way George Eastman did.

George Eastman's workers knew he had his back.

He thought a hard day's work should be rewarded with a good life, and he put his money where his mouth was. He knew it was just a way to create loyalty, and it was to be loyal.

If it worked well, why is it so difficult to find – especially in a large company – leaders like George Eastman today? [19659002] Part of the explanation can be found in the education many business executives receive at the business school. If you have ever opened a textbook on Economics 101, you know that there is literally no difference between a human and a wrench. Both are capital forms.

But humans and wrenches are very different.

There is no way to make a loyal wrench.

And there's no way to make a loyal employee think of him or her in the same way as a wrench.

When it comes to loyalty, there is no secret sauce.

Loyalty is achieved when given.

Loyalty is also strongly influenced by power. In the United States, companies often have the power to dismiss employees for whatever reason. They also restrict them from earning outside income. Most companies make it clear with a pile of employees that the employees sign on day 1.

The balance of power in favor of the company means that the type of loyalty George Eastman demonstrated has been replaced by corporate feudalism labeled as "loyalty." Kodak itself eventually went bankrupt, and not just because of technological changes.

The gradual loss of such a unique corporate culture played a role.

How do we create companies that last and turn loyalty into a real thing again?

We can change the way we train our leaders. We can recognize that a person is different from a wrench. We can stop diluting words like loyalty and leadership and redefine them by following an example of what leadership and loyalty really look like.

George Eastman would be a good place to start ..

Published on: January 17, 2020 [19659020] The views expressed here by the Inc.com columnists are their own, not those of Inc.com.


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