Purpose is high on the agenda for many business leaders. As has been widely reported, for example, even the Business Roundtable group of CEOs has started to talk about organisational purpose and values. This replaces their long-held convention of “shareholder primacy” and is seen as a big shift in thinking.
In part, this is a reaction to low trust and confidence, especially in the long wake of the financial crash and numerous corporate scandals. Many people also worry that in the future, with trends such as cognitive automation and further globalisation, the trust gap that is already prevalent in many companies is only likely to worsen,
Surveying the scene, CEOs like Alex Gorsky of Johnson & Johnson point out that “People are asking questions about how well capitalism is serving society.” IBM CEO Ginni Rometty observes that “It’s a question of whether society trusts you or not. We need society to accept what it is that we do.”
Over time, we will see if this is more than a marketing campaign by this group. I hope it is, because in my experience the best companies do have a focus on creating purpose and meaning at work. In those companies, this is achieved through sustained, practical efforts, rather than by mission statements and the like. And they accelerate progress by adopting an Employee Experience (EX) lens.
“The best companies have a practical focus on creating purpose and meaning at work”
The why of work
First though, a bit of background. One reason CEOs have been persuaded to talk about purpose and values is because of a wave of research in psychology, neuroscience and behavioural economics over the last decade on motivation, emotion and experience.
For example, Barry Schwartz, in his book Why We Work, showed that people get a sense of fulfilment from the work challenge, from social interaction, and from having some control over what they do. Another important factor is finding that what you do is meaningful. One important way of finding meaning is by linking what you do in your job to the welfare of others.
In some professions, such as healthcare or teaching, which are often thought of as vocations, that link to the welfare of others is clear and obvious. But in many jobs it isn’t. So effective leaders inspire employees by making it clear how their job affects others in positive ways.
A common way of doing this is by building a very clear line of sight to the experience of customers. Another way of doing this is by building a strong link to the organisation’s broader mission and vision.
This is a connection that many other authors have highlighted. From the viewpoint of behavioural economics, for example, Dan Ariely in his book Payoff highlights the complexity of motivation, suggesting that if you wrote down an equation to capture why you work, it would involve a very long list of factors, including money, achievement, happiness, a sense of progress, security, legacy, status, and so on.
Ariely criticises many organisations for being stuck in “a factory mode of production” when it comes to thinking about motivation. By this he means that leaders focus on financial rewards, whilst they neglect fundamental social elements such as identity, goodwill, connection and meaning.
Another person who has had a big impact is Daniel Pink. His best-selling book Drive was first published in 2009. In it, he highlights the importance of mastery and purpose in motivating people to perform at their best, which he characterises as a state of flow.
More specifically, he argues that it is the pursuit of mastery that is the most important thing. Pursuit is really a mindset focused on continuous improvement and perseverance towards long-term goals.
Accordingly, when it comes to inspiring leadership, organisations need to focus on what he calls “purpose maximisation”. Successful companies do not chase profit while trying to stay ethical and values-based. Their goal is to pursue purpose and to use profit as the catalyst rather than the objective.
Daniel Pink sets out an evolution in terms of organisations’ focus on motivation, from carrot and stick approaches, to performance-contingent rewards, which is where most organisations still are today, and on to what he calls Motivation 3.0: “The science shows that the secret to high performance isn’t our biological drive or our reward-and-punishment drive, but our third drive – our deep-seated desire to direct our own lives, to extend and expand our abilities, and to live a life of purpose.”
Daniel Pink notes, rather sadly, that the gap between what science knows and what business does is wide and it is not narrowing.
You can see this in the data collected in employee surveys. Most companies have a long way to go. In the UK, for example, only 56 per cent of employees say that leaders provide a vision for their company that is inspiring.
Narrowing the gap is where employee experience leadership (EX Leadership) really comes into play. A key dimension of EX leadership relates to providing purpose and meaning for people at work.
Of course, it’s one thing to point out that purpose matters to people and performance. What differentiates the best companies is that they actually do something about it. That practical application is increasingly achieved by adopting an EX lens.
Overall, the best companies are framing organisational performance in terms of individual experiences. They use EX analytics to ensure they are doing a number of important things well. From an EX point of view, a focus on purpose is actually quite practical and applied.
“From an EX point of view, a focus on Purpose is practical and applied”
For example, when it comes to thinking about jobs, tasks and roles, EX leaders have a focus on encouraging what is sometimes called job crafting.
In job crafting, managers and team leaders are able to provide employees with the authority and space to alter their jobs in such a way as to better suit their skills and interests. Employees are able to make small, but meaningful changes to the scope of their work, and to focus especially on the purpose of their role.
As described by Justin Berg, Jane Dutton, and Amy Wrzesniewski: “Within a formally designated job, employees are often motivated to customise their jobs to better fit their motives, strengths, and passions. Job crafting is a means of describing the ways in which employees utilise opportunities to customise their jobs by actively changing their tasks and interactions with others at work.”
This might mean people taking on more or fewer or different tasks, expanding or reducing the scope of tasks, or changing how they perform tasks and how they interact with others. This can happen in a wide range of work environments. Approaches like Lean and Kaizen, which I would argue have a similar emphasis on empowering operators, have transformed sectors like automotive manufacturing, for example.
It’s also the case that job-crafting is going to become an even more important capability in the future. This is because many companies are looking at the mix of skills and the “skills architecture” that they will need in order to for individuals and teams to continue to be successful in the future of work. For sure, as they undergo digital transformation, they are going to require flexibility and adaptability in crafting purposeful jobs.
“Companies are increasingly focused on the skills mix they will need in the future of work, which makes job crafting even more important”
EX and CX alignment
Another element in providing meaning and purpose is by ensuring there is a clear alignment between employee experience and customer experience (EX and CX).
For all organisations, your employee experience is critical for delivering outstanding customer experiences. Put plainly, it’s not possible to provide a simple and effective customer experience if your internal tools are clunky and hard to use. You’re not going to achieve customer delight if the people dealing with your customers are disengaged. It’s impossible to deliver great service if your employees are unable to exercise their own judgement effectively.
A successful customer experience strategy is the result of your company’s culture and ways of working. How you interact internally within your company will have an impact on external interactions too. As a result, leading companies realise that they have to focus on employees when they try to improve their customer experience.
A positive customer experience is, of course, the responsibility of everyone in the company. But an EX lens can be deployed the most effectively at the points of intersection with your customers: sales reps, success managers, call centres, front-line and field staff, and so on.
“An EX lens can be deployed most effectively at the points of intersection with your customers”
In practice, this can mean linking EX and CX feedback and analytics in order to identify important differences and gaps, and then addressing them.
The single best way to improve both EX and CX is to improve the flow of knowledge. Too often, critical knowledge becomes stuck inside different departments and teams, which act as silos. A key task of EX leadership is to identify and then break these silos apart in order to ensure that information is available to all who need it. This is also a key component in simplifying the way people work and in thinking end-to-end.
EX leadership and trust
EX leadership, then, involves providing a clear sense of purpose through things like job crafting and EX-CX alignment. Of course, this is one leadership component, alongside other things like team learning and personalising communications. Moreover, a critical factor is leaders’ own behaviour and consistency. Doing what you say, builds trust and confidence over time.
Ultimately, that will be the biggest test for the Business Roundtable. In a few years’ time, when people look back at their 2019 Statement on the Purpose of a Corporation, will it be seen as yet more spin? Or will these leaders have demonstrated their own sustained and practical commitment to delivering positive experiences in the organisations they lead?
Connect with me here and on twitter @nickl4 and let me know what you think.
On job crafting, see: Wrzesniewski, A., LoBuglio, N., Dutton, J. and Berg, J. (2013), “Job Crafting and Cultivating Positive Meaning and Identity in Work”, Bakker, A. (Ed.) Advances in Positive Organizational Psychology (Advances in Positive Organizational Psychology, Vol. 1), Emerald Group Publishing Limited, Bingley.
Tags: #Leadership #Purpose #FutureOfWork
This article was first published on LinkedIn on August 28, 2019
Many companies are looking at how they can transform traditional jobs through a combination of technology and new work arrangements. This is often referred to as the Future of Work.
Beyond things like robotic process automation and the increasing use of gig workers, companies are particularly interested in using Artificial Intelligence (AI) to accelerate cognitive automation. There’s a great potential for cost savings, improved efficiency and (hopefully) augmented performance.
This shift is already having an impact. Some observers, such as Richard Baldwin, for example, claim you can see a “hollowing out” of organisations as a result of this new wave of white-collar automation. New technology has always transformed work, of course. What’s different this time is that job displacement is moving far ahead of job replacement. Indeed, it’s the speed of this current digital transformation that’s the most striking aspect.
I have argued elsewhere that employees’ concerns over automation are adding to an already problematic “trust gap” that exists in many organisations. Low trust is a serious drag on performance. The best companies realise this is a critical issue and are addressing it quickly through new tools and approaches.
Unfortunately, some Future of Work thinking seems to start and finish with an old-fashioned top-down view of the workplace. It can feel like a C-Suite analysis of opportunities for saving money and improving productivity deep down in the guts of the organisation.
Looking ahead, perhaps those at the very top of the house need to reflect a bit more on their role in the future. Because if there’s one job that’s surely ripe for automation, it is the Chief Executive Officer.
Let’s imagine that a bit more… what will it mean to have an AI CEO?
Clearly, there will be some immediate and tangible benefits. For example, getting rid of your current CEO is going to shave a lot of dollars from your payroll. Human CEOs earn a lot.
How much do they get paid? According to the Economic Policy Institute (EPI) in the USA, the average pay of CEOs in large companies is $17.2 million. In the UK, the CIPD puts the mean salary for FTSE 100 CEOs at £5.7 million.
CEO compensation is also very high relative to the rest of the workforce. The EPI puts CEO pay vs. a “typical worker” at a ratio of 278-to-1. In the UK, the amount of time it takes a chief executive to earn the annual wage of an “average worker” is just 2½ days.
Replacing your CEO with technology will also help with things like gender and BAME pay gaps. This is because these very well-paid execs are overwhelmingly male and white.
Only six of the FTSE 100 CEOs (at the present time) are women. And as one of my favourite headlines of 2019 put it: “FTSE 100 has more CEOs called Steve than from ethnic minorities, research finds.”
On top of these salary considerations, there are other important factors.
Due to processing power, an AI CEO has some big advantages. No human CEO can compete with AI when it comes to strategy formulation, for instance. An AI could play out, test and learn from hundreds of competitive scenarios and simulations in the time it takes your human chief executive to adjust the recline setting on their comfortable desk chair.
In a similar vein, when it comes to responding to issues, an AI CEO is always on, always focused, 24 by 7, 365 days of the year. The AI is able to make adjustments in a blink of an eye. They can keep the business ticking over and operating efficiently anywhere in the world at any time.
Moreover, with deep learning and advanced neural processing, the AI CEO will be able to avoid predictable problems in the first place. They can also ensure that resources are available for effective risk management.
And there’s no need to provide perks as recompense for all this attentiveness and hard work. No need for golf-club membership or gym fees. No need for expensive retreats. You can sell the company jet to a pop star and forget about buying lift passes at Davos.
OK, you might think, but what about the organisational and people side of things?
Even though your CEO’s people skills may be lacking, they’re still likely to be better than a machine, right?
So how could an AI compensate?
Well, there are some things that an AI might actually do better. Think about cascading goals, creating alignment and objective setting, and then managing performance through observable, quantitative data. This is something that technology is already helping with. It could be done even more effectively by a machine leader. For instance, the AI CEO isn’t going to be bothered that the Head of Sales is a “great person” and a super “culture fit” if the sales campaign isn’t quanitifably successful and delivering positive results.
And when it comes to the ongoing monitoring of the health or fitness of the organisation, a mathematical approach can have some benefits. Imagine that you have some hierarchical redundancy in the finance function — now that the AI has brought its robot CFO cousin online. The machine CEO is going to be pretty effective at trimming non-essential people in order to keep costs down.
At the present time, there’s often little empathy from leaders when organisations undergo restructuring. At least with an AI CEO, I expect these human resources will be fired by an app in order to provide a consumer-grade experience as they exit the organisation.
The AI CEO probably doesn’t have to worry too much about culture and engagement either. Both of these things are major challenges for human executives. It’s difficult, with traditional leadership approaches, to get people to work simply, effectively and collaboratively. And it’s hard to provide the conditions whereby people are motivated to go the extra mile and inspired to bring their best ideas and efforts to all aspects of their work.
Research shows that human CEOs spend most of their time (up to 72%) bogged down in meetings, mainly in their corporate headquarters, as they try to stay in the loop and get people to do what they need them to do.
Instead of all this, the AI CEO will probably adopt a surveillance approach instead. They can monitor all digital communications and workflows as they happen. They can keep a real-time watch on productivity and collaboration by examining the “digital exhaust” trails of email, messaging and calendar data (alongside business and operational data). They can analyse the flow of information across their human networks and simply remove people who are working in silos (“low-influence nodes”). They can automatically deploy a “nudge” to their human colleagues who are failing to do exactly what’s required.
In order to fully optimise human performance, the AI might also want to assess the mood of its human colleagues. Rather than walking around, the AI can simply listen to the water-cooler gossip via the smart badges people wear. They can review the tone of meeting discussions through mics in conference rooms. They can obviously use facial recognition algorithms to analyse interactions caught on video. Of course, they can track what people are posting on social media as well. The AI leader can then add all this mood data to its retention algorithm, so that it can predict individual turnover and take action accordingly.
There are obviously some privacy concerns about this sort of surveillance (although most of this tech already exists). So there’s probably a need to ensure that the AI CEO’s algorithms follow some kind of ethical code, especially when it comes to managing people.
High ethical standards have been hard to achieve with human CEOs, of course. It might actually be easier in this new AI-led workscape.
It’s possible to imagine, for example, “hard wiring” an AI version of a doctor’s Hippocratic Oath or Isaac Asimov’s first Law of Robotics into machine leadership. This could provide consistency, reliability and even help to build trust.
Think of all the financial and non-financial scandals that can be avoided by having a piece of machinery as the boss. Plus the lawyers’ fees you’re going to save as a result.
Don’t forget all the business school tuition fees you no longer have to pay for leadership development. The AI CEO could be the final nail in the coffin of MBAs.
There are numerous other benefits, such as not stressing about succession planning and no longer paying for head-hunters. In fact, do you even need a HR department in this new world of data and analytics?
For any human CEOs actually reading this post, I apologise if it is causing your blood pressure to rise.
Let me provide some reassurance.
As your job is transformed, we will make sure that you are up-skilled to play a new role in the new organisation.
I can see, for example, you operating as a kind of Human Corporate Mascot. This could be a new future of work job title that didn’t even exist a few years ago. It involves talking to customers and investors about our vision and our values. An endless roadshow of presentations and dinners — not so unlike now really.
We will give you access to online micro-training, so you can learn to tell funnier anecdotes and we will make sure that the uniform fits.
We will need to be fair in this transition process, however. This means sending you to an assessment centre, so we can measure your current skill level and also your future potential in telling entertaining stories. And it is possible that Brenda in Accounts, whose job is also terminating, has more passion for our customers and is better suited to the ambassador role than you are.
If anyone else doesn’t like the picture presented here, then you might need to act quickly. All these trends are already apparent. Publications such as The Economist worry that capitalism is embarking on a new era of “Digital Taylorism”. Worrying about some of these trends, groups like the Business Roundtable of CEOs are trying to redefine their role and the purpose of corporations in the new world of work.
So how might you lead a different kind of organisation and still be successful in this new machine age?
Well, I would argue that a different leadership perspective is required, one that taps into the human intelligence of your workforce. One where employees and their experiences are at the heart of your thinking.
Some organisations are already making great progress in this, but many more have barely started their employee experience (EX) journey.
When I think about employee experience leadership like this, three things stand out:
Purpose: This means ensuring that people are able to make small changes to their jobs, so they achieve more and get more out of their work. Sometimes this is called job crafting and it’s one practical way of helping people get meaning from their efforts. As you think about the skills you need in the future, this kind of approach to involving people in shaping their work becomes more critical. It’s a bottom-up approach to organisational change. Another way of providing purpose is to ensure alignment between employee experiences and customer experiences. In other words, making it clear to people how their work impacts customers in positive ways. To do this well, you need open communications and transparency, so that information flows to everyone who needs it. This also helps in working simply and end-to-end.
Learning: A second key focus should be on learning and feedback. Team learning (which was first described by Peter Senge) means taking advantage of the collective wisdom of your people. It requires innovative thinking and coordination, as well as a focus on organisational capability. Team learning leads to personal growth, but it also makes organisations better equipped to solve problems and it ensures a better flow of information and ideas across silos. New technologies also provide the opportunity for more personalised learning and more useful feedback. There’s especially a need to improve performance management, which is probably the most impactful process in terms of employee experience overall. Performance management should be a process of frequent check-ins, setting and re-setting relevant goals, encouraging developmental conversations, and providing lots of real-time feedback and recognition.
Authenticity: Above all else, EX leadership needs to be personal and authentic. In terms of communications, this means designing and producing materials, preparing and delivering messages, in order to meet employees’ individual requirements. Three key elements stand out: providing personal content; when it matters to me; so that I can use the feedback to improve my experience. The final aspect of making EX personal is the individual contribution that people make through their own behaviour and their own openness to feedback. As such, the most important component is leaders’ own behaviour and consistency. Doing what you say, builds trust and confidence.
You can read more about EX leadership in my book. I have looked at how the best companies are using technology and data to create better workplaces. In particular, I have looked at the critical role that leaders play in shaping employee experience, building trust and improving engagement.
Please also connect with me here and on twitter and on LinkedIn to ask me questions and to find out more.
Many of our clients are preparing for the future of work. Technological, economic and demographic forces are causing disruption and change. Companies are adjusting their strategies so they can adapt and capture growth. They are also thinking about what it means for how they lead their people.
What are some of the things they’re thinking about? We asked leaders in our recent Future of Work Survey and the answers challenge some widely-held ideas.
For example, when it comes to AI and robotics, rather than simply replacing people as many commentators fear, most respondents (57%) see automation as a way of augmenting human performance. The big implication for many companies, therefore, is on improving the way people interact with technology. It means focusing more on human-machine interaction, on combining human skills and machine tasks, and on improving user experience.
In addition, rather than automation leading to de-skilling – a new digital Taylorism as The Economist recently put it – many organisations (27%) are already changing the design of jobs to require more skills. In fact, many organisations have a big focus on capability-building. They realise they need to make learning easier and more continuous. With a multi-generational workforce they need to support employees making different career and job transitions.
In the future, organisations will also rely a more diverse mix of worker types to deliver their services, including freelancers, contractors, and partners. A lot has been written about the rise of the gig economy and new talent platforms such as Upwork. However, the contribution of free-agent workers is only set to rise from 4% to 6% in the next 3 years. This means that the focus that most leading organisations already have on employee engagement, employee commitment, and employee retention remains critical to their success as a business.
So what are companies doing to prepare for these future trends? For one thing, they are listening to employees more often and more continuously. There is more interest in employee research now than there has ever been. Last year was the busiest twelve months in the 40+ year history of the employee insights team at Willis Towers Watson.
Many of our clients are now licensing our self-service Pulse Software to capture employee voice on an agile basis. Our Pulse Software allows them to run surveys as often as they like, as and when they need to, and to track engagement in real time.
Employee engagement surveys are also now part of a continuous listening strategy, which incorporates joiner, leaver, and key-cohort surveys. Clients are also using tools like our Virtual Focus Group Software for active listening and jams – creating conversation and dialogue with hundreds of employees at a time.
They are also using technology and analytics to understand their workforce better. For example, we use smart machine analytics to suggest the specific actions that individual managers can take to improve their team’s performance. We also connect engagement data to other workforce and business data, in order to reduce employee turnover, improve sales, productivity, customer retention, and so on. Predictive analytics like these help companies transition from a point-in-time perspective to a process of continuous improvement.
As well as listening more and understanding people better, when it comes to taking action on engagement, many companies are thinking about it through the lens of employee experience (EX). What do we mean by EX? It comprises all the elements of the employment deal and psychological contract. This includes challenging work, effective rewards, strong teams, and a clear purpose. Often our clients are thinking about EX as part of an overall culture transformation, because they are making a shift to a more digital business strategy.
It’s an exciting time for anyone involved in employee research and people analytics as both are key elements in helping leaders navigate towards the opportunities provided by the future of work.
My news feed is full of articles on the Future of Work (“FoW”). A number of trends are converging so that it feels like we are on the cusp of big changes in the workplace. Some of those trends include:
Increasing use of contingent workers and talent exchanges like Work Market.
A more diverse workforce, meaning, for example, that teams comprise people with widely different experiences.
Employees who have grown up with social media and who have consumer-type expectations of their experience at work.
A workforce that is geographically dispersed and reliant on social media rather than face-to-face interaction.
Jobs that are far more technology-dependent, with routine tasks automated by artificial intelligence or robots.
Demand for new skills, such as those required to make sense of the huge volume of data that our on-line participation leaves behind.
Within this shifting mix, many people are wondering what it all means. In practice, “disruption” is an over-used term and transformation will be incremental. But it’s clear that there are new challenges and also opportunities for those companies that are able to seize them.
One area I am interested in is what the future of work means for leadership and culture. This can sometimes be low down on the to-do list in FoW articles, as it relates to something that is generally hard, ongoing, sustained effort. Some writers have even speculated that in the future there should be less focus on culture as attention shifts to the work itself. But I believe the leadership challenge is to glue together the shifting workforce into a community of shared interests and this is as important as ever because people want meaning from their work.
Some of the emerging priorities for this are already clear and are being explored by my clients:
Focus on employee experience. This means identifying the key interactions that employees have with the organisation and then applying design thinking to improve engagement and performance. It is a joined-up approach to jobs, teams, rewards and the way people work. It includes understanding employee journeys and maximising the value of key episodes. It also means improving the digital tools employees use and reviewing the physical workspace in order to increase collaboration and productivity.
Adopt a comprehensive listening strategy. This means deploying a mix of consumer-style approaches, including pulse surveys and social media analytics. An important part of the mix is also supporting managers to have dialogue and conversation, rather than only managing from their desktop “cockpit”.1 It also means shaping the physical workspace so that it is easy for face-to-face conversation to occur.
Create a strong identity through shared experiences. Although artefacts and rituals are changing (workspaces, flex working, mobile tools, dress code, etc.), the fundamentals of culture building remain the same: role modelling, strong values, clear purpose. Increasingly, shared experiences are digital. These provide the opportunity to engage a broad group at the same point in time. However, breaches of trust are also more public, which highlights the importance of authenticity and consistency.
Reinforce meaning and purpose through feedback. Technology makes it far easier to provide useful, regular feedback, not only from colleagues, but also from customers and partners. In fact, it is vital to provide customer feedback and to align employee and customer experiences. The critical “cog” in using feedback remains the team leader. So selecting and developing front-line managers who are able to build line of sight and help people understand the contribution they make is key.
Because change is incremental, the FoW is not as far off as it might feel, so it’s important to build preparedness now. But there is an additional challenge, namely who will be your most effective leaders in the future of work? In our recent Global Workforce Study only 39% of people said their organisation is doing a good job of developing future leaders.2 It’s quite likely that your current definition of leadership reflects your old hierarchy and old ways of working. Leading people in a flatter, networked organisation requires a different set of skills.3 Understanding the behaviours needed for your future success, and incorporating those into your assessment and development programmes now, is one of the most critical components to get right.