Welcome to 2023 and my January newsletter (a short collection of the most interesting EX articles I’ve come across over the last months). As always, let me know what you make of them!
Actually, there’s a bit of a theme to this edition. That’s because the first two articles are both about systems thinking (something I’m very interested in):
In this HBR article Ludmila Praslova identifies the problem of trying to fix issues like burnout or bullying by focusing on individual behaviours and not context. I like the discussion of super-biases and mental shortcuts.
Alec Levenson has written a two-part series on systems diagnosis tools and techniques. I like his coaching guidelines such as: “Focus on perennial problems”; “Check for unintended consequences”; and “Look for root causes.”
Next up, I just really like this article by Zach Mercurio on “mattering”. His definition is “the belief that we’re significant to the world around us.” Zach explains why it’s important for your experience at work and how you can foster it. Here’s the link.
Shopify made a big noise when it announced it was going meeting-less. I really don’t like meetings (this will surprise no-one), so I was interested to learn what’s involved. The truth is more interesting and complex than the headline suggests. Click here for a great write up by Becky Kane.
I thought this was a good article by Ben Zweig, analysing the attrition risk at 3- and 12-months. Getting to your first anniversary really matters. I’m working with several companies at the moment to understand why that sometimes doesn’t happen often enough.
In December and January my LI feed is full of long lists of “new year trends and priorities”. I appreciated the simplicity of this list by Lynda Gratton as she identifies only two: 1) Check your assumptions about different generations in the workplace so you can bring people together; 2) Improve your understanding of how human skills and new technologies intersect.
The final article is a WTW one, summarising our new research into change leadership in high-performance companies. It answers the question: “What sets these Change Masters apart when it comes to employee experience?” The link is to a download form; if that’s too much faff, let me know and I will email you the report. 🙂
I assume you’re grateful that I haven’t mentioned Chat GPT even once. 🙂 (Of course, this edition could have been written by a bot; how would you tell?)
I’ve been out and about presenting at conferences recently. It’s great to meet people in person. I’ve been talking about using analytics to better support employees in a cost of living crisis. I’ve also discussed wellbeing and the need to focus on organisational health and resilience. (Someone called this “the state of the world according to Nick” presentation, which I think is fair as I cover a lot of ground, from geopolitics to neuroscience!)
Links to my slides from both these presentations are below.
Here is my latest EX Newsletter, containing a selection of the best EX articles of the past few months. The goal is that I act as a filter, so you don’t have to spend your time scrolling through LI and Twitter.
Given everything, there’s a lot being written about burnout and stress right now. I’m very interested in the longer-term reasons behind these challenges, which often arise out of complexity and bureaucracy. By adopting an EX lens, you can shine a light on these systemic problems and tackle the root causes.
I hope you find these articles interesting and useful. Let me know!
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How Can Business and HR Leaders Simplify Complexity?
I agree with Dave Ulrich that “complicatedness” is one of the biggest challenges that large organisations face. HR has a key role to play in simplifying things; I would argue, by focusing on employee experience.
I really like this analysis by Pia Lauritzen of the shifts that leaders in traditional organisations need to make to transform performance. Her list includes moving from communication to conversation and from feedback to transparency. Great stuff.
I’ve worked with Coca-Cola since 2004 and I found this interview with Drew Fernandez, Chief People Office of the Bottling Investments Group, very interesting, especially when he talks about simplifying processes in order to elevate the employee experience.
This is another interesting paper from Culture X looking at the link between culture and employee turnover by using Glassdoor data. They highlight the importance of lateral job moves and more-predictable work schedules. Sometimes it’s the simple things that can make a big difference.
I wrote an article recently on why total rewards are a key dimension of EX but are often treated separately. I describe how we sometimes bring rewards and engagement analytics together. I probably don’t talk about this enough! ICYMI, here’s the link:
The field of of people analytics has seen rapid growth over the last years. As someone who has explored the links between people and performance throughout my career, it’s been great to see this explosion of interest.
There are various definitions of people analytics, which is sometimes called HR analytics or workforce analytics. Janet Maher and John Boudreau call it “An evidence-based approach for making better decisions on the people side of the business; it consists of an array of tools and technologies, ranging from simple reporting of HR metrics all the way up to predictive modelling.”
Jonathan Ferrar and David Green in their book Excellence in People Analytics emphasise the importance of using people data to provide business value. They describe different ages in the evolution of the field with most companies now focusing on supporting leaders to navigate key challenges: “People analytics is an absolute must-have for any Chief Executive Officer or Chief Human Resources Officer.”
There is a potential hitch in all this progress, however. HR has long been a siloed function and it strikes me that this characteristic is being reflected in the work that is now published and shared in the people analytics community. Recent people analytics books, collections, conferences, and articles all seem to have a glaring gap; hardly any of them make any mention of rewards.
Recent people analytics books, collections, conferences, and articles all seem to have a glaring gap; hardly any of them make any mention of rewards.
There are a few notable exceptions. There has been some great work looking at gender and ethnicity pay gaps, for example. It’s also true that, because of the nature of rewards work, it can be harder to share the outputs in public. But in the main, reward analytics operates as a separate field from people analytics, just as rewards is usually a separate sub-function from talent. Even though rewards is full of data-savvy and analytically-minded people. This feels like a missed opportunity.
That’s because decisions about rewards are important business ones. Payroll is a significant percentage of revenue. Companies source and offer a complicated mix of pay, incentives and benefits. It’s an area where smart analytics can provide a lot of business value and generate a return on investment.
Reward design choices are also important human decisions. Rewards carry emotional as well as practical weight. A lot of organisational energy is spent discussing them. And incentives affect behaviour, often in oblique ways.
Getting total rewards right can mean the difference between competing effectively in the global talent marketplace and being left behind. A consumer-grade total rewards portfolio of pay, benefits, wellbeing and career programmes serves as a catalyst, driving attraction, retention and engagement of talent essential to business success. Yet, in many organisations, total rewards are not evolving quickly enough to keep pace with changes in the world of work.
All of this underlines that when it comes to employee experience (EX), rewards obviously matter. It’s why in our work we include total rewards as one of the four key dimensions of a High-Performance EX, as shown below:
Let me expand on this point about employee experience. I have written quite a bit about EX, and one of the things I believe strongly is that EX requires a shift in perspective. In essence, it means moving away from a traditional and top-down view of organisations towards a messy, conversational, and more personal view of life at work.
From an EX point of view, therefore, all the following things are super-interconnected: jobs, work, performance, skills, careers, learning, pay, benefits, inclusion, engagement, well-being, communications, culture…
It’s a blatantly obvious point, but worth stating — employees don’t experience life at work through a HR lens. Rather, HR needs to think about organisational effectiveness from an employee perspective. That’s the fundamental trick in making EX work.
The same logic applies to people analytics. Talent metrics only address part of the humans and work equation. If you exclude rewards, you’re not capturing the whole picture and you’re not thinking systemically.
Talent metrics only address part of the humans and work equation. If you exclude rewards, you’re not capturing the whole picture and you’re not thinking systemically.
So what does it look like to bring reward into people analytics? One example is the work we do around optimisation. Specifically, Total Rewards Optimisation (TRO) allows you to align reward investments with the employee experience. We talk about finding the “sweet spot” — the intersection that aligns what and how much you spend on total rewards with what your employees value most and least across what you offer — while uncovering how reward changes affect employee behaviour and performance on the job.
There are four key parts to TRO:
Understand which rewards employees value most and least using conjoint analysis, a survey methodology used in market research to understand customer preferences. You can also pull in selection data from your flex and benefit programmes to understand actual employee choices and trade offs. We also bring in employee engagement, retention, and performance data in order to analyse the linkages.
Assess the return on your total rewards investment, as well as the impact of the programme on your workforce, by combining employee preferences with financial data. We model various investment scenarios in order to help leaders decide how much to spend and where to get the best possible results for the right size of investment.
Use data to understand what employees see as the most and least valuable components of their reward packages. We help leaders make investment decisions and deliver a talent value proposition that is likely to foster desired attitudes and behaviours at a cost the organisation can afford.
Use segmentation to understand the different priorities and attitudes of a diverse and multigenerational workforce towards benefits, cash and work/life balance and build a competitive edge in attracting, retaining and engaging top talent.
To my mind, TRO is a great piece of people analytics. It’s got interesting and important data, cool maths, fun modelling, nice data visualisation. More importantly, you’re linking together employee preferences and behaviours to business and financial data in order to understand trade-offs and ROI. And those scenarios are typically explored interactively with leaders as different hypotheses are tested and analysed.
My broader argument, however, is that this is an example of how it’s possible to include rewards in people analytics and that this is an important thing to do. It’s one thing to look at engagement, retention and performance drivers for your key talent, and to make decisions based on that data. It’s another to look at those things alongside what you spend on total rewards and how you shape, customise and communicate your value proposition. The latter is taking a step towards thinking holistically about employee experience.
This is especially important right now as leaders are acutely aware of the importance of retaining and attracting key talent in the midst of a period of high turnover. Rather than throwing money at a problem, finding the sweet spot matters more than ever.
There’s also a point here about the state of people analytics at the current time. It’s possible to see the recent rapid growth in people analytics as a transitory moment. A point when data became more available and HR began to explore how it can be used for improving decision making. At first, growth in analytics has mostly occurred with a traditional HR mindset, within HR silos, reflecting long-held budgets and distinct backgrounds and skillsets. But in the near future, the picture might look quite different. As datafication continues apace, the current people analytics community may merge with others to become the analytics engine of an EX function or even an EX analytics team within a business intelligence function. In some of my clients, this shift is already happening.
As datafication continues apace, the current people analytics community may merge with others to become the analytics engine of an EX function.
Jonathan Ferrar and David Green also refer to this kind of transition in their recent book, as they herald a new Age of Excellence in people analytics where “the human resources function itself becomes even more data literate.”
A key question for me is whether that means “business as usual” (such as continuing to think in HR terms) or taking a leap and embedding analytics and design thinking within a truly EX mindset.
I don’t normally share quotes, but here are two of my favourites. Both get at the importance of learning and perspective. This is why I like them:
“It’s what you learn when you know it all that counts.”
This is a quote from John Wooden, the American basketball player and coach. As head coach for the UCLA Bruins, he won ten national championships. Unlike most sports quote this one is humble. It acts as a reminder that even if you have great scores and results, there’s always much more you can learn. For me that’s a hallmark of a high performance culture and great leadership.
“We cannot solve our problems with the same level of thinking that created them.”
Albert Einstein, maybe
OK, so Einstein might not have said this (there’s no clear source), but the quote highlights a problem that I come across all the time in my work. You can call it denial, obfuscation, wilful blindness, etc. It gets at the need to take a different perspective. A key way to break out of this leadership trap is to capture different voices and to involve people in solutions and changes. This is at the heart of EX.
In many companies people are frustrated. They feel they’re running hard and putting in a lot of effort, but they’re not making much of an impact, and this is often due to the difficulty of getting work done.
Yves Morieux has pointed out that the twin problems of stagnant productivity and low employee engagement share the same root cause, the increasing complicatedness of work and the growth of bureaucracy. Fighting complexity, according to Morieux, is the number one battle for all business leaders.
Yves is not alone in worrying about this. Gary Hamel is appalled at the damage being done to the global economy by bureaucratisation. He argues there is a 3 trillion dollar wealth-creating opportunity in tackling bureaucracy, and pleads with business leaders to get to grips with it.
These are some of the issues Hamel identifies:
Policies and processes sapping individual initiative
Time and energy consumed by unhelpful reporting and pointless meetings
In my experience, the single most effective way of tackling these challenges is to involve employees in simplifying the work. This is what we do when we run employee surveys. We provide a critical feedback loop and involve people in the solutions. Key topics we explore are things like: Does everyone have a clear line of sight to the customer? What’s stopping more effective cooperation? When people believe something can be done better and differently, do they speak up about it? Are people able to sustain the level of personal energy they need in order to have an impact?
These are some important things to watch out for when simplifying work:
Managers need to know that one of their key tasks is to get stuff out of the way, so their teams can work effectively
Financial and operational information should be transparent and widely shared
Managers have a role in helping their teams understand how the business works and their contribution
Feedback is critical and this means listening to employees and encouraging dialogue
You need to reward people who do a good job of simplifying work and share their success stories widely
Hamel believes we need “a revolution of the mind” in order to go to war with bureaucracy. And in this there is also a critical role for people analytics. This is because, as new ways of working are tested and piloted, you need good people analytics to understand the impact of such “hacks” on engagement, productivity and other outcomes in order to build the business case and to direct the next iteration of changes.
It really bugs me when unnecessary things get in the way of my work, so this is one mission I am proud to play a part in.
We do a lot of research into high performance organisations and I am often asked what makes the best companies stand out. Here are some of the things I’ve noticed:
High performance companies work simply. That means doing things once and always with a very clear focus on the customer. In companies where people work simply, they’re trusted to make decisions and encouraged to speak up when they see things that can be improved. “Simple” also requires discipline, the ability to prioritise critical tasks and to cut out the rest.
Innovation fuels success. Innovation can sound soft, but it’s really about transformation. I like Adam Hartung’s approach to innovation – a constant battle against old ways of working that become “locked in”. So much energy is spent defending the status quo. Effective leaders give people permission to challenge the way things are done. The best leaders actually spend time plotting how to create disruptions.
I visit a lot of different work places and what makes an effective manager is nearly always the same. They’re good at getting to know the people in their team and to learn their strengths. They’re interested in developing people, they recognise when things go well and they help people understand how the business works and how they contribute through their job. High performance depends on having more effective managers.
In many companies leaders spend a lot of time looking back – reviewing last year’s numbers in order to determine next year’s plans. The insights we collect from employees through our surveys give leaders a chance to look forward, to identify future opportunities and to think about their future workforce. That kind of forward-looking exercise is another hallmark of success, especially as there is so much change happening in the workplace.
These are some of the key things that I have seen. What would be on your list?
References: Towers Watson, Tracking Trends in High Performance Companies (2014) Adam Hartung, Create Marketplace Disruption (FT Press, 2008)
Tags: #Innovation #HighPerformance
This article was published on LinkedIn on December 3, 2015.