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?)
Here’s the autumn edition of my newsletter. The days shorten, the temperature drops, the heating bills go up, and I’m a bit worried the content here won’t cheer you up. 🙁
Two excellent articles have analysed data from social networks to measure employee experience. First up, Don and Charles Sull have mined Glassdoor to identify what leads to toxic work cultures. Their answer: bad leadership and poor work design. Second, a bunch of folks from MIT, Harvard and Stanford have explored LinkedIn connections to understand the effects of strong and weak ties on job mobility. Both are examples of analysing “passive data” in order to understand behaviour through networks (an area of growing interest).
Talking of social connections, when I started doing research into engagement (all those years ago!) I never expected that isolation and loneliness would emerge as a key theme. But it is. In the UK, one-in-five employees feel lonely at work. Importantly, only one-in-ten would ever tell their manager about it. This article by Rachel Botsman (one of my favourite writers) is to the point.
Maybe what’s needed is more compassionate leadership. To that end, this paper by Mark Mortensen and Heidi Gardner looks at how leaders can show compassion without compromising on performance; in their words “being kind and high-performing”.
When it comes to changing culture, I found this article by Roger Martin very insightful. “Culture change depends on micro-interventions: small adjustments to the structure, dynamics, or framing of interpersonal interactions, applied consistently over time.” That’s something I agree with – lots of incremental changes that can add up to something big, even transformative.
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.
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.
I’m moving my informal newsletter online as the number of recipients has grown. It’s the same format – a short selection of very best EX articles I’ve come across over the last months. Hopefully, this saves you from spending time scrolling through LinkedIn and Twitter.
Here you go:
The Four Levers of Employee Experience
Stacia Garr, who runs Red Thread Research, has written a great review of EX approaches. The four levers are: 1) A clear philosophy; 2) A supportive culture; 3) Clear accountability; and 4) An aligned measurement approach.
“Sense of connection” is a very big topic, especially as people plan for the future of hybrid working. This article by Gianni Giacomelli is interesting because it looks at the importance of networks: “Good people who fail to create a strong network in their company can end up leaving.”
Gustavo Razzetti’s new book (“Remote Not Distant: Design a Company Culture That Will Help You Thrive in a Hybrid Workplace”) is a blinder. It’s full of practical steps and templates, beginning with “understanding mindsets” and moving through to “releasing agility”. A highly recommended addition to your summer reading list.
HPEX and Hybrid
I’ve also written about employee experience and flex work in this article in People Matters. I summarise quite a bit of our recent research into high performance EX.
Here’s the latest version of my informal newsletter, containing a short selection of the very best EX articles I’ve come across over the last few months (so you don’t have to slog through LI or Twitter).
First up is a terrific HBR article by Diane Gherson and Lynda Gratton on how overwhelmed many managers are and what to do about it. In our data we’re seeing more and more evidence of manager burnout. It’s often a systemic problem that’s fixed by rethinking the role of people leader. There is some great advice in this piece: building people leadership skills, simplifying work, and job redesign. Related to this, I am working on a number of “Manager 180s” for clients at the moment that provide tailored developmental feedback to people leaders at all levels. It’s a great use of our listening platform (and often not part of a traditional “listening strategy”).
I’m a long-time fan of Joe Pine and Jim Gilmore, the authors of The Experience Economy, one of my favourite books. I really like their latest article on transforming jobs to create more compelling employee experiences. Too much of the discussion about the Future of Work focuses on automation, cost-saving, and efficiency (the transactional side of work). It’s good to be reminded of the opportunity to invest in people, engagement, and trust (by transforming jobs).
This is an interesting article by Ayelet Fishbach on how moderate emotional discomfort can be a signal that you’re developing as a person. It often happens before you can actually detect the benefits of self-growth. In other words, short-term discomfort can be a sign you’re making progress towards long-term gains. Ayelet is author of the book “Get It Done: Surprising Lessons from the Science of Motivation”.
The final pair of articles are both reflections on what has happened over the last 2-3 years:
Here, Eric McNulty focuses on leadership. He sets out a simple process of “sensing-responding-adapting” in order to be agile enough to respond to uncertainty and shocks. I think it’s a very powerful (and simple) framework:
I’m helping several companies at the moment review employee feedback from surveys and virtual focus groups and the like. On top of everything else, there are a couple of clear issues leaders are facing:
First, an innovation challenge. That might sound odd, given all the change & disruption of the last 18+ months. But a lot of those things were already in the works – they’ve mainly been accelerated. Breakthrough and disruptive innovation, which rely on collaboration and risk-taking, have been far harder to achieve. I think this is mainly due to organisations operating in a Survive State. There has been a narrowing of focus as a result. A key question for leaders is how to return to a more open innovation mindset and quickly.
Second, a growing wellbeing concern. This is not a surprise, but the sustained slog of the pandemic really is taking a toll on all aspects of wellbeing: physical, social, emotional. As a result, some people have reconsidered their working life priorities. This re-evaluation combined with sustained anxiety is one of the dynamics behind the high turnover many companies are facing. Putting deep and culture-based strategies in place to address wellbeing challenges is critical in order to support people and minimise the risk of losing key talent.
Over the last few months, we have been doing a lot of work on the connection between culture and EX, and that’s reflected in the content below. Both topics are top of mind for many leaders I’m working with. I think this is because there are just so many things happening that are impacting trust at work – witness “The Great Resignation” – that it’s important to reflect on key principles about purpose and alignment.
I like this idea of “a people-centered operating system” from Vivek Sharma, with a focus on goal setting, learning, and culture. In this short article, he argues that the future of work is really about the future of talent, which is something I strongly agree with: https://www.entrepreneur.com/article/376749
Here is the Summer edition of my EX newsletter; a selection of the key EX articles I’ve come across over the last few months.
Why Trust Is the Future of the Employee Experience
So much has been written about EX and making hybrid working work! But I really like this short and optimistic article by Gethin Nadin. “One of the biggest lessons businesses learned from the pandemic was that employees can be trusted. As we begin to recover and prepare for new ways of working, it’s critical for employers to sustain this trust and build an employee experience founded on autonomy and choice.”
Daniel Kahneman’s new book Noise (about the variability of human judgement) has been getting a lot of press. In this short LI piece, Anna Tavis asks “What does it mean for HR?” and concludes “We may consider adding the “noise audit” to our organizational tool kit and revisit our relationship with algorithms as partners on the people experience journey.”
The Pandemic Did Not Affect Mental Health the Way You Think
This was a really interesting article in The Atlantic. The pandemic has led to real struggles for many people and many companies (also see below), but at the same time there has been an astonishing degree of resilience, which in itself holds key lessons.
We have been busy with new WTW research. We have just published the results of a major external survey of employee experience. The pandemic has put many organisations under stress and we have looked at those companies that have been able to respond the best, because they have a transformative approach to EX. I have put some of our slides here if you’d like to see them (hot off the press!)
I have also written a couple of articles recently: The first is about how UK companies have responded to the FRC changes on board oversight of employee engagement. The second is on why co-creation and involvement are at the heart of EX activation.
How have companies responded to changes in the Corporate Governance Code and what does that tell us about the state of employee engagement?
Successive UK governments have made a priority of employee engagement. This has involved task forces and reports, and in 2018 it included revising the Corporate Governance Code of the Financial Reporting Council (FRC).
If you’re not familiar with it, the code is part of UK company law. First established in 1992, it sets out standards of good practice for listed companies who have to either “comply or explain”.
When the code was updated in 2018, it included for the first time a specific requirement for boards to ensure there is effective workforce engagement.
What does this mean? To quote from the guidance that accompanies the code: “Engagement through a range of formal and informal channels helps the workforce to share ideas and concerns with senior management and the board. It provides useful feedback about business practices from those delivering them, and can help empower colleagues.”
This may sound bland, but it’s indicative of an important shift whereby boards are more on the hook for culture, engagement, and people issues in general. This rightly reflects a sharper focus on human capital and the contribution of intangibles to business success.
It’s worth noting that the FRC will soon become the Audit, Reporting and Governance Authority (ARGA) — with the aim of being a stronger regulator. It’s likely that workforce and stakeholder engagement, along with environmental and social responsibility, will continue to grow in importance.
In practical terms, the updated code stated that companies should use one or more of the following methods:
A Non-Executive Director (NED) who is on point for engagement issues
A workforce panel to provide advice to board members
An employee director who is appointed from the workforce.
There was a loophole. Companies can opt for “alternative arrangements” as long as they can show they’re effective.
The revised code came into operation in January 2019. Our research at that time indicated that companies were not in a rush to do anything major. The most likely option was the first one — not surprisingly, the easiest.
Companies have now had a period of time to respond and a very useful report has come out that provides a clear picture of what’s been done.
The report is by Chris Rees and Patrick Briône who collected feedback from 280 of the companies in the FTSE 350.
The report shows that, as predicted, most companies have taken the easier option. In fact, most firms describe the changes they have made as an evolution of what they were already doing.
According to the study, 40% of companies have appointed a NED, 12% have established an advisory panel, and 16% have appointed a NED in combination with setting up an advisory panel. Only one company has installed a director appointed from the workforce (joining four firms that already had them).
Others have adopted alternative approaches instead. These have mostly been listening activities, such as focus groups, informal conversations with employees, and engagement surveys.
This confirms my experience, that the code has breathed new life into engagement surveys. Even though their demise has long been predicted, engagement surveys are actually having a bit of a renaissance.
Even when a NED has been appointed, engagement surveys feature prominently in their remit. According to the study, “Many firms report the role of the NED as being to ‘complement the engagement survey’, with the NED responsible for the provision of feedback to the board on the results.”
Other NED activities include:
Meeting with small groups of employees
Reviewing messages received through the whistle-blowing system
NEDs come from a range of backgrounds, but mostly general management. Around 1-in-5 have worked in HR previously. Half of NEDs had no specific experience of workforce engagement prior to their appointment. The report’s authors note that the process for appointing NEDs is very unclear.
When it comes to advisory panels, they meet at least twice a year. Someone from the board or from management (usually the HR director) attends and often chairs the meetings. They then give a formal report back to the board.
Panel discussions cover a wide range of topics, such as:
Mental health and well being
Workplace facilities and working environment
Strategy, purpose, culture and values
Diversity and inclusion
Pay and bonuses
Climate change and sustainability
Again, according to the study, engagement surveys feature prominently in panel discussions: “There is an emphasis on panels supporting engagement surveys, with firms referring to panels providing ‘valuable input into action plans’ following annual survey results.”
In terms of who is on these panels, the most common approach is management appointees from different functions and business units. They are often nominated by line managers; not chosen by employees.
The least popular option — by far — is employee directors. This is despite the fact that it was a much-trumpeted idea in the discussions that led up to the revised code’s launch.
One firm with employee directors is Capita. According to reports, nearly 400 colleagues applied to take on one of two director roles, which “pay £64,500 a year on top of their day job’s salary.” Two long-serving employees were appointed in 2019 and put through training on topics such as investor relations. According to the CEO, Jon Lewis, the employee directors provide an “unvarnished view of the operational and strategic challenges facing the company.” As one of the employee directors themselves put it: “I think we’ve raised things that would not otherwise have been discussed in a boardroom.”
Standing back from the specific arrangements, what’s also notable is how companies have gone about deciding on their approach to workforce engagement in the first place. As the report points out: “In the vast majority of cases, the workforce themselves were not involved in the decision regarding how the firm responded to the code. This is itself an indication of a lack of workforce voice in strategic discussions.”
So what does all this tell us about the state of employee engagement?
Of course, the last year has been far from normal. The pandemic has impacted all aspects of organisational life. Companies that were slow off the blocks have not been able to make up lost ground.
Keeping this in mind, here are three observations:
A significant rump of firms are doing close to the minimum. Effectively, they’re complying, so they don’t have to explain. The report is a reminder that there is still this low-maturity group of companies in the UK, doing as little as possible and only because they have to. The code is designed to drive improvement in this long-tail over time. That’s a good thing, as these organisations are under-prepared in terms of how they enable their talent, drive transformation, and remain competitive in the future.
Further along the maturity curve are companies that are trying new things. They are placing more emphasis on employee feedback and involving people in changes. This shift is key. A stronger focus on employee voice is positive, but it needs to be part of a more strategic approach to employee experience activation. I have written elsewhere about how co-creation and involvement are at the heart of how you go about building a high-performance EX. It’s positive that a good number of organisations are already taking steps in this direction.
Leading organisations are already far ahead of the pack. Moreover, the distance from the rump group to best-in-class firms is staggering. They are operating in different worlds. In mature, employee-intelligent organisations, feedback is translated from moment-in-time insights into a deep understanding of critical talent and the employee life cycle. HR takes a design-thinking approach to activating employee experience. This means maximising the value of key episodes and moments. They do this through prototyping and testing, from learning what’s working well and what’s not, and through rapid iteration. People managers understand their role in delivering experiences that build trust in the future.
So how will things develop from here?
The report suggests that the UK government will continue to champion employee engagement. It’s still a hot topic, as it connects many different areas that are seen as critical to the future of work.
From the government’s perspective, workforce engagement also provides a comfortable compromise, since it encourages stakeholder involvement without supporting direct worker representation.
The report’s authors themselves highlight the power of providing feedback directly to board members, so they can, in turn, make company management more accountable.
As a result, they predict the regulator will get more teeth: “As the FRC transitions to becoming a new regulator — the Audit, Reporting and Governance Authority — it may receive further powers. Demands are likely to grow for companies to give greater priority to long-term sustainable business models which incorporate employee interests.”
If you want any advice on employee engagement strategies and how to create a world class approach to employee experience, please get in touch.