Innovation & Wellbeing Are Top EX Concerns

@nickl4

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.

@HBR

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.

@WillisTowersWatson

EX Newsletter Autumn 2021

@nickl4

Here is the autumn edition of my EX Newsletter.

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.

John Kotter’s new book Change is one of my favourites of the year and I highly recommend it. He incorporates research from neuroscience with his long-standing focus on organisational culture and change. This article is a useful summary of his approach: https://sloanreview.mit.edu/article/overcoming-obstacles-to-successful-culture-change/

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

I am very interested in new and different sources of EX data, so Culture X’s research into Glassdoor reviews is something I’ve been following closely. This is another great article from them, which highlights the fundamental importance of respect and leadership: https://sloanreview.mit.edu/article/10-things-your-corporate-culture-needs-to-get-right/#EmployeeExperience

My colleague John Bremen has written a series of terrific articles on human capital issues and I really enjoyed this one on “workplace dignity”. He talks about dignity at work, dignity in work, and dignity from work: https://www.willistowerswatson.com/en-GB/Insights/2021/09/reducing-talent-risk-through-workplace-dignity

I hope you find these articles useful; let me know!

Nick

EX Newsletter Summer 2021

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.

@nickl4

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.”

https://www.hrzone.com/engage/employees/why-trust-is-the-future-of-the-employee-experience

Should HR Adopt the “Noise Audit”?

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.”

https://www.linkedin.com/pulse/should-hr-adopt-noise-audit-anna-a-tavis-ph-d/

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.

https://www.theatlantic.com/ideas/archive/2021/07/covid-19-did-not-affect-mental-health-way-you-think/619354/

The Great EX Stress Test

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!)

https://www.linkedin.com/smart-links/AQGVP983fY2w3w

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.

https://exleadership.com/employee-engagement/

https://exleadership.com/co-creating-your-employee-experience-strategy/

Any questions or comments or feedback, drop me a note!

Take care,

Nick

Workforce Engagement in the UK

How have companies responded to changes in the Corporate Governance Code and what does that tell us about the state of employee engagement?

@nickl4

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:

  1. A Non-Executive Director (NED) who is on point for engagement issues
  2. A workforce panel to provide advice to board members
  3. 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.

From the FRC

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).

From the FRC

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:

  • Site visits
  • Town halls
  • Meeting with small groups of employees
  • Focus groups
  • 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:

  • Flexible working 
  • Mental health and well being
  • Workplace facilities and working environment
  • Strategy, purpose, culture and values
  • Diversity and inclusion
  • Career development
  • 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:

  1. 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.
  2. 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.
  3. 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.

Co-creating your employee experience strategy

@nickl4

Employee Experience (EX) leadership requires a shift in perspective. In essence, it means moving from a top-down view of managing human resources to a focus on enabling people to excel in their jobs and to thrive at work.

This is one reason why EX marks a break from the previous employee engagement era. Employee engagement fits neatly into hierarchical people management. EX, by contrast, is messy, personal, and conversational.

An employee engagement strategy might look like a project plan. It would identify changes at different organisational levels in order to improve the way tools, information, and resources are deployed. 

An EX strategy is a different animal. The focus is on understanding how you can simplify the way people work and remove obstacles. The point is to enable and empower individuals and teams so they can do their best work.

One of my clients describes their EX strategy as “Making it easier for employees to do meaningful work and be customer focused. We’re always looking for ways to help people remove barriers and fix problems so we can achieve these goals.”

Another client talks about “Creating a workplace where people love to collaborate and where innovation flourishes. We look at what we can get out of people’s way. We do all that we can to help simplify things.”

Making organisations more people-centred in this way is critical, because it’s human capabilities (service, creativity, collaboration, etc.) that provide a competitive advantage in an experience economy. 

The best way to think about strategy in the EX context is to follow Henry Mintzberg’s description of it as “a pattern in a stream of decisions”. As choices are made, to what extent is the experience of your people at the heart of your thinking? How are you ensuring consistency of purpose across all the key decisions you’re taking? 

“To what extent is the experience of your people at the heart of your thinking? How are you ensuring consistency of purpose across all the key decisions you’re taking?”

Your business strategy, your values and your employee value proposition should provide three anchor points for this process of decision-making. They can help to ensure consistency and cohesion. They provide a framework for prioritising options and making choices.

An additional and necessary step is a commitment to involving people and to co-creating solutions. It may be stating the obvious, but EX activation requires direct engagement with the front-line. It’s not a desk-based topic.

Very briefly, here are some things to keep in mind:

  • Make sure EX is owned by the business rather than HR. We spend a lot of time helping our clients run workshops with business leaders at all levels, effectively taking EX outside of the HR function, where it can sometimes sit by default. 
  • Focus on the customer interface. Prioritise the areas where EX impacts CX directly. Think about your contact centre and your field force, for example. This might not be where you get the biggest return on your investment in EX in the end, but it is somewhere you can make gains quickly.
  • Listen and engage creatively. Listening to employees is at the heart of EX leadership. Agile surveys, open feedback and text analysis provide rich insights. We also use approaches like virtual focus groups (with large numbers or people) and interactive whiteboards (with small groups). 
  • Personalise involvement. We have an innovative tool for involving employees directly in shaping their experience at work, which we call Real-Time Advice. In those key moments that matter when we ask for feedback, we provide nudges and tips for individual employees that are based on their input, so they can get directly involved.
  • Design-thinking is a useful framework for EX activation, in terms of generating ideas and quickly prototyping and testing solutions. We often embed design thinking into our EX projects. EX is about understanding the employee’s perspective and design thinking begins with empathising. In addition, an apparently small idea can snowball over time into a much bigger positive change.
  • Empower existing communities. EX is not a stand-alone topic; it should integrate with your other priorities, such as diversity and inclusion, sustainability, and well-being. EX activation means engaging with communities (champion networks, employee groups) that probably already exist within your organisation and empowering them to deliver.

I have written about EX leadership in more detail elsewhere, but one thing I emphasise is the importance of learning by involving. Employee experience is personal and conversational and in order to activate EX — to simplify the way people work and free them up to do their best — you need to listen and learn directly.

In this context, I really like the phrase used recently by Rebecca Zucker and Darin Rowell, which seems to sum things up nicely: “Leaders must shift from a “know it all” to a “learn it all” mindset.” 

For some organisations and for some leaders this is more than a shift, it’s a step change, but it is key for moving on from employee engagement towards employee experience leadership.


Please contact me if you find this useful or if you would like to learn more about our work.

First published on Medium on 28 April 2021.

Tags: #EmployeeExperience #DesignThinking

“It’s what you learn when you know it all that counts”

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.”

John Wooden

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.

Tags: #HighPerformance #Leadership

Purpose Is at the Heart of Employee Experience Leadership

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”

Job crafting

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.

Notes

For more on EX Leadership, you can read my book: Employee Experience (EX) Leadership: Build trust through employee experience and engagement.

The CEO quotes and information on the Business Roundtable come from the 19 August 2019 Fortune article by Alan Murray “New Purpose for the Corporation” which you can find here.

The UK employee survey data here comes from The Global Workforce Study by Willis Towers Watson.

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

The AI CEO

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:

  1. 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.
  2. 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.
  3. 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.

Notes:

Obviously, this is all a bit tongue-in-cheek, but the article that got me thinking along these lines is this OneZero piece by Erin Marie Miller: https://onezero.medium.com/how-robot-ceos-could-save-capitalism-e410a33b1405

Also, I am hereby trademarking the term “Human Corporate Mascot” as I think it’s got legs. 🙂

Tags: #FutureOfWork #Leadership

This article was first published on Medium on September 7, 2019

The Leadership Trap

It’s hard to lead any large organisation. Putting aside the business challenges that come with size and scale, it’s simply difficult to stay in touch with what’s happening on the ground.

(This is the first chapter from my book Employee Experience (EX) Leadership, which is available on Amazon now.)

As a senior leader, it’s all too easy to become remote and detached. A close circle of assistants manage who you meet with. You spend most of your time with a cadre of other senior people who know it’s in their interest to present things in an agreeable fashion.

It’s difficult for your communications to have an impact. The things you say are filtered through layers of management. Like Chinese whispers, they have been thoroughly distorted by the time they reach the front line. This often reinforces your remoteness in the eyes of employees, who think you don’t understand the day-to-day challenges they face.

Even if you make an effort to get out and about, your people know how to manage appearances to their advantage. You may sometimes smell the fresh paint in the lunch room when you make a site visit. That friendly employee group you met with was perhaps designed to achieve that effect.

In order to keep the organisation focused you reach out for help. The management consultants you hire are happy to give advice on how to restructure and transform your business units. Consultants are temporary partners with a focus on short-term outcomes linked to project goals. They will quickly move on to their next assignment. But long-term employees, with valuable customer insights and an understanding of work challenges, can feel overlooked and ignored. They may feel their experience is not valued as a result.

These organisational transformations come in regular waves and with soundbite names. This language is then incorporated into internal communications. This leads to employees feeling even more remote, as they’re not up to speed on the latest jargon. Again, it appears as though senior management have locked themselves into an ivory tower of their own making.

None of these problems are new. They are inherent in any large organisation. Senior leaders have recognised these problems and tried to build solutions, so they don’t end up falling victim to their own hubris.

In order to avoid this leadership trap, companies have invested in building trust through open and effective upward communications. Beyond other channels that may exist — such as hot lines, employee directors, unions and works councils — you need to keep an ear to the ground and ensure that you receive honest, unfiltered feedback. You need to be able to cut through the layers directly. You need to make sure that it’s safe for people to speak up.

As a senior leader, you need to be able to cut through the organisation’s layers directly. You need to make sure that it’s safe for people to speak up.

Over time, various devices have been put in place to make this happen. In the 1970s and 1980s, large companies began to routinely run employee surveys. These quantified employee satisfaction and allowed leaders to identify problem issues and hot spots.

In the 1990s and 2000s, surveys became fully-fledged engagement programmes, which provided all people managers with anonymous upward feedback. These survey activities were supplemented with things like focus groups, town halls, jams, open mic sessions, and so on.

This book looks at the rise and development of these approaches in detail. It takes the long view on employee surveys, climate surveys and employee engagement. It highlights some of the problems with these programmes and it pulls out the key success factors by looking at companies that do them well.

The best leaders have deployed these approaches effectively. They ask tough questions. They analyse the results in detail. They act on the feedback. They keep tabs on hot spots. They provide support to areas that need it.

I have been lucky to work with some great business people who are aware of how important it is to avoid the leadership trap in this way. This includes CEOs who read every single comment written in an employee survey. When I asked, for example, Ivan Menezes at Diageo, why he does this, he explained that there is no better way to keep grounded and to stay in tune with the day-to-day problems people face. Of course, being CEO of Diageo (the maker of Johnnie Walker whisky) means he can do this with a tumbler of something tasty to hand.

It’s not easy to do this kind of thing well, especially when there are so many demands on leaders’ time. But it is the argument of this book that it is more important now than ever to deploy effective listening methods and to avoid the leadership trap.

It is more important now than ever to deploy effective listening methods and to avoid the leadership trap.

This is because modern organisations succeed or fail based on the work culture they create. Competitive advantage now stems mainly from the innovation, creativity and service that your employees provide. In order to free people up to do their best work, so they can deliver fantastic customer experiences, you have to establish high trust and open and direct communication.

The problem is that there are forces at play inside modern companies that make this difficult. Specifically, leaders have to manage a tension between pushing responsibility and risk onto individuals versus the need to build loyalty, collaboration, and strong teams and networks. Moreover, this tension is intensifying with trends such as automation, digital transformation, and the increasing use of contract and independent workers. Employees feel less secure, at the same time as leaders need them to contribute even more. The trust gap that results in many companies is a significant drag on performance.

This is why many leading organisations are exploring new and innovative ways of listening and creating dialogue with their workers. The good news is that internal social media, pulse surveys and people analytics mean that there are new sources of data that are available. These provide the means for more continuous listening. This can allow leaders to receive useful feedback on an ongoing basis about the moments that really matter to people.

Many organisations are exploring new and innovative ways of listening and creating dialogue with their workers.

This is the opportunity provided by the new and emerging science of Employee Experience (EX). This shift, from traditional listening approaches, such as employee surveys, to EX data and analytics is the focus of this book. The aim is to help leaders understand how they can use EX to avoid the leadership trap, build trust and improve performance.

In all of this, the book is a mix of review, research and personal reflection. I have included old and new client stories, and I have speculated on future trends. It includes background and theory, as well as practical guides, best practices and tips.

The reason for writing this now is because I have been working in this field for twenty years. That feels like a personal milestone of sorts. So I want to look back over that time and pull out some key lessons.

It’s also the case that the employee insights world is going through a major transformation at the present time (like most industries). So I wanted to take the opportunity to think about the future, both the opportunities that result from new technologies and data sources, and the potential risks.

Throughout my career, both as a researcher and a consultant, I have always believed in taking the long view on things. So I want to put changes that are taking place in the world of work, and which are currently much hyped, in the context of longer-term trends and developments.

It’s clear to me that the new focus on employee experience builds on prior work on engagement, commitment and satisfaction that began many decades earlier and at a time when jobs, work and careers had a different set of meanings and expectations.

EX leadership refers to two aspects that this book delves into: those companies that are leading the way in developing this new science, and the key role that leaders play in shaping employee experience to build trust and engagement.

EX Leadership refers to companies at the leading edge of this emerging science; it also refers to the key role that leaders play in activating EX to build trust.

I hope that in this mix of stories and suggestions, there is something that you will find useful and relevant for your own organisation and your own personal reflection.

***************

You can read more here.

Tags: #Leadership #EmployeeEngagement #Trust

This article was first published on Medium in May 2019

Employee Experience: The Movie

One useful lens on employee experience is to think of it as a movie.

The shift to focusing on employee experience, is part of a broader economic shift, as summarised by Joseph Pine and James Gilmore in their book The Experience Economy: “In a world saturated with largely undifferentiated goods and services the greatest opportunity for value creation resides in staging experiences.”

Pine and Gilmore are referring to customer experience, but employee experience is the other side of the same coin.  For organisations to attract, retain and engage critical talent, they need to shift from focusing on the traditional elements of the employment deal to a more holistic view of experience. This includes understanding employee journeys and optimising the moments that matter. Just as for customers, this involves a shift towards design thinking.  To quote Pine and Gilmore again: “Staging compelling experiences begins with embracing an experience-directed mindset.”

In The Experience Economy, Pine and Gilmore argue that “all work is theatre”.  As such, strategy provides the drama, business processes are the script, the work itself is the theatre, and the offering is the performance.  Performers (employees) are at their best when they are inspired to follow the principles of great acting, such as being “in the present” (engaged). And leaders are most effective when they behave like great directors, focusing on casting, working collaboratively, staying in the moment, and managing the tension between learning and creativity (Dunham and Freeman). The directing role requires organisational skills, interpretative skills and story-telling skills. During a performance, of course, the director is off-stage rather than the centre of attention, which is an important leadership lesson.

I would argue that employee experience is more like a movie (or a TV series or perhaps even a soap opera) than a play. This is because the end product comes from piecing together different scenes, episodes or moments into a consistent whole. The scenes occur at different times, in different places and with different people. From an employee experience perspective, this means understanding all the interactions employees have with the organisation, from before they join, through the hiring process and on-boarding, through all the moments that matter as an employee, and potentially on to those involved with leaving the company and even re-joining in the future.

The leader/director’s skill lies in aligning all the episodes delivered by multiple performers over time. And a key success factor is collaboration.  Movie production rarely begins with a finalised script.  Instead, the script is adjusted and revised collaboratively with performers.  And as you see in the end credits, a host of supporting roles have an impact on the final experience, from script writers to editors, CGI artists, technicians, costume designers, etc.

Employee experience management is similarly a process of collaboration between HR, IT, business analytics, marketing, leadership and front-line managers, etc. It is a joined-up approach to org. design and capabilities, jobs, teams, rewards and the way people work. It encompasses individual and team effectiveness, as well as the physical workspace and the digital tools that employees use. Thinking about employee experience management as movie-making, then:

  • Talent management is casting, ensuring you have the right people lined up for your key roles
  • Employee journey maps are story boards, helping you optimise the key moments that matter
  • A persona is a character analysis, allowing leaders to better understand key talent segments
  • Learning and development is the discipline and craft of rehearsing
  • Collaboration is editing and personalising key moments
  • And leadership is directing – creating the conditions for people to perform at their best

Pine and Gilmore wrote The Experience Economy in 1999. Today, increasingly, experiences are being co-created with customers and employees. Rather than just “personalised customisation” we are moving towards “collaborative customisation”. And the results are online, across social media, and they are transparent and public. One way to understand this is to look at your LinkedIn feed. If it’s like mine, it includes people editing their own movies as their jobs and careers evolve. For example, my feed includes people sharing pictures of their first day at work, showing their work space, equipment, new colleagues and welcome pack. It also includes people sharing news of a promotion or explaining the new role they’re taking on and why they’re excited about it. And it also includes farewells, often an image of a well-worn security pass and a commitment to stay in touch and to continue to be an advocate for that company’s services and people in the future.

In this sense, employee experience management is about creating the framework for people to produce and edit their own compelling movies online.  If you’re successful, then those stories will help to attract other talented people and reinforce the company’s culture, in turn driving more collaboration, commitment and advocacy.

References:

B. Joseph Pine II and James H. Gilmore, “The Experience Economy: Work Is Theater & Every Business a Stage” (Harvard Business Press, 1999)

Laura Dunham and R. Edward Freeman, “There is Business Like Show Business: Leadership Lessons from the Theater”, Organizational Dynamics, Vol. 29 (2000)

Tags: #EmployeeExperience #Leadership

This article was first published on LinkedIn on June 13, 2017