Tackling bias in artificial intelligence

The growing use of artificial intelligence in sensitive areas, including for hiring, criminal justice, and healthcare, has stirred a debate about bias and fairness. Yet human decision making in these and other domains can also be flawed, shaped by individual and societal biases that are often unconscious. Will AI’s decisions be less biased than human ones? Or will AI make these problems worse?

Will AI’s decisions be less biased than human ones? Or will AI make these problems worse?

In, Notes from the AI frontier: Tackling bias in AI (and in humans) (PDF–120KB), we provide an overview of where algorithms can help reduce disparities caused by human biases, and of where more human vigilance is needed to critically analyze the unfair biases that can become baked in and scaled by AI systems. This article, a shorter version of that piece, also highlights some of the research underway to address the challenges of bias in AI and suggests six pragmatic ways forward.

Two opportunities present themselves in the debate. The first is the opportunity to use AI to identify and reduce the effect of human biases. The second is the opportunity to improve AI systems themselves, from how they leverage data to how they are developed, deployed, and used, to prevent them from perpetuating human and societal biases or creating bias and related challenges of their own. Realizing these opportunities will require collaboration across disciplines to further develop and implement technical improvements, operational practices, and ethical standards.

AI can help reduce bias, but it can also bake in and scale bias
Biases in how humans make decisions are well documented. Some researchers have highlighted how judges’ decisions can be unconsciously influenced by their own personal characteristics, while employers have been shown to grant interviews at different rates to candidates with identical resumes but with names considered to reflect different racial groups. Humans are also prone to misapplying information. For example, employers may review prospective employees’ credit histories in ways that can hurt minority groups, even though a definitive link between credit history and on-the-job behavior has not been established. Human decisions are also difficult to probe or review: people may lie about the factors they considered, or may not understand the factors that influenced their thinking, leaving room for unconscious bias.

In many cases, AI can reduce humans’ subjective interpretation of data, because machine learning algorithms learn to consider only the variables that improve their predictive accuracy, based on the training data used.

In many cases, AI can reduce humans’ subjective interpretation of data, because machine learning algorithms learn to consider only the variables that improve their predictive accuracy, based on the training data used. In addition, some evidence shows that algorithms can improve decision making, causing it to become fairer in the process. For example, Jon Kleinberg and others have shown that algorithms could help reduce racial disparities in the criminal justice system. Another study found that automated financial underwriting systems particularly benefit historically underserved applicants. Unlike human decisions, decisions made by AI could in principle (and increasingly in practice) be opened up, examined, and interrogated. To quote Andrew McAfee of MIT, “If you want the bias out, get the algorithms in.”

At the same time, extensive evidence suggests that AI models can embed human and societal biases and deploy them at scale. Julia Angwin and others at ProPublica have shown how COMPAS, used to predict recidivism in Broward County, Florida, incorrectly labeled African-American defendants as “high-risk” at nearly twice the rate it mislabeled white defendants. Recently, a technology company discontinued development of a hiring algorithm based on analyzing previous decisions after discovering that the algorithm penalized applicants from women’s colleges. Work by Joy Buolamwini and Timnit Gebru found error rates in facial analysis technologies differed by race and gender. In the “CEO image search,” only 11 percent of the top image results for “CEO” showed women, whereas women were 27 percent of US CEOs at the time.

Underlying data are often the source of bias
Underlying data rather than the algorithm itself are most often the main source of the issue. Models may be trained on data containing human decisions or on data that reflect second-order effects of societal or historical inequities. For example, word embeddings (a set of natural language processing techniques) trained on news articles may exhibit the gender stereotypes found in society.

Models may be trained on data containing human decisions or on data that reflect second-order effects of societal or historical inequities.

Bias can also be introduced into the data through how they are collected or selected for use. In criminal justice models, oversampling certain neighborhoods because they are overpoliced can result in recording more crime, which results in more policing.

Data generated by users can also create a feedback loop that leads to bias. In Latanya Sweeney’s research on racial differences in online ad targeting, searches for African-American-identifying names tended to result in more ads featuring the word “arrest” than searches for white-identifying names. Sweeney hypothesized that even if different versions of the ad copy—versions with and without “arrest”—were initially displayed equally, users may have clicked on different versions more frequently for different searches, leading the algorithm to display them more often.

A machine learning algorithm may also pick up on statistical correlations that are societally unacceptable or illegal. For example, if a mortgage lending model finds that older individuals have a higher likelihood of defaulting and reduces lending based on age, society and legal institutions may consider this to be illegal age discrimination.

In order to minimize bias, how do we define and measure fairness?
How should we codify definitions of fairness? Arvind Narayanan identified at least 21 different definitions of fairness and said that even that was “non-exhaustive.” Kate Crawford, co-director of the AI Now Institute at New York University, used the CEO image search mentioned earlier to highlight the complexities involved: how would we determine the “fair” percentage of women the algorithm should show? Is it the percentage of women CEOs we have today? Or might the “fair” number be 50 percent, even if the real world is not there yet? Much of the conversation about definitions has focused on individual fairness, or treating similar individuals similarly, and on group fairness—making the model’s predictions or outcomes equitable across groups, particularly for potentially vulnerable groups.

Work to define fairness has also revealed potential trade-offs between different definitions, or between fairness and other objectives. For example, Jon Kleinberg, Sendhil Mullainathan, and Manish Raghavan, as well as Alexandra Chouldechova and others, have demonstrated that a model cannot conform to more than a few group fairness metrics at the same time, except under very specific conditions. This explains why the company that developed COMPAS scores claimed its system was unbiased because it satisfied “predictive parity,” but ProPublica found that it was biased because it did not demonstrate “balance for the false positives.”

Experts disagree on the best way to resolve these trade-offs. For example, some have suggested that setting different decision thresholds for different groups (such as the predicted score required to receive a loan) may achieve the best balance, particularly if we believe some of the underlying variables in the model may be biased. Others contend that maintaining a single threshold is fairer to all groups. As a result of these complexities, crafting a single, universal definition of fairness or a metric to measure it will probably never be possible. Instead, different metrics and standards will likely be required, depending on the use case and circumstances.

Early technical progress is underway, but much more is needed
Several approaches to enforcing fairness constraints on AI models have emerged. The first consists of pre-processing the data to maintain as much accuracy as possible while reducing any relationship between outcomes and protected characteristics, or to produce representations of the data that do not contain information about sensitive attributes. This latter group includes “counterfactual fairness” approaches, which are based on the idea that a decision should remain the same in a counterfactual world in which a sensitive attribute is changed. Silvia Chiappa’s path-specific counterfactual method can even consider different ways that sensitive attributes may affect outcomes—some influence might be considered fair and could be retained, while other influence might be considered unfair, and therefore should be discarded.

The second approach consists of post-processing techniques. These transform some of the model’s predictions after they are made in order to satisfy a fairness constraint. The third approach either imposes fairness constraints on the optimization process itself or uses an adversary to minimize the system’s ability to predict the sensitive attribute.

Researchers are also developing and testing other improvements. On the data side, researchers have made progress on text classification tasks by adding more data points to improve performance for protected groups. Innovative training techniques such as using transfer learning or decoupled classifiers for different groups have proven useful for reducing discrepancies in facial analysis technologies.

Innovative training techniques such as using transfer learning or decoupled classifiers for different groups have proven useful for reducing discrepancies in facial analysis technologies.

Finally, techniques developed to address the adjacent issue of explainability in AI systems—the difficulty when using neural networks of explaining how a particular prediction or decision was reached and which features in the data or elsewhere led to the result—can also play a role in identifying and mitigating bias. Explainability techniques could help identify whether the factors considered in a decision reflect bias and could enable more accountability than in human decision making, which typically cannot be subjected to such rigorous probing.

Human judgment is still needed to ensure AI supported decision making is fair
While definitions and statistical measures of fairness are certainly helpful, they cannot consider the nuances of the social contexts into which an AI system is deployed, nor the potential issues surrounding how the data were collected. Thus it is important to consider where human judgment is needed and in what form. Who decides when an AI system has sufficiently minimized bias so that it can be safely released for use? Furthermore, in which situations should fully automated decision making be permissible at all? No optimization algorithm can resolve such questions, and no machine can be left to determine the right answers; it requires human judgment and processes, drawing on disciplines including social sciences, law, and ethics, to develop standards so that humans can deploy AI with bias and fairness in mind. This work is just beginning.

Some of the emerging work has focused on processes and methods, such as “data sheets for data sets” and “model cards for model reporting” which create more transparency about the construction, testing, and intended uses of data sets and AI models. Other efforts have focused on encouraging impact assessments and audits to check for fairness before systems are deployed and to review them on an ongoing basis, as well as on fostering a better understanding of legal frameworks and tools that may improve fairness. Efforts such as the annual reports from the AI Now Institute, which cover many critical questions about AI, and Embedded EthiCS, which integrates ethics modules into standard computer science curricula, demonstrate how experts from across disciplines can collaborate.

One method for ensuring fairness focuses on encouraging impact assessments and audits to check for fairness before systems are deployed and to review them on an ongoing basis.
As we raise the bar for automated decision making, can we also hold human decision making to a higher standard?
Progress in identifying bias points to another opportunity: rethinking the standards we use to determine when human decisions are fair and when they reflect problematic bias. Reviewing the actual factors humans used (not what they say they used) when making a decision is much more difficult than evaluating algorithms. More often than not we rely on fairness proxies. For example, we often accept outcomes that derive from a process that is considered “fair.” But is procedural fairness the same as outcome fairness? Another proxy often used is compositional fairness, meaning that if the group making a decision contains a diversity of viewpoints, then what it decides is deemed fair. Perhaps these have traditionally been the best tools we had, but as we begin to apply tests of fairness to AI systems, can we start to hold humans more accountable as well?

Much of the conversation about definitions has focused on individual fairness, or treating similar individuals similarly, and on group fairness—making the model’s predictions or outcomes equitable across groups, particularly for potentially vulnerable groups.

Better data, analytics, and AI could become a powerful new tool for examining human biases. This could take the form of running algorithms alongside human decision makers, comparing results, and examining possible explanations for differences. Examples of this approach are starting to emerge in several organizations. Similarly, if an organization realizes an algorithm trained on its human decisions (or data based on prior human decisions) shows bias, it should not simply cease using the algorithm but should consider how the underlying human behaviors need to change. Perhaps organizations can benefit from the recent progress made on measuring fairness by applying the most relevant tests for bias to human decisions, too.

Six potential ways forward for AI practitioners and business and policy leaders to consider

Minimizing bias in AI is an important prerequisite for enabling people to trust these systems. This will be critical if AI is to reach its potential, shown by the research of MGI and others, to drive benefits for businesses, for the economy through productivity growth, and for society through contributions to tackling pressing societal issues. Those striving to maximize fairness and minimize bias from AI could consider several paths forward:

1. Be aware of the contexts in which AI can help correct for bias as well as where there is a high risk that AI could exacerbate bias.
When deploying AI, it is important to anticipate domains potentially prone to unfair bias, such as those with previous examples of biased systems or with skewed data. Organizations will need to stay up to date to see how and where AI can improve fairness—and where AI systems have struggled.

2. Establish processes and practices to test for and mitigate bias in AI systems.
Tackling unfair bias will require drawing on a portfolio of tools and procedures. The technical tools described above can highlight potential sources of bias and reveal the traits in the data that most heavily influence the outputs. Operational strategies can include improving data collection through more cognizant sampling and using internal “red teams” or third parties to audit data and models. Finally, transparency about processes and metrics can help observers understand the steps taken to promote fairness and any associated trade-offs.

3. Engage in fact-based conversations about potential biases in human decisions.
As AI reveals more about human decision making, leaders can consider whether the proxies used in the past are adequate and how AI can help by surfacing long-standing biases that may have gone unnoticed. When models trained on recent human decisions or behavior show bias, organizations should consider how human-driven processes might be improved in the future.

4. Fully explore how humans and machines can work best together.
This includes considering situations and use-cases when automated decision making is acceptable (and indeed ready for the real world) vs. when humans should always be involved. Some promising systems use a combination of machines and humans to reduce bias. Techniques in this vein include “human-in-the-loop” decision making, where algorithms provide recommendations or options, which humans double-check or choose from. In such systems, transparency about the algorithm’s confidence in its recommendation can help humans understand how much weight to give it.

5. Invest more in bias research, make more data available for research (while respecting privacy), and adopt a multidisciplinary approach.
While significant progress has been made in recent years in technical and multidisciplinary research, more investment in these efforts will be needed. Business leaders can also help support progress by making more data available to researchers and practitioners across organizations working on these issues, while being sensitive to privacy concerns and potential risks. More progress will require interdisciplinary engagement, including ethicists, social scientists, and experts who best understand the nuances of each application area in the process. A key part of the multidisciplinary approach will be to continually consider and evaluate the role of AI decision making, as the field progresses and practical experience in real applications grows.

6. Invest more in diversifying the AI field itself.
Many have pointed to the fact that the AI field itself does not encompass society’s diversity, including on gender, race, geography, class, and physical disabilities. A more diverse AI community will be better equipped to anticipate, spot, and review issues of unfair bias and better able to engage communities likely affected by bias. This will require investments on multiple fronts, but especially in AI education and access to tools and opportunities.

Source: https://www.mckinsey.com/featured-insights/artificial-intelligence/tackling-bias-in-artificial-intelligence-and-in-humans

Leaders need to bring employees into Machine Learning decision-making process

At a time that seems like a defining moment for the HR industry as the function embarks on a tech transformation and adoption journey, Mark Marone, Director – Research and Thought Leadership, Dale Carnegie and Associates and Jordan Wang, Managing Partner, Dale Carnegie New South Wales, Australia share their insights in an exclusive interaction with People Matters.

Co-author of two books on sales strategy, Mark Marone is currently the Director of Research and Thought Leadership at Dale Carnegie Training, North America. Mark leads development of research programs and quality content with expertise in workplace issues such as leadership, employee experience, customer experience, and sales effectiveness.

Jordan Wang, Managing Partner, Dale Carnegie New South Wales, Australia has worked with organizations ranging from startups to global corporations, and is highly passionate about creating scalable business growth, via highly engaged teams and complimenting the unique Dale Carnegie principles and development methodology with data driven strategy and quantifiable ROI for his clients.

Read on to find out what Marone and Wang had to say about AI, its impact on the present workforce, what the future looks like and what leaders need to focus on.

What do you think is the next big thing in HR after HR Analytics and HRTech?
Mark – Companies executing AGILE successfully is going to be the next big HR trend. It’s of course big in software development–has been for years–that’s where it emerged. But for many, it is still just an idea or concept, there is so much room for organizations to truly become agile. Working in autonomous teams, building psychological safety in teams, having the confidence and positivity to consume large data sets, making decisions and driving value for customers, employees and other stakeholders – not many companies are doing it very well because of the traditional hierarchical structure of organizations. The typical corporate mindset needs to change for companies to truly become agile. It is a long road ahead.

Employees feel insecure in implementing AI at their workspaces due to factors including fairness, privacy and security. How can organizations create strategies to build trust, keep employee experience intact and help them feel secure?
Jordan – Leaders need to have a clear vision as to what they want to achieve Organizations need to have purity of intention from the start to the end, irrespective of the task in question. As long as the intention is clear and transparent based on data backed by research, that’s a massive step in the right direction. A lot of organizations cover up their true by creating a temporary distraction for customers/employees and manage to extract personal information/data through facial recognition apps, etc. There needs to be a correlation between intention and outcome, that’s a step in the right direction.

Mark – Leaders need to bring employees into the Machine Learning decision-making process. Rather than those at higher hierarchical levels making a decision on what ought to be and what not ought to be automated, or what should be deployed with Machine Learning, I really think they need to go to the source and understand what employees do everyday and ask them which of your activities do you think ought to be automated. Knowing, understanding and having the trust that they are not going to lose their jobs as a result of implementing AI but that leaders are genuinely interested in their opinions as they build the most efficient and effective Machine Learning application will help employees feel safe and secure.

What can employees do to amplify their potential and become irreplaceable in the era of automation and technology?
Mark – Employees who champion and demonstrate embracing technology are the ones who will become indispensable to the organization. They are the ones who will be relied upon to carry it to other parts of the organization and getting other people aligned with it.

Jordan – I think the nature of roles will change. I agree with what Mark said earlier about the next big thing is to be agile. The nature of jobs will also adapt and change. Here is an opportunity for employees to amplify their creative and innovative aspirations by becoming unshackled by the day to day grind of process based work.

What do you think are the common challenges for startups as well as established organizations while they try to drive any change?
Mark – The biggest challenge as per me is building and maintaining the right culture, one that’s aligned with business environment and the types of business outcomes they are trying to accomplish. A lot of times with startups, they try to emulate the culture of another company that might even be from a different industry, or they may just try to believe they have a certain type of culture and want to hire people on those grounds. Organizations really need to understand their business environment both internally and externally and ensure the culture they create is aligned to that.

Jordan – A lot of companies don’t know where they are going but have high aspirations. If you think about grand visions, that’s great, but they don’t mean anything unless you have actual implementable steps and strategies to make that happen. When you talk about change, it’s easy to sit there and visualize, but a key part of change is to know the first step as clear as the final step.

What should an HR leader’s focus be for 2020?
Mark – Everyone needs to be clear on who our customer is, what kind of value are we delivering to them and what kind of experience are we trying to create for them, it helps to guide everyone’s decisions, like the North star. Once that is done, focus should be on building social intelligence, psychological safety and resilience among employees. Keeping in mind tech transformation and adoption, leaders need to ensure that data and information flows freely throughout the organization and is shared in a timely manner. Encourage teamwork, provide opportunities for the team to come together, give them autonomy to make decisions, move away from hierarchical structure to flat hierarchy. Build on the “Capacity to act” – that’s when organizations create an infrastructure allowing and encouraging teams to engage with each other.

Jordan – What’s the framework? What’s the intention? Answering these questions will determine focus areas. It’s easy to look at best practices and say this is what we should focus on, but at the end of the day it’s about intention. I believe everyone is creative to a certain extent, yet often we are so busy trying to find the right way that we forget to create and innovate what we can, because we are unaware what the intention is. From an HR leader’s point of view, it shouldn’t be about what key skills I need to roll out or what processes I need to implement. It’s important to know what my intention is for the organization, for the team, for the individuals – whether it’s development or tracking monetary outcomes or whatever it is – having that clarity in intention is always going to be step one.

Source: https://www.peoplematters.in/article/culturefordigital/leaders-need-to-bring-employees-into-machine-learning-decision-making-process-22649

Indian companies increase investment in HR technology, automation: Report

A pan-India Human Resources sector study of Indian companies reveals that while adoption of technology in HR is going up, levels of automation in crucial HR functions like identifying high potential individuals, succession planning and strategic workforce management remains considerably low.
The study found that while tech adoption is prevalent and on the rise, with 70 per cent of companies having some level of automation in their HR processes, it remained low in critical areas like with identifying and incentivising High Potential Employees (HiPos). In HiPo management, only 23% Indian companies have automated more than half of their the function, while the percentage is at a mere 22 per cent when it came to succession planning as well as strategic workforce planning.

The findings are part of the research report titled ‘State of HR Technology in India’, on the digital agenda of Indian corporate organisations. Conducted by People Matters TechHR. The study looked at automation levels in different aspects of talent management and also at companies’ investment plans in HR technologies and how they could future-proof HR teams for digital transformation.

The study also reveals that many Indian companies are still not training their HR teams to be future-proof. HR expert David Green, managing director of the analytics programme at Insight222, commented, “Reflecting a lack of investment elsewhere in the world, companies are still not training their HR teams. This is indeed something organisations need to ponder upon and work on while making HR tech decisions.”

The report highlighted that HR technologies are not only improving the efficiency of HR processes but also empowering employees — as 59 percent of Indian organisations will invest in technology to enable employees and managers to self-manage people processes this year.

Employer Branding observed a surge in HR technology adoption in the field of communication and collaboration by 21 percent and in employee branding by 17 percent. As per the study, 75 percent of organisations will increase investment in HR technology, wherein 20 percent of companies have allocated a budget of more than one crore in this financial year — A 35 percent increase from the financial year 2017, when the last similar study was conducted.

Source: https://www.theweek.in/news/biz-tech/2019/08/08/indian-companies-increase-investment-in-hr-technology-automation-report.html

The Most Important Hires You’ll Make Are Your First Employees. So How Do You Spot a Good One?

We all know how important employees are to any company. Payroll is often your biggest expense. It takes A-plus employees to build a successful business, and if you’re going to spend most of your waking hours at work, why not spend it with people you enjoy?

I think hiring great talent is absolutely critical to get right, and it’s why one of my favorite questions to ask other founders is “What’s your favorite interview question?”

Doing so has helped me unearth some gems that I now include in my own interviewing practices–like the all-revealing “On a scale of one to 10, how lucky are you?” (which is an instant gauge of how positive and glass-half-full a candidate is — I love answers that are 8-plus).

Asking smart questions is helpful, but only when you know what to look for. Having spent my career in companies of all sizes, I do think there are specific qualities that make up a phenomenal early-stage employee–the person you want in the trenches with you when you’ve got fewer than 50 employees.

Here’s what to look for in your future star employees:

1. Generalists, generalists, generalists
Your biggest pain point today may be marketing. But what about tomorrow? In an early-stage company, you need well-rounded players who are willing to roll up their sleeves and figure out how to do anything and everything.

The best early hires I made at LearnVest could transition seamlessly from running a focus group to understanding our customer acquisition stats to reviewing a legal doc. They were title agnostic and open to pitching in wherever they were most needed. While it might seem counterintuitive, deep expertise in a niche area is less important at this stage than finding an athlete who can do anything and everything.

Often, people who fit this description are inbound candidates. They’ve gotten scrappy and identified your company as an exciting opportunity. They want to be at a startup because they want to have a voice in shaping a company’s future. Ask questions like, “What gets you out of the bed in the morning?” to verify that their motivation is intrinsic and driven by a need to contribute in any and all ways.

2. No egos
One of my mentors once told me, “If you knew what it took to start a company, you’d never do it.” Building a company is hard.

That’s why there’s no room for egos–both literally and figuratively. For starters, chances are your first HQ will be small and a rude awakening for any employee coming from a corporate boardroom. But beyond that, everyone needs to check office politics at the door and bring a team-first mindset.

In the interview process, dig into how a candidate worked with others. Ask them to describe a group project they worked on. Is this someone who’s willing to do whatever it takes to help the team? (For example, before our first board meeting at LearnVest, I was the one cleaning the bathroom before our board members came in. At the end of the day, they appreciated how “all in” I was!) Does this person share credit and praise their co-workers?

Early-stage teams are often limited in the number of teammates, which means that everyone has to give that much more. Think of it as a startup golden rule: Be the kind of employee you would want to work with. For me, that means zero egos.

3. Believers
In the earliest days, your success isn’t tangible yet. Employees have to derive motivation from a bigger vision and unite around a shared mission.

Simply put, you can’t have any skeptics at this stage. Look for people who bring positivity, optimism, and a can-do attitude. It is these believers who will act as your culture builders, and once your company scales, they will help you carry your original mission forward.

It can be hard to spot this quality in an interview process, so be sure to spend some time on the topic in any reference calls you do. Try to understand how this person has weathered challenges in past roles (from someone other than the candidate).

4. Grit
Growing up, I was a competitive diver. One of the best lessons it taught me was grit. No matter how your dives go, you have to get back up on the platform and keep pushing yourself. You have to fully commit to every move you make, despite the pressure for perfection and the eyeballs on you.

You need that same grit in your early employees. There’s so much competition–both from incumbents and other startups that will inevitably appear in the same space. The curveballs are endless. Or, as I’ve said, being an entrepreneur is like getting punched in the face every day. Those who succeed are those who have grit, pure and simple. It’s OK to take a day off or walk around the block on a challenging day, but only the resilient ones who show up every day, ready to face the next task, make it.

I’ve long been a believer in setting goals that seem too far out of reach. When you strive for something that seems impossible, you’ll often end up going much farther than if you set the bar too low. The best gritty employees I’ve seen have been able to reach those far-out goals–because they continue to push and come up with creative solutions. In practice, this might be your business development lead who repeatedly gets a no from your dream partner. Instead of letting it lie, they come up with a creative solution to nudge the door open and end up inking a deal after all.

As the saying goes, “When the going gets tough, the tough get going.” The best startup personalities are those who are motivated by roadblocks. There’s no time to shut down for a pity party–you have to keep working harder, smarter, and better.

Source: https://www.inc.com/alexa-von-tobel/the-most-important-hires-youll-make-are-your-first-employees-so-how-do-you-spot-a-good-one.html

How Working Parents Can Get the Most Out of Calendar Apps

While professionals may feel in control of many aspects of their lives, their calendar isn’t often one of them. Work-life balance is the holy grail of maintaining a professional career. In 2014, Gallup found the average American workweek was 47 hours, with nearly four in 10 Americans working more than 50 hours per week. Bloomberg spotlighted automobile factories where 12-hour shifts were the norm, and Silicon Valley is notorious for its long hours.

With long workdays being the norm, personal priorities often don’t see the light of day. But research — particularly on deathbed conversations — shows that people don’t remember board meetings; they remember their kids’ baseball games. How can leaders, especially working parents — who have multiple calendars to juggle — make their calendars an ally in giving their personal lives a chance?

Burning the Candle at Both Ends
Consider the myriad responsibilities demanding working parents’ attention: often two careers, the kids’ activities, the kids’ appointments, the parents’ own appointments, second jobs, or side hustles. Cram all of that into working hours (and beyond), and it becomes apparent that this juggling act doesn’t leave working parents with much semblance of a personal life.

The best way to get a handle on this is to transform your calendar into your timekeeper. A calendar tool can be helpful, because it doesn’t just help you remember meetings or deadlines; it spotlights how you spend your time. [Disclosure: I co-founded Calendar.com, which is my answer to keeping your calendar organized.] When you clearly visualize the times when your priorities and your schedule don’t match up, it’s time to take action:

Outline your priorities first. The biggest culprit behind misspent time? Letting others set your priorities. Without guidelines, it’s easy to agree to head a project or take on any opportunity that falls into your lap. Those opportunities may boost your career — but they also may not.

It’s best to ask yourself some questions before others supply the answers. What would you regret not focusing on? It may be earning an executive title, running a marathon, attending most of your child’s games, or starting a side business. Work backwards: What will get you there? Taking on low-visibility projects or cramming your schedule so full that you can’t maximize creative outlets may be hurting you, not helping.

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Do you really want the things you feel you should want? This is worth asking as well. If your interest in daily yoga, the next promotion, or driving the school pick-up shuttle is waning, that’s a sign you could be using your time better.

Set limits. Time blocking (or timeboxing) is a godsend for working parents. By allocating blocks of time for specific activities, you limit how much energy those activities eat up and how much spillover they cause.

A good way to determine how big a block should be is by doing a week or two of time tracking. Time-tracking apps like Toggl or Timely can help analyze how you’re spending your time. Does email really deserve two hours of your day? Would it be smarter to delegate that time-consuming report to an early-stage employee who could use a stretch assignment?

I handle time blocking by marking “meeting days” so people who access my calendar can only request appointments on those days. That frees me up for lengthier tasks on the other days. I also use the “speedy meetings” option for Google Calendar that will limit 30 minute meetings to 25. This has allowed me to get miscellaneous items done in between meetings, which has allowed me to leave at 5 PM everyday instead of almost missing dinner because I’m working late.

Frontload your calendar. This sounds intimidating — nobody wants a packed calendar at the beginning of the month — but this technique ensures that you prioritize the things you deem most important. A couple days prior to a new month, place time blocks on your calendar for your non-negotiables: soccer practices, one-on-one meetings, conferences, a date night with your spouse, etc. This way, you — and everyone else — can truly see the time you have remaining after you put first things first. If something’s canceled or rescheduled, you get time back. With this system, you rarely find yourself scrambling to “make time” for things you’d really like to do, like hitting the gym or visiting your parents. One manager I know even blocks off time for sleep. For working parents, this can be a great trigger to go to bed, so tomorrow’s that much easier.

Create pockets of opportunity. Kids grow up fast. Miss one year of practices, and you may not even recognize your kid’s pitches. On the other hand, kids have plenty of breaks in their regular school routines — including teacher workdays, holidays, and half days of school — where you can look ahead at the school calendar and synch it with your own to take advantage of those pockets of time to surprise your kids with a stop for milkshakes or a trip to the zoo. While this may require you to use PTO (something most parents do sparingly, minus sick days), this allows you to create memories without the disruption of a two-week vacation. Last year, my kindergartener looked forward to our post-school trips for frozen custard — where she got all of my attention, even if it was just for 30 minutes.

The adage “If you need something done, give it to a busy person” is true, especially when it comes to working parents. But it’s incredibly hard to reclaim your life when you aren’t happy with how you’re spending it. Calendars can become your ally, ensuring that the most important things come first.

Source: https://hbr.org/2019/08/how-working-parents-can-get-the-most-out-of-calendar-apps

‘True Gen’: Generation Z and its implications for companies

Long before the term “influencer” was coined, young people played that social role by creating and interpreting trends. Now a new generation of influencers has come on the scene. Members of Gen Z—loosely, people born from 1995 to 2010— are true digital natives: from earliest youth, they have been exposed to the internet, to social networks, and to mobile systems. That context has produced a hypercognitive generation very comfortable with collecting and cross-referencing many sources of information and with integrating virtual and offline experiences.

As global connectivity soars, generational shifts could come to play a more important role in setting behavior than socioeconomic differences do. Young people have become a potent influence on people of all ages and incomes, as well as on the way those people consume and relate to brands. In Brazil, Gen Z already makes up 20 percent of the country’s population. McKinsey recently collaborated with Box1824, a research agency specializing in consumer trends, to conduct a survey investigating the behaviors of this new generation and its influence on consumption patterns in Brazil.1 The survey coupled qualitative insights about Gen Z in three of the country’s major cities (Recife, Rio de Janeiro, and São Paulo) with multigenerational quantitative data that cut across socioeconomic classes. Our goal was to understand how this new generation’s views might affect the broader population, as well as consumption in general.

Our study based on the survey reveals four core Gen Z behaviors, all anchored in one element: this generation’s search for truth. Gen Zers value individual expression and avoid labels. They mobilize themselves for a variety of causes. They believe profoundly in the efficacy of dialogue to solve conflicts and improve the world. Finally, they make decisions and relate to institutions in a highly analytical and pragmatic way. That is why, for us, Gen Z is “True Gen.” In contrast, the previous generation—the millennials, sometimes called the “me generation”—got its start in an era of economic prosperity and focuses on the self. Its members are more idealistic, more confrontational, and less willing to accept diverse points of view.

Such behaviors influence the way Gen Zers view consumption and their relationships with brands. Companies should be attuned to three implications for this generation: consumption as access rather than possession, consumption as an expression of individual identity, and consumption as a matter of ethical concern. Coupled with technological advances, this generational shift is transforming the consumer landscape in a way that cuts across all socioeconomic brackets and extends beyond Gen Z, permeating the whole demographic pyramid. The possibilities now emerging for companies are as transformational as they are challenging. Businesses must rethink how they deliver value to the consumer, rebalance scale and mass production against personalization, and—more than ever—practice what they preach when they address marketing issues and work ethics.

Meet True Gen
Generations are shaped by the context in which they emerged (Exhibit 1). Baby boomers, born from 1940 to 1959, were immersed in the post–World War II context and are best represented by consumption as an expression of ideology. Gen Xers (born 1960–79) consumed status, while millennials (born 1980–94) consumed experiences. For Generation Z, as we have seen, the main spur to consumption is the search for truth, in both a personal and a communal form (Exhibit 2). This generation feels comfortable not having only one way to be itself. Its search for authenticity generates greater freedom of expression and greater openness to understanding different kinds of people.

Exhibit 1

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Exhibit 2

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‘Undefined ID’: Expressing individual truth
I need to be free; I need to be myself, increasingly be myself, every day. With the internet, I feel much more free.
—Female respondent, 22, city of São Paulo

I really like things that are unisex! I think it’s absurd that stores and brands split everything into “male” and “female.” After all, fabric is genderless.
—Female respondent, 22, Goiânia

For Gen Zers, the key point is not to define themselves through only one stereotype but rather for individuals to experiment with different ways of being themselves and to shape their individual identities over time (Exhibit 3). In this respect, you might call them “identity nomads.”

Exhibit 3

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Seventy-six percent of Gen Zers say they are religious. At the same time, they are also the generation most open to a variety of themes not necessarily aligned with the broader beliefs of their declared religions. For example, 20 percent of them do not consider themselves exclusively heterosexual, as opposed to 10 percent for other generations. Sixty percent of Gen Zers think that same-sex couples should be able to adopt children—ten percentage points more than people in other generations do.

Gender fluidity may be the most telling reflection of “undefined ID,” but it isn’t the only one. Gen Zers are always connected. They constantly evaluate unprecedented amounts of information and influences. For them, the self is a place to experiment, test, and change. Seven out of ten Gen Zers say it is important to defend causes related to identity, so they are more interested than previous generations have been in human rights; in matters related to race and ethnicity; in lesbian, gay, bisexual, and transgender issues; and in feminism (Exhibit 4).

Exhibit 4

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‘Communaholic’: Connecting to different truths
We each have our own style and way of being, but what binds us is that we accept and understand everyone’s styles.
—Male respondent, 16, Recife

Gen Zers are radically inclusive. They don’t distinguish between friends they meet online and friends in the physical world. They continually flow between communities that promote their causes by exploiting the high level of mobilization technology makes possible. Gen Zers value online communities because they allow people of different economic circumstances to connect and mobilize around causes and interests. (Sixty-six percent of the Gen Zers in our survey believe that communities are created by causes and interests, not by economic backgrounds or educational levels. That percentage is well above the corresponding one for millennials, Gen Xers, and baby boomers.) Fifty-two percent of Gen Zers think it is natural for every individual to belong to different groups (compared with 45 percent of the people in other generations), and Gen Zers have no problem with moving between groups.

‘Dialoguer’: Understanding different truths
We must practice tolerance, and we must learn to listen and accept differences.
—Male respondent, 20, Gioânia

Exhibit 5

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Gen Zers believe in the importance of dialogue and accept differences of opinion with the institutions in which they participate and with their own families (Exhibit 5). They can interact with institutions that reject their personal values without abandoning those values. The fact that Gen Zers feel comfortable interacting with traditional religious institutions without abandoning personal beliefs that might not be broadly accepted by these institutions also demonstrates their pragmatism. Rather than spurn an institution altogether, Gen Zers would rather engage with it to extract whatever makes sense for them.

Members of this generation therefore tend to believe that change must come from dialogue: 57 percent of millennials, Gen Xers, and baby boomers think they would have to break with the system to change the world, compared with 49 percent of Gen Zers. Gen Z is also more willing to accommodate the failings of companies. Thirty-nine percent of the people in this generation, for example, expect companies to answer customer complaints in the same day; for the three earlier generations, the percentage is much higher—52 percent.

Gen Z’s belief in dialogue combines a high value for individual identity, the rejection of stereotypes, and a considerable degree of pragmatism. That brings us to the fourth core behavior of Gen Z.

‘Realistic’: Unveiling the truth behind all things
I don’t believe this talk of investing in the dream and all that. Work is work.
—Female respondent, 22, Salvador, state of Bahia

Gen Zers, with vast amounts of information at their disposal, are more pragmatic and analytical about their decisions than members of previous generations were. Sixty-five percent of the Gen Zers in our survey said that they particularly value knowing what is going on around them and being in control. This generation of self-learners is also more comfortable absorbing knowledge online than in traditional institutions of learning.

What’s more, Gen Z was raised at a time of global economic stress—in fact, the greatest economic downturn in Brazil’s history. These challenges made Gen Zers less idealistic than the millennials we surveyed (Exhibit 6). Many Gen Zers are keenly aware of the need to save for the future and see job stability as more important than a high salary. They already show a high preference for regular employment rather than freelance or part-time work, which may come as a surprise compared to the attitude of millennials, for example. According to the survey, 42 percent of Gen Zers from 17 to 23 years old are already gainfully employed in either full- or part-time jobs or as freelance workers—a high percentage for people so young.

Exhibit 6

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Gen Z: Consumption and implications for companies
The youthful forms of behavior we discuss here are influencing all generations and, ultimately, attitudes toward consumption as well. Three forces are emerging in a powerful confluence of technology and behavior.

Consumption re-signified: From possession to access
This more pragmatic and realistic generation of consumers expects to access and evaluate a broad range of information before purchases. Gen Zers analyze not only what they buy but also the very act of consuming. Consumption has also gained a new meaning. For Gen Z—and increasingly for older generations as well—consumption means having access to products or services, not necessarily owning them. As access becomes the new form of consumption, unlimited access to goods and services (such as car-riding services, video streaming, and subscriptions) creates value. Products become services, and services connect consumers.

As collaborative consumption gains traction, people are also starting to view it as a way to generate additional income in the “gig economy.” Another aspect of the gig economy involves consumers who take advantage of their existing relationships with companies to generate additional income by working temporarily for them. Some companies are already embracing the implications.

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Car manufacturers, for example, are renting out vehicles directly to consumers, so that instead of selling 1,000 cars, these companies may sell one car 1,000 times. The role of sporting-goods businesses, likewise, has shifted to helping people become better athletes by providing access to equipment, technology, coaching, and communities of like-minded consumers. Similarly, traditional consumer-goods companies should consider creating platforms of products, services, and experiences that aggregate or connect customers around brands. Companies historically defined by the products they sell or consume can now rethink their value-creation models, leveraging more direct relationships with consumers and new distribution channels.

Singularity: Consumption as an expression of individual identity
The core of Gen Z is the idea of manifesting individual identity. Consumption therefore becomes a means of self-expression—as opposed, for example, to buying or wearing brands to fit in with the norms of groups. Led by Gen Z and millennials, consumers across generations are not only eager for more personalized products but also willing to pay a premium for products that highlight their individuality. Fifty-eight percent of A-class and 43 percent of C-class consumers2 say they are willing to pay more for personalized offerings. Seventy percent of A-class and 58 percent of C-class consumers are willing to pay a premium for products from brands that embrace causes those consumers identify with. And here’s another finding that stood out in our survey: 48 percent of Gen Zers—but only 38 percent of consumers in other generations—said they value brands that don’t classify items as male or female. For most brands, that is truly new territory.

Although expectations of personalization are high, consumers across generations are not yet totally comfortable about sharing their personal data with companies. Only 10 to 15 percent of them declare not to have any issues in sharing personal data with companies. If there is a clear counterpart from companies to consumers, then the number of consumers willing to share personal information with companies goes up to 35 percent—still a relatively small number.

As the on- and offline worlds converge, consumers expect more than ever to consume products and services any time and any place, so omnichannel marketing and sales must reach a new level. For consumers who are always and everywhere online, the online–offline boundary doesn’t exist. Meanwhile, we are entering the “segmentation of one” age now that companies can use advanced analytics to improve their insights from consumer data. Customer information that companies have long buried in data repositories now has strategic value, and in some cases information itself creates the value. Leading companies should therefore have a data strategy that will prepare them to develop business insights by collecting and interpreting information about individual consumers while protecting data privacy.

For decades, consumer companies and retailers have realized gains through economies of scale. Now they may have to accept a two-track model: the first for scale and mass consumption, the other for customization catering to specific groups of consumers or to the most loyal consumers. In this scenario, not only marketing but also the supply chain and manufacturing processes would require more agility and flexibility. For businesses, that kind of future raises many questions. How long will clothing collections grouped by gender continue to make sense, for example? How should companies market cars or jewelry in an inclusive, unbiased way? To what extent should the need for a two-speed business transform the internal processes and structure of companies?

Consumption anchored on ethics
Finally, consumers increasingly expect brands to “take a stand.” The point is not to have a politically correct position on a broad range of topics. It is to choose the specific topics (or causes) that make sense for a brand and its consumers and to have something clear to say about those particular issues. In a transparent world, younger consumers don’t distinguish between the ethics of a brand, the company that owns it, and its network of partners and suppliers. A company’s actions must match its ideals, and those ideals must permeate the entire stakeholder system.

Gen Z consumers are mostly well educated about brands and the realities behind them. When they are not, they know how to access information and develop a point of view quickly. If a brand advertises diversity but lacks diversity within its own ranks, for example, that contradiction will be noticed. In fact, members of the other generations we surveyed share this mind-set. Seventy percent of our respondents say they try to purchase products from companies they consider ethical. Eighty percent say they remember at least one scandal or controversy involving a company. About 65 percent try to learn the origins of anything they buy—where it is made, what it is made from, and how it is made. About 80 percent refuse to buy goods from companies involved in scandals.

All this is relevant for businesses, since 63 percent of the consumers we surveyed said that recommendations from friends are their most trusted source for learning about products and brands. The good news is that consumers—in particular Gen Zers—are tolerant of brands when they make mistakes, if the mistakes are corrected. That path is more challenging for large corporations, since a majority of our respondents believe that major brands are less ethical than small ones.

For consumers, marketing and work ethics are converging. Companies must therefore not only identify clearly the topics on which they will take positions but also ensure that everyone throughout the value chain gets on board. For the same reason, companies ought to think carefully about the marketing agents who represent their brands and products. Remember too that consumers increasingly understand that some companies subsidize their influencers. Perhaps partly for that reason, consumers tend to pay more attention to closer connections—for example, Instagram personas with 5,000 to 20,000 followers. Marketing in the digital age is posing increasingly complex challenges as channels become more fragmented and ever changing.

Source: https://www.mckinsey.com/industries/consumer-packaged-goods/our-insights/true-gen-generation-z-and-its-implications-for-companies

The 3 Simple Reasons Everyone Will Be Working From Home by 2030 or Even Soon

When a company cuts costs, it usually means employee misery: fewer perks, lower salaries, and the never-ending demand to “do more with less.” However, there’s one (1) management strategy that doesn’t just reduce expenses but also makes employees both happier and more productive. That strategy is work-from home.

The Cost Savings
Conventional wisdom is that open plan offices are a good way to cut costs because you can fit more people into a smaller space that with cubicles or private offices. Conventional wisdom, however, completely misses the point in this case.

First, open plan offices are penny-wise and pound-foolish, as the saying goes. The overwhelming scientific consensus is that open plan offices reduce productivity by at least 15%. Since the cost of labor is much larger the cost of office space, whatever cost savings might accrue from an open plan office will be more than offset by the consequent productivity loss.

Work-from-home, on the other hand, when fully implemented, simply eliminates the entire office space rental expense. Furthermore, because employees really want work-from-home, it’s an incredibly attractive perk.

Even better, work-from-home also expands your candidate pool to workers who live in areas outside your commute zone. That means you don’t have to pay employees extra to cover the exorbitant rents that are the rule in business hubs like San Francisco and New York City.

As a final bonus, work-from-home decreases your carbon footprint, instantly and inexpensively making your company “go green,” which is good for both recruiting top candidates and for public relations in general. There is simply no management strategy of which I’m aware that so quickly improves the bottom line.

The Morale Boost
As opposed to cost-savings measures that employees hate, employees love, love, love work-from-home. How much? Well, according to a recent survey of 1,900 remote workers conducted by the high-tech startups Buffer, Workfrom and Hubstaff:

Nine out of ten of remote workers plan on working remotely for the rest of their careers.
Almost two thirds of employees who sometimes work remotely want to increase how much they work remotely.
Almost every remote worker surveyed (94%) recommends remote work to friends, family and colleagues.
Why are remote workers so gung-ho? For one thing, work-from-home is in effect a salary increase. Example: if you commute 1 hour a day each way and work 8 hours at the office, eliminating the commute means you’re spending 20% less time to do the same amount of work, which is the exact same thing as a 20% raise in your hourly wage.

But it’s not just the money. When the 1,900 remote workers were asked what they like best about work-from-home, they cited:

A more flexible work schedule (43%)
The opportunity to spend more time with family (15%)
The ability to travel more frequently (12%)
A generally better work environment (11%)
Again, inside the dozens of companies I’ve worked with and inside the hundreds of business books I’ve read and reviewed, I have never seen a perk that increases workplace happiness so quickly and so cheaply.

The Productivity Boost
So, why haven’t more companies embraced work-from-home? A big part of the reluctance is management’s fear that if they can’t look over employees’ shoulders, employees binge watch and play video games, rather than work.

But that’s paranoia rather than a reasonable fear. As I explained in a previous column:

“In a landmark study cited in the Harvard Business Review, call center workers on Ctrip–a Chinese travel website–were given the option to volunteer to work from home for nine months. Half the volunteers did so; the other half was the control group and thus continued to work at the office each day. The study revealed that ‘people working from home completed 13.5 percent more calls than the staff in the office did–meaning that Ctrip got almost an extra workday a week out of them,’ according to Stanford University professor Nicholas Bloom.”

While that study didn’t investigate exactly why work-from-home employees are more productive, freelance reporter Bridget Miller, writing in the online magazine HR Advisor, identifies the following factors:

“Employees who don’t have to commute get started on their work earlier or are able to work more hours because they don’t have to rush to avoid traffic.”
“The lack of commute may also mean that employees who work remotely may have more time for sleep and exercise, resulting in employees who are in better health and getting more rest.”
“Fewer distractions and better focus… because interruptions from coworkers are minimized. Employees may be more able to concentrate at home, where the working environment can be controlled.”
“Absences may decrease because employees who can work remotely can manage their day around miscellaneous tasks that would have otherwise forced them to leave early or take the day off.”
My personal experience is that I can get more done in four hours at home than I EVER accomplished in an office, even when working long hours. I know I’m not unusual in that regard because I have literally received at least a hundred Tweets, texts, and emails from remote workers who’ve had the same experience.

In short, work-from-home saves money, boosts morale and increases productivity, making it a true example of that rarest of management strategies: a win-win-win proposition.

Your next question is probably: how to do I get my company to implement it?

Well, if other states follow the lead of Massachusetts, whose governor is proposing a tax break for companies who implement work-from-home, that question may become moot. It will take a while for CEOs to admit that they were snookered by the open plan office concept, which is beyond doubt the dumbest management fad of all time.

But they’ll have to come around eventually because their companies won’t be able to compete with the open plan albatross hanging from the corporate neck.

Source: https://www.inc.com/geoffrey-james/eliminate-this-huge-expense-youll-vastly-boost-morale-productivity.html

HR Must Reinvent the Employee Experience to Drive Agility

HR Must Reinvent the Employee Experience to Drive Agility
Organizational agility is in short supply
HR should quicken its adoption of agile practices
The employee experience is ripe for HR-led agile transformation
“It’s time to blow up HR and build something new.”
While this headline from the July/August 2015 edition of the Harvard Business Review was met with disapproval, anger and mild contempt from the HR community at large, the article’s message was straightforward. In short, HR needs to get with the times and be more user-centric, accountable, and oriented toward business outcomes.

Fast forward to 2019, and our new expectation for HR: Be agile.

Agility — a concept that originated in software development — is now being used (and perhaps misused) for all manner of concepts, systems and processes in the business world. At Gallup, we measure workplace agility by asking workers for their level of agreement with two general statements about their organizations:

In my company, we have the right mindset to respond quickly to business needs.
In my company, we have the right tools and processes to respond quickly to business needs.
We find that real organizational agility is in awfully short supply. Gallup’s recent research in the U.S. shows that few employees feel that their organization is agile (and, alarmingly, those few employees are far more likely than everyone else to think their company is ahead of its competitors and feel confident in the organization’s financial future).

HR doesn’t have to blow itself up to move faster, though. What HR should do is what HR does best.

When it comes to HR, our work with clients shows that quite a few organizations are following an “agile lite” process — slowly but surely transforming the HR organization from the inside out. They’re improving HR processes, driving greater efficiencies, and picking up the pace in tasks and work activities where HR is generally considered slow.

And that’s good. But it’s not fast enough, not in this increasingly VUCA (Volatile, Uncertain, Complex and Ambiguous) world.

HR doesn’t have to blow itself up to move faster, though. What HR should do is what HR does best — but orient those core competencies toward the employee experience and agility.

How to create an agile employee experience.

Designing Your Organization’s Employee Experience
Download to learn how to create a consistent employee experience that improves individual, team and business performance.
Agility is about putting the customer at the center of design and co-creating solutions based on customer input. HR can replicate this process for employees because — as HR well knows — the employee experience needs mapping, analysis and optimization just as much as the customer experience does.

Then, with the addition of principles from design thinking, a human-centered problem-solving method that involves creativity, experimentation and empathy — HR can use the data gleaned from employees just as scrum teams do for customers.

Take, for example, the annual employee performance review — a critical element of the employee experience. Research, however, shows it is also one of the least effective aspects of the employee experience. Studies have suggested that managers spend 17 hours per employee just preparing for a performance review. And yet, according to Gallup analytics, only 20% of employees strongly agree that their company’s performance review system motivates them and fewer still, 14%, say their manager’s feedback inspires them to improve.

Meanwhile, the future of work is being shaped by extraordinary changes in technology, globalization and overwhelming information flow. Workers, particularly millennials, are asking for something different. They want a coach, not a boss. They want clear expectations, accountability, a rich purpose, and they especially want ongoing feedback and coaching. With that outlook and using principles like design thinking, HR can use the data gleaned from employees just as scrum teams do for customers – and help recraft or reimagine critical pathways on the employee experience.

Flowchart detailing the seven steps in the employee experience journey. The steps are attract, hire, onboard, engage, perform, develop, depart.
To gain the right analytics, HR must add focused listening posts at various stages — from talent attraction, selection and onboarding through to performance development and departure — and HR can obtain even richer data that will accelerate agility. A more agile and effective review process would, therefore, be individualized to the employee’s strengths and ambitions, based on objective employee and business metrics.

This process would be oriented toward the employee and the organization’s future needs, informed by the company’s current talent pipeline and market demands. All of it should be part of an HR-directed performance development program that shifts managers from bosses to coaches.

HR should be involved in tech selection and implementation.
Technology platforms are becoming an increasingly integral part of the employee experience. The last decade has seen companies double down on tech, processes, and systems in every area, and rightfully so. Agility requires considerable investments in technology and process improvement. But an agile approach to the employee experience requires significant culture change, not a systems change alone. HR can lead the charge by asking just how employee-centric these technological innovations are.

Gallup’s recent research reveals that only 17% of U.S. employees agree that their company readily implements new technologies that help them be more productive. Additionally, only 13% feel that in their company they are always looking for the simplest way to get the job done, and only 14% feel satisfied with the speed of decision-making at work.

An agile approach to the employee experience requires a culture change, not a systems change. HR can lead the charge by asking just how employee-centric these technological innovations are.

First-rate technology comes with significant ramp-up time and several teething issues. The employee experience is marred by significant disruptions to current work and a fair amount of frustration.

Whether the majority of companies aren’t buying what they need or aren’t using what they buy, most employees aren’t benefitting from the technology and processes that were intended to improve their workplace experience.

HR should become deeply involved in technology selection and implementation. With its data-rich resources and expertise in learning, HR is well-positioned to identify lapses in productivity, identify tech that could make teams and individuals more agile and more collaborative, and teach workers how to use the tech with less resistance and more enthusiasm. A better, faster tech adoption process would improve the employee experience and the agile agenda as well.

Managers must be set up for success to deliver an agile employee experience.
A real cultural shift toward organizational agility is not possible without a focus on mindset. Managers play a big part in that — managers account for 70% of the variance in employee engagement — and shouldn’t be overlooked. However, managers will need help adapting to a changing workplace. They must be taught techniques to help employees navigate the employee experience while providing consistent, real-time feedback and coaching on the fly.

Source: https://www.gallup.com/workplace/259988/reinvent-employee-experience-drive-agility.aspx

Why Celebrating Your Little Victories at Work Can Power Your Performance

You shouldn’t hold off until that long-awaited promotion or the culmination of a big project to celebrate the progress you’ve made at work. Reaching a milestone should absolutely be commemorated, but what if you could experience a little sliver of that joy every day you’re in the office? Paying more attention to your little victories, in addition to your big-time accomplishments, won’t just make you happier in the workplace — it will motivate you, too.

Bringing your attention to small wins in your daily work routine will drastically improve what Teresa Amabile, Ph.D., a professor of business administration at Harvard Business School, calls your “inner work life,” or as she explains it in Harvard Business Review, your “mix of emotions, motivations, and perceptions over the course of a workday.” How happy you are, how motivated you feel by your own interest in your work, and how you view your organization, manager, team members, and the work you do all contribute to the dynamics of your inner work life, according to Amabile. And when you have a strong, stable inner work life, you’ll probably make more progress toward your goals. A study Amabile conducted shows that employees perform better when they have more positive emotions, intrinsic motivation, favorable perceptions of their work environment, and positive reinforcement from their managers.

It’s not always easy to foster a more positive inner work life, though. In an office culture that places heavy emphasis on the bottom line, it can be all too easy to ignore day-to-day achievements and solely focus on the end result — while ignoring the process it takes to get there. “Even ordinary, incremental progress can increase people’s engagement in the work and their happiness during the workday. Across all types of events our participants reported, a notable proportion (28 percent) of incidents that had a minor impact on the project had a major impact on people’s feelings about it,” Ambile writes. Slowing down and embracing small victories can make all the difference in developing a healthier inner work life. Here’s how.

Track your progress

Paying more attention to the journey — not just your destination — will not only help you develop a growth mindset, but also give you an opportunity to identify and celebrate your small victories. “Getting to know ourselves through our work requires restructuring our mindset from focusing on results, such as a pay raise or title change, to the process of learning and improving. Worrying and placing our attention on our paychecks or titles is often unfruitful and leads us to become unhappy at work. Instead, we can invest that energy in building our skills,” Mehrnaz Bassiri, M.S., a learning and progress specialist, tells Thrive. When working on a time-consuming project or simply getting through your everyday tasks, create a road map of what needs to get done, all the way down to the small details. Maybe you need to help a co-worker draft a specific section of a report, or put the finishing touches on a presentation — no matter what kind of task is at hand, recognize when you have completed it and give yourself permission to embrace the satisfaction of getting it done.

Identify a small task that brings you joy and maximize it

You don’t need to reach a lofty goal in order to feel a sense of pride or happiness. If you take a step back and look at the entirety of your workday routine, you might be surprised at how many tasks you complete on a day-to-day basis give you a sense of purpose, help you feel a little less stressful, or simply make you grateful to be doing your work. Take some time to reflect on the things you do every single day, and write down what brings you joy and why. Do you mentor younger employees at your company, ultimately giving you a sense of intention and introspection? Maybe you do something as small as dropping mail off at your team members’ desks, and get the chance to engage in lighthearted face-to-face conversation that boosts your mood. Once you’ve identified the tasks that bring more positivity and purpose to your workday, talk to your manager or co-workers about ways you can make them a more meaningful part of your day. And while you’re at it, you can also identify a task that drains you, and discuss if you might be able to delegate the task to someone else.

Source: https://thriveglobal.com/stories/little-victories-win-work-focus-power-performance-progress-inner-work-life/

More than values: The value-based sustainability reporting that investors want

More than values:
The value-based
sustainability reporting
that investors want
Nonfinancial reports helped stimulate the growth of sustainable
investing. Now investors are questioning current reporting
practices—and calling for changes that executives and board
members must understand.
July 2019
As evidence mounts that the financial performance
of companies corresponds to how well they contend
with environmental, social, governance (ESG),
and other nonfinancial matters, more investors
are seeking to determine whether executives
are running their businesses with such issues in
mind. When companies report on ESG-related
activities, they have largely continued to address
the diverse interests of their many stakeholders—a
long-standing practice that involves compiling
extensive sustainability reports and filling out stacks
of questionnaires. Despite all that effort, a recent
McKinsey survey uncovered something that should
concern corporate executives and board members:
investors say they cannot readily use companies’
sustainability disclosures to inform investment
decisions and advice accurately.1
What’s unusual and challenging about
sustainability-focused investment analysis
is that companies’ sustainability disclosures
needn’t conform to shared standards in the way
their financial disclosures must. Years of effort
by standard-setting groups have produced
nearly a dozen major reporting frameworks and
standards, which businesses have discretion to
apply as they see fit (see sidebar “A short glossary
of sustainability-reporting terms”). Investors
must therefore reconcile corporate sustainability
disclosures as best they can before trying to draw
comparisons among companies.
Corporate executives and investors alike recognize
that sustainability reporting could improve in
some respects. One advance that executives
and investors strongly support, according to
our survey, is reducing the number of standards
for sustainability reporting. Many executive
respondents said they believe this would aid their
efforts to manage sustainability impacts and
respond to sustainability-related trends, such
as climate change and water scarcity. And many
investors said they expect greater standardization
of sustainability reports to help them allocate
capital and engage companies more effectively.
While these findings might not surprise readers
involved with sustainable investing or sustainability
reporting, it was striking to learn that investors also
support legal mandates requiring companies to
issue sustainability reports (Exhibit 1). In this article,
we offer executives, directors, and investors a look
at how sustainability reporting has evolved, what
further changes investors say they want, and how
investors can bring about those changes.
Reporting today: Externality focused
and inconsistent, yet informative
The current practice of sustainability reporting
developed in the 1990s as civil-society groups,
governments, and other constituencies called on
companies to account for their impact on nature and
on the communities where they operate. A milestone
was passed in 2000, when the Global Reporting
Initiative (GRI) published its first sustainabilityreporting guidelines. The following year, the World
Business Council for Sustainable Development
and the World Resources Institute released the
Greenhouse Gas Protocol. The same period also
saw the creation of voluntary initiatives, such as
the UN Global Compact and the Carbon Disclosure
Project (now CDP), encouraging corporations
to disclose information on sustainability. Since
the financial crisis, additional frameworks and
standards have emerged to help companies and
their investors develop a greater understanding
of the risks and benefits of ESG and nonfinancial
factors. For example, the International Integrated
Reporting Council (IIRC) advocates integration of
financial and nonfinancial reports, the Sustainability
Accounting Standards Board (SASB) identifies
material sustainability factors across industries,
and the Embankment Project for Inclusive
Capitalism assembles investors and companies to
define a pragmatic set of metrics to measure and
demonstrate long-term value to financial markets.
1 For this research, we conducted a survey of 107 executives and investors, representing 50 companies, 27 asset managers, and 30 asset
owners. The survey, carried out in January and February of 2019, covered Asia, Europe, and the United States. We also conducted interviews
with 26 representatives of asset managers, asset owners, corporations, standard-setting organizations, nonprofit organizations, and
academic institutions.
2 More than values: The value-based sustainability reporting that investors want
Given the proliferation of reporting frameworks
and standards, companies have had to decide for
themselves which ones to apply. These frameworks
and standards allow businesses considerable
freedom to choose their sustainability disclosures.
Many companies select their disclosures by
consulting members of stakeholder groups—
consumers, local communities, employees, governments, and investors, among others—about which
externalities, or impacts, matter most to them and
then tallying the stakeholders’ interests in some
way. More recently, stakeholders have asked for
increased disclosure about how companies address
opportunities and risks related to sustainability
trends, such as climate change and water scarcity,
which can meaningfully affect a company’s assets,
operations, and reputation.
The scope and depth of these disclosures differ
considerably as a result of the subjective choices
companies make about their approaches to
sustainability reporting: which frameworks and
standards to follow, which stakeholders to address,
and which information to make public. According
Exhibit 1
GES 2019
More than values: The value-based sustainability reporting that investors want
Exhibit 1 of 4
Investors and executives say that reducing the number of sustainability-reporting standards
would be benecial—and even that there should be legal mandates for reporting.
Respondents who agree with statement, %1
1 Respondents who answered “agree” or “strongly agree.” For investors, n = 57; for executives, n = 50.
Source: McKinsey Sustainability Reporting Survey
% of investors who agree or strongly agree that more standardization of sustainability reporting would do the following1
% of executives who agree or strongly agree that more standardization of sustainability reporting would do the following1
Investors Executives Investors Executives
help my „rm
allocate capital
more e…ectively
help my „rm
manage risk
more e…ectively
help my company
benchmark itself
against its peers
enhance my
company’s ability
to create value
or mitigate risk
There should be fewer sustainabilityreporting standards than there are today
Companies should be required by
law to issue sustainability reports
There should be 1 sustainabilityreporting standard
More than values: The value-based sustainability reporting that investors want 3
to the executives and investors we surveyed, the
diversity of these disclosures is a defining feature of
sustainability reporting as we know it—and a source
of difficulty, as we explain in the following section of
this article.
Nevertheless, 30-odd years of sustainability
reporting have produced a trove of useful data.
Stakeholders can use this information to track the
relative sustainability performance of companies
from year to year. By aggregating data from many
companies, stakeholders can not only discern
patterns and trends in companies’ responses
to sustainability issues but compare and rank
businesses as well.
Analysts in academia, government, and the
private sector have also used these sustainability
disclosures to examine the link between sustainability performance and financial performance. A
substantial body of research shows that companies
that manage sustainability issues well achieve
superior financial results.2
(Researchers have shown
only that these two phenomena are correlated, not
that effective sustainability management leads to
better financial outcomes.)
2 Alexander Bassen, Timo Busch, and Gunnar Friede, “ESG and financial performance: Aggregated evidence from more than 2000 empirical
studies,” Journal of Sustainable Finance & Investment, 2015, Volume 5, Issue 4, p. 210–33; Robert G. Eccles, Ioannis Ioannou, and George
Serafeim, “The impact of corporate sustainability on organizational processes and performance,” Management Science, 2014, Volume 60,
Issue 11, pp. 2835–57; Gordon L. Clark, Andreas Feiner, and Michael Viehs, From the stockholder to the stakeholder: How sustainability can
drive financial outperformance, a joint report from Arabesque and University of Oxford, March 2015, insights.arabesque.com; “Sustainability:
The future of investing,” BlackRock, February 1, 2019, blackrock.com.
A short glossary of sustainability-reporting terms
In this article, we use the following
terms for certain elements of sustainability reporting:
— Sustainability disclosure. This
disclosure is an item of qualitative
or quantitative information about
a company’s performance on a
topic not addressed by standard
financial and operational disclosures.
Sustainability disclosures ordinarily
relate to environmental, social, and
governance matters, including
companies’ sustainability impacts and
responses to external sustainability
trends. These disclosures sometimes
encompass other topics, too, such as
HR and intellectual property.
— Sustainability report. This report
is a document containing a set of
sustainability disclosures from an
organization for a period of time. It
can be a stand-alone document or a
component of the annual report.
— Sustainability-reporting
requirement. This requirement is
a mandate from an authority (such
as a regulator, a stock exchange,
or a civil-society group) about a
sustainability report’s content and
nature. Some requirements apply to
all companies in a given jurisdiction—
for example, Directive 2014/95/EU
of the European Parliament and the
European Council, requiring some
large companies to issue nonfinancial
disclosures. Others, such as the
UN Global Compact, apply only to
companies that have voluntarily
pledged to abide by them.
— Sustainability-reporting
framework. This framework is a set
of guidelines for determining what
topics and disclosures a sustainability
report should cover. The International
Integrated Reporting Framework,
published by the International
Integrated Reporting Council (IIRC),
is one example.
— Sustainability-reporting standard.
This standard is a set of specifications
for measuring and disseminating
sustainability disclosures. Examples
include the Global Reporting
Initiative’s GRI Standards and the
77 industry-specific standards
published by the Sustainability
Accounting Standards Board.
4 More than values: The value-based sustainability reporting that investors want
Investors want companies to provide
more sustainability disclosures that are
material to financial performance.
3 Global Sustainable Investment Review 2012 and Global Sustainable Investment Review 2018, Global Sustainable Investment Alliance,
gsi-alliance.org. 4 “Sustainability: The future of investing,” BlackRock, February 1, 2019, blackrock.com.
5 “Sustainable signals: Asset owners embrace sustainability,” Morgan Stanley, June 18, 2018, morganstanley.com.
Investors and asset owners appear to be taking note
of corporate sustainability disclosures and adapting
their investment strategies accordingly. The Global
Sustainable Investment Alliance has found that
the quantity of global assets managed according
to sustainable-investment strategies more than
doubled from 2012 to 2018, rising from $13.3 trillion
to $30.7 trillion.3
BlackRock reports that assets in
sustainable mutual funds and exchange-traded
funds in Europe and the United States increased by
more than 67 percent from 2013 to 2019 and now
amount to $760 billion.4
And research by Morgan
Stanley indicates that a majority of large asset
owners are integrating sustainability factors into
their investment processes. Many of those asset
owners started to do so only during the four years
before the survey.5

What investors want: Financial
materiality, consistency, and reliability
With so much capital at stake, investors have begun
to question prevailing sustainability-reporting
practices. The shortcomings investors now highlight
have existed for some time but were mostly
acceptable to early sustainable investors and the
diverse civil-society stakeholders that used to be
the primary readers of sustainability reports. But
now that more asset owners and asset managers
are making investment and engagement decisions
with sustainability in mind, a louder call has gone out
for sustainability disclosures that meet the following
three criteria.
Financial materiality
Investors acknowledge that their expectations for
sustainability disclosures have shifted. As the head
of responsible investing at a large global pension
fund remarked, “The early days of sustainable
investing were values based: How can our investing
live up to our values? Now, it is value-based: How
does sustainability add value to our investments?”
From our interviews and survey results, it is
apparent that investors want companies to provide
more sustainability disclosures that are material
to financial performance. According to a senior
sustainable-investing officer at one top 20 asset
manager, “Corporations do not provide systematic
data on one-third of the sustainability factors
[that we consider] material.” This could change
as more companies issue reports in line with the
sector-specific standards that SASB created in
consultation with industry experts and investors.
Government authorities and civil-society
organizations also appear to be coming around
to investors’ views about the material connection
between a company’s handling of sustainability
factors and its financial performance. The European
Union’s 2014 directive on nonfinancial reporting and
the Financial Stability Board’s creation of the Task
Force on Climate-related Financial Disclosures in
2015 are two signals that financial regulators realize
sustainability-related activities can materially affect
the financial standing of companies and should be
reported accordingly.
More than values: The value-based sustainability reporting that investors want 5
With so many reporting frameworks and guidelines
to choose from, and so many potential stakeholder
interests to address, companies rarely make
sustainability disclosures that can be compared
as neatly as their financial disclosures can. This
circumstance makes the job of investors more difficult,
as they indicated in response to our survey (Exhibit 2).
As the head of sustainable investing at a major asset
manager explained, “We have positions in over 4,500
companies. Unless [sustainability information] is
comparable, hard data, it is of little use to us.”
Inconsistencies among sustainability disclosures,
which arise through no fault of the companies
producing them, can also create problems for the
many investors that obtain sustainability data
from third-party services rather than individual
sustainability reports. These services use different
methods to estimate missing information, so there
are discrepancies among data sets. Some services
normalize sustainability information, replacing
actual performance data (such as measurements
of greenhouse-gas emissions) with performance
scores calculated by methods the services don’t
reveal. Research shows a low level of correlation
among the data providers’ ratings of performance
on the same sustainability factor.6
Similarly, proprietary indexes and rankings
of sustainable companies, which some asset
managers use to construct index-fund portfolios,
can also diverge greatly. It is not unusual for a
company to be rated a top sustainability performer
by one index and a poor performer by another.7
some data services fail to include sustainability data
companies have disclosed.8
As the head of responsible investing for one of the
world’s five largest pension funds put it, “Many
companies do not have the systems in place to
collect quality data for [sustainability] reporting.”
For certain tangible sustainability factors, such
as greenhouse-gas emissions, performancemeasurement systems are generally well
Exhibit 2
GES 2019
More than values: The value-based sustainability reporting that investors want
Exhibit 2 of 4
Investors report that the main shortcomings of current sustainability-reporting practices are
inconsistency, incomparability, and lack of alignment in standards.
Top challenges associated with current sustainability-reporting practices,1
mean rating on 1–5 scale, where 5 is
most challenging
1 n = 57.
Source: McKinsey Sustainability Reporting Survey
Inconsistency, incomparability,
or lack of alignment in standards
Too costly or time intensive
Unclear bene­ts or value added
0 1 2 3 4 5
6 Gregor Dorfleitner, Gerhard Halbritter, and Mai Nguyen, “Measuring the level and risk of corporate responsibility—an empirical comparison of
different ESG rating approaches,” Journal of Asset Management, 2015, Volume 16, Issue 7, pp. 450–66. The correlation between ratings of the
same performance factor is typically less than 0.6 and can fall to as low as 0.05. By comparison, credit ratings are highly correlated (0.9). 7 James Mackintosh, “Is Tesla or Exxon more sustainable? It depends whom you ask,” Wall Street Journal, September 17, 2018, wsj.com. 8 “Sustainability: The future of investing,” BlackRock, February 1, 2019, blackrock.com.
6 More than values: The value-based sustainability reporting that investors want
Exhibit 3
GES 2019
More than values: The value-based
sustainability reporting that investors
Exhibit 3 of 4
More investors believe that sustainability reports should be audited and
that the audits should be full audits,
similar to nancial ones.
1 Respondents who answered “agree” or “strongly agree.” For
investors, n = 57; for executives, n = 50.
Source: McKinsey Sustainability Reporting Survey
Respondents who agree with statement, %1
Sustainability reports
should undergo some audit
Investors Executives Investors Executives
Sustainability reports
should undergo full audit,
similar to a „nancial audit
established. For other factors, such as corporate
culture, human capital, and diversity and inclusion,
clear ways to gauge performance are more elusive.
Investors also harbor doubts about corporate
sustainability disclosures because few of them
undergo third-party audits. Nearly all the investors
we surveyed—97 percent—said that sustainability
disclosures should be audited in some way, and
67 percent said that sustainability audits should be
as rigorous as financial audits (Exhibit 3).
Refining the practice of
sustainability reporting
In our survey and interviews, one priority for
improving sustainability reporting stood out: ironing
out the differences among reporting frameworks
and standards. When we asked survey respondents
to assess the challenges of sustainability reporting,
executives and investors both rated “inconsistency,
incomparability, or lack of alignment in standards”
as the most significant challenge. A majority of
respondents to our survey—67 percent—said
there should be only one standard, and an additional
21 percent said there should be fewer than exist now.
The investors and executives who participated in
our research also described several benefits of
making reporting frameworks and standards more
uniform. Investors expect greater uniformity to help
companies disclose more consistent, financially
material data, thereby enabling investors to save
time on research and analysis and to arrive at
better investment decisions. Some efficiency
gains would accrue as third-party data providers
begin aggregating sustainability information
as consistent as the information they get from
corporate financial statements.
Most of the investors we surveyed—63 percent—
also said they believe that greater standardization
will attract more capital to sustainable-investment
strategies. However, about one-fifth of the surveyed
investors said that uniform reporting standards
would level the playing field, diminishing their
opportunities to develop proprietary research
insights or investment products (Exhibit 4).
Executives made clear, in our conversations,
that they devote excessive effort and expense
to answering numerous specialized requests
for what is essentially the same information, such
as greenhouse-gas emissions data that must
be tabulated in different ways to conform to
different standards.
This kind of burden would be lessened if the providers
of reporting frameworks and standards combined
or rationalized their rules and thereby reduced the
number of major frameworks and standards to one or
two. Companies could then use the same disclosures
to fulfill the reporting demands of multiple authorities.
(They could still develop additional sustainability
disclosures if they chose to address stakeholder
More than values: The value-based sustainability reporting that investors want 7
queries or concerns that the main mechanism didn’t
cover.) Establishing one or two reporting standards
would also simplify the task of auditing sustainability
disclosures, making it more economical for companies
to have their reports independently verified.
How investors can help effect change
Reducing the number of reporting frameworks
and standards will probably involve several more
years of effort by businesses, investors, and
standard-setting organizations—which have
begun to identify gaps and redundancies among
disclosures—and by other stakeholders, such as
civil-society groups and regulators. As it is, many
investors avoid participating in standard-setting
efforts. Some we interviewed said they distance
themselves because they feel that standard setting
should address their needs as a matter of course.
Yet some standard setters told us they assume
that investors can readily obtain the sustainability
information they value and therefore focus on the
interests of other stakeholders.
Our conversations lead us to believe that there’s
some truth to both viewpoints. Yet our survey
findings and interviews also suggest that investors
could make valuable contributions to standardsetting efforts if they chose to increase their
participation. Active investors are likelier to do
so, since they pay more attention than index
investors to the sustainability disclosures of
individual companies. Until investors clarify which
sustainability disclosures they want and help to
rationalize frameworks and standards, sustainability
reports might continue to deliver less material
information than they would like.
Investors can do several other things to make
better use of the sustainability-related information
companies now make available. First, they can
articulate the sustainability disclosures that matter
most for their investment decisions and convey
these interests to businesses. Going a step further,
more investors could engage companies (through
direct dialogue and shareholder voting) about their
approach to managing sustainability issues.
More investors could also adopt the still-uncommon
practice of collecting and analyzing data from
sources other than corporate sustainability reports
and disclosures. Some investors have developed
algorithms that automatically gather nonfinancial
data from public sources (such as government
databases of health and safety incidents or websites
where people post comments about their employers)
and scan these data for patterns that relate
meaningfully to corporate financial performance.
Exhibit 4
GES 2019
More than values: The value-based sustainability reporting that investors want
Exhibit 4 of 4
Many investors believe that harmonized sustainability-reporting standards will attract more
capital to sustainable investors, though some express concern about losing an edge.
Investors who agree with statement about eect of harmonized standards, % of respondents1
Note: Figures may not sum to 100%, because of rounding.
1 Respondents who answered “agree” or “strongly agree”; n = 57.
Source: McKinsey Sustainability Reporting Survey
Will help attract more capital
to sustainable investments
Will weaken proprietary
insights or specialized
or di…erentiated products
Will have
both e…ects
63 19 15
8 More than values: The value-based sustainability reporting that investors want
As the market for sustainable investments expands,
more investors are taking a keen interest in
sustainability reports from companies. Yet the
information these investors find seldom meets
their expectations. From an investor’s standpoint,
sustainability disclosures tend to be loosely related
to financial performance, difficult to compare from
one company to another, and less than reliable.
Investors who take part in efforts to improve
sustainability-reporting practices could gain an
edge over their more detached peers. Executives
and board members should stay attuned to these
efforts, and even participate in them, to maintain
their companies’ standing with shareholders.