Keeping the political divide from dividing employees

What can HR do to help corporations promote a culture of mutual respect and inclusion? It all starts with an organization’s core values and focus on diversity and inclusion.
As a saying from the late-1960s women’s movement goes, “The personal is political.” What comes around goes around, and it’s fair to say that we’re once again living in a time in which the lines between personal beliefs and values and politics have blurred. The current environment and political debate in many parts of the world have politicized individual preferences. People are highly polarized, and these differences have a way of creeping into the workplace. No matter how much leaders may try to stop these conversations in the workplace, they happen. Corporate leaders in general and human resources professionals in particular need to understand how to manage potentially tense discussions and situations between employees while also supporting those who might struggle to process the ramifications of political events.

There’s a lot at stake around this aspect of governance and management. Corporate reputations are on the line; recent experiences at companies such as Google and Goodyear offer some cautionary tales around the ease with which seemingly straightforward policies on political expression can be misapplied or misconstrued.

So, what can HR do to help corporations promote a culture of mutual respect and inclusion? Based on our experience and research, it all starts with an organization’s core values and focus on diversity and inclusion. Quite simply, high-functioning organizations are showing respect for diverse views, which makes employees feel comfortable bringing their true selves into the workplace. To bring this into practice, we suggest organizations put the following five ideas into place—not just for the short term but as part of a broader focus on building an inclusive workplace:

Provide space and services to help employees process their feelings.
Emphasize employee commonality through inclusive corporate values.
Provide leaders with training on how to steer inappropriate conversations.
Coach and educate employees on inclusion.
Develop nondiscriminatory policies on inclusive, respectful conversations.
One way to prevent issues from bubbling up in the first place is to provide space and professional services that can help employees process their feelings around divisive political events and election outcomes. Those who work through their thoughts and experiences around these issues and events can better contribute toward the goal of maintaining a high-functioning organization. Increasing accessibility to HR resources via open-door policies or office hours is a productive first step that can help employees regain their focus or, where more help is needed, obtain referrals to more robust mental health service offerings.

Perhaps the best way businesses can overcome employee temptation to give in to political argumentation amid so much turmoil is to emphasize the many things that all employees have in common. Amplify the corporate vision and values that brought and keep them together. Effective communication of the vision and values requires a range of channels, from events such as regional all-hands calls and virtual town halls to a cascade of messages from executives and team leads down throughout the organization. This messaging should be supplemented by reminders of the corporate vision and values on places like employee desktops, signage, value cards, and the like. Individual stories presented through internal media such as newsletters and videos that highlight how the company’s vision and values are brought into reality in the course of people’s work are also highly valuable.

Leaders need specialized training on how to behave when potentially tense situations are occurring. They need to master the fine art of allowing for open discussion characterized by respectful exchanges while also ensuring inclusivity for all parties. They also have to reinforce the need to set boundaries, establish proper conversational flow, and promote de-escalation.

Employees need coaching and education on what kinds of words and deeds might be perceived by others as non-inclusive, as well as awareness-building on the processes and procedures in place to ensure that people are held accountable for their action. Mandatory online trainings are needed, supplemented by narratives that show examples of both the ramifications of non-inclusive behavior and the benefits of inclusion (for example, the successes achieved by diverse teams). In these educational efforts, special attention should be paid to electronic communications, both because the distance provided by screens can embolden people to put forth words they might otherwise be hesitant to say aloud and because the lack of nonverbal cues and gestures can make misunderstandings easier.

Finally, carefully crafted nondiscriminatory policies need to be developed that explicitly lay out guidelines for engaging in inclusive and respectful conversations. People need to be reminded that it is crucial to keep their feelings and tempers in check during conversations and maintain a friendly, focused work environment. A clear process regarding disciplinary action for instances in which diversity and inclusiveness are not respected or hate speech is used should also be developed and communicated.

Inclusivity and respect for diversity of thought are increasingly codified in corporate vision and values statements. Those companies that have already expressed this commitment have a leg up on overcoming the challenges posed by today’s political divide, as this is a foundational step in building an intrinsically inclusive culture in which people feel a sense of belonging that helps them work well with people of all political affiliations. Laggards are strongly encouraged to consider movement in this direction to develop the sort of workplace that attracts and retains the best up-and-coming talent and maintains them through a strong, welcoming culture.

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Human After All: Organizational Change’s Critical People Factor

Why do companies change their operating model? Often they wish to become more agile. Sometimes they hope to increase collaboration. Almost always it has something to do with behavior. But as the overhaul gets underway, facts and data become the focus instead. And by the time organizational charts are drawn up, rolled out to teams and explained, management is exhausted.

Then someone remembers: We did all this to change how our people act. Oh, and those people are worried. Worried the changes aren’t good for them and that they are going to lose some of their power.

In the end, organizations don’t change, people do. And that tired management team still has a lot of work to do.

Cognitive biases’ role in organizational change
Behavioral science teaches that change triggers biases in the way humans process information and perceive threats. We are averse to loss, fear losing control and tend to view everything as a zero-sum game. We perceive losses more acutely than we anticipate gains. It’s quite natural, then, that any new organizational structure immediately sends employees into an examination of their position relative to peers. The new org chart becomes a scorecard: Some people are winning, others are losing.

Even when we understand intellectually that change is for the greater good, we balk when it diminishes our personal authority. One CEO broke down these tendencies by using a sports metaphor. “We’ve been operating like a golf team,” he said, “but now we have to play basketball.”

Metaphors can be clarifying for businesses in transition. Think of moving from a swim team to water polo, from track to soccer, from instrumental soloist to a jazz band, or even from stand-up comedy to membership in an improv troupe. In each case, strong individual performers shift from an environment that tracks and rewards independent effort to one of interdependence, in which success is determined by cooperation.

This CEO’s company still needed and appreciated great talent, as the metaphor helped make clear, but everyone needed to accept the critical importance of contributing to the team.

Anticipating the tough moments critical to organizational change
For any company to reap the full value of an organizational overhaul, its people will need to behave differently than they did in the old system. If they fall back to their old ways of working, the value will be lost.

Transforming behavior requires focusing on a few critical moments during which people will choose either the new behavior or their old habit. These moments of truth can be predicted and planned for. Leading companies do this early in the process, working with employees to anticipate the tricky moments and then ensuring everything from streamlined reports to employee support is in place to encourage adoption of the new way of working.

When a global consumer products company recently updated its operating model, one of the organizational changes was to bring all digital marketing into a centralized marketing department. It was simply too expensive for each business unit to build its own digital capability. This is quite consistent with the direction many organizations are headed today as they look for ways to build interdependencies and move away from autonomous silos. But it can lead to feelings of losing power and control, especially at the business unit level, where marketers now must turn to the center on digital topics.

The company’s executives and staff carefully anticipated which issues were likely to create discord between the business units and the center, talked them over, and decided how they would address them. Business unit heads understood that the solution rested in their hands: By modeling collaboration with the center, they would set the example for staff to do the same in their own work.

It emerged that the moment of truth for the business unit heads would be when they were asked to referee a disagreement between their team and the central digital team. Would they always side with their team against the center, or would they try to find a constructive solution?

To support choosing the constructive solution, the company created feedback loops that ran the duration of the transition. In that feedback, executives sought not only information about how the process was going but also what they themselves could do better. Over time, a pattern emerged in the data. Leaders who learned from this upward feedback and improved were rewarded with strong increases in employee engagement.

Moving forward
In the New York City Marathon, there is a hill at the 15-mile (24-kilometer) mark—the crossing of the East River from Queens to Manhattan over the 59th Street Bridge. It’s one of the greatest challenges of the race, but as runners finish their descent and head north up First Avenue, they know that 11 more miles (18 kilometers) remain.

For executives who have put months into studying what functions their organization needs, how it will be organized, and who reports to whom, it may be hard to accept that they have only finished the first leg of the race. There are many hard miles yet to go, and getting to the finish line depends on helping the humans in the organization change their behavior, too.

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How AI And Machine Learning Can Change Your Entire Approach To Employee Healthcare And Benefits

Improving your employees’ health is not a joke, but what about using Artificial Intelligence (AI) in healthcare? If that still seems like some crazy pipe dream, it isn’t. From spotting tumors to designing clinical trials, AI is already being used in many facets of health and wellness.

One of the areas that has received less attention — yet is one of the most important — is health benefits management. The majority of Americans receive healthcare from insurance plans provided and designed by their employers, making the use of AI in employer-sponsored healthcare one of the biggest opportunities to drive down costs and improve health outcomes. According to an Accenture report, healthcare AI applications can potentially generate more than $150 billion in yearly savings for the US healthcare economy by 2026.

For years employers and consultants have taken a reactive approach to providing healthcare for their people, which was the best any of us could do at the time. Last year’s data was all many organizations had access to, so they uncovered a few key trends, made adjustments, and moved forward accordingly.

But today, HR and benefits leaders can take a truly proactive approach with AI and machine learning. We have the tools to access real-time and predictive data that can help benefits and HR leaders get ahead, uncover trends, and take preventive measures to keep their workforce and business healthy. At 88% of companies, AI is already being used in many functions of HR, including recruitment and retention — saving HR up to 14 hours a week.

What does this look like? Here’s how AI and machine learning can help you change your entire approach to employee healthcare and benefits.
Think Siri or Alexa — But for HR and Benefits Leaders
Natural Language Processing (NLP) has made huge strides in recent years with applications like Siri and Alexa. We have this extremely advanced technology in our personal lives, so why wouldn’t we apply it to healthcare at scale?

By applying AI and machine learning to your health benefits practice, you can get answers to important questions that affect your business — quickly and easily. These questions could include:

How many of our employees visit the ER for non-emergency illnesses?
Who is most at-risk for severe complications due to COVID-19?
Who is most at-risk for opioid abuse?
How many of our employees with chronic illnesses are on track with treatment plans?

These answers could be at your fingertips, not hidden beneath layers of carrier reports and data that take weeks to sift through.
Technology That Thinks Ahead
As helpful as Siri is, it barely scratches the surface of what AI and machine learning can do. These applications can also identify opportunities to drive care efficiency; drug savings, help members avoid unnecessary procedures, and even proactively detect risk for chronic and serious conditions like diabetes, stroke, and other preventable diseases.

Then, AI can equip HR and benefits leaders with the right action steps to develop effective risk mitigation strategies with appropriate treatment and disease management resources. They can design targeted interventions and wellness programs to intervene, change behavior, and improve care before these conditions become chronic, a stage where treatment is often more costly.
The Future of Health and Work
Applying AI and machine learning in healthcare isn’t just the trendy thing to do — it’s the right thing to do. For years, healthcare costs have been out of control, yet America isn’t getting any healthier. Employers have the ability, and responsibility, to do something about it. With faster answers, smart scenario-planning and predictive insights, HR and benefits leaders can take real steps toward not just managing, but actually improving the health of their workforces and balance sheets.

The future of health and work depends on employers’ ability to harness the latest tools in AI, machine learning, and data science. It’s time to put these tools to work in a way that drives better health and business outcomes at scale. By taking advantage of the latest technology advancements and health intelligence, employers can deliver more strategic, personal, and effective healthcare than ever before.

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Despite The Pandemic, We Have A Lot To Be Thankful For

This week is US Thanksgiving, and despite all that’s happened this year I believe we have a lot to be thankful for. So let me give you some thoughts, as we all buckle in for a winter season of pandemic, vaccines, political change, and economic growth.

1/ We all got closer together.

I remember back in March when I first wrote The Big Reset, I felt that the pandemic had brought us together. And yes, despite a year of arguing about masks and whether or not the pandemic is real, people are more connected than ever. I know many of you have been isolated from your families, but thanks to Zoom and Microsoft Teams, we are communicating with each other more than ever. In my case I”m on hours of calls every day, and I have gotten to know many of you face to face like never before.

Much of the time we’ve spent commuting, travelling, or transiting in the past has been converted to time on the phone, video, or internet. And this creates stronger bonds.

And the concepts of collective thinking and citizenship have grown. As I discussed with our Senior Faculty last week, the pandemic points out how we are all interdependent. You cannot catch the virus from an inanimate object: it has to be transferred by a person. So as Public Health professionals teach us, we need a culture of common good to get through this in a safe way.

My mask protects you, and your mask protects me. What better way to feel connected than that.

And this gets to the issue of corporate citizenship. You as a company want to keep your employees, customers, and supply chain partners safe. And your company, in a way, is like a society. So the Pandemic has heightened our sense that we are all one global society, and what is good for everyone else is also good for us. And I’m thankful for this.

The 2020 Deloitte Global Millennial study, which surveyed more than 20,000 professionals under the age of 45, found that 75% believe the pandemic has made them more sympathetic to other people’s needs and plan to contribute to their communities. This population makes up 74% of the global workforce, so this is a huge trend.

global citizenship

And I’m not naive: I know there’s still a lot of tribalism. But this year, for the first time in a while, we are having discussions about Public Health, Public Good, and some of the other big problems we face as societies.

2/ Leaders became more empathetic.

I’m doing a big research study on corporate leadership with DDI this season and one finding is startling. Employee perceptions of “leadership capabilities” are the highest we have seen since 2011. This is a pretty amazing statistic. As you’ll see in the data, more than 48% of employees (more than 3,000 business people responded to this) believe their leaders are performing well or very well – the highest DDI’s study has ever found. (The report will be published in January.)

Why is this happening? Because this year leaders have learned that if they don’t take care of their people, they won’t have a company at all.

While the pandemic has had many impacts on work, products, services, and business strategy, the biggest thing it exposed is that human resilience is everything. For those of us in HR we know this: but hard-nosed business executives now feel it. So the focus on wellbeing, patience, flexibility, and safety has paid off.

Note also that HR’s perception of leadership has slightly dropped. I’ll talk more about this in the DDI report, but the growing gap between what HR people believe and business people believe is important. We, in HR, have to look at this carefully and it’s telling us to simplify our leadership models, and focus on what matters.

For myself, as a leader in my own way, I think this year has taught me a lot about empathy, forgiveness, and listening. These are lessons we need to remind ourselves whenever we can.

3/ Digital Transformation got “unstuck.”

I’m kind of tired of the phrase “digital transformation” and now we can just let it go. Consulting firms and bloggers have been talking about this forever, but this year we woke up and realized “digital is now the way we do business.” It’s not a balance between “e-commerce” and “regular commerce” or “e-learning” and “regular learning.” It’s just the way we do our work, develop our offerings, and live our lives.

What happened in most companies, as our Business Resilience research points out, is that companies just started using their digital tools to do things they never realized were possible. More than 90% of companies now offer remote work options; most retailers provide online purchase and direct delivery; media companies that don’t have digital offerings are developing them fast; and disciplines like design thinking, iterative design, video and audio production, and website design are growing faster than ever.

If you read our Big Reset Playbook: What’s Working Now report you can read about how Pizza Hut, L’Oreal, Sainsbury’s, and other companies went digital overnight. And they didn’t have to hire a consulting firm to do it. We are past this theoretical discussion about what it means to “be digital” now: we are all just doing it.

This means, of course, we are now in the second-order effects of all this. How do we maintain our culture and sense of energy when we’re digital all day? How do we avoid bias and make our AI recommendation engines smarter? What is the best user interface for our consumer offerings? Is TikTok a new paradigm for everything?

We are going to enter a new era of creativity in design across all aspects of our companies, and this is unleashed by the year of the Pandemic, where digital became the backbone of our lives.

4/ Wellbeing crawled out of the benefits department and landed on the desk of the CEO.

As I’ve stated in dozens of webcasts, the Wellbeing industry has also grown up this year. I used to give speeches on mental, physical, financial, and emotional health – and the audience was mostly “wellbeing managers.” Well now this is a topic for CEOs, leaders, and every person in HR.

It turns out the Wellbeing industry is more than $400 billion in size (including resorts, fancy food, diagnostics, yoga, etc) and the corporate segment is over $40 billion. We are going to publish a report on this soon, but you can read our existing report here.

What’s happened this year is that the topic became central to leadership. How do we keep people on track, improve their productivity, and give them a sense of resilience? Our Resilient HR program in the Josh Bersin Academy is filled with stories about this – and I know you’ve all been talking about it.

In a sense, the Wellbeing topic has subsumed almost everything we do: Inclusion, Belonging, Pay, Flexibility, Benefits, Safety – they’re all part of the wellbeing program. And so is corporate citizenship, responsibility, and sustainability. Remember one of the most energizing things you do at work is to help others. So this topic, which started as a set of perks in the benefits team, is now central to what we do.

I, for one, am thankful for this. It lets us think about work in a more human way, and reminds us that in the end of it all, work is just another stage of life – and the people we spend days with at work have the same human needs of our family, friends, and neighbors.

5/ Diversity, Inclusion, and Belonging went mainstream.

We are doing a massive research study on DEI right now and the whole topic is somewhat frustrating. While there are dozens of lists of “top diversity” companies, most leaders tell us their company is not doing that well.

Only 15% of companies believe their leadership is highly diverse; only 22% believe their company is well regarded as an inclusive place to work; and only a third of companies believe their HR business partners are able to consult on inclusion and diversity issue well. Our Global HR Capability Assessment, which we are publicly launching soon, shows that DEI skills are the weakest area of all across the entire HR profession.

This year, despite the issues with Black Lives Matter, Racial Injustice, and an entire presidential administration focused on various forms of racism, we are talking about the topic in a meaningful way. And I’m thankful the space is moving fast.

For example, as I wrote about in The Chief Diversity Officer is the Toughest Job In Business, the role of Chief Diversity Officer (or Chief Advocacy Officer) has gotten serious. And this is a good thing.

I won’t pre-release our research findings, but we are actively finishing our research and you’ll soon see the results, along with an exciting new program in the Josh Bersin Academy.

I’m thankful we’ve had a good year to openly discuss these issues, and I encourage you to join us to learn more. As I put this in our latest webcast, Inclusion is the goal, Diversity is the result. Think about it a little and you’ll see what I mean.

6/ The corporate learning market grew up.

This year a lot of the hype and faddishness of corporate training went away. And I”m thankful for the sense of reality that has set in.

For the last few years, companies have really over-rotated toward LXP platforms, deploying lots and lots of content, and revamping their LMS to meet the urgent training needs from the Pandemic. Well I’m thankful for two things: first, companies are now taking L&D very seriously, which is a very good thing; second, companies are becoming skeptical of the “skills clouds” offered by vendors, and pushing vendors to be more realistic.

I’ll be writing a lot more about this in the upcoming HR Technology Market 2021 report soon, but I”m thankful for the focus and investment in this area. Every company we talk with is reinvesting in their L&D team, looking at VR, LXPs, and Talent Marketplace offerings, and the focus is shifting from “skills” to “capabilities.”

I’ve invested a lot of time in our own HR Capability Model and we’ve learned that the most advanced and successful training companies spend a lot of their personal energy on “capability development.” They don’t just buy software and expect “skills” to appear – they focus heavily on identifying the strategic capabilities they need, and they do this in a business-driven way. I’ll be writing more about this and explaining how Lockheed Martin, Intermountain Healthcare, and some other advanced companies do this. For now, I’m just thankful that the market has really grown up.

Let me also mention that the JBA Capability Assessment is now ready to launch, and more than 3,000 people have already joined. If you want to understand how to build a capability model and join our HR Capability Network, please read this whitepaper and contact us.

7/ We have a new presidential administration: Unity not discord.

I won’t get into politics, but I am very thankful that we have a sea change in Washington. For the last few years, the United States has been focused on anger, divisiveness, and blame. For those of us in California, it has felt like we aren’t really part of the country. And this lack of empathy in the Federal bureaucracy has been translated into fear, discord, and unrest in our cities.

If there’s anything I’ve learned about business over the years, it’s the lesson that “win-win” always outperforms “win-lose.” Yes, business is often brutally competitive and management teams often read The Art of War (we read it at Sybase) to learn how to compete. But as a society, community, and workforce, we work better when we work together. And many of the problems we now face (Pandemic, Climate Change, Income Inequality, Racial Justice) are systemic in nature: they cannot be addressed unless people work together.

And all signs show that the Biden administration believes in uniting the country, bringing diversity into the White House, and not blaming anyone for the challenges we face.

I’m in the middle of reading The Upswing, by Robert Putnam, the Harvard economist who wrote Bowling Alone (another of my favorite books). He explains that the real problem we face in the United States is a huge cycle toward income inequality, driven by inequality in wages, wealth, education, and housing. Pointing fingers and blaming people won’t solve this problem – and I hope the new administration will take this on.

8/ I’m thankful to work in Human Resources.

This has been a bizarre year. Not only are we working from home, but the pace, demand, and uncertainty has been unrelenting. Every day I wake up at 4:30 or 5 am and find myself flooded with news, inquiries, and challenges to think about.

Well, I’m thankful for what I do. I truly love my work and I love the people I work with. And that means every HR leader, HR professional, vendor, and peer.

We are fortunate to work in one of the most noble and important roles in business, and this year we’ve shown our strength. Many of you have joined us in The Big Reset Initiative, and I am thankful for your time and sharing. Many of you have helped us with research, and I’m thankful for your data and insights. And many of you have contributed to the Academy, and I am thankful for your contributions.

As many of you know I started my career in engineering and spent almost 20 years in sales, marketing, and product management. While I loved much of my work during that time, it doesn’t come close to the fulfillment I get from being part of HR. So I want to thank the profession for letting me join and contribute as I do.

9/ I’m thankful for my team and my family.

Finally, and I hope you all feel this way, I feel thankful to my team, my family, and my friends. This is a year when we leaned on each other a lot, and in my case, the results have been inspiring. Our team at JBA has been amazing, and we support each other in very important ways. I am closer to my family than ever this year, and I hope you all feel the same.

I know Thanksgiving is an American thing, and it carries plenty of baggage. Many believe, for example, that the early settlers of the United States pillaged the land, and the Native Americans and environment suffered as a result.

But that’s not what this holiday is really about. Thanksgiving is a chance to reflect, be with family, and say thanks for what you have. Even as the Pandemic has interrupted and disrupted our lives, let’s all think about what we can be thankful for, and we’ll build a great future for the year ahead.

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CEO compensation in a COVID-19 world

COVID-19 has considerably altered the dynamics around CEO compensation. How are investors, compensation committees, and CEOs themselves approaching this question in the current environment?

WITH the COVID-19 crisis still unfolding around us, the uncertainties keep piling up: When businesses will reopen, the course the virus will take through our businesses and communities, whether consumers will feel comfortable spending again, how global supply chains will be affected … and the list goes on. But one of the very few things we can be certain of in the current environment relates to CEO compensation. Current trading conditions mean that very few CEOs will reach their performance targets this year. If this is the case, what does this mean for how pay will ultimately be awarded? How will board compensation committees react? And, ultimately, how will shareholders view any changes? Will they support CEO pay packages, and any COVID-19–induced changes, during this year’s shareholder meeting season?

To get to the bottom of these questions, Deloitte interviewed a cross-section of CEOs, compensation committee chairs, and institutional investors1 to better understand views on CEO pay from multiple angles. Certain broad patterns are discernible from these intimate, individual conversations and are highlighted below. Throughout, we have attempted to provide the actual language used by the interviewees to enable readers to develop their independent view as to the depth of this shift in mindset.

All stakeholders are starting to recognize that the dynamics around executive compensation have been considerably altered—whether due to the COVID-19 pandemic itself, or due to a move away from solely focusing on shareholder value maximization. While it is still premature to assert whether these changes are permanent, it seems that there is a need to anchor arguments related to executive pay at least in part on principles of fairness and empathy. Our discussions show an increasingly recognized link between leadership and social responsibility and how that affects the ultimate determination of fair executive compensation and appropriate return to shareholders’ investments.

Organizations must balance fairness to stakeholders with fairness to CEOs
An overarching theme that surfaced among all interviewed stakeholder groups was that fairness, both perceived and actual, in determining CEO pay must be a paramount consideration. The need for fairness in how CEOs are compensated versus how workers are compensated was a recurring topic, as was the need to be fair in aligning CEO compensation with shareholder returns. At the same time, interviewees also spoke of the need to be fair to CEOs, pointing out that how they are paid now would potentially have long-term impacts on their motivation and performance in the chief executive role.

Many of the investors we spoke with expressed concerns about the perceived inconsistency and unfairness of outsized payments to CEOs at companies under stress. In particular, we heard concerns from investors about large payouts at companies that may have received government loans or other funding, or at companies that have cut dividends, halted share repurchases, or laid off or furloughed large numbers of employees. The International Corporate Governance Network (ICGN),2 one of the largest investor-led governance organizations, published a note in April about the virus and its effect on capital. Calling out fairness as a key concern, the note suggests that the question of fairness is also important for companies that are forced to lay off staff or ask staff to operate with pay cuts. Maintaining or increasing executive pay in such cases could threaten stakeholders’ trust and motivation as well as the company’s social license to operate.

Investors also stressed that CEO pay should be fair from the perspective of shareholders, many of whom have suffered precipitous losses during the pandemic. Indeed, this theme of alignment of CEO and investor interests came through in nearly every investor interview we organized. Many pointed to declining equity markets and suggested that there must be some correlation between executive pay and the judgment delivered by the markets. “For us, it’s all about sharing the pain,” said one governance head of a large North American government pension fund. Another investor said, referencing an argument he had heard about the virus being something that was clearly outside of all executives’ control, “Yes, CEOs couldn’t control the virus, but no one else could, either.”

For their part, CEOs generally recognized that their compensation would likely be adjusted to be more aligned with the sacrifices made by employees and shareholders, and as a way to “share the pain” and “lead by example.” One US CEO told us that her company had quickly frozen merit and salary increases, and no member of the executive team would receive new equity grants this year. Other CEOs we spoke with volunteered to have their base pay cut, bringing the proposal to their compensation committee chairs, as another way to lead by example during a difficult time. It has been publicly reported that a number of CEOs have volunteered to cut their pay this year to zero, or to US$1.00, or to otherwise drastically lower their pay.3

Cutting CEOs’ compensation is not always the right move, however. Some CEOs spoke to us openly about retention risks: That, if CEO compensation is cut and with stock prices depressed (until recently, anyway), CEOs may begin to be approached by competitors. One CEO expected his company to go ahead with longer-term share or option grants as a retention tool. And it’s the longer-term grants that CEOs recognize as the most problematic. CEOs’ reactions to these will very much depend on their expectations for a post–COVID-19 recovery. If CEOs believe we are on the cusp of a V-shaped recovery, they might welcome little to no changes to outstanding grants; if they believe we are destined to experience a W- or U-shaped recovery, they might see previous grants as “lost” and seek new grants made at today’s lower stock prices. No CEO we spoke with seriously entertained the possibility of option repricing, or resetting strike prices.

CEOs are also concerned about what potential decreases in pay would mean for the long term. One CEO told us that he is approaching his pay thoughtfully: He was uneasy about the long-term negative effects on his pay trajectory due to short-term COVID-19–related reductions. Another CEO said that he is approaching discussions about pay in a slightly “timid” way, given present circumstances. Both of these viewpoints reflect a sense that short-term reductions can become facts on the ground that bring a long-term reduction in pay. There is a balance here, to be sure: CEOs may wish to do the right thing in accepting lower pay this year, but they also do not want this year’s pay levels to affect their future compensation trajectory.

Another worry some interviewees expressed was that lower CEO compensation may mean lower CEO effort and motivation, with harmful effects on business performance. This concern was evident among some CEOs serving as compensation committee members on the boards of other companies. These CEOs, in their position as directors, can be informed by a broader perspective—and one that can support higher levels of pay. One CEO who serves on the board of a large retailer told us, “The number-one thing I can do as a member of the board is to make sure the CEO is being supported and that he’s receiving compensation for what he’s put into place that’s been beneficial to the company in the long term, and that he’s rewarded for this, outside and apart from a crisis such as COVID.”

Behind all these considerations is the philosophical question of what pay is supposed to reward in the first place. If it is to reward effort in some way, then even a company facing zero revenue in the midst of the pandemic should reward the hours of work and wrenching decisions executives have had to make over the last few months. If, on the other hand, the purpose of pay is to align the CEO’s interests with those of his or her shareholders, then the answer will be very different. If, after all, shareholders have been suffering, why should leadership be rewarded? This was characterized to us by one compensation committee chair as an “input/output problem,” meaning that sometimes, even heroic efforts are not rewarded by the market.

Of course, gyrations in the market cloud this analysis further. One US compensation committee member told us: “Part of the problem is that (for me) I can’t figure out what the market is doing, nor can the board. It’s all great what we’re seeing at the moment—but in another sense, it’s certainly not reflecting the results.”

Finally, it’s not just reductions in CEO pay that were seen as problematic. The virus has not affected every business equally, or in the same way. Take the example of one compensation committee chair at a global manufacturer of, among other things, household cleaning products, whose revenues in the crisis have skyrocketed. This director, who serves on the boards of other companies that have been negatively affected by the virus, expressed equal concern about the effects on stakeholders and her CEO from pay plans paying out unusually large positive gains, as about how to pay when businesses are struggling.

Adjusting KPIs is often, though not always, frowned upon
Many interviewees spoke about the question of whether their company’s key performance indicators (KPIs) should be adjusted to account for current circumstances. The decision obviously has direct implications for CEO pay: Many, if not most, CEOs are highly unlikely to reach their KPIs for this year unless the KPIs are lowered.

But with some exceptions, most of those we interviewed felt that adjusting KPIs would not be in an organization’s best interests. Few of the CEOs we spoke with supported the idea of changing or easing KPIs in the middle of the year, or “midstream,” as it were. Particularly for those companies that have accepted government money as part of the immediate COVID-19 response, this approach is widely understood to be an unpalatable one, and one that would have deleterious effects on the company’s reputation.

The governance head of the North American government pension fund mentioned earlier put this perspective into words. “I get that compensation is tied to performance and that this is an extraordinary event, and there may be a desire to change metrics. This might be reasonable in principle, but if these changes are disproportionate, this is a concern for us. We would have a problem if they lower targets, and then they all hit it out of the park because they’ve lowered the targets, and then they all get maximum bonuses. This is a particular issue if you’re also laying off staff or furloughing people.”

These sentiments were echoed by Amy Borrus, executive director of the US’s Council of Institutional Investors (CII). She told us that, with respect to CEO goals:

Some institutional investors are extremely skeptical of companies moving the goalposts mid-year, even in the wake of COVID-19. A senior stewardship staffer at a large public (US pension) fund told me: “Given these unprecedented times, we think it is important that there is an alignment between corporate executives, employees, and shareholders. If shareholders are feeling the pain, we feel executives should as well. In addition, we think this is the time to reinforce a focus on long-term metrics and the strategic direction of the company. I anticipate that we will review these ‘revisions’ with great scrutiny. There could be acceptance of revised KPIs if a company is truly changing their long-term strategy, but I think these will be rare.”
A Continental European compensation committee chair identified several additional reasons that he believed performance targets should not be reset. The first was that because doing so can be distracting to management teams who should be focused instead on the safety of their people. The second was that because resetting to a wider set of targets—including a measure of sustainability, say, or taking care of colleagues—would require enormous time and effort to define. And the third was because, in any case, events with the virus are moving faster than most boards can act. That said, some companies are examining the question of COVID-19–related KPI adjustments in a broader context. As noted by the investor quoted by Amy Borrus, the COVID-19 crisis could be an opportunity to examine KPIs to make sure they truly reflect a company’s long-term strategy.

These debates are occurring at a time when a CEO’s compensation may be becoming less solely tied to KPIs. Some CEOs expressed a sense that KPIs themselves are changing to account for more nonfinancial measures of performance, and that COVID-19 is accelerating this. Compensation committees recognize that there is more to pay than just rewarding growth to the bottom line, and that this approach to compensation may allow discretion in how awards are made. This can reassure some CEOs.

However, some interviewees were equivocal about allowing boards discretion in setting CEO compensation. In Europe, even where compensation committees might wish to make some kind of adjustments to pay packages, corporate governance legislation is generally not supportive of committees applying discretion to pay policy. One compensation committee chair at a French-listed company told us that application of discretion by a committee is uncommon in France. At her company, she plans to introduce a specific discretion statement in the Annual Report—that the board would review executives’ performance at the end of the year and that shareholders should expect the committee to apply some discretion. At the same time, the chair admitted that this was uncharted territory for the committee. “What does this mean? Who knows?” she responded.

Interestingly, one feature of the current landscape around pay seems to be a trans-Atlantic divide on compensation committees when it comes to targets. One director we interviewed, who serves on the boards of two equally large listed companies in London and New York, told us she sees a large contrast between the United States and the United Kingdom when it comes to pay. Here, an extended quote is enlightening:

“In the US we have a CEO who said very early on in the crisis, ‘Look, we’re not going to hit these targets, but we need our people to continue to keep their eye on the ball. So, what we will do is, we will stop the process midyear, pay out bonuses based on half-year results, then issue new targets. Then we pay modestly for the rest of the year, in order to encourage our people to keep their eyes on the ball.’ But the CEO could say this in the context of a great deal of moral authority—he’s already agreed to give up 50% of his own bonus. In the UK, it’s a different story. There, we knew by mid-March that these goals would not be achieved. It would have been much more logical to do what (my US company) did. But in the UK you don’t change goals.”
For committee members in the United Kingdom and to a lesser extent the United States, an overriding concern is securing approval from proxy advisers such as ISS and Glass Lewis, who provide voting recommendations to companies’ institutional shareholders. Given the reputational impact of a “no” vote, staying on the right side of voting recommendations that can influence how more than one-third of one’s shareholders might vote on a compensation issue can feel, at times, like the number-one job of a compensation committee member.

On the other side of this debate are those companies that have been buoyed by the crisis. Certain health care companies, videoconferencing technology companies, and manufacturers of personal protective equipment are just a few examples of businesses that may have experienced record growth beyond anyone’s imagination. If these companies use this year’s numbers as a benchmark of any kind, comparable targets may be very difficult to reach in the same quarter next year. Yet investors can be unforgiving and have short memories: Compensation committee members we spoke with at these companies harbored worries that their investors might ask later why their company is relaxing targets.

Different countries may perceive and manage CEO pay differently
Our interviews highlighted some differences between the approach to CEO compensation in the United States and in the United Kingdom. To some extent, these differences reflect different degrees of involvement by shareholders and even the government in questions of pay, which lead to different consequences. In the United Kingdom, great attention is directed to pay levels at large, listed companies, and there is often an impatience with, and a lack of acceptance of, what is perceived to be high pay. In the United States, in contrast, high pay packages, or changes to pay plans, rarely make it to the front pages of even the business papers, nor are they often subject of government inquiry.

There are also several differences among countries in how compensation is conceived and how it is managed. For example, one UK compensation committee chair told us that they sometimes observe a conflation between compensation for the CEO, along with other top executives, and compensation for the entire organization. This can create problems: Treat everyone equally, and goals may be too strict, and the very people who should be incentivized the most end up with little to show for their effort. On the other hand, a US compensation committee chair we spoke with had little difficulty treating the CEO’s pay differently.

A continuing debate in an environment of crisis
The debate about executive pay in the middle of a global pandemic was always likely to be a contentious one. The issue brings to the foreground questions of fairness, alignment with stakeholders, and the responsibility companies have to the broader society during a time like this—not to mention fundamental questions about what CEOs can and cannot control, irrespective of the effort put into it.

It is apparent that the tenor of the debate between executives on one end and boards and investors on the other has changed. Whether because of the peculiar nature of this crisis (broadly “human” vs. narrowly “economic”) or because of the past two decades’ secular evolution of the underlying societal paradigm to an increasingly nuanced version of capitalism, the bargaining dynamics seem different. On the surface at least, and possibly at a deeper level, an increasing number of CEOs seem willing to acknowledge the link between their social responsibilities as leaders and the implications of that link for their compensation. But despite these new and emerging dynamics—given how greatly the virus has touched and will continue to impact businesses for the foreseeable future—for CEOs, compensation committees, and investors alike, the next few months are likely to be as bumpy as the last.

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We need change leaders to save lives: How can you be one?

Generically, change leaders are those who are willing to engage in the new behaviors and do so publicly so that others know about it. Notably, change leaders are not afraid to challenge other people’s expectations that everything should stay the same, and change leaders are respected enough that at least some other people will follow their lead. And like the lesson from the famous YouTube video of how one man started an entire crowd dancing, it’s not just the first person publicly doing a new thing, but the “first followers” who are, of course, also leaders.

In the case of coronavirus, workers will need to know with certainty that it is not only OK to stay home, but it is preferable that they stay home – at a minimum when they are sick or someone they interact with is sick. Perhaps a (temporary) work-from-home policy is possible even for healthy workers to stay away from a riskier workplace.

What the boss wants
How does a worker really know that staying home in certain situations is what the boss wants? Proof comes in many forms, the least of which is verbal communication. Hearing those words is a start, but actions will speak louder. The policy for when staying home is acceptable should be created or revisited so that it is very clear. Managers at all levels need to hear that the policy is in place because it has a business purpose of saving lives, maximizing total work time, and ultimately keeping money coming through the door over the long haul.

But most importantly, those visible change leaders need to use the policy. If the CEO announces that he will be working from home twice a week and that he expects his team to do the same, that will help. If the CEO goes on to demand a work schedule from all departments that enables as many employees as possible to work from home twice a week, that helps even more.

More than managers
Change leaders are not just managers, however, and if managers recognize those who lead without formal authority, then there can be some collaboration among them to create more visibility. When the non-managers become first followers and are praised for doing so, a lot of would be followers will take heed.

Now obviously some workers in some workplaces will always need to be at work, but with planning and cooperation from the entire team, contingencies can be made for those times when someone is forced to call in sick. Some of those contingencies might need to be radically different from a typical business operation, such as a restaurant closing their dining area and only serving take-out customers, but if doing so prevents both zero revenue and massive turnover, the benefits may temporarily outweigh the costs. A drastic effort to retain staff despite their need for excessive time off will build loyalty and engagement once this outbreak has passed.

How Do Perceived Social Norms Lead Individuals to Conform?
Social psychologist Robert Cialdini correctly points out that individuals frequently base their own behavior on social norms: what other people do and what other people say ought to be done. When just three people are seen looking up at the sky, nearly every passer-by will feel pressured to also look up. Canned laughter on your favorite TV show is there for the same reason. Of course we know that laws, rules, and even expectations tell you what you ought to do, even when some are not abiding by those dictions. That’s why some drivers are obeying the speed limit even when most are not.

The power of peers
But the strongest pressure on an individual is when there is a match between what ought to be done and what is being done by many others.

Leveraging social norms is a critical part of changing an organizational culture because so many behaviors are not dictated by a formal authority figure, like the boss. In contrast, peers are the ones who create and police much of what individuals do. Anyone who has successfully kept the workplace microwave free of dried up crusty things (usually not the boss) will understand that a peer’s plea for help or some corny routine can have a big effect on how others behave. For example, imagine a peer-enforced “Sneeze Police” that reminds all to use their arm to cover their mouths, to throw out tissues immediately, and to wash their hands when the bell goes off. It’s laughable, but if you and your peers create the rules, you are all likely to follow them. Remember, you can always point out a group of people (three or more!) who are doing something to show others that a new behavior is catching on.

How Do Subtle Shifts in the Social Environment Encourage Individuals to Change Their Own Behavior?
The renowned culture researcher and consultant, Edgar Schein, wrote that the best way to persuade an individual to engage in some new behavior is to leverage the things that the individual dislikes about the current behavior. Find the dissatisfaction with the status quo, and then introduce an alternative that alleviates that dissatisfaction. Additionally, one can influence a person by redefining something that the person identifies with so that the definition now includes the new behavior.

A new kind of hero
One application of these concepts is addressing the hero mindset of employees who would go to work even if a limb were dangling off. Obviously, that definition of heroism needs to change to prevent the spread of the coronavirus among teammates and customers. Luckily, most employees would dislike the old hero mindset if they understood that they were risking the health of the coworkers, associates, and customers with whom they work.

Change leaders need to define a new brand of heroes who can be as productive and helpful as possible, but without endangering other people and the business itself. These “anti-virus work heroes” make advanced preparations in case they get sick or have to care for others who are sick. Those preparations might include taking home a laptop each day to enable remote work, communicating to others the details of assignments that might need to be passed on to others, or creating a phone chain to alert coworkers of unplanned absenteeism. Most importantly, change leaders need to redefine “the right thing to do” when people first feel symptoms or realized they may have been exposed to the sickness. The right thing means staying home to protect others.

What Predictable Stages Exist When Individuals Change Their Own Behavior?
One last consideration when seeking organizational change is to plan for individuals to change at different rates. There is clear empirical evidence that people go through stages of change roughly equivalent to I won’t, I might, I will, I have, and I do. The first three stages are cognitive in nature. Just getting people to consider making a change involves emphasizing the benefits of the new behavior. Having them consider what might make things work involves identifying all the reasons for NOT doing things differently, and then countering each reason with an alternative plan. From there, social support helps to get good intentions into initial attempts and eventually a new habit.

Making employees feel that they can really stay home when needed will be more difficult for some jobs that lack generous paid time off or sick days. Many employees are likely to say “I won’t stay home if I am able to go into work” because they don’t feel they have a choice. The only way to counter that reason is for employers to provide new options for remote work, and if that is not possible, then to create extra paid time off and sick days. Yes, that is a financial hardship for small businesses, but these are necessary precautions to make the best of a very bad situation.

We have learned that this virus can create havoc with our health, our lifestyle, and our economy, and that to only rely on hope is not only lazy, but lethal.

One simple and inexpensive preparation you can implement right now is to start employees thinking about work processes and behaviors in place now that would put your business at risk for a COVID outbreak. We are offering two ways of doing so.

In March, using the WHO recommendations, CultureIQ created an Organizational Virus Protection Assessment to assess behavioral risk factors that will need to be addressed if the virus were to spread further within the US. Since then, we’ve also created a Coronavirus Business Resilience Survey to cover all work scenarios during COVID: remote work, on-site and return to work. Please use these assessments to consider where your organization is most vulnerable, and where it is strongest.
CultureIQ has also created a lighthearted Keep-Us-Safe Quiz that is designed to educate employees about healthy and risky work behaviors while creating some buzz or “water cooler” talk about precautions that can be organized now. Please use this as a follow up to the first assessment OR as an initial step in ensuring your staff is considering their safety and the safety of others. Try to emphasize the fact that everyone needs to have each others’ backs – we have to protect our teammates.
Source :–how-can-you-be-one-&

HR Leaders – Wake Up to the Realities of Your Business

For many decades now, HR Leaders have been justifiably criticized by CEOs and line executives as having little or no pragmatic understanding of the strategic, financial or operating aspects of the business while wanting to be considered as an equal business partner to their line executive peers which is best illustrated by a seat at the C-Suite table. While the current crisis has HR leaders being seen in a different light, many still struggle to acquire that much-desired seat at the table.

Accordingly, this overall lack of business acumen has caused many CEOs and line executives to view HR primarily as an administrative afterthought with little or no direct impact on the business itself.

Most HR leaders fervently hope for a CEO or line executive who appreciates the worth of the function and will grant them such a seat. However, most CEOs and line executives are looking to their HR Leader to chart its own path to business success and earn its business legitimacy.

After decades of trying, the vast majority of HR leaders have not achieved the reputation as an equal business partner to the other executives in the company. In fairness, over the last decade or two, many HR leaders have tried valiantly to achieve HR’s business legitimacy by implementing several different approaches to the problem, but all have been unsuccessful.

Unsuccessful HR Approaches
Here are some of these unsuccessful approaches.

Soft Skills and Leadership Development – these programs are almost exclusively designed for low to middle management situations where the problems discussed are usually one-dimensional easy ones with relatively simple solutions, while avoiding the senior or upper management situations where the problems are far more complex and the answers are much difficult to identify and implement.
Similarly, such programs typically avoid the discussion of any appropriate job-related hard skills that line executives consider critically important to the achievement of their quantitative business results. To be valued by CEOs and line executives, soft and hard skills should be taught together within the practical context of the leader’s business objectives, plans, challenges and risks.

HR Metrics – these HR functions track various quantitative measures that deal with recruitment (such as cost of hire, offer-to-acceptance ratio, internal vs external hires, etc.), management development (such as average number of training hours, average program evaluation rating, training costs, etc.), compensation (such as compensation cost as a percent of sales and operating costs, average merit increase percentage, etc.), benefits (such as cost as a percent of payroll and operating expense, medical/dental claims cost per covered employee, etc.) and employee relations (such as voluntary turnover rate for all employees and new hires after six months, absenteeism rate by department, number of employee absences by department, etc.) and so on.
Company Initiative Support – many companies have one or several strategic initiatives that they feel are critical to their company image, culture and competitive success. Some examples might include technology, innovation, teamwork, benefits, continuous improvement and customer care, among others. For any particular company initiative, HR will typically provide support in recruitment and staffing, corporate culture, management training, and other related programs.
HR Analytics – the use of analytics in HR is still emerging, even though several advances have been made in a relatively short period of time. However, it is still a costly effort that needs to be funded year after year. Moreover, to be effective, these analytics must identify the right metrics which must be accurately measured in order to identify actionable items that hopefully will yield a more positive and quantifiable impact on the desired outcome. Unfortunately, it usually takes several efforts over a relatively long period of time to achieve such success.
In the end, it has a high price tag for which its return on investment must be measured and quantified. It is not a panacea for HR.

HR Technology – like any other function within a company, HR is constantly striving to improve its own technological capabilities. Unfortunately, when a company has to prioritize its technologically-related expenditures, it typically has to give preference to those that directly impact the company’s products and services to its customers.
Overly relying on technology has a significant and distinct disadvantage for HR because it keeps its own people in their offices, away from the hectic world of its customers, employees and management where the real business needs exist.

Common Denominator
The common denominator that runs through all the above approaches is that they concentrate on HR trying to improve the effectiveness and/or efficiency of its traditional administrative duties which, even if successful, typically have only an indirect impact on the profitability and long-term strategy of the business.

Conversely, the CEO and line executives are primarily concerned with achieving specific quantitative business objectives that have a direct impact on the business, such as increasing sales, improving cash flow, reducing costs, improving productivity, enhancing customer care, achieving new product development, improving innovation, increasing market share, improving operational effectiveness, and so on.

ALSO READ: Becoming a More Effective HR Business Partner

Importantly, they are committed to the Board of Directors to achieve them in an effort to improve the company’s shareholder value while directly responding to your customer’s needs. When HR assumes the responsibility for an HR project that helps a line executive to achieve a specific business objective, it is having a direct impact on the business.

How the HR Leader Can Identify the Realities of the Business
Every fiscal year, most CEOs and line executives still operate their businesses by setting specific quantitative business objectives in such areas as earnings per share, sales, market share, cash flow, new product introductions, improved customer care, etc., that are consistent with the company’s overall business strategy. Therefore, any HR project that can support and enhance the executive’s ability to achieve any one of those objectives in a practical way is very well received.

Preferably before the start of the fiscal year when the annual financial budgets are being developed and finalized, the HR leader should meet with the CFO to understand the critically important numbers in the company’s upcoming Income and Cash Flow Statements, and any other financial priority. With that background information, he/she should meet with the CEO and/or appropriate line executives to understand their specific business objectives for the upcoming fiscal year.

For each business objective, the HR leader should ask the following question: Is there a related HR project that can help the line executive to achieve the business objective?

HR Project Examples for Typical Business Objectives
Many HR experts, especially Dave Ulrich from the University of Michigan and the RBL Group, call for the HR function to do a much better job in connecting it to the needs of the company’s customers and, thereby, business. Unfortunately, many HR leaders struggle in doing so. Therefore, here’s a practical way to do it by following the examples of several HR projects that can support some typical financial, operating and strategic business objectives.

Financial Objectives
To improve earnings per share from “X” to “Y” dollars/share.

o With Finance, implement a Cost Control/Profit Improvement workshop to identify and quantify potential cost savings and profit improvement opportunities.

o With Engineering and Marketing, implement a Product Improvement workshop to identify some product and service innovations that can help gain market share and/or reduce product cost.

To increase cash flow by “Z” dollars.

o Train Sales staff how to resolve and collect outstanding receivables to bring in more cash.

o With Manufacturing, implement an Inventory Reduction workshop to identify and quantify items that can be eliminated, reduced or replaced by less expensive ones.

Operating Objectives
To reduce time-to-market for product “A” by 30%.

o With Engineering and Marketing, implement team projects to reengineer and streamline the design and launch cycle, while recognizing quality, cost and manufacturing standards.

o Retrain appropriate management on key changes before implementation.

o Conduct a Project Management workshop to ensure that this project, and all subsequent product development projects, are achieved on time.

To improve customer care to exceed industry standards.

o With Customer Care (CC) staff, survey outside and company experts to catalog new key service principles, standards, measures and reporting requirements.

o Determine the CC needs for the next generation of company products.

o Determine the new key skills areas required for success and assess the competency level of current staff on all required skills.

o Identify new positions and retraining that are needed for all staff on new principles, standards, processes, measures and reporting requirements.

o Establish on-going Innovation Workshops to continually improve CC.

Strategic Objectives
To develop 20 general managers who can operate a $50M/year business.

o Develop a seminar workshop that covers strategic planning, financial management, product/market development, sales, customer service and leadership with outside experts.

o Set up a personalized development plan for each general manager.

o Review the entire compensation package for each general manager annually.

To increase sales 20% by acquiring a business that uses an important new technology.

o Update the Sales Incentive plan to recognize the new technology and improved profit.

o With Sales, evaluate the competency level of the Sales staff in the new technology.

o Evaluate the current recruiting sources for the new technology and identify new ones.

Understanding the realities of your company’s business, while effectively directing HR’s administrative duties, and then selecting HR projects that directly impact the business is not for the faint-of-heart. The task is not easy, is fraught with many difficult challenges, is risky from a compensation viewpoint and is time-consuming. It is not recommended for any incumbent who enjoys the cozy warmth and quiet aspects of HR’s administrative life and is comfortable in it.

However, if an HR Leader really wants to connect the function to the company’s business and is willing to put in the necessary time and effort to better understand the realities of the strategic, financial and operating business objectives, the task can be accomplished.

In doing so, he/she must think and act as a businessperson first when applying various innovative HR projects to the company’s business objectives that are crucial to its profitability and long-term strategic success.

If the HR Leader desires to pursue this challenging path, there is one hard truth that must be understood and personally internalized.


Therefore, meeting or exceeding these business objectives every fiscal year is the top priority of the CEO and line executives. It should be the HR leader’s top priority too.

When the HR Leader successfully connects the function to the company’s business objectives, he/she will gain the respect of the CEO and line executives as a business person, become an equal business partner and will finally get that much desired seat at the C-Suite table. In doing so, the HR leader will bring the function into the company’s operational mainstream and gain the full measure of respect from the CEO and line executives for the function’s true worth.

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Yep, Your Organization Needs “Momboarding”

The benefits of onboarding are well-known and can be extended to employees returning from parental leave as well in the form of “momboarding.”.
A survey in the U.K. revealed that 90% of maternity leave returners received no support from their organizations.
Many momboarding procedures can have a number of benefits at zero cost to employers.
Last Monday, I woke up to my alarm clock for the first time in twelve weeks.

I nursed my tiny baby, so little her head still fits in my palm, and I got her, my older daughter, and myself ready for the day. I packed lunch for my eldest, bottles for my youngest, and dropped them off at their meticulously vetted, socially-distanced care facilities. I nursed and snuggled my daughter in the car before reluctantly handing her over.

And then, I came home, took a deep breath, and returned to the working world.

For most women, coming back to work after maternity leave is…complicated. I absolutely love my job, my boss, and my colleagues, and I was more than eager to return to the professional world. But the prospect of being away from my brand-new baby—who’s been either inside of me or right next to me for the past year—for the majority of her waking hours was, and is, heart-wrenching. She’s growing quick, and I’m going to miss key moments of her life.

Even for an engaged and highly satisfied employee like me, that’s a hard pill to swallow. Add to this the physical considerations (pumping breastmilk every two to three hours, sleep deprivation, navigating childcare arrangements and doctor’s appointments, etc.) and it’s no surprise that the transition is difficult for most moms.

It’s a turbulent time for their companies, too, as they struggle to support and retain their people.

In 2011, a Census Bureau report revealed that 20% of working first-time mothers quit their jobs after having babies. (I couldn’t find more recent credible statistics.) For “highly qualified women” (read: graduate degrees, executives, etc.), that number jumps to 43%. Worryingly, mothers later seeking to re-enter are in for an uphill climb —as Sheryl Sandberg cites in Lean In, “only 74% of professional women will rejoin the workforce in any capacity, and [just] 40% will return to full time jobs.”

Couple this with the current mass exodus of working mothers due to COVID-19, and our nation is facing an alarming reversal of decades of progress. The share of working women is currently the lowest it’s been in 35 years.

But it doesn’t have to be this way. Just as many organizations are devising creative ways to support their people in the age of pandemic parenting (such as UKG’s sanity-saving summer camp and kids club), there are clear ways we can support new moms as they return to work after maternity leave. Despite their unique challenges, working mothers make up a significant part of the workforce. Learning to support and retain them is good for them, good for business, and good for the economy.

But let’s be clear: It’s not just about maternity leave.

Paid maternity leave: Crucial. Not enough.
You’re probably aware that the U.S. is one of only four countries in the world that doesn’t offer national paid maternity leave (and the only developed country with that distinction). Fifty nations provide six months of paid leave or more. It’s pretty shocking, really—but I digress.

Fortunately, more and more private companies are recognizing the importance of paid family leave and stepping in where public policy fails. As of 2018, more than one in three U.S. employers offered paid maternity leave, and many even extend time-off benefits to fathers, who’ve traditionally been neglected in the parental leave conversation.

As someone who’s experienced two maternity leaves, both paid and unpaid, I can attest that paid is much better. The ability to take twelve full weeks to bond with my daughter, establish my milk supply, and recover from birth was a godsend, especially as we didn’t have to worry about how my absence would stress our finances. When I had my oldest daughter, I was working at a different company. Taking twelve weeks of unpaid leave wasn’t financially viable for our family at the time, so I began working part-time within two weeks and full-time by six. This time around, taking the full twelve weeks of leave helped me become much more rested, motivated, and excited to return than I was six years ago.

By offering paid parental leave, employers signal that they care. It’s a coveted benefit that certainly helps both attract and retain talent. And still, twelve weeks is just three months; a blip of time in your employees’ (hopefully) long trajectory with your company. Trust me: That time passes quickly, and it’s mostly a blur of sleepless nights and diaper changes.

They’ll be parents forever, with changing circumstances and needs over time. Offering a competitive parental leave package is an important piece, but it’s not the panacea. There’s more to the puzzle.

Enter “Momboarding”
We’ve all heard it before: Onboarding matters. We understand the importance of welcoming new hires, ensuring their technology needs are met, and easing into their responsibilities with plenty of communication and feedback. We know that a well-designed onboarding process contributes to long-term employee success, engagement, and satisfaction.

But what about welcoming back new parents?

In a survey of 1,000 working mothers who had recently returned from maternity leave, 90% said their organizations offered no returner support, and more than a third felt so unsupported that they wanted to quit. What’s shocking about this survey is that it was conducted in the U.K., with respondents who received nearly an entire year of paid maternity leave.

Clearly, organizations need more than just generous paid time off.

Fortunately, implementing “momboarding” processes can help mitigate the stress new parents face. It’s a win-win for everyone, simultaneously increasing retention, engagement, and loyalty.

Here are a few simple best practices to consider as you evaluate your current return-to-work and momboarding procedures. And the best part? They’re all free—they just require a little time and consideration.

Plan ahead
Great momboarding begins before offboarding. During the last few months of their pregnancies, managers and employees should define who will be taking over which projects, have process documents in place to ensure seamless transitions, and discuss return-to-work plans (with the understanding that these plans may change once baby is born). As part of these conversations, managers should ask whether employees would like to be kept abreast of important organizational changes, and if so, the desired method of communication. This can help employees feel connected and remembered in their absence, without any pressure to check in (or check emails).

“Welcome Back” party
Okay, an actual party isn’t necessary, but taking the time to welcome people back is a nice gesture. You don’t want to overwhelm them on their first day back, but just as it’s a best practice to introduce new hires to their teammates, you should give returning employees the opportunity to catch up with their colleagues in a friendly, stress-free way. A quick touch-base between employee and manager should also set the stage for open communication about any new concerns or considerations, such as ensuring mothers have time to pump or evaluating potential scheduling changes.

Be flexible
If there’s a silver lining to COVID-19, it’s the increased trust and willingness to let people work when and how they work best, where applicable. Many managers and companies who were firmly opposed to working from home saw record productivity with newly remote teams. The challenges of working strict 9-to-5’s without schools or daycare centers helped managers realize that just because work doesn’t get done during typical hours, doesn’t mean it doesn’t get done.

Or, as UKG’s CEO Aron Ain says, “I don’t care when or where you do it—I just care that you do it.”

As a nation, it seems we’ve finally learned that flexibility at work is both acceptable and desirable, and I’d argue this sentiment is especially true when it comes to new mothers and momboarding. Babies get sick…a lot. Pumping is time-consuming, exhausting, and absolutely necessary for breastfeeding mothers (not to mention a legally protected right). There are doctor’s appointments, school activities, daycare closing times to consider. Staying flexible and working with employees to help determine which expectations, if any, need to change fosters mutual trust, strengthens the employee-employer relationship, and hedges against losing top talent.

Create a “while-you-were-gone” resource
The world of work moves fast, and things change quickly. (In my case, I came back to a brand-new company name!) It can be overwhelming to return to a “new normal” that everyone else is already accustomed to, so it’s helpful to explain new workplace developments, such as the latest projects, technologies, or team structures. Managers should also take note of any important company-wide communications or policy changes, so employees aren’t blindsided upon their return.

Keep communicating
Just as feedback shouldn’t be limited to annual reviews, it’s importantly to regularly communicate during the return-to-work process (and forever, really). Think about how much energy goes into welcoming and fully acclimating new hires. Building trust and complicity takes time, and while managers (hopefully) have strong existing relationships with returning employees, the fact remains that the employees’ lives have changed dramatically since they left. They are, in many ways, new people, with new needs.

While you build out your “momboarding” strategy, remember to pull inspiration from the work you already do onboarding new employees

Source  :–your-organization-needs–momboarding-&

How Transformative CEOs Lead in a Crisis

The COVID-19 pandemic has changed many aspects of business, but one thing that hasn’t changed is the urgent need for companies to transform. In fact, the crisis has underscored that need. Most organizations have already launched rapid measures in response to the situation. The challenge now is to build on these measures and develop longer-term, comprehensive initiatives to reposition the company for the future—which may feel like a permanent state of emergency.

BCG’s experience with more than 750 successful transformations helped us define five traits that will enable CEOs to lead more successful transformations. These insights have been tested across a range of economic conditions, including growth markets, recessions, and periods of turmoil. They should head the agenda of any CEO facing or implementing a transformation—in other words, every CEO.

We initially developed the five traits of transformative CEOs in 2018. Since then, much has evolved in the business world, including political uncertainty in Europe and the ever-escalating tension between the US and China. The collective impact of these changes increased the pressure on companies and leadership teams—and the novel coronavirus dramatically compounded the burden. As a result, many companies across industries and geographic markets now need to stabilize revenue, unlock growth through new digital sales channels, and reduce costs. Most important, they need to embed digital in all aspects of operations and commercial functions and become more agile. Transformation is the vehicle to address these issues, but executing a transformation has never been tougher.

Given that broad challenge, CEOs need a reliable set of measures to use when developing and implementing change. Transformative CEOs share the following traits.

They take decisive action quickly and launch a formal transformation program. Most companies have already launched initiatives—reducing costs, testing e-commerce models, stabilizing supply chains, and using technology to improve communication and engagement with both employees and customers—to respond to the pandemic, building cross-functional teams that have accomplished impressive feats amid significant uncertainty. Now, CEOs must quickly build on those baseline actions by taking bolder measures. Our research shows that, historically, 57% of companies launch a comprehensive transformation program within one year of experiencing a severe reduction in TSR. Such decisive actions have led to increased chances of success in both the short term and the long term.

Formal transformation programs with coordinated targets, actions, and milestones boost investors’ confidence, leading to an increased valuation relative to earnings. A well-managed program delivers more quickly, ensures discipline, includes actions to build up needed capabilities, and establishes effective communication both within and outside the organization.

Notably, an economic downturn isn’t a reason to put off necessary changes. Instead, it can serve as a proving ground for management. BCG research shows that although a sizable share of companies during the past four US downturns saw reductions in both their top lines and their bottom lines, a set of top performers managed to generate increases in both dimensions. (See Exhibit 1.)

They unlock immediate gains to fund the journey and tell a convincing story of change. Because the pace of change in business has accelerated, companies can no longer spend six months plotting a transformation and then several years implementing it. Instead, companies need to take immediate steps to begin delivering results, send cash to the bottom line, and fund future initiatives.

Top-performing organizations don’t rely on just cost cuts to free up capital—instead, they also improve capital efficiency and deliver quick wins to boost revenue. Digital is often a critical step toward generating fast, sustainable performance improvements and funding the journey. For example, using digital to improve pricing or optimize promotions can increase revenue by 4% to 6%, while also improving EBIT margins by up to 2 percentage points. Empowering the sales function through analytics to identify the best channel mix and marketing messages can produce substantial gains. Companies that digitize their sales functions can generate gains of 10% to 20% in revenue through higher conversion rates while reducing the cost per lead by 15% to 30%.

Similarly, implementing robotic process automation, machine learning, AI, and other tools to handle administrative and repetitive tasks—in functions such as workforce planning within HR and invoice handling or payment approvals within finance—can reduce head counts by 20% to 30% in corporate centers, decrease handling times, and increase accuracy and service quality.

In addition to boosting short-term performance and raising funds, rapid early measures can serve to build up critical expertise, convince naysayers, and increase the credibility of leadership teams—both internally (the workforce and the board) and externally (investors and other stakeholders).

They include an explicit emphasis on boosting growth and increasing vitality. As noted above, the understandable impulse of many CEOs in a crisis is to center a transformation on cutting costs. To be clear, cost reductions are often a critical step, but they can never stand alone. Over the long term, revenue growth has a greater impact on transformation success—contributing, on average, nearly half of cumulative value creation after five years. (See Exhibit 2.)

In fact, transforming for growth often involves a higher level of investment—and investments in R&D and digital for new business models, in particular, create more value: our findings suggest that such investments increase the likelihood of success by up to 29 percentage points. On the other hand, transformations accompanied by high (when compared with the industry average) capital expenditure spending only boost the chances of success by 11 percentage points. Why? Capex investment generally suggests that a company has the intention of exploiting existing opportunities by expanding capacity—that is, doing more of the same. In contrast, investments in R&D and digital capabilities help companies redesign their business models, tap into new markets, rethink product and service offerings, and engage more directly with end users—leading to a greater likelihood of transformative impact.

They are able to think like a new CEO. New CEOs perform better in transformations. In fact, a new CEO can boost the odds of a successful transformation by 7 percentage points, on average. Why do new CEOs perform better? Because they take an outsider’s view of the business, with no legacy bias, and they are willing to take bold steps to shake up established ways of thinking.

Incumbent CEOs and management teams, therefore, cannot afford to be complacent and maintain the status quo. Instead, they must be somewhat paranoid and continuously take a fresh look at the business. Or, as we say, “If it ain’t broke, fix it anyway.”

Once a management team is in place, it is critical to maintain the team for the duration of the transformation. We found that only 7% of companies changed their CEO during a transformation. Changes in top management not only heighten uncertainty for people within the company, decreasing the buy-in, but also send a negative message to investors, leading to increased skepticism about the company’s ability to deliver results.

They understand that transformation is a race without a finish line. We live in an era of persistent disruptions, and for some businesses it will feel like a permanent crisis. Given the nature of transformations and the tendency to be distracted by external events, companies need a North Star to keep them oriented on their long-term objectives.

Our analysis revealed that companies with an above- average long-term strategic orientation for their transformations outperformed those with a below-average orientation by almost 5 percentage points. This finding was even more pronounced when such companies were operating in turbulent environments: in those cases, long-term orientation correlated with an increase in TSR of 7 percentage points.

Similarly, companies running their programs for at least five consecutive years (either as one continuous program or as an unbroken series of overlapping programs) were especially effective at transforming in turbulent environments.

Transformation can no longer be thought of as a project with an end date. Transformative CEOs know that, in order to succeed, they will have to keep stretching the goals, act more boldly than ever, and identify ways to renew the organization.

Source :

7 Powerful Results Of Nurturing Innovation

Leadership in times of crisis is
a widely discussed topic today.
Although there is no handy manual
out there that can guide a leader
through a crisis, the way a leader
leads the team during a crisis will
brand them as a good leader or a
poor one. A leader who paves the
way or encourages others in the
organization to think differently and
work in new ways to face challenges
is the need of the hour. Are you a
leader who fosters innovation?
The most common misconception
about innovation is that it’s only for
the chosen few. However, the truth is
that you will miss out on the valuable
talents and contributions of your
team if you don’t involve everyone
in the organization—from CEO to
entry-level admin. Not only should
every person in your organization
play a part in the innovation process,
but every industry and every
company can benefit from innovation,
especially right now. What are some
of the benefits of nurturing innovation
in your organization? To learn about
that and more, read Dr. Evans Baiya’s
article, 7 Powerful Results Of Nurturing
Innovation that focuses on how/
why collective brain power of every
employee is a great tool and one you
have right at your fingertips.
On the same lines, Laura Dribin’s
article, Productivity During Covid-19 –
At What Cost? talks about how valuing
productivity over innovation may turn
into a short-sighted strategy. How do
you nurture that innovation now given
we don’t know how much longer this
crisis will last? Read Laura’s article
for some great ideas.
The realities leaders face today
demand a new approach to
leadership. Covid-19, the economic
collapse, and even climate change
pose real and serious threats to the
workforce and organizations. The
old way of doing things, commandand-control, has failed to meet
these threats. It’s time for the 4th
Evolution of Leadership to emerge—
Collaborative Leadership. But what
is collaborative leadership, and who
is likely to become one, even in these
critical times? Read Dr. Edward
M. Marshall’s article, Leaders Who
Want To Become Collaborative, for
more insights.
In my work, I hear a lot of reasons why people don’t
engage in innovation: “That’s not part of my job
description.” “I’m not an idea person.” “Innovation
doesn’t really apply to my industry.” “We don’t need
innovation right now. Our company is doing just fine.”
“Our workforce is already well trained.” “The CEO is
the one who comes up with new ideas.”
The most common misconception about innovation
is that it’s only for the chosen few—the chosen few
decision makers, the chosen few departments, the
7 Powerful Results Of
Nurturing Innovation
By Dr. Evans Baiya
The collective brain power of every employee is a
great tool and one you have right at your fingertips
chosen few industries, the chosen few gurus, experts,
and technical folks. This couldn’t be farther from the
truth. Throughout the six stages of innovation, there
is a place for everyone. In fact, you will miss out on
the valuable talents and contributions of your team if
you don’t involve everyone in the organization—from
CEO to entry-level admin.
Not only should every person in your organization
play a part in the innovation process, but every
industry and every company can benefit from
Leadership Excellence presented by NOVEMBER 2020 7 Submit Your Articles
7 Powerful Results Of Nurturing Innovation
innovation, especially right now. There is so much
more to innovation than simply coming up with
new products or services. The remunerations of an
innovative culture are far-reaching. When you make
innovation an integral focus, your organization will
make great strides and see significant positive
Here are some of the benefits of nurturing innovation
in your organization:
Increased Employee Engagement
We all want our employees and colleagues to
contribute to value creation for the organization and
the community of clients we serve. When all of your
employees have their ideas and thoughts heard,
and when you engage them to collectively solve a
problem or capitalize on an opportunity, you have
just validated their role and their importance in your
organization. People who feel and are in fact valued
and heard will actively engage to make your company
better, to increase customer service, and to improve
results. When decisions and ideas are not limited
to just coming from the top, but instead come from
all levels of your employees, who are closest to the
situation and closest to your customers, extensive
ownership and accountability to value creation will
increase significantly.
Enhanced Teamwork
The six stages of innovation require different talents
and people at each stage. Because of this, innovation
projects will naturally involve a diverse cross-section
of employees, forming new and dynamic teams.
When you give your employees the opportunity to
work with different colleagues during the stages,
they will start to develop relationships and form new
connections, fortifying your organization. One of
our clients had employees in various departments
and locations across the country who hadn’t had
the chance to work together, let alone meet. After
working on an innovation project together, many
remarked how grateful they were to have formed
relationships and that even after the innovation
project was over, they continued to collaborate to
share best practices and make positive changes
in the company. Innovation gives departments and
teams a meaningful way to connect around small and
sometimes large shared objectives.
Improved Processes
Innovative thinking naturally leads to improved
processes as employees dig deep to discover better
or more efficient ways to do things—saving money
and often illuminating wasted time or the duplication
of efforts. When you ask employees to innovate a
Leadership Excellence presented by NOVEMBER 2020 8 Submit Your Articles
process, whether it’s internal or one that involves
your customers directly, they will be able to uncover
ideas and timely microsolutions that make a big
difference. One of our clients, while attempting
to improve one of its customer service process,
uncovered nearly $250,000 in waste and duplicated
services, just by taking the time to look at all the
factors involved in that process. It was a great win,
not only for the team involved in this innovation
project, but for the company as a whole.
New Products and Services
New products are probably what people think about
most when they think about innovation because
new products are the natural result of solving a
problem or capitalizing on an opportunity. The
most impactful aspect of having everyone in your
organization participate in the innovation process is
that you will get far greater and deeper ideas using
the collective brain power of your team than you will,
utilizing only a select few people. Your employees
are seeing the problem or opportunity through their
own unique lens, which gives the ideas of diversity
and creativity. You would be surprised at the number
of great ideas you can elicit, and how refined and
high-quality those product ideas can become once
they are vetted, combined or applied.
New Processes
Another natural result of innovative thinking is new
or updated processes. When you enlist the help of
your team in the innovation process, you will be able
to realize and recognize opportunities you may not
know even existed. Your team is perfectly aligned to
help you come up with better methods to serve and
take care of your clients. After all, your employees
are on the front lines; they are the ones who are
interacting with your clients most frequently and
see the day-to-day needs as they arise. They are
well-positioned to come up with better avenues to
provide your products and services.
New Ways of Thinking
One of the most powerful outcomes of innovation
is how it shifts paradigms and inspires new ways
of thinking. The more you prioritize innovation, the
more innovative your company will become—it is
Dr. Evans Baiya is an internationally recognized and trusted guide
to business leaders and innovators.
Using his 6-stage process, he helps
companies identify, define, develop,
verify, commercialize, and scale their
ideas. He is the co-author of the
award-winning book, The Innovator’s
Advantage and co-creator of The
Innovator’s Advantage Academy™,
a detailed step-by-step innovation
training experience.