Month: September 2021

Many years ago, as a young business reporter at the New York Times, I learned about the pernicious concept of institutional imperative. The phrase was coined by Warren Buffett, who first wrote about it in his 1989 letter to shareholders, to help explain why organizations that are run by generally smart leaders often make misguided decisions. Though the term institutional imperative sounds like a good thing, Buffett characterized it as a sheeplike response to power and the status quo that can derail critical thinking.

Two of Buffett’s examples: “Any business craving of the leader, however foolish, will be quickly supported by detailed rate-of-return and strategic studies prepared by his troops,” and “the behavior of peer companies, whether they are expanding, acquiring, setting executive compensation or whatever, will be mindlessly imitated.”

This powerful insight helped me understand the ways in which CEOs explained the rationale for deals that seemed puzzling in the moment, such as Time Warner’s merger with AOL in 2000. The US$350 billion deal, which was largely unwound ten years later, has been studied endlessly as one of the worst business transactions in history. But in the heat of the moment, once the leaders of each company had convinced themselves that the combination made sense, the institutional imperative kicked in to build unstoppable momentum and make the deal happen. The logic box is what you find yourself in when you think you are making analytically solid choices among various options but haven’t understood that the overall concept is misguided or flawed. There may be many defensible reasons that one possible choice is clearly better than the others. But the area in which you have chosen to operate is in the wrong box.

Over my career, I’ve been a part of teams that ended up making questionable decisions that seemed brilliant and entirely logical at the time. And I’ve wondered about countless products or marketing strategies that might have made perfect sense to the teams that developed them but turned out be duds or horribly off-key (like Pepsi’s ill-conceived 2017 ad showing model Kendall Jenner handing out cans of the soda at what appears to be a racial justice protest). One of the lessons we learned from the New Coke debacle is that it is possible to do a good job of executing a bad idea. (All of Coke’s internal studies showed that the taste was in fact better than the original Coke, but that didn’t matter.)

The point of the logic box is to help develop self-awareness, an essential skill of leadership that is becoming more important as we negotiate our VUCA—volatile, uncertain, complex, and ambiguous—world. Leaders and their subordinates must always examine the basic premises of a key decision and interrogate its surface validity.

This came up in a recent conversation I had with Dambisa Moyo, a widely published economist who is a board member at Chevron and 3M. One of the most important qualities she looks for when assessing leaders is their ability to use different mental models for analyzing choices, an idea that she attributed to Buffett’s partner at Berkshire Hathaway, Charlie Munger.

“It’s this idea of road-testing their thinking using different paradigms,” she said. “So, if, say, an investment looks quite attractive from a financial perspective, it might look less attractive through a geopolitical or environmental lens. Given the world that we live in now, people who think about complex problems in a more versatile way have an advantage.”

With the passage of time, I have thought more about how the dynamics of institutional imperative can play out at a personal level, too. I now have enough years behind me to have had more than a few occasions when I was absolutely convinced of the rock-solid logic of a decision I had made, or was about to make, only to later wonder, “What on earth was I thinking?”

The list includes a book proposal sent to publishers, based on what I was sure was a breakthrough idea, that garnered zero interest. There was also the house that the family lived in for a dozen years that required far more work and upkeep than I had convinced myself it would when I first saw it. And there have been other real estate moves that my wife and I pursued (fortunately, we pulled back before closing the deals) that seemed like brilliant ideas at the moment but that later left us scratching our heads, asking again, “What were we thinking?”

The trick, both in business and in personal life, is to always ask yourself when contemplating a big decision, “Am I trapped in a logic box?” I find that reminder helps me pull up to a higher altitude, to be certain that I’m not simply making smart choices among misguided options.

Source:https://www.strategy-business.com/blog/Are-you-stuck-in-a-logic-box

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 actions. Mandatory online training 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 incorporate 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 moving 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.

Source:https://www.kearney.com/leadership-change-organization/article/?/a/keeping-the-political-divide-from-dividing-employees

A novel management theory looks past individual leaders to constraints that might limit their effectiveness.

As a leader, you may sense the heavy mantle of work to be done, employees to motivate, bosses to impress, organisational culture to manoeuvre. Most leadership theories place all these burdens squarely on your shoulders: How you handle them all is entirely up to you. Concepts such as transparent leadership neglect external factors. Although leaders may be highly talented individuals, they are constrained by their environment and their own internal conditions.

Rather than making leaders solely responsible for their own effectiveness, we can allow a balance between managerial competences and the many constraints that limit leaders. With bounded leadership, we look past the leader’s characteristics and consider the many constraints they encounter at the individual, team, organisational and stakeholder levels.

Co-written with Andrzej Krzysztof Kozminski, Anna Baczynska and Michael Haenlein, our article in the European Management Journal found that leaders’ competencies are not enough for them to be effective. Our study of middle-level managers in Poland included 97 participants, around 57 percent of whom were men. Using focused questionnaires, we found clear indicators of their competencies and constraints. When we matched certain competencies with a specific set of constraints, we cleared the path for leaders to increase their effectiveness.

Competencies

In bounded leadership, we see five distinct abilities leaders require to be effective:

Anticipation competence: The ability to predict market patterns and conditions, which are essential to the organisation, such as future trends or customer needs
Mobilisation competence: The ability to inspire employees to put an extraordinary effort into their work
Self-reflection competence: The ability to analyse past experiences and draw useful conclusions
Values-creation competence: The ability to promote a leader’s values in the organisation
Visionary competence: The ability to create an attractive vision of the organisation, communicate this vision to followers and empower them to implement it
Each of these competencies presents several hurdles. We have narrowed these down to the following constraints: cultural (difficulties in changing values and norms), emotional (strong negative emotions that prevent rational behaviour), entitlement (formalised organisational responsibilities and hierarchy), ethical (leaders’ dilemmas), informational (difficulties in processing or collecting data), motivational (problems with inspiring others) and political (office politics and power plays).

Anticipation

Leaders might easily see what the future holds for their industry but distinct constraints – informational and ethical – can prevent them from effectively using their anticipation competence. Red flags should go up when a leader insists their gut is a better indicator than data. Yet a report from KPMG shows that 56 percent of CEOs don’t trust the data they use when making decisions.

To overcome these constraints, a leader needs to pay attention to various details, cooperate with outstanding analysts, be able to understand them and draw conclusions. Vishal Marria, CEO of Quantexa, an anti-fraud firm harnessing AI to crack down on money laundering and improve decision making, recommends combining the best of human and machine intelligence.

Mobilisation

When encouraging or stimulating employees to act, the particular constraints at hand are entitlement, political and motivational.

If a leader tries to mobilise co-workers from other departments or outside experts, these colleagues may not feel that this leader is entitled to make demands upon them. Perhaps these colleagues are from different interest groups, and the problem of office politics rears its ugly head. When mobilising disengaged employees, a leader needs to find ways to inspire.

Choosing the right people to reach first, rather than insisting on a single message for all audiences, can help a leader face these constraints. Considering the organisational structure and listening to others upholds the mobilisation competency. It’s easier to encourage others when you understand their needs and can provide advantages.

Leaders who have a lot of formal power and play office politics well aren’t always the most effective in mobilising the troops if they don’t understand people. One example of this is former US President Donald Trump, who had tremendous power but was constantly haemorrhaging staff because he wasn’t listening to them.

Satya Nadella, CEO of Microsoft, is an example of a leader who has authority but is open enough to introduce a culture of understanding and listening to employees.

Self-reflection

When using the self-reflection competency, leaders need to be aware of two constraints: the risk of being overly emotional about situations and of considering unethical ways to fix them.

Greg Glassman, the founder of CrossFit, was trying to help Americans become more fit – not only through his gyms, but also by spreading the word about health through a network of physicians. However, he failed to overcome his emotional constraints and the results were devastating for him and the company. Glassman stepped down after his offensive remarks about the death of George Floyd caused athletes and sportswear firms to flee the brand.

To overcome emotional and ethical constraints, leaders must cultivate emotional intelligence.

Values-creation

The values-creation competency must always start with the leader who walks the talk. Failing that, ethical and motivational constraints need to be managed.

Some leaders promote values yet neglect to apply those values to themselves. Others join organisations with existing ethical issues and motivational barriers and change them. One example is Uber CEO Dara Khosrowshahi. When he became CEO in 2017, he knew he was going to have to clean up a spectacular mess. Using a leadership style in stark contrast to that of his predecessor, Travis Kalanick, Khosrowshahi dramatically reshaped Uber’s famously “toxic” corporate culture, overcoming ethical and motivational constraints.

Visionary competence

The visionary competence bumps up against political and cultural constraints while formulating and communicating the organisation’s overall vision.

Some leaders are visionary, but they aren’t successful in the long run if they can’t overcome office politics. For example, Dinesh C. Paliwal, former CEO of Harman International Industries, famously railed against office politics, forgetting that these are a part of organisational culture and implicate his leadership.

To overcome these constraints, demonstrate tolerance for organisational culture while encouraging colleagues to work together.

Accountable leaders

With the understanding that certain competencies are blocked by different constraints, managers at all levels can see a clear path to better leadership. They need a drone view for the big picture of the organisation; a kind of MRI view to be aware of their own emotions; and a film director view that encompasses the details of employee behaviour, social norms and sources of motivation.

To use bounded leadership effectively, managers must:

Identify constraints.
Apply weights to constraints to determine if they can be overcome.
Some constraints are obvious, while others are not. To identify political and entitlement constraints, a drone view is required. For cultural, motivational and informational constraints, leaders need a film director view. To identify emotional and ethical constraints of employees, an MRI view is necessary.

Applying weights to certain constraints doesn’t always entail fighting these constraints. Instead, a leader might need to change the setting because regardless of her competencies, sometimes the rules simply don’t make sense. Fighting against norms, for example, is an exercise in futility. In that situation, finding the right opinion leader can make a difference.

Source:https://knowledge.insead.edu/leadership-organisations/the-competencies-and-constraints-that-determine-leadership-success-16621

Hacking human evolution to unlock innovative potential in our brains.

The need for greater authenticity has been a common mantra in business for the last few decades. Yet, authenticity, or the enactment of thoughts, feelings and values through outward actions, ensures neither ethical behaviors nor effective leadership. Anecdotally, the glorification of authenticity fails to account for universally revered leaders such as Nelson Mandela, who forged world-changing alliances often by appealing to ideas at odds with his own.

More critically, as recent research has shown, authenticity is not the most advisable influence approach when leaders’ minority status does not accord them the legitimacy to promote their values or when their personal values are at odds with those of their stakeholders.

Outside the domain of influence, perpetually expressing and behaving according to one’s thoughts, feelings and values can be counter-productive for another important reason – it can cost organisations creative ideas. My research in the last decade has found that people can gain a creative edge when they assume physical expressions that contradict their state of mind, otherwise known as “mind-body dissonance” (MBD).

MBD occurs in various forms: from the job candidate adopting a powerful stance in contrast to their inner anxiety, to the team leader nodding along during an awkward presentation, to the manager accepting a professional award with outward humility while awash with internal pride. For social or strategic reasons, mind-body dissonance can be an inescapable aspect of organisational life. Yet, it is surprising that we understand little about its effect on individual performance.

Physical discomfort as creative catalyst

My recent research shows that mind-body dissonance, while uncomfortable, can actually be a catalyst for creative thinking. In a series of studies involving about 500 participants, I experimentally manipulated people’s emotional states and physical expressions through random assignment.

For example, I asked them to write about a happy or sad experience they had gone through while either smiling or frowning, or assume a high-power or low-power role while adopting a constricted or expansive posture. Participants were then assigned “unrelated” tasks such as generating novel uses for commonplace objects and drawing a creature from another planet.

A pair of judges unaware of the experimental manipulations rated each effort on a creativity scale. The results showed a clear pattern: Participants who experienced MBD came up with more outside-the-box insights and novel ideas than those who acted “authentically”, i.e. whose facial or body expressions matched their inner feelings.

My findings also turned up nuances that shed light on how mind-body dissonance sparks creativity. For example, in one study that involved over 200 participants, the creative effect of MBD was more pronounced for people who were less experienced with it. This evidence suggests that senior managers, whose rank tends to insulate them from the need to dissimulate, would therefore benefit more from MBD. Similarly, employees new to jobs that entail a great amount of MBD may be particularly suited for creative tasks. More broadly, it suggests that MBD is more likely to promote creative thinking when individuals experience it as atypical and unconventional.

We tend to think of the workplace as an environment where inauthenticity is the norm, and people are already fairly accustomed to MBD. If that were true, it would limit the creative benefits of MBD. But research suggests otherwise.

First, it has been shown that it is difficult for humans to produce many facial expressions on demand without first generating the feelings that correspond to those expressions. Second, humans strongly dislike internal contradictions such as MBD and go to great length to avoid them. A 2015 study confirmed that individuals who were asked to relive an inauthentic personal experience considered themselves less pure and less moral. Consequently, MBD may be a less common subjective experience than it appears to be.

Because of its atypicality, MBD is likely to promote a mindset where employees are receptive to atypical ideas, which has been shown to be conducive to creative thinking. Indeed, in a series of studies involving about 600 participants, my co-author and I found that participants who experienced MBD were more open to broader, more free-floating definitions and associations, including considering garlic a vegetable or a handbag a piece of clothing. They also agreed more with statements such as “at this moment, I am drawn to situations which can be interpreted in more than one way”, “I would rather be known for trying new ideas than employing well-trusted methods”, and “being distinctive is very important to me”.

In turn, this mindset predicted participants’ tendency to generate unconventional ideas and atypical solutions. Connecting the dots, we can also speculate that the unaccustomed tensions associated with MBD cue our minds to develop novel ideas to suit an abnormal situation. Human evolution may help explain this phenomenon: Survival of the fittest would favour heightened abnormality sensitivity as well as agile and nimble reaction.

How to harness MBD

Of course, the workplace is not a lab, and managers thankfully lack explicit authority to control how employees stand or sit and what facial expressions they must display. But the essence behind MBD – using physical activities to generate creativity-inducing departure from the status quo – can be brought to the workplace. Here are a few ideas to jumpstart your imagination.

To begin with, leaders can work as an entry-level employee for a period of time. The reality show Undercover Boss promoted this same idea. While most people see it as feel-good TV for the under-appreciated “working class”, my research suggests that it may also be a creativity-sparking practice for executives to adopt. The bending, squatting, pushing and pulling involved in many frontline occupations (even the fabrics and cut of the uniforms), while feeling foreign and perhaps incompatible with an executive’s mental state, can create MBD and give them novel perspectives on their organisation.
Organisations can encourage employees to work in a different culture where their physical work environment is likely upended and contradicts their inner journey. For example, for months, celebrity chef Gordon Ramsay left behind his well-choreographed and perfectly fluent motions around modern kitchens. He went to a small Vietnamese village to learn how to make rice cakes and an Icelandic cliff to learn how to catch puffins for food. The physical motions of balancing on (and eventually breaking) shabby makeshift stools while cooking, or struggling clumsily with a bird-catching net, are the kind of MBD that my research suggests can give someone a creative edge.
In team retreats or close-knit groups of colleagues, organisations can encourage physical theatre, for example, through improv workshops. Organisations that adopt this approach will want to create a psychologically safe backdrop against which employees can conduct such creativity-boosting excursions. Employees should feel relaxed, otherwise in control, and not having to fear looking foolish in front of their colleagues. They should also be told that it is OK to feel awkward or uncomfortable. Starting the exercise at the top of the hierarchy can help set the tone. If the CEO is willing to put him- or herself out there, it will encourage everyone else to let their guard down.
In short, organisations should experiment with activities that disrupt the comfortable coherence and fluency that our mind and body are used to. This can trigger an unconventional mindset and encourage creative insights and resilience.

Source:https://knowledge.insead.edu/leadership-organisations/how-mind-body-dissonance-leads-to-creative-thinking-17186

1/ Employee Experience takes over.

As you’ll hear in my keynote, EX is now at the center of the HR Tech market. Every tool, platform, and vendor is rotating in this direction and it’s all for good reason. Thanks to the pandemic, the number one issue in HR is engaging, supporting, and caring for people. And the new dimensions of remote work, hybrid work, and contingent work are on everyone’s plate.

What this means to HR Tech vendors is that everyone wants to build an “experience layer” that sits in front of employees. This, of course, is impossible – employees will never want to learn how to use 100 different tools to get things done. So there are the “EXP” vendors and the “EX contributing” vendors.

As I discuss in the podcast and will explain next week, this means that all HR Technology has to plug into productivity tools, creating a new “software stack” to consider. Take a look at the picture below: every HR Tech vendor has to figure out where they play in this landscape.

The bottom (blue) is the transaction layer, where the myriad of HR applications capture transactions, workflows, and information about workers. Above this is the intelligence layer, where the system combines data about people with external data (job market data, external skills models) to create career recommendations, skills ontologies, and matches between people and opportunities. Next is the experience layer, where we create user-portals, workflows, and various support services like case management and knowledge management. Above this is a layer of “Creator tools” that let us build, customize, and configure what employees see and consume. And above this, all these apps have to interact with the systems of productivity.

In reality, of course, HR Tech is a market of “products” and “platforms” that fit together to make all this work. But ultimately each product tends to focus on one of these layers, with some vendors building all levels.

And I know that HR departments struggle with this. Where do we put our Employee Portal? How will we deploy integrated communications to all our stakeholders? Where do we build the new onboarding or leadership solution? I was on the phone with a client last week who told me “we have BetterUp, Bravely, Harvard Manage Mentor, and Korn Ferry Assessments – how do we build an integrated leadership experience?” This type of conversation is happening all the time.

2/ ERP still strong, redefined.

As I mentioned in the podcast, ERP platforms are bigger than ever. Integrated HCM and payroll systems like Workday, Oracle, SuccessFactors, UKG, ADP, Paychex, Paycor, Namely, BambooHR, Gusto, HiBob, and many others are becoming large and ever-growing companies. These systems are not going away – in fact, they’re all experiencing growth.

What’s new is that they’re redefining their offerings. While many of these vendors have a wide range of features, they’re each adding learning, career, wellbeing, analytics, performance management, and their own EX layers as well. The next disruption is figuring out how the “talent intelligence” layer gets built (shown in green above), which is the software that lets you adapt your org model, job architecture, and identifies and uses skills. This layer of software has become a completely separate market (vendors like Eightfold, Gloat, Fuel50, Hitch, Degreed, SkyHive, and others).

HCM and ERP vendors are in a complicated position. They have to design improved tools for employee experience and simultaneously decide how much of the “blue layer” they build. And Microsoft and ServiceNow are starting to slowly encroach on their territory.

Despite all this, ERP, HCM, and payroll platforms remain critical. Companies need a core “system of record” and they always will. Eventually, someone will build a “next-gen HCM” (ie. ADP is working on it) but it isn’t here yet.

3/ Skills Taxonomies and Intelligence Platforms are the “next big thing.”

Hang onto your hat: skills engines, skills inference, and talent intelligence systems are taking over. Every vendor from Gloat to Degreed to EdCast to Cornerstone now has a built-in skills engine. And the more integrated solutions like Workday, Eightfold, Oracle, (and soon SAP) are building skills engines that cross all the talent applications.

The problem for buyers is that one “integrated skills platform” does not yet exist. And as you decide where to put this information, you realize that third-party data is critical. Advanced vendors like Workday, Eightfold, Censia, and Skyhive integrate data from many external systems (EMSI-BurningGlass, IT skills libraries, and dozens of other sources). So this new “Skills Engine” you build will be a living, breathing system.

4/ Recruiting and internal mobility collide.

Recruiting is a very hot market. Most of the recruiting vendors (iCims, Phenom, Avature, SmartRecruiters, Eightfold) are growing quickly and many have Unicorn valuations. Where are they going? As I discuss in the podcast, two big things are happening.

First, they’re being forced to source internal and external candidates. This means they’re turning into Talent Marketplaces (which is a robust market of its own). Second, they’re becoming ever-more sophisticated at the candidate experience (read item 1 above), AI-enabled sourcing and assessment, and workflow management. Avature, who we worked with on Talent Acquisition at a Crossroads, can now manage every possible scenario for recruiting and its customers are using the platform for onboarding, first-year performance management, and more. Eightfold can manage sourcing, recruiting, internal mobility, and skills ontology.

This is a fantastically healthy market, and while some of the mid-market vendors have been acquired, the enterprise vendors are innovating rapidly.

5/ Learning in the flow of work has arrived.

While I didn’t come up with the idea, I’ve been explaining and popularizing this paradigm for a while. Well, it is now here, so ignore it at your peril. Employees are consuming vast amounts of learning right now, all for good reason. They want to stay healthy, learn their new jobs, and understand how to manage their complicated lives. But they don’t have time for 2-hour elapsed online courses, so we need to give them “semi-synchronous” learning experiences (like we do in the Josh Bersin Academy) and lots of micro-learning, self-authored resources, and new modalities.

VR is a fast-growing market now, and vendors like Mursion and STRIVR Labs could become unicorns next. Content vendors like Udemy (a disruptive marketplace provider), Coursera, and LinkedIn Learning are growing at high double-digit rates, and providers like Skillsoft, Cornerstone, and many others offer exciting new content that people can consume on-demand. (Go1, one of the biggest content aggregators, now has a Unicorn valuation.) And thanks to platforms like Degreed, EdCast, LinkedIn Learning Hub (going GA this quarter), Viva Learning, and Percipio – you can find “just what you need” at scale.

That all said, there is still high demand for Capability Academies, so providers like NovoEd, Nomadic, 360Learning, Docebo, Fuse Universal, Totara, and others remain strong. These platforms create integrated and highly configurable learning experiences so they’re also in high demand. Leveraging the focus on skills and capabilities, these providers are inventing new models for cohort-based learning, collaborative learning, and self-authored content.

6/ Talent Marketplace has become a category.

As I talk about in the podcast, vendors like Gloat and Fuel50 (each claim to have “invented” the market) are growing like crazy, and that’s for good reason. Of all the new offerings I’ve studied over the years, this is the only HR Tech space that seems to be universally successful. Every company that has deployed a Talent Marketplace is happy, so I will simply state that “you need to put this on your list.”

The vendor market looks crowded (Gloat, Fuel50, Hitch, Eightfold, Workday, Oracle, iCims, Avature, PeopleFluent, SuccessFactors, Cornerstone, Degreed, and more) but these vendors are each very different. I won’t get into the details here, but the “New Truth” is that internal mobility, internal gig work, and marketplace-based mentoring and coaching is white-hot. Most of you will look into this in 2022, and the market will decide whether this remains a standalone market or a set of “features” in the ERP.

7/ Employee listening explodes with growth.

This is an exciting trend: integrated employee listening platforms have become a robust market. It isn’t enough to buy a fantastic survey system: you need a system that does pulse surveys, annual surveys, open-ended surveys, 360 multi-rater surveys, crowdsourcing, video and audio analysis, and even website analysis. And you want all this information in one database with real-time analytics so service centers, HR business partners, and line managers can use it.

The big vendors here are Glint, Medallia, Perceptyx, Peakon, Qualtrics, and others. As I’ll discuss in the speech, these are mission-critical systems, and if you don’t have something like this you can’t really “shorten the distance between signal and action.” (Our new Employee Experience research found that employee listening is the #1 tech driver of engagement during the pandemic!). This market grew over the last 8 years and it’s now robust, advanced, and ready to replace your standalone survey tools.

8/ Performance, talent and learning converge.

The performance management software market has been bloody and difficult for vendors. Many of the most innovative vendors were acquired (Reflektiv, Highground, Zugata) but some are growing like crazy (Lattice, BetterWorks, Workboard). Last week BetterUp acquired Impraise, which gives you a sense of where BetterUp is going. And when Workday acquired Peakon they got their hands on a pretty cool next-gen performance system.

The big direction is away from standalone PM tools toward much more integrated “management platforms.” This is where Lattice, BetterWorks, Workboard, and 15Five are going. They’re building integrated “management platforms” that can help teams, individuals, leaders, and HR manage projects, performance processes, development, and rewards. While we used to call this “integrated talent management,” I prefer to call these “management platforms.” And these tools embrace top-down goal alignment, OKRs, and all sorts of other models for goal setting.

The ERP/HCM vendors each have tools in this area, but they typically don’t put a lot of energy into them. Workday is likely to do something innovative with Peakon and SuccessFactors continues to innovate, but these new vendors are really doing something different. They’re building integrated “management systems” that help team leaders, managers, and executives manage their people, coupled with HR. And as you know, every company with more than 100 employees does performance management in some form.

9/ Microsoft changes HR Tech forever.

You cannot underestimate the impact of Microsoft on this market. Two years ago nobody thought about Microsoft for HR Tech. Today everybody is. With the combination of Viva, LinkedIn, and the new Teams features, Microsoft is soon to deliver an end-to-end employee experience, collaboration, portal, and learning solution that IT departments may adore. While the product set is new, it is forcing every vendor to create a Teams app and now lets Microsoft study the HR space in detail.

I know for a fact that Microsoft is very serious about this market, and the Viva product set has now moved into mainstream Microsoft sales. You should look at what they’re doing and make sure you see if it fits. If you”re a big Google Workspace shop, I’d expect them to wake up to this market within the next year or two. And Workplace by Facebook, Webex, and Zoom are nipping at the edges of HR too. But to me, Microsoft is the one to pay attention to.

10/ Watch out for The Creator Economy.

My final “New Truth” is the incredible power of Creators. The Creator Economy tools (TikTok, Instagram, Snapchat, Twitter, Facebook, Reddit, Pinterest) now command over $100 Billion in valuation and grew by over 40% last year. This entire new market is now coming to HR.

We are desperate for Creator platforms in HR: we want to create learning content, employee journeys, feedback systems, back-to-work tools, reporting and analytics interfaces, and lots of communication and change programs. We don’t want HR Tech platforms that “do what is designed” – we want systems that let us create our own content, our own customizations, and our own innovative ideas. So in many ways, all HR Tech platforms are becoming “Creator Systems.”

Let me cite just a few examples: ServiceNow, 360Learning, Articulate, Docebo, and Udemy. ServiceNow’s “citizen developer” interface lets companies build their own workflow, journeys, and work management and scheduling apps with ease. 360Learning has built a huge business enabling any subject matter expert to author courses and instructional programs. Articulate is the #1 provider of easy-to-use content development tools for e-learning and just received $1.2 Billion in funding (!). Docebo has unlocked the power of “learning as a product” and lets you create your own learning business. And Udemy is growing at 2-3 times its competitors because it is a “Creator Platform” for tech and business experts.

This idea, using HR Tech to “build” not just “configure and deploy,” is a theme in every market. Ask your vendor to give you a “developer tool” for their platform, and you’ll be amazed at what you can do.

Source :https://www.humanresourcestoday.com/?open-article-id=20244196&article-title=ten-new-truths-about-the-hr-technology-market&blog-domain=joshbersin.com&blog-title=josh-bersin-on-enterprise-learning

Imagine, if you will, near-zero employee organizations in the traditional sense of “employment” might be the reality for tomorrow. Permanent headcount, tenure, and work experience may be substituted with a more agile, and more responsive approach to strategic and business demands. The performance will be dictated by the achievement of desired outcomes and perhaps not demonstrated by historical milestones.

Many organizations today especially, in the consulting space, manage their talent requirements by “acqui-hiring” specialist strategists in combination with adaptive intelligent technologies to deliver the intended outcomes. With the new reality upon us, accelerated by the global pandemic, the potential for digital talent matchmaking platforms and AI (ie, standing for both Adaptive and Artificial Intelligence) systems will play an essential role in the digital value chain for talent acquisition and deployment.

Markets are beginning to understand the power of cutting through traditional hierarchies in place of agility and speed to generate value. The war for talent will be supplemented by gig economy workers and domain experts/strategists on demand. The call to action for organizations and people professionals is what I would refer to as my “ABC Talent Model” to manage your workforce solutions for the future:

A) Spring to action as the future of work is here to say and accelerating everyday as situations unfold in the global landscape

B) Be ready for change as the price of being constrained by conventional rules will not win the war for talent

C) Embrace technology and all its potential, but never lose your focus on people!

YOUR SPEAKERS: STEPHEN TJOA, CHANDRU PINGALI
YOUR MODERATOR: YEN-LU CHOW

With over three decades of experience as a global people professional on what it takes to transform HR practices and in curating many award-winning and progressive initiatives across the employee lifecycle, Stephen will shed light on what it takes to become a respected strategic business partner. In addition, he has provided strategic leadership to many of the challenges around the people and business agenda which continue to dominate boardroom conversations across organisations.

Stephen is a high-profile and decorated thought leader nationally (in Singapore) and across the Asia Pacific in the people space and has been sought after for his expert insights as evidenced by his appointment in various advisory boards and councils.

Chandru was Global CHRO at Standard Chartered, now turned entrepreneur.

• Twice funded by Singapore Government, he launched an award winning AI platform to aggregate, curate and engage experts on full time- short to medium term or part time or on turnkey assignments at CXO and minus 3 levels, across Asia and GCC countries.

• The platform has access to 400+ M experts globally with integrated databases that we continuously curate on the platform to shortlist and verify thousands of domain experts to be actively engaged by the clients.

Event link: https://asiainstituteofmentoring.com/event/3-business-strategies-for-crisis-management-aim-10xceos-entrepreneurship-series-2021-10-28-170

There seem to be endless studies about the impact of Hybrid Work. Microsoft’s most recent study, supported by academic studies, shows a significant decline in cross-functional communications when people work from home. And we have all read the studies about Zoom fatigue, the need to get fresh air, and the importance of physical activity during our stint in the hybrid work environment.

Well, some new research just came out (sponsored by Guru and Loom), developed through surveys and interviews with 500 software professionals this month. And it reinforces something that I’ve heard anecdotally all year: people are just wasting too much time in online meetings.

As the research points out clearly, there are two types of interactions at work: asynchronous (you respond whenever you have time), and synchronous (someone calls a meeting or conference call). As the report discusses, whenever someone “calls a meeting” there is a slight sense of dread. Ugh, another video meeting. I guess I have to comb my hair, clean up my office, and get online. You can see the stress on people’s faces.

And then there’s this terrible need to “check-in” with everyone at every meeting. I call it the “Global Climate Change” minute, where we all talk about the weather in our area, what kind of flood or fires we’re dealing with, and why it seems to be unseasonably hot (or cold). Of course, this doesn’t happen in every meeting, but it happens a lot of the time. And before you know it, ten minutes are burned up on the niceties and many of us are already doing our emails in the background.

I’m not saying this is all bad, we all need to feel connected with our teammates. But as the Guru-Loom research points out, software professionals definitely feel there’s a lot of time wasted. More than half the respondents said that 40% of their meeting time is utterly wasted, which leads me to believe that most software teams would rather just “get the meeting going” and then go back to work. And I often feel that way as well.

The research also points out that “finding just the right information” is what people want most, not a general discussion or sharing of information or a global search to scan for the information you need. Of course Guru and Loom kind of specialize in this stuff, but in our company we use an end-to-end Microsoft Teams environment and it’s very very easy to find “Just what you need.” In larger companies this is a massive challenge.

The bottom line for me is that “managing meetings” has to change. There’s no reason to schedule a one-hour meeting if 30 minutes will do, and there’s no reason to schedule 30 minutes if ten minutes will do. You can skip the niceties now and then and just discuss the issue, then hang up. It works fine and people take a deep breath and go back to work. (And by the way, the research also shows that most software people really like working from home.)

Real-life meetings suffer from the same problem, of course. I remember hundreds of meetings at Deloitte where we had to go around the room and let everyone reflect on their ideas, and I often felt like I was watching my life pass before my eyes. In large companies these alignment meetings are important, but as this research shows they can be more for managers than the staff.

Our new mantra is that face-to-face meetings are for things that are Complex, Critical, or Emotional. In those cases, it’s good to take the time to talk, listen, socialize, and discuss. But for many synchronous communications, a quick phone call or brief meeting is fine.

We’re all learning about new work practices and it’s time to be creative. Let’s stand up and walk around, keep the meeting short, and point people to precisely the information they need.

If you’re in the engineering or software industry, I encourage you to read this study – it will definitely open your eyes.

Source:https://joshbersin.com/2021/09/new-research-shows-that-40-of-tech-worker-meetings-are-a-waste-of-time/

“I got an urgent email from my manager at 4:30 a.m., asking me to make some small changes in a report I’d written for a client. Not only was it early in the morning, I was on my way to the airport for a family vacation. Any of my colleagues could have made the changes. I didn’t know whether to laugh or cry,” says Sasha, a manager in a multinational IT services consultancy. She had spent most of the previous month working 14-hour days as her team rushed to evaluate the client’s IT system and future needs. “Meanwhile, the firm’s leaders were stressing the importance of well-being and urging everyone to take time off to recharge. They were saying one thing and doing another. Clearly, I couldn’t trust them.”

Related stories
An arrangement of colorful pins linked together with string on a pale blue background suggests a network of connections.
Is organizational culture the hero or villain of your pandemic story?
by Reid Carpenter, Varya Davidson, and Christopher Hannegan
Torso and hands of a man using a smartphone. To his left is an overlay of the image on his screen: a rating system for customer service with a frowning face, a neutral face, and a smiling face. The smiling face is selected.
Activating culture is key to making customer-centricity stick
by Sujay Saha, Reid Carpenter, and Matt Egol
A photo of eight rolls of tape, each a different color, converging against a pink background.
Making transformation stick
by Augusto Giacoman and Craig Hapelt
Many business leaders are devotees of the power of culture. Two-thirds of board and C-suite participants in PwC’s 2021 Global Culture Survey say culture is more important to performance than strategy or operating model. But Sasha’s story highlights a major obstacle to tapping its potency: many employees simply don’t trust their leaders. The reason is inconsistency, which manifests itself in two ways. First, some leaders, like Sasha’s, don’t act authentically—their behavior is at odds with the cultural message they’re sending. Second, in many organizations, the purported culture doesn’t match employees’ experiences.

Both problems could be contributing to a looming talent retention crisis. After “sheltering in job” during the pandemic, people are now quitting their jobs in enormous numbers. Four million workers resigned in the US in April 2021, the highest level in 20 years, and another 3.9 million resigned in June 2021. A global Microsoft study found that 41% of workers are considering quitting their job or changing their profession this year.

PwC’s research suggests that leaders are right to prioritize culture in the face of this challenge and many others. Respondents in PwC’s survey who said their organizations have a distinctive culture were more likely to report good outcomes during the first year of the pandemic (see graphic below). But for culture to create a competitive advantage and help leaders build trust with their employees, leaders’ aspirations about it and employees’ experiences with it need to align.

Data from PwC’s recent survey show that companies with a more distinctive culture have a better business outcomes. Such companies were more likely than their counterparts without a distinctive culture to see an increase in revenue (48%), employee satisfaction (80%), and customer satisfaction (89%).In PwC’s survey, 79% of C-suite and board respondents agreed or strongly agreed that what they say about their culture aligns with the way people act every day in their organization—but only 58% of frontline workers said the same. The contrast is particularly stark with respect to diversity, equity, and inclusion: 64% of C-suite and board respondents said that their organization encourages discussion of sensitive and uncomfortable topics, but only 51% of frontline workers agreed. And 71% of C-suite and board members said their organization embraces flexibility and accommodates people with different needs, but only 54% of frontline workers said so.

How can leaders close these gaps? With a clear-eyed understanding of the impact of leadership authenticity and cultural cohesion and an action plan for activating their culture, they’ll be well on their way.

The value of authentic leadership
When New Zealand’s prime minister, Jacinda Ardern, got onto Facebook Live at the beginning of the pandemic—from her home, after putting her daughter to bed, and in a well-worn sweatshirt—to explain to citizens the importance of imposing a national lockdown, she was sending a clear message: “We’re all in the same boat.” The changes she was telling her constituents they’d have to make were ones she would also have to live with.
A lot of leaders seem to think they also walk the talk on culture. PwC’s survey shows that 73% of senior management think they do. But only 46% of the rest of the workforce agree. We’ve seen firsthand that this mismatch damages trust. And without trust, it can be difficult to motivate people, bring about change, and encourage the desired behaviors.

One of our team members at the Katzenbach Center, a former US soldier, tells a story that accentuates the importance of leadership authenticity. In the armed forces, which rely on the ranks obeying their leaders’ instructions without question, Army leaders routinely make sure they eat only after their troops have been fed, to give a clear signal that the troops’ welfare is their top priority. But on one occasion when our colleague was a first lieutenant in the 25th Infantry Division, his entire unit was locked down because a piece of equipment was missing. “The lockdown went on all day and into the evening, and instead of hot food, we were given MRE [meal ready-to-eat] rations. But then some of the soldiers saw the commander’s wife sneaking him Burger King. After that, he was completely ineffective as a leader because no one in the unit respected him.”

Organizational coherence is critical
Consistency and cultural coherence also matter in terms of the actions of the organization as an entity. The US retail giant Target, which has long touted its commitment to employee training and development, recently announced a program to pay 100% of college tuition for any of its 340,000 full-time and part-time US-based workers pursuing business-related majors at certain colleges. The program is one of the most high-profile examples of a company taking concrete action to reinforce what it says about its culture and values.

More PwC insights
An aerial photograph of office workers collaborating in a conference room.
Organizational culture: It’s time to take action
Although few companies can afford a program as extensive as Target’s, consistency on any scale matters. Take, for example, a financial-services company that prided itself on its culture of meritocracy, which was based on a transparent performance management process. “We all knew where we stood and exactly what we needed to do to get on. We were always told that our annual performance review, and whatever happened as a result of it, should never come as a surprise to us,” said Paul, who joined the organization in his 20s and progressed steadily over the following decade.

The cultural wheels came off when an economic downturn made layoffs necessary and management failed to communicate what was coming. “Four people in my department were laid off,” Paul told us. “Three months earlier, we had all been told we were doing the right things, and then [the four individuals] were suddenly told to go because their performance wasn’t up to scratch. Morale took a nosedive after that, and it never really recovered.”

In our work, we’ve seen many similar examples of inconsistency and the mistrust it breeds. A company that wanted to improve collaboration across silos continued to align metrics and rewards to individuals meeting personal financial targets. A product team was told to focus on quality, even though KPIs were built around time to ship. To overcome such inconsistency, leaders should examine all of the formal and informal building blocks of their cultural DNA at every touch point across the employee experience.

Source:https://www.strategy-business.com/article/To-build-trust-with-employees-be-consistent

Depression among U.S. employees has risen steadily over the past few years. According to recent data from Pathways, over 70% of employees showed concern with depression in Q4 of 2020. Additionally, researchers from Boston University found that the depression rate has tripled among U.S. adults since the onset of the COVID-19 pandemic.

So what does this mean for employers?

Depression in the workplace can have long-standing effects if left untreated. For example, it can lead to poor performance, lost productivity, increased absenteeism, and reduced job satisfaction. These things can have a big impact on an organizations’ bottom line—the CDC estimates that employees miss over 200 million workdays each year due to depression.

If your company addresses employee depression, potential outcomes include lower absenteeism and presenteeism, increased collaboration, and more productive employees. Additionally, well-designed, evidence-based employee health and wellness programs can reduce employee medical costs and show companies a positive return on investment.

Continue reading to discover how HR teams can identify, prevent, and help employees struggling with depression, creating a happier and healthier workplace.

How to Identify Depression in the Workplace
Depression is a common but serious mood disorder that causes severe symptoms that affect how someone feels, thinks, and handles daily activities, such as sleeping, eating, or working. Employees who are struggling with depression are likely to exhibit some or all of the following symptoms:

Feelings of sadness or emptiness over long periods
Extreme irritability over seemingly minor things
Anxiety and restlessness
Difficulty concentrating, remembering, or making decisions
Difficulty sleeping, early-morning awakening, or oversleeping
Loss of appetite
Loss of interest in activities
Fixation on the past or on things that have gone wrong
Decreased energy or fatigue
Aches, pains, headaches, cramps, or digestive problems without a clear physical cause
Additionally, employees operating in particular work environments are at a higher risk of depression. Some characteristics of those environments include:

poor or unsafe working conditions
high turnover rates
poor work-life balance
lack of upward mobility
irregular working hours
history of workplace harassment and discrimination
If your human resources team notices many employees who show signs of depression, consider distributing a survey that screens for the common symptoms. A well-designed depression screening, such as the PHQ-9, will give your team insights into the depression levels in your workplace and the potential causes. You can then use these insights to design and develop a customized mental and behavioral health wellness program that is right for your organization.

Looking for help screening your employees for depression, stress, anxiety, and other common workplace mental health conditions? Contact us today—our team of licensed behavioral health experts is happy to help.

How HR Can Help Depressed Employees
HR professionals wear many hats in today’s world—including ‘payroll expert,’ ‘compliance analyst,’ and ‘recruiting aficionado’— but ‘company therapist’ should not be one of them. However, employees often feel safe seeking help from their HR department when they’re struggling. So if an employee comes to you with concerns about their depression levels—lead with empathy.

Reduce shame. The stigma around mental health creates considerable barriers for employees who are struggling to ask for help. If an employee seeks help from HR, they’ve probably been struggling with depression for a while. Taking the step to ask for help puts employees in a vulnerable position. Having a conversation about mental health with an employee who’s struggling should be judgment-free.

Normalize depression. It results from a treatable neurochemical imbalance, and many people struggle with depression, especially in the current day and age of elevated stress and uncertainty. Give hope. Depression is highly treatable. Affirm that the employee is taking this step into wellness.

Validate their experience. Discussing changes in their work performance or behavior can validate an employee’s experience. If an employee’s depression has impacted their ability to complete projects, or they’ve withdrawn socially, touch on that during your conversation. Focusing on changes in their performance or behavior can bring the conversation back to the workplace and make them feel seen. Validating their experience can encourage employees to seek help from a professional.

Give support. Show that you’re here to help. Actively listen to the employee’s personal experience and needs, know their voice is heard, then refer them to a mental and behavioral health resource. If your company offers an Employee Assistance Program (EAP), they can connect employees struggling with depression to mental health professionals who can adequately diagnose and potentially treat the issue.

Explore resources. Beyond referring them to your company’s EAP, explore other benefits your company offers to support employees suffering from depression. For example, if your organization provides health insurance, encourage employees to use the insurance company’s find-a-provider service to get connected with a behavioral health professional who’s in-network. Other tools like Psychology Today allow employees to find mental health care providers who accept their insurance.

If an employee shows signs of extreme emotional distress or expresses thoughts of self-harm, please refer them immediately to the National Suicide Prevention Lifeline: 1.800.623.8255.

Preventing Workplace Depression Before Costly Interventions Are Needed
One of the best ways an employee can prevent employee depression is by making mental health a core pillar of their wellness initiatives. A wellness program focused on mental and behavioral health has many benefits for an organization, including:

destigmatizing mental health issues in the workplace
promoting mental health resources where an employee can seek treatment, like an EAP
improving both the physical and mental health of employees, potentially lowering health-related costs
providing an additional employee benefit, which HR teams can use in recruiting and retention efforts
For HR teams at smaller companies, generic programming is readily available online. But, on the other hand, customized mental health programs are the most effective, according to a recent Cigna study. By accounting for each workplace’s unique health and well-being issues, customized employee mental health programs generate impressive returns in reduced healthcare costs, absenteeism, and improved productivity gains.

To ensure the maximum effectiveness of your mental health programming, partner with a provider who will work hand-in-hand with your HR team to design courses that fit your company culture and integrate well within your work environment.

Source:https://www.humanresourcestoday.com/?open-article-id=20212591&article-title=how-hr-teams-can-identify–prevent–and-help-depressed-employees&blog-domain=pathways.com&blog-title=pathways

Bringing innovation inside an established firm, even one that has created novel ideas in the past, is not as simple as just purchasing bundled external knowledge and expecting it to work wonders at headquarters right away.

Enel CEO Francesco Starace’s mandate was to create long-term sustainable value for all stakeholders. For the energy giant to incorporate novel products and ideas from outside its own business units, Chief Innovability Officer Ernesto Ciorra used open innovation, which required systemic changes in the culture and structure of the multinational. Ciorra’s innovability teams – blending innovation with sustainability – were integrated into each business line.

These teams were just a jumping off point. As I detail in a recent case study, next, the firm began pulling external innovation into the company with a crowdsourcing innovation platform. Using “Open Innovability”, thousands of “solvers” were able to contribute solutions to important challenges. Instead of thinking outside the box, the company invited people from the outside to consider problems in ways that hadn’t yet been considered.

Enel is a stellar example of incorporating external innovation into a large firm. Over the years, I have studied how external knowledge is successfully transformed in multinational firms. This behaviour, which used to only be the domain of large firms, has now been co-opted by smaller firms, as the concept of buying external knowledge has grown in popularity. Of course, it’s not as simple as just buying a product off the shelf – ideas from the outside need a safe place to land, as I describe in this INSEAD Knowledge podcast.

How to bring external knowledge in

Not every company is like Enel. In fact, most firms struggle to use external knowledge well. To bring it in, you need to give proper attention to your new information and give it room to flourish at headquarters.

First, pay attention to what you bring from outside. You can’t assume that just bringing it in will make something happen from nothing. When managers encourage innovation, they must pay attention to the new concepts, but also be aware of their own confirmation biases in terms of looking for products/services/ideas that confirm what they already know. Without the attention of management, external knowledge can be like buying a book. If you just put it on your bookshelf, it will add to the ambiance of your room but unless you open it and find out what’s inside, the book won’t do all the good it could be doing.

An example of this is the BT Group, where Jean-Marc Frangos had to boost synergies between internal research and external innovation. He was able to evaluate how these play out over time for his firm and for telecommunications in general. Instead of having fuzzy goals around its innovation outposts, BT put together metrics and innovation dividends; how much new revenue or cost-saving those external ideas were bringing to the organisation.

Second, your firm needs to create an organisation that will allow it to fully benefit from external knowledge sourcing; it’s the structure with incentives, processes and most importantly the culture that integrates outside ideas. Just building an innovation hub isn’t enough, a large firm must develop an organisational mindset that welcomes new ideas and allows them to fit within the larger structure.

Enel, for example, started with a culture change. Innovation was not for its own sake, it needed to be tied to sustainability. For the energy sector, this is both revolutionary and kind of obvious. With open innovation and the UNSDGs, top managers changed the way their organisation sees the world. The fit between innovation and culture became much more open. Enel is far more the exception than the rule, but it is an excellent example of how to bring external knowledge into an established firm.

Problems in innovation outposts

My recent work on innovation outposts uncovers the idea of brokers – people who are highly connected to both the innovation ecosystem and their MNC. Brokers are often unique individuals, acting as a bridge from one group to another, serving the needs of disparate groups rather than their own. Effective brokers are not easy to find.

In fact, my co-authors and I found three types of ineffective brokers: the loners, the connected castaways and the VIP sightseers.

Loners lacked connectivity at both ends. Parachuted into an innovative ecosystem, they didn’t create strong ties with their new network or maintain strong bonds with headquarters. Because they were neither central to the entrepreneurial ecosystem nor to the strategy of the company, they lacked ties and were alone.
Connected castaways were completely tuned into the innovation hotspot, but lacked connectivity to headquarters. They might be high-profile people, but were unable to transfer their connections back to base. This kind of innovation outpost had the additional challenge of trying to transmit a “not-invented-here culture” back to the company.
VIP sightseers were closely connected to headquarters, but lacked connectivity to the local entrepreneurial ecosystem. They were often closely connected to the C-suite, so their ties to the MNC were strong, but they were referred to as “innovation tourists” who arrived in the innovation hotspot without contacts on the ground and were unable to create value.
Change the people or change the people

Ideas that are revolutionary or disruptive are less likely to land back at headquarters for two reasons. It can either be a lack of absorptive capacity or motivational problems.

Absorptive capacity is your capacity to absorb information. In this case, it could be that you don’t have enough knowledge to really appreciate what you’re seeing outside. For example, in class I ask, “Would you open a very expensive bottle of wine for people who have never tasted wine before?” Most people say, “No, I would not.” When I ask why not, they reply that these people would not appreciate the fine wine. Now, imagine it’s technology and managers who don’t have a tech “palate”. Sometimes companies don’t act on new ideas because their managers don’t understand new technology. They lack comparisons in that domain to appreciate what they see, like our non-wine drinkers.

Of course, the other reason people only see what they are familiar with is a lack of motivation. It’s not that managers lack the capacity to understand something, it’s that they don’t want to see the new idea. Perhaps it challenges existing ideas about themselves and their firm, or they don’t really want to change, or a new idea may impact their incentive package. Because if they are incentivised based on an old technology, innovations could disrupt that.

If the problem is absorptive capacity, the solution is education – teaching people about a new technology and encouraging them to develop their own capacities for learning. But, if external ideas are not accepted in the firm because of motivational issues, education won’t help. In the words of one executive I’ve met, “You need to change the people or change the people.” Either encourage different intrinsic motivations and modify incentives so that people change their view of innovation, or these people are no longer the right fit for your company.

Innovation isn’t limited to the hotspots of Silicon Valley or Shenzhen. It’s possible for new ideas to flourish anywhere, especially if they land in a welcoming organisational culture.

Source:https://knowledge.insead.edu/strategy/the-importance-of-incorporating-innovation-in-a-firm-17431