This article is the third in a series based on our latest research, Catalysts: How to Build an adaptable organization that thrives during uncertainty. Conversations with senior executives in multiple industries helped us define concrete steps leaders can take to create a sense and structure for shared ownership within the organization.  

In his now-famous address to Congress in 1961, President John F. Kennedy laid out an audacious goal of landing a man on the moon and returning him safely to the earth.” The President lauded the endeavor’s impressiveness to humankind and its importance to future space exploration. The speech also represented an unspoken political gauntlet throwdown: pitting the distributed intelligence and decision-making of the US’s market-based economy against the Soviet top-down, centrally-planned model. 

At the time of JFK’s speech, and for the better part of the twentieth century, management theory favored predictability and consistency as means to economies of scale. This resulted in streamlining business processes and organizational structures to maximize standardization and minimize marginal cost. Whole disciplines such as Toyota Production System (TPS), Six Sigma, and Lean emerged as proven methods with terrific results when implemented well.  

Today we operate in a very different economy. The advancement of digital technology has upended the economics of value creation. As a result, we live in a world that is more unpredictable. Today’s leaders must channel President Kennedy’s faith in systems with distributed intelligence and decision-making to thrive. Rather than centralize decision-making, leaders can gain better control through the twists and turns of the market by “letting go” – empowering autonomy and decision-making within their organizations by establishing the organizational structures, processes and culture to make it successful. 

The Benefits of “Letting Go” 

Leaders and managers who look at the big picture quickly realize that delegation of authority greatly benefits the firm and its customers. The company gains strategic agility because it can pivot faster to respond to market shifts. Customers benefit because “bringing authority to the information” increases customer intimacy, driving the development of more relevant and impactful products, services, and experiences. 

Additionally, shifting decision rights lower in the organization drives greater employee engagement, resulting in a 23% productivity increase, according to Gallup’s 2020 meta-analysis. It also delivers a radically improved employee value proposition, as demonstrated by significantly increased retention and ratings for employee wellbeing. 

C-suite leaders that we interviewed for this series told us they are working hard in 2023 on letting go. “This is a major cultural shift that we need to make in order to unlock the potential of the great talent we’ve hired and the leaders we have on deck,” says the Vice President of Talent of a multinational e-commerce company. “We constantly ask ourselves, `What can we do today to step out of their way and unleash that potential?'” 

Three Critical Shifts for Empowering Autonomy and Decision-Making 

“Organizations often underestimate what’s required to release control and still achieve results,” says Jane Hanson, former Chief People Officer of Nationwide Building Society, the UK’s third largest mortgage provider. “It’s not just a matter of leaders stepping back and declaring others are empowered. It’s about building the scaffolding and putting the right systems in place to help people be successful.”  

Empowered teams need the authority to make or influence business decisions. As recently as 2015, just 11% of US workers said they could consistently influence decisions critical to their work. However, it takes more than just leadership’s permission to “let go” successfully. Teams also need the organization’s formal structures, the “Body”, to follow suit. Through our research, we uncovered three critical structural changes required to enable more adaptive and resilient organizations.  

1. Clear Vision, Goals and Accountabilities

To operate with agency, teams need clarity on the strategic direction for the company overall, what success looks like, and how the team contributes to the larger organization. A clear vision and goals at the organizational level establish a “north star,” while breaking enterprise goals down to team-level outcomes and accountabilities gives the team the direction they need to make effective decisions on prioritizing their efforts.  

How goals are framed is equally as important. JFK aimed “to land a man on the moon and return him safely to Earth.” The goal is ambitious and transparent, and its outcomes are easily measured (an astronaut either returns to Earth or they don’t). Yet the goal does not prescribe outputs or how to achieve it. The goal doesn’t stipulate the spacecraft’s design, the mission’s trajectory, the number of crew, etc. Instead, NASA was responsible for determining how they would accomplish this goal. By articulating goals as outcomes (versus outputs) and holding teams accountable to those outcomes, organizations can create greater resiliency and scale by delegating the “how” to teams. 

Outcome-oriented goals can also become an essential facet of the company culture. A senior product leader at one of the world’s largest tech firms shared, “When we pass someone in the hallway that we haven’t seen in a while, typically the first question you ask is ‘what’s your goal?’ not ‘who are you reporting to?’ or ‘what project are you working on?’ Everyone understands what the company’s goals are. It’s actually how we navigate the organization.”  

2. Transparent and Responsive Resource Allocation

In addition to clarity on outcomes and accountability, teams also need resources to achieve their goals. Delivering great products, services, and experiences takes human effort, financial resources, and technological capabilities. Simply having access to those resources is not enough. Teams also need the ability to reallocate those resources to pivot quickly. Too often, financial planning and allocation of talent is an annual process that, for most organizations, is far too infrequent to facilitate effective pivots. Faced with emerging opportunities or market shifts, teams can often find themselves saddled with resources committed to one project while watching opportunities for higher and better use of those resources pass by. Redirecting resources usually takes time and attention-consuming escalation to senior leadership.   

“Letting go” often requires redefining how resources are allocated within an organization, making those processes more agile and giving teams greater autonomy in regular resource reallocation.  

3. Cross-Functional Work 

Reorienting teams around outcomes versus outputs can be liberating but requires more cross-functional work. Rather than being accountable for a single activity or component, teams responsible for business outcomes, such as customer satisfaction, operational efficiency or launching a new product, need the talents of many functional domains that often operate in silos.  

Organizations seeking to become more resilient and adaptive by “letting go” should find ways to accelerate cross-functional collaboration. That could be by shifting the organization’s structure outright, such as to agile teams or matrix models, or by evolving how individuals and teams are aligned to work.  

Putting “Letting Go” Into Practice Across the Organization’s Mind, Body, and Soul

Every organization can find its way to the level of shared, distributed decision-making that best fits its strategies and goals. Using our Human-Centered Transformation Model to think holistically, here are some actionable ways leaders can empower autonomy and decision-making within their organizations.” 

DNA: Define the Strategic Destination 

• Make decision-making faster and easier at all levels by promulgating clear and compelling statements of corporate purpose with well-articulated values to support it. The clearer they are, the easier it is to trust that decisions will be made consistently at all levels. 
• Identify where autonomy and decisiveness are best aligned with company values. 
• Celebrate significant decisions that are well-aligned to purpose and values. 

Mind: Enable Employees With Necessary Skills and Knowledge 

• Shift hiring practices to include problem-solving and cross-functional collaboration, not just hard skills. 
• New responsibilities require new capabilities. Create learning and development resources that help employees build an ownership mindset and cultivate the underlying skills, such as data analysis, to contribute to better decision-making.  

Body: Provide Structure and Governance to Deliver the Strategy 

• Charter work for business outcomes and empower decision-making in the teams that need to achieve them. 
• Simplify governance models as much as possible by moving decision makers closer, if not into, the work process. 
• Advance managers into true coaching models that avoid micromanagement. 
• Ensure all relevant employees can access the data, systems, and inputs they need to make the best decisions.  

Soul: Motivate and Ignite Belief in the Strategy

• Reward progress in decision-making quality, speed and accountability, not just outcomes. 
• Spotlight employees who demonstrate an ownership mindset and recognize them publicly. 
• Champion new leadership behaviors.  

This is the third article in a series based on our latest research series, Catalysts: How to Build an Adaptable Organization That Thrives During Uncertainty. In the previous article, Catalysts: Transform Purpose From Catchy Slogan to Growth Engine, we explored how the most adaptive companies use their purpose to drive compelling business strategies.  

A culture of experimentation is essential for innovation and growth. And while virtually every business leader knows that’s true, at least in theory, relatively few companies know how to build that culture. Through our research, we uncovered plenty of reasons organizations resist experimentation. Fear and short-term thinking top the list.  

Today’s economic uncertainty makes many organizations even more timid about investing in experimentation. “Since the Great Depression, there have been nine bear markets,” says Mark Jamison, former Global Head of Design and Innovation and currently Head of Global Accounts for Visa. “Humans are not designed to take a longer view. They tend to be reactive, particularly in times of stress. Leaders need the fortitude and the foresight to step back and ask, `What strategies might we put in place to go after opportunities this uncertainty has created?’ You can then use this foresight to focus the organization’s energy on delivering outsized impact while competitors are inwardly focused.”  

But too often, organizations shut down that scientific spirit. Experiments often fail, and that scares people. A 2020 Gallup survey found fewer than one in ten respondents strongly agreed with the statement, “I take risks at my job that could lead to new products or solutions.”  

Ironically, the same leaders who struggle with encouraging experimentation are often the same ones lauding data-driven decisions. To foster an organization that effectively uses iterative experimentation, leaders must promote the discipline of regularly testing hypotheses. And, like any scientist, they have to learn to view every outcome, failure or success, as progress. Only then can innovation flourish.  

Encouraging an A/B Ethos 

Firms born in the digital era, such as Amazon and Netflix have repeatedly demonstrated that experimentation through A/B testing can help identify how to generate more value.  

Amazon, for instance, discovered that making a mobile game called Air Patriots easier unexpectedly increased the enjoyment of its end users, leading to more revenue. Netflix runs constant experiments to determine how best to personalize artwork so that each customer sees images with actors and genres they like best.  

Ghost kitchens have given rise to new levels of innovation for many large restaurant groups over the last three years. These kitchens are used to test new menu items, new restaurant concepts and even branding. They provide an efficient way to offer food delivery, of course. But these kitchens have also proven to be ideal testing labs. Since many have no visible connection to their existing brands, companies can measure market demand and consider how to scale winning concepts with relatively little risk. 

Increasing Organizational Experimentation 

There are specific actions organizations can take to lower the costs of experimentation and increase innovation. At Prophet, we use our Human-Centered Transformation Model.™ to think holistically about an organization. We view the organization as a macrocosm of the individual, with four distinct components. 

DNA: Define the Strategic Destination 

A company’s DNA is its purpose and core beliefs, which should inform all decisions and strategies. If innovation is part of these core corporate values and most companies recognize that new ideas are essential to survival, make sure the definition of innovation includes the idea of experimentation. Innovation often becomes synonymous with “new,” neglecting the disciplined experimentation required to hatch ideas. 

Mind: Enable Employees With the Necessary Skills and Knowledge   

Leaders must also examine the skills and competencies needed to encourage test-and-learn thinking. Knowledge, capabilities and skills compose the mind of an organization. Our research finds that the most innovative companies are reinforcing employee learning in multiple ways, including:  

• Invest in bringing in knowledge from outside the organization, including secondments with other companies, university relationships, entrepreneurs-in-residence and speaker programs. 
• Build experimentation into the performance review for every role. Embedding innovation into the reward and performance structure is vital. 

• Make agile methods, design thinking and innovation skills standard training across functions.  

Body: Provide Structure and Governance to Deliver the Strategy 

Leaders may also reconsider organizational structure. Companies need to be designed in ways that facilitate experimentation. Not only does that differ from company to company, but it also calls for various operating models within each enterprise. Groups working on near-term innovation likely require different teams, funding, processes and incentives than those working on long-term horizons. And organizations need ways to astutely assess the risks and rewards of each flavor of innovation.  

“We use the concept of one-way and two-way door decisions,” says Gabriel Mas, chief marketing officer at Amazon Mexico. “A one-way door decision is almost impossible to reverse. A two-way door decision is easy to reverse. For one-way door decisions, more analysis, discussion and senior leader input are provided. If a decision is a two-way door, people closer to the decision are empowered to move quickly and execute, and we have mechanisms in place to learn from each decision, good or bad.” 

Soul: Motivate and Ignite Belief in the Strategy  

Finally, the organization’s soul must celebrate experimentation, especially when an exciting hypothesis is disproved. That means developing traditions, symbols and rituals that make people feel safe. They must be encouraged to test ideas, even when their work results in negative data. It’s easy for a company to say it sees failure as a learning opportunity. But genuinely living that conviction is difficult.  

Leaders need to model and promote the scientist’s mindset, releasing any attachment to the positive outcomes of experiments in their organizations. They need to demonstrate that all experiments deliver valuable information. 

This article is the second in a series based on our latest research, Catalysts: How to Build an Adaptable Organization that Thrives During Uncertainty. In-depth conversations with senior executives across industries helped us define concrete steps organizations can take to ensure corporate purpose becomes a powerful growth engine. 

Having a mission, purpose or vision for an organization has been a business essential for more than a decade. In our interviews with senior leaders, purpose emerged as one of the five most important drivers for creating a culture of resilience. Yet the practical application of corporate purpose has fundamentally shifted in recent years, and it is fast becoming one of an organization’s highest priorities. 

It’s hard to overstate how fast the purpose train travels through the business landscape. In 2019, the Business Roundtable, a U.S.-based organization chockablock with globally influential companies, released a statement that distilled the new definition: Businesses can’t exist just to make money. They must also serve customers, employees, suppliers, communities and shareholders.  

Months later, the global pandemic arrived. The crisis vaulted purpose-driven thinking into a new realm. COVID caused billions of people to re-examine their individual purposes. Businesses recognized that their workforce and society as a whole had begun to question their expectations about work. By early 2021, academics, economists and journalists began to record a dramatic reshuffling. Whether they called it the Big Quit or the Great Resignation, it all reflected a ferocious desire to prioritize life based on meaning.  

Companies responded in many ways, from increasing work/life balance initiatives to taking stronger stands on social issues. They sought more transparency and better corporate behavior. The number of companies striving for B Corp certification, which requires a full-scale commitment to purpose and higher ESG standards, has risen 38% since the pandemic’s start. 

Moving through 2023, people’s search for meaning through work continues. But economic uncertainty and large-scale layoffs have thrown new curves. People are still increasingly thoughtful about the brands they associate with as employees, consumers and investors. But, they’re more focused on job security and exhausted by bureaucratic inefficiency. 

Authentic Corporate Purposes Unlock Uncommon Growth 

An authentic corporate purpose can inspire and engage both employees and customers. For employees, purpose can inspire belief and cultivate hope for employees that their efforts will add up to something more significant. And for customers, purpose creates brand trust and signals they can and should believe in those brands. Customers and employees are much more loyal when a company’s product or service delivers on its promised value proposition and expressed purpose. 

Well-crafted purposes are durable and can help an organization navigate, particularly in tumultuous times. “Purpose becomes the bridge between us that allows us to be less physically connected but not less aligned,” says Kris Ahrend, chief executive officer of the Mechanical Licensing Collective, a nonprofit music rights administration company. “Purpose minimizes confusion and accommodates creativity. It is integral to maintaining that connectivity and alignment.” 

It’s also a lens for what comes next. “Our purpose is always at the root of our decisions for what to do next and why,” says an HR executive at a large financial company. “We never take our eyes off why we’re here as an organization.” 

A properly developed purpose is part of an overall management philosophy and allows continuous engagement with investors, employees and customers. Operationally, a well-framed corporate purpose is a tool for leadership alignment, a source of employee motivation, a criterion for business decisions and a natural foundation for the brand.  

Making Purpose Practical 

The most adaptive companies keep purpose alive rather than letting it become a platitude. They continually find new ways to use purpose as an engagement tool.  

Patagonia has long been known for its fierce environmental commitments. Over the years, that’s been expressed through supply-chain innovations, leading the re-commerce movement with Worn Wear, voter drives, and even suing the federal government to protect public lands. 

Recently, founder Yvon Chouinard made the most significant purpose-driven move ever, donating the entire $3 billion company to a foundation that will protect the planet. Earth is now Patagonia’s only shareholder. 

This bold move has made Patagonia the most relevant corporate voice in the environmental crisis. And it speaks directly to its adventure-loving and environmentally-conscious customers and employees. 

No other company has gone as far as Patagonia, but more are finding novel ways to express and expand their purpose in memorable and credible ways. Calm, made headlines when it volunteered to pay fines for tennis players like Naomi Osaka, who skip press events for their mental well-being. Chipotle, which has long stood for cultivating a better world, has made massive investments in fighting hunger and food insecurity through tech. 

Every organization can find ways to use purpose just as effectively. To help companies think more holistically about operationalizing a strong corporate purpose, Prophet uses its Human-Centered Transformation Model™. Here are four actionable steps that can help companies turn purpose into a reality.   

DNA: Define the Strategic Destination 

For a company’s purpose to be compelling, it has to be right and in tune with its goals and objectives. That means it should be: 

• Inclusive: Corporate purpose needs to encompass every internal and external stakeholder. Without inclusive language, it inherently limits the spectrum of inspiration.
• Built into the employee value proposition: People must understand and reflect on the purpose, so it should be integrated into the hiring process. Hiring skeptics who keep a company honest is great. Hiring folks who might subvert its purpose and values is an unforced error. Dick’s Sporting Goods, for example, is devoted to promoting youth sports and goes out of its way to hire people passionate about athletics,  including Olympic hopefuls. 
• Monitored consistently: Ensuring that purpose is healthy is an ongoing activity. Does it still resonate with stakeholders? Do employees believe in the company’s future? How confident are they that the company is improving the world? 

Mind: Enable Employees With the Necessary Skills and Knowledge  

It is important to identify critical skills required to achieve the company purpose by each function, enabling organizations to understand the roles and responsibilities of each function and champion the skills that best support that purpose. 

3M, for instance, is using science to solve the world’s most challenging problems. That requires diverse thinking, which explains the company’s $50 million commitment to closing the racial gap in STEM and intense recruiting at historically Black colleges and universities. 

Body: Provide Structure and Governance to Deliver the Strategy 

Companies must ensure that employees have the decision rights to infuse purpose in day-to-day operations. For example, Ritz-Carlton operationalizes its purpose, to provide warm, comfortable experiences by delegating every employee that responsibility. Each is empowered to spend up to $2,000 to rescue a souring guest experience without a manager’s approval. 

Soul: Motivate and Ignite Belief in the Strategy 

This means leading by example, making sure leaders demonstrate how they live and celebrate the company’s purpose.  

• Make language purposeful: Include corporate purpose in the internal language, identifying employees as “one of us.” Pfizer employees, for instance, are encouraged to “zig-zag,” making non-linear career moves to bolster personal and organizational growth.  
• Infuse purpose into the everyday: Find “moments that matter” within the experience of both customers and employees. 
• Give employees a platform: Help employees share and celebrate their connection to the purpose by creating forums, social networks, and events. Alaska Airlines’ promise to “run our company with care” has taken on new meaning in the last 18 months, when passenger-facing travel roles have become especially grueling. They now host an annual day-long retreat focused entirely on mental well-being. 

 A company’s purpose must be holistic, permeating all aspects of the organization. That’s what builds adaptability. “Resilience is about understanding your organization’s strengths and areas of focus and aligning people to pursue these things as a collective,” says Danielle Clark, eBay’s vice president of talent. “An adaptive business model or value proposition isn’t enough to create resilience. You need purpose and people behind it.” 

The turbulence and upheaval of the last few years have become routine. That’s good since many believe this era of volatility, uncertainty, complexity and ambiguity is here to stay. Business leaders should pay close attention to the post-pandemic twist on Darwin’s law. 

It is not the most intellectual of the species that survives; but the species that is best to adapt and adjust to the changing environment which it finds itself.

Charles Darwin 

Recent disruptions have proved that while some companies are already impressively agile, many aren’t. Many larger businesses have spent the last few years lurching from one crisis to another, relying on limited moves torn from old playbooks.  

This article – the first in a series – is based on interviews with senior leaders and is focused on how enterprises can tap into variety, building organizational flexibility.  

Our respondents detailed their successes and setbacks, and ultimately illuminated five critical principles for creating adaptability at multiple speeds during this critical moment in time.  

Defining Adaptability in a Post-Pandemic World 

At Prophet, we define “adaptability” as the ability to anticipate and respond to opportunities created by a shifting market. And we define “at multiple speeds” across three horizons.  

Something that separates humans from other animals is the ability to plan ahead and imagine multiple potential futures. In modern life, we do this quite naturally:  

• What’s for dinner tonight?  
• Where might we take the family on vacation this year?  
• When can I retire, and how much must I save?  

Here are just a few ways our respondents are anticipating and responding to uncertainty across these three key horizons.  

Optimizing for Today 

Our respondents are evolving operating models to deliver the current portfolio of products and services to the same customers. They are organizing resources to increase customer satisfaction and profitability. And they are hunting for efficiencies, like centralizing or outsourcing back-office functions for greater scale or lower costs. 

Innovating for Tomorrow  

Planning within medium-range windows includes expanding product and service portfolios or reaching out to adjacent target customers. And while many of our respondents may be leveraging brand relevance to expand into new categories and integrate new capabilities, it’s still happening within the boundaries of the existing business model. 

Building the Future  

To build for the future, our respondents are transforming their business models and fundamentally changing how the business makes money and creates value for customers. It’s a seismic shift, like Netflix’s move from mail-order DVD business to a content studio. 

Five Ways to Build Adaptive Organizations 

Our research led to five key strategies to enhance adaptability and create future-ready, resilient organizations.  

1. Put Purpose to Work  

Purpose-driven branding has been part of the corporate playbook for over a decade. Yet the definition and expression of that purpose keep gaining importance. Customers increasingly demand that companies stand for something, and people insist employers care about more than money. They won’t settle for a slogan on a wall or some fluffy catchphrase dreamed up at an executive retreat. It must mean something. 

Like human DNA, an organization’s purpose is fixed. “To operate in an environment filled with uncertainty, you have to create stability in other ways,” says Kris Ahrend, chief executive officer of the Mechanical Licensing Collective, a nonprofit focused on streaming royalty distribution. “Our culture is what gives us stability.” 

But while purpose may be steadfast, it can still be leveraged differently and more effectively, filtering throughout an organization’s activities. That way, it can provide renewed focus, guiding decisions and strategies. 

“Our purpose is always at the root of our decisions for what to do next and why,” says an executive at a large banking company. “We never take our eyes off why we’re here as an organization.” 

2. Gain Control by Letting Go 

Decentralizing governance can feel counterintuitive in these turbulent times. “We’re all moving forward wishing we had a crystal ball,” one human resources executive says. “Between the war in Europe, pandemic recovery, economic instability, and return to office policy, everything feels more uncertain.” 

But respondents feel strongly that this uncertainty is what makes pushing decision rights down even more important. Many wish they’d worked harder for this change in the past.  

Decentralization lets those closest to customers and operating problems make better and faster decisions. “It’s not just about tactical changes,” says Danielle Clark, a talent executive at eBay. “We have to address the underlying behaviors that enable leaders to step back and lead differently. It requires trust and a greater appetite for thinking boldly.” 

3. Lower the Cost of Experimentation 

 Adaptability requires innovation. And innovation, by definition, involves failure. Organizations must have realistic conversations and processes about what that means and what those failures might cost, especially in an uncertain economy. It’s easy to invest in experimentation when business is good. But experimentation is too often a prime target for budget cuts when revenue gets tight.  

“To be truly resilient, your organization must practice failing,” says one tech executive. “This is supported by a culture that encourages fast and safe failure with risk mitigation measures in place, so resiliency is exercised regularly.” 

4. Reinvest to Realign  

Aligning new strategies with existing structures is often challenging, especially for big companies that typically overinvest in growth areas during prosperous times and overcorrect in culling these growth areas during times of economic uncertainty.  

Over the last year, we’ve seen this pattern emerge within the technology industry, resulting in a hemorrhage of talent, confusing investors and disappointed customers. These massive gaps between their current structure and new strategy inhibit growth.  

The companies that overcome this risk and protect their business from boom-and-bust cycles are the ones creating agile operating models and continuously aligning structure with strategy.  

It is critical that business leaders get crystal clear about what the organization will not do going forward. “We have a strong understanding of who we are at our core,” says eBay’s Clark. “The work over the past few years has been to innovate boldly to maintain relevance while delivering with impact. This has led to our focused category strategy.” 

5. Embrace the Next Wave of Digital Transformation 

 Digital transformation continues to reshape how industries operate and deliver value to customers. The recent explosion in AI makes automation more accessible than ever before and will usher in the next generation of digital transformation.  

Best-in-class organizations embrace new technology to innovate the customer experience and streamline operations. They are using it to redefine systems, making work and life better. Rather than fearing it, they’re upskilling employees to work with these innovations, finding ways to drive a better business outcome.  

“We are asking questions about the business and people benefits,” says Jane Jin, a vice president at Takeda, a multinational pharmaceutical company. “What productivity might we gain when using these technologies? How might we develop our people so they continue to bring value to the company if technologies automate some of their tasks? How do we innovate responsibly and remove bias? How do our values translate in this digital age?” 

With a leadership team determined to decide when and how to adopt new technologies proactively, companies can guarantee decisions that boost productivity and encourage growth while staying true to their DNA. 

If history is any guide, these companies will grow faster and have an outsized advantage in attracting talent. Those that don’t will fall further behind. 

Earlier this year, Meta, Facebook’s parent company, completed its second round of layoffs in 2023, with a third wave planned for May.  

Meta is not alone. Alphabet, Google’s parent company, laid off 12,000 people this year, its largest reduction ever. Amazon has eliminated 27,000 jobs. And Disney plans to reduce its total workforce by 7,000. Some experts anticipate that one out of three companies plans to cut 30% or more of their people in 2023. 

Downsizing isn’t just rough on those who are laid off. Researchers found that `survivors‘ in companies with reductions experienced a 41% decline in job satisfaction, a 36% dip in organizational commitment and a 20% drop in job performance. 

Yet, the talent war still rages in other areas of the economy. “In 2023, talent will become one of our top priorities,” said a large accounting firm recently.  

“Our leadership focus will be on ensuring we have a clear employer value proposition, on providing the right learning culture, offering the necessary flexibility, and on leading with purpose.”  

Growth in the renewable energy sector is outstripping the leadership talent pool, forcing companies into more imaginative talent strategies. Healthcare, too, faces a worsening shortage.  

Regardless of whether your company is hiring or in retention mode, your Employee Value Proposition (EVP) attracts employees, gives them a reason to stay and is critically important to future growth. And some companies are sitting on a secret weapon: Their environmental, social and governance (ESG) policies. 

ESG Plays a Crucial Role in Employee Engagement 

While most businesses know how vital an EVP is, with 86% of human resources executives naming it a top priority in a recent study, many are missing the opportunity to include ESG policies. 

ESG elements are a significant factor in employees’ decision to join, stay or leave a company: 

• 58% of employees consider a company’s social and environmental commitments when deciding where to work.  
• Employees are three times more likely to stay and 1.4 times more engaged at what they consider purpose-driven organizations. 
• 93% of employees who believe their company is making a strong positive impact on the world say they plan to stay in their jobs. Of workers who disagree with that statement, only 43% plan to remain with their employer. 

And integrating ESG and goals into an organization’s EVP can also help employers gain the upper hand in acquiring and retaining Gen Z and Millennial employees.  

For example, 64% of Gen Z workers say the companies they work for must act on environmental issues. For Millennials, 96% cite sustainability as a key issue, and one in four say they’d quit if they found out their company had a poor environmental record. Women, people with higher incomes and those with higher levels of education are also significantly more likely to choose ethical employers.  

Three Ways to Infuse ESG Strategies Into Your EVP 

1. Put your ESG goals and achievements center stage  

Companies can do more to communicate sustainability achievements via social media and websites, increasing visibility to current and future employees. 

Starbucks anchors its EVP on the commitment to “inspire positive change in the world while you grow in your career and in your community.” One way it demonstrates that is by offering the Starbucks Greener Apron program, a partnership with Arizona State University. This program helps employees learn about global sustainability practices and create personal pledges to support them. 

2. Make ESG part of the candidate’s experience  

Companies can show how they bring ESG initiatives to life by connecting prospective talent with employees deeply engaged in sustainability and social programs. They can also infuse interview guides with questions that test affinity to ESG goals or dedicate time in the “pitch” materials to highlight ESG opportunities for perspectives.  

Slack, for instance, focuses on how it has reworked and implemented diversity, equity and inclusion policies into the candidate experience. It started by sharing the company’s current ethnic and gender makeup and strategies for improvement. 

 Slack implemented some of these experiences to rework and promote more equitable hiring practices, including revising job descriptions with more inclusive phrases like “care deeply” and “build relationships,” eliminating whiteboard interviews and replacing them with blind code reviews and using co-worker role-plays for anyone conducting interviews. 

3. Make your employees part of your ESG program 

Organizations can mobilize initiatives to engage existing employees in contributing to ESG goals and celebrate those “from the front lines” stories, especially via social media.  

Chipotle delivers its “Cultivate a Better World” EVP to employees all the time, including using more local produce in restaurants. Employee-led organizations provide millions of fresh food to local food banks. It funds fledgling Agri-Tech businesses, encourages micro-producers and helps provide meals for food-insecure members of the LGBTQIA community. It further fosters accountability by linking executives’ annual bonuses to ESG strides. This compensation plan is another way it hopes to champion responsible leadership and sustainable solutions. 

Companies are still struggling to find their footing on the constantly shifting sands of hybrid and remote workplaces. And now, the increasingly turbulent economy further unsettles the landscape, challenging existing employee experience strategies.  

Many organizations are reducing headcount and cutting back on engagement efforts. That’s understandable in the short term, but it’s a mistake to take your eye off the ball completely. Longer term, the war for talent will rage stronger than ever, even if we see a relative truce for a while. The pandemic, the Great Resignation and the demand-driven labor market made people realize that they can choose how and where they work. The mold has been broken and you can’t put it back together. Ignoring the experience elements while the economy slows will only worsen the hiring dilemmas of the future and see the confidence decline of those employees that remain. That means every organization will have to grapple with (if they haven’t already) an employee-centric offering if they are to attract, retain and engage the right talent they need to thrive. 

Through our work as people strategists, psychologists, change practitioners and service and product designers, we have helped clients around the world accelerate their employee experience journeys and studied countless experiments and their outcomes. As one might expect, there is no silver bullet. However, our work has shown that experiences that are desirable to employees don’t have to conflict with what is viable and feasible for the business. After all, maximizing desirability, viability and feasibility (DVF) is crucial for creating a long-lasting, sustainable impact on the employee experience. 

The economic situation may remove the feeling of urgency, but talent will always have a choice about who they work for and in harder times organizations need to motivate and enable their people to perform, even more than usual. Organizations are still entirely reliant on their people and those that accept the reality of employee power and the demands that come with it will reap the rewards in the long term.  

Employee Power is on the Rise 

Over the two years of the pandemic, every type of organization had to quickly test and experiment with countless workplace policy updates to stay afloat. Companies didn’t have time to “wait and see”– they had to create new policies in a few days. In some cases early on, companies saw surprising increases in productivity. In a survey carried out by the University of Chicago, 40% of respondents said they believe they are more productive at home while 15% said the reverse is true. Others reported remarkable gains in employee satisfaction, even reaching record levels. And for those workers reporting greater happiness when allowed to work remotely at least some of the time, over 80% reported an improvement in their work-life balance.

But now this picture has evolved to one of burnout, stress and cultural disconnect. Job satisfaction has plunged to a 20-year-low. Women have been especially crushed by this downside, with education and childcare crises forcing millions out of the workplace, likely setting gender pay equity efforts back for more than a generation. And as the Great Resignation, well underway before the pandemic, continues to make hiring harder, the economy is sputtering. 

The point is, it’s harder to be an employee than it used to be. Economic uncertainty will make it harder still. Organizations need employees to perform, and it creates an even greater need to provide a stable and productive working environment.    

“Employee experience” is a common buzzword that is over-used and ill-defined. For decades, conventional wisdom has dictated employee engagement as the ultimate goal of employee experience. Experts believed that engaged employees are more productive, stay around longer and grow into the leaders of tomorrow. One of the problems with employee engagement is that it is inherently employer centric. Firms want their employees to be engaged with work. But employees crave so much more. They want to be well compensated, valued and connected to a purpose. They no longer compartmentalize their careers and work as separate from their personal lives. They pursue well-being across financial, physical, mental, social and intellectual dimensions. 

The New Equation: Flexibility + Connection = Wellbeing 

What people want more than anything is holistic well-being. It’s fast becoming the foundational tenant, with a recent survey finding that 80% of employers believe helping workers achieve this well-being is an important objective. Prophet’s research also finds that flexibility and connection are the main levers for getting there.  

Flexibility means accounting for individual and team preferences, circumstances and strengths. 

Connection, and how people experience it, is complex. It encompasses interpersonal dynamics, relationships and interactions among peers. And it also aligns individuals with the company’s purpose and mission, tapping into their own values. Connection flourishes in inclusive environments when people are psychologically safe and comfortable being themselves at work.  

Companies must constantly balance this equation. Any policy that impacts flexibility or connection must be considered.  

Designing employee experiences around flexibility and connection creates an environment of:

Wellbeing: The New End Goal 

Health is now the ultimate headline. People have had the chance to re-evaluate what’s important and possible in their lives. Fed up with outdated norms like the 9-5 schedule and chronic stress and fatigue, employees are less willing to sacrifice their physical, mental and social health for their job. 

As a result, employers are now in the hot seat, charged with prioritizing and more actively supporting these health goals. While previously, employers’ duty of care lay solely in the realm of physical health and safety, the pandemic elevated emotional and mental well-being to the same level of priority.  

More traditional leaders may raise their eyebrows at the expansive responsibility of providing for employee wellbeing. And some long-tenured executives want to resist this change. But it’s too late. The paradigm has already evolved, and the trends are clear: Employees today have a record level of bargaining power. And even if a slow economy causes a blip, this trend will only get more prevalent, as we enter the era of “employment as a service”. It’s incumbent on employers to develop an experience that is desirable, viable and feasible. 

This power shift has been especially acute in retail and food service. When a leading QSR brand engaged Prophet to understand the evolving restaurant workforce, well-being emerged as the central concern. We learned that employees want more than financial gains and physical safety. To them, well-being also meant personal development, solid communities and psychological safety. They wanted a sense that the company cared about them, of course. But they also wanted ways they could demonstrate their care for co-workers. 

Those insights helped us to reinvigorate the employee value proposition and identify the moments that matter, along the entire employee journey, developing initiatives and experiences that would allow it to retain current workers and attract top talent. Prophet developed “100 Ways to Care,” an expanded set of team support systems. The customizable and flexible collection of benefits includes instant pay, automated shift scheduling, and holistic wellness options, focusing on company-led and funded mental health and employee assistance. By first establishing essential truths about team members of the next five to 10 years and envisioning what their journey will look like, signature experiences can address needs and opportunities with new capabilities.  

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We also developed quantifiable metrics beyond the usual engagement scores to measure the impact of these efforts on the experience. Capturing metrics on a wider range of factors including tenure, attendance, complexity of the role, overall job satisfaction and attention to/interaction with solutions, as well as engagement, enables an ongoing view of “experience” and supports agile refinement and improvement over time. 

Other companies are using this holistic approach to make key decisions and reap returns. BP and Bank of America have built mental well-being support and accountability into their leadership cultures. BP gets real-time mental well-being feedback from regular employee engagement surveys to understand how teams feel and how to support them. Bank of America is creating opportunities for colleagues to talk about their mental well-being, breaking down attached stigmas. 

Other organizations are taking corrective action with core business activities, demonstrating the power of employee experience (EX) to create significant benefits to customer experience (CX). Mojang Studios of Minecraft fame, for example, recognized the toll that the pandemic and related stress was taking on the well-being of its employees, even as it faced an urgent deadline on the Caves & Cliff Update at Minecraft Live. It decided to delay the update to ease the burden on employees, sharing the news via a blog post. Users of the world’s most popular game, although disappointed, respected that decision. And they responded by pushing Minecraft’s monthly active users to record levels. 

That’s not an isolated incident of business benefit, either. One recent study ranked companies by measures of workforce well-being. Those in the highest 10% reported a 27.2% increase in return on equity and a 24.8% gain in profits, substantially higher than their Fortune 500 peers. 

The ante is rising. As businesses adapt to growing demands, a holistic well-being strategy will be even more vital to the employee experience. Caring for the entire person–not just who they are at work–is now a table stake when it comes to talent attraction, recruitment and retention. When businesses take care of their people, those people take care of the business. 

Flexibility: Developing a Targeted, Flexible Workplace Strategy 

Much to the delight of many, hybrid working is here to stay. Even the U.K’s minister for Brexit opportunities and government efficiency has revealed plans to offload £1.5 billion worth of London office space because of the number of civil servants who continue to work from home. More broadly, just over half– 53%– expect a hybrid model going forward, with 24% expecting the option to work remotely all the time.  

But for the most part, the policies that initially governed remote work came together in a period of intense panic, implemented in an environment of desperation and uncertainty. 

As firms work to create their long-term policies, they have an opportunity to learn from COVID-era flexible working experiments and formalize what started as ad-hoc solutions. As hybrid working becomes the new middle ground, flexibility must become inherent to employee experience. People want to make decisions based on what’s best for them, considering their families, commutes and work-life balance.  

Dropbox’s 3,000 employees now work remotely most of the time and go to the office for more collaborative and team-building work. The company redesigned its facilities to make this shift, removing individual desks.  

Many financial services companies like Goldman Sachs and Morgan Stanley have drawn a line in the sand for return to the office, wanting employees back five days a week. But fueled by a robust job market, their employees are reluctant to give up flexible working conditions. How can institutions that want employees back full-time compete with others who allow hybrid work? 

Prophet worked with one of the U.K.’s leading financial companies to develop a long-term workplace strategy. Early on, it had won rave reviews for its rapid pivot to a work-from-anywhere policy. But as the months ticked by, it realized that culture, morale and engagement began to erode. It needed something beyond a monolithic approach to flexibility. One size, it acknowledged, definitely did not fit all.  

And this approach had unintended consequences, including increased pressure on leaders to navigate managing fully remote teams. It also raises the question: How can companies retain the benefits of in-person collaboration, which are proven and time-honored ways to keep people motivated, while preserving the option to be remote?  

Our work started – as it always does – by looking through the lens of Prophet’s Human-Centered Transformation Model™.  

This model looks at organizations as a macrocosm of an individual– with DNA, Mind, Body and Soul– and provides a framework to map the employee journey and address all of the organizational factors that touch on the experience people enjoy day-to-day. In this instance, we took a closer look at the core employee personas and archetypes. While many people reported improved morale and engagement, there was an increased risk of losing a sense of belonging and investment in the company’s culture.  

We helped our financial services client create an employee experience strategy that balances the needs of all stakeholders. That meant a shift from flexibility based on individual needs to flexibility that works for all. Instead of asking employees to work from anywhere, they’re now being asked to work from where makes sense for them and their teams – encouraging them to make decisions that balance their individual needs with the needs of the team and the needs of the business. They are also encouraged to make decisions “led by the work.” That encompasses more than just the tasks on their to-do list. It includes learning and development, team building, career conversations and leadership, which all make them feel more connected to the company’s broader mission. 

We’ve worked closely with this client to ensure transparent communication around these changes. Employees must understand that this isn’t about the company going backward on its commitment to flexibility. That would damage the employer-employee trust it has nurtured so carefully since the pandemic began. 

Instead, it’s working to ensure hybrid work options that provide “freedom within a frame.” 

Importantly, much of the focus has been on leadership, ensuring they can be effective in hybrid and remote scenarios, including performance conversations, spotting well-being needs and empowering decision-making. It is also paying more attention to the importance of role modeling. Leadership is both the most significant risk to employee experience policies and also the best amplifier. 

We also helped the company expand the different tools and technology used to maintain performance levels and initiate conversations throughout the organization about what good looks like. Today, they can much more easily encourage inclusive practices to ensure equal opportunity for growth across all talent. 

An essential outcome of this type of work is that leaders throughout the organization better understand why this all matters and just how valuable a flexible employee experience strategy is. Being more intentional about how an organization defines “flexibility” goes beyond a happier workforce. It strengthens the organization, expanding the talent pool for employers. That includes geographical range, of course, but potential employees who must work from home, such as caregivers, and those who simply prefer remote work. 

However, this recruiting advantage will continue to wane as more companies clarify their version of flexibility. That means it’s essential that each organization defines flexibility in a way that meshes with its operations, culture, technology and purpose. Done right, it makes a company’s employee value proposition distinctive and relevant. It becomes a competitive talent advantage. 

Representation and Diversity Matter  

Employees increasingly want to (re)build a sense of connection to their co-workers, communities and the broader mission of the employer. We used to have the proverbial watercooler to engage in small talk and get up to date on the latest developments. Often, it’s where we built trust, camaraderie and relationships. But in increasingly hybrid and digital environments, companies are still finding it hard to recreate the spontaneity and organic moments to build those connections.  

Representation, too, factors deeply into the connection. Employers need to be clear about what diversity, equity and inclusion mean to them and how it aligns with the organization’s values. It needs to be active in the cultural norms and hard-wired into processes, developing metrics to track impact. Research suggests that diverse teams outperform individual decision-makers up to 87% of the time. And DEI initiatives matter to job seekers too, with 64% of candidates saying diversity and inclusion are key factors when evaluating a job offer. 

The presence of women in senior management has long been understood to improve financial performance, and new research finds that as firms add more women, they become more open to change and less afraid of risks, increasing psychological safety in the workplace. Specifically, the firms studied shifted towards innovation, investing more in research and development and less in acquisitions.  

As companies scramble to make sure their efforts show tangible results, attracting, retaining and motivating key talent through turbulent times, we’re finding that small acts of inclusion have the most impact. Robust employee resource groups for workers of color and LGBTQ+ are a must. So are networks that encourage women, who continue to leave their jobs at higher rates than men.  

Prophet’s global research, “The Collaborative Advantage”, finds that one of the biggest barriers to effective organizational collaboration is a lack of clarity on the connection of work to the broader business strategy. Organizations often fail to show employees how working together more closely helps achieve personal and corporate goals. Despite 80% of leaders believing that collaboration produces better outcomes, many are still struggling to meet the collaboration challenge and break down siloed work. 

Humans are fundamentally a social species and people want to belong, to be part of a team. And they want those teams to function well, to collaborate in ways that are rewarding to all involved. Our research shows that individuals who work at more collaborative organizations aren’t just more productive and satisfied. They’re keenly aware that it teaches them valuable new skills and expands their networks. 

Connection Starts with Employee Onboarding 

Organizations realize that they must be more intentional at creating connections at work, finding new ways to put all kinds of relationships back into play, from formal work roles and team responsibilities to friendships and side conversations. 

It’s especially critical to get this right and set the tone for the new joiners’ tenure. Within an employee’s journey, the onboarding experience can define how engaged employees are within their roles and for how long. We worked with Reltio, a high-growth data management unicorn, to improve, standardize and scale the onboarding experience.  

As we spoke to employees across functions and levels, we discovered that new hires depended on the relationships formed in that critical period. In its remote-first environment, Reltio already had a culture of virtual connection and helpfulness, which had become crucial in an employee’s ability to connect and learn important information about the organization.  

To better support this informal approach, we articulated “foster relationships”.  This became one of five experience principles that now inform how Reltio supports new hires. Designed to recognize relationships as a fundamental need, this ensures that employees can continue to stay in touch and support each other as they find their way within the company. This principle came to life across experience concepts, including buddy systems, pre-scheduled meetings, access to organizational charts that outline roles and teams and one-to-one coffee chats.  

The Steep Cost of Standing Still 

All this creates an urgent need for companies to sharpen and expand their employee experience. Businesses, even those that were considered highly progressive employers, are losing talent every day. And it doesn’t look like this recent phenomenon is slowing down with a near record-high number of Americans still quitting each month.   

Employees, from the most highly sought-after tech executives to fast-food workers, know they have the upper hand. They know they can–and will–find an employer more willing to support their total well-being and in some cases offer a pay rise as well (with a median raise of 16.1% in the US). Recession or not, employee expectations have changed forever. 

Twenty years ago, marketers had to accept that the age of customer experience had arrived quickly. Now it’s the employee experience’s turn. Organizations don’t have the luxury of treating the employee experience as an afterthought. They need to be more intentional about every interaction–how they recruit and hire and how they encourage connection. They must acknowledge that individual needs don’t always align with a team or organizational goals. 

They can’t–and shouldn’t–revamp their employer brand overnight. But by focusing on the simple equation–Flexibility+ Connection = Wellbeing–they can shape their vision, building a roadmap to working towards over time.  

By taking advantage of these turbulent times to reimagine the experience employees enjoy, companies can prepare for the growth journey ahead. 

Start with these four general guidelines: 

1. Of every new experience shift, ask: Is this desirable? Viable? Feasible?  

2. Tailor the experience strategy and design to clearly symbolize company values and elements of the employee value proposition, aligning them with the corporate purpose and strategy. 

3. Focus on moments that matter. Employees travel many journeys, and the thing that makes a company great for an entry-level employee may be very different than what matters to a seasoned leader. Understand different employee personas and archetypes.  

4. Make a balanced, healthy and diverse workforce the new end goal, using flexibility and connection to drive well-being and grow stronger every day. 

With layoffs and hiring freezes dominating headlines, it would be easy to think the war for talent is over. And if one were to judge talent acquisition trends by past economic downturns, many organizations would shift their hiring strategy. 

But this economic environment is different. In the U.S., the Federal Reserve projects the current downturn might cause the unemployment rate to rise from 3.8% to a still-low 4.4% in 2023 and 2024. And in the U.K., unemployment hovers at the lowest level in 50 years.  

Despite these challenges, there is still a war for great talent and acquiring the right people with the right skill set to do the job. And it is vital to your firm’s success. According to Forrester’s recent Budget Pulse Survey, most leaders reported they would not decrease spending on talent, with 60% of leaders expecting to increase spending on personnel and 62% expecting to improve external services.   

Strategic workforce planning is by no means a new concept. As far back as the 1960s, management thinkers prescribed methods to balance the talent supply and demand equation. And in financial downturns, the topic usually finds renewed interest among the c-suite.  

Here are six fundamentals you should consider when building your talent strategy.  

1. Strategic Workforce and Talent Planning Should Be an Activity of the Entire C-suite  

As of 2020, 80% of all assets in the S&P 500 are intangible. And one of the most important intangible assets of any organization is its people, which is why it is essential that the entire leadership team participates and has a responsibility in the firm’s talent acquisition and workforce planning process- not just human resources.   

The leadership team should start with a clear vision of the company’s business strategy over multiple horizons- say six, 12, and 24 months. While no one has a crystal ball for the future, even a directional view of the organization’s immediate, mid and long-term needs will provide a solid foundation for strategic investments in talent.   

2. Identify Critical Talent Segments to Deliver on Your Business Strategy  

Once companies are clear on where they want to go, strategic priorities come into focus. To identify your critical talent segment, you should assess three key areas:

1. Internal labor market: Identify the emerging trends within your workforce and how these trends will impact your business priorities.
2. External labor market: Analyze the external labor market to determine who you should hire and what skill sets you will need to match your business priorities.
3. Assess talent needs and prioritize critical roles at the enterprise level: Uncover each business unit’s capability needs to sharpen your recruitment efforts.  

3. Invest in Your Workforce Like You Would a Financial Portfolio   

As your leadership team makes strategic investments in immediate needs, it’s easy to lose sight of your future vision – and the talent you’ll need to succeed. 

To help you avoid this common pitfall, we recommend approaching your workforce planning as you would with your investment portfolio. Consider a 70/20/10 investment framework to ensure you have the talent you need today to drive critical business outcomes and the workforce you need in the future:

• Dedicate 70% of your talent investment to core business needs  
• Reserve 20% of talent investment for emerging business opportunities
• Devote 10% of talent investment for future growth opportunities  

4. Build a People Analytics Team   

A robust people analytics team can help translate the refreshed strategy to the future workforce, even as the hiring picture changes. Consider building a people analytics team (with access to workforce planning tools) who know how to leverage your data to answer critical questions like:

• How many people are needed to execute current plans?   
• What skills will our future people need?
• What roles and responsibilities can we outsource?   
• What work, if any, should be outsourced or automated?   
• What structural changes are required for future initiatives?   

5. Invest in a Compelling Employee Value Proposition and Company Culture   

There’s no secret to this. People want to work for companies that value them. New graduates stampede toward firms like Alphabet and Apple because they are good employers. That creates a flywheel: They attract and keep the best people, and these gifted workers help them grow faster. And because they grow faster, they can better invest in people, enabling their growth and success.  

In addition, a compelling employee value proposition and company culture help you build trust, engagement and performance within your workforce, which is critical when implementing significant change within your organization.   

6. Develop Flexible Ways to Deploy Your Talent   

New strategies–and new markets–create opportunities for employees to diversify their skill sets. Make it easy for them to do so with formal and informal ways, such as project-based agile squads, partnering models and centers of excellence.   

These flexible ways of working will empower your employees to mesh their interests with the needs of the business.  

Individual employees will immediately see the benefits, recognizing new avenues of career development. And the organization benefits from a more flexible, multi-talented workforce.  

The past few years have felt like anything but a game – unless that game is Monopoly and you’re losing to your older sibling after landing on Park Place for the eighth time. In this case, the taunting sibling has more teeth: global pandemics, social reckonings and war. 

All of these factors have shaken people’s sense of safety, identity and trust. And these challenges have required companies in every industry to accelerate transformation—something that’s difficult in an environment where people are exhausted, frustrated and, at times, scared.  

Fortunately, many companies are heeding the call to take care of their people with 90% of employers reporting an increase in investment in mental health programs (come on, the other 10%!) according to Wellable Labs’ “2022 Employee Wellness Industry Trends Report.” 

And while holistic well-being is incredibly important, work itself still lacks the humanity (the human beings in “well-being”) needed to sustain change. But that’s where play comes in. Forgive the pun, but it plays a part in the transformation.  

What is Play and How Does it Tie Into Transformation? 

Prophet’s Change Fitness Model reflects the different starting points for how companies see and address change, ranging from the transactional belief that “change is an obstacle to overcome” to the transformational state of play where transformation can be a sport to be enjoyed. 

You can think of play as “batteries not included.” Because, given the constant nature of change, those who have achieved play can spend less energy overcoming each effort and more time being fueled by it.  

So how do you get to the state of play? Exactly—you play!  

Scientists Meredith Van Vleet and Brooke Feeney define play as: A behavior or activity carried out with the goal of amusement and fun that involves an enthusiastic and in-the-moment attitude or approach, and is highly interactive among play partners or with the activity itself.  

Applying this lens to work clarifies the opportunity–making work that people enjoy, that brings out enthusiasm and deepens connections.  

The skeptic will say, “We don’t have time for play – we have work to do!” But those ahead of the curve see the intrinsic need to link the two. Better play means better work. In fact, in a 2019 study by Brigham Young University, teams that played video games together were 20% more productive than others.  

That’s because play unlocks creativity, helping people tap into new sources of inspiration and ways of thinking—which creates better solutions.  

And, especially at a time when the universe is playing chess with humanity, play creates sustainability and safety, encouraging people to enjoy what they’re doing, so they’ll want to do it more. And it deepens skill building, encouraging trial and growth in new ways. Checkmate. 

Of course, play is easier said than done and toxic environments will reject it. People can’t experiment if they believe their job or reputation is at risk. They won’t be themselves if they don’t like the people they’re working with. And they won’t prioritize play if they’re getting mixed or conflicting signals from leadership.  

Play shouldn’t be isolated to an innovation team, a single brainstorm, an occasional company outing nor the funniest person in the room. Play needs to take place across all levels and contexts – across a company’s culture, teams and individuals. Each reinforces the other with a company’s culture making it easier for teams to be able to play, and individuals bringing their whole selves to both innovation and the everyday.    

How to Create a Culture of Play Within Your Organization  

So how might you best implement a culture of play? We couldn’t not use the SMILE acronym, could we?  

Safe 

No one wants to play “the floor is lava” with actual lava. People need to feel safe in their environment. That means feeling confident that they can make mistakes and learn from them, not be punished by them.  

According to Peter Temes, founder and president of the Institute for Innovation in Large Organizations (ILO), “that hasn’t changed since we began this work 15 years ago, and probably hasn’t changed from decades prior to that—this idea of lowering the cost of failure.”  

Leaders can create safety by modeling and being transparent about failures and growth opportunities. Most importantly, leaders’ actions must speak louder than words – when individuals fail, they need to celebrate those learnings, not focus on the implications. 

Leaders can also help create a sense of safety through joy and levity in the workplace. Jennifer Aaker and Naomi Bagdonas, authors of “Humor, Seriously,” have shown that companies that embedded humor in their culture had employees who were 16% more likely to stay at their jobs feel engaged and experience satisfaction.  

Meaningful 

By nature, games have stakes and meaning – it’s what makes them exciting and, as defined above, creates the enthusiasm that creates play. Giving meaning to play can take many forms.  

One way is through reinforcing an organization’s purpose, helping people see why their work matters. Some companies create meaning through competition – whether individual incentives, team challenges or by focusing on external competition.  

One company created an internal fantasy league, resulting in an 18% increase in outbound calls and an increase in morale. Making play meaningful like this can be a great cause for celebration and recognition as well—reminding people about why they need to be invested in what they’re doing. Of course, “meaningful” must be rooted in safety – if people fear the stakes are too high, that fear can hold them back.  

Individual 

Everyone’s favorite radio station is WiiFM – “What’s in it for me.” Ask someone about a project they’re working on, and they might smile. But ask them what they did this weekend, and they’ll light up—even more so if they get to talk about personal hobbies or passions.  

Create more ways for people to light up, and you’ll create more ways to unlock that joy and translate it into their work and relationships. At a systemic level, consider how you’re fostering individuals’ passions and making them feel heard and represented. And at a team and day-to-day level, find ways to share them.  

Linked 

On the other side of the “individual” see-saw is the need to bring people together. Often, people have more fun working with other people, and collaboration creates those all-important feelings of togetherness and belonging. Prophet’s 2022 Catalysts research: The Collaborative Advantage finds that employees achieve better outcomes personally and professionally when they collaborate – 65% of respondents cited higher levels of productivity as a result.  

In hybrid environments, it becomes more challenging, where it may seem like people are working together on endless transactional Zoom calls. In reality, there is a shrinking emphasis on true connections which require smaller group interactions and a mix of both work-related and non-work-related focuses.  

Exploratory 

People need new inputs to get to new outputs. Trying a new dish can be more fun and exciting than eating the same meal for the fifth time this week. Consider how to fuel people’s joy and creativity by putting them in new situations, hearing from new voices or thinking about things in new ways. Then, use that space to give people a chance to get their hands dirty, safely.  

Build in the flexibility for exploration. A global airline used the power of play to teach the organization its seating pricing strategy. Leaders used a game of “The Flight is Right,” taking the principles of “The Price is Right” and applying it to the complex principles that airlines face. By approaching the learning in a new way, and allowing people to play and participate, the message stuck.  

LEGO’s serious play methodology is another great example of encouraging exploration to envision challenges in new ways while tapping into the joy of being a child.  

The creativity expert, Edward De Bono, describes “Rivers of Thinking” – the building nature of experiences that help us to unlock new solutions. When we fill our rivers with the same water, it becomes difficult to explore new ones.