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
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.
Achieving organizational resiliency by “letting go” requires organizations to rethink how they set goals, manage their resources, and structure their teams – no small undertaking. Yet leaders who can make the shift from top-down control to delegating accountability and decision-making are rewarded with more autonomous and engaged employees, faster decisions, and better outcomes for both their companies and customers. Even if their ambition may not be to land a human on the moon, their organizations may achieve something truly transformational.
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.
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.
All businesses can lower the social and literal costs of experimentation. Doing so makes them more adaptable by fostering the psychological safety required to design and execute more experiments. Embracing disciplined experimentation is necessary to increase a company’s ability to flex, pivot and thrive in changing market conditions.
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.
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.”
Operationalizing purpose requires significant cross-functional collaboration. Failure to do so wastes opportunity on every level. And it causes cognitive dissonance among stakeholders, especially employees. Using the Human Centered Transformation Model™ is a straightforward way to holistically conceptualize and organize your efforts to bring your purpose to life, creating real business value and increasing organizational flexibility.
Catalysts: How to Build an Adaptable Organization that Thrives During Uncertainty
Prophet’s 2023 Catalyst research highlights how companies can thrive despite disruption, stay on course for long-term transformation and turn change into a strategic advantage.
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.
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.
As leaders grow increasingly comfortable with uncertainty, they’re hungry for strategies to build resilience and flexibility. In this series, we’ll explore why your company’s purpose needs to play a different role and how the most adaptive companies use their purpose to carve out compelling new business strategies.
The healthcare industry is facing a massive labor and operating model problem – one that involves a predicted workforce shortage of up to 3.2 million people. With more than a quarter of the industry workforce planning to leave in the next two years and $9 billion in annual burnout-related turnover costs the healthcare industry is at a crossroads. So, where do we start?
Prophet suggests that the solution starts with our nurses. In this report, we clarify the magnitude of the crisis, identify tangible issues to tackle and introduce viable solutions that will begin to drive impact against this behemoth of a challenge.
Addressing the workforce shortage starts with a focus on nurses. By starting with the largest population of clinical workers, we can begin to make a more meaningful impact on the collective workforce challenge.
Sustainable solutions to this crisis are not just about workforce retention. They will require us to revisit hiring and talent development practices, redesign care delivery models and the roles required, and rethink the infrastructure needed to support innovation and scale care.
Ultimately, to drive meaningful impact for nurses, we need to hear from nurses. Once nurses have a say in the tools and solutions we develop for them, real change can happen.
Before jumping to the most ground-breaking innovations, we must bring ourselves back to the day-to-day needs of our nurses. Simplifying their routines with technology can help them feel heard and improve employee and patient satisfaction.
Prophet’s Human-Centered Transformation Model™ can help you understand where your organization can begin to tackle organizational and cultural dynamics that contribute to the labor crisis.
Winning Hearts and Minds in Financial Services: The Imperatives to Amplifying Purpose
Purpose isn’t a mere sales tactic; it’s how you forge deep trust with your organization’s stakeholders.
In a world where trust in financial institutions is being shaken up and consumers have more options than ever, organizations must tap into their purpose to assure they can be counted on for more than high-quality products and services.
Research shows that purpose-related drivers rise to the top in motivating consumer choice – especially in financial services. Prophet’s 2023 Relentlessly Relevant Brands report found that consumers are shifting to brands that spark an emotional connection—reaching beyond functional needs. And we’re not the only ones tracking this trend: IBM and the National Retail Federation found that, for the first time, more consumers are driven by purpose than by value.
But simply having a purpose does not move the needle. To effectively build trust and harness the power of purpose, organizations must amplify their purpose. It must be fully integrated into the business, showing up in key moments and being championed authentically by employees—otherwise, it’s just lip service that leaves consumers doubting that the organization truly delivers on its promises.
In our research, we found there are four key imperatives financial services organizations must work toward to effectively amplify and deliver on their purpose:
1. Have a clear and inspiring purpose.
Taking the first step means clearly defining your organization’s purpose. It should be both authentic while also being aspirational, meaningful, and engaging for all relevant stakeholders (e.g., consumers, investors, and employees). Your organization’s purpose should be clear enough that it can be used as a locus for decision-making. Once it’s clearly defined, time and resources must be invested to socialize it internally. Employees should be able to not only understand your organization’s purpose, but easily reference and use it in their daily work.
What this looks like:
Edward Jones recently made a significant investment in defining their purpose, working to create an authentic, clear, and compelling North star for their organization. Beyond just crafting an inspiring purpose statement, they Identified clear purpose impact areas to focus their work.
Edward Jones’ purpose is to “partner for positive impact by improving the lives of their clients and colleagues and bettering their communities and society.” They achieve this by focusing on three key areas: partnering for lasting financial strength, promoting healthier futures, and advancing inclusive growth.
Questions you might ask about your organization’s purpose:
Is it clearly defined?
Is it relevant to key stakeholders?
Is it clear enough to guide decision making?
Do employees know it and understand how their role contributes to delivering against it?
2. Own your purpose.
Don’t outsource purpose through philanthropy. Instead, embed it across the organization and ways of working. Leaders at all levels should be taking actionable steps to integrate your organization’s purpose into everyday operations, making it easy for employees to action against it in their daily lives. Purpose should be inherent to each project and every team, not a siloed effort or initiative.
What this looks like:
FinTech Current’s purpose is to “create better financial outcomes for more people.” They don’t just talk about it—they deliver on it through their product. Believing that legacy banks constrain consumers, Current moves consumers forward by helping them make the most of what they have, specifically by removing all fees (minimum fees, overdraft fees, transfer fees, ATM fees, etc.), expediting direct deposits and simplifying saving through Savings Pods and Round-Ups.
Questions you might ask about your organization’s purpose:
Is it being outsourced (e.g., focused on delivery through philanthropic donations alone)?
How is it being actioned against in day-to-day operations?
Are there metrics in place to measure progress as it relates to delivering on purpose?
3. Build the capabilities to deliver on your purpose.
Purpose must be engrained into your organization’s operating model, guiding each change and transformation. The operating model should be organized to hold leaders and teams accountable for delivering on purpose through incentives and business structures. Additionally, employees should be equipped with the right tools and skillsets to effectively live out the organization’s purpose.
What this looks like:
Mastercard’s purpose is “connecting everyone to priceless possibilities.” To help employees deliver on their purpose, Mastercard created a new compensation model that ties bonus calculations to the organization’s performance on purpose across three key areas: carbon neutrality, financial inclusion, and gender pay parity.
Questions you might ask about your organization’s purpose:
Are employees adequately incentivized to deliver on it?
What tools and skills are needed to equip employees to deliver on it?
Is it a central consideration in business decisions?
4. Ensure that your purpose shows up in key moments.
After establishing purpose as a foundational component to how your organization operates, it’s time for stakeholders to feel its impact. Employees, consumers, and investors should be able to experience your organization’s purpose firsthand—whether through communications, experiences or other touchpoints. When purpose shows up in key moments, internal and external stakeholders are inspired to join in, contribute and learn more.
What this looks like:
USAA’s purpose is to “empower members to achieve financial security through highly competitive products, exceptional service and trusted advice,” and “be the #1 choice for the military community and their families.” One way they bring this to life is through their annual Poppy Wall of Honor and other Memorial Day-related installations. Aligning closely with their purpose, USAA uses their Poppy Wall of Honor to help raise awareness of the true meaning of Memorial Day and provide visitors of the National Mall an opportunity to remember the service members who have died in service to our nation since World War I. Throughout the year, USAA’s Memorial Day microsite allows users to remember heroes, visit the virtual Poppy Wall and honor heroes through action.
Questions you might ask yourself:
How is it being activated with both internal and external stakeholders?
How does it show up in the moments that matter for employees, investors and consumers?
Simply put, financial services organizations must do more than just have a purpose to build trust with consumers. Recent shakeups across the Industry elevate the need for companies to put their purpose into action, amplifying it across all levels of the organization and creating a shared experience for all stakeholders alike.
Contact us to learn more about how to develop and put an authenticate purpose Into action for your organization. organization’s purpose to life and put it into action.
Creating a More Sustainable Employee Value Proposition
Purpose has power. Learn how ESG can help retain and engage your employees.
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.
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.
ESG can become a company’s secret weapon in modernizing its EVP and revitalizing its culture, regardless of the economic climate. People want to work for companies making the world a better place, which is why infusing your EVP with your ESG strategy can help strengthen your recruitment and retention efforts.
Designing the Employee Experience for the New World of Work
Economic turbulence. Ripples of resignations. Worker power on the rise. To keep up with fast-changing expectations, businesses need to make employee experience a central pillar in their people strategies.
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.
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?
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:
Of every new experience shift, ask: Is this desirable? Viable? Feasible?
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.
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.
Make a balanced, healthy and diverse workforce the new end goal, using flexibility and connection to drive well-being and grow stronger every day.
Employee experience design is a rapidly growing discipline. It’s how organizations can maximize their advantage in the war for talent and take advantage of seismic shifts in working patterns. When employee experience becomes a central pillar in a company’s people strategy, it makes it easier to align with brands, business strategy and customer experience.
Six actionable steps you should take when developing a winning workforce strategy.
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:
Internal labor market: Identify the emerging trends within your workforce and how these trends will impact your business priorities.
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.
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.
If your organization isn’t yet taking a strategic approach to workforce planning, consider starting with a solid foundation around these six principles. You’ll find that reimagining your workforce strategy with the same passion and innovation as customer-facing aspects of business doesn’t just prepare your organization for your future vision; it will also help ensure you have the right talent to weather current storms.
Learn how your organization can work better together in service of the greater good.
Major challenges to life and the planet are mounting. Many of them, like extreme weather events, are only a precursor to far greater threats to life as we know it. Sustainability is the solution to these challenges, but time is not on our side. Progress towards the UN Sustainable Development goals (SDGs) set in 2015 – “to end poverty, protect the planet and ensure that by 2030 all people enjoy peace and prosperity” – has been disappointingly slow – not least because the scale of collaboration it requires across government, business, the non-profit sector and the public is immense.
Against this background, we want to know what should be done, what can be done and what action we can take now, not simply as consumers, employees and investors but as people. As we increasingly choose brands for their commitments to make a difference, business leaders are sharply focused on their Environmental, Social and Governance (ESG) activities to build sustainability. Shareholder returns are no longer an accurate measure of success. Now organizations must create value through their ESG efforts for all their stakeholders.
There has been a varied landscape of responses to these challenges. Organizations in some sectors have, by their very nature, long been conscious of their mandate to operate, such as those in mining. Some organizations like Unilever have been progressive, acknowledged consumer demands and adopted the UN SDGs early, while others were built for ESG – from The Body Shop to Patagonia. However, many more are still searching for the appropriate growth journey that embraces and integrates ESG in the post-pandemic world.
Reconciling Sustainability and Growth
Sustainable growth is now a widely accepted mantra. However, it is far more complex to achieve, as organizations must balance the demands of diverse stakeholders with those of the environment. And automation, digital and data are accelerating the scale and pace of business transformation.
These challenges aside, we firmly believe ESG will become an increasingly important driver of growth and transformation. How an organization defines and activates its ESG strategy within its overarching growth ambition should influence every facet of its operations. Strategy and vision are one thing. But ethics and behavior prove the intent. Culture and organizational ways of working are “the rubber” where ESG strategy “hits the road”.
It’s a mistake to dismiss the alignment of sustainability and growth as an “internal” challenge. Given the complexity of partnerships and stakeholder engagement that ESG commitments bring, the need for organizations to build effective internal and external working relationships has never been so great. It’s a phenomenon and fundamental need we describe as “heightened collaboration.”
“We can’t make people want to save the world – we don’t define the rules. But we can show people what we can achieve, when we work together.”
Larissa Alghisi Chief Communications Officer, Julius Baer
In this report, we explore heightened collaboration in-depth, outlining its character and composition and how it is achieved. We will also see that without this collaboration and the action it drives, ESG strategies can flounder and fail and are easily dismissed and discredited as greenwashing.
Prophet is a global consulting firm that believes in unleashing the power of people, businesses and brands to move society forward and unlock uncommon growth. Within our Organization & Culture practice, we believe that uncommon growth begins by unlocking the full potential of human-centered organizations.
For the past four years, Prophet has conducted a major study, “Catalysts,” across the globe to examine culture and transformation – identifying the key levers within an organization’s culture system that achieve effective and sustained change.
Unpacking the Power of Collaboration
In “Catalysts: The Collaborative Advantage,” we looked closely at what it means to collaborate effectively. Collaboration in the workplace is a long-standing challenge. However, it is more relevant than ever, as organizations need to solve increasingly complex challenges and develop more holistic customer solutions faster.
Our findings revealed that despite optimism amongst senior leaders, half of all organizations still struggle with effective business-wide collaboration, even in face-to-face environments. With remote and hybrid working well-established, there’s a clear need to add muscle to this organizational skill.
“ESG will do a lot of good for a lot of businesses. But it is going to result in significant changes in how organization operate in terms of governance and processes, all of which will require a great deal of collaboration across teams”
Shari Hofer Chief Marketing Officer and EVP, Wiley
Heightened Collaboration and ESG
More positively, our research underscores collaboration’s power to unlock the potential of more human-centered organizations. Working together effectively brings clarity and purpose to both the organization and its individuals. And collaboration’s power to accelerate transformation is captured in the report’s key takeaway: our Collaboration Flywheel.
Against this backdrop and our hypothesis that heightened collaboration is essential to deliver ESG strategies and the multi-stakeholder engagement they require, we reached out to business leaders globally. We spoke with 15 senior leaders to examine the links between the Catalysts report findings and their increased relevance to the ESG agenda. They were drawn from various industries and geographies with backgrounds in sustainability, strategy, supply chain, marketing, HR and front-line operations.
This research validated our hypotheses, uncovering some key lessons on enhancing collaboration in service of ESG.
Emerging Research Themes
Four key themes emerged from our exploration. All of these build on the original levers identified in our Collaboration Flywheel, but they have particular relevance to achieving heightened collaboration in service of ESG.
Before we begin, a note on language. “Collaboration” was often used in the research to describe ways of working that are only part way, in our view, along the Collaboration Flywheel. These are more accurately “coordination” and “cooperation” rather than fully-fledged and effective collaboration. Most organizations involved are well-versed in coordination but acknowledge that bureaucracy and silos continue to challenge their ability to “give ground” for a bigger ESG cause.
Theme One: Persuasive Passion
Effective collaboration is often founded on a strong and inspirational leadership style. Leaders with purpose, who work towards a focused agenda and model a consistent organizational mindset, set a clear and accessible example to follow. Naturally, leading by example is only part of the equation, but commitment and energy spark true collaboration. We often respond to passion and chemistry before the process. A leader who displays pace and conviction can have a magnetic effect on their colleagues, catalyzing collaboration pervasively.
As well as inspiring others, these leaders must persuade colleagues to get behind shared goals and develop mutually beneficial ways of working. ESG goals are cross-stakeholder and sometimes require difficult conversations to balance conflicting needs. We shouldn’t underestimate how big an issue ESG is for organizations. It’s either embedded in what they do and what they stand for– so leaders are naturally at the forefront–or it’s about a change journey with leaders stepping up to set ESG priorities, align the organization around specific goals and find shared approaches that reconcile different agendas. Either way, priorities, goals and approaches can be identified with coordination and promoted with cooperation, but they can only ever be achieved with the momentum of collaboration– the momentum that so often begins with the energy and focus of a persuasive leader.
Client Spotlight: Polestar
As a leader in electric vehicles, ESG has always been part of Polestar’s DNA. Sustainability is omnipresent in the organization. Polestar is truly a global company with a global R&D function that includes teams in Sweden, China and the UK. And it is this global outlook that helps it drive collaboration in very different cultural markets.
Its CEO embodies the business’ passionate style of leadership. Polestar hires driven people with strong team skills, which the CEO channels by role modeling a very clear ‘one organization’ mindset with ESG at its heart. So, what does this style of leadership look like in practice?
“He is so clear on the purpose of Polestar: it has to be a cohesive experience all over the world. So, he is extremely clear our brand also has to be consistent wherever we are. One Polestar Experience, One Polestar Brand. He’s constantly driving the organization to think as one brand.”
Monika Franke Head of HR, Polestar
From the Polestar example, we learned that when leaders visibly champion, reinforce and celebrate steps on their ESG journeys, they create a pull toward more effective collaboration.
Leaders like this build a movement, but that’s not all. They also create safe spaces to explore and challenge ambitions that can seem daunting to many—environments where individuals feel able to explore the connections with their own belief systems.
Theme Two: Personal Purpose
ESG collaboration starts with and requires true commitment from each individual. ESG-related initiatives tend to resonate with people’s values and identities, even more so than other work. Whether it’s improving the environment or creating a more diverse and inclusive workplace, ESG topics intrinsically motivate people, and they often feel deeply personal about them.
As a result, organizational cultural change around ESG is fueled by the personal belief systems of individuals. The challenge for leaders is to channel these personal beliefs to drive collaboration by ensuring individuals can see their values reflected in the ESG strategy.
What we consider the DNA of an organization – its purpose, values, EVP and strategy—is growing in importance for employees. It influences their motivations to join, perform and stay with companies. Now organizations have the opportunity to develop ESG-focused strategies that attract like-minded talent whose personal beliefs align with their ambitions.
86% of employees prefer to support or work for companies that care about the same issues they do.
38% of employeeswould look for a new role if they thought their organization was not doing enough on ESG Issues.
93% of employeeswho said their company was making a strong positive impact on the world were planning to stay in their jobs. For employees who did not agree with that statement, only 43% were planning to stay with their employer.
Developing and implementing a comprehensive ESG strategy and embedding it in organizational DNA can be challenging, particularly for those organizations in which sustainability is not inherently linked to the value chain. However, for organizations with a resolute focus on ESG, the long-term potential for accelerated change, enhanced engagement and talent acquisition are substantial. Aligning employees’ personal values with a clear organizational commitment to ESG will build satisfaction by creating a sense of belonging to a wider collective with a shared set of values.
Client Spotlight: Liquid I.V.
Sustainability has been a guiding principle for Liquid I.V. from the very beginning. As an international wellness brand redefining rehydration, it has used sustainability to shape its relationship with the brand’s own talent as well as its partners. Liquid I.V. has a refreshing, non-corporate approach that emphasizes energy, transparency and personal impact with a stated aim to grow, profit and inspire positive change. The prospect of becoming independent changemakers attracts new talent, and employees are given the opportunity to leave a legacy.
Signature employee experiences include:
Placing sustainability at the center of their work so that each day starts with a focus on purpose. This allows Liquid I.V. to create a powerful ripple effect through its efforts and successes in transparency, sustainability and giving back.
An ambition to convince others that the impossible is possible and that there is an urgency in this work
Monthly Net Positive conversations to confirm the “why” and explore the ‘how” together as a collective
A focus on ‘making it work’ – to prove that a company can inspire positive change and demonstrate that sustainability is ‘the new way”
“[Sustainability/ESG] is the one area that I believe you do not pull back and hide information. It must be shared because it is a responsibility of every brand and every person.”
Sean Lavin Vice President, Impact – Innovation, Global Sustainability and Giveback, Liquid I.V.
A focus on sustainability results in a collective of inspired individuals collaborating towards shared ESG goals to become a culture of changemakers. Liquid I.V.’s example shows that purpose-driven organizations with clear ESG goals can create inherently collaborative environments by channeling each individual’s commitment to sustainability. Its strong ESG stance and shared drive enable it to attract and retain talent. And not just any talent, but individuals who tend to be ESG-minded and are naturally collaborative.
Theme Three: Shared Success
As we’ve seen, leadership behaviors and the connection with the individual belief system are critical to effective collaboration in service of ESG. However, while these catalyze effective collaboration, scaling and sustaining to achieve heightened collaboration requires more.
With any collaborative effort, individuals are occasionally required to “give away their LEGOs”: sacrificing their own ambitions to serve a greater good. Interestingly, this becomes more pronounced with ESG. Sustainability activities don’t always have easy-to-quantify commercial returns, but teams and individuals must make room for ESG efforts in their own agendas to advance the organization. In particular, ESG-related metrics must be embedded into incentive structures for ESG initiatives to succeed.
The strength of these goals and incentives varies between organizations according to their ESG credentials. Some companies, like Liquid I.V., have embedded ESG efforts into their business models. However, in other mature businesses, a passion for ESG may be present organically or within pockets of the organization, but it is not integrated into the culture. This prevents truly collaborative efforts. Such organizations must provide stronger incentives—a rewarding collaboration between teams and within them – to realize all the potential of these initiatives.
Client Spotlight: DSM
Successive CEOs have helped ensure that purpose has long been established at DSM. A global leader in health and nutrition, the business has a history of projects that support its ambition to “create brighter lives for all.” For example, since 2007, DSM has partnered with the World Food Programme to use micronutrients to enhance nutrition for pregnant mothers and their children. The program, which has a proven impact on the long-term healthy development of both mother and child, is so deeply embedded in the culture of DSM that it – and others like it – is often why employees join and stay with the organization.
To ensure its commitment to ESG has real meaning for its 20,000+ employee organization, DSM has embedded ESG and sustainability metrics within its incentive program for the pasts 10 years. Even at the highest levels of the organization, these metrics shape 50% of employee remuneration. And the organization continues to look for ways it can do even more. In 2021, it completed a full review of its remuneration policy to maximize its impact and prioritize sustainability within DSM.
“We make sure [sustainability] is embedded in the way that we reward people, to continue to bring the organization forward and contribute to more than just making money. It helps us attract and retain really good talent – people come to us because of who we are and what we’re trying to do.”
Cristina Monteiro Chief Human Resources Officer, DSM
Transparency and openness are key to effective cross-organization collaboration in the service of ESG. Employees who do not have direct influence over shaping the ESG agenda may feel that sustainability is a large, vague and insurmountable challenge. Without clarity and openness, they may be less motivated to do their part, as they are unsure of what that looks like for them.
The first step in effective ESG collaboration is to dedicate time and effort to educating employees on the organization’s ESG-related goals, how they will get together and their role in that journey. Employees will be empowered to work more closely together with a clearer sense of the “why” and a greater understanding of their individual contributions to the overall goal. At the same time, clear ESG-related incentives will encourage the creation of new priorities, enabling heightened collaboration for sustainability across the organization.
Theme Four: Expansive Collaboration
In previous sections, we have seen how pivotal the presence of strong leadership, committed individuals and aligned incentives are to unlocking effective collaboration for ESG. Another catalyzing force is the ability to collaborate across ESG’s expansive stakeholder ecosystem, particularly its external stakeholders. In our research, we found that breaking down silos is especially important because the success of ESG’s goals and initiatives hinges on the engagement of external parties and partners, including the supply chain, partners and even competitors.
“[ESG] strategy cannot be a standalone effort within a business, because if it is, it will always be a siloed function. You have to truly integrate it in the business. For instance, together with our Chief Finance Officer, we share ESG targets that are tied to our overall compensation, and we are continuously looking for ways in which we can incorporate sustainability metrics into our investment decisions.”
Ezgi Barcenas Chief Sustainability Officer, AB InBev
Change Fitness and Collaboration
Working within this ecosystem to meet ESG goals demands innovation and a high degree of what Prophet calls maturity in “change fitness”. We describe the more mature levels of change fitness as a state of “flow” or even “play.” This is when leaders recognize and are comfortable with the idea that they don’t have all the answers seeking out and embracing other contributors, including competitors. Organizations and teams exhibiting Change Fitness will embrace more experimental working styles to support continuous and disruptive innovation. Meanwhile, individuals will be better equipped to move fluidly between roles and teams to improve personal and business outcomes.
It’s worth noting that achieving change fitness isn’t always comfortable for leaders. It’s a “human-first” approach focusing on diverse contributions and devolved decision-making. This often conflicts with how leaders have been recognized for achievement in their working lives to date.
One example of a company that has a high maturity in change fitness is AB InBev, the world’s leading brewer. It pinpoints collaboration as the foundation of its respective ESG success, especially as it relates to its supply chain.
“External partnerships are a part of sustainability and have to sit at the heart of what you’re doing. You’re not tackling the problem for yourself; you’re tackling shared challenges and creating shared value.”
Ezgi Barcenas Chief Sustainability Officer, AB InBev
AB InBev also recognizes the unique opportunity to work with others in the private sector, because advancing work in ESG is better for the business as well as the world. This list of partnerships includes NGOs, the UN, peers, the broader food and beverage industry, local authorities and governments and suppliers.
“These [sustainability] initiatives will help you solve a business challenge, but also help you tackle a societal problem as well…. Collaboration is required, and external partnerships are required, even if the project is internally focused.”
Ezgi Barcenas Chief Sustainability Officer, AB InBev
Increased collaboration not only makes it possible to achieve your ESG goals but also fuels innovation and improves internal efficiency.
The increased focus on ESG in recent years has helped drive massive shifts in organizational priorities and mindsets. Businesses have started to move from catering to shareholders to caring for stakeholders; from risk mitigation to sustainable growth realization; and perhaps most importantly of all, from “me” to “we.”
“You are always looking for the spark to ignite and you particularly need it when collaborating on behalf of the planet.”
Rahul Malhotra Head of Group Brand Strategy & Stewardship, Shell
Perhaps unlike any other type of work, ESG creates win/win possibilities for the business, its employees, its customers,and the planet. But to realize these possibilities for all demands the collaboration of all.
There is no doubt that achieving true collaboration in any type of work, let alone a burgeoning frontier like ESG, has its challenges—especially in today’s hybrid working world. But through our research, we discovered that organizations can achieve heightened collaboration in service of ESG when they:
Direct efforts through clear and passionate leadership
Connect deeply to the belief systems of individuals
Align shared goals and incentives across the organization
Push the boundaries of collaboration beyond teams, business units and, critically, the company itself
Enabling Transformational Growth in Asia Through Effective Collaboration
Learn how companies in Asia can drive innovation and accelerate outcomes through better collaboration.
In Asia, effective collaboration is paramount to unite a diverse set of countries and strive towards a common goal.
Our latest global research report, “Catalysts: The Collaborative Advantage,” unveiled that companies in Asia value collaboration more than other regions, but lag in execution. How can the region work to close the gap?
In this webinar replay, leaders from Prophet’s Organization and Culture practice and the APAC team share insights from our latest global study, introducing clear pathways for leaders to prioritize and accelerate the efforts to build their collaborative muscle.
Learn how effective cross-organizational collaboration can help your business unlock transformational growth through a holistic, human-centered approach.
How Prophet’s Collaboration Flywheel helps deliver better, more impactful outcomes faster over time through a 3-phase approach.
Characteristics unique to the APAC region, and why effective collaboration is paramount to unite a diverse set of countries and strive towards a common goal.
Actionable tactics and case studies to unlock collaboration in today’s ever-evolving organizations with remote, hybrid and face-to-face workplaces and the future opportunities for improvement.
How to create a change-ready organization through a culture of play.
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?
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.
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.
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.
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.
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.
Play isn’t a moment in time or something you do outside of work. Organizations can use the power of play to create a sense of safety in the workplace, give employees a purpose, and build trust– all factors needed to accelerate transformational change in an organization.