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How HR Leaders Should Adapt to Generation Y

HR leaders I speak with often express frustration about Generation Y – those in their mid-teens to mid-thirties today. Common questions and refrains I hear are:

  • Why do they leave their employers with such startling frequency?
  • Why do they expect a promotion every six months?
  • Why do they want to go on a sabbatical?  They just started work!

Generation Y is indeed different. It can be challenging to motivate,  engage and retain this oft-misunderstood group.

I should note that one cannot make sweeping statements that apply fully and equally to every individual within any demographic. Inevitably, in characterising groups, we must make generalisations. If these generalisations broadly help further to understand a population if not an individual, then they are helpful for how HR leaders might adapt organisational policies.

Roots and trends

Understanding this complex Gen Y demographic starts with a look back at the crisis that rocked the global economy a decade ago. Gen Y grew up during the most traumatic economic convulsion of the past eighty years: the 2007-2009 Great Recession.

Gen Y’s attitude toward economic security was formed by some tough life experiences in these years. Many from this generation observed their parents losing jobs and overheard their hushed conversations about finances. They saw banks closing their doors, pension plans decimated and houses foreclosed. A key lesson was learned in the midst of this: companies will not look after you, so you need to move on to different employers whenever you have gained everything necessary from a particular role.

Gen Y also watched as terrorism became more prevalent, both in the West and globally. This contributed to a carpe diem philosophy. After all, we might not be here tomorrow.

Against the backdrop of upheaval and change in Gen Y’s formative years, we can also see two related macro-trends that make the world of work fundamentally different for younger employees.

First, significantly longer forecasted life spans offer young people an uncertain retirement, but more opportunity to explore and experience different jobs and even different careers.

People born today in developed countries have a better than fifty percent chance of living beyond one hundred years, noted Lynda Gratton and Andrew Scott in their 2016 book, The 100-Year Life. Today’s youngest employees know that they will live much longer and will enjoy a higher quality of life for more of their old age.

As the reality of their likely longevity becomes apparent, Gen Ys take a much more flexible, evolutionary and personal approach to their careers than that of generations past. This means that the classic retirement age of 65 is quickly becoming anomalous. With the luxury of time, Gen Y doesn’t even have to be loyal to a single career. If graduates expect that they can and will work from, say, the ages of 22 to 82, they have huge scope to reinvent themselves professionally several times over. One could earn a degree, train and work as a doctor for 30 years, then earn a degree, train and work as a teacher for another 30 years.

The second macro-trend is related to the first. Today’s typical pension plans contribute to an uncertain retirement and are dramatically less attractive in their ability to retain employees.  Companies moved away from ‘employment for life’ in the 1980s and the pension crisis that followed a decade later only exacerbated this trend. Because of longer life spans, companies have had to radically change their employee retirement plans over the last twenty-five years in order for both pension funds and corporate balance sheets to be sustainable.

We’re facing a perfect storm of longevity, disintegrating pensions and social security (or ‘national insurance’ in some countries). This storm forces Gen Y to consider the unpalatable truth that their old age will be more uncertain and difficult than that of any previous generation in almost a century.

Rebuilding loyalty

There’s no point in blaming Gen Y for their lack of loyalty. They’re only responding to the world of work that older generations created.

What, then, can HR leaders do to engage and retain their Gen Y employees? As tangible benefits like salary and pension are watered down, companies must turn to the intangible yet hugely powerful levers of personal and professional development, creating a strong culture, and helping their employees articulate their purpose and how it relates to the company purpose. In recruiting, this implies changing the classic job interview question, ‘Why do you want to work here?’ A better question for understanding applicants might be, ‘Why do you want to work in this function, in this industry, or for these particular customers?’

HR leaders should also encourage career enrichment beyond traditional learning initiative, such as secondments, shadowing, mentoring and reverse mentoring.  What better way to understand and work across generations then (shudder) to ask for their views?

This human-centric approach will help companies navigate turbulence in the employment market – and begin to demystify Gen Y.

— Adam Kingl is Regional Managing Director, Europe for Duke Corporate Education (www.dukece.com). His new book, Next Generation Leadership, will be published by HarperCollins in February 2020.

Changeboard

Getting to grips with Generation Y

The question of how to attract and retain generation Y (or millennials – popularly identified as those born between 1982 and 2004) has dominated our thinking over the past decade; after all, this group has represented our graduate-level employees for about 14 years.

The emerging challenge is that the oldest millennials are now in their 30s and count managers, executives, seasoned specialists and professionals among their number, including Facebook CEO Mark Zuckerberg (34) and airbnb co-founder Brian Chesky (37).

While we have already put substantial effort into identifying how to lead generation Y, gen Ys are now starting to lead themselves… and us.

Team value proposition

To provide insights into both challenges, I surveyed an executive education open enrolment programme for emerging leaders, over five-years, asking about their attitudes to work and leadership. This course was a training ground for global managers of the future; participants were all gen Y, from 44 different countries, with an average age of 29.

When asked whether they felt greater loyalty to their team or to their organisation, it is notable that more than half (54%) of participants said that their loyalty lay with the team rather than the company. This turns the classic idea of employer value proposition on its head. Perhaps we should instead be asking ourselves “what is the ‘team value proposition”?

Leaders and managers have a growing responsibility to develop team cohesion – a tangible community – consciously and proactively.  After all, millennials grew up with social media, in the age of connection. Institutional influence has less sway over this generation than at any time since the 1960s rebellion against incumbent authority.

Today, long-term company benefits provide nowhere near the security they used to. As almost all UK pensions shift from defined benefit (final salary) to defined contribution (a pot of investments whose value fluctuates with the market), companies have lost their ‘golden handcuffs’. The reward for longevity and loyalty is meagre. Many corporations used to promise promotion based on tenure over decades. This too means less to the millennial employee than immediate opportunities for professional development and meaning.

If development is so important, and most of our younger employees value their team above all, a powerful tool for employee engagement is team development. Rather than rewarding individuals with executive training and development, there may be more impact in developing the intact team, building a common vocabulary, a collective call to action, a stronger culture, and a renewed and sharpened focus.

What is your purpose? 

According to a study by Princeton University, more than 85% of young people claim their top criterion in selecting an employer is meaning and a strong sense of purpose. The articulation and cultivation of purpose is therefore critical: the power of ‘why we are here and what it means to work here’ has never been more important to employees. That higher order of meaning surely needs to be owned by team leaders and present within the everyday dialogue of the team.

Research by Bain & Company discovered that employees working for purpose-driven companies are more than three times more productive than their dissatisfied counterparts. Different sources are concluding that purpose delivers manifold benefits from attraction and engagement to effectiveness outcomes.

The older segment of generation Y, those who have attained leadership, understand this dynamic better than anyone. As more millennials emerge into leadership, not only will the ‘team value proposition’ come to the fore, but the paradigms of this generation of community will start to influence the corporation’s priorities, the way it organises internally, creates incentives and defines what success means.

We are quickly approaching a meridian, and once it is crossed, the fundamental questions of company life that we have answered from the perspective and experience of the 20th century will be transparently anachronistic.

Adam is manging director for Europe at Duke Corporate Education. To hear more from Adam, listen to episode 44 of the Future Talent Podcast

Thomson Reuters Practical Law

Business View: Failure; the key to success

In this article, London Business School thought leaders, Julian Birkinshaw, Professor of Strategy and Entrepreneurship, and Adam Kingl, Executive Director of Thought Leadership, suggest that companies should embrace the idea that there’s no shame in trying something new – even if the result is a flop.
There are two classic approaches to failure. One, epitomised by Winston Churchill, is bullish and relentlessly cheerful: “Success consists of going from failure to failure without loss of enthusiasm.” Also in this camp are the Silicon Valley entrepreneurs who wear their failed start-ups as badges of honour. For a time, pharma giant Eli Lilly adopted the same view: in the 1990s it launched “failure parties” to honour great research that flopped. However, ultimately, the word “failure” proved just too demoralising and the “celebrations” were scrapped.
Johnny Cash summed up the second approach: “You build on failure. You use it as a stepping stone. Close the door on the past, don’t dwell on it. You don’t let it have any of your energy, or any of your time, or any of your space.” This is the default response of many big corporations to failure: keep it quiet; ignore it; hope it goes away. The attitude of most businesses is somewhere in between the two extremes. Leaders know that failures are meant to be valued and even celebrated. They buy into the theory, but don’t know how to put it into practice. Old habits die hard: bosses hold post-mortems when projects or products fail, grimly seeking to identify lessons learnt.
Admitting defeat doesn’t come easy due to what Black Box Thinking author Matthew Syed calls “the stigmatising attitude towards error”. Mistakes generally incur punishment and disapproval. Who wants that? But for an organisation to hide its failures, while it stumbles towards some imagined perfection, can be a huge mistake. London Business School’s Julian Birkinshaw suggests that simply burying failures in an attempt to forget them is itself an epic failure:
“I have seen several companies adopt a zero-tolerance approach to failure: the person who failed gets fired, the failure gets swept under the carpet and everyone gets the message that this must not happen again. But this creates a fear culture. People follow the rules, whether they make sense or not, and no one dares try anything new. Not a recipe for success in today’s fast-moving business world.”

Be courageous

So, how to give a business the best chance of survival through innovation? Tim Harford, author of Adapt, identifies three essential steps:
  • Try new things in the expectation that some will fail.
  • Make failure survivable, because it will be common.
  • Make sure you know when you’ve failed.
The third step chimes with Birkinshaw’s thesis: fail methodically and learn to maximise your return on failure. It sounds like an eminently sensible approach, so why don’t more people adopt it? Birkinshaw observes:
“When you take a business person with responsibilities and a budget and sit them down and ask, ‘Why don’t you do this as an experiment?’, they will say, ‘No, that won’t work. Let’s pilot it or do some more research’. Experimentation is beautiful in theory, but it’s very difficult for people to have the guts to follow through. You have to admit that you don’t know the right way forward – and nobody likes to admit that.”
But truly innovative companies do understand the need to incorporate a tolerance of failure in their corporate culture. This has been investigated by Professor Rajesh Chandy. He says:
“Innovative companies often have asymmetric incentives for enterprise. Enterprising employees in these companies understand that the rewards for success will be much higher than any punishment for failure. It’s certainly not the case that failure has no negative consequences in these companies. Those responsible for failure may get their wings clipped or may face higher burdens of justification the next time they propose something.
But the incentive structure is such that if they succeed, the rewards will be disproportionately higher than any negative consequences should they fail. Moreover, innovative companies manage risk by having a diverse portfolio of innovation projects; some that are quite risky, and many others that are quite safe. They also look outside and capitalise on the risks that others are taking. By letting the ecosystem do some of the risk-taking, they reduce the risks to themselves.”
Birkinshaw recommends drawing up a balance sheet to assess a project’s return on failure. On one side, consider “assets”, which might include:
  • What has been learned about customers’ needs and preferences?
  • Is there a need to change underlying assumptions?
  • What insights have been gained into future trends?
  • What have you discovered about the way members of a team work together?
Set against this, look at “liabilities”. What were the costs; financial as well as less tangible things, such as damage to reputation or morale? Bottom line: what insights have you gained? And what was the bill?

Be alert: take a chance

Adam Kingl, Executive Director of Thought Leadership at London Business School, maintains that a fundamental change in attitude is required if organisations are to innovate and succeed:
“Realigning our position on failure, risk and experimentation is key. You’re not going to spot every single thing that’s coming over the horizon, the next opportunity or threat. Better to build a capability throughout the whole organisation so that as many people as possible have a chance to spot and respond to what’s coming in the distance. Leadership is about enabling your team to continually experiment, respond and get in front. If you experiment, by definition you will be more agile.”
Kingl adds: “Aristotle said if you want to be a braver person, find a brave person and imitate them. Just by imitating ‘brave’, you will automatically be braver. That’s what experiments are. They give you the opportunity to try or just imitate ‘agility’. In so doing, you will be more agile in a year’s time. Why do you need to be agile? Because, as one CEO put it, business used to be like trying to spot trends and opportunities while on a swing: you’re always moving, but you can still keep an eye out. Today, it’s like trying to do it while you’re on a rollercoaster, so you need to experiment to build your agility muscles.”
For a company to be genuinely innovative, it must be willing to try new ideas with a readiness to accept that many will be duds. For most organisations, this requires an entire shift in mindset. Kingl carried out a survey in June 2016, asking more than 100 UK HR directors about their company’s reaction to failure. Some said: “Anyone who fails is quickly fired”, or “We never speak of it – it’s shameful”. Others were marginally more enlightened. They said: “‘Good’ failure is tolerated but not shared”, or “Failure is shared to a point, but there’s a stigma”. A mere 3% of respondents said their company had a real understanding of the potential value of failure. It was, they said, “shared and even celebrated”.
Tom Watson, chief executive of IBM during the company’s glory years of the sixties and seventies, demonstrated a laudable attitude to the risks and rewards of experiments that failed. When a top salesman lost US$5 million on a project, Watson didn’t fire him. “Why would I fire you?” he said. “I’ve just spent five million dollars on your education.”

Four-step risk-mitigation framework for the design of experiments

Julian Birkinshaw has a four-step, risk-mitigation framework for the design of experiments:
  • Step one: make your hypotheses explicit. A good experiment is designed so you learn something new, whatever the outcome. Far better to be able to say your hypothesis wasn’t supported than the project failed.
  • Step two: limit the scope of the experiment. Make it clear exactly what’s being tested, design it so the new idea is clearly identified and run it in parallel with the old one.
  • Step three: start at home. In the early days of an experiment, stay under the radar while you figure out if it really is a good idea. If possible, try it out in your own department or business first and use volunteers to help you; don’t expose yourself to formal review until you’re well down the track.
  • Step four: iterate. You never get everything right first time. So learn the power of iteration and continuous improvement. James Dyson famously tried more than 5,000 prototypes before his bagless vacuum cleaner worked. All being well, you won’t need quite that many.
This article was written by Kathy Brewis and first appeared in London Business School Review.
London Business School

Inspiring the workforce of the future

We’ve all woken up to the exponential rate of change that Gary Hamel, Visiting Professor of Strategy and Entrepreneurship at London Business School (LBS), talked about at last year’s HR Strategy Forum. That event was future-focused: what’s just over the horizon? This time, we’re going a step further and challenging the 100+ learning and development executives who attend to ask themselves: so what can we do about it? How do we prepare for this volatile, uncertain future? Because the time to act is now.

No one can spot every change that’s coming – the next opportunity or threat. Companies need to build a capability, a habit, throughout the organisation so that as many people as possible have a chance to identify and respond. For leaders, that’s about enabling your team to experiment and get in front of ‘what’s next’ – which involves agility at scale.

We need to make change an autonomic process, as simple and reflexive as blinking. Too often it’s a painful cycle of breaking what you have, refreezing it and hoping you’re good to go for another five years. What if we all got in the habit of trying a new principle, making a change that’s within our power to make, every month or even every week? What if we made change a habit, instead of a miserable thing we do once a year or once every five years?

At the Forum on 27 February we will be suggesting principles for action and inviting HR leaders to consider which applies most pertinently to their context – either for the whole company or for a particular team or department. Meanwhile, here are four suggestions from LBS faculty speakers to spark your thinking in advance.

 

1. Be clear about the intangible assets you’re offering

 

Most organisations are still operating along the old paradigm of offering people tangible assets – salary or pension – as they key factors to attract and retain talent. But people’s expectations have changed. Today’s employees want purpose, meaning and development – and they want all that now and continually, not as a reward after 10 years of service. Lynda Gratton, Professor of Management Practice at LBS and co-author of The 100-Year Life: Living and Working in an Age of Longevity, argues that we should refocus on intangible assets such as relationships, flexibility and wellbeing. From an HR perspective, if we make the intangible assets that we offer as an organisation much more explicit, then it must over time be easier to win the talent war.

 

2. Help your people become world-class at something they enjoy

 

Organisations often make the mistake of continuing to assess talent from a deficit perspective: ‘What don’t you do well? Let’s apply all our energies towards working on that.’ Problem is, if it’s something the person is poor at, chances are you can apply endless amounts of energy and they’ll end up being merely mediocre at it. Why not instead find the thing they are good at and make them world-class at that? Wouldn’t that be better, more powerful and beneficial for your organisation? Dan Cable, Professor of Organisational Behaviour at LBS, believes so. In his pending book, Alive at Work, he cites examples of companies that have done just that and are actually higher-performing as a result. Beyond that, when you let people enjoy doing what they’re good at, they stay longer and get better customer feedback.

 

3. Rethink how the work your company does is structured

 

The way we work is changing, whether it’s organising around projects instead of around roles or flexible organisational design instead of fossilised architectures and pyramids. Tammy Erickson, Adjunct Professor of Organisational Behaviour at LBS, challenges leaders to be clear about purpose, promise and experience. What is your purpose, what do customers expect when they hear that purpose and how do they experience it? It’s not about fancy-sounding summaries of what we represent to shareholders or financial reports, probably written by consultants who don’t even work for the company. Leadership is around coordination and facilitating relationships rather than telling you what to do. What if you gave your people a lot more freedom to instantly respond to customers? Take Haier, the white-goods company, where semi-autonomous teams have their own P&L and can offer what they like in response to what customers need. If those services get scaled up, so much the better.

 

4. Explore how technology can transform your business

 

Businesses must start experimenting with technology right now to be ready for the future, says Michael Davies, who teaches strategy and entrepreneurship at LBS. Change is happening at the speed of light. When it comes to artificial intelligence we haven’t seen anything yet. He claims a seismic shift is needed towards reskilling and lifelong learning. No repetitively routine and narrow work is safe, and automation is going to be continual – not a one-off event. People will need to get used to mastering new skills over and over again. Technology can also get you closer to customers because it enables them to tell you what they want directly. And it enables organisations to become ecosystems for their industry. Twenty years ago Amazon was just an online bookseller. No-one would have thought that it would one day be the largest and fastest-growing B2B web services company in the world. Organisations need to think about how they can harness technologies to add value and transform their business to survive and thrive in the future.

Adam Kingl is Director of Learning Solutions at LBS

 

Book your place at the 2018 HR Strategy Forum

CIPD

The six workforce challenges you must tackle now

Something is stirring in the GCC. The flatlining oil price and the newfound maturity of many local economies are forcing organisations to think afresh about their business models, and to call time on the era of short-term, expat-reliant workforces in search of something more sustainable. But what does that mean for HR professionals and business leaders planning for the future? People Management speaks to a range of experts to build a comprehensive picture of the challenges organisations face in a reset GCC economy – and the innovative ways they are finding to flourish.


1 Find and develop talented nationals

The GCC workforce faces profound challenges if it is to match the productivity levels of G20 economies: local businesses must be at the forefront of a drive to work both smarter and harder. But if their endeavours are to result in the widest possible and most sustainable prosperity, they must harness local talent at a time when the Emirates, Saudi Arabia and others are desperately trying to rebalance their economies away from oil and an over-reliance on the public sector.

Dr Kai Chan, distinguished fellow at INSEAD’s Innovation and Policy Initiative in Abu Dhabi, says the current experience of the UAE offers a wider set of lessons for the region’s policymakers. “Around 95 per cent of Emiratis in the labour force work for a government entity, whereas less than 1 per cent of private sector employees are locals,” he says. There is an entrenched antipathy by locals towards the private sector, and major hurdles must be overcome if these figures are to change. The background isn’t hard to understand: generally, government jobs pay more, have shorter working hours and the national pension scheme for UAE nationals is non-transferable to the private sector.

Chan says a major challenge is creating skills among Emiratis that are attractive to the private sector. Few currently graduate with degrees in STEM subjects. He suggests governments must align their policies with tactical goals. The UAE’s ‘National Agenda (Vision 2021)’ sets clear aspirations for more sustainable Emiratisation, and there is every indication the government is solidly behind the plan. But Chan highlights the aims to increase the proportion of Emiratis in the private sector to 6 per cent, even though they only account for 11 per cent of the population and historically have lower labour force participation rates.

The way forward, says Chan, is to continue blending the immediate need to increase participation of nationals in the private sector with the longer-term objective of relying less on expatriate talent. There have been tentative steps among private sector firms to support this objective, such as the recent HSBC Leadership Programme, which identified high-potential Emiratis from organisations including Etisalat, Etihad and the Department of Finance, and offered them a course in leadership skills and innovation.

Indeed, the finance sector – where participation rates stand at more than 30 per cent – is a shining example of how greater nationalisation can work hand in hand with economic prosperity. A slowdown in public sector recruitment, driven by plummeting oil prices, may act as a lubricant for such ideas to become more widespread. But members of the UAE’s Federal National Council have become increasingly vocal in demanding quotas for the integration of Emiratis into the private sector workforce, and Chan sees them as inevitable: “Ideally, the government sets a target for a given industry and firms are either incentivised or obligated to have a certain number of nationals on payroll.”

2 Make workplace learning really work

Gulf governments have invested substantially in educating today’s cohort of graduates. But when they reach the workplace, are they getting the learning opportunities they need to flourish? Many L&D experts suggest the quality and frequency of workplace learning in the Middle East lags behind Asia or Europe, and economic uncertainty often means training budgets are among the first to take a battering.

But Adam Kingl, executive director of learning solutions, executive education at London Business School, says organisations realise things need to change – if only because the status quo is simply unsustainable. “Organisations across the GCC are telling us they need to undergo fundamental changes,” he says. “It might be due to increased nationalisation and they want a joined-up leadership culture, or they might want to create a common vocabulary, toolkits and combined skills.” Many companies, he adds, are considering new business ventures as they prepare for a downturn precipitated by the fall in oil prices.

Surviving challenging times demands leadership, strong strategic objectives and the ability to execute, Kingl says. These areas can only be addressed by building a culture of continuous learning, which means the perception of learning interventions must change if there is to be a lasting impression on an organisation. “Too often, organisations evaluate success or failure based on the level of response of the participants,” says Kingl. “More often, it’s about how much fun the participant has had. But learning can be a wake-up call – it might not always be fun.”

Organisations that are still at a relatively nascent stage of L&D development have the opportunity to bypass the attitudes of their peers and leap straight into the fast-evolving field of social learning. This abandons the didactic model of trainer-led learning and encourages employees to learn from each other. It connects them through enterprise social networks to talk about what they’re learning, and uses videos, ‘lunch and learn’ workplace talks and internal wikis to capture knowledge, supplemented by access to external experts and industry peers through social media. As Kingl puts it: “A single download of content isn’t effective… a learning journey is built across years.” Companies such as Oman Oil and UAE-based Aldar Properties have both used learning interventions to encourage cross-functional collaboration, he adds.

There is also a place for structured internships, an area where GCC organisations have traditionally been found lacking. Companies are beginning to see the value in offering young employees a concerted learning programme, which broadens their exposure to different areas of the business and ensures they have the support they require to develop. “We are seeing a trend, particularly in the technology sector, for which internships can create a strong pipeline of talent,” says Ali Matar, head of talent solutions at LinkedIn MENA. “Another approach is offering UAE nationals structured and quality internships to strengthen their competitive positioning in the job market. Some combine these, like the SAP Academy in Dubai, which trains both UAE nationals and other interns on ERP solutions.”

3 Understand the importance of good HR

As companies vie for talent, and CEOs become increasingly aware of the value of people to their future prosperity – not to mention the detrimental cost of bad hires or rotten cultures – HR is becoming more mature, and more involved in business strategy. Alexandros Kopitsas, HR director at Johnson & Johnson in Dubai, says this is an inevitable byproduct of a wider business maturity: “Companies are realising the importance of better quality people management, owing to the fact employees have choices and are no longer loyal to one company.” Kopitsas says the main reason for leaving an organisation is usually poor management skills or poor leadership. That has translated into enhanced investment in leadership development through a combination of assessments, training and coaching. In-house coaching has surged as companies try to ensure managers lead and involve their teams more effectively. Better talent management, succession planning and internal communication are next on the agenda, says Kopitsas.

But a drive towards more effective HR must be matched by a similar appetite for professional standards, says Alan Ovens, international director for the CIPD. “There is an increasing demand from HR leaders, HR practitioners and business leaders to become a licensed profession,” he says. “Recent market research in Asia and the Middle East showed more than 70 per cent of HR leaders think it’s important for employees in HR and L&D to hold professional membership, and they believe HR should become a licensed profession. Yet it is estimated that less than 20 per cent of HR practitioners internationally have an HR qualification. Is this OK? If we asked the finance director this question of finance, the answer would be no.” Professional designation and membership are “incredibly important,” adds Ovens. “For the individual, it is recognition that they have achieved a level of professional standing. For the organisation, it is a benchmark and reassurance that HR has attained a level of professional recognition.”

HR teams will, over time, need to develop a broader combination of skills to reflect the diversity of the company, says Nairouz Bader, Middle East chair of the Association of Executive Search Consultants, who helps place HR professionals in senior roles across the region. “HR professionals need to seek wider business responsibilities and roles, especially commercial ones that enable them to prepare for more strategic roles [later].”

Standards have risen, but there is some way to go. Bader is hopeful the recent anti-discrimination law passed in the UAE will force companies to drive out poor practices. But she warns: “Without HR best practice, corporate growth, sustainability and the whole economy will suffer.”

4 Make wellbeing a corporate priority

“One of the best assets employers have on their balance sheet is their employees,” says Markus Giebel, the CEO of Eternity Medicine, a corporate healthcare provider in Dubai. “If you have healthy, productive and happy employees, you have a healthy balance sheet. The region is suffering critical health issues, and companies need to be the main driver promoting health.”

For too many organisations, wellbeing remains a woolly concept. Kopitsas says this is partly due to corporate cultures that encourage hard work and a focus on the job, rather than a work-life balance. As Bader puts it: “GCC countries do not offer citizenship, and resident talent looks at working in the region as a temporary stage.” As a consequence, there is insufficient emphasis on ensuring employees are both physically and mentally fit for the job, and that problems – whether underlying illness or stress-related conditions – are not properly diagnosed, let alone actively incentivising employees to maintain their personal health.

This may change as a move to mandate comprehensive insurance for all employees gathers pace, particularly in the UAE. Active management of personal wellbeing decreases insurance costs, and encourages organisational loyalty. “HR departments in the region are not given much leeway to be as creative and innovative as they would like around wellbeing,” says Bader. “But this is a growing region, and HR practices in this area will grow with it.”

DHL Express is one company taking the lead. Its Dubai office includes a fitness centre, a café offering healthy food, health check-ups and sports activities. Other businesses are beginning to introduce enhanced healthcare benefits. As nationalisation programmes emphasise the importance of long-term planning over opportunism, the era of seeing people as a natural resource rather than an investment looks over. Will employers grasp the wellbeing challenge?

5 Get to grips with a post-oil economy

An overarching narrative, particularly from outside the GCC, is that oil remains the engine of the economy, and that fluctuations in price are a death knell for local businesses. But dig deeper into the figures and something more intriguing emerges. The contribution of the non-oil sector to the national economy of the UAE, for example, reached 68 per cent in 2015, and there is every reason to believe a government-mandated target of 80 per cent by 2021 is far from unrealistic. The service industry already accounts for more than 70 per cent of total GDP and is buoyant: the number of hotels in the UAE grew by almost eight per cent in the first quarter of 2015, and retail profitability is reaching record levels.

Such returns cannot be accounted for by the shrinking of national income alone: there is a determined diversification in place across both public and private sectors. There is also a very obvious reason to increase the pace of change even further. The era of $100 per barrel already seems a distant memory and, with several GCC economies facing deficits, the pressure is on. Chan says lower oil prices are already having an economic impact that may ultimately affect competitiveness: “Low oil prices hamper the ability of governments to hire foreign experts. Given a tighter budget, governments are more likely to skimp on hiring foreigners rather than absorb fewer nationals. So the oil shock is a double whammy – it makes it harder to bring in foreign talent and at the same time makes it difficult for governments to employ locals or push them onto the private market.”

To manage in a period of economic uncertainty, Chan says GCC governments must push through further labour market reforms, before it becomes financially unsustainable to subsidise them. The IMF has already urged governments to roll back subsidies that underpin all Gulf economies. The UAE has taken the lead by recently deregulating fuel prices, but it is not yet clear whether these savings will be used to accelerate labour market reforms. It is almost a cliché to say the GCC is at a crossroads, but reduced hydrocarbon income could offer the impetus it sorely needs.

6 Innovate properly – without trying too hard

The societal convention of not wanting to be seen to lose face – common across Gulf countries – is viewed by many experts as a euphemism for not wanting to be seen to fail. Yet ‘failure’ in economies such as the US is seen as a positive, and is often cited as an essential route to long-term success. It is this paradox that stifles the ability of organisations across the Gulf to go toe-to-toe with international competitors in terms of innovation. Overcoming such deep-rooted conventions is going to be a challenge, according to Kingl: “It is important within organisations, and especially among leaders, that it is recognised that those first 99 attempts were roots to success, not failure.”

Adversity is a common cultural norm that can hold back innovation just about anywhere, but in the GCC it is going to require a change of mindset. Part of the solution, Kingl says, is separating the idea of saving face from the inevitable and necessary failures that are part of business experimentation and are necessary in order to innovate.

“As an organisation, you cannot just tell people ‘I am incentivising you to be innovative – go forth and be innovative’ – you have to help people to understand what that means,” Kingl says. Businesses should consider separating out entrepreneurial units, particularly when trying to introduce a new product, business model or unit within a larger company. “People then feel they have more freedom to be agile, have their own P&L, their own organisational structure and their own management.”

This is an extension of the ‘Skunkworks’ idea pioneered by aircraft maker Lockheed Martin, in which small teams are hived off to solve business challenges under top-secret conditions. Steve Jobs housed Apple employees working on Mac projects in separate buildings and encouraged them to develop their own culture. Nike develops many of its most celebrated trainers in a lab so secret no outsider has ever visited it.

But innovation isn’t always about brainstorming great ideas, or even coming up with new ones. Incremental innovation (improving by degrees), reverse innovation (taking products back to basics to introduce them to the mass market) or even plain replication can, in their own way, be just as important.

Fast-growing tech businesses such as Spotify have embedded innovation into their culture, not through huge R&D investment, but by reorganising teams to separate hierarchical line management from technical expertise. Management ideas such as the currently-in-vogue ‘holacracy’ (a system populated by small, nimble teams) offer similar aims. And in a gleaming waterfront property in Abu Dhabi stands a very visible testament to the fact the UAE is determined to make innovation part of its own national culture: the UAE Space Agency stands ready to boldly go, even as NASA has said it will remain earthbound for the foreseeable future.

London Business School

The Rise of the Intrapreneur

The rise of the Intrapreneur
Forward-thinking companies are stealing a march on their competitors

ADAM KINGL
01 JANUARY 2015

Jobs required the agility of a start-up, so he created a company within the company. He put together a Mac development team, housed them in a separate building with a pirate flag on the roof and told them to tear up the rulebook. Then, once his team of entrepreneurs had come up with the goods, he harnessed the size of Apple to spark a computing revolution.

Searching for agility

In the last five years, I’ve noticed a big change in what companies are asking us for in Executive Education. It used to be about skills – boosting a company’s performance by boosting the input of its key talent. Today, we’re talking more and more about the capabilities of the company as a whole – and one capability above all: agility.

How, like Apple, can a company be both big and fast? How can senior executives spot threats and opportunities sooner and respond more quickly? How can they have the mindset of entrepreneurs when they are in charge of organisations so many times larger than a start-up?

The answer involves exploding the decades-old paradigm of the ‘all-knowing’ leader. Traditionally managers make decisions and staff act on them. It’s the managers who have the authority, the responsibility and the rewards.

However, the world today is just too complex and companies are too big for managers, senior executives and CEOs to know everything about everything. They shouldn’t be solely responsible for knowing what’s over the horizon or for deciding on the best response to every new threat or opportunity. Instead they need to admit ‘I don’t know what I don’t know’ and make more use of the company’s internal resources. They need to become what I call ‘intrapreneurial’.

Harnessing internal resources

Being intrapreneurial is about pushing authority down, flattening the hierarchy and saying to everybody in the company that what they bring to work is as powerful and as important as what the CEO brings. Take the example of Toyota, as originally illustrated by London Business School (LBS) Professor Gary Hamel in The Future of Management. For many years General Motors knew that its Japanese rival was putting out cars at a faster rate and with fewer errors, but they couldn’t figure out how. They returned to the problem again and again – and Toyota even allowed them to visit their factories – but for decades they simply couldn’t pinpoint a reason.

Finally it clicked. The senior management at Toyota had devolved responsibility for its production line to the experts – the people actually working on the factory floor. They were the ones best placed to spot a problem in the manufacturing process or a way to improve it. And they were the ones given the authority to bring the whole production line to a halt.

At General Motors such a potentially expensive decision could only be taken by an executive far removed from the factory floor via a series of complicated processes and protocols. What Toyota was doing was so alien to the General Motors team that they couldn’t even identify it. But for decades the agility of the Japanese giant’s decision-making had given it a real competitive advantage.

Putting it into practice

For the past five years the Executive Education team at London Business School has increasingly been working with companies to make them more intrapreneurial. We start with the idea of purpose rather than financial performance. We had one company come to us recently with a proud 140-year history and one of the first things we did was to ask what its purpose was. It quickly became apparent that long-held assumptions about the company were no longer relevant, and we challenged them to create a new purpose for the next 50 years.

The next step is to rewrite one’s business plan to match the refreshed purpose. Rewriting a business plan is something that entrepreneurs do all the time and there’s no reason why bigger companies can’t do the same. In fact, it’s often just a question of mindset; many companies tell us that what seemed like impassable blocks on innovation can turn out to self-invented obstacles.

Aligning jobs, teams and functions to be more intrapreneurial can mean a number of things. Often it’s about creating small teams with the authority to shape and execute individual projects – just like Steve Jobs did. This kind of responsibility and accountability is exactly what the Generation Y employees in many companies want, and it means that the company as a whole can benefit from the agility and entrepreneurial spirit of its smaller teams.

Being intrapreneurial also means opening up channels of communication so that knowledge is constantly shared throughout the company. Leaders need to be encouraged to canvass opinion from everyone – even from those who have just joined their workforce. What are they seeing? What do they think should be the company’s next move or product? With today’s communications and media, this kind of information gathering and sharing can be achieved on a much larger scale, so that decisions can be made through a process of open-sourcing. Some of the companies we work with, for example, make great use of the ‘Future of Work Jam’ technology developed by LBS Professor Lynda Gratton.

Another way to be intrapreneurial is via the inorganic path. This means finding start-ups that can help the larger parent deal with issues more quickly and effectively. It also means allowing those start-ups to continue acting like start-ups even after they have been acquired. Then, when their agility leads them to valuable insights or opportunities, the parent can quickly and profitably scale those up, as LBS Professor Costas Markides has described in his book Fast Second. It’s something that companies like Cisco and Google do very well.

Being intrapreneurial involves the type of culture change that bigger companies often struggle with, but the results can be transformational, marrying agility to size and making the most of one’s wider resources. It provides a competitive advantage that can last for years to come. It’s time to join the rise of the intrapreneur.

Fortune

The best way to develop new ideas at work

An essential part of IBM’s (IBM) campaign to conquer cloud computing is a new product called BlueMix. Launched in February of this year, the platform offers developers tools to create and run new apps for business. Unusually for a project of its size, it came together fast. A team of IBMers took only about 18 months to build BlueMix from initial concept, through technical underpinnings and design, to beta testing and marketing.

Phil Gilbert, Big Blue’s general manager of design, who led the BlueMix project, thinks it’s no coincidence that the dozens of engineers, developers, and designers who worked on it are scattered all over the world and have rarely, if ever, sat down with each other at the same time and place. “You get much more diversity of thought with virtual teams,” Gilbert says. “A well-run virtual team comes up with, not just more ideas, but better ones, and faster.”

It seems BlueMix was no fluke. Adam Kingl, executive director of learning solutions at London Business School, has studied teams and consulted with managers at more than 120 companies, across a range of industries, from pharmaceuticals to retailing to banking. “When it comes to innovation or solving complex problems, virtual teams often get better and faster results,” he says. “And that is true whether you’re looking at teams in different office locations around the world, or teams that simply have some members telecommuting from home.”

The key, Kingl says, is to brainstorm using the BlueMix approach, a technique some companies call an “idea jam.” Instead of a teleconference or conference call that brings everyone together (no matter what time zone they may be in), an idea jam poses a question or describes a problem and then gives the whole team a chance to weigh in online, typically over a 48-hour period, via a message board or chat room.

Letting people make comments and suggestions on their own schedule contributes to “a meritocracy of ideas” in a couple of ways, says Kingl. First, the group dynamics are different. Whether in person or online all at the same time, team members “often agree with a dominant person—either the most senior, or simply the loudest or most persuasive—to keep the peace,” Kingl observes.

By contrast, opening up a forum for discussion where people weigh in one by one “prompts the participants to evaluate ideas based on their merit, rather than deferring to one team member,” he says. Phil Gilbert agrees. People who might otherwise hesitate to disagree with a colleague directly—even if they have a better idea—are bolder in an asynchronous, idea-jam-type setting. “It’s not confrontational, more just contributing a different opinion,” he says.

That’s especially true for teams with members who are introverts, notes Kingl. “Introverted people often have valuable insights to contribute, but they often take time to formulate their thoughts,” he says. “In traditional meetings, they may not get that.” With a couple of days to speak up, instead of a couple of hours, introverts are more likely to be heard.

When team members are all together in one place or at one time, the result is sometimes “a tendency toward groupthink,” Gilbert adds. Since BlueMix is a global platform, he says, “we very deliberately put the team on every continent, in Canada, India, Brazil, England, and so on. So even when the whole group came together online, what had happened in between was very different because the locations and cultures were so different.” That approach breeds innovation, he says, by eliciting “not just diverse ideas, but independently developed ideas,” he says. “It can lead to great outcomes.”

London Business School

The future CEO’s answer to ‘profit or purpose?’

Earlier this year, I revealed the full details of a five-year survey of Generation Ys.  These respondents are more likely to be in the C-suite of the future by virtue of their companies’ nominating them to attend a London Business School Executive Education development programme, from which we derived our survey population. We asked a series of questions to understand if there are dominant paradigms toward work and leadership, which may reveal for us a preview of the future CEO’s priorities.

In previous blogs, I discussed how this sample of Gen Y planned to stay no longer than five years in any job, and how work-life balance and organisational culture were more important than traditional benefit packages in choosing their employer.  We learned that 90% plan to stay no longer than five years with their company and over a third no longer than 24 months.

Finally, we turned to what these Gen Ys would focus on if they were the CEOs of their organisations.  We gave them five general options and asked participants to select only their most preferred answer.  The options speak to five themes:  minding one’s core business, going global, thinking entrepreneurially, aligning with purpose, or maximising return to shareholders.  We anticipated a spread of alignment across these options with perhaps a favourite emerging.  What actually occurred in the results was far more surprising.

The results, reported as the percent of all respondents who selected each option, are as follows:

Would you focus on:

  • 11.5% How business is trading
  • 11.5% The global impact of the business
  • 33% Retaining an entrepreneur’s point of view: ‘How’s my baby doing today?’
  • 43% Renewing personal mission: ‘How do I make my organisation and world a fundamentally better place?’
  • 1% The financial worth of the business

On the two occasions I have shared these responses with an audience, I always follow up by asking if the last response, the 1%, scares them.  It has been about 50-50 ‘scared, not scared’.  I would posit that if 50% of a population is scared about a topic, then it’s worthy of attention!  Either way, 1% is  significant in its insignificance – that it bears so little import to this population.  This answer flies in the face of conventional wisdom that the purpose of business is to maximise profit and shareholder returns.

Does this mean that the Gen Y CEO does not want to make a profit?  Absolutely not. Business has to survive and thrive.

Here’s the rub.  Most businesses (banking is perhaps a notable exception) started because of a strong sense of a purpose: introducing an exciting product to the world, serving a previously undiscovered market need, bettering a community, creating employment opportunities.  But then financial analysts’ opinions grew in importance to investors, with their use of various ratios that are useful shortcuts in assessing company health.  However, we must remember that these ratios were created as shortcuts useful for financial analysis as a snapshot today; they do not assess if the business is closer or farther from achieving it purpose, closer or farther from achieving long-term and ‘moon shot’ objectives.

Furthermore, chasing ratio optimisation is a short-term game.  Before one knows it, the purpose of the business can tacitly, implicitly be to please the analysts, and making decisions toward long-term objectives takes a back seat.  If the CEO or CFO starts adopting someone else’s KPIs, using these ratios as their primary KPIs, they risk creating drift from the mission of the organisation.  Longer-term, this can make sustained success much harder over time.

Unilever has famously tried to break this dynamic by informing the investor community that it will no longer publish quarterly forecasts.  This was entirely to allow CEO Paul Polman more freedom to make the longer-term a priority – environmental and social sustainability.  Mr Polman said in 2012, ‘We’re not going into the three-month rat-races. We’re not working for our shareholders. We’re working for the consumer, we are focused and the shareholder gets rewarded.’   This is a refreshing perspective, inverted from the traditional ‘shareholder focus’ view  – that the company’s outputs, its efforts, are consumer focused, and shareholder rewards are some of the outcomes of that focus.

Returning to the Gen Y survey, and looking at the last two answers together – 43% want to focus on mission and 1% on financial worth – perhaps indicate that more CEOs of the future will behave as Polman has.  But will the investor community tolerate this?  There will be inevitable tensions, but remember that with every week more Gen Ys become investors and asset managers themselves, and they may be seeking companies under management that share their ethos.  After all, in the US alone there are over 90 million Gen Ys with an aggregate net worth of more than $2 trillion; by 2018 that is expected to grow to £7 trillion.

A good example of the purpose-driven, commercially savvy company is Facebook.  One need only read Mark Zuckerberg’s (arguably the face of the new Gen Y CEO) letter to potential investors in Facebook’s $5B IPO: ‘Facebook was not originally created to be a company. It was built to accomplish a social mission — to make the world more open and connected.  We think it’s important that everyone who invests in Facebook understands what this mission means to us, how we make decisions and why we do the things we do. I will try to outline our approach in this letter.’   Not only was Facebook’s funding goal met, but a shareholder investing only two years ago would be earning approximately a 100% compound annual growth rate on their investment today.

Perhaps our ultimate question should be: ‘Are “mission” and “financial return” fundamentally in opposition to each other?’  Recent research indicates this is not necessarily so, and the two forces may even serve each other.  A huge amount of dialogue has attempted to answer this question both in media and in conferences.  The opinions are typically more definitive then one may guess and often resemble the sentiment:  ‘The most successful companies, both in profitability and longevity, are the ones who recognize the absolute necessity of profits as well as the equally high necessity of having a purpose beyond shareholders’ wealth.’

The Gen Y CEO’s paradigm of management and work gives me hope for a more sustainable future.  To say that we must either ‘work to live’ or ‘live to work’ is a false dichotomy.  If organisational purpose is strong, informs every decision, and is tangible in outputs and outcomes, then work-life could perhaps more resemble the life that is worth living; surely that is a work-life worth working for.

Changeboard

How can you justify your position as a credible HR professional? Insights from London Business Schoo

Justifying talent to boards

Generally accepted accounting principles are not kind to the HR executive. Almost every investment request at board level is to add or improve an asset.

People, on the other hand, by virtue of being on the payroll, are listed on the balance sheet as a liability. Therefore, hiring and developing talent is more difficult to justify to boards which typically look at everything in terms of return on investment and internal rate of return.

What hope do you, as an HR director, have when asking for resources against the black and white calculations produced by the VPs of marketing, operations and finance?

Why invest in people?

As a result of this phenomenon, I see HR professionals in the Middle East (with some exceptions) struggle to gain buy-in for investing in people. Instead of creating a case around how new hires will impact the business, HR often spends too much time influencing the business sponsors to believe in their cause, unsubstantiated though the reasons for the support may be.

So your success is completely predicated on the quality of your internal relationships.

There is a case for at least meeting the ROI burden half way. I would argue that doing so would not only assist the HR function, but it would start to change the paradigm of HR as a secondary function, and ennoble those who have dedicated their professional lives to their talent.

At London Business School, when we started thinking about tackling this significant challenge of assessing talent development, or how we measure impact, we came up with this premise: begin with the end in mind.

Assess your talent

When we speak to our new clients about the impact of the future executive development work in the GCC, we start with the business versus the personal impact. What difference would we see in the business after so many months or years as a result of this programme? How would we assess that business improvement? This depends entirely on each organisation’s objectives, but it could include internal promotion rate, new initiatives created and implemented with the resulting commercial benefits, employee retention, and the impact of action learning projects.

We suggest that this approach can be tailored to each organisational context and culture, and gives the HR executive a fighting chance to prove their function’s impact in the boardroom.

More importantly, the Middle East region – through a more rigorous assessment process – can sharpen the business case beyond the obviously important macro-societal needs. This will develop citizens into more senior management roles. Building the business case for people development then becomes no less than building the business case for building the nation’s capacity for leadership.

FastCompanyLogo

Will Half of People Be Working Remotely by 2020?

Will Half Of People Be Working Remotely By 2020?

It isn’t all-or-nothing when it comes to time at the office anymore. How long until that scale tips toward the remote workforce’s favor?

Will Half Of People Be Working Remotely By 2020?
[IMAGE: FLICKR USER IMPACT HUB]

Remote work seems to be the wave of the future. A recent survey of business leaders at the Global Leadership Summit in London found that 34% said more than half their company’s full-time workforce would be working remotely by 2020. A full 25% said more than three-quarters would not work in a traditional office by 2020, which is not some far off, futuristic era. It’s six years from now.

Yet in many organizations, getting to work from home a day or two a week is still considered a big perk that needs to be negotiated. These facts seem at odds until you realize that “it depends on your definition of ‘remote,’” says Sara Sutton Fell, CEO of FlexJobs, a resource for job seekers looking for flexible positions.

“In most white-collar jobs, I’d say 99% of people are already working remotely in that they take work home. It creeps into our work style already. I think it’s just not formalized by either the employer or employee.” If remote work means that you check email on Sunday night then congratulations! You already have a work-from-home job.

A GENERATIONAL SHIFT

But that’s not all that’s going on. Adam Kingl, director of learning solutions at the London Business School, notes that another topic that came up frequently at the Global Leadership Summit was millennials approach to work.

Flexibility “is the number one reason they’re attracted to a workplace,” he says. “People want to take an afternoon off and catch up on Saturday morning.” With younger workers being fully aware that you can email or call someone from anywhere, the idea of working differently becomes “a criterion that people are expressly looking for before they’ll sign on the dotted line,” says Kingl. “It’s not a perk or reward.”

More significantly, the oldest of these digital natives are now in their thirties. They have moved into management. They “are starting to be the architects of workplace culture,” Kingl says. Once your boss knows that “work is fluid–it can happen anywhere, at any time,” then there is much less value put on “being around for its own sake.”

WHAT ABOUT INNOVATION AND COLLABORATION?

So what about the debate over the past year that working remotely was at odds with innovation? A few companies (such as Yahoo) have famously canceled telecommuting arrangements, arguing that people come up with better ideas when they’re physically in the same space. Attendees at the Global Leadership Summit put a high priority on innovation in the workplace as well.

Sutton Fell argues that the mistake is thinking that working remotely, and working in an office, are either/or propositions. “Most people think of remote work as 100%, all or nothing,” she says. “But the reality we see is that’s it’s not all or nothing.” People might visit clients two days a week, thus technically working remotely, even if they’re not at home. Then they work in the office another day or two, and one day from home or a coffee shop.

Such a schedule allows for plenty of spontaneous interactions with colleagues, but also some focused, head-down productivity too. In the near future, “I believe that 50% of the workforce will be working remotely half the time,” Sutton Fell says. “I don’t think that 50% of the workforce will be working 100% remotely by 2020, or even 2030.”

But that’s okay. There are lots of ways to work, and working remotely is a good tool to have in the mix.

ABOUT THE AUTHOR

Laura Vanderkam is the author of several time management and productivity books, including I Know How She Does It: How Successful Women Make the Most of Their Time (Portfolio, June 9, 2015), What the Most Successful People Do Before Breakfast (Portfolio, 2013), and 168 Hours: You Have More Time Than You Think (Portfolio, 2010). She blogs at www.lauravanderkam.com.