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The three things millennials want if they are going to work for you

The three things millennials want if they are going to work for you

Leadership expert Adam Kingl believes a new way of thinking is needed to retain and attract Generation Y talent.

London Business School

How Best To Manage Millennials

How best to manage Millennials

Gen Y is poised to transform the future of work, management and leadership. Enabling them to thrive and deliver value takes serious thought

For generations gone by, the only way to get on in work was to pay your dues. Promotion, reward, the steady ascent up the corporate ladder were all earned and paid for by commitment to the job, loyalty to the company and – perhaps more than anything else – by putting in the time. It took time – several years usually – to really learn the ropes and to demonstrate readiness for more responsibility.

Then Generation Y (aka Millennials) arrived in the workplace and turned much of this on its head. HR leaders and managers of Gen Y were shocked by a new wave of workers who are prone to leave their jobs with frightening rapidity. This is a generation that stays around for two to five years before moving onto the next opportunity; a cohort that cleaves more to purpose than to material reward, that demands to know why as much as what they are required to contribute or accomplish, and whose primary allegiance is not to the organisation but to the immediate team and the individuals who surround them.

Generation Y are, of course, the leaders of tomorrow. And they are starting to accede to positions of influence today. They are also causing friction with incumbent leaders who don’t know how to manage them.

So says Adam Kingl MBA2004 in his book, Next Generation Leadership: How to Ensure Young Talent Will Thrive With Your Organization. An educator, author, advisor, keynote speaker and alumnus of London Business School, Kingl had plenty of opportunity to observe Generation Y, as well as the organisations who hire them: ‘I directed, then supervised that is now titled the Leading Teams for Emerging Leaders programme at LBS for several years, working with young, high potential participants.  Since they were nominated by their organisations to attend, they are, more likely than a random selection of Gen Ys, the CEOs and leaders of the future. But their bosses just don’t know how to deal with them.’

The core issue, says Kingl, is a shift in priorities, expectations and values – a sea-change in the paradigms of work and leadership that set the upcoming generation apart from (and very often at odds with) the incumbents. And it’s not Gen Y’s fault.

“You have to remember that this is a generation that won’t have the security of retiring on a defined benefit (final salary) pension,” he says “The golden handcuffs and a job for life simply don’t exist for them. They’re also the first generation whose majority will experience the 100-year life, as explained by Professors Lynda Gratton and Andrew Scott.

Longer life, shifted expectations

“Now, as we live longer, the expectation is that we’ll also have to work longer; the luxury of retiring at 65 will be replaced by the necessity in many cases of working into our 80s. Millennials will be spending probably 60 years of their life working, and that has shifted expectations and driven a feeling of optionality and greater flexibility in terms of where they work, who they work for and how long they choose to stay.”

Gen-Y workers are also demonstrably less materialistic than their forebears, argues Kingl. Salary, bonuses and promotions, while important, compete with concepts like purpose, development, culture and work-life balance. Capitalism, for Millennials, is a fungible concept, and as these emerging leaders assume influence, we are likely to see a swing in focus from outcomes to outputs: from bottom line and share prices to impact and value for customers, employees, communities and the world.

To manage this new generation more effectively, says Kingl, and to ensure that they thrive, organisations need to start thinking differently: “I believe there’s an onus on today’s leaders to recalibrate their own ideas and expectations when it comes to managing the leaders of tomorrow. There are things that the Boomer and X generations have to let go: the idea that young talent will stick around forever, that investment in things like development and training are tied to tenure, or that emerging leaders must be 100% dedicated to their job at the expense of all other interests or activities. We need to embrace their agility and recognise that the workforce can be a little more fluid without damaging our long-term prospects.”

But how do we enact this kind of shift in thinking?

Kingl’s work at LBS with emerging leaders and their companies has yielded key insights. For five years, he surveyed Generation Y participants, then interviewed them, their employers and other organisations across 44 countries, complementing the quantitative evidence with qualitative analysis across a sample that spans highly diverse industries and sectors.

His findings, which are shared in the book, point to a broad homogeneity in Millennial priorities – a generational “tightening” that stems from having much in common. They are the first truly global generation, the first to be digitally connected from the start, and a generation who will live – and work – longer than their predecessors by a considerable margin. Kingl believes that this consistency or homogeneity makes it possible to see Gen Y as a more coherent group, while recognising that to discuss generations does force one to generalise.  But he urges not to dismiss the findings merely because one can find an exception: “If we can better understand patterns and trends that are more true than not, then this can only benefit our ability to manage and empathise with our youngest colleagues.”

And this, in turn, makes it possible to distil insights about them into actionable ideas for their managers: practical frameworks, strategies and tools that he shares to ensure that young talent can thrive within today’s organisations.

Six ways to manage Millennials

The following are six tips from Kingl’s book to help manage Millennials.

#1: Articulate and live your purpose

Be proactive in terms of articulating your purpose and help your people connect their own purpose to that of your organisation. An impactful and cost-effective means of doing this may include putting together a workshop built around two central ideas: Why should talent work here versus anywhere else?  Why should customers come to us versus anyone else?

#2: Hold one another to account

Organisational culture is something that needs to be engineered versus emerging organically. Aim for transparency, responsibility and accountability as a rule, and be clear about the kinds of behaviour that model your organisation’s ethos.  Consider what behaviours, if shared among your bellwethers, should become new norms.

#3: Be fluid about development

Understand that development opportunities should not be tied to tenure. There are a host of cost-effective measures your organisation can take to weave training and development into everyday life, from shadowing to coaching to international placements to secondments. Aim to think more dynamically about this theme.

#4: Re-consider what work-life balance means

The number one thing that Gen Y asks for from their employers is work-life balance.  Too many organisations have resisted this request, but we all are now confronted with the necessity of remote working because of Covid.  Even when we exit the pandemic, our global, digitally connected workforce will inevitably have to get a lot better, and a lot more comfortable, with managing virtual teams.  We will not go back wholly to the way things were.

Before lockdown, the term “work-life balance” was often a contentious topic. Kingl discovered semantic discord between the generations when it came to having a common definition of work-life balance. For Baby Boomers and Generation X, asking for work-life balance sounds like a “when” request, concluding incorrectly that young people requesting work-life balance just want to work less than their seniors when they were paying their dues, leading to the common misconception that Gen Y must be lazy.

Work-life balance: when, not where

For Generation Y, work-life balance is a “where” request: they see the 9-to-5, chained to the desk, face-time model as archaic when technology makes it possible to have constant access to work. Emerging leaders want greater flexibility and a higher degree of agency or autonomy – some margin to choose where and how they work.  Be sure that you are all on the same page and that you aren’t talking about terms that mean different things to different people.  Our current world environment amidst self-isolation is a good time to practice working remotely yet effectively.

One insight that Kingl discovered after running an experiment with his London Business School programme cohorts is that some types of activities will yield better results if they are conducted virtually instead of face to face.  For example, brainstorming innovations or solutions to intractable challenges require as many insights as possible and reducing the noise of the usual voices who dominate the conversation.  An asynchronous virtual discussion board to solicit and respond to ideas can disintermediate a lot of the dysfunctions of dominating voices due to factors such as status, gender, culture or personality.

#5: See the value in side-hustles (activities that employees pursue outside work)

Talented young people often have interests that go beyond their role or the organisation. Whether those are charity work, personal websites or projects that leverage professional skills, try to reframe these activities as sources of dynamism and opportunities for intra- and entrepreneurial development. Encourage your employees to pursue opportunities to learn and to share that learning.

#5: Be flexible about people leaving

After all, they might well come back. Encourage a sense of fluidity that leaves the door open so that after your leavers build new skills and knowledge outside your company, they might bring that back to your organisation should they choose to return further down the line. Embrace this fluidity and find ways to make it work to your advantage. Many professional services firms are world-class at cultivating an alumni network of former colleagues, even hosting reunions!

As Generation Y accedes to leadership, Kingl believes the world of work is set to become ‘more human’.  The real challenge for today’s employers is to leverage this forward momentum to the advantage of the organisation – and the advantage of young people driving change.

“Research, polls and surveys repeatedly tell us that the majority of employees in today’s businesses are not engaged,” he says. “The management models that we have in place come from a time long past and are no longer truly fit for purpose. Generation Y feels this keenly, and this is the generation that feels the urgent need to fix it.  It’s our responsibility as leaders and managers to empower them as they prepare to rehumanise the world of work.”


Making Adaptability A Habit

Making Adaptability a Habit

Adam Kingl

We are living in an age of unprecedented rates of change.  We’re well versed in narratives about shifts in landscape, industry, market needs, and redundant strategies.  However, familiarity with the challenge does not necessarily create a solution.  What do we have to do as leaders to navigate these waters?  What skills do we require to keep our organisations relevant and successful in the 21st century?  There are mindsets, tools and practices that you can use for yourself and in the development of others to make adaptability and agility a habit.

In my consulting and executive education practice, I consistently see three barriers to adaptability, no matter the size or industry of the company.  First, the organisational culture punishes failure, or at least attaches a strong stigma to failure.  As a result, the priority is for perfection and predictability.  Generally, new practices, processes, products or services that we create are but tiny, incremental adjustments or improvements to what already exists.  Such an enterprise rarely develops the sort of game changing, supernova innovations that create exponential rewards and disrupts its industry.  So the first area to work on is the organisation’s attitude toward adaptability.  After all, you can be error-free or your can be agile; you can’t be both. 

Second, a huge reason that companies struggle to adapt is that their people don’t have clarity about what the change is supposed to look like.  Too many of us are familiar with the scenario:

Boss: After the board meeting, we’ve all received a memo that we need to encourage agility and innovation.

Put-upon employee: OK.  What should I be doing?

Boss: What do you mean?

Put-upon employee: What do I need to do that’s different to what I’m doing now that would demonstrate that I’m being agile and innovative?

Boss: You’ll work it out.  You know – explore! 

Since routines and habits are so difficult to disrupt at the best of times, it is incumbent on leaders not only to set direction but to suggest, not dictate, a vision for what a new direction could resemble, how it might impact the team’s day-to-day, and what behaviours are encouraged. 

Third, I have found it immensely helpful to suggest lenses through which leaders and their teams can practice adaptability and innovation with a little more focus.  For example, perhaps a team could run a 24-hour hackathon where they create experiments and then prototypes of innovations that they wish to develop.  That activity automatically moves the organisational needle forward in terms of enhancing its creative capacity.  Or a department could conduct some interviews with customers, suppliers and partners about what emerging trends they’re seeing in the marketplace.  This exercise would by definition break that team out of its internal perspective.  How many times do we try to adapt to a new world, but we only discuss the potential responses amongst a small set of colleagues?  Yet at the same time, we decry that we keep coming up with the same solutions to any problem!  It’s probably because we’re drawing from a toolkit that rarely refreshes. 

Change usually feels like a difficult, drawn-out, top-down, military campaign instead of an organic, market-driven, exciting prospect.  It can be the latter, but we have to question some of our long-held management paradigms about leading change that have fostered some our collective disabilities. 

  • Adam Kingl, www.adamkingl.com, is the author of Next Generation Leadership (www.nextgenerationleadershipbook.com) and is a keynote speaker, educator and advisor.  Adam was previously the Regional Managing Director, Europe, for Duke Corporate Education – Duke University, and the Executive Director of Thought Leadership and Learning Solutions at London Business School.  He is a writer, keynote speaker, educator and advisor.    

*First published in Michael Page and Future Talent Group, Adapting is Thriving in a Post-Pandemic World, 2020, p.9



Spare A Thought For Middle Managers

Perspectives: Spare a thought for middle managers
Written by
Adam Kingl, author, keynote speaker and advisor

04 Aug 2020

Though they are often highly adaptable, middle managers can be the most overlooked element of any company. For Adam Kingl, a little more empathy for the ‘squeezed’ middle wouldn’t go amiss.
My recent book, Next Generation Leadership, explores how to engage and better manage Generation Y, the most junior segment of the workforce. In researching generational theory for the book, my sympathy for my own generation, X, grew exponentially. Gen X is crammed between two huge generations, the Baby Boomers and Gen Y, unable to enjoy the privileges and prerogatives of the Boomers and at the same time managing the most difficult group that the workforce has seen in the Ys. Gen X is currently our sandwich generation and is a perfect metaphor for middle management – pushed from above and pulled from below, unthanked, unloved and overworked. Yet we all acknowledge that our middle managers make the gears turn, hold the culture and need to pivot and have to adapt faster than anyone else in the company.

If our organisations depend upon middle managers, what paradigms about this critical segment might we need to revise?

‘Uncrunch’ the middle layer
First, I firmly believe we must challenge the assumption that the executive suite decides on new or revised products or services, and middle managers are responsible for executing those decisions. One of the greatest difficulties implicit in a hierarchical organisational architecture is that the more we are promoted, the less we talk to actual customers! Yet in too many companies it is the enterprise leader who decides the customer offer, and that leader’s concept of what the market may want could be years or even decades out of date. Instead, perhaps the external-facing employees and their managers should be incentivised to develop new and adapted products and services and submit the evolved prototypes and business plans to executives for sign-off.

Second, we must offer development to the middle management layer for what they require now, and not only what skills they need at the next level. In my many years of working in executive education, I find that too often organisational learning is around the skills that one will need at the next level, yet I observe so many capabilities that the employee needs right now! If we consider the areas that will help to ‘uncrunch’ the squeezed middle layer, they would be themes that would free capacity for expanded exploration and empowerment. These include customer-centric innovation, trends we perceive in the market and the consequences of those trends; experimenting and prototyping in order for the organisation to enjoy a constant pipeline of adaptations and creative outputs; articulating one’s purpose in work and enabling one’s team to do the same – this last theme is perhaps the most critical in a world that is wracked with disappointment about the role of business in society.

In these manners, learning initiatives are directed toward including the customer voice, enhancing the agility of the organization, focusing intent, and engaging and retaining the largest segment of the workforce. A little dose of extra empathy for the squeezed middle manager wouldn’t go amiss either. Perhaps my favourite phrase that I’ve ever heard from a colleage is ‘How can I help?’

Adam Kingl, is the author of Next Generation Leadership and is a keynote speaker, educator and advisor. Adam was previously the Regional Managing Director, Europe, for Duke Corporate Education – Duke University, and the Executive Director of Thought Leadership and Learning Solutions at London Business School. He is a writer, keynote speaker, educator and advisor.


You’ve got to fight for your right to innovate

If reaching optimal brain function requires longer than an hour-long meeting, we must schedule time for innovation, argues Adam Kingl.

Written by
Adam Kingl, author, keynote speaker and advisor

15 Jul 2020

In my many conversations with organisations about their quest to be more creative, the challenge that I hear more than any other is, ‘We just don’t have enough time.’ Yet these same organisations complain that their relevance is declining daily because they are not as innovative as they need to be, governed by the tyranny of the daily schedule, the hundred emails, the endless conference calls.

So I offer one hack for individuals and organisations to be more creative that has little to do with bringing in jugglers, sticky notes on the wall, or foosball tables – be disciplined about carving out time to dream, brainstorm, prototype and look outside your immediate silo. After advising companies whose very existence depends on their creative capacity, such as Disney and Pixar, I found one crystal clear distinction in their daily habits versus those in organisations from just about any other industry. Companies who depend on innovation prioritise it in their daily activities. I know – shocking idea, right?

But I’m not asking you to trust my own experience or instinct. Let’s look to the neuroscience as to why this advice may be mission critical. We cannot trust that only hurried, captured moments of precious time for creativity will yield anything but paltry results. Our brains can’t turn on the creative magic for such short, unsustained periods of time.

It’s a state of mind

There are several brain states from deep sleep to normal consciousness to deep focus and peak performance. The higher the performing brain, the higher the brain wave frequency, hence Hertz is the degree of measurement. Our typical brain state during a normal work day is beta (14-30 Hz). You might disagree and suggest it’s theta (4-8 Hz), which is light sleep, and I would neither agree or disagree with you until I experienced your employer! But beta is probably our normal state and theta when we’re in committee meetings, agreed? Beta is what we require of our brains to accomplish our normal tasks of answering emails and solving our workaday problems.

Neuroscientific research has revealed that our brains can stay in beta for a long time and in fact are conditioned to stay there. As a result, if we crank the mental engine to get up to gamma (30-70 Hz) for peak performance and creative thinking the brain through habit easily and proactively usually drags us back to beta. Therefore, if we need our brains to be in gamma in order to be truly innovative, genuinely adding previously unheard of insight and exponentially big ideas, our brains would struggle to do that in, say, a one-hour meeting once a week, no doubt in the creative committee meeting! Beta state is like a constant and familiar noise; it’s the ever-present static of our work lives that can block gamma state. I compare it to how it’s hard for me to think when I’m eating an apple because I have this magnified constant crunching noise in the echo chamber of my skull.

We can’t shut off the laundry list of actions and decisions we have to make, even if we’re completely confident in our ability to make them. Beta is our habit, our rhythm, our tyranny. Because we don’t have balance between the mundane and the creative, we can’t achieve innovation even if we give ourselves those fleeting thirty minutes a week to do so. We have to fight for our right to be innovators.



Should We Focus On Our Strengths Or Our Weaknesses?

Perspectives: Should we focus on our strengths or our weaknesses?
Written by
Adam Kingl, author, keynote speaker and advisor

04 Nov 2019

Our willingness to focus on negatives has persisted since the post-war era, and this includes our approach to talent management. Shifting emphasis from weakness to strengths can help transform personal development, argues Adam Kingl.

The ways in which we consider and develop talent are still largely derived from military influence on leadership in the wake of the Second World War, as imported into the business world from generations entering the workforce upon their release from service, and the “delete all errors” foundations of scientific management.

Our talent experiences these foundations as a two-pronged pincer assault on their weaknesses. The implications are that they are never good enough, always wary of slipping up, and their fleeting moments of pride and job satisfaction are quickly subsumed by frequent reminders of their own inadequacies.

Assessing strengths vs weaknesses

Consider your own experience of talent-assessment reports in the organisations in which you have worked; 99% of you will probably recall an almost universal way in which these reports are organised: your strengths and your weaknesses.

Now remember how you read and reflected on this assessment. For most of us it went something like this:

Strengths: “Oh, I’m pleased that I have done well here. I know that I’m good at these things.”

Reader now dismisses and forgets this section entirely. Similarly, their manager opens a development conversation with these strengths for all of five minutes, then never mentions them again.

Weaknesses: “Oh no, I’m not good enough. I’m a terrible colleague and an embarrassment to my family. I’m wholly inadequate. And who was that traitor who gave me ones across the board in my 360?!”

Reader obsesses about this section for the next eight months, and their manager is similarly obsessed, beginning every conversation with a progress report and feedback on how well the weaknesses are being addressed.

The positive effect of building on strengths
This is a deficits-based approach to talent assessment. It implies that the best way for our people to develop is to focus on and improve those things at which they are terrible. There’s a massive and obvious problem with this philosophy. Allow me to explain with a personal story.

When I was about 12 years old, my parents took me on holiday to a ski resort. I was hopeless on skis; ragingly atrocious. I was holding onto a rope (my only job was to hang onto the rope quietly and do nothing else) that would drag me up the kiddy slope…and I fell over. Since no one behind me could ski either, and I couldn’t navigate out of the way, everyone fell on top of me – a novice skier puppy pile. My nose met my tonsils, as I was squashed into the bottom of a Black Forest Gateau of helmets, scarves and skis, a tartiflette of flattened bodies and egos.

Now, here’s the point: imagine I’d spent the rest of my life attempting to be a world-class professional skier. That was never going to happen, and I don’t regret it. I pursued hobbies that I enjoyed and academic topics about which I was either curious or had some natural aptitude.

I’m sure that for most people this is completely normal and ‘commonsensical’. Yet in most companies today, incredibly, we assess and spend our development resources as if we want to turn our ‘worst skiers’ into ‘average skiers’.

Developing world-class qualities

Wouldn’t our organisations be stronger and our people more fulfilled and successful if we identified their strongest skills and invested in turning those great attributes into absolutely world-class skills?

The shift we are just beginning to experience is from deficit-focused performance management (improving one’s weaknesses) to a focus on strengths. If we work on our weaknesses, most likely we can at best hope to improve those areas from ‘weak’ to ‘mediocre’ or ‘barely passable’ and only after an unconscionable amount of unfulfilling graft and attention.

If we work on our strengths, we have at least some chance, maybe even a reasonable one, of improving those qualities to ‘world class’, which will have a stronger impact on us individually and on the success of our organisations.

What do you want to tell your customers?

“Everyone in our company is world class at something, and we’ve worked hard on that.”

Or: “Everyone in our company is at least average in everything, and we’ve worked hard on that.”

Generational shifts
This shift from weakness-based assessment to strength-based assessment will only accelerate as generation Y (millennials) grow in numbers to become the majority of the global working population. As one typical way in which a generation develops its attitudes is its reaction to previous generation(s), gen Y is clearly embracing a healthier approach to self-regard, celebrating what colleagues can bring to the table.

Positive psychology is also a harbour from the ceaseless economic and socio-political breakers crashing into generation Y’s already justifiably shaky sense of security and confidence.

Adam Kingl is the author of Next Generation Leadership and a keynote speaker, educator and advisor. He was previously the regional managing director, Europe, for Duke Corporate Education (Duke University), and the executive director of Thought Leadership and Learning Solutions at London Business School.

Financial Times Logo

How Lockdown Is Changing Decision Making

By Dawn Cowie, The Financial Times

People Feature

28 April 2020


The Covid-19 lockdown should be used to usher in a new era of more devolved decision making and put an end to control freakery, say experts.

Leaders have an opportunity to learn from the crisis by stamping out micromanagement and trusting more in the expertise of managers that have kept businesses running smoothly in unprecedented times.

Some firms have been taking the lockdown as an opportunity to streamline and speed up decision-making procedures that are too cumbersome.

Adam Kingl, author of Next Generation Leadership and keynote speaker, says: “Your people, customers and community are looking for transparency and quick answers. This is not the time for bureaucracy to encumber action.”

Having never run a business remotely before, leaders have been deferring more to specialists in their operational, technology and digital teams.

Chris Mills, a financial services expert at technology consultancy 6point6, says decisions about day-to-day issues, such as client reporting, are being taken “faster than ever”.

People in operations and technology teams at fund firms say getting authorisation to push ahead with existing projects has become much quicker, according to Mr Mills.

Typically, business leaders ask if everything is “as expected” and, if there are no problems, then they give the green light, he adds.

Increased levels of trust in IT and operations chiefs over the lockdown period may have lasting consequences, says Mr Mills.

Now that technology and digital strategy are being recognised as business critical, Mr Mills expects more chief technology and digital officers to be given seats on boards.

Remote working has, however, thrown up particular challenges for firms going through strategic change.

Tim McEwan, culture coach, and former head of leadership and development at Henderson Global Investors, says remote working has slowed down the pace of decision making at one firm going through a transaction.

In normal times, “corridor conversations” play an important role in allowing people to clarify points, where there might be a lack of understanding, he says.

Without these side conversations, people tend to have to go over the issues again in another round of Zoom calls, which may lead to better-quality decisions but it takes longer, says Mr McEwan.

The inability to micromanage the business at a time of crisis has been a real shock for some leaders, particularly traditional owner managers.

Mr McEwan says it has been “an uncomfortable time” for leaders who prefer “closer management” because they cannot “eyeball everyone”.

“Bosses don’t need this level of control,” says Mr McEwan.

“They need to be clear about who holds the decision rights. This must be discussed, agreed and signed off. Then they need to trust people.”

In a “shocking” attempt to retain control, one boss asked staff to wear jackets and ties on Zoom calls at the start of the lockdown, Mr McEwan says.

At another firm, managers wanted daily team gatherings at 5:15pm to talk about what had been done during the day.

The idea backfired because it was seen as a way of checking up on staff and an indication that managers did not trust them, he says.

The flaws that undermine effective decision making in physical meetings can be even worse in virtual meetings, say experts.

While meetings should be about “idea creation”, the reality is that people often sit around “waiting for the leader to say something”, says Mr Kingl.

“This dynamic risks being even worse when teams work remotely. It’s scarily easy for people to be even more silent in a virtual meeting,” he says.

Mr Kingl suggests that managers try holding team discussions on an online discussion board, where everyone is asked to contribute at least three ideas and comment constructively on at least two others.

This means that “introverts can reflect before answering, the less confident can reply thoughtfully and bravely”, says Mr Kingl.

Adding anonymity to contributions reduces the senior voices from owning the lion’s share of the conversation, he adds.

A virtual forum can then be used for part of the discussion or for teams that are particularly diverse.

This approach can help leaders to “bring out the best in everyone”.

Leaders need to be “much more aware of the composition of virtual meetings”, says Mr McEwan, who adds that 20 people on a Zoom call is a nightmare.

“The chair has to work really hard to control the discussion, which may mean they take their eye off the content,” he says.

It may be better for bosses to let someone else control the meeting so they can focus on “the meat” of the discussion.

Experts say the pandemic should not be used as an excuse for putting important decisions on hold, even if they involve a change in direction.

“The pandemic may very well have changed priorities or assumptions about our organisations’ business models, operations models, talent strategies, channels to market or customer segments,” says Mr Kingl.

“It might be a once-in-a-generation opportunity to really take a moment to examine our organisations’ long-held beliefs and ask if they’re still fit for purpose,” he says.


Next Generation Leadership

London Business School

How To Fail Successfully

How to fail successfully
The most innovative companies embed experimentation in their strategy and extract maximum learning from their mistakes.

27 MARCH 2020

Everything has shifted – and it continues to shift. Being able to adapt quickly could make the difference between staying afloat and foundering. Most fundamentally, says Julian Birkinshaw, Professor of Strategy and Entrepreneurship at London Business School, business leaders and managers should reevaluate and think afresh about risk, uncertainty and failure.

“Many organisations have highly structured ‘stage-gate’ processes for managing innovation, as a way of keeping things as orderly and predictable as possible,” he says. “But the reality is that innovation is messy and requires an acceptance of high failure rates. And never more so than in these unprecedented times.”

Many businesses will struggle to embrace this new reality. They might know in theory that failure is meant to be valued, but they’ve not quite put this into practice. Old habits die hard: bosses used to holding postmortems when projects or products fail are now going to need to focus on genuine learning.

“I have seen several companies adopt a zero-tolerance approach to failure,” says Professor Birkinshaw. “The person who failed gets fired, the failure gets swept under the carpet and everyone gets the message that this must not happen again. 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 this world where the context is changing daily.”

Experimentation takes courage
Fortunately, there are some lessons we can all learn from businesses that have taken learning from failure seriously. Tim Harford, author of Adapt, said there were three essential steps: try new things, in the expectation that some will fail; make failure survivable, because it will be common; and make sure that you know when you’ve failed.

Professor Birkinshaw advocates an essential strategic shift for business leaders: fail methodically, through robust experimentation – and learn to maximise your return on failure. This sounds like an excellent plan. So why don’t more people do it?

“When you actually take a business person with responsibilities and a budget and sit them down and say, why don’t you do this as an experiment? They’ll say, ‘No, that won’t work: let’s pilot it or do some more research’,” says Professor Birkinshaw. “Experimentation is beautiful in concept but it’s very difficult for people to have the guts to follow through. An experiment says, let’s run two different pilots. You have to admit that you don’t know the right way forward – and nobody likes to admit that.”

Rajesh Chandy, Professor of Marketing and Academic Director, Wheeler Institute for Business and Development at London Business School, has studied how innovative companies incorporate failure in their corporate culture. 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 not the case that failure has no negative consequences in these companies,” he points out. “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.”

Professor Birkinshaw recommends drawing up a balance sheet to assess a project’s return on failure. On one side, consider your ‘assets’. These might include: What have you learned about your customers’ needs and preferences? Do you need to change any of your assumptions? What insights have you gained into future trends? What have you discovered about how you work as a team? On the other side, look at your ‘liabilities’: costs, both financial and less tangible costs such as damage to reputation or morale. Bottom line: What are the key insights and takeaways for your business?

Costas Markides, Professor of Strategy and Entrepreneurship at LBS, agrees that experiments are crucial in identifying which of your ideas will fly, especially if you’re trying (or indeed forced) to innovate in a company that’s resistant to your big ideas.
“How do you select the good ideas? Try them out. Get the data and then you can say, ‘Look, what do you think about it now?’ Design clever little experiments to try your ideas. Small-scale, low-cost experiments, that get results quickly.”

Great idea – now prove it

This is the tricky part. “You have to bring the learning into the workplace,” says Adam Kingl, an executive education programme director at London Business School. “Realigning our position on failure, risk and experimentation is key. Aim 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 continually to respond, experiment and get in front. If you experiment, by definition you will be more agile.

“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 even 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 when you’re on a swing – you’re are always moving but you can still keep an eye out. Today, it’s like trying to do so while you’re on a rollercoaster. So you need to experiment to build your agility muscles.”

Here is a four-step risk-mitigation framework Professor Birkinshaw suggests you keep in mind when you’re designing experiments:

1. Make your hypotheses explicit – a good experiment is designed so that whatever the outcome, you’ve learned something new. It’s much better to be able to say your hypothesis wasn’t supported than to say the project failed.

2. Limit the scope of the experiment. In the world of IT, the ‘sandbox’ is the offline testing environment where you try out new code. The same concept applies in business more generally – try the experiment in a limited way and make sure to run the new in parallel with the old.

3. Start at home. You want to stay under the radar during the early days of your experiment, while you figure out if it’s really a good idea. So this means trying it out in your own department or business first, and using volunteers to help you. You don’t want to expose yourself to formal review until you’re well down the track.

4. 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. Hopefully you won’t need quite that many.

Ultimately, what’s required is a shift in mindset. Kingl carried out a survey asking more than 100 UK HR directors about their company’s reaction to failure. Answers ranged from “A: Anyone who fails is quickly fired” through “B: We never speak of it – it’s shameful”, “C: ‘Good’ failure is tolerated but not shared” and “D: Failure is shared to a point, but there’s a stigma” to, finally, “E: Failure is shared and even celebrated”. Only 3% of the HR directors said their company’s attitude was an E.

The attitude you want to emulate is that of Tom Watson, CEO of IBM, in the company’s 1960s and 70s heyday. When a top salesman lost US$5 million on a project, Watson didn’t fire him. “Why would l fire you?” he said. “I’ve just spent five million dollars on your education.”