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Professional Services and the Resignation Crisis

The press has recently been discussing what appears to be a resignation crisis that we’re facing globally.  After all, there are four million people who quit their jobs in April in the U.S., a 20-year high. There were a record 10 million job vacancies in June. A Microsoft study indicated that 41 percent of the global workforce are considering resigning within one year, and a Fast Company article suggested that number may be as high as 55 percent.

 

The implications of the resignation crisis are especially dire for professional services firms. I’m thinking of management consultancies and law firms who have a partnership model in particular. Initially, the partnership model only worked if graduates knew they were on an 8-12 year journey to make partner, but what if those graduates don’t care about making partner anymore?

 

This is a potential existential crisis if that young talent is considering leaving every two to five years, which research for my book, Next Generation Leadership, has shown. I talk to firms all the time who are seriously questioning their philosophy of work and the architecture of how they are composed. We have to reconsider the models in our organisations, particularly in partnership models, and think about how can we still imbue people with purpose and values so that they will stay a little bit longer, but also create those organisational designs that are not necessarily ‘up or out’.  That must involve working on purpose and legacy, particularly with senior partners, those in the last trimester of their careers, who might otherwise be thinking, ‘Well, there’s very little else that you can teach me.’

 

I would want to get this stakeholder group together ask them to think about the type of firm that they wish to leave for their successors.  How might it be possible to have more fluid movement in and out of the firm? In that way, top talent might include those who are en route to becoming partners, or might become future clients, or might become suppliers or partners, or might ultimately want to work with you on a contractor basis. After all, over sixty percent of the world’s work is now organised according to projects.

Top talent might even want to return as senior executives later on in your company’s life. In other words, you might get two, three bites of the cherry from that same person who might come in and out of your organisation with greater dexterity that most companies currently would tolerate. It really involves rethinking how you work, but I do think that it is necessary to have that conversation now.

 

 

 

 

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What Is Strategic Innovation?

When I talk to executives about innovation, they generally go right to products and services.  In other words, their default is to explore those innovation questions that everyone asks themselves.  But what questions are neglected as a result?

If you are a senior executive, what are the things that you can affect, that you can change, that no one else in your organisation can change? And generally the answer to that question ultimately is strategic or business model innovation, challenging assumptions implicit in the questions: who are your customers, what are you offering them and how are you offering it.

If you can change the assumptions in those questions you are playing a different game from your competitors and you are giving yourself an inimitable competitive advantage.

Take for example Enterprise Rent-A-Car. Enterprise decided to play in a  completely different sphere. Rather than primarily trying to serve air travellers, they served customers who were suffering from car breakdowns. Now, that implied that they would be putting their depots and their offices in residential areas rather than in expensive airports, so now all of a sudden, they were competing in an area that for a long time had no competitors and offered them cost advantages.

So do consider, when you can think about innovation and if you are a senior leader, what are the business model innovation questions that you can ask yourself so that you can claim advantages that would take many, many years for your competitors to imitate? And in so doing, you truly become a game-changing innovator in your industry.

Adam Kingl is Adjunct Faculty at the UCL School of Management, Hult Ashridge International Business School, an Associate of the Moller Institute at Cambridge University, and the author of Next Generation Leadership (HarperCollins 2020).  www.adamkingl.com 

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Transitioning from hierarchical to a network-based organisational structure: 4 key points for leaders

Networks are powerful systems. While the networked-based structure seems to be the way forward to many teams, leaders need to be aware of issues related to the flow of decision making, talent retention and purpose.

by

 Jun 23, 2021

The covid-19 pandemic and subsequent acceleration of digital transformation have forced organisations to innovate rapidly, change their products and services, and remain flexible to adapt to an ever-changing landscape. These significant changes have prompted a resurgence of the debate about the optimal organisational structure.

Over the past few years, there has been a welcome shift toward client-centricity with organisations adopting more agile structures – centred on products, teams, and projects – and forming both internal and external networks of teams that are generally empowered to communicate, coordinate, and make decisions.

Yet, given the volatility of our times and challenges related to digital communications and employee wellbeing, there are certain limitations to the model. A recent study, for example, found that “network centric organisation does not necessarily lead to higher perceived situation awareness or better understanding of the situation”.

We asked three experts from our global educator network to share their advice on the key points to be aware of when adopting a new organisational structure. Their answers reveal that while the networked-based structure seems to be the way forward to many teams, leaders need to be aware of issues related to the flow of decision making, talent retention and purpose.

1. The rise of ‘extreme teaming’

The move towards network-based structures is a recent evolution, according to author and thought leader Peter Fisk.  “A decade ago, around 80 percent of employees had functional roles, the rest seconded to ad-hoc projects. Today, that ratio is reversed. Few employees now have fixed roles. Formal job titles in outdated organisational charts have given way to a more fluid deployment of talent, by project, to manage constant change”, says Fisk.

In a recent article, Fisk states: “Networks, whether organisational or social, are powerful systems. “Every additional participant creates new connections, capable of driving the exponential growth of today’s network-based start-ups.”

At the heart of these network structures is the concept of “extreme teaming”, Fisk continues. “They assemble the best people for the job, energised by customers not managers, building psychological safety, and a collective commitment to deliver excellent, innovative results.”

In his recent book Next Generation Leadership, business educator and adviser Adam Kingl explores how organisations can enable younger talent to thrive. He sees the shift toward networked structures as a competitive advantage:

“Companies that reimagine how work is organised around projects and freelance experts will be sailing on a rising tide”, said Kingl.  “The volume and strategic importance of projects is growing.  About one-fifth of the world’s economic activity per year – $12 trillion – is now organised around projects.”

Over the next decade, Kingl says, “companies are expected to experience over two-thirds’ increase in project work”.  “As the operating environment becomes more volatile and complex, businesses need a new playbook to seize opportunities faster, an adaptive approach to talent and the skillsets that one might need at any point in time.  Organising company structure around project work may make more sense.”

2. Leaders become decision aggregators

Joe DiVanna is a Cambridge-based management consultant and author. As well as working regularly with Headspring clients on custom programmes, he runs his own innovation think-tank providing research and advisory services to the financial services industry. He says that the transition from a hierarchical to a network-based structure is essentially a change in how decisions are made. More traditional structures were based on the assumption that upper levels had “more collective knowledge and experience than the level beneath it” and therefore decision-making flowed up and down the pyramid. In network-based structures, this changes completely.

“This evolution strives to push decision making close to the action where the decision is needed”, says DiVanna. “As each node on the network becomes more and more empowered the entire role of senior leadership changes from a control point to approve or disapprove issues to a consultative resource to be consumed by the organisation”.

Yet, he argues, this change in organisational structure does not relinquish decision making of the senior leadership to the business unit: “What has changed is the parameters of what decisions can be used to empower people at all levels of the organisation”, he said.

As organisations go through this transition, DiVanna continues, “decision making often becomes fragmented. Not all decisions can be handled by the business unit. As a result, exceptions which need decisions become the underlying challenge (which is also an opportunity) for senior management to act as a decision aggregator.”

3. Mind the generational gap

While the network-based structure can help organisations move faster, Kingl warns that there is a significant generational gap when it comes to the acceptance of change and the adoption of networked structures.

“When I ask audiences to consider a world where companies comprise just a dozen or so executives and hundreds of freelance project directors and contractors under them – the gig economy writ large – Baby Boomers and older Gen Xs in the room appear ashen-faced and horrified, while the Gen Ys beam with optimism”, Kingl said.

In Kingl’s opinion, employers will have three possible responses to the inconstant tides of their younger workforce:

  1. Fight it and do everything in one’s power, spending whatever money is necessary, to keep talent,
  2. Embrace it and create the twenty-first century community of (mostly) freelancers,
  3. Select a hybrid path, distinguishing between talent that the company must keep at all costs and employees who one is prepared to let go, because their knowledge or expertise is replicable, or their functions may be completed more efficiently by contractors or business partners.

4. Your structure defines your culture

“Organisation structures define companies – culturally and innovatively, revealing both opportunities and limitations”, concludes Peter Fisk. “Henry Ford’s hierarchical business model that produced low-cost cars a century ago no longer reflects today’s organisational needs: to be fast and agile, human and technological, collaborative and creative, personal and global.”

According to Kingl, as the operating environment becomes more volatile and complex, “enterprises may choose to organise themselves differently, to be able to deliver more and more complex projects and initiatives in this dynamic operating environment.”

Thiago Kiwi

Head of Marketing & Communications at Headspring

Thiago is an award-winning marketing and communications leader with over 10 years of experience in the global higher and executive education sector. He holds a Bachelors in Communications and a Masters in Political Communications & Marketing from the University of London, as well as multiple executive and leadership development certifications. When he’s not busy studying for a new course, he’s growing vegetables in his allotment or training for his next marathon.
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Considering the End of Lockdown

What should companies be thinking about regarding their talent as we (possibly?) near the end of lockdown?

First, think about the physical space of your company office.  A lot of organisations are shedding commercial real estate.  The implication is that employees returning to the office are going to be smooshed together in ever more constricted open plans.  Well, that may work for some people but not for others, so do consider also providing flexible, private space.  You have introverts; you have neurodiverse colleagues.  They will, at some points in the workday, need time to themselves.

Second, think about how you may extend flexible work, giving people the opportunity to continue to work from home at least part of the time.  For many industries and functions, an option to work from home is never going to go away now and in fact will be expected from many if not most employees.  For example, over half of the U.S. workforce was already working from home at least part of the time before lockdown happened.  Most companies have already demonstrated that it can and does work.

Third, when your colleagues are back in the workplace, you now have the opportunity to socialise again.  You probably have many employees (hundreds or thousands in some cases) who joined your company during lockdown and have never yet had the opportunity really to get to know their colleagues in social situations.  To do so build trust, and that helps to reinforce culture.

This brings me to my fourth point.  If you want to build a stronger culture post-lockdown, create opportunities for your people to observe important meetings with important clients and customers.  And in that way, they start to understand how you work when it really matters, which is the true test of organisational authenticity.  This initiative can be easier when you are physically co-located, so seize the opportunity to demonstrate that being the office does have its advantages.  Get people together to observe the behaviours you desire and need for a culture that wins and has fun together, where people would not wish to be anywhere else.             

Adam Kingl is Adjunct Faculty at the UCL School of Management, Ashridge-Hult International Business School, an Associate of the Moller Institute at Cambridge University, and the author of Next Generation Leadership (HarperCollins 2020).  www.adamkingl.com

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How to Fail Successfully

I think you will agree with me that when we come together in these social constructs called companies we tend not to be as innovative, adaptable or inspirational as any one of the human beings in those organisations.  Why is that?

These companies tend to perpetuate this fear of failure.  As a result, we only innovate around tiny, incremental ideas that we’re almost one hundred percent certain are going to succeed because it’s a reputational hazard if we do otherwise.  As a result, companies usually don’t invest in big, supernova ideas that are going to leapfrog the competition and achieve exponential returns.  It is contingent on the leadership community in organisations to rethink their attitude toward failure and how they communicate failure as a learning opportunity.

Of course you have to control the risk when you are innovating, but you have to consider your innovation pipeline as a portfolio with a collective return rather than as individual opportunities that represent lots of chances for embarrassing failures.  If you have one supernova idea out of a hundred that you try over the course of a year, it doesn’t matter if the other ninety-nine were unsuccessful.  And I’ll go even further!  You never could have had that one supernova idea unless you also tried the hundred ideas.

How many of us in our companies try a hundred new things in a given year?  Very few!  U.S. Poet Laureate Maya Angelou once reflected, ‘People will forget what you said…but people will never forget how you made them feel.’  As leaders, therefore, let’s think about how we make our people feel about failure.  Change that attitude and we may find that our organisations are much more innovative than they ever could have been in the past.

Adam Kingl is the author of Next Generation Leadership (HarperCollins) and is a keynote speaker, educator and adviser.  www.adamkingl.com

      Photo by Matthew T Rader on Unsplash

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How our brains hinder creativity

How our brains hinder creativity
Written by
Adam Kingl, author, keynote speaker and advisor

Published
22 Mar 2021

Our brains have learnt to sabotage our creative thinking efforts. Adam Kingl explains why taking the time for creativity can help address this issue.
Too many schools minimise or ignore creativity, too many parents discourage it, and too many companies devalue it. Our firms sometimes abrogate responsibility for innovation to a select fraction of the employee population, often someone with a lofty title like Chief Creative Officer, which of course communicates to the rest of the company that they should ‘leave creativity to the experts’.

If we observe how our leaders spend their time, and by extension how we should spend ours, too many are tacitly telling us that creativity is relegated to possibly a few minutes a week and ideally in one’s free time, not when we’re on the clock. In my advisory work to global corporations, I usually find this last condition, lack of time, to be the most common and pernicious.

Why we should make creative thinking a priority
The problem is that if we budget very little time in our lives to innovating or adapting to try new ideas, we typically incur a double deficit in our creative capacity.

First, we never make the time because creativity is always at the bottom of our priority list. Inevitably, we can never plan on all the firefighting and pop-up meetings that will occur in the week, so our real week is much more full of dealing with the day to day than our diaries suggested on Monday morning.

Allowing time for creativity is the only way to yield results
Second, if we do keep and honour a tiny fraction of our week or month to creative thinking, brainstorming and the like, we find our attention span is constantly distracted. We never seem to produce anything worthwhile as a result, and so we face each new window of opportunity for innovation with an ever growing, soul-sucking impression of dread or, at the least, resignation.

What we’re learning now is that we’re unfortunately training our brains to deliver this depressing result. Recent neuroscientific research has revealed how we repress and invigorate creativity. These hurried, captured moments of precious time for innovation yield paltry results. Our brains can’t turn on the magic for such short, unsustainable periods of time.

The five brain states explained
There are several brain states from deep sleep to deep focus and peak performance. The higher the performing brain, the greater the frequency of brain waves, hence Hertz is the degree of measurement:

Delta – deep sleep: 1-3 Hz
Theta – deep meditation, light sleep: 4-8 Hz
Alpha – relaxed, calm consciousness: 9-12 Hz
Beta – normal, alert consciousness: 13-30 Hz
Gamma – super-focused mind, increased brain power, peak state of consciousness and performance: 31-70 Hz.
Which of these do you think is our typical brain state during a normal work day?

I imagine many of you are thinking Theta! Sad but true – light sleep can be our normal work state. That’s rather depressing if that’s your normal. But Beta is probably our usual state, right? This is what we require of our brains to accomplish our normal tasks of answering emails, solving our workaday problems…and possibly Theta state when we’re in committee meetings.

Typical business routines encourage us to work in a state where the Beta waves (business as usual) in our brains are dominant, though we now know that maximum innovation and insight occurs when we are in Gamma state.

How to remain in Gamma state for longer
Neuroscientific research has also 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, the brain through habit easily and proactively often drags us back to Beta.

Therefore, if we need our brains to be in Gamma in order to be truly creative, 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. Beta state is like a constant and familiar noise, the ever-present static of our work lives that can block Gamma state. I liken this to how I find it hard to think when I’m eating an apple because I have this magnified, crunching noise in the echo chamber of my skull.

Mundane and creative – why getting the balance right is important
We can’t easily shut off this Beta activity, 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 creativity even if we give ourselves those fleeting thirty minutes a week to do so. We must change our routines so that we give our brains more time to marinate in Gamma and increase the frequency of those marinades. Like any muscle, the creative function in our brains requires exercise in order to improve, but as importantly, to be receptive to create in the first place.

The point is not that we denude all traditional routine from our organisations. We need some of that. But most of companies that I’ve experienced usually operate at a ratio of about 99% business as usual to 1% creative time…on a good week! So if you’re feeling uncomfortable that I’m suggesting something like a fifty-fifty balance, I’m not saying that. But the better ratio surely has to be closer to eighty-twenty at least? I’m merely entreating us to ask ourselves honestly, ‘Is the balance right?’

Adam Kingl is the author of Next Generation Leadership (HarperCollins) and is a keynote speaker, educator and advisor. www.adamkingl.com

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What Should Senior Executives Focus On When Pursuing Innovation?

A lot of executives say they want to enhance innovation in their organisations. I tell senior executives not to focus on products, services or processes because they have many colleagues who can focus on those. Senior executives should be focusing on strategic innovation, answering three fundamental questions: ‘Who, what, how?’ : Who is my customer? What am I offering that customer? How am I offering it?

This is also known as business model innovation, challenging the assumptions implicit in the answers to those three questions. If you can innovate around your strategy, you can develop an inimitable competitive advantage. To improve the quality of internal conversations in an organisation, leaders have to encourage that their assumptions be questioned. They should be asking their colleagues, including those more junior, ‘Based on what you’ve just heard me say, what assumptions do you think I’m making?’

Once those assumptions are surfaced, then ask, ‘OK, which of those assumptions may not be true or may no longer be true? Maybe some of the ways I look at the world were fit for purpose five or ten years ago, but they aren’t so today.’ That’s a really simple hack to make yourself automatically a more innovative executive. Of course, in a COVID and post-COVID world, the relevance of one’s perspective may be limited to months rather than years!

This approach to encourage questioning is rather antithetical to the old paradigms of the leader as the font of wisdom. Experience is sometimes an ally and sometimes a professional hazard. So do consider encouraging others to identify and then question your assumptions in order to progress on the road to enjoying an innovative environment in your team or company.

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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 a Unique Culture Proposition Became a USP

How a unique culture proposition became a usp
How can you transform the way you do things into a compelling sales proposition? Zurich Insurance has created a Unique Culture …

ADAM KINGL
01 MARCH 2010
How can you transform the way you do things into a compelling sales proposition? Zurich Insurance has created a Unique Culture Proposition which may well be its Unique Selling Point. Adam Kingl tells the story.
How a unique culture proposition became a uspEvery day dozens of Zurich Insurance risk engineers visit customer sites. This adds up to thousands of direct customer interactions and reams of risk insights fed back to the customers’ risk managers. In addition, Zurich’s global relationship leaders (GRLs) utilize their own meetings with corporate customers to make recommendations for risk management for the following year, always hungry to understand their customer’s risk exposures better than the customer. Examining these activities in 2007, a compelling message emerged: both customer and insurer benefit from a relationship based not on the transaction alone but on valuable knowledge-sharing. Here was an opportunity – to develop a genuine point of differentiation in the market by emphasizing risk insight – and a challenge – to change the culture of the organization so that time-pressured GRLs would incorporate even more of the contribution of the risk engineers in their conversations with risk managers. The potential benefits were clear: the ability to put a premium price on certain products and services, greater customer loyalty, cross-selling of products and services and an enhanced reputation for customer insight and innovation.

Unique Culture Proposition

In essence, Zurich was not envisioning a Unique Selling Point (USP) but a Unique Culture Proposition (UCP), or how the company culture – “the way things are done around here” – would stand out as a point of competitive differentiation. A UCP can be defined as a simple, direct message that governs all your people’s actions at all times and carves out your own space in the market for customers and/or talent.

To explore the implications of this definition, a UCP is what governs behaviour within an organization while a classic USP focuses on the nature of the product or service. Most of us are familiar with the 4 Ps of marketing (price, product, place, promotion) and how differentiating any one of these building blocks can carve out a USP. Like a USP and its 4 Ps, a UCP is built on a handful of building blocks: values, mindsets or assumptions, processes or systems, incentives and stories.

The UCP that Zurich pursued was clear. Aligning mindsets and behaviours around that goal was the challenge, and the anticipated result was serving customer needs not only better but uniquely.The means to that end was to make explicit the value of Zurich’s own people, particularly risk engineers, to the customer via the customer’s primary contacts, the GRLs. This initiative aimed to create real economic value for the company because its aim was for the GRLs and risk engineers to work differently together and to appear differently to their customers. That is a true UCP.

Storytelling change In spring 2007, the risk engineering team met with a senior group of GRLs to turn their vision of a UCP into reality. In their first design meeting, the team conceived a workshop that would be run in several key cities in Europe and North America for the local GRL communities.

One of the first points agreed by the group was that the workshop should prompt stories among the audience in order to lend credibility and to provide examples of how the suggested way of working has succeeded in the past. There were also many more general reasons why storytelling would be a powerful tool: stories are easy to remember by everyone in a community; they create a shared context; they have emotional resonance; and they provide a touchstone for how things were, are, or should be.

The team concluded that a hypothetical customer story would be a valuable vehicle for delivering their story. But this would not be a case study in the classic sense, more of a Choose Your Own Adventure type of customer story that can encompass all variety of risk challenges. Each workshop group would be divided into smaller groups to solve the challenges important to them. In that manner, the workshop designers would also put a risk engineer with each group to collaborate. The emphasis in the workshop was on sharing new ways of working and starting to practise them in a safe environment; storytelling to suggest practical ways of working in closer collaboration with risk engineers; using an experiential, interactive approach; leaving the GRLs with tools to facilitate this new way of working and a forum to share success stories and suggestions; and overall the onus was on the delegates themselves coming up with ideas and solutions rather than being taught.