How Organizational Capital Boosts Financial Performance

Companies have significantly better financial performance when they create a culture of consultative and challenging leadership, skill development, and collaboration. These factors also support bottom-up innovation, and positive and inclusive work environments, that McKinsey referred to as building “Organizational Capital.”

Sustained Excellence

McKinsey’s Global Institute looked at the impact of investing in human capital and skill development on company performance. Looking at 1,800 large companies across 15 sectors they assessed how much these companies focused on human capital and whether they financially outperformed their sector peer.
It turns out there is a significant impact.  The study identified what McKinsey calls People + Performance Winners. These companies excel at creating opportunities for employees to build skills, which they measured by looking at internal mobility, training hours, and organizational health scores. They also consistently clear the highest bar for financial performance. P + P Winners achieve more consistent results and have greater earnings resilience, along with the ability to attract and retain talent.
McKinsey asked, ‘How did they succeed on both fronts?’ The additional key element for these companies is what McKinsey calls Organizational Capital – their management practices, systems, and culture. It’s not enough to simply hire and train the great talent, it’s essential to create the environment where they can thrive. Think of it as the car that surrounds a driver. Even the best drivers are able to perform at higher levels when they have the best steering, braking, engines, and safety features in their cars.
As McKinsey noted in their report, “P+P Winners have a distinctive signature characterized by consultative and challenging leadership styles; bottom-up innovation and collaboration; positive and inclusive work environments; and rewards and advancement opportunities for employees.”
This research is important for all HR professionals and leaders who care about performance. It reinforces the view that we at NextBridge have always held:  People and company performance are a “both/and”conversation. Investing in one while not investing in the other will move the needle on some indicators of company success, but it won’t create sustained, consistent success in a variety of economic environments. Those companies that have the highest success are those that excel at balancing their investments and building organizations that thrive.

 

5 Minutes. 5 Days. (Re)gaining Joy at Work

Joy and happiness are two different things. Both impact things like creativity, individual productivity, and the company’s bottom line (yes, it’s true). But joy is more sustainable.  Here’s a 5-minute per day, one-week plan for kickstarting your path to getting more joy out of work.

Are you missing joy at work?  Or maybe, you’ve never even put the two words joy and work together in the same sentence.  May is Mental Health Awareness Month. Joy is important to mental health. Finding it at work is very challenging for many of us. However, finding it may be more important than ever.

Isn’t joy just another word for happiness?  Not really. According to Merriam Webster dictionary joy is the emotion evoked by well-being, success, or good fortune. Joy comes from being connected to our uniqueness, authenticity, to others and to something meaningful. Joy is something we create and more intrinsic. Happiness is sparked by an external event or situation. Research shows both joy and happiness impact our creativity, energy, productivity, health, ability to handle stress, and the company’s bottom line. Joy is more sustainable.

Interested in (re)gaining joy at work? After all, we do spend most of our days working. Creating joy needs to be an active pursuit made up of small steps we take every day. I challenge you to take the 5-minute, 5-day challenge to (re)gain joy at work. It works best when you implement it over 5 consecutive days and jot your answers down somewhere so you can look back on them.

Day One: 5 minutes:  Reconnect to your North Star.  What is your big why?  Why do you do the work you do? How is it helping you live your values? How does your work connect with other important things in your life? What about it is driving you right now?

Day Two: 5 minutes:  What is one thing you can influence or change at work that will allow you to align with your North Star more completely – even if it’s a small thing. What is one task you could do? Or stop doing? What is one opportunity you could take to give yourself a few minutes to focus on something more meaningful? Or to laugh? Or to take a deep breath?

Day Three: 5 minutes: What colleague could you help?  Maybe you’re thinking you don’t have time to help a colleague because you have so much on your plate.  What if you grabbed them a cup of coffee when you go to grab one yourself? Could you have a walk and talk to help them think through a challenge while you both go to pick up lunch (that you may be eating at your desk so you can keep working!)

Day Four: 5 minutes: What are your strengths?  What energizes you?  What is one way, in the next week, you could more fully use that strength? How could you craft your job so that you are able to do this more consistently and frequently?

Day Five: 5 minutes.  Reflect and reward yourself.  What accomplishment are you proud of this week? How did you live your big why? What one thing did you influence or change? Who did you lend a hand to? How did you use your strengths more fully? Do you feel more joy today than you did 5 days ago?

Integrate this challenge into your daily routine every week. Assess the impact at the end of 3-weeks and 3 months. Let me know what happens.

Has Your Team’s Leadership Been Tested in 2021?

The Hard Truth: It’s Not Going to Get Easier.   Here Are the Trends and What You Can Do…

Adapting to rapidly changing market, technology and client-demand trends will consume organizations in 2022.  Which means that the risk of change burnout for employees and leaders alike is soaring.  Leaders at all levels will need to improve their change leadership capability quickly and continually.

Consider the following trends:

  • Hybrid work models are here to stay and will continue to evolve. 63% of high-growth companies already have enabled hybrid work models.  While 69% of negative or no-growth companies are focused on complete on-site or all-remote models.  McKinsey
  • Hybrid models will fail for 30% of businesses on their first try.  Why?  According to Forrester, shifting to a permanent hybrid model won’t be easy.  There are significant, competing demands between face-to-face and remote work along a myriad of dimensions: including roles, processes, and promotion opportunities.
  • The “great attrition” will continue.  64% of workers said they are at least somewhat likely to leave their job in the next 3-6 months, according to PwC.

What talent development strategies are most organizations focused on?

  • Skill building is the number one action taken by businesses to close pandemic-era skill gaps – for 69% of businesses.  That’s 13 points higher than redeploying, 17 points higher than hiring and 33 points higher than contracting.  McKinsey.
  • Social, emotional, and advanced cognitive skills are the most focused-on development targets.  What’s #1? Leadership and managing others.  McKinsey.
  • Top two priorities for 2022 according to 550 HR Leaders surveyed by Gartner?  #1 is Building critical skills and #2 is organizational design / change management.
  • Start with strategy.  How will your organization respond to both the business and talent changes coming your way? Link team objectives and people development to your strategy. Be sure to set expectations that priorities will shift over the course of 2022.
  • Increase engagement.  Seems like you’ve heard this before? It gets more important in 2022. To ensure your hybrid model works, make sure you have a thorough DEI plan.  Get a balance of both office and remote voices when you consider policy, plans, and assignments. Align your reward and recognition strategy with your DEI objectives.
  • Don’t fall behind. This is not the year to be playing catch up.  Your 2022 organizational strategy and planning must account for the massive market and talent changes taking place. Uncover what’s worked over the last 18 months, what hasn’t worked, and build some projections about how things will be different in 2022. And that includes assessing the leadership skills necessary to implement and continually adapt your hybrid model.

To continue to be successful, organizations will need to do some or all of the following:

  • restructure jobs
  • figure out how to organize work processes differently
  • rethink how your teams need to work together
  • build trust and rapport with your employees
  • work hard to maintain or recreate a better business culture
  • address the change burnout problem we’re all facing
  • develop new leadership mindsets and skills

Could You Use a Partner to Help Boost Your Team’s Leadership Capability and Business Culture? 

We’ve been working with our clients for over 20 years to help solve these kinds of challenges. As your leadership team develops your 2022 plans, we’re here to partner with you.

In recent months we’ve seen an uptick in inquiries into how we can help leaders and their organizations work, lead, and organize differently. Our clients have been benefitting from our newest suite of programs and consulting services, Solving the Hybrid Puzzle.

Or contact us for more information. 978-475-8424 info@nextbridgeconsulting.com

 

When Your Team Needs to Redefine Itself

Most organizations are either operating in a permanent hybrid model or they’re planning to go there early in 2022. That means redefining who you are as an organization and as a team. How will you do that successfully?

Lots of Questions

How’s your team adjusting to hybrid work or planning for a hybrid future? This next-new-normal way of working will be most successful if you start the transition by deeply reflecting on who you are now and, often, redefining who you will be 

 –as an individual and a team. What goals are a priority? How will you prepare for the inevitable shift in priorities? How will people really work together? How will you navigate and build our relationships? Even in ‘normal’ years, these questions take center stage during the business planning cycles many of you are immersed in right now.

Recently, I had the pleasure of working with two executive teams. Their businesses are very different. One is over 20 years old with almost 4000 employees. The second is a start-up driving towards commercializing its first product. While different, both of them were exploring a common question…

Who are we today and who do we want to be?

In both cases we started with who the team wanted to be so we could frame that sometimes more difficult conversation – who are we now?

Answering this question requires that these executives become aware of and more comfortable with the answers to several other, deeper questions about themselves and the team:

  • Do we fully understand who each of us is?  Do we understand how each of us filters information, makes decisions, and communicates?
  • Are we aligned around a common vision of where this company or department is going? And how are we, as a team, are leading it? This may seem obvious, but misalignment amongst leadership is a common cause of organizational dysfunction and average performance.
  • Are we role-modelling the characteristics we want this organization to exhibit?
  • How are we pushing each other to step out of our comfort zones in a productive and effective way? Innovation doesn’t happen when everyone is comfortable.
  • How do we provide impactful feedback to each other so that we increase the team’s effectiveness rather than diminishing it?
  • What about when the inevitable happens – when we’re sometimes annoying each other? Are we avoiding certain people? Aggressively confronting them? How well is it working? Is there a another option that gets better results.
Why so many questions? Because good answers require good questions… and these are all stones that need to be turned over.  In today’s environment, personal and organizational curiosity is a prerequisite for leadership and business growth. And if you’re not digging deeply enough, you’re limiting the depth and speed of your growth.
Want some guidance on asking the right questions and ensuring you get meaningful answers? We’ve been helping individual leaders, teams and organizations do just that for over 20 years.  Let’s talk.  978-475-8424 or e.onderick-harvey@NextBridgeConsulting.com

 

When is Bad News Better than Good News?

When is bad news better than good news?

When you put off communicating important information to your organization until you have something “good” to say to them.

There’s an old saying that “no news is good news.” That may still apply to some things in life, but it’s decidedly untrue when it comes to communicating important information to your organization.

When people don’t have any or enough information about what’s important to them, what happens? One typical result is that they get anxious. And anxious team members are more distracted and less productive. In fact, in a recent business survey reported by McKinsey, “Employees who felt included in detailed communications about what’s decided and what’s still uncertain were nearly five times more likely to report increased productivity.”

Employees (and leaders) who don’t have enough information will also begin to develop their own ideas about what’s going on. They suppose something is true without having evidence to confirm it.  And then you’re playing defense against a difficult foe with multiple tentacles: the rumor mill.

Decades of leadership research and best practice application support the “over-communication” of information to employees when an organization is facing change, particularly during the most trying of times. That means direct, open communication on the status of what’s important to employees on a regular basis through multiple channels from all levels of management.

Some leaders have a difficult time dealing with uncertainty themselves and assume others will too. For them it’s tempting to “wait until we get it all figured out before we let people know what direction we’re going in.” What these leaders often fail to realize is that it’s a lot easier as a more senior leader to deal with uncertainty when you have much more real-time information available to you; and this is especially true if you have some control over the decisions and direction the organization is heading in.

It’s better to be frank with your teams about what the challenges are, what decisions have been made and what is still pending. Explain the competing variables the organization faces and trust them understand the complexity. It allows people to process information along the way. That makes the eventual decisions that are made easier for people to accept and adjust to because they will have felt involved along the way.

The competition for talent is never over and the best talent wants to feel that their leaders are making them part of the dialogue about what’s important. It’s up to leadership at all levels to share the news… good, bad, or incomplete.

3 Ways to Improve Your Strategic Thinking

You may have heard the story of the truck that was immovably stuck under a bridge and how the solution came from an unlikely source. If you don’t know it, I’ll share it at the end of this newsletter.

I was thinking about this story when recalling a professional meeting where the topic was developing a global mindset. One of the speakers was talking about their company’s research showing that experiencing another culture has a significant impact on one’s strategic thinking. “Experiencing” didn’t mean going there on a vacation. It was an immersive, longer-term experience, like ex pat assignments or managing a global team where you had to travel to work within their culture somewhat regularly.

The speaker noted that these assignments have this profound impact because they challenge your perceptions and perspectives of the world. These different perspectives allow you to be more nuanced in your thinking about how different parts of a whole interact, the variables that impact it, and the resulting implications. Your competitors are increasingly global, not just national or local. Therefore, such experiences help you to think more like (and outthink) your competitors, to anticipate trends, and to consider solutions and strategies from a broader array of possibilities.

How, then, can you stretch your perspectives to help develop your strategic thinking when working globally isn’t a possibility (or, at least, not yet)?

  • Regularly interact with people in a different function or area of the company. Marketers and engineers don’t think alike. Operations people think differently than researchers. See how someone different from you may experience the same issues or the organization itself.
  • Interact with those outside your industry.  For years, benchmarking was the buzzword when you wanted to get a more strategic perspective and to gain some competitive advantage. Benchmarking is often practiced with a closed-system approach. Life science companies benchmark other life science companies. Tech firms benchmark other tech firms. That’s important, but it’s also somewhat limiting, especially in a world where industries and disciplines are bleeding together like never before. The perspective of someone in a different industry about your issue or situation will cause you to think about the variables and interactions more broadly, more strategically. One of the things that made Steve Jobs so successful at product design was that he included perspectives he gained from things as diverse as digital animation, calligraphy and architecture.

When we hire people who are mostly like ourselves we multiply our strengths… but also our weaknesses and blind spots.

  • Hire people who are different from you. We’re all familiar with research which shows that diverse organizations are generally more successful. In addition to the typical diversity categories we’re used to thinking about (gender, race, age, etc.) we should look for diversity of thought, experience, and education, among many other factors. When we hire people who are mostly like ourselves, we multiply our strengths… but also our weaknesses and blind spots. Make sure to regularly ask those you’ve hired for their perspective and input on the business issues you are working to address.

Thinking about your daily business interactions expansively will help you develop the broader perspective needed for strategic thinking.

So, the story of the truck goes like this. The top of the truck was wedged against the underside of a bridge, and it could go neither forward nor backward. It just wouldn’t budge. Traffic was backed up and police and tow trucks were trying to figure out how to get it out. A little boy walked up and asked what was going on.  The police officer explained the dilemma. The little boy looked at him and said, “let the air out of the tires.”

10 Things that Keep You from Hiring Great People

Over the years, one of our most popular workshops is Accelerated Hiring.  That’s because hiring great people is one of the toughest and most impactful of leadership responsibilities.  A lot of hiring mistakes are self-inflicted.  Some are a function of the organization’s approach (or lack thereof).  As we come out of the Covid pandemic in the coming months, hiring will take off, and the competition for top talent will seem like a contact sport.

I love this article by Lou Adler about the 10 Things Managers Intentionally Do to Avoid Hiring Great People.  We address almost all of these in Accelerated Hiring.  See if any of these 10 things resonate with you:

  1. Filter candidates on skills and experience
  2. Target the wrong talent pool with the wrong message
  3. Using compensation to save time but prevent the best from being evaluated
  4. Looking for the person to fit the “perfect” job rather than modifying the job to fit the “perfect” person.
  5. Use of generic traits
  6. Believe gut feelings, first impressions and that the “halo effect” predicts performance
  7. Allow a hiring in your own image mentality to exist
  8. Use gladiator voting
  9. Accept a safe “no” vote with no proof that it’s justified
  10. Don’t make hiring managers responsible

Even the most experienced leaders can find it challenging when it comes to making such a critical talent decision.  Are you guilty of any of these?

Alignment + Agility = Competitive Advantage

Our previous two articles talked about creating alignment for success in 2021. First, your organization (and your teams) need a clearly articulated North Star and strategic clarity. Second, it is imperative to build a culture that reinforces alignment between how you work and what you aim to achieve. Alignment is essential for success. However, agility – in addition to alignment – will lead to competitive advantage.

Alignment without agility is stagnation.

Agility without alignment is chaos.

Over the past year, rapid response and breakneck adaptation have been watchwords for successful businesses in the COVID environment. The pace of that agile response has left people exhausted and organizations risking burnout among their teams. Some organizations have been changing so quickly that they have prioritized adaptation too highly. They are no longer aligned with or certain about their business strategy. And some feel they no longer recognize their culture. In a deep and dire emergency, business survival trumps culture.  Nevertheless, it has its negative consequences.

On the other hand, some of my clients are already worried that, as we approach a post-pandemic world, the desire for a sense of “normalcy” and decompression will result in a temporary, but dangerous stagnation. It could be very tempting to feed the longing for some stability, and focus too heavily on alignment, deprioritizing agility.

And therein lies the conundrum. Organizations that build and maintain competitive advantage create a balance between two competing elements: alignment and agility. It can be convincingly argued that the benefits of agility are only achieved within the context of ongoing alignment with strategy and culture. It is also a fact that change and alignment are, at their core, competing forces that require constant attention.

How can you create alignment and agility within your team?

  • Clearly focus on only a handful of strategic imperatives. And don’t assume clarity. Revisit those imperatives regularly with your team and discuss how the team’s work contributes to them. Use them as your guardrails.
  • Help strategy bubble up from the bottom.  People in the organization who are closer to the customers, operations and technologies often see opportunities and threats more quickly than executives do. In my HBR article, “5 Behaviors of Leaders Who Embrace Change”, I shared these two ideas for building this capability in your team:
    • Make opportunity-seeking part of the regular conversation. Simply asking questions like “What are our customers talking about? What do you think they will want a year or two from now? What new trends do you think will impact us?” sends the message that looking ahead is important. And that you value their input.
    • Advertise successes. Nothing breeds success like success. Tell the stories at company events and recognize team members who are looking ahead and identifying opportunities. Demonstrate that the status quo is not enough anymore.
  • Encourage experimentation and learn from failure:  Too often, traditional organizations’ first response to a risk is to ask, “Why?” Change agility requires leaders to ask “why not?” and to establish opportunities for pilots, prototypes, and experimentation. Experimentation is an integral part of R&D. While an overall strategy informs the researchers’ focus, any R&D scientist will tell you that there are sometimes dozens of experiments that don’t get results and that, without those failures, they wouldn’t have been able to find the successes.
  • Reallocate resources with discipline.  As Sulls’ and Homkes research found, organizations tend to move too slowly or move quickly but lose sight of the strategy. I consulted to an organization a few years ago where moving too quickly without discipline was hampering their ability to achieve results. The CEO had started the company and was the classic early-stage entrepreneur; extremely responsive to market needs, ready and willing to change strategy, and endlessly shifting resources. However, the company was not early stage anymore and this nearly sole focus on agility led to a complete lack of follow-through, very little alignment and was seriously impacting results. The board removed him and named a new CEO who added a new level of discipline to resource allocation through a combination of centralized oversight and distributed decision-making.

Start 2021 with the ideas we’ve discussed in these three articles – defining your North Star, creating strategic clarity, building a strong culture and creating aligned agility – and you will have improved your ability to thrive.

The 3rd Key to Better Results in 2021

Everyone wants a competitive advantage. In our last article, we talked about the critical nature of purpose (a North Star) and strategic clarity. They provide much needed direction in a time of change and uncertainty. The third key to better results in 2021 is culture. And it’s considered by many to be the most important.

Peter Drucker famously said “Culture eats strategy for breakfast” and research supports that assertion. Just a couple examples:

Culture is what bonds people together (or doesn’t) – and it usually determines how effectively you pursue strategy. Whether your organization or team will be remote, blended or back in the office, one of your 2021 priorities should be ensuring your culture is positioning you to take advantage of opportunities.


Just Words on a Page?
Culture is often defined in terms of published values (or principles, philosophy, ideals). These statements are meant to guide the actions and decisions of employees throughout the organization. Do those statements actually create culture? The answer is no. Sull, Turconi, and Sull researched the correlation between 9 of the most frequently stated company values and how well the companies lived up to those values in their employees’ eyes. The correlation between the published values and actual values were very weak for all, and negative for four of them.  As the saying goes, “don’t pay attention to what they say, pay attention to what they do.”

Culture is a Reflection
It reflects how we actually navigate our relationships… with employees, peers, customers and business partners.  Culture is about where we spend our time. Do we spend more time fixing client problems than anticipating them, more time penalizing people for mistakes than recognizing effective behavior? Should we spend more time on service, on innovation or on building value? Ultimately, culture is the collective nature of what we value as a company. And it’s not what we write on a piece of paper, but what we do. Every. single. day.

Build, Maintain and Adapt Intentionally
Our behavior is how we define, demonstrate, and continually recreate culture. As a leader, what actions should you take to build a culture that supports peak performance?

Start with your North Star and strategy: 
Purpose and strategic clarity need to be defined and communicated regularly. They provide the context and direction for the culture choices the company makes.

Align it with the company’s brand:
 Your brand is how your company is perceived and experienced by the customer and other stakeholders.  David Matting, Head of Trends and Insights for TrendWatching notes “There’s really no such thing as internal culture anymore. Your culture is always public, and it’s your most powerful, public-facing asset or liability.” It’s difficult to tell the market you are, for example, positioned around an outstanding customer experience when your business doesn’t support an outstanding employee experience.

Define the behaviors that epitomize values.
 Values are often stated as words or phrases like ‘act with integrity’ or ‘delight the customer’. What does that look like? Define the behaviors that epitomize those values. By watching how people behave, what they say and what decisions and trade-offs are made, any leader or employee should be able to say what your culture is.

Connect roles and work to purpose
.  What does a salesperson, developer, machine operator or the CEO do (and not do) that represents the best in your culture? Go beyond traditional job descriptions and define how that role connects to the purpose and culture. Hire for those attributes; expect them, celebrate them and reward them.

Actively and regularly assess.
Whether through surveys, focus groups or an assessment by an external consultant, regularly take a step back and assess how well people in your organization understand the cultural goals.

According to Gallup, Only 41% of employees strongly

agree that they know what their company stands for

and what makes it different from competitors

Leaders also should be asking how well their teams reflect the stated culture. It’s easy for employees and leaders alike to become unmoored from cultural goals. An honest look will continue to position your culture as a competitive advantage, including when it comes to attracting talent.


Adapt in real time.
 Change can’t wait. When the culture no longer represents who the organization or team should be, adapt it to meet changing needs.
By defining your North Star, creating strategic clarity, and intentionally focusing on culture, you are well on your way to creating competitive advantage and an ability to take advantage of the opportunities presented in 2021.

Our Most Read LinkedIn Articles of 2020

As we all welcome 2021, we thought we’d look back to 2020 and some of our most-read LinkedIn articles.


COVID has taught us that we can and must be able to change rapidly, to transform on the fly if need be. We’ve had no choice but to go more completely digital, transforming our customer, employee, student and supplier experiences. Truly listening with empathy, and being agile became key not just for leaders, but for everyone. Change can’t just be a priority for a few people at the top. It needs to be a priority for everyone. And, honestly, that’s kind of exciting. 

1. 10 𝑻𝒊𝒑𝒔 𝒕𝒐 𝑯𝒆𝒍𝒑 𝒀𝒐𝒖𝒓 𝑻𝒆𝒂𝒎 𝒊𝒏 𝒂 𝑫𝒊𝒔𝒓𝒖𝒑𝒕𝒆𝒅 𝑬𝒏𝒗𝒊𝒓𝒐𝒏𝒎𝒆𝒏𝒕: http://bit.ly/3q8oMg

2. 𝑺𝒊𝒍𝒗𝒆𝒓 𝑳𝒊𝒏𝒊𝒏𝒈𝒔 𝒐𝒇 𝑪𝒐𝒗𝒊𝒅 19: http://bit.ly/3qbjpi0

3. 𝑻𝒉𝒆 𝑴𝒐𝒓𝒆 𝑻𝒉𝒊𝒏𝒈𝒔 𝑪𝒉𝒂𝒏𝒈𝒆… 𝒕𝒉𝒆 𝑴𝒐𝒓𝒆 𝑾𝒆 𝑵𝒆𝒆𝒅 𝒕𝒐 𝑳𝒆𝒂𝒏 𝒐𝒏 𝒕𝒉𝒆 𝑭𝒖𝒏𝒅𝒂𝒎𝒆𝒏𝒕𝒂𝒍𝒔: http://bit.ly/39uetOF


NextBridge partners with you to create and execute pragmatic, sustainable business solutions. Please let us know how we can help you in 2021.