What if you woke up tomorrow and you could not make any money like you do today? What would happen? How would you stay in business? What would you do? 10 years ago, these questions would have been unthinkable. At that time, banks were ‘too big to fail’, established companies reigned supreme, and the Internet and technology as we currently know it was only in its infancy. Now it seems that we ask these questions all too frequently as overnight profits can turn to dust and unexpected players who utilise technology and innovation challenge established business practices from all angles.
What are the tools for the success for the future? The answers are numerous, and it does depend on various factors as to what will work and what will not—but many are pinning success as being rooted in an innovative company culture. There is no set blueprint for implementing an innovative culture—neither is it something you can just download and bolt onto your company. What is known is that it is uniquely weaved into the fabric of a company—and in the coming years, particularly as millennials come to dominate the global workforce and technology develops further, knowing how to build a successful culture into an organisation will be crucial for business success. As the entity that specialises in the workforce, HR will come to play an integral role—and this is how.
What is culture?
To be sure, every company does have a culture in some form or another. According to Howard Schwarz and Stanley M. Davis writing in their article Matching Corporate Culture and Business Strategy culture…is, “A pattern of...organisation.” Such beliefs and expectations can come in different forms, and they can be positive or negative.
Schwarz and Davis make clear that successful companies place a lot of emphasis on good values, and give time and attention to shaping those values. They are not imposed overnight but emerge from long-term processes that require commitment and energy—and which certainly should go beyond traditional notions of profit-making.
As Annemie Ress, former Global HR Director, eBay and Skype stated, “Success in the future requires us to make more of the human side of the business. Businesses need to encourage their people to develop mindsets geared towards connection, conversation and experimentation.” As such, the values and the culture of the future have to evolve around encouraging participation in innovation—but if this is the goal, how is it achieved?
Incorporating millennials
Creating the culture of the future requires HR to understand the workforce of the future too. According to EY’s Global Banking Outlook 2016, 72% of the global workforce will be made up by millennials in 2025, and their expectations of work often vastly differ from older generations.
For one, millennials tend to want more opportunities and experiences, and want them immediately. This breaks the traditional mould of business because in previous years, going further up the career ladder was considered a reward for tenure of service rather than a work right. This, however, is not what millennials want as many of them see roadblocks put in front of them and are therefore focused on building a portfolio experience. Such is this desire that the London Business School discovered that 90% of millennials did not plan to stay with an employer for more than five years, with 37% saying they aimed for staying less than two years.
With HR responsible for training and also under pressure to produce a high-performing workforce, building programmes that give millennials multiple experiences or give them the ability to provide input into the business is one way of helping marry all these demands.
As an example, EY has initiated numerous activities to engage younger generations in the workplace. Speaking to HR Magazine, Michael Wong, Partner and Greater China Talent Leader, EY explained, “Hong Kong Cross Generation Network kicked off a campaign early last summer with a three-month team-building competition called Mission 2020 that aimed to narrow the generation gap, strengthen the understanding among generations and build good relationships across different service lines.” This comes in addition to their EY Visionaries programme, where people from senior management level help staff members understand how they can support EY’s Vision 2020 in their roles, and an EY Academy for university students.
However, millennials tend to want more than just experience—they also highly value work-life balance. According to PwC’s NextGen survey, 71% of millennials say that work demands interfere with their personal lives—compared to 63% of non-millennial employees. What’s more, if given the chance to make their work more flexible, 64% of millennials would like to occasionally work from home and 66% would like to be able to shift their working hours.
From a HR perspective, implementing flex-time can be challenging, and it is often the case that certain employees are needed—and without them, business productivity can suffer. It is however not impossible—many professions have found the capacity to provide flexible hours at least for certain job functions.
Fostering a culture of engagement
According to a recent Gallup poll, only 13% of the world’s workforce is ‘highly engaged’—and this has a negative knock-on effect with research from Bersin by Deloitte finding that up to half of workforces would not recommend their employer to their peers.
If organisations need more engagement, how can they successfully achieve that? In many respects, it comes down to empathy and a willingness to act upon what is heard from within the organisation. As an example, looking towards Generation X—who were born between the 1960s and 1980s—many worry about the prospects of retirement as pensions get changed and cut back. Understanding that this is different from the deal they were originally offered when they started work can often help HR get to the root cause of low engagement and unproductive work in the office that sometimes exists amongst this generation.
With this in mind, engagement involves more listening and working with employees to figure out solutions to the challenges that they face. This is a start but employees also need to be able to have the trust in HR to deliver. As Tim Sackett, President, HRU Technical Resources, a talent solutions provider, explained, “The one true fact in all workplaces is your people want to be in the know, they want to be in the circle of trust. HR and leadership, in general, don’t do a good job at this, and it has a huge impact to engagement. Find ways to make this happen and let your people know that it’s ‘inside’ information. Trusting your employees can handle it raises engagement.”
By being engaging, firms can differentiate themselves in the market as well as enhance performance. As an example, EY, as part of its Vision 2020 strategy to become a corporate leader, have developed a diversity and inclusiveness (D&I) strategy to help itself differentiate from others. Michael Wong, Partner and Greater China Talent Leader, EY elaborated, “At EY, there are D&I internal networks, including Professional Women’s Network (PWN), Working Parents’ Network (WPN) and Cross Generation Network (CGN). PWN helps to build broader social network for female professionals and promote their career development. WPN is to enhance communications among working parents and share their experience on work-life balance, child care or education. CGN facilitates the understanding and communication among the different generations.”
The point of having an innovative culture in this respect is coming up with the ideas of how to engage and then having the innovative capacity to know how to deal with these problems. Developing this capacity is crucial if companies want to have a more satisfied workforce and to really bring out those ideas that will make the organisation much more successful and productive.
Incubating innovation
With all the major pillars in place to create an innovative environment, what does innovation itself actually look like? When you have got the workforce of the future onboard, and engaged with everyone in the workforce, it is then a question of allowing space for people to innovate. The kinds of innovations that emerge differ, and the path to get there is varied depending on individual companies, but what innovative firms all have in common is the time given to innovate.
Looking to Google as an example, not only are its offices and benefit packages the envy of many employers, but the time they dedicate to innovation is notable. In particular, it is famous for its ‘20% time’ which allows employees to spend 20% of their working time to explore ideas that could drive the business forward. This time has led to some of Google’s most valued products, such as Google Drive, Maps and Gmail to be developed and brought to the market.
For Google to go from 20% time to Google Drive did require process. As Matt Collier, Lead Instructor, LUMA explained, such innovative processes start with the empathetic questions: ‘what experience do you want to deliver?’, ‘what services will enable you to deliver those experiences?’ and ‘what products will drive the services and technologies needed to build those products?’. These initial questions are about putting a firm in the client’s shoes and help it to understand its differentiation and core strengths.
Then it is a case of conceptualising the proposed solutions and giving employees the time to question and discover ideas that improve upon what has already been made. This process can be long drawn out and will involve iterative testing throughout and constant collaboration but the end result is a product, service or solution that satisfies.
In the long run, such processes do save money. The risk of not being innovative is greater than most firms could imagine. According to CEB, for every billion dollars an organisation makes in revenue, a company could potentially forgo USD 930 million accumulatively over five years if they fall behind on innovation. As such, innovation is not about lazing around on comfy chairs with headphones while employees come up with unrealistic ideas, it is about financial security too.
With innovation there should always be awards for success. EY has a global recognition programme called ‘Better Begins with You’ in which ‘pursuing innovation’ is one of the award categories. To win, employees have to have shown to drive continuous improvement, develop new services and solutions and build new approaches to drive efficiencies. But of course, not all projects are successful. At Tata Group, in its annual employee awards, it has included a category called ‘Dare to Try.’ The essence of this award is to reward a person or group of people who has tried to initiate a new idea which ultimately failed. The winner is the group who is best able to explain why their project failed and the lessons learnt from it.
In this respect, when HR is developing training and also seeking to reward its employees, it should have these aspects in mind and encourage employees to go out and innovate beyond their traditional duties. Although it has been seen as a ‘want to have’ by many, the financial implications of not doing so are considerable which is the business case that HR can now take to the CFO.
Understanding purpose
When a firm is innovating, they should always keep in mind their organisation's purpose. Tony O’Driscoll, Regional Managing Director, Duke Corporate Education speaking at AmCham’s Human Resources Conference in December explained, “People don’t buy what you do but why you do it. It’s about emotional resonance with the aspiration of the organisation that people—employees, customers and partners—can connect to. If you don’t have a why, you only have a what.”
From the perspective of the employee, to be able to get an organisation to innovate, the employee has to believe that the company builds this into its purpose. This is crucial for retention because according to EY’s The Business Case for Purpose 2014, 89% of respondents believe ‘purpose-driven’ organisations have higher levels of employee satisfaction—and this is particularly true in the case of millennials.
In discovering its purpose, in 2003 IBM used engagement and combined that with harvesting its employees innovation to do a revaluation of their basic values. In a 72-hour online discussion on its global intranet, they came up with a set of core values which they claim shape ‘everything we do and every choice we make on behalf of the company.’ They called this a ‘ValuesJam’.
Sam Palmisano, former Chairman and CEO, IBM stated, “You have to empower people while ensuring that they're making the right calls the right way. And by 'right,' I'm not talking about ethics and legal compliance alone; those are table stakes. I'm talking about decisions that support and give life to IBM's strategy and brand, decisions that shape a culture. That's why values, for us, aren't soft. They're the basis of what we do, our mission as a company...You've got to create a management system that empowers people and provides a basis for decision making that is consistent with who we are at IBM.”
Embracing the Glassdoor era
Everyone knows the power of technology and how it is shaping organisations worldwide. It has thrown up new challenges that 10 years ago would have been unimaginable. Organisations are harnessing its power and potential—but firms are also learning how destructive it can be.
For one, companies have to come to terms with the transparency that it opens up. According to Deloitte’s Global Human Capital Trends 2015 report, ‘today’s organisations live in the Glassdoor era. HR is already familiar with what this means for wild employees who post inappropriate photos on Facebook—but companies themselves are falling into the same trap. Organisations worldwide can be subjected to the same treatment through the website, Glassdoor—which works similar to Tripadvisor in the sense that employees can rate and leave comments about any firm online for everyone to see.
The effects of this of course could pose a challenge to some firms. With nearly 62% of Hong Kong employees, according to Community Business, feeling that work-life balance has significantly deteriorated in the city over the last 10 years, it is easy to see how websites like Glassdoor can become a forum for venting anger and disappointment, which in turn can damage a firm’s reputation.
The imperative therefore to implement engagement, instil purpose, have work-life balance and initiate innovation has become greater than ever. One way to get the ball rolling in implementing this culture is to harness the power of the internet to turn it into a promotional opportunity. If HR can show that it has brought about the aforementioned aspects together to build an innovative culture into the fabric of an organisation, the word will spread. According to LinkedIn’s Global Recruitment Trends 2016 report, 47% employees worldwide share or contribute to employer branding with marketing—this could reach a huge potential talent pool. DBS in Hong Kong is a good example of an employer who uses the likes of LinkedIn to show the world what its employees are doing.
Developing an innovative culture is by no means an easy task. The amount of planning it will take and the number of people involved in the process will be substantial, and will need patience. But on many fronts, developing a culture which engages employees of all ages, develops purpose, allows space for innovation and turns the creeping threat of transparency into a positive marketing tool will overall enhance the working productivity and long-term profitability of an organisation.
Large established organisations are increasingly finding themselves up against smaller, more versatile firms that innovate and take advantage of the new resources around them to develop alternative services. The former firms may feel like big aircraft carriers that are hard to turn around but it is imperative to do so. As the human entity of an organisation, HR has a real opportunity to play a strategic role in a company’s lifespan and profitability long into the 21st century by encouraging a culture of innovation.
Paul Arkwright
Publisher
