Taking on a transformation is hard, we all know that; in fact, according to McKinsey (and pretty much everyone else) over 70% of transformations fail. Taking on a transformation in the digital era, I would argue, is even harder. Why? Markets, companies, and information is changing so much faster, so thinking of it as one transformation every 7 to 10 years doesn’t work anymore. It is now demanded that everyone be more nimble and adaptable all the time.
Most companies are responding to the changes required to be effective in the digital era by taking small steps, believing the change can be tackled by individual departments. Those that have successfully made the transition, however, know that it starts with a digital business model and the associated capital reallocation across departments, that can only be driven from the very top. This is a tough ask as operating effectively in the digital era is an unknown quantity for many Executives.
Moore’s Law continues to hold, doubling computing power relentlessly, and together with the speed of information, analysis and automation will halve costs every 2 years. Nanotech, medicine, and artificial intelligence will follow that same pattern. This decade’s mega-trends such as technology automation, globalization, demographic changes, as well as the environmental, and sustainability crisis are expected to continue for decades until their reach and impact hit a tipping point and mark the beginning of a new era.
Transformations are Here to Stay
Most of us openly acknowledge that our lives in the digital era feels increasingly empty. We are more socially connected online than we have ever been and yet it’s not providing us with the meaning we seek, most of us crave something more consequential. When you consider that we spend about 30 percent of our entire lives working, finding purpose and meaning in one’s work is even more important than ever before. However, most of us are not finding this meaning at work. In fact, according to Gallup, 51 percent of workers are “not engaged” in their jobs and 17.5 percent are “actively disengaged.” This means people aren’t as productive as they could be.
Large organizations have always assumed that people need to work there. Organizations have typically been structured with employees recognized simply as the cogs in the system, managers the zookeepers and work as the daily grind. Humanity has literally been designed out of our organizations over the past few decades. In the past, there wasn’t much one could do about it, organizations could pretty much treat employees however they wanted.
Today that is no longer the case. Along with increased competition and the pace of change, employees have a voice that they never had before.The war for talent has never been more fierce, and in an effort to attract and retain the best, organizations need to shift from creating places where they assume people need to be, to creating organizations where people truly want to be.
One very specific field of research in positive psychology which can be applied in the world of leadership, work, and organizations, is that of Positive Organizational Scholarship. The term was coined by Kim Cameron in 2003 to research factors that lead to “especially positive outcomes, processes, and attributes of organizations and their members”. In contrast to other organizational research frameworks, it explicitly focuses on positive patterns, dynamics, and processes and leads to excellence in organizations. The word “scholarship” emphasizes the importance of empirically validated studies and data so that the work is lasting, rather than seen as a fad. An organization was imagined that focused on abundance and human well-being, where talent is nurtured and people are encouraged to thrive and supported by processes, capabilities and other enablers, as well as altruistic motivations and meaningful outcomes while not losing site of productivity and business value.
This business value has been quantified by Jacob Morgan in his bestselling book “The Employee Experience Advantage”. He shares the research from over 250 global organizations proving that creating the desired employee experience results in 20 percent fewer employees, 40% lower turnover, 1.5x the employee growth, 2.1x the average revenue, 4.4x the average profit, 2.9x more revenue per employee, and 4.3x more profit per employee. This translates to many millions of dollars for the organization.
Why Focus on Happiness?
Without a focus on individuals and their happiness transformations tend to focus on the mechanics, the processes, as well as extrinsic motivations which are typically driven by external rewards such as money, fame, grades, and praise. This type of motivation arises from outside the individual and what you typically get in return is incremental improvements, not transformation or business results at the speed required. You often lose many of your star players along the way.
Better to focus on intrinsic motivation which drives one to succeed based on inner goals and ambition. This can be done by focusing on the employee experience by deliberately designing an organization where people want to show up and perform their best work. This needs to cover the cultural, technological, and physical environments.
Looking through the lens of the employee, what they see as the company’s culture is a manifestation of who you hire, fire, and promote. Looking past the values displayed on the walls and observing how people truly behave tells you all you need to know. Leaders set the values for a company, not by what they say but how they act. This sets the tone and, if done well reinforces the hope employees had when joining the company. This is increasingly important in the digital era when 50 percent of the workforce will be made up of millennials by 2020, who crave impact and meaning. This number jumps to 75 percent by 2025. When employees join a company where people don’t manifest the values it cares about, they feel lied to, betrayed and cheated. Too often we see the following scenarios play out.
Do Leaders work all hours rather than leaving at a reasonable time to be with their families?
Did Jane get hired because you liked her rather than her references praising her incredible work ethic, teamwork and ability to make an impact?
Did you decide not to fire Bill even though he was a “brilliant jerk” who upset those around him and wouldn’t listen to feedback?
Did Mike get promoted because he had been in his role a long time rather than because he was demonstrating that he was effectively operating at the next level?
Unfortunately at that point, your employees have signed their employment contract and so are not easily able to jump ship right away. Instead, they immediately become resentful.
As the company grows employees begin to act according to what their Leaders either actively reinforce through praise and promotion or passively reinforce by allowing to happen.
Would they have joined the company had they seen which colleagues are getting hired, fired, or promoted? If not, that is a good place to start.
You will know you have the desired employee experience when people genuinely want to show up to work to perform their best. Research shows that it gives you an unfair advantage over the competition when it comes to talent as well as a more productive workforce by unlocking the discretionary effort of your employees.
However, as the employee experience is a moving target, you need to keep revisiting what it looks like by engaging your employees in the design led by people who genuinely care about the experience of each and every individual.
Before we look at the steps to transform your organization so that it becomes a place where people want to work, it’s worth exploring the concept of happiness. More than simply a positive mood, happiness tends to be a state of well-being that encompasses living a life that is filled with meaning and deep satisfaction.
Dr. Sonja Lyubomirsky, in her book “The How of Happiness”, shows that 50 percent of a given human's happiness level is genetically determined (based on twin studies),10 percent is affected by life circumstances and situation, and the remaining 40 percent of happiness is subject to daily intentional activities and choices. While the exact percentages are of lesser importance, the key is focusing on the choice you have each day to affect your happiness levels.
How can you affect your happiness levels? For more than twenty years, Dr. Barbara Fredrickson has researched and discovered how experiencing positive emotions in a 3-to-1 ratio to negative emotions leads people to flourish, be happy and achieve what they once could only imagine. In her book “Positivity”, she shares her discoveries that experiencing positive emotions broadens people's minds and builds their resourcefulness in ways that help them become more resilient to adversity and effortlessly achieve what they once could only imagine.
I believe that happiness is:
1. Personal to you
2. You have a choice to be happy
3. A mental state of being
4. A sense of progressing through life in a meaningful way.
How Do You Transform with a Focus on Happiness?
While companies need to focus on the following areas that impact the employee experience, the focus on happiness requires a culture and belief system that values individuals deeply and helps them grow and advance in their careers.
1. Get the right people on the bus.
Look at who you’ve hired over the past year: Are they still there? Are they your “A Players” and the talent you need for the digital era? Are they contributing positively to the culture? If not, assess your hiring process as chances are it’s not fit for purpose, especially for the adaptable skills needed in the digital age. By getting this right alone, you will save millions and ensure your people work with those who enrich their lives.
2. Set them up for success.
Develop Adaptable Leaders: “People join companies and leave Managers”. A familiar saying that is even more important in the digital era, given most Managers and Executives have built their career in the analog era, using historical and contemporary management theories. According to Gallup, Managers account for 70 percent variance in employee engagement. It’s vital to invest heavily in an Awesome Manager and Top-Notch Executive program tailored to build the skills of an adaptable Leader in the digital era, starting with the three powers, where Managers and Executives experience what it takes to shift their mindset from seeing themselves at the top of the pyramid to the bottom where they push everyone else up. They understand the value of developing positive energy and relationships. You will know that they are displaying high levels of personal power by how many people they make more successful than themselves. Their people feel deeply valued. If they are not doing this within a relatively short period, perhaps three months, move them to an equivalent individual contributor role. Your people will thank you!
Get to know them as individuals: Are you meeting with your people regularly? This should be at least every other week. What works well is to take them outside of the work environment to get to know them as individuals. They’re more likely to open up. Provide them with a sense of meaning and purpose so they feel connected to the organization. A big part of creating a sense of purpose comes down to self-awareness. Learn who they really are and what’s important to them. What does it mean to them to work well in a team? Do they feel like they are part of a team that is dynamic, nimble and adaptable? People want to feel like they belong and that they can rely on others to have their back. This measures trust, psychological safety, communication and collaboration. How would they rank what they want from their jobs? Do they want security, good relationships with co-workers, opportunities for growth and advancement, or something else altogether? Follow through on providing them with the environment that will make them successful.
Allow them to play to their strengths and develop resilience: Studies have found that Leaders who focus on the strengths of employees benefit from lower levels of staff turnover, higher levels of productivity, more satisfied customers, and greater profitability. Focusing on addressing the weaknesses of individuals is a common management philosophy. Instead, create a shared language of strengths across the organization. Three of the most commonly used strength models include VIA Signature Strengths, Clifton Strengths Finder, and the R2 Strengths Profiler. The R2 Strengths Profiler developed by Linley (2010) not only builds on the VIA and Clifton models, it also provides a dynamic model of many strengths that may change depending on the situation. In order to perform optimally, Linley recommends that we should marshal our realized strengths, maximize our unrealized strengths, minimize our weaknesses, and moderate our learned behaviors. In this way we can produce optimal outcomes rather than trying to be good at everything. As Linley claims, “Using strengths is the smallest thing that people can do to make the biggest difference.”
Give them interesting work: What is considered interesting work will vary from individual to individual. This is why it's critical to get to know your people as individuals. Use an individual’s realized strengths to experience flow (Csikszentmihalyi, 1990), in order to create more optimal experiences. Flow is the sweet spot where skill meets level of challenge and you lose all sense of time. If the activity is too challenging for their skill level, anxiety results. If it’s not challenging enough, lethargy or boredom results.
Make sure they have clear career paths: Engage your people in the design of a career framework so they understand what is expected of them at each level. Providing dual career tracks is an example of enabling people to play to their strengths, either as an individual contributor or as a Manager. For those truly adaptable individuals, provide them with exposure and growth opportunities beyond a traditional career path. According to a global study, one of the top reasons people quit their jobs is a lack of advancement opportunities.
Promote fairly and transparently: Fairness means free from bias, dishonesty, or injustice. Engaging People Managers and peers to provide evidence of people operating at the next level boosts a sense of transparency and fairness. Promotions should be based on competence at the next level that is obvious to everyone, rather than time in a role.
You still need to properly clarify the organizational structure, roles, responsibilities, processes, and rewards that are needed for the digital era. That alone, however, will not give you the results you are after although it will help eliminate job dissatisfaction in your organization. As Herzberg (1968) discovered, just because someone is not dissatisfied doesn't mean they are satisfied either. Building job satisfaction by laying the cultural organizational foundations that lead to employee happiness is a key part of the process as well. Both need to be tackled.
As Morgan’s research shows, organizations that get this right have higher customer satisfaction scores and rankings; have top-notch innovation practices; are the most attractive and respected places to work; are the most valuable brands; are also smarter, greener, happier and more diverse; have the best people teams; and have the best camaraderie. This is in addition to providing a higher return on performance benchmarks when compared to their competition, and they provide a higher return on investment when looking at stock price performance.
What are you waiting for? You can’t afford not to get started.