As WEF starts in Davos, building resilience is more than ever on leaders agenda to accelerate transformation !

As WEF starts in Davos, building resilience is more than ever on leaders agenda to accelerate transformation !

Original publication in weforum.org on December 2nd 2019

A. The purpose of a company is to engage all its stakeholders in shared and sustained value creation.

In creating such value, a company serves not only its shareholders, but all its stakeholders – employees, customers, suppliers, local communities and society at large. The best way to understand and harmonize the divergent interests of all stakeholders is through a shared commitment to policies and decisions that strengthen the long-term prosperity of a company.

 

  • i. A company serves its customers by providing a value proposition that best meets their needs. It accepts and supports fair competition and a level playing field. It has zero tolerance for corruption. It keeps the digital ecosystem in which it operates reliable and trustworthy. It makes customers fully aware of the functionality of its products and services, including adverse implications or negative externalities.
  • ii. A company treats its people with dignity and respect. It honours diversity and strives for continuous improvements in working conditions and employee well-being. In a world of rapid change, a company fosters continued employability through ongoing upskilling and reskilling.
  • iii. A company considers its suppliers as true partners in value creation. It provides a fair chance to new market entrants. It integrates respect for human rights into the entire supply chain.
  • iv. A company serves society at large through its activities, supports the communities in which it works, and pays its fair share of taxes. It ensures the safe, ethical and efficient use of data. It acts as a steward of the environmental and material universe for future generations. It consciously protects our biosphere and champions a circular, shared and regenerative economy. It continuously expands the frontiers of knowledge, innovation and technology to improve people’s well-being.
  • v. A company provides its shareholders with a return on investment that takes into account the incurred entrepreneurial risks and the need for continuous innovation and sustained investments. It responsibly manages near-term, medium-term and long-term value creation in pursuit of sustainable shareholder returns that do not sacrifice the future for the present.

B. A company is more than an economic unit generating wealth.

 

It fulfils human and societal aspirations as part of the broader social system. Performance must be measured not only on the return to shareholders, but also on how it achieves its environmental, social and good governance objectives. Executive remuneration should reflect stakeholder responsibility.

 

C. A company that has a multinational scope of activities,

not only serves all those stakeholders who are directly engaged, but acts itself as a stakeholder – together with governments and civil society – of our global future. Corporate global citizenship requires a company to harness its core competencies, its entrepreneurship, skills and relevant resources in collaborative efforts with other companies and stakeholders to improve the state of the world.

 

Written by 
Founder and Executive Chairman, World Economic Forum

Empathy : the magical ingredient for performing teams

Empathy : the magical ingredient for performing teams

Original publication in LinkedIn on septembre 11th 2019

Two European telecoms had partnered to develop a new product. Each had a team of engineers devoted to the product, but those team members each stayed in their own company headquarters, never seeing the other, even though they were working in the same city. The teams emailed each other—and soon the partnership broke down as the emails devolved into a flame war.

A consultant called in to help with the crisis had a simple solution: he got the two teams together for an offsite where they had beers together and got to know one another. The resulting empathy, he knew, would heal the split. The new product was delivered on time.

With the faster pace of change and disruption, markets and teams have become more diverse than ever. And alongside the digital whirlwind and the emergence of artificial intelligence, the human side of work, paradoxically, matters more than ever. Our relationships with colleagues, clients, and business partners will play a major role in the organizations that rise to the top and those that flounder. Empathy, our ability to understand and relate to others, will be key to success for organizations and their employees.

Empathy Bridges Cultural Differences

Take the increase in global business relations as companies go multi-national, markets become global, and the workplace itself morphs into an international reality. People who excel in empathy are most successful at leading cross-cultural teams and managing global customers. Understanding others’ points of view creates bridges across cultures. This is critical, for example, on teams who may never meet each other in person, yet need to communicate effectively.

On international assignments, empathic leaders get along well with people from very different backgrounds and cultures, and can express their ideas in ways the other person will understand. They also quickly pick up on unspoken cultural norms, enabling them to have smoother relationships.

Research shows that emotional intelligence (EI) is a crucial predictor of cultural adjustment, which means better outcomes on overseas assignments. Global managers with strong EI were able to adapt to new cultures and so received more positive feedback from their supervisors. In contrast, managers with low EI were more likely to struggle to adapt to a new culture and end their assignment early. By reducing the cultural gap, emotional intelligence enables managers to find commonality and build connections while on an international assignment, both in and outside of work. The result: success for their career and organization.

Build Loyalty in the Face of Change

Then there’s the relentless pace of mergers and acquisitions, during which the most effective leaders must recognize and deal with their employees’ unspoken feelings, such as fear, in order to successfully motivate and inspire them. Leaders who empathize with the emotions that uncertainty or change bring can find resonance even when delivering bad news.

Rosa Chun at the Manchester Business School found that a major factor in the low success rate of mergers results from a lack of understanding of the human side of such a disruption, and the emotions that roil within employees while companies are integrating. Too many organizations focus on the obligatory aspects of a merger—ensuring legal compliance, maintaining revenue, and keeping shareholders satisfied—while ignoring the human side of mergers and their emotional cost.

Particularly during a merger, clear communication can make the difference between satisfaction and dissatisfaction, loyalty and poor morale. In Chun’s study of a major pharmaceutical company that has grown through mergers and acquisitions, empathy was found to be the most desirable characteristics leaders could display during a merger. Organizational empathy, Chun found, yielded “employee loyalty, perceived job security, satisfaction, and emotional attachment” during and after a merger. By paying attention to the human side of mergers, leaders avoid letting the merger become an organizational crisis.

How to Strengthen Empathy

A first step in strengthening our own empathy might be simply taking some moments amid the distractions of life to care about the emotions and suffering of those around us, particularly those impacted by our decisions. Further steps might include: 

Active listening. Active listening is vital to relationships that work—letting us forge deeper connections throughout our lives. Showing genuine interest in what the other person is saying and feeling puts this into action, for example by asking follow-up and open-ended questions. Once you begin to strengthen your connection with someone, you can use what you learn to inform your future conversations.

Open up. You can complement active listening by opening up yourself. Sharing something deeply personal—such as a difficult experience or current struggle—lets us share our emotions and connect with others on a deeper level. If you’re a leader and find it difficult to disclose your emotions to your team, try talking with a colleague first.

Try well-wishing. Research has shown that people who spend time each day wishing well to themselves and others create a sense of ease, kindness, and greater well-being. In a well-wishing practice, we extend compassion to ourselves, our families and friends, our colleagues, and even people in our area we do not know. For a simple well-wishing practice, choose a routine activity such as walking your dog or driving to work to do a silent practice. Offer silent good wishes to the people nearby, to the people with whom you will be meeting with next, to those with whom you just met, or even to yourself.

Whether you’re preparing for an international assignment, leading a merger, or simply want to improve connections throughout your life, empathy is crucial for leadership success and personal well-being.

Written by Daniel Goleman 

 

The rise of complementary leadership

The rise of complementary leadership

By deploying and supporting diverse teams of leaders with complementary skillsets, HR leaders can ensure they meet their goal of preparing their organisations for the future, writes Aaron McEwan

Modern superhero films might seem an unlikely source of insights about future leaders. However, popular culture occasionally offers an uncannily accurate view into emerging social and business trends.

Technology is fundamentally changing how we work, with a startling 70 per cent of employees reporting they haven’t mastered the skills they need for their jobs. The reskilling challenge is not unique to one industry, geography or even level, yet it has been identified as an employee problem rather than an issue among leaders.

Leaders cite the top changes to their roles in the last three years as a greater number of job responsibilities, the expectation to have a greater number of skills and the expectation to have a greater depth of knowledge about specific areas.

Beyond the skills challenge, leaders are being asked to meet a range of new internal and external demands. They face increased scrutiny on their decision-making, must navigate economic and social volatility, radical transparency and a multitude of new forces making their jobs more complex today.

Leadership investment vs performance payoff
Unfortunately, by leaders’ own admission, they’re facing a crisis of confidence. Gartner research finds only 50 per cent of leaders agree they are well equipped to lead their organisations into the future.

HR executives agree. Fundamentally, leaders must transform to drive business into the future. To help make this transformation, HR has increased leadership development expenditures by 172 per cent in just two years from $797 per leader in 2017 to $2,169 in 2019.

Much of this investment is going into clarifying leadership competency profiles to optimise individual leader performance against a common standard. In fact, 41 per cent of surveyed HR executives are “adding new competencies to leadership models over the next 12-18 months”.

“HR has increased leadership development expenditures by 172 per cent in just two years from $797 per leader in 2017 to $2,169 in 2019”

The rise of complementary leadership
Despite this increased investment, there is little variation in team performance based on a leader’s competency profile. Gartner examined top-performing leaders and teams across all leadership competency profiles and found that most leaders have “spikey” profiles; they excel in a few competencies but also have some areas of relative weakness. The research also found that there is no ‘silver bullet’ set of competencies or gold standard leadership model that correlates with team performance.

Rather, leaders of top-performing teams share their leadership responsibilities with others. They engage in complementary leadership; the intentional partnership between one leader and one or many leader partners to share responsibilities based on complementary skillsets.

Leaders’ individual effectiveness accounts for approximately half of team performance. Complementary leadership accounts for the other half.

Future leadership lessons from Tony Stark
The original Iron Man, released in 2008, introduced us to the quintessential 21st-century superhero in the form of Tony Stark; a white, charismatic and visionary billionaire CEO with access to unlimited wealth and technology. He had some clear strengths but was also impulsive, arrogant and insecure. The original Iron Man movie poster showed Stark as a lone figure, encased in a futuristic iron suit ready to singlehandedly take on the evils of the world.

Ten years down the track, the most successful superhero film and one of the top-grossing movies of all time, follows an ethnically and gender diverse team of superheroes. Each character brings their own unique superpowers (and flaws) to create a team that works together to defeat a vastly superior enemy. The poster for Avengers: End Game, shows all the Avengers unmasked, vulnerable and paired together with their complementary partner.

“Strength-based approaches work and individual leaders do better when they share their skills and abilities with one another to compensate for individual gaps”

As popular culture is suggesting, the world’s challenges are simply too big for one leader to solve.

As HR professionals suspected, strength-based approaches work and individual leaders do better when they share their skills and abilities with one another to compensate for individual gaps. Complementary leadership represents a new tool for leaders to boost their team performance amid complexity and uncertainty and negates their need to do it all on their own. It’s a clear recognition that no well-rounded, perfect leader exists today.

Ensuring leaders are prepared to lead their teams into the future is a key component of HR strategy for most organisations today. However, HR leaders must ensure they’re directing their resources to the right components of leader development and support. Instead of relying on leadership models, HR leaders need to enable leaders to share their responsibilities with colleagues who have complementary skill sets. This not only increases leaders’ own effectiveness, but also effectively improves their teams’ performance.

Supporting leaders: 3 steps for HR
To help future leaders participate in complementary leadership, HR leaders should adjust the way they support leaders in three areas:

  1. Rather than measure leaders’ capabilities against standard metrics, enable them to understand their strengths and development areas in their own contexts.
  2. Instead of creating development programs that will transform leaders’ approach, identify ways to embed leaders’ real workflows into development, so they can make immediate and effective changes to the way they work.
  3. Rather than waiting for individual leaders to develop all necessary skills, help them find the right partners to share the responsibilities.

The world has changed and so too have our biggest threats. By deploying and supporting diverse teams of complementary leaders, HR leaders can ensure they meet their goal of preparing their organisations for the future.

 

Consider these 4 points to inspire and retain your best millennials !

Consider these 4 points to inspire and retain your best millennials !

Original publication in Gallup.com on October 28th 2019

For years now, millennials have been criticized as job hoppers, easily bored and over-entitled.

The critique is so widespread and well-known that it hardly seems worth investigating. It should be — because it’s not true. Millennials are as likely as anyone else to be loyal to their workplace.

If they get what they need from it. But most, apparently, do not.

According to Gallup data, only 29% of millennials are engaged at work. The national engagement average is 34%, which means many more millennials than their elders feel uninspired, unmotivated and emotionally disconnected from their workplace.

Those are the millennials with the least reason to stay, so they leave. In droves. Millennials are three times more likely than their elders to say they’ve changed jobs within the past year, 10 percentage points less likely to expect to be with their current employer in a year, the most likely to be looking for a new job, and the most open to whatever opportunities might come along.

What Millennials Want

This may seem mystifying to business leaders — why would millennials be so disengaged? They’re treated the same as everyone else, so why would they leave?

The answer is in the question. Millennials don’t want to be treated like everyone else. Their elders may be satisfied (though satisfaction is a poor workplace metric) with a mediocre job, but millennials are not. They’ll keep looking until they get what they need, which includes:

A sense of purpose: More so than others, millennials are motivated by mission and purpose. Of those who say they don’t know what their organization stands for and what makes it different, only 30% say they plan on staying in their position for at least another year.

High-quality management: 58% of millennials say “quality of manager” and “quality of management” are extremely important to them when applying for a new job. For a millennial, their job is their life, so a bad manager will quickly drive them away.

Chances of advancement: Perhaps because they have lower net worth and higher student debt than other generations, millennials (50%, compared with 42% of Gen Xers and 40% of baby boomers) are most likely to say advancement is extremely important when looking for a new job.

Millennials are as likely as anyone else to be loyal to their workplace.

Not coincidentally, what millennials want is the same thing everybody wants in a job. Millennials just want it more and are less likely to wait around to get it. Their refusal to settle for less increases businesses’ turnover costs, which bleeds $30.5 billion from the U.S. economy every year, according to Gallup estimates.

However, leaders who focus on employees’ growth and advancement, who select managers for talent, and who know their company’s purpose can engage millennials.

Those who do will keep millennials.

Those who don’t will train another company’s employees — and wonder why millennials just won’t stay.

Written by Jennifer Robison

4 levers to grow as a purpose-driven compagny

4 levers to grow as a purpose-driven compagny

Original publication in Forbes on October 31st 2019

As untamed capitalism and corporate greed come under increasingly fierce and widespread siege, the business world has begun to respond, loudly.

In August, the elite CEOs of the Business Roundtable lobbying group released a statement promising to move away from the decades-old corporate belief in “shareholder primacy” toward a more holistic, purpose-driven approach that “serves all Americans.”

Let’s be clear: this move is a huge milestone in the recent history of management. After all, the signers of this statement lead organizations that take in a combined $7 trillion in revenue and employ 15 million people. However, whether the group’s stated goal of shifting commitments actually transpires remains to be seen.

The advantage of purpose-driven companies

Still, the business roundtable’s announcement, while greeted excitedly, shouldn’t have come as a huge surprise. Over the 11 years since the start of the fiscal crisis, more and more attention has been paid to the ethical, social and environmental responsibilities of co~rporations.

Yet businesses that do operate with a sense of purpose and of bettering society reap economic benefits. Recent studies have shown that the performance of companies with a clear sense of purpose grew by 10 times the median rate of companies on the S&P 500. 

What’s more, purposeful organizations appeal to younger people just entering the workforce. This generation has grown up connected in unprecedented ways by technology to a global community, alert to what threatens it and attuned to social justice. To reach these new or future workers of the Greta Thunberg generation, companies can’t ignore social ethics.

How to promote purpose throughout your business

Purpose is a word that packs a punch. It’s an idea whose meaning, while lofty, may be easily grasped. But attaining a sense of purpose can prove daunting, especially in the context of business and its more practical economic goals.

This can be seen in the gap between society’s expectations of businesses and its perception of results: just 39% of people think that organizations work with the goal in mind of improving the quality of life and well-being of their employees and surrounding communities.

It was with this challenge in mind that I, along with my colleagues A. Lleo-de-Nalda, C. Rey, A. Alloza and N. Pitta, set out to research the promotion of purpose in business. And to develop what we call the Purpose Strength Model compiling the successful techniques and strategies drawn from analyses of 25 purposeful businesses.

How can CEOs and managers promote purposeful business? It’s helpful to first recognize the three pillars of purpose: 

1) Coherence, or the alignment between what a company says and what it does.

2) Authenticity, or the true motivation and intention behind the things a company does. 

3) Integrity, or the naturally occurring behaviors that help maintain a purposeful drive. 

Then, it’s necessary to understand the first and most fundamental step toward building and sustaining purpose, which is constructing a shared purpose that enters the minds and hearts of all employees and inspires them to do their best, most purposeful, work.

How exactly can this communal purpose be achieved? Our model presents four factors, or levers, to attend to while sowing purpose in your organization: 

1. Strategy. The company should define a strategy for the development of a clearly defined purpose. This may sound simple, but it requires deep, prolonged reflection and understanding of corporate responsibility and ethical objectives. This strategy should include specific mile markers to be met along the road to purpose. 

2. Leadership. Company leaders must be depended upon to capably transmit the company’s purpose to employees so that it enters their minds and hearts. This leadership includes directors who promote purpose from the top of the organization and, so that purpose permeates each employee, leaders at all levels and divisions of the company.

3. Management. Systems of management and organizational procedures that guide day-to-day work and ensure that purpose is remembered each day. The organizations we studied saw fit to integrate the company’s purpose into all daily aspects of work including budget planning, talent recruitment and performance assessments. 

4. Clear communication is paramount to demonstrating that what the organization is, what the organization says it wants to be, and what it is perceived to be, all align. 

By following the model of companies who are ethically and financially successful, managers can help lead their companies into a thriving, purposeful future.

By Nuria Chinchilla

What HR needs to look for hiring new leaders ? Check what defines the “3C’s leaders”!

What HR needs to look for hiring new leaders ? Check what defines the “3C’s leaders”!

Original publication in InsideHR on October 18th 2019

The leader of the future is the antithesis of many current leaders who focus on their silos to achieve results, writes Jerome Parisse-Brassens, who explains that HR needs the appropriate tools to support the development of new culture leaders

There is a significant shift occurring in organisational cultures, in response to the VUCA world we live in and the coming-of-age of digital and artificial intelligence (AI). What I find interesting is that this is happening in every market, regardless of their levels of maturity. And this has big implications for leaders and HR professionals.

Over the past twenty years or so, businesses have increased their focus on results, achieving significant profit, establishing a strong reputation and setting fast track records in growth. Successful cultures were centred on achievement, with environments in which accountability is king, people keep their promises, KPIs are clearly established, and little room for error. Achievement cultures required leaders to take personal responsibility, drive accountability, and manage large teams of people who knew what they had to do.

Side-effects of achievement cultures
While this enabled growth, it also reinforced silos at all levels and limited cross-collaboration. For HR teams, this meant they had to recruit leaders who were experts, had delivered results before and could lead teams in fairly predictable environments.

An unexcepted consequence of the strong pressure on results has also been a sharp increase in burnout and staff disengagement, leading to increased absenteeism and sick leave and higher recruitment costs. In the race for results, people were often forgotten.

It’s recently become obvious that the siloed, results-focused model is not sufficient anymore, and the concept of agility made its appearance as a technology enabler, tool, and cultural attribute. True agility is a step change from the previous business model.

“It’s recently become obvious that the siloed, results-focused model is not sufficient anymore”

Beyond customer-centricity as the anchor, agile cultures are requiring leaders to be open, lose the fear of mistakes and not knowing, adopt a learning mindset and the ability to establish collaborative networks across the business. The silos still exist, but new bridges are being built.

What HR needs to look for in leaders
What this change means for HR is the need to recruit and develop leaders who are curious, have courage, and display a collaborative mindset. The significant shift in culture today is not a shift away from a focus on achievement and results (this has to remain strong in the current competitive environment) but the dialing up of the people lever.

Organisations have realised that the next step-change cannot come solely from more pressure, but from utilising the strengths, the skills and the capabilities of their people. This translates into increased empowerment, enhanced work/life balance and wellbeing, more trust and caring, and loosening the top-down approach. Many of my clients are working on just that – but this is easier said than done.

Putting people at the centre of AI and digital transformation
Unfortunately, this is not enough. With the coming-of-age of digital and AI, organisations have to reinvent themselves. AI’s power comes from the amount of data at our disposal and the speed at which machines can analyse it to make faster decisions than us humans could ever do.

The big difference between today and tomorrow is the sheer amount of data available and its connectedness. Silos do not exist with data and this is where the true power of AI lies. It is breaking down barriers. The good news, which the most fearful of us have not yet understood, is that digital transformation and AI are putting the human at the centre. It is the human who will teach machines how to make decisions based on the data they receive, it is the human who will clarify ethics and arbitrate between values, it is the human who will feed the machine data and rules and tell it what to do, how to learn, and how to surpass us in many of the tasks we care currently performing.

So, how does translate for tomorrow’s culture leaders?

“The next step-change cannot come solely from more pressure, but from utilising the strengths, the skills and the capabilities of their people”

What the culture leader of tomorrow looks like
The culture leader of tomorrow is a connected leader. They have to let go of their need to control and their fears of not knowing. They have transitioned from a “command-and-control” mindset to one of trusting and serving people to help them be their best. They have a whole-of-organisation approach to thinking, which allows them to connect data, processes, customer, people and results beyond traditional boundaries.

They are curious, responsible, and learn from their mistakes. They are not experts, but they can find the expertise where it resides, from customers through to employees and machines.  Their vision is clear, and they can flex the roadmap along the way. To be effective as a networked leader, they have developed openness, caring and listening skills. And everything they do adds value to the customer. I call them “3C leaders”: customer-centric, connected and caring.

What this means for HR
Understanding this shift is critical for HR teams. This new kind of leader is the antithesis of many current leaders who focus on their silos to achieve results. The keys to tomorrow’s success are not the keys employed today. This has strong implications for recruitment, learning and development, performance management and communications. Each of those systems needs a complete overhaul, a new perspective, and the appropriate tools to support the development of the new culture leader.

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