Human Capital Trends 2019 Podcast
Deloitte’s Global Human Capital Trends research is one of the world’s largest longitudinal studies of HR, talent, and related technology topics ever conducted. In this podcasts series, you will find our experts exploring the top three UK trends and how organisations should respond to certain challenges and also take advantage of the opportunities that our report presents.
Episode 1: Top three trends in UK
In this episode, our guest William Gosling, UK Human Capital leader discusses this year’s top 3 UK human capital trends, and shares insights on the report’s overarching theme ‘Leading the social enterprise—Reinvent with a human focus.’
Speaker: Natalie Belgrove, an analyst in Deloitte’s human capital practice and Will Gosling, UK human capital consulting lead.
NB: Hello, I’m Natalie Belgrove, an analyst in Deloitte’s human capital practice, and I’m delighted to be joined today by Will Gosling, UK human capital consulting lead, to discuss this year’s Human Capital Trends report.
So Will, I’d like to start by asking you about the overarching theme of this year’s report. The 2019 Human Capital Trends report builds on last year’s concept of the social enterprise with a focus this year on how companies can drive towards building a social enterprise with a human focus. For those who are not clear on the concept of the social enterprise, please can you summarise what it means and explain why reinvention with a human focus is so critical for organisational success?
WG: Thanks, Natalie. Delighted to be here and really pleased to talk about this year’s Human Capital Trends. I think, yes, what you just said is right. This year, the social enterprise was very strong as a theme. It started to emerge last year but this year it dominated the responses. In fact, in our discussions with CEOs (remembering that Human Capital Trends gets the voice of the business as well as HR) they told us that their number one priority this year, and how they’re going to measure their success, was the impact that they’re going to have on society. Things like gender pay equality, diversity, climate change, environmental stuff.
So the social enterprise has come through really, really strong. And what I mean by social enterprise is an organisation that pursues revenue growth and profit growth but does so with respect to the environment that it works in, the stakeholders that it supports, and stakeholders that it impacts, whether that’s employees, customers, or the wider population.
It sometimes called profits with purpose, and we’re seeing a lot of organisations jump on that now and try to define purpose statements and what they stand for, what is their purpose over and above making money. But I think that what we saw in this year’s survey was that philanthropy, or corporate social responsibility and dialling that up, which is what a lot of organisations have been doing, is not enough.
The workforce and society are asking businesses to go further and really rethink the way in which they conduct work, think about the work they do and how that work has a societal impact.
NB:Thank you, Will. That was really helpful. The report also uncovers three specific areas that underpin the need for humanistic reinvention: the future of the workforce, the future of the organisation and the future of HR. Please can you expand on what is meant by each of these macro categories and explain why organisations must address all three if they are to start operating as a true social enterprise?
WG:This year what we decided to do was try and organise the trends into three actionable categories, and as you’ve just explained those categories are: the future of the workforce, the future of the organisation and the future of HR. Let me just quickly go through each of those.
So the future of the workforce.
This has been a trend that’s been emerging for some time. We’re seeing that the workforce is much more diverse, more complex and more demanding to manage because organisations are having to dip into different talent pools to fulfil their growth requirements and to obtain the capabilities that they need. They’re also having to look at different types of talent, so not just different talent pools for full-time employees but alternative sources of capability, whether that’s crowd associates, contractors etc. And I think what this means is the workforce is going to look and feel very different going forward, and that’s got profound implications for leadership, leadership models and leadership styles but also the way in which organisations manage talent.
How do you manage pay and performance for people who are not actually on your balance sheet as they’re not full-time employees employed by you? These are not insurmountable problems but they are more complex. And when you have got five generations in the workforce, you have very different demands from your workers in terms of what they want from work. Some want more meaningful work, some want more pay, some want more opportunity. Being able to recognise that your workforce has those different demands is the first step.
The future of the organisation is evolving and we’re seeing a lot of disruption by digital businesses that are challenging traditional business models – they are typically flatter in hierarchy. They’re made up of networks of teams and this year we’re seeing networks of teams going mainstream! It’s no longer a side experiment that many organisations are dabbling in. They’re actually going wall-to-wall agile networks of teams, and are seeing some really dramatic effects from that.
So the organisation is changing quite dramatically and in redesigning that organisation, companies are rethinking the experience their employees have. What’s the employee experience and how does it play through in the whole employer value proposition and the way in which we think about how we, the human capital processes supports that experience? This moves right through into things like rewards, as well and how rewards need to be more personal and personalised to the team or the individual to get the most out of them.
And then finally the future of HR. HR needs to continue to step up and involve its own capability. It has an increasingly important role in the transformation of the organisation. What we’re talking about here this year, in terms of the social enterprise and building a social enterprise and reinventing work, is a big job, and it’s not something that the HR function itself can do alone.
Technology is only going to become increasingly important. How does the HR function ensure that the human element is not lost through introduction of technology and how we actually augment employees through the use of technology?
This involves the function looking at itself as well. A lot of HR functions have embraced cloud technology and core systems are now in the cloud, which is great but it’s only a start. If we think back to employee experience, this has got to be looked at across the whole hire-to-retire journey that an employee goes through, and ensuring that technology is embraced, that best breed of technology is embraced across that.
NB:That’s great. Thanks, Will. The research also suggests that human capital processes need to be reinvented in order to tackle these broad shifts within society, which have given to rise to the social enterprise. With the three macro categories in mind, what steps can organisations take to bring meaning back into the workplace?
WG:Well, before I answer that, let me just spend a moment talking about meaning because meaning is something that came through as a key finding from this year’s research and a theme alongside the social enterprise. Respondents were telling us, and I see this day in day out with my clients, that we seem to have lost a connection for employees between the work that they do and the impact that it has. And that’s where the social enterprise comes in. The advance of technology into the workplace is a great thing and I think there’s lots of positives around that, but the human element has been left behind. As a consequence employees are struggling to understand what their role and identity in the organisation is. They’re asking, what impact am I having and why does it matter? If artificial intelligence is telling me what to do next if I’m in a call centre or I’m in a store, I’m being prompted in what to do, I’m a data point, and I’m being looked at and thought of as data in the organisation. So my identity and my connection with the organisation is being challenged. That’s why we looked again through these actionable categories to think about how organisations can reinstate meaning into work.
Firstly, the future of the workforce - creating a sense of belonging. I think this is where leadership really comes in and new leaders have a real responsibility to ensure that they are able to engage and articulate to employees what their role is, what their purpose is and why their work matters.
I think I saw a study recently that said 85% of workers are disengaged across the world. That’s a tremendous statistic is that true, and I think one of the key solutions is the role of the leaders and managers and how they can instil that sense of purpose.
When we think about the future of the organisation this is about the design of work and how we reward for not only business performance or the commercial value that people create, but the societal impact they create as well. It’s really important that when we design work we’re able to help workers understand and get the recognition that they need for the impact that they’re having.
And then finally the future of HR. This is about creating a place for self-actualisation, and is where the HR function really needs to step in and make sure that we’re using technology to augment the worker. But also ensure we’re using the human skills we have, that only humans have, to actually bring human plus technology to create the concept of super jobs or the augmented employee.
One of the things I think every HR professional can do is think about the projects and programmes that are going on in their organisation. I’m pretty sure that technology will have a big role in most of them, if not all. Every HR professional can go back into their organisation and really challenge to make sure that the human element of that project/programme is being thought through. Ensure the organisation gets the best return out of it but that the worker is not left behind.
NB: Thank you. That was really interesting. I’d now like to touch on the top three UK trends from this year’s report, which are from employee experience to human experience: putting meaning back into work; learning in the flow of life; and leadership for the twenty-first century: the intersection of the traditional and the new. Can you highlight what the key insights are in these areas and what practical actions organisations can implement in order to become a social enterprise?
WG: Well firstly it didn’t surprise me that employee experience was number one in the UK this year because it’s a topic of conversation I’m having with my clients all the time. It was number two globally with learning being number one globally.
I’m seeing more and more work being done by businesses that really think about the employee experience, and start to do things like orientate their operating model, rethink technology programmes, all about the experience that they are giving to employees. In a similar way that organisations have in recent years talked about and thought about the customer experience, so thinking about the customer journey. We’re thinking now about the employee journey from hire to retire.
But what the trend here is talking about is all of that, but it’s also a little bit more. And it’s about the human experience as well. So not just the experience that people have at work but the experience of work itself, and what I mean by that is this is where the social enterprise comes back in. How is the work that I’m doing actually impacting society and the stakeholders that I as a worker in an organisation interact with, or have some kind of relationship with?
Workers are grappling for the reasons I’ve talked about elsewhere because technology and disruptive business models are really changing the work that they’re doing, and they’ve lost some of the connection. Whatever businesses can do, and leaders in particular, to help bring that connection back to work, even simple things like helping call centre workers understand the personas of the people that they’re dealing with and the impact that solving a problem quickly can have on a stressed customer. If you’re helping solve their problems, what impact is that having? Paying attention to those types of things is really important. So it’s not an easy challenge but just shifting the dial a little further, not just about the experience people are having at work, but the experience of work itself and the impact it’s having in society.
And learning. Learning is a very big and exciting trend. It’s been one of our top trends for the last few years, but it’s really risen to the top this year. I think this is being driven in large part by the acceleration of technology into the workplace, and the disruption that’s having on the half-life of skills. I think the half-life of many skills is approaching something like four years, which means employees are having to reinvent themselves much more frequently than they had to in the past.
But in parallel, you have demographic disruption going on here as well. You have people living much longer: 70 is the new 50! And over 55 is the fastest growing worker segment in the UK today, which means people are expecting to and need to have several careers as well. So there’s a role for organisations to step in, to reskill workers as their skills become either redundant through technology or the business model changing.
And then finally leadership is always in our top three/four trends every year the difference this year though is the idea of societal impact. So with new capabilities like artificial intelligence and digital, these are capabilities that need to be built for leaders and leaders need to address these. How do you lead in a way that has relevance for the impact that your organisation is having on society? That whole social enterprise piece, leading in a social enterprise is a very new discipline. And many leaders are grappling with that when what they’re measured on and what they’ve grown up focusing on - shareholder value or commercial value, profits, and revenue growth. And there’s a whole new angle now that leaders are having to tackle, and that’s not easy. So that’s the new dimension to leadership that came through loud and clear this year. NB: That’s great. I think you outlined some fantastic practical steps there. Finally, to finish off, let’s pick up on your area of expertise, organisational change. When we begin change projects, we always talk about an organisation’s change readiness irrespective of the shape or size of the change. However, the only way to get an idea of an organisation’s change readiness is to talk to the individuals that work within them. We’ve already covered how organisations need to prepare themselves for the social enterprise, but how can individuals better prepare themselves for work in the age of the social enterprise? WG: That’s a great question, Natalie, and I think it’s all too easy for us to focus too much on the organisation and not actually on the individual and what the individual needs to do. It is really a two-way relationship between the organisation and the individual in the future of work. Having an open-mind and a desire to learn and embrace new technology and new skills. I think it’s going to be really important for employees to do this concept of ‘learning how to learn’ as a meta-skill. It’s partly the organisation doing something to help but it is also very much a mindset and a willingness on the part of the employee to accept the fact that their careers are changing and there are new opportunities that technology brings or a business model change brings. I suppose I liken this to what’s happening in our day-to-day consumer lives. We’re all employees and workers, but we’re also all consumers and we’re getting more control as consumers in how we buy things and how we interact with organisations, how we can customise products and services. We got that control largely through technology that’s come to us, and our careers are going in the same way. The sooner we recognise that and the sooner employees embrace that, I think we’ll all realise that’s the key to success in the future of work. NB: That’s great. So that brings us to the end of our discussion. I’d like to thank you, Will, for both your time and the fascinating insights you’ve provided. It’s been an absolute pleasure speaking to you today. WG:Thanks, Natalie. I’ve really enjoyed the conversation. END
And then finally leadership is always in our top three/four trends every year the difference this year though is the idea of societal impact. So with new capabilities like artificial intelligence and digital, these are capabilities that need to be built for leaders and leaders need to address these. How do you lead in a way that has relevance for the impact that your organisation is having on society?
That whole social enterprise piece, leading in a social enterprise is a very new discipline. And many leaders are grappling with that when what they’re measured on and what they’ve grown up focusing on - shareholder value or commercial value, profits, and revenue growth. And there’s a whole new angle now that leaders are having to tackle, and that’s not easy. So that’s the new dimension to leadership that came through loud and clear this year.
NB: That’s great. I think you outlined some fantastic practical steps there. Finally, to finish off, let’s pick up on your area of expertise, organisational change. When we begin change projects, we always talk about an organisation’s change readiness irrespective of the shape or size of the change. However, the only way to get an idea of an organisation’s change readiness is to talk to the individuals that work within them. We’ve already covered how organisations need to prepare themselves for the social enterprise, but how can individuals better prepare themselves for work in the age of the social enterprise?
WG: That’s a great question, Natalie, and I think it’s all too easy for us to focus too much on the organisation and not actually on the individual and what the individual needs to do. It is really a two-way relationship between the organisation and the individual in the future of work. Having an open-mind and a desire to learn and embrace new technology and new skills. I think it’s going to be really important for employees to do this concept of ‘learning how to learn’ as a meta-skill.
It’s partly the organisation doing something to help but it is also very much a mindset and a willingness on the part of the employee to accept the fact that their careers are changing and there are new opportunities that technology brings or a business model change brings. I suppose I liken this to what’s happening in our day-to-day consumer lives. We’re all employees and workers, but we’re also all consumers and we’re getting more control as consumers in how we buy things and how we interact with organisations, how we can customise products and services. We got that control largely through technology that’s come to us, and our careers are going in the same way. The sooner we recognise that and the sooner employees embrace that, I think we’ll all realise that’s the key to success in the future of work.
NB: That’s great. So that brings us to the end of our discussion. I’d like to thank you, Will, for both your time and the fascinating insights you’ve provided. It’s been an absolute pleasure speaking to you today.
WG:Thanks, Natalie. I’ve really enjoyed the conversation.
Episode 2: Employee Experience
In this episode, our guest Dimple Agarwal, global leader for Organisation Transformation & Talent explores one of the top UK trends this year, which is the need to humanise the employee experience and put meaning back into work.
Speakers: Lucy Matthews, an analyst within our human capital practice and Dimple, a global leader of our organisational transformation and talent practice and one of the authors of the 2019 UK Human Capital Trends report.
LM: Hello. Thank you for joining us. I’m Lucy Matthews, an analyst within our human capital practice, and today I’m joined by Dimple, a global leader of our organisational transformation and talent practice and one of the authors of the 2019 UK Human Capital Trends report.
So, Dimple, I’d like to start by talking about last year’s report a little bit because in that we discussed the rise of the social enterprise and the implications that this had on organisations. This year’s report then focuses on leading the social enterprise and so I’d be keen to understand from you how you feel that this relates to employee experience.
DA:Yes, I think the context is quite important. So last year we talked about how various generations of employees and also organisations are expected to think about themselves as being more of a social enterprise, and this year that continues.
What I mean by this is that social and political pressures are forcing organisations to think more carefully about their brand and therefore what is expected of them not just from the future generation of employees, but from regulators, from their customers, from their clients. These pressures continue to mount, as well as pressure to retain and engage talent. We know that employees expect organisations to play a bigger role in society, rather than just making a profit, so that was actually behind the theme from last year, and continues in this year’s report.
LM: Thank you for that, Dimple. This year’s Human Capital Trends report sees a shift from employee experience to human experience and this is ranked as the most important trend in the UK. But for those who aren’t clear on the concept of human experience and how that relates to employee experience, please can you summarise and discuss why organisations should consider it.
DA: Sure. If you recall, employee experience was a term used around customer experience. Customer experience methodology was all about raising customer service levels and it encouraged organisations that sold products and services to think about what they did with a customer lens on, so how the customer would experience things, and that was very useful.
What we’re saying is we now need to make a shift towards human experience, which looks to improve the experience of employees by putting employees at the centre. That’s a big and important shift because we are increasingly seeing that organisations need to rethink what their relationship with the employees is.
So moving from a very transactional experience and relationship, to using the customer experience lens, and now the shift is more human, which means bringing meaning into work so that we can focus our attention and our effort around what motivates an individual to come to work. Thinking about how we can make work more meaningful means we might need to rethink work itself, and also the culture and environment that we provide for people to work in.
LM: So we’re continuing to see an increase in number of companies introduce initiatives that are designed to enhance employee experience. However, many think of employee experience as something that happens to workers beyond work itself, and therefore they focus simply on the benefits and the perks. But this year’s report suggests that greater value would be generated if companies could instead focus their efforts on factors that affect work itself. Please could you explain what is meant by this and how organisations can start to ensure that employees are being provided with such experiences?
DA: That’s a very interesting one because most organisations focus on benefit programmes and wellbeing programmes, which I agree are a starting point because they kind of cater, if you like, to the basics of that experience. But the key to producing human experiences is to put meaning back into work, which is more human centric i.e. creating a positive work environment, meaningful work, you’re providing growth opportunities and you have a supportive management who listens and acts upon feedback.
So all of this alludes more to the culture in the organisation rather than necessarily just the very tangible reward and benefits that you provide to people. Leaders need to begin this process by ensuring open and honest dialogue between themselves and employees, and therefore implementing feedback tools which are more real-time, which actually engage employees on an ongoing basis. This is going to go a long way in driving that that experience.
It’s also important for employees to understand how their work contributes to the organisational strategy. There needs to be transparency between leaders and employees so that the whole experience of working is very meaningful. A lot of people go to work because they know they have to and they know they have to earn a living. But if you could put meaning into their work, they will be far more motivated and feel better about themselves, which will ultimately have a very positive impact on the organisation.
LM: Absolutely. Thank you. So another key message that’s arisen from this year’s trends report is the criticality of employee experience being jointly owned, so not just by HR but also by the business, which 82% of UK respondents this year stated that was in fact the case in their organisations. But how can organisations ensure that employee experience isn’t just an HR problem if they are beginning on the employee experience journey now?
DA: That’s absolutely right because creating a seamless employee experience is simply not a HR issue. If you think about a person who comes to work, they deal with technology all the time, they deal with finance for their pay and they have interactions with various facilities within the organisation.
So a current project I’m doing with a client right now is about moving away from thinking about employee experience as a HR process, to thinking about it as a journey which connects all these sub functions and activities together to deliver the employee experience.
And something we talked about in last year’s report was to say that part of being a social enterprise was to move away from functional silos into cross-functional working, and employee experience is certainly one of those areas where HR can lead of course, but needs to absolutely be supported by other functions.
I have another example where a client brought all the elements of its workforce experience - workspaces, people, technology, shared services, mobility, travel - all of these things were brought under a single function to help build a consistent and holistic experience for its employees. This is the critical part of employee experience from an organisational perspective. We need to forget what a function is there to do by itself, but start bringing functions together to provide that experience.
LM: That was really interesting. Thank you, Dimple. So looking to the C-Suite and C-Suite leaders, how do you think that they can sell employee experience as a strategic imperative to the rest of their leadership team? What message is it that they should give?
DA: We’ve been saying for a very long time that people are our most important asset, but a lot of times we just pay a lip service to that. So why don’t we start by actually thinking about and believing in the fact that creating a more human workplace will be good for all.
But factually, and we have been saying this for the last I think three years in our trends reports, careers are changing and organisations need to prepare for this. We are seeing year-on-year that that pace of change is getting faster and we know that the average tenure for a job today is four and a half years. With the introduction of Gen Z into the workforce there will be new expectations placed upon organisations.
For years we’ve talked about what millennials expect. Gen Z is similar but actually has some very different expectations of the workplace. What does that actually mean? It means we need to provide a rich set of experiences versus lifelong careers, which is quite a dated concept now.
We need to provide work flexibility and not just in the form of providing virtual working. Think about it more creatively, to empowers individuals to work from wherever they like, on what they like, because work should be very outcome driven rather than hours or presence driven, and a transparent culture is crucial.
Our employees today expect us to be very transparent and all of those factors go towards the creation of an employee experience that is expected, well not just expected actually I think it’s absolutely essential. If you want to be an organisation that’s going to attract and retain the best, then to me an absolute must to think about employee experience in a very strategic way. This will lead to more engaged employees.
We know from data that actually the more engaged your employees are, the more productive they are going to be. And statistically we know that for organisations that actually took initiatives to increase employee engagement and measured it, 84% believed there was a strong correlation between employee engagement and productivity.
So I think we as HR professionals know that the more we can engage employees and the more we can make work more meaningful for them, the better it is from an organisational perspective. And employee experience doesn’t need to be about transforming your operating model on day one; there are point improvements which can be made and you can build improvements over a period of time.
So, for example, implementing feedback tools, using collaboration technologies, putting small changes in place related to your reward and benefits programme - you don’t have to make big bang changes. You can start to introduce these into your organisation which will make the whole package, or the whole experience, far more meaningful to people.
And just to finish off, a large part of an organisation’s success depends on its people, right, and if you don’t truly understand what the drivers are of strong performance or high motivation levels, you really don’t know what changes to make in the organisation. So I think one last point from me would be to actually spend some time trying to understand what experiences people actually want. They may not want the same thing, and that’s where flexibility in what you offer becomes really, really critical.
LM: Absolutely. Well, thank you very much, Dimple, for your time and thank you, everybody, for listening.
Episode 3: Learning
In this episode, our guest Jonathan Eighteen, UK Learning & Talent Practice leader explores the global report’s top trend - learning and development (L&D). Jonathan discusses how crucial it is for organisations to take steps to deliver learning to their people in new ways to meet the evolving demands of the workplace and changing skills requirements.
Speakers: Sam Schindler-Glass, a practitioner in Deloitte’s human capital practice and Jonathan Eighteen, a Director at Deloitte.
SSG: Good morning, I’m Sam Schindler-Glass, a practitioner in Deloitte’s human capital practice. And I’m joined by Jonathan Eighteen, a Director at Deloitte who’s here to talk to us about the top trends in Deloitte’s 2019 Human Capital Trends report.
Jonathan is the expert for the learning trend. He leads the learning solutions practice in the UK, boasts over 15 years of consulting experience and a career spanning a range of industries and geographies. Good morning, Jonathan.
JE: Good morning, Sam.
SSG: So without any further ado let’s move on to some of the questions. As I mentioned, our number one global trend this year is learning. And 86% of respondents globally rated the need to improve learning and development as important, or very important. However, only 10% feel very ready to address this, so why do you think this is? And, more importantly what can organisations do to change this?
JE: Well it’s a very big question, but I think it’s something that has been growing over the last few years. The requirement to look at learning and skills development becomes even more acute in the modern age. I think it’s driven by a whole nexus of various different forces. There is a shortage in the talent market and a need to try and find various different skillsets that may not necessarily be inside your organisation.
Huge involvement and drive in terms of technology which is changing jobs quite significantly. This has meant that organisations need to refocus on learning in a lot more detail. Rather than it being one of the nice things to do, it is now becoming the front and centre in most organisations’ minds. So that’s one of the key things.
I think organisations are also looking at whether they need to build skills, to buy them, to borrow them, or, indeed to bot them and make use of artificial intelligence and other such technologies as well. So there’s a whole different way of looking at things from a workforce planning perspective now that organisations need to take into account. They really need to be very strategic about the way that they look at the skilling and re-skilling agenda within their organisations.
So I think there’s no better time to focus on learning as it becomes so much more acute. It has definitely got the ears of the C-Suite who are looking at learning in a much more focused way to see what they can do to drive more productivity and performance within their organisations at large.
SSG: Excellent and I think that’s going to be bring us on very nicely to some of the stuff we’re going to touch on later, across the board from automation to the view of the C-Suite. So following on closely from that, 44% of respondents in the UK described their company’s learning culture as fair or inadequate. And given the importance of culture and learning, how can organisations set themselves apart in driving a culture where learning’s at the forefront?
JE: I think all of our research over the last eight to ten years has always pointed at learning culture being one of the critical drivers with regards to improving the success of learning and then, in turn, driving greater productivity and benefits for an organisation.
We produced a study in 2017, part of the Bersin research, which basically broke down 40 plus ways for you to look at learning culture. But some of those were more influential than others. So things like encouraging reflection within the organisation, so that managers give individuals and their teams the opportunity to reflect on things that are happening at the moment. This is really driving and fostering a culture of conversation around the way things are done and the way things are improving.
Also, making sure that there are ways to demonstrate the value of learning in the organisation. This is not something you go off and do like a traditional type of course or an e-learning, it is something you do on top of your daily tasks. This is now crucial and essential, it is actually part of doing your work.
I’m sure we’re going to talk about learning in the flow of work and learning in the flow of life, shortly. This is all about empowering employees and empowering them to take responsibility for their own development. Give them the skills and the tools and make sure they can access these easily, as well as give them the opportunity to take the time to learn. Because one thing’s for certain, if people do stand still they’re going to become out-dated and not necessarily as competitive personally in the organisation and the world moving forwards. So I think it’s those three things, amongst others that are going to give the key benefit and the biggest tangible difference when looking at culture.
SSG: And for an organisation or a company looking to make the first step in that direction, where would you send them? What would your recommendations be?
JE: So we’ve seen many firms go through a bit of a process when looking at evolving their learning as a whole inside their organisation. We saw within a 2017 report that only 6% of firms had actually reached a high impact learning maturity level, out of a poll of about 1,500 firms globally of all industries, all geographies and all sizes. So that’s quite a small amount. But firms that have moved through that particular process to become mature at learning, have gone on a little bit of a journey. I think it’s necessary to look at where you are and understand what you are doing with regards to L&D and get a holistic view of it.
This can be done by not necessarily just looking at the learning department as a small area, but looking at how it operates in the organisation at large; because learning is moving more towards being closer to the business in terms of the way that it works. So getting a thorough understanding of spend, of what activities are happening, the way things are working, how technology is being used and so on, is probably the first step. From there one can create a very tangible business case, in terms of looking at investments for the future, and where you’re going to make a significant difference within the organisation, in terms of the way that learning is used.
I think I’d build on that to basically say that those firms that are enlightened around their use of learning as a strategic lever in the organisation; really have got the ear of the C-Suite and they’ve definitely got big sponsorship from that particular area, and that particular part of the organisation to drive through some of these changes.
So those firms that can create compelling cases to do that and work in partnership with the organisation to get them to understand the value of investing in L&D, are the ones that have been more successful.
SSG: Excellent, thank you very much. So now, moving from a sort of organisational view on learning and how to take that first step to building a good learning culture, to the learning itself. 61% of respondents in the UK said that experiential learning was limited, or not in use whatsoever within their organisations today. So what is experiential learning and should it fit into the wider suite of learning methods that organisations have at their disposal?
JE: So I think that’s an interesting phrase, experiential learning, which means lots of different things to lots of different people. But let me try and give it some kind of loose definition. For me, experiential learning is the process of learning through experience and learning through reflection or doing. So if you think about how that happens either as a child or as an adult in terms of the way that you grow and you learn new things, it can be through experimentation. Trying different things and seeing how it works and improving every single time. It can be through an experience that you have, through seeing something for the first time. It could be through exposure to different activities, thoughts, knowledge, conversations, etc. But it all comes back round to a kind of reflection.
So to say that it’s not available in an organisation, I think is probably slightly strong because it does go on everywhere all the time. And I don’t know whether the word learning is the right word any more for this topic, perhaps development, capability or performance, I think we really do need to redefine it.
If we’re really looking at the way that learning does occur in an organisation at large, it could be you’re a salesperson out on the road, how do you pick up something to give you a quick tip or performance aid before you go into your next meeting? It could be a conversation with a line manager looking at what you’ve done and having a quick piece of feedback, influencing how you do that piece of work again. Learning could be a formal course, or an e-learning piece. It could be something you read on the train. It could be something you read on LinkedIn. It could be all of these things. And so I think all of those elements in terms of what is experiential learning, goes right across this whole spectrum in terms of the way it happens.
I think if we look at experiential learning holistically we get a better view of it. What we do find, however, is that those firms that are more mature at learning don’t just do a wider variety of different learning types, but they do so much more of it. It’s available, it’s enforced, there’s a lot more opportunity for it to be undertaken, either at an individual level or at a team level across the organisation.
So that’s a long answer to a very specific question, but I do think that there’s always a lot more that is going on in our organisations than we give ourselves credit for.
SSG: I’m going to put you on the spot here, but what are some of the other methods of learning that firms may turn to in order to boost their suite of what they have available and enhance their people?
JE: So as I said earlier it’s not necessarily all about courses, not that I’m saying that courses or face-to-face courses should be taken away as they are still crucial for developing certain skillsets, but it’s very much looking at how can you use work itself as a learning opportunity.
And I think those firms that are working well in this particular area are taking a new approach. They’re using skillsets out of marketing, for example, to truly understand the way in which an individual is doing work and how they are being productive.
So understanding what employees are doing on a day-by-day basis, the environment they’re in, the technologies that they’re using, and trying to understand how they can put learning into the flow of work. So that it doesn’t become a distraction, but it becomes an aid to improving productivity moving forwards. I think that have a true understanding, and a product manager type perspective or idea, of the way that something gets done inside an organisation, and the way that individuals are trying to do work, is how you can infuse the learning into it. And therefore be attuned to what employees actually require.
SSG: Thank you very much. So you spoke a little bit on the subject of learning in the flow of work and learning in the flow of life, within that answer. And in last years, Human Capital Trends Report, the shift from careers to experiences clearly requires that sort of continuous development for employees. And as well as this, hybrid jobs are a focus of this year’s trends report, and can command a salary premium of 20% or more, as they combine technical skills with skills in design, communication and business management. So how can organisations best equip their people to prepare for hybrid jobs in order to make the most of their existing talent pool?
JE: Big question. I think giving employees the opportunity to access information and access skill-building tools will become more prevalent. We will see an increase in technologies which will enable people to actually look at a variety of different topics, not only within the learning department but also the outside world through course content libraries. Employees should also make sure they’re picking up on the opportunity to connect and network with specialists and/or experts inside and outside their organisation as well. Organisations need to make this easy and accessible, so employees can access information whilst commuting, whilst getting ready for a meeting etc. This approach is becoming much more popular.
It’s also important that employees have learning journeys and the opportunity to understand that if they do want to reskill, pivot, change jobs, move into a different area, that they can, and they are able to get an understanding of what is required to be successful in that new world. Followed up with the resources needed to do that. This is going to need to be far more prevalent in the future.
This approach will aid this kind of reskilling, up-skilling, out-skilling type words, or set of words that are now becoming more common in the marketplace, as organisations do seek to try and make sure that people are aware of the need to have this hybrid of skillsets as you said. But also that it’s an organisational imperative to make sure that they can be more productive.
SSG: Excellent, yes and you touched on that answer again, in terms of the internal/external divide of learning, which you mentioned briefly before. And that really came out in this year’s trends report. It’s clear from this year’s survey that the up-skilling of internal talent is critical for organisations. And yet 64% of UK respondents, who preferred to access new talent, rather than train existing employees, do so as these new capabilities are more prevalent outside their organisation. So can organisations shift their learning and development strategy quickly enough, or is the reality that they will always have to rely more heavily on external talent for the new skills they require?
JE: So being in the industry that I’m in, I’m a firm believer that there’s a lot of talent inside organisations which is misunderstood, that can be redeployed. I think that if you employ methods to try and understand where those are and understand what the true talent is in your organisation, then it is possible to reskill vast areas of the organisation to achieve the needs of the organisation moving forwards.
It is possible and I come back to that four Bs concept I mentioned earlier on; are you building internally, are you buying it, are you borrowing it from a partner or part of your ecosystem, or are you automating it? So you need to understand what those nucleuses of forces actually are, to understand where you should invest your dollars, in terms of where you’re going to move forwards.
But we’re also seeing that firms over the last few years are investing significantly more on this topic as a whole, be that on vendors, technology, the learning department and the skills that exist within inside it. So, some of the enlightened firms that are more mature, as we’ve talked about, are spending a lot more money on this topic than they have done in recent years.
I think firms have gone through the process in many cases of becoming more efficient, becoming more directive about where they’re spending money. But we’re seeing a second wave of some firms who have been through that process now saying it’s not actually enough just to maintain learning investment. They see learning as a strategic enabler and are going to convince leadership that a lot more should be spent on this topic.
We’re also seeing a lot of firms trying to compete with others in their marketplace by investing a lot more on learning and development as a whole. Which I think says quite a lot to your question; that if they’re actually doubling down on investing on this topic it means that they see a lot of opportunity within their organisation. Rather than have to go through lengthy recruitment processes, the challenges of on-boarding, potentially the misalignment of external hires to corporate culture and then attrition that comes through that particular area as well. I think there’re a couple of different things that come to play here that’s not necessarily just my view, but also the view of organisations who are seeing that there is an opportunity to really redevelop learning strategies as a force in the organisation.
SSG: And so the investment piece is a key driver for many organisations looking at where to direct themselves. And as organisations look towards the future and we touched on it when we talked about experiential learning and the hybrid workforce and elsewhere, technology is going to play an ever-increasing role in learning and a place where companies are looking to direct their investment. So can you talk about some of the examples where you’ve seen learning technology really drive forward how an organisation operates? And tell us a bit about some of the most exciting aspects of learning-related technology?
JE: Well it’s a big question, but before I go to talk about learning technologies I think we should just wind back a little bit and think, because it’s not just about the additional investment or the doubling down in investment in learning, what we’re seeing is firms are spending their money in a very different way from what they have done in the past.
So yes technology, and we’ll come to that, is an area where people are spending a lot more money, and there are a lot of exciting tools that are being used now to create that kind of system that we talked about earlier on. But it’s also about making sure that the learning organisation, the traditional function that sat inside HR or in the line of business, is needing to re-skill itself quite dramatically as well.
To borrow skills and capabilities from marketing functions, from finance functions, from analytics, from the technology function, they’re really changing the way that they need to do things. Rather than being the centre of where you went to get learning in the past, they’re now enabling it in the organisation as a whole. That may sound very simple, but it’s actually a very significant change in the way that you deliver learning and indeed how you skill your learning organisation. So there’s much re-skilling that’s going on in the function itself as well, to try and make sure that this whole culture of learning in the organisation can be delivered.
But you mentioned there are lots of new technologies. We’ve seen the rise of this new segment called the learning experience technologies, or the Netflix type approach, which I have a little bit of a bugbear personally about, because I think you can create a Netflix approach that can all look very cool and consumer grade but it should be all about the content.
If you look at the Netflix strategy themselves they’ve invested so much more in their content. You can have the greatest and most user-friendly front end, but if the content when you get into it is really, really poor, then people are going to get disengaged with it. There is still a need to invest in and/or to provide quality content, connections, communities, links to experts, etc. through the use of technology that people can use, and make sure they’re actually encouraged to go back repeatedly to promote it. And be an Evangelist for how well it works in the organisation!
SSG: And that links in quite nicely with what you were saying earlier, in terms of utilising experts within the organisation to drive learning forward. And would it be with their assistance to then drive that content?
JE: Yes, we’re seeing experts either that are known getting more asked of them in terms of connecting or providing content, and we’re also seeing people that may not necessarily be thought of as experts suddenly being unleashed through this particular rise of technology. This helps content become far more prevalent. I also think that organisations and us as a human group, will rank content and rank resources relatively well, so it will constantly be upgraded and refreshed. And so then content management process becomes all the more important moving forwards too.
SSG: Thanks very much. So I Sam Shindler-Glass speaking to Jonathan Eighteen about learning, the number one global trend in the 2019 Deloitte Human Capital Trends Report. Thanks very much for listening.
Episode 4: Leadership
In this episode, our guest Philip Coleman, Workforce Transformation Leader explores ‘Leadership for the 21st century’ and shares his insights on how leaders are facing unique and new requirements, driven by technology, and the challenges presented by the so called industry 4.0.
Speakers: Gloria Viedma Navarro, a consultant at Deloitte and Phil Coleman, Workforce Transformation leader.
GVN: Hello and thank you for joining us today. My name is Gloria Viedma Navarro and I’m a consultant at Deloitte. I’m joined today by Phil Coleman, a workforce transformation lead and one of the authors of this year’s UK Human Capital Trends report.
Today we’ll be discussing this year’s third most important trend, both globally and in the UK, which is leadership for the 21st century, the intersection of the traditional and the new. Developing leaders is the persistent issue of our time. Leaders today face new challenges, due to the speed of technological, social, and economic change.
80% of responders globally this year said that 21st century leaders face unique and new requirements, mainly driven by technology, changing demographics, and the pace of change. New entrants, exponential technologies, changing ways of working, and new business models, which is also known as Industry 4.0, continually test leaders with new demands.
With that in mind, Phil, what, in your view, do these new requirements mean for leaders? What impacts do these requirements have on leaders and on the organisation?
PC: Well, thank you, Gloria, and it’s lovely to have the opportunity to talk about this important subject today. I really appreciate it. I think one of the important things to start out with, in discussing this topic, is we at Deloitte don’t believe that the fundamental essence of leadership has radically changed. Not in the last ten years, not necessarily in the last 100 years. But, what we do believe is that the context for leaders is changing, and when that context changes, the leadership characteristics that become most important and come to the fore, change as well. Therefore, what we are seeing today is that some of the characteristics that our leaders are well versed in reflect the economic period that we’re coming out of, largely characterised by, in the UK, downturn, austerity and defensive strategies being adopted by leaders and businesses. That fosters a certain type of leadership expectation and culture. It fosters really strong leadership skills about hand to mouth management, being able to lead organisations through turbulence, through restructure. Being able to focus on short to medium-term results and to be able to deliver in very constrained environments.
What it has cost is the ability of leaders to really focus on what is it going to take to change their organisations and their businesses fundamentally and transformatively. Leaders have had less practise over recent times in risk taking, in innovation, in being able to apply new and experimental dimensions to what they are doing day-to-day. And conversely, what we’re seeing in the context of Industry 4.0 is that those are the skills that absolutely are required. If I just reflect a little bit on what you were saying about the characteristics of Industry 4.0, geopolitical uncertainty, that means where work gets done, how work gets done, how organisations externally navigate, manage, and influence a rapidly changing socioeconomic agenda is fundamentally new and different and is much more highly dialled today.
Disruptive technology means that organisations that have relied on tried and tested ways of doing business, are suddenly finding that their core business models are being disrupted, that new entrants are starting to bring new paradigms, with greater agility and greater speed. The heritage organisations and leaders are finding it challenging to say, how can we navigate this? How can we bring that same agility, speed of reaction on innovation in a culture, which has been, for the last ten years, defensive and not about taking risk, but about managing short-term protective results?
And finally, and very important to me from the perspective of workforce transformation, is how work gets done and who does it, is increasingly changing. We are seeing workforces, which are spanning five generations, therefore, leaders are having to work out how to manage a population where they have 80 year olds working, as well as 18 year olds. We have mixes in workforces of permanent employees with transient contingent workers. How do you manage and make sure that you’ve got motivation, quality, sense of purpose, shared agenda, and commitment to an outcome when you have such different motivations for coming to work on a given day?
On the other hand, we have organisations that are not doing things on their own anymore. We’re seeing the rise of ecosystems, of alliances and partnerships, therefore, how you influence and how you get stuff done transcends the old fashioned hierarchical model of command and control down a traditional organisation. So, all of these things are challenging the leadership skills that are required. Whereas previously, it was defensive environment lending itself to autocratic management and utilising the hierarchy for command and control. Now what we’re seeing is flatter management structures, ecosystems, the skills around collaboration, innovation, risk tolerance and risk taking are much more heavily dialled. And these are the areas that we are seeing leaders finding themselves unprepared against some of the challenges of Industry 4.0.
GVN:Thanks, Phil. That was a really informative overview, actually, of what these new requirements will mean for leaders. And the fact that it’s more the context that’s really changing. With that in mind, you also touched upon rapid disruptive changes in technology. And with a more increasingly digital world, what do you think are the biggest challenges that leaders might be exposed to as we become increasingly more digital and the workforce is increasingly more digital, as well.
PC: Leaders today often feel insecure about the pace of change in technology and their own level of comfort with it. We have a saying, which is that you, as a leader, may not have been born a digital native, but it doesn’t mean that you have to be a digital tourist either. And a lot of what we are seeing is more enlightened leaders immersing themselves in understanding the emerging and disruptive technologies that are impacting their industry. Now, this doesn’t mean that we have CEOs going and becoming programmers of digital platforms and technologies, or understanding the intricacies of hash algorithms in blockchain distributed ledgers. But, it does mean that they have an understanding of the application of these technologies, what they mean, and how they’re being orchestrated and assembled by other, often new, parties in their sectors and their industries, and how they might use those technologies themselves for competitive advantage in their own business.
So, one of the best ways leaders are insulating themselves from obsolescence within technology is getting over the fear of saying, I don’t know, I don’t understand, and actually, rediscover that childlike intellectual curiosity and go and immerse. It doesn’t mean immersing into a level of detail and a level of depth of execution. But, it means understanding and applying that wider business and leadership context they already have to saying, if I understand the power of this type of technology, I can understand how to defend myself from it or how to harness it.
GVN:Thank you! I think that’s a really good point that you made earlier. It’s not really about becoming a digital native necessarily, but it’s also not just being a digital tourist. It’s finding that happy medium and utilising that to the advantage of being a good leader.
PC: Or being a digital local.
GVN:Yes. A happy mid-point. It’s quite telling that less than 10% of respondents this year think that their companies’ current leadership programmes are effective or very effective in preparing leaders to move rapidly into the digital economy. Our survey respondents don’t think that’s necessarily happening. So, they don’t think that programmes within organisations are effective at the moment, in actually preparing leaders to tackle those digital challenges or digital transformation that’s happening. In addition, less than 20% of UK organisations actually believe that their leadership programmes are effective at developing or integrating leaders to meet these evolving challenges. So, how, in your view, can leadership programmes better prepare leaders for this shift, as this seems to be an area where responders don’t feel very comfortable that it’s necessarily there yet?
PC: I have quite a lot of thoughts on this particular topic, as you may imagine. The first one is quite a fundamental one, which is, that we need sponsorship and we need the drive for leadership development to actually come from leadership. Now, that might seem blindingly obvious, but what we see an enormous of is that the genesis and the energy for leadership development programmes is coming from learning teams. Now, whilst learning teams have a role in execution, learning teams saying, we’ve identified in a people’s survey that we need our leadership to be better in putting in place a leadership development programme sets up for failure. Because fundamentally, if leadership is going to change, you need to have, to my earlier point, that intellectual curiosity about what needs to be different from the top, that sponsorship from the top. And, one of the things that we are seeing is that the highest impact, most successful transformative leadership development programmes are where the C-Suite are actually behind it and are sponsoring and driving it, rather than it is coming out of a learning team agenda in response to other data that might be around in the organisation.
The second thing is a related point. When leadership development looks like a learning programme, it has certain characteristics. It very often happens in Zen style retreats. And it’s always great to take leaders off and have a nice hotel experience for three days. Very often, you can get deep and meaningful and have some great insights. But, if the result of that is returning to a workplace and a context, which hasn’t also been on the three-day retreat whilst you’ve been away, very quickly, BAU catches up. The radioactive decay and the benefit of what has been learnt evaporates very quickly, and the half-life benefit of the leadership intervention actually is far, far weaker, to the point of insignificance, versus what you would have predicted from the energy after a three day offsite.
So, what we’re increasingly seeing is leadership development programmes moving away from Zen style retreat environments and moving into the workplace. And rather than moving into the workplace as something, which is done on the side of BAU, it’s about how do you apply leadership development inputs to the work and the challenges that you, as a leader, are facing? We talked a little bit earlier about the context and the demands for leaders today being around the need to innovate. What we are increasingly seeing a lot of are leadership development programmes where innovation and going on an innovation journey is at its core. What do these look like? Very often, they look like a period of digital disruptive immersion, to help with the education and the know-how and the appreciation of disruptive technologies. They look like coaching and helping people through a structured process of problem identification. Identifying what are those wicked problems they have in their BAU? But if only they could be solved, things could be transformed. It’s about helping those leaders challenge what are the orthodoxies? What are the things that people are telling you that you can’t do, or you’ve always assumed must be impossible for must be true that might be challengeable? It’s about creating the coach led support structure that actually allows people to follow a structured process and take a problem statement that is real and genuine for their own business and go through an innovation journey and try and crack it and solve it.
Now, one of the challenges we get is: well that’s great but that’s an innovation education programme, or an innovation learning programme, rather than a leadership education programme. Yes, there is some core content learnt about the art and science of innovation, and we do believe at Deloitte that there is a disciplined approach you can take to innovation that can significantly move the dial on results. But, where the leadership learning kicks in is, as people go on that journey and they suddenly experience the challenges within their organisation that they need to overcome as leaders to make change happen. They realise that the people they need to collaborate with are not within their usual line structure, so they have to start forming new networks, new relationships. They have to practise collaboration. They get to points where they have setbacks. And the emotional challenges of I shouldn’t be here, I should be going northeast in a straight line, suddenly kick in. And that’s where what are my detailers, what are those leadership mind-set models that are actually stopping me taking risks?
It’s about breaking away from an expectation that I have to get everything right, that failure is something that’s punished in the organisation, to recognising setbacks and failure as opportunities for learning and course correcting. So, what we’re finding is that innovation provides a learning canvas, upon which, leadership factors and capabilities can be practised, can be developed. Some of those leadership requirements that have not been tested in BAU maybe over the last decade can actually be amplified and brought to the fore.
GVN:Thank you. I really like the points you made, particularly the fact that there’s a level of theoretical learning, or theory behind it. But, what’s also really important is the practise, as you mentioned. On the day-to-day, that’s where you’re showing and where you’re learning, as a leader, those key skills and capabilities to meet those evolving challenges. One of the messages from this year’s UK Human Capital Trends report, actually, was that leaders of the future also need to master the art of being able to switch from being commander to coach. And this is something you’ve already touched on, the fact that leaders and also coaches, are these inspiring figures. Not just isolated in the C suite, but in the fabric of the organisation. In your opinion, how can this best be achieved? This duality of commander and coach, where a leader actually empowers the employees within the organisation.
PC: I’m going to start off with an observation from a recent innovation led leadership development programme that I’ve been working on, and then zoom out and apply that to answer your question. So, one of the hardest parts in innovation is defining a good problem statement. One of the things that we often see happening is they define a problem statement that has an implied answer already baked into it. For example, I need to know how to implement a new CRM platform, in order to drive customer revenue. That I need to go and implement a solution I’ve already decided is not a problem statement, which is, I have a problem with customer revenue, I need ideas of how to drive customer revenue. The answer might be a new CRM platform is required. It might be we need to address our brand. It might be we need to be looking at our product fundamentals.
Part of the journey of leaders going from commander to coach is asking people to solve problems without giving them, if you like, the answer that you’re expecting them to come back with. If you give someone a problem statement with an implied answer to come back with, effectively what you’re doing as a leader is you’re using that person as a leverage for your own idea. If you’re going to be in coach mode, you want to open yourself to the opportunity that there may be other solutions, other answers to the particular problem. Yours might be the right one. It might be part of a basket of answers that collectively is the right one. It might actually not be the right answer at all. So, part of the coaching in these programmes is around how do you actually give space for people to take a problem, go away, and potentially come back with answers, which are not necessarily the things that you have in mind as being the answers when you start. That’s difficult for leaders, because leaders like to feel that there’s a degree of predictability. If I’ve sent somebody away with a particular task, they’re going to come back with a particular answer.
In coach led leadership you’re thinking, is that answer/solution actually addressing the problem? Might it be addressing the problem the way my initial hypothesis would have got there? And how do I actually support the person to try things out, to experiment, to genuinely try and learn something new, rather than necessarily take a pre-prescribed answer of my own? It’s one of the reasons why in leadership development we are saying, you cannot just do it at one level in an organisation. You actually need to have the seniors and the superiors to that level of leadership also aligned and on board to create that space and to have that language to allow people to actually fall in love with their problem, rather than tell them they have to fall in love with your solution. And to my mind, in terms of the development of leaders and getting them to move away from commander and coach, it’s about actually allowing people to have the unpolluted problem statement to be able to truly apply their talent and their intellect to.
GVN:Thank you. That’s a really interesting way of seeing it, and I actually quite like that.
Rather than giving the problem statement with the nuance of what you’d like the answer to be, it’s giving that freedom and allowing for that creativity to seep through in that role of coach. And being able to manage that duality, as well, effectively.
PC: Can I give a couple more thoughts on this answer? This has to move slightly outside of the leadership realm and look at the organisational culture and what the organisation recognises. So, in an organisational culture that is recognising an individual leader for their own personal success in what they have attributably done and delivered themselves, the temptation is always going to be, ‘right, I’ve now got to take what’s in my head and get others to do it in my pattern’. If an organisation says, we now need to reward leaders for the success, the capability, the energy, the commitment, the output, the innovation coming from their teams, it’s different. At that point, the incentive is there to say, I will be rewarded and I will be made successful if the team beneath me feels empowered and able to actually execute on the problems that we have, and feel enabled and empowered to make a difference.
So, there is a cultural dimension as well around what the organisation values from its leaders, and how the organisation actually creates a priority in assessing its leaders, and rewarding its leaders, and celebrating its leaders on the success of the people that they are responsible for.
GVN:That makes absolute sense, and I agree with that. Thank you.
So, in addition to all of the new requirements mentioned earlier, the disruptive changes in technology, Industry 4.0, what we’ve just talked about between being able to be a commander and a coach as effectively as required. These are all obviously affecting leaders globally. However, leaders in the UK, specifically, must also deal with the aftermath of ten years of economic austerity and then high levels of social and political uncertainty, which you touched upon at the beginning, in terms of the socioeconomic and geopolitical forces that are also in play in shaping the leaders of today, but also tomorrow. And all these forces pulling in different directions, it’s therefore unsurprising that 96% of UK respondents this year feel that the biggest challenge for leaders is in leading more complexity and ambiguity.
Also, in this year’s UK report, we find that austerity and political uncertainty have driven defensive balance sheet strategies among British corporates. And this is a quote taken from the report this year. This is echoed by the respondents who are saying that the most important role for leaders today is being able to deliver financial results, and it’s 72% of UK respondents who said this. Do you agree that, or do you think that delivering financial results defines the role of a leader? I think I may know the answer.
PC: So, it may surprise you, do I believe that financial results matter? Yes, I do. I will go on to qualify that quite heavily, actually, in the build on this answer. But yes, financial results do matter. They matter when you have shareholder expectations and investors. They matter when you have a workforce that is dependent on those financial results for their own standard of living and compensation. And also, financial results are very often for organisations’ table stakes, upon which they can actually achieve other things. Do I believe that leadership should be all about financial results? No, I don’t. What I am seeing increasingly is that leaders have a responsibility for the wellbeing and the humanistic system in which their workforce is operating within. Especially in a future of work context, as workforces are going through significant transformation.
There is a responsibility for leaders on the health, the wellbeing, the resilience for development, the succession planning, the creation of the next generation, the future of the leaders who are going to succeed them. That has to have a huge priority for that particular leader’s agenda. And increasingly, we’re also seeing the impact that leaders and their organisations are making on society is very, very important. It’s very important to the workforce. We hear all the time about millennials and the increasing demand for a sense of meaning and a sense of purpose in coming to work. I don’t actually believe that stops with millennials. I believe that many of our best leaders at all levels, be it generation X, baby boomers, millennials, or the incoming generation Z, actually share that passion for making a difference and feeling that what they are doing matters, and actually is making a difference and has a purpose in wider society.
So, financial results are important because they actually create the permission to continue making a difference and making an impact. But fundamentally, making an impact that is meaningful for them and for their organisation and their workforce, to my mind, is above all else the role of a leader.
GVN: Thank you. I agree with that, and wearing multiple hats is also, I guess, key for leaders of the future and of today.
Finally, we’ve spoken a lot about digital transformation and all the disruptive forces at the moment influencing the organisation and the ecosystem of organisations. However, I’d like to touch upon the other transformation where 60% of respondents consider that the second major transformation that leaders are, or should be, driving after the digital transformation is the organisational transformation. So, in your opinion, and this will be the last question before we wrap up, what role does the leader play in the organisational transformation?
PC: The role of leaders is absolutely critical in delivering transformation. What we find if we look at the delivery of change projects in organisations, is once upon a time we invented project management, recognising that the delivery of projects couldn’t happen in a haphazard fashion and needed some degree of controlled environment in which to operate. We then realised that projects couldn’t get their results to be adopted and accepted by a wider business, unless there was change management. And change management came along saying, let’s actually now look at the people who are going to use the outputs of this project, who are going to have to use them, adopt them, embrace them, change their way of working, and a science for change management was born.
What I’m seeing today is the biggest barrier of the successful failure of programmes, even with project management and change management in place, is the organisational leadership/the leadership environment which that change is being delivered into. Let me give a couple of examples. We are seeing a number of clients looking to embrace agile and enterprise agility as a way of working. Enterprise agility requires a different mind-set of how to deliver change. It requires the ability to iteratively prioritise what happens next, to be able to dynamically produce work on a backlog. To actually have work pulled through a value chain, rather than planned eons in advance, set in stone, and then delivered through big phase gates of traditional programme management. From a leadership perspective, if the leaders aren’t aligned with that way of working, what you get is: what are the milestones, where are the stage gates, where are the plans? And the leadership environment kills the agile way of working, and it reverts to meet the leadership’s expectations back to traditional methods, which are no longer appropriate for the types of programmes organisations are trying to do.
So, having the leadership aligned, literate, and understanding, and willing to adopt and change the wider organisational practises, to actually allow transformational change to happen in the way that it needs to happen is a critical step in order to unblock.
The other thing that I would identify is that the nature of leadership is also part of what needs to change in organisational transformation. So, if you’re going to have a genuine organisational transformation, leadership will need to change its priorities. It will need to change its emphasis per the earlier conversation. It may well be that the how leaders interact with each other, how they collaborate, behave and operate, will need to change. The organisation’s appetite to risk will also need to change, along with its attitude towards failure and how you learn from failure. Embrace the ‘fail fast, fail cheap’ philosophy, rather than ‘I set you an objective and don’t dare fail’ philosophy. That is fundamentally a leadership mind-set shift that is essential and required, in order to allow successful transformation in particular in the digital age.
GVN: Thanks, Phil! Thank you very much for spending the time today to sit with us and talk us through your points of view and your ideas, and all that knowledge regarding the leadership for the 21st century. I also wanted to thank everyone who’s listening. It’s been a very informative session.
PC: You’re very welcome, Gloria. Thank you!