Only a few actions matter, and they require the CEO’s attention.

Organizations have always needed leaders who are good at recognizing emerging challenges and inspiring organizational responses. That need is intensifying today as leaders confront, among other things, digitization, the surging power of data as a competitive weapon, and the ability of artificial intelligence to automate the workplace and enhance business performance. These technology-driven shifts create an imperative for most organizations to change, which in turn demands more and better leaders up and down the line.

Unfortunately, there is overwhelming evidence that the plethora of services, books, articles, seminars, conferences, and TED-like talks purporting to have the answers—a global industry estimated to be worth more than $50 billion—are delivering disappointing results. According to a recent Fortune survey, only 7 percent of CEOs believe their companies are building effective global leaders, and just 10 percent said that their leadership-development initiatives have a clear business impact. Our latest research has a similar message: only 11 percent of more than 500 executives we polled around the globe strongly agreed with the statement that their leadership-development interventions achieve and sustain the desired results.

In our survey, we asked executives to tell us about the circumstances in which their leadership-development programs were effective and when they were not. We found that much needs to happen for leadership development to work at scale, and there is no “silver bullet” that will singlehandedly make the difference between success and failure.

That said, statistically speaking, four sets of interventions appear to matter most: contextualizing the program based on the organization’s position and strategy, ensuring sufficient reach across the organization, designing the program for the transfer of learning, and using system reinforcement to lock in change. This is the first time we have amassed systematic data on the interventions that seem to drive effective leadership-development programs. Interestingly, the priorities identified by our research are to a large extent mirror images of the most common mistakes that businesses make when trying to improve the capabilities of their managers. Collectively, they also help emphasize the central role of technology today in necessitating and enabling strong leadership development.

Focus on the shifts that matter
In our survey, executives told us that their organizations often fail to translate their company’s strategy into a leadership model specific to their needs (whether it is, say, to support a turnaround, a program of acquisitions, or a period of organic growth). Conversely, organizations with successful leadership-development programs were eight times more likely than those with unsuccessful ones to have focused on leadership behavior that executives believed were critical drivers of business performance.1
The implications are clear for organizations seeking to master today’s environment of accelerating disruption: leadership-development efforts must be animated by those new strategic imperatives, translating them into growth priorities for individual managers, with empathy for the degree of change required. An important piece of the puzzle is enhancing the ability of leaders to adapt to different situations and adjust their behavior (something that requires a high degree of self-awareness and a learning mind-set). Leaders with these attributes are four times more prepared to lead amidst change.

Make it an organizational journey, not cohort specific
Ensuring sufficient reach across the organization has always been important to the success of leadership-development efforts. Organizations with successful programs were six to seven times more likely than their less successful peers to pursue interventions covering the whole organization, and to design programs in the context of a broader leadership-development strategy. The same went for companies whose leadership strategy and model reached all levels of the organization.

Achieving sufficient reach amidst today’s rapid change is challenging: most leadership-development programs are typically of short duration (a few weeks to several months), sporadic, and piecemeal—making it difficult for the program to keep up with changes in the organization’s priorities, much less develop a critical mass of leaders ready to pursue them.

Fortunately, technology isn’t just stimulating the need for change; it’s also enabling faster, more flexible, large-scale learning on digital platforms that can host tailored leadership development, prompt leaders to work on specific kinds of behavior, and create supportive communities of practice, among other possibilities.

Design for the transfer of learning
Technology can also help companies break out of the “teacher and classroom” (facilitator and workshop) model that so many still rely on, maximizing the value and organizational impact of what is taught and learned. Fast-paced digital learning is easier to embed in the day-to-day work flows of managers. Every successful leader tells stories of how he or she developed leadership capabilities by dealing with a real problem in a specific context, and our survey provides supporting evidence for these anecdotes: companies with successful leadership-development programs were four to five times more likely to require participants to apply their learnings in new settings over an extended period and to practice them in their job.

This is just one of several modern adult-learning principles grounded in neuroscience that companies can employ to speed the behavior and mind-set shifts leaders need to thrive in today’s fast-changing environment. Others include learning through a positive frame (successful leadership developers were around three times more likely to allow participants to build on a strength rather than correcting a development area), and providing coaching that encourages introspection and self-discovery (which also was three times more prevalent among successful leadership developers).

Embedding change
Leadership-development efforts have always foundered when participants learn new things, but then return to a rigid organization that disregards their efforts for change or even actively works against them. Given the pace of change today, adapting systems, processes, and culture that can support change-enabling leadership development is critically important. Technology can support organizational interventions that accelerate the process. For example, blogs, video messages, and social-media platforms help leaders engage with many more people as they seek to foster understanding, create conviction, and act as role models for the desired leadership behavior and competencies.

Also critical are formal mechanisms (such as the performance-management system, the talent-review system, and shifts in organizational structure) for reinforcing the required changes in competencies.2 In our latest research, we found that successful leadership-development programs were roughly five to six times more likely to involve senior leaders acting as project sponsors, mentors, and coaches and to encompass adaptations to HR systems aimed at reinforcing the new leadership model. Data-enabled talent-management systems—popularized by Google and often referred to as people analytics—can increase the number of people meaningfully evaluated against new competencies and boost the precision of that evaluation.

Most CEOs have gotten religion about the impact of accelerating disruption and the need to adapt in response. Time and again, though, we see those same CEOs forgetting about the need to translate strategy into specific organizational capabilities, paying lip service to their talent ambitions, and delegating responsibility to the head of learning with a flourish of fine words, only for that individual to complain later about lack of support from above. To be fair, CEOs are pulled in many directions, and they note that leadership development often doesn’t make an impact on performance in the short run.

At the same time, we see many heads of learning confronting CEOs with a set of complex interwoven interventions, not always focusing on what matters most.

But as the pace of change for strategies and business models increases, so does the cost of lagging leadership development. If CEOs and their top teams are serious about long-term performance, they need to commit themselves to the success of corporate leadership-development efforts now. Chief human-resource officers and heads of learning need to simplify their programs, focusing on what really matters.

Source: McKinsey.com, August 2017
By: Claudio Feser, Nicolai Nielsen and Michael Rennie
About the authors:Claudio Feser is a senior partner in McKinsey’s Zurich office; Nicolai Nielsen is an associate partner in the Dubai office, where Michael Rennie is a senior partner.
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If you know the “why” of your procrastinating, you can easily find the “how” to overcome it.

Procrastination is like a sore throat; it’s a symptom with many possible causes. Unless you know the cause, the treatment for the symptom might things worse. This column contains the five most common causes of procrastination and how to overcome them.

1. The size of a task seems overwhelming.
Explanation: Every time you think about the task it seems like a huge mountain of work that you’ll never be able to complete. You therefore avoid starting.

Solution: Break the task into small steps and then start working on them. This builds momentum and makes the task far less daunting.

Example: You’ve decided to write a book. Rather than sitting down and trying to write the book (which will probably cause you to stare at the blank screen), spend one hour on each of the following sub-tasks:

1. Jot down as many ideas as possible.

2. Sort the ideas into an outline.

3. List out anecdotes you’ll want to include.

4. Write a sample anecdote to determine style.

5. Review existing materials (e.g. presentations).

6. Assign those materials to sections of your outline.

7. Write the first three paragraphs of a sample chapter.

8. Create a schedule to write 2 pages a day.

2. The number of tasks seems overwhelming.
Explanation: Your to-do list has so many tasks in it that you feel as if you’ll never be able to finish them all, so why bother getting started?

Solution: Combine the tasks into a conceptual activity and then set a time limit for how long you’ll pursue that activity.

Example: Your email account is being peppered by so many requests and demands that you feel as if you can’t possibly get them done. Rather than fret about the pieces and parts, set aside a couple of hours to “do email.” Schedule a similar session tomorrow or later that day.

Thinking of the work as an activity rather than a bunch of action items makes them seem less burdensome.

3. A set of tasks seem repetitive and boring.
Explanation: You’re a creative person with an active mind so you naturally put off any activity that doesn’t personally interest you.

Solution: Set a time limit for completing a single task in the set and then compete against yourself to see if you can beat that time limit. Reward yourself each time you beat the clock.

Example: You’re a newly-hired salesperson who must write personalized emails to two dozen customers. The work involves quickly researching their account, addressing any issues they’ve had with the previous salesperson, and then introducing yourself.

Rather than just slogging through the work, estimate the maximum amount of time it should take to write one letter (let’s say 5 minutes). It should thus take you 120 minutes (2 hours) to write all of them.

Start the stopwatch, write the first email. If you have time left over, do something else (like read the news). When the stopwatch buzzes, reset, write the second email, etc.

4. The task seems so important that it’s daunting.
Explanation: You realize that if you screw this task up, it might mean losing your job or missing a huge opportunity. You avoid it because you don’t want to risk failure.

Solution: Contact somebody you trust and ask if they’ll review your work (if the task is written) or act as a sounding board (if the task is verbal). Doing the task for your reviewer is low-risk and thus the task is easier to start. The reviewer’s perspective and approval provides you extra confidence when you actually execute the task.

Example: You need to write an email demanding payment from a customer who’s in arrears. Because you don’t want to damage the relationship and yet need to be paid, it’s a difficult balancing act–so difficult that you avoid writing the email.

To break the mental log-jam, ask a colleague or friend if they’ll review your email before you send it to see if it hits the right tone. Writing the email then becomes easier because you’re writing it for your friend to read rather than for the customer.

Problem: You just don’t feel like working.
Explanation: You’re feeling burned out and generally unmotivated, so you’re finding it very hard to get down to work.

Solution: You have two choices: 1) reschedule the activity for a time when you’ll be more motivated or 2) motivate yourself in the short-term by setting a reward.

Example: You need to write a trip report but you’re tired after a long day of travel. While you know that the report will be more accurate if you write it now, you decide to write it tomorrow morning after breakfast and coffee–a time when you’re typically more motivated.

Alternatively, you motivate yourself short-term promising yourself that you’ll buy and download a book that you’ve been wanting to read… but only if you write the report tonight.

Source:Inc.com, 7 July 2017
Author: Geoffrey James
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Technological tools provide a new opportunity for the function to reach its potential and drive real business value.

A leading US healthcare company was struggling recently to recruit more nurses and stem high staff turnover. Patients were suffering, and the crisis was beginning to hit revenues.

Instead of just continuing to “firefight,” however, the company’s human-resources department responded by launching an in-depth analysis of the tenures in the group’s nursing population, noting in its study some surprising correlations between length of service, compensation, and performance.

HR leaders quickly saw the source of the problem—as well as a solution. They raised the minimum rewards for those early in their tenure and tweaked the total rewards for those with longer career paths, with the result being that the company retained more early-tenure, high-performing nurses. When the company rolled out the plan more widely, employee engagement increased and productivity jumped by around $100 million.

The story shows what can happen when HR steps out of its traditional silo and embraces a strategic role, explicitly using talent to drive value rather than just responding passively to the routine needs of businesses. That’s a transformation many companies have been striving to make in recent years as corporate leaders seek to put into practice the mantra that their people are their biggest asset.

Some companies are making progress. The best HR departments are creating centers of excellence (COEs) in strategic areas such as organizational development, talent acquisition, and talent management. They are also providing better support to line managers via strategic HR business partners, and gaining points for pulling up from administrative minutiae to work on the long-term health of the business.

But there is still a long way to go. We hear continued frustration from business and HR leaders alike that the value of the much touted “strategic” approach remains at best unquantified, at worst ill-defined and poorly understood. Too many HR organizations still fail to make a hard and convincing connection between talent decisions and value.

This article sets out an agenda for renewed action. We believe the time is right to accelerate the reinvention of HR as a hard-edged function capable of understanding the drivers of strategy and deploying talent in support of it—most importantly as a result of the availability of new technological tools that unleash the power of data analytics.

The new HR—at a glance
New roles
Short of rewriting job descriptions and changing roles right away, companies should launch a tailored training program for the best HR business partners—the ones who show the potential to become truly strategic talent value leaders (TVLs). Additionally, launching targeted and rotational career-development opportunities that move HR leaders into business roles, and vice versa, can jumpstart the development of TVLs.

People analytics
The first step for companies is to assess data readiness—how personnel data can enable analytics insights that add value to HR. Sustained progress will require a dedicated analytics capability, including roles, capabilities, and data governance.

HR operations
Most companies are already standardizing and centralizing key work flows. Next-generation automation technologies—robotics, cognitive agents, and natural-language processing, for example—will accelerate efficiency.

Resources
Making HR more agile requires companies to establish a rigorous strategic-planning process that lays out which initiatives HR will pursue each year to drive value and which ones it will not.

To advance the agenda, we believe businesses need to concentrate on four things: rethinking the role of business partner to enable a better understanding of the vital link with strategy, using people analytics to identify the talent actions that will drive the value, fixing HR operations so they are not a distraction from HR’s higher mission, and focusing HR resources in more agile ways so as to support these fresh priorities. Companies that take these steps will move toward a next generation of HR that’s data driven, not experience driven; systematic, not ad hoc; and consistent, not hit and miss. (For more, see sidebar, “The new HR—at a glance.”)

Rethink the role of the business partner
The starting point is for HR business partners—those senior HR individuals who counsel managers on talent issues—to stop acting as generalists and show that they really own the critical talent asset. This is a big enough change that it calls for a change in roles: replacing the business-partner role entirely with a new talent value leader (TVL), who would not only help business leaders connect talent decisions to value-creating outcomes but would also be held fully accountable for the performance of the talent.

The talent value leader
A TVL should have real authority over hiring and firing, even if actual decision rights remain with managers in the way actual spending decisions are taken by budget owners rather than being dictated by the finance function. Think of the manager of a European football team who is responsible for allocating resources using acquisition, compensation, evaluation, development, motivation, and other levers to maximize the players’ collective performance.

Unlike the typical HR business partner of today, TVLs should be held to account using metrics that capture year-to-year skills development, capability gaps, engagement, and attrition. And to the maximum extent possible, they should be disconnected from the day-to-day concerns of operational HR so as not to get pulled back into dealing with employee issues—that means eliminating the HR liaison role that so many HR business partners play today.

TVLs, however, won’t succeed without being able to deliver analytically driven talent insights to business managers systematically. This is a substantial change from today; while many HR business partners are resourceful and smart advisers to managers, few possess a data and analytical mind-set or the appropriate problem-solving tool kit.

When adopted, the expanded HR role we are describing starts to be taken seriously, as some companies are beginning to discover. A leading global materials company, for example, has been moving in this direction, specifying competencies for its HR leaders that now include the ability to “use analytics to diagnose and prescribe talent actions,” to “translate talent decisions into profit-and-loss impact,” and to “measure talent outcomes and their impact on value while holding managers accountable.” The results have been significant. After an adjustment period, internal surveys show managers are substantially more satisfied with the support they receive from HR. Anecdotally, we also hear that more business leaders are scripting a role for their talent advisers during the strategic business-planning processes.

Broader leaders for a bigger role
A key challenge, of course, is where to find appropriate candidates to fill these bigger HR shoes. Many business partners, after all, have grown up in traditional HR roles with an operational-service culture. HR departments should therefore start a cohort-based, high-potential program that balances rotations in and out of HR with dedicated time for skill building. Companies can also reward executives from other functions for stints in HR, and potential HR leaders should experience line and other functional-leadership roles—in finance, for example—in order to build better business-strategy capabilities. Eileen Naughton recently stepped in to run people operations at Google from her role as managing director and vice president of sales and operations in the United Kingdom and Ireland. And Pepsico has begun to fill some HR roles with people from engineering, technology, or process-oriented backgrounds: leaders at the soft-drink giant say that engaging the business with data is critical to expanding the strategic role of HR.

Put people analytics at the core
Many organizations have already built extensive analytics capabilities, typically housed in centers of excellence with some combination of data-science, statistical, systems-knowledge, and coding expertise. Such COEs often provide fresh insights into talent performance, but companies still complain that analytics teams are simple reporting groups—and even more often that they fail to turn their results into lasting value. What’s missing, as a majority of North American CEOs indicated in a recent poll, is the ability to embed data analytics into day-to-day HR processes consistently and to use their predictive power to drive better decision making.

In today’s typical HR organization, most talent functions either implicitly or explicitly follow a process map; some steps are completed by business partners or generalists, others by HR shared services, and still others by COE specialists. Many of these steps require a recommendation or decision by a human being—for example, the evaluation of an employee’s performance or the designation of a successor to a specific role.

Embedded analytics, by contrast, either inform or replace these steps with algorithms that leverage the data to drive fact-based insights, which are then directly linked to the deployment steps in the process. For example, many companies now use HR analytics to address attrition, allowing managers to predict which employees are most likely to leave and highlighting turnover problems in a region or country before the problem surfaces. By making the development and delivery of insights systematic, HR will start to drive strategic talent value in a more consistent way, rather than episodically and piecemeal as at present.

To understand more concretely the role of people analytics in an HR organization’s journey toward a more strategic role, let’s look closely at a single process—succession planning—and then assess the potential business impact of a broader suite of initiatives.

Analytics in action: Succession planning
A standard approach starts with a talent-management or organizational-development COE laying out the process for the organization, designing the tools or templates, and training key stakeholders in what to do. Managers might then sit down with their HR partners and discuss potential succession candidates for key roles—ideally taking skills, competencies, and development pathways into account (in practice, of course, there may be a bit of “gut feel”). A traditional best-practice process would then create individual development plans for potential successors, based on the gap between that person and the potential role. As vacancies occur, these potential successors may or may not be tapped, much depending on whether the manager (or his or her HR partner) bothers to refer back to those plans.

An analytics-driven succession-planning process looks and feels very different. First, machine-learning algorithms might review years of succession data so as to understand success factors in a given role. Using that insight, the company might then derive the top five internal candidates for that role, accompanied by customized development plans (that is, what courses to take, what skills to build) based on their individual competencies. Such information would support subsequent strategic decisions, consultations between managers and strategic HR partners, and cross-functional assessments of enterprise bench strength.

Business impact
The real prize is for those that can use data analytics not just to improve a single process, like recruitment or retention, but also to drive business performance—as has happened at a leading global quick-service restaurant business. The company mined data on employee personality traits, leadership styles, and working patterns and introduced changes that have improved customer service and had a tangible impact on financial performance (see “Using people analytics to drive business performance: A case study,” forthcoming on McKinsey.com).

To achieve such impact across the board, leaders will have to make significant investments in analytics skills and capabilities—but the returns should be commensurate. Based on a study of a range of industries with diverse workforces, operating models, and financial features, the McKinsey Global Institute estimates that companies using a portfolio of HR-analytics solutions could realize an increase of 275 basis points in profit margins, on average, by 2025. These increases will likely come about through productivity gains among front- and middle-office workers (which can translate into revenues or other increased-output opportunities) and through savings in recruiting, interviewing time, training, onboarding, and attrition costs.

Fix HR operations
The current reality of HR, as many business partners will attest, is that of the function routinely being pulled into operational issues and distracted from its core strategic mission. McKinsey research, indeed, shows that typical HR departments still spend close to 60 percent of their time and resources on transactional and operational HR, despite decades of pushing work out to shared services; the best-performing HR departments spend less than 40 percent of their time and resources on these transactional activities.

As part of its continuing transformation, HR must therefore raise service levels and improve the employee experience, using next-generation automation tools and standardized processes to drive higher productivity. There are three critical operational priorities for the HR organization of the future: continuous process improvement, next-generation automation technology, and user-experience-focused service improvement.

Continuous process improvement
Based on our work with companies, we see several ways to make HR operations more efficient—including finding further things that individuals and managers can do more easily themselves—notably by providing direct access to information or transactions online, introducing simpler processes, and ensuring clearer decision making. It’s also worth considering more geographically diverse sourcing of work and talent, as a leading agricultural company did when it found deep pockets of high-end instructional design talent in several Indian cities. These people, it turned out, not only were less costly but proved themselves capable of delivering equal or better service than the relatively well-compensated instructional designers who had served the businesses previously, mostly from the United States and Western Europe. There is always scope for smarter sourcing of external vendors, whether through insourcing or outsourcing: one US insurance company, for example, improved its reliability and cut the overall cost of its payroll process in half by bringing it back in-house.

Next-generation automation technology
New automation technologies will soon reshape a number of HR processes, building on core human-resource-management-system platforms (both on premises and in the cloud). Robotic process automation (RPA), smart work flows, cognitive agents, and natural-language processing, for example, will automate HR tasks previously carried out by people. The case of a leading global automotive-component manufacturer that was struggling with its employee-onboarding process is instructive. Thanks to the cross-functional complexity of the work flow, with different HR people needed to complete steps such as employee paperwork and scheduling orientation—and with IT, facilities, and security people needed to complete others—onboarding used to take weeks. RPA solved the problem with a bot that can access multiple systems, follow an intelligent work flow, and initiate communications. Onboarding time, on average, has been reduced by more than two-thirds, many errors created by manual tasks have been eliminated, and the journey has become more compelling for the individual.

Toward a new HR philosophy
For operational HR, the new frontier of technology is cognitive agents, especially when paired with natural-language processing. The former have developed to the point where in many cases employees can’t tell that they’re interacting with a piece of software. Natural-language processing may not yet offer seamless unstructured voice conversations for an HR setting—but leading HR-service organizations already leverage chat as a communication channel to answer most questions, “learn” from past interactions, and conduct “warm” handoffs when needed. One major international food and beverage company believes these automated technologies can reduce its costs by 20 percent while maintaining or increasing service levels (for instance, by enabling 24/7 immediate response).

User experience
Operational effectiveness is a critical part of employee satisfaction with HR. But whether it’s understanding the customer decision journey in marketing or understanding user needs as the foundation to driving digital user experience, other areas of the business have sought to improve customer satisfaction in ways that most HR departments generally have not. The HR department at the Orlando International Airport is a notable exception. It found that staff employed by about 60 organizations based at the airport, ranging from airlines and security to retail and janitorial, faced a common set of challenges. These challenges were both undermining the employees’ job satisfaction and affecting the quality of services they were providing for passengers and other customers. An overhaul of the staff experience tackled both problems. The airport revamped its shuttle-bus schedules, reducing commuting time for workers using the employee parking lots, which had a tangible effect on morale at the start of the day. The airport also made it easier for employees to find their way through its buildings and facilities. Finally, it took an entirely new approach to onboarding employees, providing them with updated weekly information so that everyone, regardless of their role, could help customers with queries about directions, the availability of services, or events taking place in other parts of the airport.

Focus HR resources in more agile ways
The changes discussed not only require the HR organization to recruit a new cadre of TVLs and to use people analytics to drive business value—they also demand a new type of agile organizational structure. Applying agility to the organization of HR will be critical to HR’s ability to deliver a harder link between talent decisions and value.

Agile HR: A case study
It’s easiest to understand HR agility through an example. A leading European bank implemented an agile HR model aligned to this vision, with great results. Previously siloed HR resources responded to opportunities or issues slowly and inefficiently, their work dominated by transactional and operational tasks. Morale was low as a result of a lack of role clarity and a surfeit of meetings aimed at engaging every conceivable HR stakeholder. In response, the bank’s HR leaders implemented an agile “flow to the work” organizational model: there are a limited number of deep specialists and talent value leaders in a few global roles, and they are supported by strong shared-service centers and a pool of multiskilled HR professionals—people with capabilities to perform most HR actions and who are responsible for much of the talent work.

The model reduced the HR budget by 25 percent in its first year of implementation, the goal being 40 percent within three years. Just as important, the HR organization is working with renewed purpose, implementing key talent initiatives faster and substantially accelerating HR’s response to opportunities and issues. Now fewer in number, the bank’s HR business partners (TVLs in all but name) and COE leaders are devoting much more of their time to connecting talent to business strategy.

Agility, operations, and structure
As this example suggests, the move toward a more agile HR organizational model has both operational and structural implications. Operationally, HR functions need to be able to create a solid backbone of core processes that either eliminate the clutter or camouflage the complexity to the business, all while delivering the basics (such as payroll, benefits, recruiting, and simple employee and manager transactions) without error or delay.

Agility, combined with analytics, also suggests structural change, particularly for centers of excellence. With more automation of insight generation, and especially the mass customization and delivery of those insights through technology, HR COEs will probably be a much smaller group in the HR organization of the future. Shorn of transactional resources and unburdened by operational responsibilities, these pools of talent will be able to work across disciplines (talent management, learning and development, and organizational design), supporting the new talent value leaders and business as a whole.
Calls for a more assertive and strategic role for HR are not new. The idea that the CHRO (controller of human capital) should be part of a C-suite triumvirate that includes the CEO (principal owner of strategy) and the CFO (owner of financial capital) has been championed by our colleague Dominic Barton, among others. But if HR leaders are to finally achieve the promise of being strategic—the sustained delivery of talent insights and actions that drive real business value—they will need to transform their own function to provide a foundation. By changing the way HR interacts with the business on strategic questions, notably through the creation of new talent value leaders, HR can gain responsibility and accountability for driving talent-linked value. By deploying data-driven insights and solutions in a systematic way, HR can dramatically ramp up the level of talent insight it delivers to the business. By driving continuous improvement in operational performance, HR can create the space for its leading thinkers to drive strategic talent insight and solutions. And by adopting a more agile approach to its resources, HR can drive significant productivity and focus execution and investments on the core initiatives each year that are proven to link to value.

Source: McKinsey.com, July 2017
Authors: Frank Bafaro, Diana Ellsworth and Neel Gandhi
About the author(s)
Frank Bafaro is a consultant in McKinsey’s Southern California office; Diana Ellsworth is an associate partner in the Atlanta office, where Neel Gandhi is a partner.
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Who has to take the blame when a company is deemed to have the wrong workplace culture? Is it the individual managers who are not behaving correctly? Is it your Chief HR Officer? Will your board feel that it is their responsibility? Or will it be you, the CEO?

You have most likely read that Travis Kalanick, CEO of Uber, has been ousted from the company which he himself co-founded. Previously celebrated by many for running an aggressive strategy and a high-energy workplace culture, Kalanick has seen things go from bad to worse since Susan Fowler wrote her now famous post. Fowler, an engineer who left Uber in December, described in her post a sexist, discriminatory, and seemingly well-established side of the company’s workplace culture. Uber has defined 14 core values to guide decisions, processes and priorities – super-pumpedness, always be hustlin’, make magic are a few of them. Kalanick was not ousted for putting these in place. He was ousted because how he managed – or mismanaged – other aspects of workplace culture, as manifested in leadership, career paths, and collaboration.

Another celebrated CEO recently losing his throne is Martin Winterkorn of Volkswagen. The company’s engineers had installed software to cheat emission tests. Winterkorn resigned days after the scandal broke, and long before the total cost to Volkswagen was known, now estimated to more than 20 billion euros. Winterkorn still denies blame, claiming he was not informed. But whether he was informed or not, he is deemed to have neglected his duties as supervisor. The question being how this cheating could have been imagined at the first place and then survived the scrutiny of the Volkswagen management. The behaviour was shared and spread within the organisation and as such it was systematic. Cheating regulations was a way of doing things at Volkswagen (and arguably several other car manufacturers). Culture – the way of doings things – claimed the CEO as its victim.

After the last financial crisis, financial companies had to face numerous new interventions from the regulator. The goal of these rules are to avoid another financial meltdown, by trying to control excessive risk-taking. Legal checks and balances are part of most processes and transactions. Every CEO will have a well-staffed legal team to ensure full compliance. But the regulator is even more ambitious, indicating that financial companies must also manage their culture of risk taking. Basically, requiring companies and with their CEOs in charge, to monitor and shape “the way things around here”.

Corporate culture is not just about having Communications or HR stating the core values that you have decided. Culture is the way things are done in your organisation. It is worth paying attention to. Your CFO would approve as research shows that companies with a great work place culture are outperforming the average in terms of growth, profit and share price. And not paying attention to it could, similar to Kalanick and Winterkorn, ultimately claim your job.

Since you have read this far, culture is probably already one of your priorities. Or if not, perhaps you have found something to reflect on over summer. Unlike sales, not investing in culture doesn’t leave you with no culture. Instead it leaves you with a culture you probably don’t want. And perhaps, that you can’t afford to have.

Source: Linkedin.com, 29 June 2017
By: Michael Daun
About the author: Michael Daun, founder of Wellevue.com – the app that shapes company culture

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While top executives tend to be thought of as a confident bunch, they are no less susceptible to anxiety than the rest of us. After all, they routinely have to make important decisions, often under conditions of uncertainty, that affect countless people, organizations, and industries.

It is less clear, though, what this anxiety means for how they do their jobs. Psychology research has shown that anxiety influences decision making—for example, job anxiety can cause people to fixate on potential threats, thus missing big opportunities. This made us wonder whether boards or employees should be worried about anxiety influencing their CEO’s strategic decision making in ways that might hold back their firm.

We interviewed 84 CEOs and other top executives of major corporations to find out. They described some of the toughest decisions they had faced in their roles. Overall we collected data on 174 big decisions, such as those relating to acquisitions, major product launches, new foreign market entries, and complex corporate restructurings. We analyzed transcripts to assess whether executives’ language focused on opportunities or threats. Then we surveyed the people who knew them best – their spouses (mostly wives, but a few husbands), close friends and family, and their chief lieutenants (COOs, general counsels, etc.) – to get more information about their personal lives and how they handled tough decisions. We combined this with archival data about their businesses, competitors, and industries. Finally, we conducted a follow-up survey of employees at the lower levels of these organizations to see how their anxiety levels compared to top executives.

We found that more-anxious leaders (those that were described as experiencing job anxiety “to some extent,” “to a considerable extent,” or “to a great extent”) took fewer strategic risks than their less anxious peers in order to avoid potential losses. Job anxiety reduced the attractiveness of big strategic bets for the company, despite their potential to drive large gains.

This isn’t necessarily a bad thing, as excessive risks can lead companies into ruin. But smart risks are often key to driving corporate growth, and our results suggest that anxious executives may, in their overriding desire to avoid threats, miss out on high-upside strategic opportunities and thus limit growth.

However, context matters. Researchers have shown that executives facing loss contexts (e.g., when the company has recently underperformed relative to peers) are more inclined to make big strategic bets that, if successful, can undo the loss. Conversely, executives facing gain contexts (e.g., when the company has recently performed better than its peers) eschew risky bets in favor of safer alternatives that offer more predictable, albeit lower upside, returns.

This suggests that while anxiety may lead executives to avoid risky strategic initiatives, such tendencies may be counteracted when the executive is facing a loss context that calls for bold action. We found that job anxiety exerts a weaker effect on risk-taking in loss contexts, while gain contexts exacerbate anxious executives’ risk-reducing tendencies.

For example, consider the case of a tech CEO in our sample who was described as experiencing “a considerable extent” of job anxiety by his close friends and family. This CEO was facing an important strategic decision for his firm regarding future growth, and made the decision to sell the firm to a larger rival rather than pursue the potentially much higher upside of independent growth as a standalone business.

Already naturally inclined to play it safe, anxious executives are especially careful not to upset the apple cart when things are going well. While a conservative bias might sound reasonable, or even admirable, markets might very well see this as a serious threat to shareholder interests if it causes a firm to miss out on promising opportunities that would propel growth.

Our results also showed that anxiety drives some executives to stack the deck. Prior research has shown that one of the ways anxious individuals deal with their worries is to lean on trusted others for support and protection, a phenomenon known as “social buffering.” Similarly, we found that anxious executives are more likely to staff their teams with loyal subordinates whom they know and trust. This is especially true in loss contexts, where threats loom large. Anxious executives are particularly driven to close ranks within their teams and stack their inner decision-making circle with loyalists. This effect disappears in gain contexts where anxious executives are presumably less compelled to create a protective shield against perceived threats.

The main takeaway is that top executives are influenced by job anxiety just like the rest of us, but because the impact of their biases can have serious downstream consequences for thousands of employees, shareholders, and stakeholders, leaders should ask:

Maybe the paranoid are more likely to survive, but at what cost? Intel CEO Andy Grove famously noted that paranoia can be a good thing for executives when it compels them to keep a close eye on their environment. Our results suggest, however, that overly anxious (and perhaps paranoid) executives may be less willing to make the big strategic bets that could catapult the company to long-term success. Serious consideration of both potential upside and downside outcomes is necessary for forming a clear-eyed assessment of firm strategy, but anxiety may cause executives to become myopic to such balanced views.

Who is asking the tough questions? One can hardly fault anxious executives for relying upon subordinates that they trust. But this could come with drawbacks if a sense of loyalty prevents subordinates from asking difficult questions or otherwise engaging in healthy debate with leaders. Executives are well-advised to put together teams that are nevertheless unafraid to challenge them when the situation calls for it.

What can boards do? Boards may not have an easy way to assess anxiety in executives, but they should realize that anxiousness plays a meaningful role in the fortunes of their firms. For instance, an anxious executive’s risk-averse outlook may run counter to the board’s (or shareholder’s) vision for bold strategies.

Although a CEO is unlikely to report to their board that they are feeling anxious about their job, boards can be proactive in looking for signs of stress that may bias executive decision-making, perhaps through informal conversations with executives’ close colleagues. They can also offer social support and encouragement to help mute some of the more dysfunctional effects of executive job anxiety. And to avoid anxious leaders surrounding themselves with loyalists, board members can protect the firm by requiring CEOs to present multiple strategic options before making big decisions, or by asking individuals other than the CEO to present opposing options.

Source: Harvard Business Review, July 19, 2016
Authors:Mike Mannor, Adam WowakViva, Ona BartkusLuis and R. Gomez-Mejia
Link

Favorisering, arrogans och konflikträdsla är några av de egenskaper hos chefer som retar oss mest, enligt en ny undersökning från Yougov. Det bör inte viftas bort, eftersom det påverkar människors hälsa.

Kan påverka arbetsmiljön – rejält
Enligt undersökningen av Yougov retar vi oss allra mest på konflikträdsla, det angav 21 procent som chefens mest irriterande sida. Anna Nyberg, psykolog och forskare i arbetsmiljö, har skrivit en avhandling om hur chefers ledarskap påverkar medarbetarnas hälsa. Hon säger att en chefs oförmåga att ingripa vid konflikter kan få väldigt negativa effekter:
– Det har visat sig påverka arbetsgruppens dynamik negativt, så att det till exempel kan uppstå mer utstötnings- och mobbingprocesser med mer stress och psykisk ohälsa i de här grupperna, säger hon.

Viktigt att människor blir sedda
18 procent av de svarande uppgav att de stör sig på att chefen inte tar tillvara på deras kompetens. Anna Nyberg är inte förvånad över att det hamnar högt upp på listan.
– Att inte ta vara på medarbetares kompetens kan handla om att inte vilja ge dem inflytande, men att ha inflytande i arbetet är en av de mest studerade faktorerna i arbetsmiljöforskning och vi vet att det är viktigt för vår hälsa.

Chefskapet kan vara störande i sin egen rätt
Att chefen favoriserar vissa anställda mer än andra och inte kan ta kritik är andra egenskaper som svenskarna inte gillar hos sina chefer. Men enligt Anna Nyberg kan bara det faktum att en chef har inflytande över medarbetaren vara tillräckligt för att man ska irritera sig.
– En auktoritet aktiverar ofta processer inom oss som kan härstamma från relationen från våra föräldrar eller andra tidigare auktoritetsfigurer.

Topp 5 dåligt chefsbeteende – enligt anställda

• Konflikträdd 21 %
• Tar inte vara på min kompetens 18 %
• Favoriserar vissa anställda över andra 16 %
• Tål inte kritik 13 %
• Allt ska göras på chefens sätt 12 %

Informationsbas: Stressforskningsinstitutet

Källa: HRnytt.se, juni 2017
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The CEO helps a transformation succeed by communicating its significance, modeling the desired changes, building a strong top team, and getting personally involved.

In today’s business environment, companies cannot settle for incremental improvement; they must periodically undergo performance transformations to get, and stay, on top. But in the volumes of pages on how to go about implementing a transformation, surprisingly little addresses the role of one important person. What exactly should the CEO be doing, and how different is this role from that of the executive team or the initiative’s sponsors?

Based on a series of interviews we have conducted with nearly a dozen executives over the last couple of years—as well as our own experience working with companies—we believe there is no single model for success. Moreover, the exact nature of the CEO’s role will be influenced by the magnitude, urgency, and nature of the transformation; the capabilities and failings of the organization; and the personal style of the leader.

Despite these variations, our experience with scores of major transformation efforts, combined with research we have undertaken over the past decade, suggests that four key functions collectively define a successful role for the CEO in a transformation:

Making the transformation meaningful. People will go to extraordinary lengths for causes they believe in, and a powerful transformation story will create and reinforce their commitment. The ultimate impact of the story depends on the CEO’s willingness to make the transformation personal, to engage others openly, and to spotlight successes as they emerge.
Role-modeling desired mind-sets and behavior. Successful CEOs typically embark on their own personal transformation journey. Their actions encourage employees to support and practice the new types of behavior.
Building a strong and committed top team. To harness the transformative power of the top team, CEOs must make tough decisions about who has the ability and motivation to make the journey.
Relentlessly pursuing impact. There is no substitute for CEOs rolling up their sleeves and getting personally involved when significant financial and symbolic value is at stake.
Everyone has a role to play in a performance transformation. The role of CEOs is unique in that they stand at the top of the pyramid and all the other members of the organization take cues from them. CEOs who give only lip service to a transformation will find everyone else doing the same. Those who fail to model the desired mind-sets and behavior or who opt out of vital initiatives risk seeing the transformation lose focus. Only the boss of all bosses can ensure that the right people spend the right amount of time driving the necessary changes.

Making the transformation meaningful
Transformations require extraordinary energy: employees must fundamentally rethink and reshape the business while continuing to run it day to day. Where does this energy come from? A powerful transformation story helps employees believe in the effort by answering their big questions, which can range from how the transformation will affect the company down to how it will affect them. The story’s ultimate impact will depend on not just having compelling answers to these questions but also the CEO’s willingness and ability to make things personal, to engage others openly, and to spotlight successes as they emerge.

Adopt a personal approach
CEOs who take time to personalize the story of the transformation can unlock significantly more energy for it than those who dutifully present the PowerPoint slides that their working teams created for them. Personalizing the story forces CEOs to consider and share with others the answers to such questions as “Why are we changing?”; “How will we get there?”; and “How does this relate to me?”

Some leaders include experiences and anecdotes from their own lives to underline their determination and belief—and to demonstrate that obstacles can be overcome. Klaus Zumwinkel, the chairman and CEO of Deutsche Post, talked about his passion for mountain climbing, linking the experience of that sport and the effort it requires to the company’s transformation journey. John Hammergren, the CEO of McKesson, stressed that every employee was or would be a patient in the health care system and that this “larger purpose” made a difference. “Had we been in the ball-bearing business, I’m not sure it would have been as easy to personalize it,” he acknowledges.

Openly engage others
When a CEO’s version of the transformation story is clear, success comes from taking it to employees, encouraging debate about it, reinforcing it, and prompting people to infuse it with their own personal meaning. Most CEOs invest great effort in visibly and vocally presenting the transformation story. Julio Linares, the executive chairman of Telefónica de España, says the most important and hardest part of the transformation was “to convince people of the need for the program.”

Once the story is out, the CEO’s role becomes one of constant reinforcement. As P&G CEO Alan G. Lafley says, in “Leading change: An interview with the CEO of P&G,” “Excruciating repetition and clarity are important—employees have so many things going on in the operation of their daily business that they don’t always take the time to stop, think, and internalize.” Paolo Scaroni, who has led three public companies through various chapters of change, likes to find three or four strategic concepts that sum up the right direction for the company and then to “repeat, repeat, and repeat them throughout the organization.”

Reinforcement should come from outside as well. Passera notes, “If everyone keeps reading in the newspapers that the business is still a poor performer, not contributing to society, or is letting the country down, people will not believe you.”

Spotlight success
As the company’s transformation progresses, a powerful way to reinforce the story is to spotlight the successes. Sharing such stories helps crystallize the meaning of the transformation and gives people confidence that it will actually work. Murthy of Infosys describes how high-performing teams were invited to make presentations to larger audiences drawn from across the company, “to show other people that we value such behavior.”

Ravi Kant, the managing director of the integrated Indian auto business Tata Motors, deliberately identified people who would serve as examples to others. In “Leading change: An interview with the managing director of Tata Motors,” he talks about how he highlighted the achievements of one young man whose success on a risky project and subsequent promotion showed colleagues that talented and determined people can rise through the hierarchy.

Emphasizing the positive, behavioral research shows, is especially important. In 1982, University of Wisconsin researchers who were conducting a study of the adult-learning process videotaped two bowling teams during several games. The members of each team then studied their efforts on video to improve their skills. But the two videos had been edited differently. One team received a video showing only its mistakes; the other team’s video, by contrast, showed only the good performances. After studying the videos, both teams improved their game, but the team that studied its successes improved its score twice as much as the one that studied its mistakes. Evidently, focusing on the errors can generate feelings of fatigue, blame, and resistance. Emphasizing what works well and discussing how to get more out of those strengths taps into creativity, passion, and the desire to succeed.

Role-modeling desired mind-sets and behavior
Whether leaders realize it or not, they seem to be in front of the cameras when they speak or act. “Every move you make, everything you say, is visible to all. Therefore the best approach is to lead by example,” advises Joseph M. Tucci, CEO of EMC, the US-based information storage equipment business. Ultimately, employees will weigh the actions of their CEO to determine whether they believe in the story.

Transform yourself
Employees expect the CEO to live up to Mahatma Gandhi’s famous edict, “For things to change, first I must change.” The CEO is the organization’s chief role model.

Typically, a personal transformation journey involves 360-degree feedback on leadership behavior specific to the program’s objectives, diary analysis to reveal how time is spent on transformation priorities, a commitment to a short list of personal transformation objectives, and professional coaching toward these ends. CEOs generally report that the process is most powerful when all members of an executive team pursue their transformation journeys individually but collectively discuss and reinforce their personal objectives in order to create an environment “of challenge and support.

Murthy’s 2002 decision to take on the job title of chief mentor at Infosys, for example, meant that he had to reinvent himself, because he laid aside his formal managerial (CEO) authority at the same time. He explains, “You have to sacrifice yourself first for a big cause before you can ask others to do the same,” adding, “A good leader knows how to retreat into the background gracefully while encouraging his successor to become more and more successful in the job.”

Take symbolic action
The quickest way to send shock waves through an organization is to conceive and execute a series of symbolic acts signaling to employees that they should behave in ways appropriate to a transformation and support these types of behavior in others. For instance, C. John Wilder, CEO of the Texas energy utility TXU, gave a large bonus to a woman who had taken a clear leadership role in a very important business initiative. “This leader’s contributions generated real economic value to the bottom line,” he explains. “Of course, news of that raced through the whole organization, but it helped employees understand that rewards will be based on contributions and that ‘pay for performance’ could actually be put into practice.”

Building a strong and committed top team
The CEO’s team can and should be a valuable asset in leading any transformation. As Deutsche Post’s Zumwinkel suggests, “You need excellent individual players, but you also need players who are dedicated to playing as a team.” Sharing a meaningful story and modeling the right role will certainly increase the odds of getting the team on board, but it is also vital to invest time in building that team.

Assess and act
Successful CEOs take time to assess the abilities of individual members of the team and act swiftly on the result. In some cases, input from third parties (such as executive search firms) is sought to create a more objective fact base. Many CEOs find it useful to map team members on a matrix, with “business performance” on one axis and “role-modeling the desired behavior” on the other. Those in the top-right box (desired behavior, high performance) are the organization’s stars, and those in the bottom-left box (undesired behavior, low performance) should be motivated, developed, or dismissed. The greatest potential for sending signals involves the employees in the box of “undesired behavior, high performance.” When clear action is taken to improve or remove these managers, the team’s members know that role-modeling and teamwork matter. Banca Intesa’s Passera affirms that, “If necessary, you have to get rid of those individuals, even the talented ones, who quarrel and cannot work together.”

How do CEOs know when to intervene with the strugglers? They can reflect on the following questions:
Do team members clearly understand what is expected of each of them in relation to the transformation?
Is the CEO serving as a positive role model?
Does everyone recognize the downside and upside of getting on board and doing what is required?
Have struggling team members received a chance to build the needed skills?
If the answer to all of these questions is yes, decisive action is justified.

Experienced CEOs attest to the positive impact this can have on the rest of the company. EMC’s Tucci says he had to take “public” action to tackle the “whiff of arrogance” that used to characterize certain parts of the company. TXU’s Wilder recalls that “When we did a cultural audit, we found that the number-one complaint was that management was not dealing with employees that everyone knew weren’t carrying their load.“

Invest team time
Even with the right team in place, it takes time for a group of highly intelligent, ambitious, and independent people to align themselves in a clear direction. Typically, the first order of business is for members to agree on what they can achieve as a team (not as individuals), how often the team should meet, what transformation issues should be discussed, and what behavior the team expects (and won’t tolerate). These agreements are often summarized in a “team charter” for leading the transformation, and the CEO can periodically use the charter to ensure that the team is on the right track.

Intesa’s Passera speaks of how he brought his team together regularly to “share almost everything,” to make it “clear to everyone who is doing what,” and to “keep the transformation initiatives, budgets, and financial targets knitted together.” P&G’s Lafley emphasizes the importance of spending the time together wisely: “You need to understand how to enroll the leadership team.” As a rule of thumb, 80 percent of the team’s time should be devoted to dialogue, with the remaining 20 percent invested in being “presented to.”

Effective dialogue requires a well-structured agenda, which typically ensures that ample time is spent in personal reflection (to ensure that each person forms an independent point of view from the outset), discussion in pairs or small groups (refining the thinking and exploring second- and third-level assumptions), and discussion by the full team before final decisions are made. In this process, little tolerance should be shown for minutiae (losing the forest for the trees) and for any lack of engagement. Face-to-face meetings, as opposed to conference calls, greatly enhance the effectiveness of team dialogue.

Relentlessly pursuing impact
Organizational energy—collective motivation, enthusiasm, and intense commitment—is a crucial ingredient of a successful transformation. There is no substitute for a CEO directing his or her personal energy toward ensuring that the company’s efforts have an impact.

Roll up your sleeves
Initiatives with a significant financial or symbolic value require the CEO’s personal involvement for maximum impact. There may be several beneficial effects, among them ensuring that important decisions are made quickly—without sacrificing the value of collective debate—and sowing the seeds of a culture of candor and decisiveness.

Leaders must be willing to leave the executive suite and help resolve difficult operational issues. Peter Gossas, president of Sandvik Materials Technology and a man with lifelong experience in the steel industry, observes, “If there’s a problem, it can be helpful if I come to the work floor, step up on a crate so that everyone can see me, and hold a discussion with a shift unit that may be negative to change.” He adds, “It’s hard for me to walk into a melt shop and not begin discussing ways to solve operational problems.”

Hold leaders accountable
Successful CEOs never lose sight of their management responsibility to chair review forums. Through these, they compare the results of the transformation program with the original plan, identify the root causes of any deviations, celebrate successes, help fix problems, and hold leaders accountable for keeping the transformation on track, both in activities (are people doing what they said they would?) and impact (will the program create the value we anticipated?). A central role for the CEO during these review forums is to ensure that decision making stays grounded in the facts. As Narayana Murthy wryly observes, “We have embraced the adage ‘In God we trust; everyone else brings data to the table.’”

The CEO also plays a critical role in ensuring an appropriate balance between near-term profit initiatives (those that deliver performance today) and organizational-health initiatives (those that build the capacity to deliver tomorrow’s results). This is a lesson applied by John Varley, CEO of Barclays: “For several years, the focus on initiatives to improve financial performance dramatically crowded out attention on franchise health, leaving us with a set of issues in some businesses that needed urgent attention. We are addressing those issues.” During the transformation, some CEOs even choose to hold separate review meetings for short- and long-term objectives in order to ensure that companies maintain a balance between operational improvement (tactical strategies, wage management, productivity, and asset management) and long-term growth (revenue and volume growth through market share, new products, channels and marketing, M&A, talent, and capability management).

For CEOs leading a transformation, no single model guarantees success. But they can improve the odds by targeting leadership functions: making the transformation meaningful, modeling the desired mind-sets and behavior, building a strong and committed team, and relentlessly pursuing impact. Together, these can powerfully generate the energy needed to achieve a successful performance transformation.

Source: McKinsey.com, June 2017
Authors: Carolyn Aiken and Scott Keller.
About the authors: Carolyn Aiken is a consultant in McKinsey’s Toronto office, and Scott Keller is a principal in the Chicago office.
Link

Investera Aktieinvesteringar är mer än bara ekonomiska nyckeltal, räkenskaper och finansmodeller. Bolag som leds av inspirerande och hängivna ledare har visat sig vara särskilt lönsamma, skriver ODIN Fonder som ger ett exempel på ett sådant bolag som tagits in i portföljen.

I sin bok «Intelligent Fanatics Project – How great leaders build sustainable businesses» beskriver Ian Cassel vad som kännetecknar ledare som åstadkommit exceptionell aktieavkastning under många decennier.

Den här typen av ledare har två utmärkande drag som förklarar varför det går så bra för dem:

• De vet hur man ska behandla medarbetare

• De vet hur verksamheten ska organiseras

Världsmästare på kapitalallokering

Vi har tidigare pratat om vad ”god” ledning är ur ett finansiellt perspektiv. Slutsatsen var att goda ledare alltid vet vilken kapitalkälla som ska användas (skuld, eget kapital eller fritt kassaflöde), och var kapitalet ska sysselsättas (investeringar, förvärv, utdelning, skuldavbetalningar eller återköp av aktier).

Så kallad kapitalallokering, det vill säga förmågan att flytta pengar från ett ställe till ett annat, är ett utmärkande drag hos goda ledare ur ett ägarperspektiv. Men ”intelligenta fanatiker” går ett steg längre. De vet hur verksamheten ska läggas upp för att åstadkomma konkurrensfördelar och de vet hur man behandlar medarbetarna.

Organisation och ledning

När ett bolag rör sig från litet till stort så klarar dessa ledare att bevara småföretagskänslan utan byråkrati fast med korta beslutsvägar, riskbenägenhet och entreprenörskap i behåll. Och de är aldrig nöjda.

De har ofta en informell ledarstil och pratar med alla medarbetare oavsett nivå i organisationen; de flyger ekonomiklass; bor på vanliga hotell och går i jeans på jobbet. De har inte ledningsgrupper – de arbetar i team. De kommunicerar enkelt och tydligt och har mycket få ledningsnivåer i organisationen. De strävar ständigt efter förbättringar och är paranoida när det kommer till kostnader.

Carlos Brito, koncernchef på bryggerijätten ABInBev, slår huvudet på spiken när han säger:
«Costs are like fingernails. You have to cut them all the time. If not, they grow»

De bryr sig mindre om tjänsteår och rang. Som anställd blir du bedömd utifrån dina prestationer. Och presterar du bra så får du bra betalt. Sådana ledare bryr sig mer om kunderna än aktieägarna, då de vet att det gynnar aktieägarna på lång sikt.

Överraskande nog har dessa ledare ofta begränsad branscherfarenhet och saknar ofta både affärsplan och uttalad strategi. De börjar som regel med noll erfarenhet och lite kunskap om den bransch bolagen verkar i. Det gör att de tänker helt annorlunda än etablerade aktörer.

Visste inget om öl
Exempelvis visste inte grundarna av ABInBev – världens största öltillverkare – hur man brygger öl. Men de visste allt om hur anställda fungerar. Det hade de lärt sig genom att bygga upp en mäklarfirma.

På ABInBev har filosofin fungerat i flera decennier, och vi tror att trenden kommer att hålla i sig en lång tid framöver. Detta är anledningen till att vi investerat i bolaget. Vi värdesätter bolaget just tack vare dess ledning och kultur.

Medarbetarna som ägare
Ledare som kan få medarbetarna att agera och tänka som ägare har goda chanser att skapa något unikt och varaktigt. Ägarna uppför sig inte på samma sätt som medarbetarna. Äger du bilen du kör beter du dig annorlunda än om du hyr en bil. Vem har inte varit frestad att testa vad som händer med hyrbilen om man gasar och håller i handbromsen samtidigt? Det gör du inte om du äger bilen själv.

Dessa hängivna och inspirerande ledare respekterar medarbetarna och ger dem möjlighet att utvecklas. De vill att medarbetarna ska få chansen att lyckas. Incitament som involverar medarbetarna i bolagets resultatutveckling är ett viktigt verktyg för dem.

Eller för att citera en av de centrala figurerna i uppbyggandet av ABInBev, Marcel Telles:

«Actually, the main role of a manager is to recruit, train, motivate and especially to keep people within the organization. A business manager should be called a people manager. Those who are really good with people will be good as a manager»

Investeringar handlar om så mycket mer än kassaflöden, kvartalsrapporter och nästa års marginaler.

Källa: Privata Affärer och Odin Fonder, maj 2017
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Today’s executives spend a lot of time managing the balance sheet, despite the fact that it doesn’t represent their company’s scarcest resource. Financial capital is relatively abundant and cheap. According to Bain’s Macro Trends Group, the global supply of capital stands at nearly 10 times global GDP. As a result of capital superabundancy, global quantitative easing and relatively low demand for investments in R&D and capital projects, the after-tax cost of borrowing for many companies is at or near inflation, making the real cost of borrowing close to zero.

In contrast, today’s scarcest resource is your human capital, as measured by the time, talent and energy of your workforce. Time, whether measured by hours in a day or days in a career, is finite. Difference-making talent is also scarce. The average company considers only about 15% of its employees to be difference makers. Finding, developing, and retaining this talent is hard — so much so that the business press refers to a “war” for talent. Energy, too, is difficult to come by. Though intangible, it can be measured by the number of inspired employees in your workforce. Based on our research, inspired employees are three times more productive than dissatisfied employees, but they are rare. For most organizations, only one out of eight employees is inspired.

There you have it. Financial capital is abundant but carefully managed; human capital is scarce but not carefully managed. Why? In part, it’s because we value and reward good management of financial capital. And we measure it. Great CEOs are held in high regard for their clever management and allocation of financial capital. But today’s great CEOs need to be equally great at managing human capital.

How can we manage human capital better?
Measure it. As the adage goes, you can’t manage what you can’t measure. A veritable alphabet soup (ROA, RONA, ROIC, ROCE, IRR, MVA, APV, and the like) exists to measure our financial capital. To measure human capital, you can deploy metrics such as our productive power index, which looks at the cost of organizational drag and the benefits of effective talent and energy management on your overall productive power. You can measure the amount and value of the time that you put against projects or initiatives, and you can measure the return on that time. You can actively measure the amount of difference-making talent that you have in your organization. When Caesars Entertainment, a gaming company, reorganized operations in 2011, the senior team not only developed a database on the performance and the potential of the company’s top 2,000 managers but also analyzed the ability of the top 150 to take on new and different jobs.

Invest human capital just like you invest financial capital. For financial capital, the business world has developed concepts such as the opportunity cost of capital, which is reflected in a company’s weighted average cost of capital. We measure the lifetime value of investments, and we establish hurdle rates before deploying a single dollar of capital. We run Monte Carlo simulations to evaluate various returns under uncertainty. For human capital, we need to start thinking about the opportunity cost of a lost hour. One way to do this is to measure the cost of meetings. My colleagues at Bain discovered that a weekly executive committee meeting at one company consumed 300,000 hours a year in support time from departments across the company. When Woodside, an Australian oil and gas company, took a hard look at meetings, it discovered that they were consuming 25%–50% of staff’s time. A series of pilots reduced meeting time by an average of 14% among the pilot groups — a time savings equal to 7% of those groups’ full-time equivalent capacity. We should think about projects in terms of hours and dollars as well, and before taking on a new meeting or new initiative, include the opportunity cost of time and talent in the hurdle rate.

Monitor it. Teams of financial planning and analysis professionals measure actual and expected results for financial capital. Investment management committees evaluate new investments. Capital expenditure plans are subjected to detailed board reviews. We all must submit capital approval requests to release funds. Similarly, for human capital we should do periodic reviews of how much controllable organizational drag we have in our organization and what actions we are taking to compress it. Many big data tools, such as Microsoft Workplace Analytics, can provide detailed reviews of how we use time. For talent, we need to know who our difference makers are and whether they are deployed in mission-critical roles and initiatives.

Consider the case of one B2B supplier that wanted to figure out what made some salespeople top performers. A statistical analysis of metrics from Workplace Analytics and other factors revealed that top performers and average performers spent their time differently. Some of the differences were obvious: spending an average of four more hours per week than other reps communicating with customers, or being 25% more likely to cross-sell. But some behavior was surprising. For example, top performers were three times more likely to interact with multiple groups inside the company. In other words, they connected with people who could help them with customer issues, such as staff in finance, legal, pricing, or marketing.

Recognize and reward good management of time, talent, and energy. Historically, successful investment of financial capital can make someone’s career. Variable compensation is often tied to some measure of economic value added. Even though most companies no longer offer lifetime employment, they should still find a way to create a lifetime of assignments for their difference-making talent and work hard every day to re-recruit them by creating a working environment that is inspiring and results oriented. When Reid Hoffman founded LinkedIn, he promised that the company would help advance the careers of talented employees who signed on for two to four years and made an important contribution, either offering them another tour of duty at LinkedIn or supporting their efforts if they moved on. This tour-of-duty approach helped attract and retain entrepreneurial employees.

Leaders should be measured and rewarded on their inspiration quotient. They should also be measured and rewarded for building a talent balance sheet: how many high-potential individuals they have recruited, developed, and retained, and what is the trade balance of talent — that is, the net imports of high-potential talent into their group minus exports. A company’s actual values, reads Netflix’s famous HR playbook, “are shown by who gets rewarded, promoted, or let go.”

These are only some of the ways that we might begin to bring greater discipline to human capital management. There are likely many more creative solutions out there. Time is finite. Talent is scarce and worth fighting for. Energy can be created and destroyed. The sooner we act on these beliefs, the sooner we will get the return on human capital that we deserve.

Source: Harvard Business Review, May 2017
Author: Eric Gartner
About the author: Eric Garton is a partner in Bain & Company’s Chicago office and leader of the firm’s Global Organization practice.
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Talangrekrytering genom spel eller en snabbfotad organisation. Det är några av trenderna inom nordisk personalpolitik – som kan förändra arbetsmarknaden i framtiden.

Det är drygt 10 000 företagsledare och HR-chefer som har fått lista de viktigaste frågorna och hetaste trenderna inom personalpolitik. Nu har konsultfirman Deloitte sammanställt svaren till en nordisk rapport, vilket Dagens Industri först skrev om.
Här är 4 av trenderna du som chef bör ha koll på:

1) Framtidens organisationsmodell
Klart hetast på listan. Nio av tio chefer i Norden tycker det är väldigt viktigt med en organisation som är redo för framtiden. Lika många av cheferna är övertygade om att branschen de verkar inom kommer förändras av digital teknik. Därför tror cheferna att snabbhet och flexibilitet är viktigast för att skapa framgång i en organisation i framtiden.Hur det ska lösas? Genom minskad hierarki och starka interna nätverk, skriver Deloitte.

2) Karriärutveckling
Den näst hetaste trenden på listan är karriärutveckling för medarbetarna. När unga ska välja ny arbetsgivare är möjligheterna att växa ett av de viktigaste kriterierna. Samtidigt förändras och föråldras äldre medarbetares kunskaper snabbar i dag vilket ställer högre krav på att det finns utrymme att utvecklas på arbetsplatsen.

3) Nya generationens digitala chef
Digitaliseringen förenklar mycket, men ställer också nya krav på chefer och ledares agerande. Du som chef måste våga ta fler risker. Därför är ett råd i rapporten att det ska vara tydligt vem som ansvarar för att ta fram nya digitala ledare. Ett förslag är att tidigt befordra unga medarbetare.

4) Talangrekrytering
I dag är det allt vanligare att talangen själv hittar sin nya arbetsgivare än tvärtom. Därför är företagets varumärke viktigt för att ha en stor attraktionskraft bland unga. För att hitta rätt personer är det trendigt att under rekryteringsprocessen skapa en relation med kandidaten – inte sällan med tekniska hjälpmedel som spel och video.

Källa: Chef.se, april 2017
Författare: Gustaf Nilsson
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