Responsive Orgs: Designing to Meet the Needs of the Modern Era
Posted on Tuesday, October 1st, 2019 at 1:52 PM
Why we care:
Organizations, and the employees within them, are often compared to machines: leaders give employees a task, tell them to execute it, and approve any deviations. While this approach can work well for creating large efficiencies on clear tasks, it fails in times of massive and rapid change and complexity. We are now in one of those times.
We think it is time for an alternative approach – one that rethinks how we design organizations’ systems, processes, and measures to enable the entire organization to be more responsive.
This has been an ongoing conversation at RedThread for over a year and a half. Thankfully, the good folks at Glint agree with us, and have been kind enough to sponsor this research on understanding and creating a “Responsive Organization.”
Hypothesis:
Our hypothesis for this study is fairly simple:
The world has changed and requires a different kind of organization. Those that focus on being responsive – not just efficient – adjust better to external market pressures, which results in a competitive advantage.
What got us here won’t get us there
For at least the past 100 years, the corporate world has heavily focused on efficiency – and that has driven everything from the way we measure success to how we structure our organizations. And while a focus on efficiency has led to some excellent gains in productivity in the last century, signs point to the fact that it’s no longer enough. Specifically, as you can see in Figure 1, the last decade has experienced a much slower rate of productivity growth (which is essentially a measure of efficiency), than the two decades before it.
Why are we seeing this flattening? There are a significant number of potential reasons, but we believe that at least part of the problem is that we may be reaching the limit of efficiency. It is impossible to make a machine or system infinitely efficient; at some point, the effort required to make something more efficient is greater than the resulting benefits from the efficiency. At that point, a fundamentally new system is necessary to improve efficiency gains. Let’s use a second industrial revolution example: people can only weave textiles so quickly, no matter how hard they worked and how efficiently they moved. At some point, the only way to do this more quickly was to use a sewing machine.
Here in the fourth industrial revolution, we believe we are at this point where we have to fundamentally rethink how we conduct business to adapt to the fast-moving, technology-saturated world in which we all work. Our organizations need to become more responsive to all that change. However, to do it, we will have to change organizational structures, measures, and practices that were designed for efficiency, but not responsiveness.
Technology alone won’t solve our problems
We recently read a pretty interesting (and disturbing) study done by Korn Ferry that indicated that CEOs are so enamored with technology that they see it as a larger source of competitive advantage than their own people. Other disturbing statistics from that study are shown below:
Of particular concern, is the last finding – that 44% of CEOs say the prevalence of robotics, automation, and AI will make people “largely irrelevant” in the future. While some of the technologies that are becoming embedded in our daily lives seem amazingly “smart,” they have limitations. For example, Jonathan Zittrain in The New Yorker shares the following point:
Consider image recognition. Ten years ago, computers couldn’t easily identify objects in photos. Today, image search engines, like so many of the systems we interact with on a day-to-day basis, are based on extraordinarily capable machine-learning models. Google’s image search relies on a neural network called Inception. In 2017, M.I.T.’s LabSix—a research group of undergraduate and graduate students—succeeded in altering the pixels of a photograph of a cat so that, although it looked like a cat to human eyes, Inception became 99.99-per-cent sure it had been given a photograph of guacamole… Inception, of course, can’t explain what features led it to conclude that a cat is a cat; as a result, there’s no easy way to predict how it might fail when presented with specially crafted or corrupted data. Such a system is likely to have unknown gaps in its accuracy that amount to vulnerabilities for a smart and determined attacker.
While we certainly believe in the power of technology, we cannot lose the human aspect of work. People are the ones who design the systems in which we all live – and are the ones who can do the deep thinking to identify when we need to build different and better ones.
A fundamental re-think on how we measure and manage
As organizations realize the benefits of moving away from a focus solely on efficiency, we think they will begin to rethink their organizational structures. This will lead to changes in the following (at a minimum):
- Communication channels – Individuals at lower levels will have data and information they need to react to needs “on the ground.”
- Power structures – Decision-making will be more decentralized.
- Employee development – More autonomy and continuous development will ensure that employees have the skills and knowledge needed.
- Metrics – Measurements of efficiency will begin to give way to other types of productivity metrics that focus more on innovation, agility, and responsiveness.
These changes will have profound implications for organizations’ people practices and require different types of leaders than in the past.
This Project:
With this study, we want to gain an understanding of the characteristics that make organizations better able to respond to their markets. In our initial discussions, several themes have emerged that will serve as the basis for the research:
Networks and Gender: Why Do We Care?
Posted on Thursday, August 29th, 2019 at 4:20 PM
Efforts to improve women’s representation in leadership are decades old, yet the numbers remain stubbornly low:
- For every 100 men promoted, only 79 women are promoted1.
- Approximately 40% of women in senior roles/technical positions report being one of the only women in the room2.
- The World Economic Forum3 estimates it will take 168 years for North America to close the global gender gap.
So, why don’t we see more women in leadership?
There are many potential answers to the question of why women do not rise at equal rates as men. However, of all the potential solutions, our research identified one we think deserves more attention than it has received to date: women are not gaining access to the information and opportunities they need from their professional networks in order to advance.
Our network connects us to the right groups, people, and information and inclusion at work – through our networks – can be a critical factor that influences promotion and advancement opportunities. Unfortunately, research indicates 81% of women report some form of exclusion at work, yet 92% of men don’t believe that they are excluding women at all4. This difference highlights the critical, yet less obvious influence of our professional networks.
Based on our interviews, women tend to advance when three conditions are present:
- People work with them and experience them as equally competent professionals.
- They are given access to opportunities and experience.
- They are included in conversations and have access to information at the right level.
Focusing on networks can help with all these things. More specifically, networks – and the information they carry – are one of the primary ways people learn about career advancement and development opportunities. By being in the right networks, women have an opportunity to work alongside and for others who would support them in their advancement. They also have access to high-quality opportunities and can have the conversations that help them advance.
However, research suggests that women and men's networks – and the information within them – are different. Understanding these connections between people – who knows whom and why – could help organizations understand why some employees rise and why others do not.
How are men and women’s networks different and why does it matter?
Traditional social dynamics – along with promotion rates, power, and rank – influence the creation and composition of professional networks.5,6 In general, as men move up the ranks in organizations, they join higher-status networks with more information and power. They also are more likely to be surrounded by men, because men, statistically speaking, are more likely to be promoted. Women – who tend to be promoted at lower rates – more often find themselves in lower-status networks (which can be women-dominated).
Network status influences the extent to which someone has access to key conversations, information, and projects that would help them advance in an organization.7 Since men tend to be in those high-status networks, they tend to have access to higher-quality information and gain access to opportunities that support advancement. Women in lower-status networks do not receive the same benefits.
While this is an incredibly simplified version of a very nuanced and complex problem, the key message is that the mechanisms that have created traditional organizational hierarchy, policy, and practice have also created echo chambers that disproportionately benefit men and hamper the advancement of women.8
What should women consider when building their network?
The research is great, but what does it mean, practically speaking, for women and how they build their network? For starters, it means understanding that networks – left to haphazardly build by chance – are likely to disproportionately negatively impact women. The good news is that women who use this information to intentionally build their network can increase their likelihood of advancement.
Research reveals there are four foundational principles (see Figure 1) women should keep in mind when building a professional network that can help them advance.9 These four foundational principles are critical for organizations to consider when designing initiatives to help women advance; we will discuss them in that context at further length later in the report. For more information on these four foundational principles, see the Appendix.
Are organizations considering networks today when trying to advance women?
Given the huge preponderance of research10 we’ve seen that points to the importance of networks in enabling women to rise, we began this research with high hopes of finding examples of organizations using network theory in their approach to advancing women. After all, there are decades of academic research11 on the topic of how networks differ among genders and how network status and power influence professional advancement. Further, most professionals are on various social networks that are technologically enabled, so our awareness of networks – and how they can be accelerated or changed by technology – is higher than ever. Therefore, it seemed logical that a number of organizations would be thinking about gender, networks, and how to use technology to help women rise.
We were wrong. After our 50 interviews with organizations of very different sizes, industries, and geographies, we found that relatively few organizations are thinking about how to help women design and build their networks intentionally. And even fewer are thinking about how to use technology to help. This was deflating.
However, all was not lost. Through our interviews, we gained significant insight into what organizations are doing today to advance women and found some examples of organizations tweaking common practices to account for network dynamics. We also uncovered a lot of existing technology that could help organizations evolve their existing practices to help with network dynamics. Further, we identified some novel practices that are showing early promise in advancing women.
In the pages that follow, we describe the common and novel practices for advancing women that we identified through our interviews. For all of these practices, we explain how network dynamics – in particular, the four foundational principles for women building their networks – play out. We further highlight the technology we think could help and give ideas for how new, yet-to-be-invented technology could assist in the future. We provide case examples wherever possible to bring the research to life.
Our hope is that this paper serves as a call to action for all leaders to re-think the practices and technology they use to advance women, and to much more substantially integrate an awareness of networks and how they play out differently for women into their efforts.
We know our connections matter. Both who we know and what those connections provide (information, resources, access, visibility) matters to career progression – so let’s make sure that women have the right connections that can help them advance. Our organizations’ future successes – and many women’s livelihood – depend on it.12
Managing and Enabling Performance
Posted on Thursday, April 25th, 2019 at 6:04 AM
It feels like we have been talking about performance management forever. In our conversations, organizations are telling us that performance management practices are not just ineffective; in some instances, they’re painful. In fact, when we recently asked managers in one organization how performance management was handled, our two favorite answers were: “with a pointy stick” and “like it’s 1979.”
Why this is important:
We are at least 7 years into the performance management “revolution”, and yet, many (rightfully) have a healthy skepticism about whether the new approaches are any better than the old. In fact, recent research by McKinsey & Company found that 54% of respondents still don’t believe that performance management has a positive impact.
Despite myriad articles and case studies about simplified ratings (or no ratings at all), separate performance and compensation conversations, real-time feedback and the technologies that support it, agile goal-setting, and coaching and development as a part of performance management, most organizations would admit that performance management is still a struggle.
Today, we’re launching a formal research study, sponsored by Glint, into what organizations are doing with respect to performance practices and how effectives those practices are.
Hypothesis:
Peformance shouldn't just be managed; it should also be enabled.
The premise for this project is that we have moved from an era where organizations only had to concern themselves with performance management to one where enabling performance is equally as important.
In the beginning…
A hundred years ago, performance management was much less complicated than it is today. Organizations were looking for a way to understand the return on their people investment. During the first industrial revolution, as assembly lines and other methods for increasing efficiency made an appearance, people were plugged into those systems and processes.
The worth of an employee was much more easily quantified than it is today. Tasks had a “right” way, and because measures associated with those tasks were objective (e.g., cycle time, number of widgets), it was easy to determine how well an individual performed based on those numbers. It created a transparent and equitable way to compensate employees.
The times, they are a-changin’…
However, we’re not living through the first industrial revolution; we’re living through the fourth. And there are some differences.
First, the work organizations are asking employees to do is different and much harder to measure. There are increasingly fewer ‘right’ ways to do a task because employees are continuously adjusting to changes in both internal and external environments. Instead of a set way of doing things with a set way of measuring things, employees are often left with nebulous job responsibilities and organizations are left with even more nebulous ways of assessing them.
As a result, “performance” has necessarily become less of a technical term. Instead of objective measures, shifting goals and strategies make it necessary to use more subjective measures when appraising employee performance.
Second, employee expectations have also shifted. As our societies continue to evolve toward a knowledge and information economy, compensation has become only one of many factors that keep employees with an organization. Employees now choose roles and tasks, not solely based on compensation, but also on things like how interesting they find the work, whether there is room for growth, opportunities for recognition, and what types of skills they can learn.
These expectations have prompted organizations to supplement traditional performance management processes. They are no longer just worried about the outcome or throughput; if organizations invest in individuals, they also want to measure their propensity to learn and their attitudes as a part of their overall performance.
The result…
As a result of these changes, many organizations have implemented a hodgepodge of old practices that don’t quite fit current conditions, and new practices that are applied haphazardly. As organizations try to blend the old with the new, gaps are introduced that result in frustration and uncertainty, both for the organization and for their employees. We currently see that frustration in the market. Gaps include:
Focusing on management or enablement, but not both
It is likely that during this last performance management revolution that we threw the baby out with the bathwater. Performance appraisals are an important part of how organizations compensate and create fairness, and throwing them out has caused havoc in more than one company.
As we begin to adopt some of the new ways of doing things, it becomes doubly important that we figure out how we fulfill some of the more traditional reasons for performance management. (By the way, if you’ve managed to create performance management practices that balance both of these, we would love to talk to you.)
Treating performance as a stand-alone challenge
Currently, most organizations look at performance and performance management as a separate set of practices and measures. However, how employees perform is ultimately the culmination or result of all other people practices.
This means that incentives, recognition, compensation, wellness programs, career management, coaching and mentoring, and engagement programs impact the performance of the organization. Truly enabling performance means taking a holistic approach to people practices by looking at all parts of the organization and understanding how they impact individuals and their ability (or willingness) to perform.
Missing the perspective of the employee
Most modern performance management practices have been conceived of by leaders of organizations and management consultants. Strangely, a lot of organizations limit upstream feedback to engagement surveys and the occasional 360. In the case of performance management, we think employees are in a unique position to tell us what would be useful to them in order to perform better. As a part of this study, we will be asking them.
Ignoring inherent bias
Performance management processes as implemented in most organizations are inherently biased. Most processes are largely subjective, no matter how many times a year a conversation is conducted. While a manager’s and peers’ opinions are important and valid to appraise performance, new technologies and access to new data can provide additional information that may create more fairness in the process and provide the organization with much more information about who is performing well at what tasks and in what instances.
We want to explore that further.
What's the Link Between Employee Experience and Customer Experience?
Posted on Thursday, April 18th, 2019 at 1:10 AM
Why we care:
It seems like everywhere we look folks are talking about employee experience (EX). In fact, a global 2018 study of five hundred CHROs, found that 83 percent of organizational leaders believe a positive employee experience is crucial to the organization’s success.1
Why is this the case? Some folks mention the hyper-competitive talent market and the expanding need for innovation. However, an equally critical reason is financial: many believe there is a clear connection between employee experience and customer experience (which should then drive revenue).
While this makes sense intuitively, there are still many unanswered questions:
- What, exactly, comprises employee experience?
- What is the relationship between employee experience and employee engagement?
- How does employee experience impact customer experience (CX)?2
- What is the measurable impact of employee experience on customer experience?
Understanding the answers to these questions will allow leaders to make much more strategic employee experience investments.
This is why we are launching a new research initiative, sponsored by Medallia, focused on these questions. We have already begun our analysis of existing literature and are actively looking to interview organizational leaders (is that you? Email us!) who can share their stories (the good, the bad, and the ugly) of how they have used employee experience to impact customer experience.
Hypotheses:
There is not a clear definition of employee experience. For example, some believe that employee experience is the result of connection, meaning, impact, and appreciation that employees find in their jobs – and builds on the foundations of culture and engagement3. Others see employee experience as being more akin to customer experience – using technology to make employee life more personal, predictive, and seamless4.
Though neither of those definitions of employee experience are aligned, they are different from employee engagement, which itself does not necessarily have a clear definition. For example, some5 defined employee engagement as the harnessing of organization member’s selves to their work roles. Others,6 stated it is a positive fulfilling, work-related state of mind that is characterized by vigor, dedication, and absorption. And, yet another academic7 defined it as an “employee’s willingness and ability to contribute to company success by freely giving the extra effort on an ongoing basis.”
Finding clarity on the differences and similarities of employee experience and engagement is our starting point.
Despite the competing definitions, research8,9 indicates that both employee engagement and experience influence customer experience and satisfaction, but the way they do that may be different. To better understand where and how organizations should invest, we need to have a framework for thinking about all of these concepts.
In addition, we believe there are insights that can be drawn from the customer experience world,10 such as thinking about experience as both static (e.g., a specific point-in-time or interaction) and dynamic (developing collectively over time), that can be applied to our understanding of employee experience.
Finally, we believe that organizations where employees can take action on employee experience and engagement insights tend to see better customer experience. To create a culture that enables these actions, organizations need to consider desired behaviors, leadership activities, information sharing protocols, decision-making rights, incentives and technology.
This Project:
Some of the ideas this research project will explore include:
Please take a few moments to share your comments with us!
Women, Networks, and Technology
Posted on Saturday, January 19th, 2019 at 7:50 PM
Why this is important right now:
Research abounds showing the positive impact of diversity – and gender diversity in particular – on an organization’s outcomes. For example, a recent McKinsey study showed 47% higher return on equity for companies with women on executive committees.1
However, women are unique in that they are the only historically disadvantaged group who make up nearly 50% of the workforce. Despite that, they are woefully underrepresented at top levels. Fewer than 5% of S&P 500 CEOs are women and only 26% of senior management positions are occupied by women.2
To address this, organizations have recently invested in unconscious bias training in droves. However, it is not at all clear that unconscious bias is the villain. One large-scale analysis of more than 80 research studies and 17,000 individuals found no reliable relationship between measures of unconscious bias and actual behavior.3 And even if unconscious bias did affect behavior in some cases, simple awareness cannot remove implicit bias. It cannot be trained away. Diversity training, in fact, is one of the least effective methods to promoting diversity and inclusion.4 It may even make matters worse.5
Hypotheses:
Exclusion from informal professional networks has been identified as one of the greatest barriers to career success.6 One multinational study of over 240,000 men and women found that while 81% of women report some form of exclusion at work—astonishingly—92% of men don’t believe that they are excluding women at all!7
However, research shows that men’s and women’s networks do not seem to follow consistent patterns, revealing that solving the problem is not so as easy as simply identifying new ways in which women should build their networks. Instead, we believe organizations may need to re-think work partitioning, training, mentoring, sponsorship programs, and collaborative technologies to create opportunities for professionals to develop effective working relationships built on understanding and trust.
To that end, RedThread Research is excited to announce our new research initiative on how women use their networks to advance in organizations and the potential opportunity for technology to amplify those network behaviors. This research is being supported by GSV AcceleraTE. The final research report will be previewed at the 2019 ASU GSV Summit, April 8-10 in San Diego, and published shortly thereafter.
This Project:
This research will focus on identifying how women can more effectively use existing opportunities, overcome factors that hinder performance, examine the role of technology, and make recommendations on what can be done by women and men as individuals, and organizations as the system in which people work, to improve women’s likelihood to rise in companies.
More specifically, we will examine the following topics:
Participate:
The above list represents our initial hypotheses as to what the study will cover. However, one of our core values at RedThread is collaboration and we need you to be a part of the process. We are collaborating with Dr. Inga Carboni, Associate Professor of Organizational Behavior at the College of William and Mary, to conduct interviews now through the end of March. If your organization is doing anything interesting on this topic, we encourage you to reach out to us and share your input at [email protected].
We are currently looking for folks to participate in our research around these topics:
- How organizations help women advance in their organizations
- How organizations help women build and develop important professional relationships inside and outside their organizations
- How organizations are helping women design their networks intentionally
- The importance of women’s networks and relationships in enabling them to advance within the organization
- The role or potential opportunity of technology to democratize or accelerate women effectively using their networks
If you have an interesting story to share about the topics above, wish to participate in an interview, or have recommendations, please contact us.