Events

We all know that the people analytics tech market is hot and growing fast. That rapid growth has created a lot of confusion in the market for buyers, who have puzzled over which vendors they should use and for what purpose.

We've been studying this space for about a year so we could help everyone understand it much more deeply. From this in-depth research, we've created 2 reports that share our most important findings. The first report, People Analytics Technology: The Market, focuses on the state of the broader market. The second report, People Analytics Technology: The Vendors, goes into detail on the vendors and their differentiators, as well as offering recommendations for both buyers and vendors.

This first report, People Analytics Technology: The Market, answers these questions:

• How big is the market and how quickly is it growing?
• How should we think about classifying the market?
• What types of data do vendors analyze and for whom?

At a high-level, our analysis uncovered a number of insights, such as:

1. The people analytics tech market is comprised of ~90 vendors with ~$1.7 billion in annual revenue
2. There has been rapid revenue growth in the market between 2016-2018 (220% CAGR), and slower, but still significant customer growth (23% CAGR), which we attribute to an increasingly successful search for product / market fit
3. Buyers come from all sizes and knowledge industries, revealing a large addressable market for vendors
4. Primary users are HR and people analytics practitioners with independent use cases / needs
5. Top implementation and adoption barriers include privacy, data integration, and lack of robust data cultures
6. The outcome metrics most impacted by people analytics solutions include: efficiency, collaboration, and innovation (business outcomes); engagement and retention (talent outcomes); and, better workforce insights, higher data quality, and improved reporting (HR outcomes)
7. We can differentiate vendors based on data source and frequency of use

While the first 6 findings are likely of general interest to all, the last point is probably most important for people analytics practitioners trying to understand the market. Specifically, we developed a 2×2 matrix that compares usage frequency and data sources (see Figure 1) as this analysis can help us understand how and by whom different solutions are used. In the report, we explain the 2×2 and the four quadrants in more detail. (Spoiler alert: Being up and to the right is not necessarily better.)

Figure 1: People Analytics Technology Market Classification Matrix | Source: RedThread Research, 2019.

The report also covers another topic near and dear to our hearts: data ethics. We learned that only about 1/3 of vendors in our study believe they have a role in designing systems that protect employees as well as educate HR and other leaders. Further, we found real opportunity for vendors to provide employees with more control over their data at work.

In fact, only 50% of vendors report they allow employees to access their own data / insights and the same percentage allows employees to correct the data collected on them (see Figure 2). This point is especially important, as a recent study shows that when organizations deliver value back to employees, they're more open to data being collected on them. The topic of data ethics represents a significant opportunity for vendors to lead by bringing a thoughtful perspective to what customers should and shouldn't do with people data.

Figure 2: Availability of Features to Give Employees More Control Over Their Data at Work | Source: RedThread Research, 2019.

We hope that these insights will whet your appetite for more.

As we mentioned above, this report is just the first one in a 2-part series. The second report, People Analytics Technology: The Vendors, is specifically designed to help practitioners understand the players in the market. It goes into much more detail on the vendors themselves, what differentiates them, and where they are on our 2×2 model.

With this research, we know we're just scratching the surface of this conversation on people analytics tech. We invite you to comment below or reach out to us at [email protected].

After we published The Makings of Modern Performance, we then hit the road to share our findings and learn from conversations with practitioners! After 4 interactive breakfast meetings, we came away with a few lessons. In wrapping up this project, we want to share with you the things we learned.

We're losing sight of the forest

Many organizations are hyperfocused on the tactics of performance management (PM) and have lost sight of the forest (why they do it) for the trees (how they do it). Many of the questions during our time on the road focused on identifying best practices or the “right” way to do PM and were similar to those we heard during our research (see Figure 1).

Figure 1: Questions We Heard During Our Research | Source: RedThread Research, 2019.

While some organizations have taken a step back to see PM as a holistic approach to developing talent and improving performance, many organizations still struggle to shift their focus. Leaders need to focus on this question:

What should my organization do to improve the performance and engagement of our employees, and the ability of us all to meet our business goals?

The following are some of the key takeaways from our road trip.

The fairness waters are a bit muddy

In our roadshow events, there was general agreement that fairness in PM is important, and some of the new practices have helped make it more so (i.e., more frequent conversations to address recency bias, involving more people in performance feedback to reduce managers’ bias). However, we discussed how other practices, such as removing ratings or implementing shadow ratings, have increased some employees’ perceptions of unfairness.

Our research found that creating fair evaluation processes – and connecting compensation to them in a transparent and fair manner – is an important part of performance management. In our (well-intended) efforts to address important concerns about ratings and evaluation methods, we might have muddied the waters. Our study gives some suggestions on how to address this issue.

A closely related topic that we also discussed was pay transparency, which our research found to be critical. Interestingly, session attendees had different levels of awareness on this topic, but one thing was certain: It doesn’t make anyone particularly comfortable.

The challenge is that pay transparency is not an all-or-nothing concept, but a continuum. At one end of the spectrum, employees have no insight into compensation philosophy, structure, and outcomes. At the other end, employees and individuals external to the organization have full access to this information and data.

Implementing pay transparency is full of “what ifs,” potential benefits, and some potentially serious drawbacks. However, employees are already having discussions about their salaries and these discussions aren’t just among colleagues in the hallway. People are more open to share the details of their compensation and benefits package to just about anyone (e.g., Glassdoor). As a result, organizations need to figure out how they will address pay transparency sooner than later.

Organizations have a choice – they can be a part of these discussions, helping to craft the narrative and using the information to better address rewards and benefits, or they can ignore it and miss this opportunity.

Engagement & performance: Increasingly intertwined

While we know that, in general, PM, engagement, learning, and career management are increasingly converging, our roadshow reinforced that the first 2 have grown particularly close. Performance practices, when done well, can engage employees by providing them with a culture in which they can thrive and with the clarity they need to perform well today and tomorrow (see Figure 2).

Figure 2: Three Levers of Performance | Source: RedThread Research, 2019.

To that end, organizations’ performance philosophies and practices need to be designed and executed to engage employees, in addition to helping them perform better. In the future, this likely means that organizations need a more nuanced and personalized understanding of what engages employees, and to then provide them with the insights, resources, systems, and metrics that are most relevant. This'll allow organizations to be more responsive to employees’ needs so they can do their best work.

PM is no longer about just measuring performance. It's about engaging employees – in a personalized and responsive way – in their work and enabling them to perform better as a result.

Where do we go from here?

While organizational leaders can certainly make significant and important changes to their PM approaches, we think there's a bigger question that can’t be answered just by changing performance practices:

How do leaders go about creating a more responsive organization?

This question is at the heart of another project: The Responsive Organization (read: the premise, the lit review, the report, webinar and slides, and the infographic).

In this study, we're looking at the changes the leaders should make to create an environment in which people – and the organization as a whole – can be more responsive to employees and customers. For example, we think that a more responsive organization 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 they need
• Metrics – Measurements of efficiency will begin to give way to other types of productivity metrics that focus more on innovation, agility, and responsiveness

Want to share your thinking on this topic? Feel free to reach out to us at [email protected] and we will find some time to talk! Also, if you want to talk more about performance management, we would love to hear from you.

In 2019, we studied how networks and technology could be used to advance women in organizations. Along with the release of the full report, this article summarizes our findings. Gender diversity in the workplace matters, and leaders are taking it seriously. In fact, 87% of organizations say gender diversity is a top priority – up from 74% in 2015.¹ Yet, the gender gap – especially in leadership – is not closing and the number of senior women in organizations doesn't reflect this increasing commitment.

We clearly need a different approach. Organizations should understand how professional networks impact women’s advancement and design initiatives with this in mind.

In our report, Helping Women Rise: How Networks and Technology Can Accelerate Women’s Advancement, we analyzed how our professional networks impede or promote women, and the technologies that help organizations understand and address this issue.

Taking a networked perspective

Our networks connect us to specific groups, people, and information. Inclusion at work – being in the "right" professional networks – can be a critical factor that influences promotion and advancement opportunities. Even though we know that our networks matter, we often don’t build and maintain them with intention.

The bad news? Left to haphazardly emerge and evolve by chance, professional networks can negatively impact women’s advancement.

The good news? Organizations can use this information to help women intentionally build opportunities and networks that increase the likelihood of their advancement.

Before companies begin designing network-based initiatives, they should consider four foundational principles of networks (see Figure 1).

Figure 1: 4 Foundational Principles of Networks | Source: RedThread Research, 2019.

New twists on old classics and novel approaches

Our research identified a handful of common and novel practices that organizations use to help women advance (see Figure 2). The common approaches consisted of some of the mainstays in diversity and inclusion efforts. Novel practices are exciting, but have not necessarily proven to be more effective (yet).

Figure 2: Common and Novel Approaches to Advance Women in Organizations | Source: RedThread Research, 2019.

Each of these practices can – when designed with a networked perspective – address at least 1 of the 4 foundational principles of networks and help women advance.

Take the common practice of mentorship and sponsorship for example. These initiatives haven’t seen much change in how they’re implemented over the years. However, by applying a networked perspective (see Figure 3), organizations can support – or even create – group-based mentorship and sponsorship – a new twist on an old classic.

Figure 3: Group-Based Mentorship and Sponsorship | Source: RedThread Research, 2019.

Novel approaches also benefit from taking a networked perspective. For example, internal gig-work marketplaces – if designed appropriately – help women in organizations create new, diverse connections and help strengthen their ability to standout from others in their network.

Technology’s role

When we started this project, we had high hopes that organizations would share with us tons of insight on how they were using technology to aid in the advancement of women. After all, if social media can use our networks to suggest events we should attend, music we might like, people we may know, and careers / roles that match our interests and experience, organizations should be able to mirror this internally.

Well, we were wrong. Our research found that, overall, organizations are not taking full advantage of the technologies that can help them take a networked approach to support women who want to advance their careers.

Organizations know technology can help; they just aren’t sure what options are available, or where to start. So, we created a few cheat sheets in our report to get organizations started (see Figure 4).

Figure 4. Examples of Technology Cheat Sheets (available in full report) | Source: RedThread Research, 2019.

Learn more

Our report breaks down each of the common and novel practices we uncovered, and how they can address one or more of the foundational principles of networks. In addition, we dive into technology offerings for each of these practices.

For more information on each of these practices and the technologies organizations can leverage to take a more networked perspective, we encourage you to download and read the full report by clicking the image below.

You can find information on the specific practices our research uncovered in short articles – part of the Women & Networks series – including:

• Employee Resource Groups: Taking a Networked Perspective
• Mentorship and Sponsorship: Building Broader Networks
• Leadership Programs & Conferences: Building Networks for Women
• Gig-Work Marketplaces: A Novel Way to Advance Women
• Articulating Invisible Information: Leveling the Playing Field

Event Overview

As I wrote about in our article, "The Fight Over Employee Experience Is Finally Here," we expected the Workday team to come out swinging at their annual Workday Rising event. And, wow, did they ever.

Not only did Workday put a heavy focus on employee experience, which they're calling “People Experience” (more on that below), but they also made a wide range of other announcements, including the limited availability of Workday People Analytics, Skills Cloud, and Talent Marketplace.

Before we dive into the details below, here is my main takeaway:

Workday announced products that required them to stretch (People Analytics and Skills Cloud, in particular) at Rising 2018 and we were able to see the fruition of their efforts at Rising 2019, including some early customer stories.

Product announcements & enhancements

While we would like to see more customer testimonials – especially from end-users themselves, not just those responsible for purchasing decisions – we applaud Workday for its diligence in working toward the innovative products they promised last year.

People experience

With that said, let’s move on to some of the key announcements, starting with Workday People Experience (see Figure 1), which is a new user experience (UX). In its description, it's very similar to the new UX that SAP SuccessFactors announced recently – in that it integrates into one location conversational AI, robotic process automation (RPA), machine learning, nudges, and predictions to try to get people higher-quality information more efficiently. Workday People Experience provides information ranging from career development guidance to personalized answers to HR and payroll questions, from both within Workday and external systems.

Figure 1: Workday’s People Experience UX | Source: Workday, 2019.

The biggest differentiator I could discern between the People Experience UX and the one announced by SAP SuccessFactors in September is that Workday seems to have more significantly embraced a critical employee experience concept: journey maps.

The value in using journey maps is that they can identify critical "moments that matter" for specific types of employees and create a standard (and scalable) way of managing (and then improving) those experiences. The result is a much more employee-centric approach to designing software.

Workday identified a number of specific journeys for different employee profiles and used them to create personalized recommendations within Workday People Experience. For example, if a parent is returning to work after welcoming a new child into their family, there are likely a specific set of steps they should go through, such as informing the insurance company, filing leave claims appropriately, etc. Similarly, if someone is recently promoted, there are specific and standardized onboarding and training tasks that need to be completed, which People Experience can recommend. This information automatically populates for those employees within Workday, making it easier for employees to find critical information.

The other addition in the area of employee experience was the announcement of a partnership between Workday and Medallia to allow for the integration of customer experience data with employee data within Workday.

There is clearly value in the integration of these two data sets (see our research on the connection between employee experience and customer experience) and think that this partnership further enables organizations to manage their customer and employee experiences in closer concert and more effectively. It also gives Workday an answer to SAP’s acquisition of Qualtrics, with Qualtrics being another major player in the customer experience space.

People analytics

Let’s move on to Workday’s People Analytics (see Figure 2), initially announced at last year’s Rising event. This solution, which integrates the 2018 Stories.bi acquisition, leverages that technology’s ability to identify patterns within data, process those insights using machine learning, and then highlight the most critical “stories” in natural language. The range of topics covered includes hiring, organization composition, diversity and inclusion, talent and performance, and retention and attrition. Workday People Analytics has limited availability with the Workday 33 release; at Rising, Workday announced a number of customers using it.

Figure 2: Workday People Analytics Solution | Source: Workday, 2019.

As we have discussed in our People Analytics Technology research,

One of the areas many solutions struggle with is in telling clear and compelling stories with the data, and this is something the People Analytics solution is clearly targeting.

This should really help the HR business partners and other leaders who are less quantitatively-focused to grasp new trends quickly. That said, I didn’t get much sense from the RIsing demo of how the more quantitative folks will be able to manipulate the data. I presume the assumption is that customers will use Workday Prism to do that more sophisticated analysis – but I didn’t see an in-depth demo of how to do that at Rising, so we will have to leave that one for another post. Overall, though, this announcement represents progress for Workday on the beguiling people analytics front.

People skills

Let’s move on to Skills Cloud, which is another solution Workday announced last year and brought into production this year.

The idea is that Skills Cloud will “mine” employees’ skills by looking at employees’ job descriptions, any internal online profiles, feedback on their performance, and any other work experiences, and then infuse these skills across the entire platform, including talent planning, talent marketplace, career hub, learning, recruiting, performance enablement, compensation, and people analytics.

This information can then be used to better understand the skills within the workforce and to make more strategic decisions (see screenshot in Figure 3) via the Skills Insight analysis tool. Workday says they have more than 200 customers live on the Skills Cloud.

Figure 3: Workday Skills Insights | Source: Workday, 2019.

As many of you know, we care deeply about skills and are planning to write several pieces of research on this topic in 2020. We love that Workday is making skills such a core part of their overall platform and see huge potential for what they are doing. That said, we have a few concerns:

• Data quality. Many of the data sources Workday is using can be inadequate reflections of someone’s overall skills. We know that employees can change / augment their skills, but we worry that they will not, and that the skills data will not be as robust as it needs to be to make critical strategic decisions.
• Data bias. We know from numerous studies that women and under-represented minorities tend to under-report their skills, while majority populations often over-report their skills. We worry that these types of algorithms will perpetuate biases about people’s skills (or lack thereof).

Neither of these items are show-stoppers, as Workday clearly has to start somewhere when it comes to documenting skills. However, for folks using the technology in its earliest stages, we think these 2 items are something of which to be mindful.

People management

Finally, let’s turn to the Talent Marketplace (see picture in Figure 4), which is a single location that includes internal opportunities that are matched to employees’ skills and interests. Importantly, the solution alerts employees to those opportunities, versus employees having to look for them. The idea is that employees can more easily find internal opportunities that will help them grow, and hence stay at an organization longer.

Figure 4: Workday’s Talent Marketplace | Source: Workday, 2019.

We tend to see internal marketplaces positioned as part of an organization’s learning and development strategy, where the “gigs” give employees a chance to augment their existing work with opportunities that align to their career aspirations. Interestingly, at Rising, Workday positioned Talent Marketplace as a way for organizations to compete against external organizations who could also be sharing new opportunities with an organization’s employees. So, it is not just an internal gig-work marketplace, but also an internal job board that automatically alerts employees to opportunities.

Wrap up

In the course of my conversations with other analysts, we had two questions with internal marketplaces we think have currently gone unanswered:

• What if an employee wants to develop skills they either do not have or are currently weak on? Does the solution allow for them to indicate this, or will the algorithm only suggest things aligned with their current capabilities? And further, will this solution allow them to connect with managers who are willing to coach them, especially since they won’t be a fully committed resource?
• Is there a way to pay people for doing this extra work? Presumably, if it is possible this work would have been given to a contractor, to whom an organization would pay to do it. If the work is going to an internal employee, is there a way to compensate them for it?

Ok, that was more than 2 questions. 🙂 We think there’s great opportunities for internal marketplaces but think there are still some details to get sorted out.

All of these announcements together create a compelling case for why Workday is the competitor to beat when it comes to creating a unified and personalized employee experience.

Many of these solutions are in limited availability, so the market has yet to tell us of the impact — hopefully we will hear that at Rising 2021. Workday is clearly pushing forward with a lot of innovations and we look forward to hearing from end-user customers on how these changes are helping them meet their people and business needs more effectively.

As the year comes to a close, we’ve taken a bit of reflection time to think about some of the trends we’ve seen this year. While there's been a lot of hype about some of the big ones (AI anyone?), we think some of the most impactful ones are simple realizations or subtle shifts in mindsets that people leaders make.

One that has particularly caught our eye – the importance of connecting for learning.

The Importance of Connecting

Connecting has a prominent place in our Learning Model (see Figure 1). It's well-understood that all learning doesn’t happen in the classroom and people learn from one another¹. What types of opportunities we give our employees to do this type of connecting can have a significant impact on how successful they are.

Figure 1: Learning Model | Source: RedThread Research, 2019.

Through our discussions with both leaders and solution providers this year, we’ve identified 3 things that lead us to believe that Connecting is gaining prominence.

Thing 1: Enabling performance, not just managing it

In the fall of this year, we wrapped an extensive study on performance management (PM). The goal of this study was to understand which of the “new” practices were having an impact on business outcomes. Not surprisingly, one of the more noticeable group of practices all had to do with people development or learning. Two practices particularly caught our eye.

First, organizations are encouraging much more frequent development conversations between managers and employees. Whereas performance discussions used to happen once per year, most of the organizations we spoke with encouraged monthly or quarterly check-ins that didn’t just discuss performance, but also career aspirations and potential development experiences.

These conversations are the epitome of connecting – allowing managers to share expertise, employees to ask questions, and them both to talk about development and course correction where necessary. As performance discussions are well-established in most organizations, increasing the cadence and changing up the expected agenda has been minimally invasive and, according to the leaders we spoke with, pretty impactful.

Secondly more organizations are enabling peer-to-peer feedback and recognition. Peers are often less intimidating and often have a better idea of what is going on in the team, which means their feedback can often be more timely, more focused, and more engaging than manager feedback.

Thing 2: The rise of coaching & mentoring

One of the most exciting trends we’ve seen this year for developing people is the rise of coaching and mentoring. In the past, coaching and mentoring has been focused mainly on leaders – senior leaders really – and has been used to correct troubling behaviors or prepare promising leaders for the next step in their careers.

That seems to be changing. Organizations are understanding the value of a coaching or mentoring relationship and are implementing programs at much broader scales. For example, organizations are:

• Including coaching and mentoring activities in larger development initiatives, including new-hire training, leadership development, and level-up programs
• Leveraging technologies to be able to scale coaching and mentoring to make it more accessible to more employees – these technologies range from simple matching software to full-on use of AI and automation, and everything in between
• Offering external mentoring as a benefit – we've seen this work particularly well for younger employees trying to navigate early career moves

We’re thrilled that coaching and mentoring are gaining traction; organizations are beginning to realize the importance of one-to-one connections for employee development and the value of leveraging internal expertise.

Thing 3: Structured collaborative learning

Yep, we said it. In a world that is touting the necessity, efficiency, and beauty of micro and self-directed learning, we’ve seen an ever so slight resurgence of more structured, collaborative types of programs. We’re not saying that the majority of training is going to (or should) return to the classroom. Rather, we recognize that organizations may have gone too far, and that we’re starting to see them self-correct a little bit to ensure that opportunities for Connecting exist.

Organizations are remembering that there's value in struggling through a learning experience together. And that some insights only come from listening to those with experience and expertise. And that when people connect, storytelling can motivate and inspire. And that there are some things that are just better taught through discussion, brainstorming, and collaboration.

Interestingly, while technology has largely been associated with the self-directed and micro types of learning until now, we’re seeing it being used more broadly in helping with the structured, collaborative learning as well. We finally seem to be figuring out how to replicate or improve upon the best parts of in-person collaboration and learning.

So, while these may seem like small things – more conversations with managers, more mentoring and coaching, and a realization that there's value in structured collaborative learning – we think they constitute a trend: one that will make our workplaces more human-focused, and frankly, probably more pleasant. Thoughts?

With the all the recent talk on challenges organizations face when it comes to their frontline workforce (i.e., turnover, reskilling, and empowerment), how organizations manage those on the frontlines and their performance has become a critical issue. You may encounter these frontline people directly at coffee shops, a customer service help line, or indirectly through the products you currently buy or use. So, their performance matters.

Culture Is Key for Frontline Workers

In our recent report, Frontline Workers: Creating a Performance-Driven Culture, we explored the nuances of performance management (PM) for frontline workers and examined the specific practices that organizations use to help them perform better.

This research is a continuation of our recent study, The Makings of Modern Performance Management. We conducted a thorough lit review of roughly 40 academic and business articles, reports, and book chapters, along with a quantitative survey of 623 respondents (more than half being frontline workers). From all of this, we found some interesting insights on culture and frontline workers’ performance:

• Frontline workers are generally more satisfied with their PM experience, as compared with other workers, especially when it comes to having clear goals and expectations
• Frontline workers feel they have less autonomy, and don't feel that their managers enable the same degree of autonomy as their desk and knowledge worker counterparts
• Of the 3 levers that organizations can use to drive employee engagement and organizational performance, culture provides the greatest opportunity

Overall, we found culture to be a key performance lever for frontline workers, particularly because having a strong culture helps organizations address some of their biggest challenges with this segment of the workforce.

In fact, a study of blue-collar workers showed that those in supportive organizational cultures – which promote people’s strengths, capabilities, and functioning – performed 27% better than those in unsupportive cultures.¹ They were also 89% more innovative and 79% more committed to the organization. This means that organizations can use culture as a lever to better performance, greater innovation, and stronger commitment.

Specifically, an organization’s focus on providing a fair and consistent evaluation process, its ability to provide a broad range of feedback, and its focus on developing skills that'll serve individuals and help the business strategy in the future, all help to mitigate some of the challenges which organizations often face.

Learn More

For more information on each of these practices in high-performing organizations and examples of companies that create a performance-driven culture, we encourage you to download and read the full report.

What specific practices create a performance-driven culture for frontline workers? A lot has been said about the importance of frontline workers, but few organizations truly understand how to best manage their performance and where to begin.

RedThread Research’s study, Frontline Workers: Creating a Performance-Driven Culture, explores the nuances of performance management for frontline workers and examines the specific practices that high-performing organizations use to help them perform better.

The power of how we experience a company, brand, or product is often in the hands of a select group of people. Your perception of the product and how well it was made influences your satisfaction with it.

Frontline workers influence our experience as customers.

As markets become more aggressive, as companies offer abundant choices, and as customers become more informed – organizations are relying more heavily on customer experience as a competitive advantage. Frontline workers are at the center of this intensifying spotlight: They’re no longer just cogs in a machine – they’re crucial players in the growth engine.

However, organizations face challenges when it comes to their frontline workforce. In fact, our initial literature review identified 3 main issues:

• Turnover
• Reskilling
• Empowering workers

Bottom line: The performance of those on the frontlines matters and companies are taking notice. Organizations find themselves asking: How can we ensure that our frontline workers are engaged, skilled, and have what they need in order to meet the needs of our customers?

To provide a bit of clarity on this question, we took a deeper look at the practices that organizations use to help their people perform. This research is a continuation of our recent study, The Makings of Modern Performance Management. This report provides more insights into the differences and opportunities between frontline workers’ performance and other types of workers. Specifically, this report addresses:

• Differences between frontline workers and other types of workers in how they experience performance practices
• 3 areas of focus to use culture as a performance lever
• 7 practices that high-performing organizations use to create a performance-driven culture
• Ideas and relevant tips to bring these practices to life in your organization

We encourage you to download and read the full report by clicking the image below.

Earlier this year, we began to explore the concept of employee experience. Since then, we talked to more than 20 organizations to understand their approach to employee experience and identify leading practices. Now, this is the 3rd in a series of 4 articles highlighting our findings.

Throughout our research, we identified 4 levers of employee experience to create sustainable results. This article focuses on one of the employee experience levers – articulated accountability – and is just an excerpt from the main report, The Four Levers of Employee Experience to Create Sustainable Results.

Who's Responsible for Employee Experience?

We wanted to find out, once and for all: Who's responsible for employee experience? Is it HR, marketing, operations, or technology?

In our quest to understand who’s accountable, we found a wide variety of opinions. Some people think HR is responsible because it concerns people. Others think it’s a coordinated effort across organizational functions.

Even though organizations hold differing opinions as to who is responsible for employee experience, one thing is true in progressive organizations: HR still holds many of the cards when it comes to employee experience.

Hands down, most of the people we talked to believe that, because HR is already privy to employee feedback and talent management practices, it should serve as the hub for employee experience. This means that, as a hub, it serves as a speaker of the house of representatives, like in government. And as an employee experience speaker of the house, it acts as a leader: It upholds standards, coordinates efforts, maintains order, and tracks progress.

So, this isn't much of a surprise, given that HR has historically taken on the people-advocate role. But what’s interesting is that, in progressive organizations, accountability doesn’t just begin and end with HR. Instead, they define accountability as being either distributed across functions or centralized to a specific manager or team – and they further define what that means for the employee experience.

“As a company, we have 6 company level objectives. And one of them is around employees and enabling them to do their best work every day. Our goal is to ensure that at least 85% of our employees are having a level 4 or 5 employee experience.”

Greg Pryor, VP of People and Performance Evangelist, Workday

Distributed accountability: Leaders are responsible for strategy & large-scale issues

In distributed accountability, leaders are responsible for the employee experience strategy and vision. This is a plan of action designed to achieve the best and most appropriate experience for the organization. It also includes organizationwide interventions, which are often necessary to address employee feedback.

In progressive organizations, we often found that senior leaders in HR, and especially those in executive positions, play a key role in tackling these macrolevel aspects of employee experience.

Leaders in HR – working closely with leaders across functions – hold a powerful role in developing a strategic vision for employee experience. They are responsible for understanding the big picture of employee experience and developing a coherent strategy at the upper echelons of the organization. This isn't to say that they operate in a top-down manner. If you recall the speaker of the house example, these senior leaders uphold standards, coordinate efforts, maintain order, and track progress. They also play a key role in conveying the strategy’s value to the organization and setting the overall tone.

Senior leaders, especially those in VP positions or higher from a wide variety of functions (not just HR), are also responsible for addressing large-scale issues quickly and effectively (see Figure 1).

Figure 1: Distributed Accountability for Large-Scale Employee Experience Issues | Source: RedThread Research, 2019.

To do so, senior leaders uphold the employee experience strategy while seeking to understand employee and customer feedback. They collaborate with other leaders across functions to successfully address large-scale employee experience issues. They also establish and communicate clear escalation procedures for employee and customer feedback.

In progressive organizations, cross-functional senior leaders hold a special place in employee experience because they have the power to successfully address any organizationwide issues pertaining to their areas of expertise. Thus, having clear escalation procedures – in which people know which issues to escalate, how to communicate them, and to whom – for any organizational issues that arise at the local level is crucial.

“It’s important to detail the business rules to make your VOC program actionable and impactful. For example, if you get a detractor, how fast do you need to respond? Who needs to respond? When does it get escalated? Addressing a detractor quickly – while you still have a chance to fix the situation – is very important.”

Chris Hummel, Chief Marketing Officer, United Rentals

Centralized accountability: Individual contributors & direct managers are responsible for feedback

In centralized accountability, individual contributors and junior leaders – more specifically frontline or direct managers – play a significant role in sharing and responding to feedback (see Figure 2).

Figure 2: Centralized Accountability for Experience Feedback | Source: RedThread Research, 2019.

For experience efforts to work, individual contributors, especially those on the frontlines, must share meaningful feedback. In fact, individual contributors in progressive organizations share feedback frequently and effectively in a variety of ways (e.g., surveys, team huddles, one-on-one conversations). They also serve as mediators of information between what they hear from customers and the organization. They shed light on what truly matters to customers and to them as employees.

“The relationship between frontline facing employees and customers is so important. I call it contagious: how they feel and how they show up translates to the customer experience.”

Chris Albertson, SVP Client Feedback and Experience, LPL Financial

We also found that feedback (from both employees and customers) plays a key role in experience if direct managers do something about it. Thus, direct managers are also accountable at the local level. In progressive organizations, they're highly responsive to both employee and customer feedback. Responsive managers actively seek to understand feedback, and react quickly and effectively to it. They enjoy ample decision-making rights to address issues as they come up. They also have the authority to rally employees and make decisions.

For more on this and other levers of employee experience – and examples of how companies have brought them to life – we encourage you to download and read the full report by clicking the image below.

Earlier this year, we began to explore the concept of employee experience. Since then, we talked to more than 20 organizations to understand their approach to employee experience and identify leading practices. Now, this is the 2nd in a series of 4 articles highlighting our findings.

However, we wanted to uncover the nuances of what a supportive culture means for employee experience, and in our pursuit, we identified 2 components. Supportive cultures that have values, beliefs, and assumptions anchored in employee experience drive core behaviors throughout the organization.

“We have open door policies. Our CEO and I don’t have secretaries. You can dial us directly and we’re extremely approachable. We care about what our employees have to say and love to hear their feedback. They make us better every day and are critical to our success. It’s about having a transparent and collaborative conversation.”

Vivian Maza, Chief Culture Officer, Ultimate Software

We mentioned that a supportive culture is anchored in employee experience. But what does that mean exactly? In practice, progressive organizations have people – up and down the ranks – who accept the value of employee experience and model behaviors that reinforce it. Organizational climate, internal policies, and leadership – all constructs of organizational culture – contribute significantly to employee experience.⁴

“We have a very collaborative culture. So for us, it was very important that we bring people together to talk about the desired employee experience, then make recommendations and decisions.”

Kate Miller, Director of Employee Experience, Robert Half

Supportive culture anchored to employee experience: Values, beliefs & assumptions

A supportive organization weaves employee experience into its cultural fabric: It does so by clearly anchoring its values, beliefs, and assumptions to experience and accepting it as fundamental to success. Figure 1 shows what progressive organizations with a culture anchored in employee experience value, believe, and assume.

Figure 1: Values, Beliefs & Assumptions of a Supportive Culture | Source: RedThread Research, 2019.

“Our first belief, and we think about our values in that order, is that happy employees enable happy customers. Happy customers want to innovate with us. The ability to have great innovation allows us to attract happy employees and do really interesting work, and that creates a virtuous cycle.”

Greg Pryor, VP of People and Performance Evangelist, Workday

5 essential behaviors of a supportive organizational culture

A supportive organizational culture also fosters an experience mentality that encourages people to adopt, at a minimum, 5 essential behaviors:

• Collaboration
• Transparency
• Psychological safety
• Alignment
• Feedback-sharing

While there may be other relevant ones in a supportive culture, we found that these 5 behaviors are tablestakes. We heard them mentioned over and over in our various conversations with organizational leaders. They also underscore the importance of employee experience as a fundamental priority to the wider organization.

In a culture that supports employee experience, everyone – from senior leaders and direct managers to individual contributors – plays a key role. Although the 5 essential behaviors may apply to everyone across levels, we found that, in highly supportive cultures, senior leaders and direct managers often demonstrate collaboration, transparency, psychological safety, and alignment. Individual contributors are also adamant about sharing meaningful feedback. Essentially, how leaders behave paves the way for employees to frequently share meaningful feedback about themselves and about customers. This creates a supportive and reciprocal environment rooted in employee experience.

“Autodesk has figured out how employee behavior and practices align to the culture we care to cultivate. The business and senior leadership fully support The Culture Code we’ve developed and encourage healthy behavior within our system of business practices. The CEO’s consistent reinforcement of The Code has reinforced the work our team does and helped us maintain the momentum for our most recent, successful business transformation.”

Andrea Robb, VP Talent, Culture, and Diversity, Autodesk

For more on this and other levers of employee experience – and examples of how companies have brought them to life – we encourage you to download and read the full report by clicking the image below.

It feels like every time we turn around another post, article, video, or report is discussing the changing nature of, well … everything. We’re constantly inundated with information showing the dynamic and ever-evolving world in which we live and work.

Rethinking How We Do Business: Responsivity

In previous times – when organizations could reasonably predict their environment for the foreseeable future – it was easier to set a course of action and revisit the plan every 3 or 5 years. That no longer works today. Businesses must now find a way to adapt and to change in ways that don’t become obsolete in the same amount of time it took to strategize about those changes.

So, what kind of organization will survive in the future?

Our prediction – the responsive organization.

But what exactly is a responsive organization and what steps can organizations take now to be more responsive?

Our current (working) definition of a responsive organization is:

An organization that identifies change, determines trends, and responds in ways that turns change and disruption into a distinct organizational advantage.

To begin understanding these organizations in more detail, we looked at more than 50 academic and business articles, reports, and books for this literature review.

What we saw

It may not come as a surprise that academic literature isn't flooded with research on the concept of “responsive organizations.” However, the concept has loosely been described throughout popular press and the foundational ideas have been rigorously studied. We looked at any concept we thought would help us uncover what makes an organization responsive (i.e., agility, decision-making, engagement, motivation, rewards, learning, empowerment, technology, performance management).

In reviewing the literature, we uncovered 5 themes of responsive organizations:

• Structure is still needed, but rigidity won’t work
• Authority and power can’t be held by the few
• Empowerment leads to chaos if learning is lacking
• The human element is a distinct advantage, now more than ever
• Technology has an increasing role as a supporting actor

Structure is still needed, but rigidity won’t work

There's a general agreement that traditional hierarchical structures are barriers for organizations wanting to be more responsive. These organizational structures were set up to address efficiency – as though humans would always just make widgets on an assembly line. However, work is no longer done in a linear manner and efficiency limits responsivity – to customers, changing market conditions, new technology, etc. The modern world of work requires a network of individuals and teams that balances stability and flexibility.

More specifically, responsive organizations remove layers – opting for flat, more networked, team-based structures. Working in a network enables businesses to organize around what matters most (i.e., specific challenges, products, knowledge, customers, markets) and to remove traditional notions of control and authority. Yes, there are some decisions that should be made by leaders and within a centralized structure but, by in large, there's a lot more opportunity for the employees who are doing the work on the frontlines to identify problems and take action on solutions.

Regardless of the actual structure, the key point is that old models which primarily emphasize command-and-control operations will become increasingly less effective in the future. Instead, organizations have to provide enough structure to direct work but be flexible enough to evolve in real-time. This idea of flexible, network-based organizational structure is central to the idea of the responsive organization.

Authority & power can’t be held by the few

One of the key benefits of more network-based, flexible structures is the ability to facilitate decentralized decision-making and shared leadership. In traditional models, authority is held by the few and decisions trickle down to workers lower in the hierarchy in a (slow) process. Responsive organizations recognize that power can no longer be held just by the few and embrace the idea of shared leadership. Power – the authority to make decisions and to act on behalf of the organization – has to be pushed down to the people closest to the challenges being solved.

Responsive organizations trust their employees and provide the psychological safety necessary for employees to know they won’t be punished if they act – in good faith – on behalf of the organization. This is critical. Evidence suggests that, when employees feel trusted, it positively impacts performance and these employees are more likely to make extra effort outside of their role.²

Decentralized decision-making and sharing authority are more than simply telling employees they can make their own decisions. Responsive organizations create cultures that value entrepreneurialism and encourage – even reward – employees for coming up with solutions.

“The need for organizational sharing of information, decision making and responsibility among project team members requires a new paradigm of how data and personal relationships will flow.”³

All that said, responsive organizations also understand that strong organizational norms, articulated accountability, and organizational controls are still needed. These set boundaries for employees and help them interpret shared authority through the same lens – ensuring that employees know when leadership needs to be involved.

Empowerment leads to chaos if learning is lacking

Traditional command-and-control models can impede how quickly individuals identify and address skill gaps. When individuals have little insight on strategy and no authority to make decisions, in real-time, they're simply doing a job. They’re not as often confronted with the reality of what’s needed next for them to be able to succeed.

On the other hand, responsive organizations are pushing individuals to operate in roles not easily defined. They're giving employees insights on the vision, strategy, and goals of the organization so employees can better respond to customers. But to respond effectively to customers, employees need to have the skills, capabilities, and knowledge necessary to meet customers’ existing and future needs. This requires employees to be continuously learning both the skills they need to perform today and those necessary to prepare for the future.

Unfortunately, our recent research suggests that a majority of organizations are falling short in helping employees learn and prepare for the future. Less than 50% of organizations are providing an environment to facilitate information-sharing, encouraging continuous learning, or helping employees identify what's needed for future success (see Figure 1).

Figure 1. Developing and Preparing Employees for the Future | Source: RedThread Research, 2019.

Employees in responsive organizations are constantly faced with the reality of their own limitations and must work quickly to address these. This requires responsive organizations to place learning and development (L&D) at a premium for 2 reasons:

1. Giving employees the power and authority to act on behalf of the organization and to take charge of problem-solving is great, unless they don’t have the necessary skills and abilities to actually do this.
2. Expecting individuals to operate in roles, not jobs, means they need to also identify where the skill or knowledge gaps are among the team and find a way to fill those.

Responsive organizations are also learning organizations that push individuals to continuously build upon their capabilities and teach employees how to learn.

The human element is a distinct advantage – now more than ever

It would be great if we could read the “Responsive Organization Playbook” and see a few chapters on structure, authority and decision-making rights, and L&D, and call it a day. But the truth is, there’s a human element in responsive organizations that is often overlooked when reading up on organizational agility (a term similar to and highly related to responsive organizations).

Responsive organizations balance profit with purpose.⁴ Sure, organizations have to make profit to survive, but “rather than viewing profit as the primary goal of an organization, progressive leaders see profit as a byproduct of success.⁵” That means, responsive organizations are clearly attuned to the human side of their organization – creating 2-way channels of communication to understand their talent beyond the profit they provide.

This enables responsive organizations to create cultures that are intrinsically motivating⁶ – creating an employee experience that minimizes control and micromanagement, and increases individual agency and competence. These cultures recognize and reward progress, not just goal attainment.

Technology’s role as a supporting actor

The sheer volume and speed of information coming into and out of organizations necessitates the use of technology. In fact, many of the articles we read highlight a need for organizations to leverage technology to capture and interpret data both within the organization and external to the organization. This is especially true for responsive organizations. Next-generation technology has to be embraced by the organizations of the future.⁷

This doesn't mean that technology should be seen as something which will come in and disrupt the human element of the workforce. In fact, responsive organizations will need to identify the unique attributes that humans bring to the workforce and leverage technology in a way which enables people to do deeper, more creative work.

Just as responsive organizations need to create flexible, networked, and agile structures – they also need to invest in technologies, systems, and tools that will evolve with them. More importantly, disparate technologies have to be able to seamlessly integrate with each other. Employees are tired of leaving one system to manually enter data into another system about what they just completed in the first system. Unfortunately, this is the reality in many organizations – technologies aren’t integrated with each other and many don’t fit into the flow of work.

The truth is, there are a lot of great technologies out there, and many solutions are trying to provide seamless integration in the flow of work. But we aren’t sure we’re quite there – yet. This suggests to us that responsive organizations may need to think differently about their technological architecture and use a buy-and-build approach to ensure they're arming their people with access to the right information, at the right time, and in the right way.

What caught our attention

Of the literature we reviewed, several pieces stood out to us. Each of the pieces below contained information that we found useful and / or intriguing. We learned from their perspectives and encourage you to do the same.

The Operating Model That’s Eating the World

Aaron Dignan

“These companies are lean, mean, learning machines. They have an intense bias to action and a tolerance for risk … They are obsessed with company culture and top tier talent, with an emphasis on employees that can imagine, build, and test their own ideas. They are driven by a purpose greater than profit….”

Highlights:

• Discusses the responsive organization from 5 key components, including purpose, process, people, products, and platforms
• Highlights the shift in each component of the responsive organization
• Gives an example of an organization that has made the appropriate shift in each area

This article gets us excited about the responsive organization of the future. It gives a simple overview of the components of the organization that need to be reimagined and calls out the organizations that have made shifts in these areas.

The Future of Organizations is Responsive

Mike Arauz

“This difference – between optimizing for certainty vs. optimizing for uncertainty – is at the core of what separates successful organizations from everyone else.”

Highlights:

• Illustrates that organizations are thriving – and will continue to – because they are responding to disruption by creating new ways of working
• Argues that traditional structures impede resource availability
• Suggests that responsive organizations optimize for uncertainty, rather than certainty

This video presentation (slides and transcription provided) illustrates why work isn’t working anymore and provides a compelling argument for organizations that embrace uncertainty. In addition, the presentation highlights where technology is best-suited to support organizations and where the qualities unique to human (creativity, collaboration, etc.) should be leveraged.

Elements of a Responsive Organization

Dean Kimpton

“The idea of placing purpose before profit, is not about blind altruism, but attracting the interest of people.”

Highlights:

• Gives a short review of the ideas central to responsive organizations
• Discusses the potential upside in risk and failure
• Outlines the link between engagement and responsiveness

This quick read offers a fast skim of what makes an organization responsive and outlines a few reasons why. It also highlights what organizations should consider when trying to measure responsiveness.

The Four Intrinsic Rewards that Drive Employee Engagement

Kenneth Thomas

“ requires workers to make a judgment – about the meaningfulness of their purpose, the degree of choice they have for doing things the right way, the competence of their performance, and the actual progress being made toward fulfilling the purpose.”

Highlights:

• Argues that intrinsic motivation is essential when workers are asked to self-manage
• Highlights the factors involved in whether a worker is likely to experience intrinsic motivation
• Discusses each fact in the context of how organizations can create a high-engagement culture

This article provides an overview of current thinking about intrinsic motivation. It highlights the 4 components that help individuals determine whether they are intrinsically motivated, including meaningful purpose, choice, competent performance, and progress toward purpose. It also provides 7 recommendations for how to build a more intrinsically rewarding environment to boost engagement.

The Darkside of Transparency

Julian Birkinshaw and Dan Cable / McKinsey & Company

“We’re getting used to transparency in our lives … But transparency can also cause pain without much gain.”

Highlights:

• Summarizes the potential benefits of transparency within organizations, but cautions where this can go awry
• Suggests there are certain times and internal practices that shouldn't be open to radical transparency
• Discusses the role of transparency in daily activities, employee rewards, and creative work

There's an increased discussion around sharing information and pushing it down to the right levels. With that discussion comes the debate around transparency. This article highlights that debate, suggesting there might be times when privacy wins out over radical transparency.

Overall impressions

When we started this research, we weren’t sure what we’d find. To be honest, there isn’t a lot of information outside of the popular press to help organizations understand what the idea means. It’s still a bit of a muddy concept, and we had to get creative about the avenues we took to research topics that supported this concept. However, in taking a step back, we see that yes, it is a thing – a real thing that’s more than just organizational agility.

Responsivity requires organizations to:

• Rethink how they're structured
• Invest substantially in learning
• Give up control, and push leadership and decision-making down
• Embrace technology
• Rethink the importance of the qualities unique to the human-side of their enterprise

Additional readings

1. "Responsive Organization Practices: Lessons from Pepisco, AirBNB, and Charity: Water," Responsive Organization Practices – Responsive Org – Medium, Seidman, D., 2018.
2. "Adaptability: The New Competitive Advantage," Harvard Business Review, Reeve, M. and Deimler, M., 2011.
3. "Linking Empowering Leadership and Employee Creativity: The Influence of Psychological Empowerment, Intrinsic Motivation, and Creative Process Engagement,” Academy of Management Journal, Zhang, X. and Bartol, K.M., 2010.
4. "Knowledge Sharing in Teams: Social Capital, Extrinsic Incentives, and Team Innovation," Group & Organization Management, Hu, L. and Randel, A.E., 2014.
5. "The 5 Trademarks of Agile Organizations," McKinsey & Co., the McKinsey Agile Tribe, 2017.