Meant to raise questions and serving as a learning opportunity for graduate students in academic program around the globe, this case study lifts the corporate curtain a bit to show how innovation through intrapreneuring really happens and decision points along the way.
The newly appointed director of Innovation Management & Strategy at Boehringer Ingelheim, a German-based multinational pharmaceutical company, is finding his way forward in his firm’s new, first-of-its-kind role, which is central to the company’s growth rejuvenation strategy. His job has a threefold mandate: to build internal networks, to establish internal structures and to leverage internal ideas. His biggest challenge, however, may be transforming the organization’s DNA. The blockbuster business model that has characterized the company for decades is no longer appropriate. Instead, the firm needs to develop healthcare products available to end users over the counter. This shift in strategy requires innovative changes in distribution, delivery and customer focus. To accomplish this goal, he needs to institutionalize innovation so that it becomes sustainable. But in doing so, he must also identify the metrics for assessing progress. The case provides an opportunity for students to step into the shoes of an innovation leader, to develop an innovation roadmap for the organization in the face of uncertainty and to understand how to engage in innovation leadership at various levels of a global enterprise.
This case has two key objectives. First, this case provides students an opportunity to grapple with the difficult decisions associated with innovation in an uncertain environment. Second, this case highlights that anyone has the ability to cultivate an entrepreneurial mindset and to lead innovation. The case divides the attributes of an innovation leader into five components: observing, questioning, experimenting, networking and associating. It shows the real-life experiences of a manager doing seemingly routine activities, who evolved into a leader who transformed the DNA of a global enterprise. The case also provides a template of the tasks, responsibilities and value-added changes as an individual moves progressively within an enterprise from an operations manager to a senior manager to an innovation leader. This case can be used either toward the beginning or toward the end of any course that addresses innovation and creative thinking in a large organization. At the beginning of a course, it illustrates the challenges of acting in the face of uncertainty in a large organization. At the end of a course, the case provides an opportunity for students to apply what they have learned about innovation, entrepreneurial thinking and innovation leadership.
The traditional world of corporate Diversity and Inclusion (D&I) is being disrupted by a new take on D&I and combining it with innovation and talent management. What some perceive as a threat to the D&I establishment may just be the next step of evolution that could invigorate and drive D&I to new heights.
Though not an entirely novel approach (see also How to create innovation culture with diversity!) the new thinking gains traction. As this could play out in different ways and only time will tell what worked, here are my thought on where we are heading.
Struggles of the Front Runner
Many traditional D&I programs, let’s call them “version 1.0” of D&I, struggle transitioning beyond a collection of affinity groups, tallying corporate demographics and competing for D&I awards to post on their webpage. In these traditional D&I programs ‘diversity’ is often understood to be reflected by more or less visible differences among individuals at the workplace while ‘inclusion’ translates to supporting defined sub-populations of employees through, for example, establishing affinity groups.
The United States is seen as the front runner of the D&I movement. D&I has been around in the U.S. corporate world for decades. For historic and demographic reasons it hones in on removing obstacles for minorities at the workplace supported also by strict legislature and execution; exercising Affirmative Action, for example.
This legacy in the U.S. lends itself to an inside focus on organizations that became the backbone of the traditional D&I programs. It comes down to the question ‘what can or should the organization do for specific groups of people’ defined by ethnicity, gender, age, sexual preference, faith, disability, war history and so on. Apparently, it still is work in progress as, for example, Silicon Valley just recently got on the public radar, which stirred up the debate afresh along the lines of D&I 1.0; see Google releases breakdown on the diversity of its workforce.
Stuck in the ‘Diversity Trap’?
The inside focus and minority messaging of D&I 1.0, however, can be limiting when D&I erodes to a process of ‘doing things right’ by pushing for quotas, ‘checking boxes’ and inflating variations of terminology perceived as ‘politically correct’. This can in fact be different from ‘doing the right thing’ for the company overall, its employees as well as the affinity groups and their constituency. It should not surprise that Affinity groups can be (and often get) stigmatized and perceived as self-serving and self-centered social networks without significant and measurable business impact.
Under this paradigm these D&I 1.0 programs struggle to get serious attention, support and funding from executives beyond operating on a minor level to ‘keep the lights on’ more for public image purposes than business drive. The fundamentals seem to get forgotten: in the end, a business exists to generate a profit, so less profitable activities are likely to be discontinued or divested. It’s a symbiosis and to say it bluntly: without healthy business there is no D&I program and no affinity groups. When this symbiosis get lopsided, D&I 1.0 gets stuck in the trap.
“Diversity” is catching on beyond the United States in Europe, for example, where many countries do not have share a highly heterogeneous demographic composition, for example. Here, companies can start with a fresh approach jumping straight to D&I 2.0 – and many do! It reminds me of developing countries installing their first phone system by skipping the landlines and starting right away with mobile phones.
The 2.0 internal focus corresponds to hiring workers that truly think differently and have different backgrounds and life experiences some of which overlaps with D&I 1.0 affinity roots. In addition, there is also an external focus putting the staff to work with a clear business proposition and reaching even beyond the organization. So here a candidate would be hired or employee promoted for their different thinking (2.0) rather than more visible differences (1.0).
While need remains for affinity groups to tend to their members needs within the organization, the “new” D&I 2.0 opens to shift focus to go beyond the organization. It goes along the lines of a statement President John F. Kennedy became famous for and that I tweaked as follows: “Don’t ask what the COMPANY can do for you ask what you can do for the COMPANY AND ITS CUSTOMERS.”
D&I 2.0 gears towards actively contributing and driving new business results in measurable ways for the better of the employees as well as the organization and its customers. A visible indicator for D&I 2.0 affinity groups helping their constituency beyond company walls is affinity groups identifying and seizing business opportunities specific to their constituency. They translate the opportunity and shepherd it trough the processes of the organization to bring it to fruition. For example, affinity groups are uniquely positioned to extending and leveraging their reach to relating customer segments in order to identify ‘small elephant’ business opportunities; see How to grow innovation elephants in large organizations.
The D&I 2.0 approach demonstrates sustainable business value which is why D&I 2.0 sells much easier to executives. It makes a compelling business case that contributes to new business growth, the life blood of every company.
U.S. companies stuck in D&I 1.0 are hard pressed to keep up with the D&I 2.0 developments and overcome their inner struggle and resistance. With decades of legacy, D&I 1.0 programs in many organizations lack the vision and ability to make a compelling business case, to develop a sound strategy as well as capability and skill to implement it effectively. This is the requirement, however, to truly see eye-to-eye with senior executives and get their full support. This can become a serious disadvantage in the markets relating to products and customers but also in attracting talent.
In the end, the saying holds true that “talent attracts talent” and all organizations compete over talent to compete and succeed. Therefore, a D&I 2.0 program combines business focus and talent management while tying it back to the core of diversity and inclusion: Fostering diverse thinkers and leveling the playing field for all employees. This requires a level playing field that offers the same opportunities to all employees, which is the real challenge.
How do you level the playing field effectively in a large organization? How this will be implemented becomes the differentiating success factor for companies transitioning to D&I 2.0!
Here is a example 2.0-style for a level playing filed that has its roots in the D&I affinity group space yet opened up to include the entire workforce. It empowers and actively engages employees while leveraging diversity, inclusion and talent management for innovative solutions with profitable business outcomes. It may take a minute or two to see the connection between D&I, talent and disruptive innovation but it is at work right here in the School for Intrapreneurs: Lessons from a FORTUNE Global 500 company.
Previous posts relating to innovation and employee affinity groups / employee resource groups (ERG) / business resource groups (BRG):
The increasing diversity of employees at the workplace led to employees gathering along affinity dimensions like birds-of-a-feather to form networking groups within organizations. The next step goes beyond affinity and establishes employee resource groups (ERGs) strategically as a business resource and powerful driver for measurable business impact and strategic innovation bottom-up.
Let’s start with what it takes to found a successful ERG on a high level and then drill down to real-life examples and practical advice. What you cannot go without is a strategy that creates a business need before you drum up people, which creates a buzz!
While many companiesdemand creativity and innovation from their staff few companies seem to know how to make it work. – Is your organization among those hiring new staff all the time to innovate? The hire-to-innovate practice alone is not a sustainable strategy and backfires easily.
Strategic innovation hands-on: Who hasn’t heard of successful organizations that pride their innovation culture? But the real question is what successful innovators do differently to sharpen their innovative edge over and over again – and how your organization can get there!
What every new employee resource group (ERG) requires most are people: the life-blood for ideas and activities! But how do you reach out to employees, help them understand the value of the ERG and get them involved to engage actively?
What do Generation Y (GenY) oriented Employee Resource Groups (ERG) share with the military? – More than you expect! A constant supply of active members is the life-blood for any ERG to put plans to action and prevent established activists from burning out. The U.S. Army faces a similar challenge every year: how to attract and recruit the youngest adult generation? Next-generation ERGs listen up: Let the U.S. Army work for you and learn some practical lessons!
It’s a long list to describe Generation Y with a commonly unfavorable preconception. This youngest generation at the workworkplacern after 1980, also called Millennial) is said to be: lazy, impatient, needy, entitled, taking up too much of my time, expecting work to be fun, seeking instant gratifications, hop from company to company, want promotions right away, give their opinion all the time and so on. But is it really that easy to characterize a new generation?Don’t miss my Top 10 Innovation posts and Top 10 posts for Intrapreneurs!
What do Generation Y (GenY) oriented Employee Resource Groups (ERG) share with the military? – More than you expect! A constant supply of active members is the life-blood for any ERG to put plans into action and prevent established activists from burning out. The U.S. Army faces a similar challenge every year: how to attract and recruit the youngest adult generation? Next-generation ERGs listen up: Let the U.S. Army work for you and learn some practical lessons!
The U.S. Army brand
Everyone knows the U.S. Army. This American icon has been around for well over 230 years!
The ‘U.S. Army’ is more than a well-known military force. We recognize it as a brand. Just like ‘Coca-Cola’ or ‘IBM’ portray and advertise a certain company image to sell its product, the U.S. Army needs to constantly appeal with a unique value proposition for new recruits to enlist. The ‘product’ offered if what the recruit expect to get out of it along the lines of ‘what is in it for me’ (WIIFM).
From this commercial perspective, it seems only natural that the U.S. Army hires world-class advertisement agencies to help meeting recruitment targets. Marketing and advertisement gained importance especially since the U.S. Army turned into an all-volunteer force in 1973. This is similar to a voluntary ERG membership.
Aiming at a moving target
We distinguish four generations at the workplace today. Each comes with different motivations and characteristics. The collective personality or zeitgeist influences each generation’s behavior and values. These need to be considered to adapt and effectively connect with each generation in its own way to maximize their potential and productivity for the better of the organization overall.
You can easily find this spectrum of generations reflected in the historic recruitment campaigns of the U.S. Army. The U.S. Army ‘brand’ changes over time and adapts to appeal and attract fresh recruits.
Let’s take a look at these recruiting campaigns for the four generations before we move on to extract the practical benefits for ERGs today:
1. Veterans, Silent or Traditional Generation (born 1922 to 1945)
I admit, in practice this campaign hardly affects today’s ERG anymore since most of this age group has already left the workforce by now.
Nonetheless, using the ‘propaganda’ flavor in this message proved very successful in both WWI and WWII.
‘Uncle Sam’ captures the essence of a generation of disciplined conformers with much respect for authority and an ingrained understanding that duty to the country is an obligation.
2. Baby Boomers (born 1946 to 1964)
The U.S. Army became an all-volunteer force in 1973, which changed the recruiting game entirely. Not being able to rely on a general draft anymore, the U.S. Army needed a new approach to attract a steady stream of voluntary recruits.
This coincided with an upcoming new generation of the younger Baby Boomers generally characterized as full of optimism and thirst for social engagement. To tackle the new challenge of effective marketing, the U.S. Army brought in a professional advertisement agency.
The first ads to the “Today’s Army wants to join you” campaign (1971 to 1980) suggest membership in a nice group of people sharing many similarities.
Also, women were now encouraged to enlist. It’s all about optimism, getting together and being involved!
This was a gutsy and somewhat liberal first step to attract a volunteer force. Though thinking ‘out-of-the-box’ it did not work out all that smoothly as indicated by changes following quickly.
This ad (1973 to 1976) is like a pendulum swinging back to the opposite extreme!
Tone and focus changed dramatically in this newer version of “Join the People” emphasizing the seriousness and commitment of being a soldier while also highlighting personal benefits.
The message is clear: No more playing around here, responsibility and duty is back, no more football on the beach!
Finally, the U.S. Army settled on a more balanced campaign.
Here is an example for “This Is the Army” campaign ads. The headlines read “In Europe You’re on Duty 24 Hours a Day, but the Rest of the Time Is Your Own” or “Back home, I wouldn’t mind doing the work I’m doing here” influenced also by a loss of military reputation after the Vietnam war.
One campaign or another, the U.S. Army missed its recruitment goal by more than 17.000 in 1979. This announced a new generation, GenX, coming with a different background and values that required the U.S. Army to re-think and find a new approach.
3. Generation X (born 1965 to 1980)
Birthrates cut into the recruitment pool. In addition, the smaller Generation X turns out to be tough to target.
This generation came with an inherent distrust of authority originating from geopolitical change as well as changes in western society and family structures. Despite GenX’s dominant drive for independence and self-reliance, this generation is also looking for structure and direction in life.
“Be All You Can Be” (1980 to 2001) emphasizes a personal challenge and an opportunity for self-development, i.e. taking charge of your fate to become a better individual. Note that the “we” is gone, it’s all about “me” for GenX.
The benefits offered by the U.S. Army included significant education support. (The U.S. military remains the largest ‘education organization’ in the U.S. in terms of funding tuition, in particular.)
The succeeding “Army of One” campaign (2001 to 2006) hits the true core of the independent GenX by underlining the single person in their message.
However, the campaign was also short-lived because a focus on the independent individual appeared contrary to the idea of teamwork that any military organization relies on and cannot work without.
Facing demographic decline, recruiting advertisement reached out into Spanish-speaking ‘markets’ (in a campaign known as “Yo Soy el Army”) to tap into the increasing Hispanic population.
The U.S. Army made more use of TV advertisement to reach GenX, a generation brought up in front of a TV.
Perhaps the boldest recruitment stunt was the 1986 smash movie “Top Gun” – sponsored by the Pentagon in need of a major image boost. And it worked! Think about it: Tom Cruise is a self-reliant ace who has a problem with accepting authority – a poster-boy Gen-Xer. In the end, he became a valuable team player for the greater good meeting the military’s needs and got the girl.
4. Generation Y or Millennials (born 1981 to 2001)
The ongoing “Army Strong” campaign builds on a proposition of lifelong strength through training, teamwork, shared values and personal experience. – What a change from the previous focus on independence for GenX!
Here, ‘strength’ is meant literally: The U.S. Army overhauled the fitness training to ‘toughen up’ this generation. Weakened by a more tranquil lifestyle (such as video-gaming), GenY-ers often lack experience with physical confrontation that is unavoidable and crucial for effective warriors.
Perhaps confusing for older generations, “Army Strong” caters to GenY’s interest in making a difference not only in their lives but also for their extended communities. Work is less central in this generation while individuality and leisure value high.
The campaign milks the social ties deliberately addressing not only recruits but also the people who love and support them, i.e. the people who influence the recruits’ decisions such as family and friends as well as the broader public.
Consequently, the U.S. Army presents itself more as a responsible and somewhat selfless social service in advertisements by highlighting how soldiers serve their communities and for their nation beyond executing force during a conflict.
The U.S. Army adapts its spectrum of communication channels to keep up with GenY, a generation for which technology serves as an extension of their personality and their physical selves. Constantly online and connectedness with an appealing adventurous fun-factor, the U.S. Army is present across the entire landscape of noteworthy social media these days – it even entertains its own video game to warm up GenY.
Targets on the demographic curve
Next-generation ERGs and the U.S. Army both aim to attract a specific demographic: The U.S. Army targets 17 to 24-year-old recruits, looking at the lower end, while ERGs typically look for the older end, i.e. young adults with professional training, perhaps a college degree and some work experience.
Thus, the U.S. Army’s target demographic starts just a few years younger than the typical employees entering the (civilian) workforce, so the U.S. Army operates a bit ahead of the age curve that becomes relevant for ERG membership recruitment.
Let the U.S. Army do your research!
Using this time difference to their advantage, next-generation ERGs, in particular, benefit from the U.S. Army doing the heavy lifting with regard to generational research. With the U.S. Army’s advertisement contract worth more than $200 million each year (or $2,500+ per recruit) don’t fool yourself: an ERG will never have funds anywhere close to hire a top-notch advertisement agency for attracting new members … unless you are perhaps the guys who invented Google or so… J
From a next-generation-ERG’s perspective, here is what you can reap:
Using its marketing dollars, the U.S. Army identifies the characteristics of your future demographics for you – for free! Look at how the U.S. Army is targeting today. It gives you a clear picture of what the characteristics are of your next ERG generation tomorrow.
The U.S. Army shares its findings publicly. This includes a sharp outline of the specific characteristics of the youngest employees that enter your workplace now or it in the near future. So, keep an eye on the U.S. Army’s next recruiting campaign and time is on your side!
Trial-and-Error without getting hurt
It gets even better. The U.S. Army provides you with field test results on whether their findings hold true in practice: The U.S. Army’s annual recruitment figures serve as a success criterion for the recruiting campaign. These figures are available in the public domain and found easily online within seconds.
The early warning signal
If the actual Army recruitment figure exceeds or falls short of the target figure (somewhere around 80.000 recruits each year), you get an idea what worked and what did not. The latter reflects not only that the campaign lost effectiveness but may also indicate that the next generation has arrived with a changed set of values and characteristics. – Use this as a free early‑warning system for your ERG!
Note that over the past five years the U.S. Army’s number of “accessions” (=recruits) exceeded the “mission” (=target value); note though that the “mission” bar was lowered in 2009 and 2010.
When the U.S. Army misses its recruitment target in the future, the next campaign is just around the corner. A significant change in the core message targets the next generation. So, here comes your next lesson and opportunity for the ERGs!
Back to the Future?
If the U.S. Army is not for you, don’t worry. Choose any military branch of your liking – they all face the same challenge. You don’t need to love the military to learn from it, and the lessons are valuable.
As a general yet effective approach to strategic innovation, keep an eye on industries and organizations that face similar challenges earlier than you do. Learn from them and prepare your business and ERG for the change.
While many companies demand creativity and innovation from their staff few companies seem to know how to make it work. – Is your organization among those hiring new staff all the time to innovate? The hire-to-innovate practice alone is not a sustainable strategy and backfires easily.
An alternative and sustainable way to tap deep into your employees’ creative potential and turning it into solid business value is by forming an employee resource group (ERG). A well-crafted ERG serves as a powerful and strategic innovation engine for your organization!
Losing the innovative edge?
It is the large companies that seem to struggle with innovation most. When companies grow they tend to become less innovative. When this happens we see great talent turning into under-performing employees. – Why is that and is there a way out?
Stuck in mental models of the past?
Remember the heavy dinosaurs that finally got stuck in the pre-history tar pits and starved, too heavy to move themselves out of the calamity? Mental models are the tar pits that companies grow to get stuck in – unless they find a way to shed (mental) weight and think nimble again to survive.
The mental models often originate from days past when the business started and flourished with initial success. The models worked when the company grew back then but models out-date easily over time. At some point the company began to work harder to standardize its processes to ensure the output is delivered reliably and predictably and costs are driven down: the focus shifted from innovation to efficiency. Specialized and refined business functions create increasingly complex and bureaucratic processes, ‘standard operating procedures’ rule the course of action. Things don’t move fast here anymore. Improvement ideas from employee on the floor hardly make it to the top executives and starve somewhere in between, probably in the famous ‘idea box’…
This focus on incremental efficiency also traps R&D departments to a point where true creativity and innovation get stifled, the innovative output drops. In short, the larger a company the less it innovates. Sounds familiar?
Many companies chose the dangerous and seemingly easy way out in buying new ideas from the outside through acquisitions and hiring ‘new talent’. The danger lays in applying this practice too broadly and becoming reliant on this practice, i.e. getting trapped in a vicious and reinforcing cycle. This practice also alienates and frustrates the more seasoned employees who feel underutilized and –quite rightly so see their career opportunities dwindling. Soon enough the sour side of the hire-for-innovation practice for employees becomes transparent also to the newer employees and drives them away in frustration. This organization just found the perfect recipe to turn top talent into poor performers!
Don’t waste your human capital
Bringing in fresh brains to an organization may justify mergers, acquisitions or hiring at times – but not as a strategy for continuous innovation and without also at least trying to tap into the innovative capacity that lays dormant within the organization.
Don’t write your staff off easily by following blindly the common yet wrong assumption that an employee loses the creative spirit after a few years and that new hires would be more innovative than whom we already have working for us. Haven’t we hired the best and brightest consistently in the past? Well, then this logic doesn’t add up, right?
Ask yourself: have you lost your innovative edge? Will you personally be more innovative once you change to another employer? – I don’t think so either. The good news is that even if you don’t believe it, changes are that managers and human resource experts of your new employer do, at least the ones who follow the outdated mental model! – But then, how long can you expect to last there before you get written off? It’s like getting on a train to nowhere.
Derailing the train to nowhere
But seriously, the seasoned employees’ intimate knowledge of the organization and its people can hold enormous potential for innovation not only under financial considerations but also as a morale booster for staff. Getting personally involved more and engaging them in driving change again actively leads the way to measurable and favorable results for the organization. These employees are the people who know your business, your markets, your customers and where to find resources and short-cuts if needed to get things done! Remember the “Radar” character in M*A*S*H who creatively procured whatever his unit needed by knowing how to play ‘the system’ and navigate the cliffs of bureaucracy on unconventional routes?
So, how can you motivate and (re-)activate your employees to come forward with brilliant ideas and getting them implemented to boost the organization’s profitability? How can you spread new hope and direct the enthusiasm to practical and meaningful outcomes for the company and the individual employee alike?
Facing organizational barriers
There is no shortage of good ideas in the heads of employees. Too few of them, however, actually get picked up and implemented since organizational barriers have many dimensions the need to be overcome first. Here are some examples:
A vertical barrier effectively disconnects employees from the executive level which hold the (financial and other) resources to make things happen. Penetrating this barrier means to connect the people within the organization closely and effectively again.> Readers of my previous post What does take to keep innovating? (part 1) will recognize that an executive champion is needed who brings together the technical and business champions. If you feel intrapreneurial and consider becoming an executive champion, check this out: How to become the strategic innovation leader? (part 2)
The horizontal barrier separates business functions and operating units that evolved to become silos or manager’s ‘fiefdoms’ of sub-optimized local productivity often with lesser concern to the overall performance of the organization. What you are up against here is often enough beyond specialized deep expertise but also defensive egos and managerial status thinking that led to a comfortable and change-adverse local equilibrium. As an intrapreneur you bring a much needed yet disruptive element to the organization. Since you are rocking the boat you can get caught up in ‘politics’ easily. Functional managers and their staff may perceive you as throwing a wrench into their well-oiled and fine-tuned machine that could jeopardize not only their unit’s efficiency but also their personal incentives for keeping operations running smoothly.> For more insight on the tension field of management vs. leadership check out Leadership vs Management? What is wrong with middle management?
Another barrier relates to the perceived value that your work creates for the organization, so let’s call it the value barrier: When you start acting intrapreneurial, you may be seen as someone wasting resources, incurring additional cost or generating questionable value (if any value at all) in the eyes of executives and other managers.
Therefore it is of critical importance to clearly demonstrate the business value your work adds to the organization. Based on an unambiguous success metrics the value proposition needs to be communicated clearly and frequently especially to executive management to gain their buy-in and active support.
These and possibly more barriers are a tough challenge. Now, I assume you are not the almighty ‘Vice President of Really Cool Stuff’ (that would be my favorite future job title!) but hold a somewhat lower rank. Perhaps you got stuck in the wrong department (the one without the Really Cool Stuff).
So, where do you start to innovate and ‘rescue’ your organization from a looming train-wreck scenario?
Breaking down barriers by innovating from within using ERGs
A vehicle I tried out quite successfully over the past years was forming an employee resource group (ERG). This grassroots approach has the power to crash right through the vertical, horizontal and value barriers while driving change effectively and sustainably through the organization as a strategic innovation engine.
Here are the first steps on the way to founding an ERG:
Identify a business need and build a business case, i.e. a clear value proposition aimed at executive management convincing them of the need and benefits of forming an ERG within the limits of company policies. Attracting an influential executive sponsor to gain buy-in is a key requirement for instituting an ERG successfully. The sponsor serves as a political and resourceful ally, an experienced advisor and advocate but also ensures strategic alignment of the ERG’s activities with the broader goals of the company.Since executives value their time more than yours, keep it short and to the point. Think executive summary style and offer details separately for those who chose to dig deeper and to demonstrate that you thought this whole thing through. If your organization already has a distinguished officer or departments with a vested interest in employee engagement for example then connect, collaborate and leverage your joint forces.> More on how to build a case study for an ERG at: Q&A – Case study for founding a business-focused ERG
Get organized! Seek voluntary members and reach out to future constituency of the ERG. Active members are needed as the driving force and source of ideas that the ERG turns into business projects aimed to innovate and energize the organization.
The first ERG I founded was “NxGen”, which stands for the “Next Generation at the Workplace”. The NxGen ERG has a generational orientation but is open to all employees regardless of their age or workplace generation. Nonetheless, from the start mostly the youngest employees (Generation Y) drove NxGen. In many cases they did not know of each other as the GenY-ers were spread thin across the various business functions of the company.The GenY-ers, in particular, found a forum in the NxGen ERG to get to know each other in the first place. We then focused on goals based on shared values or needs to build a strong support network within the company. At all times we kept the ERG open and inclusive to interested employees join from other workplace generations.
The ERG offers its members a safe environment to discuss issues and ideas. It also serves as an informal forum to find coaches and mentors for personal development or specific projects and initiatives. Active ERG membership allows less experienced employees to quickly acquire new skills and test them in real-life by running a project hands-on even in areas outside of their job description or business function to address needs close to their heart with tangible business value. Here, the ERG serves as a very practical leadership development pipeline and safe ground for experimentation within the organization.
Get active by launching business-focused projects. Again, you are targeting management and executives in particular to build credibility and thereby become more effective over time.Start with feasible projects of high visibility and short duration that address a significant business need with a clear and quantifiable success metrics. For each project seek executive sponsorship at the highest level you can attain from the business area that the project affects. Make sure to communicate your successes broadly and frequently to kick-start the ERG. Stick to a clear, specific and unambiguous metrics for your success; if you can tie it to a monetary ROI the better, as this is the language of business.> More on establishing a success metric under: Driving the ROI – where to start your projects metrics?
Showcasing and celebrating your successes as an ERG motivates the already active members, keeps attracting new members and builds credibility among executives to keep the ERG wheels turning as a strategic innovation engine for your organization.
On a personal note
The example of the NxGen ERG is very real. NxGen was nationally recognized as best-practices ERG within 5 months (!) of its founding and became a valued and frequent sounding board for C-level executives within one year. The ERG has no funds of its own yet runs projects and initiatives nationally and internationally that already shifted the company culture and opened it more for change.
The proposed business model for ERGs forms a foundation for continued innovation, strategic alignment and measurable results. It turns an ERG into a true and sustainable business resource for its members as well as the hosting organization.
Summary – The increasing diversity of employees at the workplace led to employees gathering along affinity dimensions like birds-of-a-feather to form networking groups within organizations. The next step goes beyond affinity and establishes employee resource groups (ERGs) strategically as a business resource and powerful driver for measurable business impact and strategic innovation bottom-up.
Limited to social?
Employee resource groups (ERGs) emerge for various reasons. They tend to start with a social underpinning that naturally unites and organizes like-minded employees. ERGs come in different flavors mostly along the traditional lines of diversity characteristics such as ethnicity, skin color, age, gender, physical (dis)ability, sexual orientation, military veterans, etc.
For ERGs, a ‘social stickiness’ is important and can be the key integrating factor of employee populations within organizations. It may also influence the choices of ERG goals and activities to a large extent. This may result, however, in possibly limiting the ERG and its members to be seen as a ‘social club’ of sorts by others. Management, in particular, may not see the direct (or even indirect) positive business impact that an ERG can have.
This is where ERGs can fall short: when they fail to tie a strong business-focused bond that ensures continued support by leadership that in return ensures the ERG can sustain and proper for the better of its members as well as the hosting organization.
Becoming a business resource
From a management perspective, ERGs can provide social ties within the workforce that are mostly seen as favorable ‑ at least as long as it does not affect the employee performance; whether perceived or real.
Better off is the ERG that demonstrates an unambiguous contribution to the bottom line. A clear business value proposition sets a solid foundation that makes it easy to communicate with and convince executives securing their continued support. The company benefits from positive business outcomes as a direct result of the ERG activities, while it engages employees broader and deeper. This uses more of the employees’ true potential to ‘maximize the human capital’ as an important element also of employee engagement, development and retention.
This approach serves not only the company but has advantages also for its employees and the ERG in return. The ERG members benefit directly in many ways such as by interesting work outside the immediate scope of their job, by developing new skills and by increasing their visibility within the organization and continued ‘employability’, i.e. their personal market value as an employee.
So what is the key to success, how do you ‘build’ an innovation-driven and business-focused ERG?
A ‘business model’ for ERGs
My proposal is to establish the ERG as a self-propelling and sustainable system, an ongoing process that continues functioning quite independently from changes in the ERG leadership and consistently delivers innovations. Individual leaders are important for operations and make valuable contributions, but the ERG must be able to continue functioning even if key players become unavailable and replaced.
The following dimensions are generic and apply to any organization. Here, we use them to describe a general business model for the ERG:
To illustrate the model and making it more tangible I use a generic example. It is based on NxGen (for Next Generation at the Workplace), a generational-oriented and business-focused ERG that I founded. NxGen was recognized in early 2010 as a best-practices approach by the National Affinity Leadership Congress (NALC).
The strategy brings to the point the ERG’s goal and objectives. A well-thought-out value proposition is a foundation for the ERG.
For example, NxGen is a forum to develop leadership skills, networking and problem-solving that aims to open up cross-functional/cross-disciplinary opportunities for its active members through strategic business projects with measurable results. As a goal, NxGen aims to become a sounding board for management as a valued business resource.
2. People practices
People, active volunteers, are the life-blood of every ERG. Staffing and selection are crucial and continued activities to induce fresh ideas and prevent burn-out of established ERG members. What you are looking for are active volunteers who are passionate and energetic. You want members who become active change agents, role models, within the organization. Value a diverse set of backgrounds and capabilities that can complement another.
Rather than trying to recruit new members, focus on how to attract new members to engage and actively participate (in contrast to the ones signing up to receive email updates or a periodic newsletter, which is a passive form of membership). NxGen membership is open to all employees.
There is a broad range of benefits for active ERG members that can include (but are definitely not limited to):
Insight and work in other business functions and departments
Members lead a relevant project possibly in another business function
Experiment and learn in a safe and nurturing environment
Develop and apply skills like leadership, consulting, problem-solving
Build an open and supportive network with members coaching each other
Increased visibility within the organization
Potential to open new career opportunities
Making a measurable change in the organization here and now.
At NxGen, we see that younger employees (primarily Generation Y also called Millennial, born after 1980) tend to drive the ERG activities most. The explanations I offer is that GenY’ers, in particular, enter the workplace as well-educated professionals, optimistic and motivated to make a difference. GenY was brought up to believe they can achieve anything and are interested to explore lateral career moves. They are used to collaborating in teams to overcome obstacles and network while leveraging technology effectively to this end. At the workplace, GenY typically is not (yet) part of the decision-making bodies due to their junior positions ‑ but they do want to be heard (and should be listed to given their increasing numbers in the demographic shift of the population that has reached the workforce).
The ERG acts through business-relevant projects. At NxGen, the member ‘grass-roots’ identify otherwise un-addressed or under-served business needs that the ERG chooses to pursue. Based on a clear value proposition (return-on-investment, ROI) for the organization the ERG seeks executive sponsorship for each project. The executive sponsor ensures strategic alignment with the organization’s goal, expertise in the functional area, political support and funding for the project (since the ERG has no funds of its own).
The project scope often lays outside of the immediate job description of the ERG-appointed project leader allowing for broader hands-on learning opportunities. Applying professional project management methods to all projects ensures the projects deliver the specified deliverables.
The ERG core team steers and administrates the ERG project portfolio which is documented in an annual business plan and shared publicly. As resources are limited, not all imaginable projects can be conducted at once but are staged. Projects can build upon and leverage each other while making use of synergies whenever possible.
In the beginning, it might be challenging to find meaningful projects that make the best use of the ERG’s resources and capabilities with favorable business impact. It takes time and persistence to develop a trustful relationship with executive management and to gain credibility as an ERG to attracts more complex and important projects from management in return.
NxGen works and communicates openly, it acts transparently and leverages (social) media to inform and connect with its members and non-members displaying operations and result of the ERG’s work.
The NxGen ERG operates within a general framework set by a company’s office to ensure all ERGs abide the company policies. This office also provides an organizational home for ERGs within the company. It generally coordinates and supports the different activities across ERGs and ensures each ERG has a distinguished executive sponsor to connect the ERG with senior management.
A charter defines the basic roles and processes of the NxGen ERG in more detail and is posted publicly. A core team of active members guides the ERG activities and ensures ERG operability. The core team is lead by the ERG’s elected chair and co-chair(s); it further comprises the project leaders, distinguished role-holders, and liaisons to key functions in the organization. The core team members support and advise each other. The ERG provides a safe and social environment that relies on trust among the members to connect, to build relationships, to network and to run projects.
NxGen actively reaches out to other ERGs, innovative groups within the organization but also other operating units and companies to cooperate, share, benchmark and collaborate on common goals.
5. Metrics and rewards system
How do you measure success, i.e. the effectiveness of an ERG? An annual business plan covers the portfolio of ERG projects. It serves as an instrument to measure the ERG performance across all ERG activities that the ERG chair is held accountable for.
What are the rewards for active ERG members? Besides the benefits listed in the above section ‘People’, accountability and success for individual members derive from their projects or their input to other ERG activities that all have clear objectives and a success metrics attached. Driving the change and making a difference is a reward in itself.
NxGen and individual members received several awards and recognition for their work inside and outside the company which the ERG celebrates in public. Some members list their ERG involvement and experience proudly on their résumé which is an indicator that the ERG’s value proposition is effective for its members, i.e. the members value the ERG membership, projects, recognition and awards as means of their ‘employability’.
Building the ERG as an innovation incubator
The business model positions the ERG clearly as a powerful business resource for the organization but it can be even more. The ERG can serve as an ‘innovation incubator’ by combining an attractive system with creative space in an effective governance framework. The processes create measurable value for the individual and the organization that can significantly contribute to process innovation and also drives product innovation.
In an empowering bottom-up movement, the ERG directly connects its active members from any level of hierarchy with the decision-makers high up. This bears the potential to cut right through established or perceived boundaries such as hierarchy, bureaucracy, and red-tape or functional silos that may severely limit the effectiveness and innovative effectiveness of other units that were created top-down within the organization.
Herein lays the deeper potential of ERGs as a true business resource and going beyond possible self-inflicted limitation to social affinity. ERGs can well be the means that contribute to driving the future success of an organization for an organization that understands and value how ERGs open opportunities to tap into its workforce and unleashes hidden potential.
GenY for managers: look beyond the labels! Understand the drivers and grasp opportunities that Generation Y brings to your workplace!
It’s a long list to describe Generation Y with a commonly unfavorable preconception. This youngest generation at the work place (born after 1980, also called Millennials) is said to be: lazy, impatient, needy, entitled, taking up too much of my time, expecting work to be fun, seeking instant gratifications, hop from company to company, want promotions right away, give their opinion all the time and so on. But is it really that easy to characterize a new generation?
Generational clash has changed Clashes between generations were always present to some degree: Young people want to prove themselves, probe the boundaries and seek opportunity. The older are in power, hold the wealth, make the decisions and are typically reluctant to change and letting go of their well-established and comfortable status quo.
However, something significant has changed: Where in the past three generations used to live at the same time, we now see that four generations are working together simultaneously. A conflict that used to predominate the homes is now also present in the workplace (as a result of several factors that include demographic change, geo-economical impact, longer life expectancy and increasing retirement age).
While in our personal lives we may be able to avoid or by-pass some areas of generational friction these same ways may not be possible in the workplace. Here you have to get along and collaborate with your co-workers. This is challenging not only for the multi-generational workforce but also for the managers facing the new need to mitigate generational conflicts, integrate the staff, and provide a constructive and collaborative work environment.
Why managers struggle with the mysterious Generation Y For managers it is important to take a close look at GenY, since GenY outnumbers the significantly smaller GenX (born 1965 to 1980) and is the largest workforce generation. The Baby Boomers (born between 1946 and 1964) retire from the regular workforce leaving a gap. Nonetheless, given the typical career progression, higher management positions are still firmly held by Baby Boomers or their preceding Pre-Boomer generation (born before 1946) – the generations farthest apart from GenY.
Ignoring the differences between generations or addressing them in a ‘one-size-fits-all’ manner backfires. It also misses to leverage particular traits of the young generation that become critical for an organization to sustain in the face of change coming at ever faster pace and with increasing complexity (see my earlier blog: ‘Complexity’ is the 2015 challenge! – Are leaders prepared for ‘glocal’?).
It is Generation Y that people seem to have the hardest time wrapping their heads around. Simply pigeon-holing GenY does not do them justice and doesn’t help understanding and managing them either.
‘Kids’ entering the workplace? It is even a common misconception that GenY have not yet arrived at the workplace and that they are ‘kids’ just coming out of school or college. If you consider the demographics, however, the early GenY’ers are 30 years old now, so they are hardly ‘kids’ anymore. They come well educated and already gained some experience at the workplace for several years now. They are not ‘out there’ anymore but ‘in here’ now!
Instant gratification and fast promotions? It is true that GenY seeks fun (who doesn’t?) and grew up with high-end video games in which the players typically rack up points in fast progression opening up new levels or challenges to continue the game. But that’s only one side of the coin. It also forms a mindset to figure things out, address challenges with optimism in a playful way, master technology, compete in ever-changing surrounding as well as hooking up with a network of friends to play and succeed together – don’t be fooled, these are the critical basic skills in the world we live and do business in!
Entitled? Look at GenY’s parents that determined the up-bringing: The generation of Baby Boomer parents indulged in perks and benefits like only few before them; the succeeding GenX only saw these goodies going away when they started entering the workforce. Fortunes were racked up or inherited by Baby Boomers.
GenY kids often grew up in a world of abundance; nothing was too good for them or out of reach – and sponsored freely by the parents with enough cash in their pockets to offer their kids any imaginable aspect of a ‘better life’.
Instead of flipping burgers during summer holidays to earn their own money, many GenY kids had spare time on their hand to learn and have fun while ‘helicopter parents’ took (and continue to) care for their well-being and even professional advancement as adults. Who would say ‘No’ if you are young and your parents offered to pay for your car, your shopping dreams or set you up for a prosperous and promising career?
This way many Baby Boomer parents did their part to breed a generational culture of entitlement or at least high expectations while reinforcing the message “You can do anything and succeed!” – It does not seem fair to hold this upbringing against their kids. (Instead, it provokes the questions why Baby Boomers, in particular, seem to have such a hard time letting go to let their kids live their own lives without excessive parental hand-holding? – But that is a topic for another time…)
GenY is prepared, assertive and speaks up. They know what they want and how to get it. Don’t underestimate them as customers either, since GenY is a serious economic power and probably even more so than any previous young generation in history!
Lazy, impatient and needy? Let me share with you my first-hand experience with GenY at the workplace. I gain my insight as the founder and chair of a generation-oriented employee resource group (ERG) which gives me ample opportunities to work closely with GenY’ers on various projects. It made me probe my own biases and assumptions based on practical work experience (which, by the way, I don’t always see reflected in articles written about GenY).
What I learned is quite different from most preconceptions: The GenY’ers work hard and with ambition, they are not a bit lazy.
When we coin GenY ‘needy’ or ‘taking up too much of my time’ we are actually ignoring that they want to contribute to a meaningful cause in the most effective way. What they are asking is to understand the ‘why’ before going to work. This questions and challenges the status quo in a constructive manner – which is good! If we cannot answer their question satisfactory or insist that we already know the best way ‘how-to’ then it is us (the non-GenY’ers) standing in the way of innovation and change. As a general truth it is not their questions that can be compromising but rather our answers.
Some tasks require not only book-smarts but also experience (including managing people) that many GenY’ers cannot have made at this time in their careers. Therefore, they can be over-confident and over-estimate their abilities and effectiveness; support them and offer them learning experiences as a reality-check and growth opportunity.
Empower GenY to put their specific inherent qualities to best use given that they tend to be natural networkers and solvers of complex problems, they user modern technology effectively and approach different ethnicities and cultures with an embracing ‘color-blindness’. – Are these not exactly the qualities that we need in the world we live and work in today and tomorrow?
Engagement and empowerment drives loyalty A short while back I wrote in this forum about How to retain talent under the new workplace paradigm? It comes down to approaching the workforce differently by offering flexible career paths, support staff to remain employable and accommodate benefits to their needs instead of hiding behind archaic one-size-fits-all models.
As managers we need to consider GenY’s particular needs and expectations to attract, engage and retain them. We need to leverage their unique talents and skills for the better of the company while helping them to development and grow. Empowerment includes guidance and creating opportunities for GenY to make mistakes, learn and get active ‘their way’ in areas that wakes their interest and that are meaningful to them as well as to your organization. – Then relax, sit back and see beautiful surprises unfold!
Leverage employee resource groups (ERG) as an opportunity Some managers may ask on how to get started, what could be a first step to engage and leverage GenY? One way of doing it is by founding an inclusive ERG to focus and organize your emerging workforce.
As an example, I founded the Next Generation at the Workplace (coined ‘NxGen’) ERG that has already changed the company’s perception of employee engagement, increased ERG credibility and raised the business value seen in ERGs among managers. Our NxGen approach is to address opportunities in business-relevant projects with measurable results for the business (such as return-of-investment, ROI). Our projects often focus on relevant topics are outside our immediate field of work but are always sponsored by an executive to ensure governance and strategic alignment. These projects provide an excellent and safe training ground for up-and-coming leaders. NxGen supports the organization directly through the project’s immediate deliverables as well as indirectly by establishing a free and hands-on management development program that comes with networking, coaching, and skill development already built-in. Everyone wins!
No matter if you have a dedicated ERG or not, don’t discount GenY based on labels. Dig deeper to find the treasures that this generation has to offer. Your organization’s future relies on them!
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NxGen was nationally recognized as a ‘cutting-edge’ approach to employee resource groups by the Network and Affinity Leadership Congress 2010 (NALC), a national conference focused on training ERG leaders to align with the business goals of their organizations.
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