10x vs 10% – Are you still ready for breakthrough innovation?
Google co-founder and CEO, Larry Page, continues to have big expectations for his employees: come up with products and services that are 10 times better than their competitors, hence “10x” – that’s one order of magnitude!
10X vs. 10%
Many entrepreneurs and start-up companies, they seem to ‘shoot for the moon’! Far more than 90% of these ventures fail within just a few years. Few, such as Google, succeeded and grew to dominate internet giants. The question remains though if they can maintain the innovative pace of 10x when the innovation rate tends to sink closer to 10% in matured companies.
How big dreams changed the world
This challenge effects also other visionaries that changed the face of the world and transformed society in ways nobody has imagined, such as:
- Apple building a micro-computer at times when mainframes ruled the digital world and only few could envision a demand for personal computing
- eBay establishing a new online sales model that millions around the globe use every day
- Google taking over the browser market through simplicity, by giving everyone control to use the most complex machine on Earth, the Internet
- Microsoft cultivated software licensing to sell one piece of software millions of times over effortlessly at minimal cost.
As disruptive and transformative ventures grow and mature, the definition of what is perceived ‘innovate’ changes. Both momentum and focus shifts. With size companies struggle to continue innovating similar to their nimble start-up origins.
What happens? With size comes a downshift from disruptive to incremental change. Simplicity makes space for adding features. Adding features makes products more complex and ultimately less usable and appealing to the majority of customers.
Look at Microsoft’s Offices products, for example: Wouldn’t you wish they came out with a ‘light’ version with reduced feature complexity by let’s say 75%, so the software becomes easy to use again?
It also starts haunting Google, as their established products such as Search or Gmail need to be maintained. Additional “improvements” aka. features creep in over time. Perhaps you noticed yourself that recently Google search results seem to be less specific and all over the place while the experimentation-happy Gmail interface confuses with ever new features?
Even the most iconic and transformative companies experience the reduction of their innovative rate from 10X to an incremental 10% or so.
Funny thing is that -at least in technology- incremental improvement quickly becomes obsolete with the next disruptive jump. The current technology matures up along the S-curve (see graphics) and generates revenue, but the next disruptive technology emerges. Companies hold on as long as they can keeping revenue flowing by adding features or improvements of sorts to gain or maintain a marginal competitive advantage. Thus, incremental improvement and process optimization found their place here to minimize cost and maximize profit in a market where the product became a commodity, so the competition is based only on price.
The new technology does not yet make significant money in the beginning at the beginning of the next S-curve. The few early units produced are expensive, need refinement and are bought by enthusiasts and early adopters who are willing to pay a steep premium to get the product first. Nonetheless, development reached the point of “breakthrough,” becomes appealing to many and quickly takes over the market: the big jump onto the next S-curve gains momentum. Suddenly, the former technology is ‘out’ and revenue streams deflate quickly.
Large and matured organizations ride on an S-curve as long as possible. They focus top-down on optimizing operations. Little effort is made to address the underlying limitation of the current technology and seeking out risky new successors. Maturing companies tend to transform into a ‘machine’ that is supposed to run smoothly. A mind shift happens to avoid risk in order to produce output predictably and reliably at a specific quality level to keep operations running and margins profitable. Incremental process improvement becomes the new mantra and efficiency is the common interpretation of what now is considered ‘innovative’.
10X has turned into 10%. To keep up with the ambitious 10x goal, companies would have to constantly re-invent themselves to replicate their previous disruptive successes.
How Goliath helps David
Even our recent iconic ‘giants’ find themselves in a tighter spot today:
- Google struggles to integrate a fragmented product landscape and maintain the ambitious 10X pace of innovation
- Microsoft suffocates loaded with features that make products bulky and increasingly unusable while consistently failing to launch new technologies in the growing mobile segment successfully
- Apple waters down their appealing simple user interface by adding features and clinging to defend their proprietary standards from outside innovations.
On top of it, all giants tend to face the stiffening wind of governmental scrutiny and regulation that influences market dynamics to protect the consumers from overpowering monopolies that jeopardize competition and innovation.
This is a fertile ground for the next wave of innovators, small Davids, to conquer markets from the Goliaths with fresh ideas, agility, and appealing simplicity. Where does your organization stand on the S-curve, riding the current curve with 10% or aiming high at the next with 10x?
Observing the down-shift
What can you observe when the down-shift happens? How do you know you are not on the transformative boat anymore? Here are just some examples:
- Small Jobs – job descriptions appear that narrow down the field of each employee’s responsibility while limiting the scope by incentivizing employees to succeed within the given frame.
- Safe Recruiting – practices shift to playing it safe by hiring specialists from a well-known school with a streamlined career path to fit the narrowly defined mold of the job description. They newbies are expected to replicate what they achieved elsewhere. To risk is taken to getting the ‘odd man out’ for the job, a person who took a more adventurous path in life and thinks completely different, as this may disrupt the process and jeopardize the routine output by shifting the focus away from operations.
- Homogenized workforce – as a consequence of hiring ‘safely’, the workforce homogenized thereby lowering the innovative potential that comes with the diversity of thought and experience.
- Visionaries leave – with the scope of business shifting, the visionary employees that drove innovation previously lose motivation when innovation and creativity slows. Now they are held to operate in a business space where they do pretty much the same thing as their competition. Naturally, these go-getters move on, as it is easy for them to find a challenging and more exciting new job in a more dynamic place. – This ‘leaky talent pipeline’ gets only worse and costly when the talent management focus shifts to talent acquisition and leaving talent retention behind.
- Complexity creeps in – the temptation to constantly add features increases the complexity and starts a spiral that is hard to leave again (see also ‘Complexity’ is the 2015 challenge! – Are leaders prepared for ‘glocal’?)
- Procedures for everything – operating procedures regulate every detail of the job. The new ‘red tape’ is not limited to the necessary minimum but rather by the possible maximum.
- Short-term focus – work output becomes mediocre and focuses on short-term goals and sales targets; the next quarter’s numbers or annual results take priority over following the big dream.
- Sanitized communications – broader communications within the company become ‘managed’, monitored, ‘sanitized.’ A constant stream of (incremental) success stories pushes aside an open discussion to target the bigger problems. Opportunities are missed for open dialogue and creative disruption that fuels the quantum leaps forward to outpace the competition. Peer to peer communication is monitored to remain ‘appropriate’ and can even be actively censored. Trust in management and subsequently also among employees erodes.
Management fear of being the first
The real problem is the shift of mindset in top management that quickly works its way down: not wanting to take the risk of being first, which includes avoiding the risk to fail while chasing to next big opportunity or technology. Instead, they sail the calmer waters among more predictable competition fighting for small advantages and holding on to the status quo opportunistically as long as they can. In some cases, the management even acknowledges the strategy shift from ‘leader’ to ‘fast follower’ despite whatever the company motto proudly promotes – and thereby accepting 10% and avoiding to leap ahead of their competition by bold and game-changing 10x moves.
Interestingly, these same managers still love to look over the fence to awe the iconic leaders but steer away to take charge and work to become the leader again themselves. The nagging question remains if they could actually pull it off getting into first place.
Outside-of-the-box thinking may still be encouraged in their organization but is not acted upon anymore. Internal creativity or ideation contests become more of an exercise to keep employees entertained and feeling engaged, but the ideas are hardly being funded and executed. Instead, company resources are concentrated to run the incremental machine predictably and reliably at 10% as long as its profitable, no matter what. – They simply have no resources to spare and dedicate to 10x!
These businesses undergo a cycle of breaking through by successful disruption in a narrow or completely new segment, then continued growth to a size where the organization slows down to an incremental pace and somewhat stagnating innovation. It may then get driven out of business by the next disruptor or pro-actively break up into more competitive fragments that allow for agility and risk-taking once again to become leaders in their more closely defined space of business. This closes the cycle they are to go through next. There is a strong parallel between evolution and Charles Darwin’s survival of the fittest.
Keeping this cycle in mind, it becomes easier to see why management undergoes the mind shift to predictable and incremental improvement during the massive growth phase of the company in the center of the S-curve. It is also the time when the disruptive innovators have jumped ship to join the next generation of cutting-edge innovators and risk-taking disrupters that prepare to take the leap working on the next S-curve.
Which way to turn?
The question is where you want to be: the true risk-taker or the incremental improver? Understanding the trajectory and current location of your company helps to make the right decision for you. It can save you from frustration and be banging your head against corporate walls and be wasting your energy in a dinosaur organization that is just not ready anymore for your ‘big ideas’ and quick moves outside its production-house comfort zone.
This leaves some of us thinking which way to turn. If you are looking for predictability, longer-term employment (an illusion these days one way or another) and good night sleep, this is the place you will feel comfortable in.
Otherwise, dare to follow the risk-taking visionaries like Elon Musk (the brain behind PayPal, SpaceX, and Tesla Motors; see his recent great interview) to move on.
And then there is ‘intrapreneuring’ as a third direction that tries to change the company from within. (See ‘The Rise of the Intrapreneur‘)
To say it with the words of Niccolo Machiavelli, the wise and sober realist: “All courses of action are risky, so prudence is not in avoiding danger (it’s impossible), but calculating risk and acting decisively. Make mistakes of ambition and not mistakes of sloth. Develop the strength to do bold things, not the strength to suffer.”
Shoot for the moon (or Mars, if you are Elon Musk), change the world no matter what and enjoy what you do!
How to make virtual teams work! (part 2)
This second part of the blog post looks at how to make virtual teams work. Don’t miss the first part: “Why virtual teams fail“
Telecommuting is on the rise. It leads to more ‘virtual teams’, which means co-workers collaborate separated from another by location and often also time.
There is a bright side and a dark side to telecommuting.
Here is the upside: According to Staples Advantage’s study (see “Employers say work from home works“), 93% of employers found programs that allow employees to work from home benefits employees as well as companies. Half of the employers report more productive employees and 75% agree that telecommuting makes their employees happier. No wonder that the amount of telecommuters has roughly doubled in the US over the past 10-or-so years (http://www.globalworkplaceanalytics.com/telecommuting-statistics).
The stubborn tendency remains that work may get done at home, but careers are made in the office. The benefit of control over one’s work place and time comes at a price for the career as a recent study by Stanford University revealed: working from home cuts the chances for a promotion in half!
Obviously, there is a disconnect between where the professional world is moving towards rapidly and our mindset that seem to adapt slower and less flexibly to change using digital interaction for effective collaboration.
Because the world is not flat…
Even the most advanced and latest ‘virtual presence’ technology does not offer the same bonding with senior management as face-time does. The ones working from home can be overlooked or -when opportunity knocks- forgotten, even though they often work harder compared to in-office workers and their productivity is higher, as the study showed.
When it comes to telecommuting the world is not flat. Simply put, the playing field is not level between in-office and at-home workers, explains the gap between the positive perception of remote working by employers and employees alike, and the sobering reality of career crunch.
Furthermore, it is not the remote workers alone that require attention and need to be managed differently. It is also the staff remaining in the office (if there are any), since both parties are affected and need to perceive the same leveled plain.
It is human nature to favor those whom we feel close to and whom we work and spend time with in close proximity. To make working-from-home (or from anywhere else outside the office) work successfully, it is the management’s responsibility to level this playing field effectively and sustainably.
Achieving this is anything but easy; in particular, if managers are used to working out of an office. For them it means to break with their habits for the better of the organization. – It’s not impossible though: our habits of sitting at a table in front of a computer all day is just as unnatural for humans; yet we get used to it.
Cover the bases
There are some key aspects to make remote working work:
1. The work itself
First, the work must lend itself to be conducted remotely. Quite a no-brainer: other than in a factory setting, the necessary tangible tools and resources to collaborate cannot be concentrated in one place but must be accessible to the remote staff where ever they work from. For example, remote working is not possible for a factory assembling gadgets along a conveyor belt, where each worker contributes to some part of the process assembling the product. Tools are expensive and immobile, so resources need to be concentrated in around the tools to allow for efficient collaboration.
Not much different from factory workers, the collaboration of knowledge workers is enabled by tools to communicate and to share data and information. The difference is that technology allows information to be transmitted, so we can collaborate effectively and efficiently from all corners of the world. Choosing the most suitable collaboration tools can become a differentiating competitive advantage; you don’t want to lose quality or effectiveness when collaborating remotely.
2. The workers
Working from home is not for everyone for different reasons. It does require continued motivation and self-discipline to work from home as if in the office among co-workers. It takes establishing a new work-day routine in the isolated home environment that is invisible to co-workers. It becomes just as import for the home-workers to take regular breaks: Burnout can easily become an issue when home-workers over-compensate because they either feel under scrutiny by management and/or co-workers in the office. Also less interruptions at home can lead to missing breaks and working longer hours continuously than in the office.
When I introduced remote working as a pilot project in my department several years ago, one of my staff reported in the beginning that he felt guilty taking a bio-break at home, so not to appear unavailable to staff from other departments who remained working from the office.
3. The management
Managing a remote workforce requires a different management style. Managers need to become more pro-active, use communication channels that the staff is comfortable with and adopt ways to communicate with their staff transparently and effectively. Key points for managers are to:
- Establish shared team goals
- Establish communication best-practices together with the team; this also helps to mitigate timezone, language and cultural differences as well as choosing the proper communication channel depending on content
- Manage by performance, not by face-time or physical presence
- Actively create equal opportunities for on-site and off-site staff
- Set clear rules for management and staff alike aiming to show transparency and leveling the playing field by incentivizing favorable behavior (a matter of organizational justice)
- Remain flexible and ask your staff for ideas on how to improve knowledge-sharing and collaboration.
4. The performance metrics
Leveling the playing field comes down to truly embracing a performance culture that incentivizes results – not face-time. Managers need to articulate clear and measurable goals for the team and its individuals in advance and sometimes also more frequently than they used to. Acting transparently and objectively can be a serious challenge for managers and requires leaving the personal comfort zone.
To achieve this, training may be necessary to shift the culture of the organization and prepare management and their staff alike.
As an example, when I first introduced remote working, I asked my managers to establish and document weekly goals with each staff member and to review them for completion the following week. After a couple of months, I left it to the managers to use any other way to set and track performance with their staff. When some managers wanted to put away with the weekly goal agreement sheets, it was their staff who asked to keep them, as they valued the clear and documented goals in their hand. The staff also found them helpful to discuss facts during their following periodic performance reviews. Though not planned for, the weekly goal setting contributed measurably to increase trust of staff in their managers.
Plan for the “soft factors”
Interesting are the “soft factors”, which are the real make-or-break but often tend to get overlooked, forgotten or just not taken into account seriously. What it boils down to is the relationship (trust) and interaction (communication) between managers and their staff as well as among the members of a virtual team. These soft factors are subtle and often require behavioral changes or adaptation, more for managers than their staff.
Do you trust?
Take the time to ask yourself two questions honestly:
- Do you trust yourself to be as productive working from home as in the office?
- Do you trust your coworkers or your direct reports to work as productive from home too?
My own experiences are consistent with the research: we trust ourselves more than others. – And this is where the problem starts.
Why trust matters
A trustful personal connection is unsurpassed to build trust as a foundation for robust and sustainable business relationships and collaboration. Individuals trusting a person we don’t want to work or do business with this individual.
Trust also makes up much of the ‘social glue’ that holds together teams and organizations. Trust is critical for the success of virtual teams. With lack of trust also the willingness to share information dwindles and so does productivity.
When this happens, our energy gets wasted every day with concerns and redundant or counterproductive work. Workers focus to avoid perceived threats from others, which takes over more and more of their work time, focus, and productivity. In contrast, for people we trust we happily go the ‘extra mile.’
Trust (or the absence thereof) has been identified as the pivotal element ranging from detailed investigations in hundreds of organizations (by Virtual Distance International) to recent bestsellers like “The Five Dysfunctions of a Team” by Patrick Lencioni.
Coming back to the two earlier questions, it proves hard turning the mirror towards ourselves and to accept that also we need to build trust with our co-workers to build and fuel our most robust and valuable business connects and relations.
What is trust?
Let’s take a closer look – what makes up trustful work relationships? Trust is an interpersonal phenomenon. It comes down to three factors that make up trust at the workplace as Karen Sobel Lojeski, NYU professor at Stony Brook and CEO of Virtual Distance International explains:
- Benevolence – our co-workers have your best interest at heart
- Ability – our co-workers have the knowledge and ability to get the job done
- Integrity – our co-workers will do what they promise.
Innovation needs trust
High trust correlates with more successful innovation – why?
When colleagues trust another they open up and share information. Besides the obvious benefit of cross-fertilization that leads to more ideas and creative approaches, by giving away our views and knowledge we become vulnerable as an individual and even more so in a competitive professional environment. This openness comes with a risk to fail that people are only willing to take if failure is acceptable and does not come with repercussions.
Sharing ideas alone is not enough though. Asking thoughtful questions, constructive criticism and mutual support lead to better solutions while curbing hostility and competitiveness. Opening up happens when a task-related conflict will not easily deteriorate into a personal conflict. Innovation within an organization relies on trust among colleagues as a key ingredient that cannot be substituted otherwise.
How we build trust
Trust requires communication and is built most effectively face-to-face with another person, which offers the broadest information channels. An MIT study found a 47% higher performance in companies that are highly effective communicators. Team success is consistently tied to robust team communications. (I wonder if this communication-related increase in performance was ever considered by companies focusing on saving cost…)
Customer-facing business knows that no technology today can offer the same quality and trust-building dialog as in person face-to-face.
Thus, travel to meet business partners and team members remains essential at least in the beginning. Traveling more to meet in person is out of the question for organizations who boarded the ‘cost-cutting’ train: it is considered too expensive. Saving cost here, though, does not pay off over time when it cuts into building trust for good working relationships.
Even more important is trust-building when on-boarding new staff. It is a challenge if most or all work is done remotely by team members who already know and trust each other. It comes back to human nature that we tend to rely on the same people we worked with before, which puts newcomers at a natural disadvantage. Here, management must intervene to level the playing field and provide opportunities also for the new staff.
Perhaps, women are at a natural advantage to connect with others given a higher social sensitivity, i.e. the ability to ‘read’ other people’s emotions face to face better than men. This is also one of the three criteria that increases group intelligence (see “Boost ‘Group Intelligence’ for better decisions!“)
Investing in trust and technology
Since it is not possible (and defeats the purpose) to meet in person especially in virtual teams, we use digital technology to bridge the distance. Consequently, we need to invest in effective tools to remove communication barriers and open broad, information-rich channels of communication among all team members.
Rather than relying on one channel or system, it is more effective to enable the team to communicate by offering many channels that cater to the individual team member’s preferences; for example, phone, instant messaging, video chat, email, etc). For example, waiting more than one minute to establish a video-conference connection is too long and already poses a significant communication barrier.
‘Tele-presence’ seems to be the gold-standard for remote communication but sadly often remains reserved only for executive use if the technology is invested in at all.
Nonetheless, enabling technology can also enhance performance and add value by
- Indicating if people are online and available to communicate
- Finding experts or collaborators easily within large organizations
- Share and exchange information to relevant audiences directly and without delay.
In contrast, here are some examples for communication barriers of organizations with a cost-saving focus that tends to include also ‘technological disablement’ such as
- Using slow or time-delaying communication or productivity equipment
- Users spending more time trying to connect than actually communicating
- Information-poor channels or poor call quality
- Resolving technology-related problems consumes a long time or is a cumbersome process.
The Deep Dive
Virtual Distance ™ is a powerful framework to identify and quantify barriers within virtual teams. This methodology helps not only to evaluate existing teams, but to anticipate barriers in future teams. Virtual Distance makes for a superb strategic forecasting and planning tool to build effective virtual teams.
For more detail, see Virtual Distance International.
Too much trust can hurt innovation
Just as a side note for completeness, there is a risk that too much trust within a team can become and obstacle to innovation (see “Why too much trust hurts innovation“).
It comes down to management again to be observant and vigilant to detect and counteract such tendencies.
While introducing remote work in virtual teams comes with significant change and challenges for everyone involved, the burden and responsibility to make it work in the end remains with the manager.
Have you read part 1 yet? “Why virtual teams fail“
- Why virtual teams fail, and how to make them work (part 1) (orgchanger.com)
Top 10 Innovation posts
Here are my Top 10 posts on innovation:
Can strategic innovation rely on creative chaos? – To make a long story short, the answer is: No! Read what it takes to consistently innovate and give you a very cool example too.
2. How to become the strategic innovation leader? (part 2 of 3)
What is an innovation leader? Is this role similar to an innovator? (The answer is ‘no’.) – Recognize the three key roles in innovation, how to find an approach and avoid critical pitfalls.
Not everything new is an innovation and some is more renovation than in innovation. Here is a framework that helps to distinguish an innovator from a renovator and works for entrepreneurs and intrapreneurs alike. It is important to understand which role to play and when; it all depends on what you need to achieve and what is critical to reach your goal!
Creating value through new products is not enough. Capturing the value requires equal attention on the innovation process. Focusing on creativity and neglecting execution along the value chain is a costly mistake.
5. Why too much trust hurts innovation
Most managers understand that trust is a key ingredient to effective collaboration and innovation. Yet, few actively try to cultivate and nourish trust in their own organization to achieve the right mix between trust and constructive tension.
6. Imitators beat Innovators!
You thought Facebook was the original? Or YouTube? Or LinkedIn? – Get ready for your wake-up call! Break-through innovations are over-rated! Imitators are successful by combining someone else’s innovation with the imitator’s advantage and by doing so they can become innovators themselves!
7. Boost ‘Group Intelligence’ for better decisions!
Group intelligence can be increased and lead to better decision-making – or why not to rely on a group of geniuses! New research breaks the ground to understand collaborative intelligence and the – but how to apply it to the workplace?
8. Collective Intelligence: The Genomics of Crowds
Group intelligence beats individual brilliance – and businesses are willing to pay for the crowd’s wisdom in the social sphere. The MIT’s ‘genetic’ model allows combining social ‘genes’ to harness the collective intelligence of crowd wisdom successfully and sustainably; areas of application are scientific research or business/employee resource groups, for example.
9. Can movies innovate with only seven stories to tell?
How innovative are movies really – if at all? While AVATAR and THE ARTIST appear polar opposites, they share a similar story; so where is the innovation?
10. ‘Complexity’ is the 2015 challenge! – Are leaders prepared for ‘glocal’?
What is the key challenge in the coming years and how to prepare future leaders.
Don’t miss my Top 10 posts for Intrapreneurs!
Boost ‘Group Intelligence’ for better decisions!
How to increase group intelligence for better decision-making – or why not to rely on a group of geniuses! New research breaks the ground to understand collaborative intelligence – but how to apply it to the workplace?
Better alone than in a team?
Think about this: What teams make the best decisions?
We all experienced it at some point: Even a group of the best and brightest people often ends up with poor decisions that do not do its individual member’s intelligence justice.
What goes wrong? How does a group of smart individuals, even geniuses, end up with poor decisions when they stick their heads together? What are they missing? Moreover, how can we avoid those obstacles to come to better decisions as a group?
Intelligence of individuals has been well studied for over a 100 years: A solid framework exists to measure the intelligence quotient (IQ). Individuals undergo a series of mental challenges under the premise that someone performing well in one task tends to perform well in most others too. Overall, the IQ is regarded as “a reliable predictor of a wide range of important life outcomes over a long span of time, including grades in school, success in many occupations, and even life expectancy,” as researchers put it.
Modern IQ tests consider an IQ close to 100 as average.
Does ‘Group Intelligence’ exist?
When we look at what it takes to make more intelligent decisions as a group than as individuals, the first question this raises is whether something like a measurable ‘group intelligence’ actually exists. If so, is it measurable and –perhaps‑ higher than the intelligence of its members?
Only recently, scientists took a deeper look at the intelligence of groups and made surprising findings. The joint team included MIT’s Tom Malone, whom we met previous in a post (“Collective Intelligence: The Genomics of Crowds”) as well as others from well-known academic institutions comprising the MIT, Carnegie Mellon, and Union College.
The researchers approached group intelligence following a similar systematic approach as the intelligence metrics for individuals. However, they linked group intelligence to performance as an endpoint, which makes their finding even more valuable for the workplace!
Outsmarting genius as a group
First, the researchers established that group intelligence in performance indeed exists and is measurable. They also found that the group’s intelligence does not add up to the sum of the intelligence of its individual members. In fact, the collective intelligence, or ‘c-factor’, shows only a weak correlation “with the average or maximum individual intelligence of group members” – this is remarkable finding! It means is that you cannot boost a group’s intelligence by composing or spiking the group with genius-level individuals!
Obviously, factors apply other than high individual IQ to increase the intelligence of the group.
The results from two studies consistently and overwhelmingly demonstrate that group intelligence outsmart individual intelligence – by far!
Here are more details on the science for those how want to dig deeper: Evidence for a Collective Intelligence Factor in the Performance of Human Groups.
Limited by a high IQ?
Individual intelligence only has a practical value to a certain point. There is an important difference between what an IQ test measures as general intelligence and what Robert J. Sternberg calls ‘practical intelligence’ in his book Successful Intelligence: How Practical and Creative Intelligence Determine Success in Life. The presence of one does not automatically imply the presence of the other.
What it comes down to is that a high general intelligence is merely a measurable value in the lab but it does not also translate into a more successful life! An individual IQ above 135 or so can lead to quite the opposite (for reference, ‘genius’ starts at 140 on Terman’s classification). The higher IQ becomes rather a hindrance than an advantage in real life: a very high IQ tends to clutter and confuse a genius’ mind with more irrelevant options, which make it harder for them to see the most applicable one and come to a decision.
In contrast, practical intelligence relates more to social savvy or ‘street smarts’ – a cunning and practical understanding that proves advantageous in the real world more than a high general IQ!
Here is the magic sauce!
Surprisingly, the strongest correlation of group intelligence is with three factors:
- The average social sensitivity of the group members, i.e. “reading the mind in the eyes” of another person. There is something to be said for bringing together emotionally intelligent people.
- Equality in the distribution of conversational turn-taking meaning an equal share of time to speak. Our society and businesses seem to favor smooth-talkers and attracted to extrovert and outspoken individuals that seem to signal competence, decisiveness, and determination.
Group intelligence, however, does not increase when there is a strong vocal leader, who dominates the discussion to push everyone in his or her direction. Be careful not to leave out the brilliance of individuals who may get steamrolled by the loud and dominating: introverts, in particular, are at a disadvantage. They are easily stuck in an extrovert world.
Given that the introvert/extrovert ratio in the USA is roughly 50/50 (according to the 1998 National Representative Sample), failing to include introverts effectively is a costly mistake, as it excludes their knowledge and valuable input to the decision making process ‑ and lowers the collective intelligence of the group. Introverts, for example, favor structured communication that plays to their strengths by allowing them to research and prepare; they need more time to express their refined response.
- The proportion of females in the group composition; the more women the better. This appears to account largely to a higher social sensibility that women have over their male group members in general. However, all three factors have to come together, so building female-only teams does not do the charm either.
In a nutshell
When we bring it all together, what surprises me most is how little of this solid research has penetrated the workplace. Where employees and management teams make decisions, the survival of organizations is at stake and relies on leveraging the collective intelligence of the group effectively.
A myriad of practical applications for these findings come to mind. Here are just two examples:
- Women still struggle to achieve gender equality in many organizations ‑ the amount of women in management positions is a widely used metrics that refers to the female proportion of the workforce. The common approach is to achieve this by ‘swinging the stick’ to establish and enforce quotas and leave it at that – Mission accomplished?!
Wouldn’t it be more compelling to offer the ‘sweet carrot’ of increasing group intelligence in leadership teams for better business results that includes leveraging the natural advantage of females?
Again, the female quota alone does not boost the group intelligence. We also need social sensitivity and equal shares of talking time. Thus, a flanking business application would go beyond how we compose teams based on gender. It considers social sensitivity measures and some structure to how we conduct group discussions or meetings to maximize the collective intelligence by including and engaging all participants. A challenge also for how we recruit, train, and evaluate our workforce.
Food for thought.
Job description for an Executive Sponsor
Job description for an Executive Sponsor
Executive sponsorship is an important prerequisite for the success of employee groups. The challenge is finding a great sponsor, so what should you look for? What would a job description for an executive sponsor look like? ‑ Here are some practical ideas that have worked.
Why executive sponsorship is critical
Employee groups consist of volunteers with good intentions. They work, typically, in addition to their day job and after hours driven by the desire to address a need close to their heart. Together with colleagues, they seize opportunities to complement the organization’s objectives and goals and to improve the workplace. In most cases, employee groups are not an integral part of the organization: they don’t show up in organizational charts and have no formal authority.
For most group members, this voluntary work is ‘on top’ of the regular job and not reflected in their professional goals or performance evaluation. What makes a difference is having a strong ally: the executive sponsor.
From the organization’s perspective, some governance is needed to:
- Prevent the employee group left to operate in a void or detach from the rest of the organization
- Align the goals of the group with the needs and strategy of the company in a complementing and synergistic way
- Ensure the group’s practices comply with company policies and other regulations.
The leaders of employee groups owe their members to:
- Focus the group’s work to make a meaningful impact on the organization (instead of wasting resources and the member’s time on projects or activities that do not create value, are meaningless or even harmful to the organization)
- Get funds, active support, and political backing in the organization.
Both, the organization and the employee group benefits from the connection with an executive sponsor.
No silver bullet
When you are looking for an executive sponsor, what are you looking for? What are the relevant criteria? – Executive sponsorship is a role, just like any other job, so what would a job description for an executive sponsor look like?
Bear in mind that there is no one right answer for the working relationship with an executive sponsor. The sponsor role and level of involvement varies and depends on many factors. It also shifts over time with the changing maturity of the group and its leadership, for example, or levels of involvement and autonomy of the group. A new group may turn to the sponsor for help with forming, direction, and funding where a mature group may seek business insights, refined success metrics, and leadership development opportunities.
Criteria for an Executive Sponsor
A perfect sponsor effectively leverages their personal brand, relationships, resources to enhance the visibility and credibility of the group. Look to ‘recruit’ a well-known leader, who is well-connected within the leadership team and respected throughout the organization. In an earlier post, we briefly touched on “How to attract an executive sponsor?”
Ideally, the sponsor is a top-level executive ‑ you hit the jackpot if you can get the CEO!
Overall, the group’s expectations of the sponsor’s role usually include that the sponsor:
- Serves as a champion of the group
- Gives strategic direction to align with the organization’s business strategy
- Helps to identify measurable success criteria that support business goals
- Provides advice and counsel to guide the group’s development
- Connects to a broad network of relationships
- Liaises with the executive team and accepts accountability
- Helps actively to identify and overcome obstacles and resistance within the organization
- Supports the group through communication and visibility.
The stronger your sponsor, the stronger the group! A strong sponsor
- Shares valuable business knowledge
- Demonstrates leadership, and is
- Genuinely willing to help others.
A good sponsor encourages people to focus on how to engage others and improve communication, enhances the members’ leadership qualities and developing partnerships while helping to overcome barriers.
The sponsor you do NOT want
On the other end of the spectrum, there are also people you should avoid as executive sponsors for the group. This category includes people who:
- Provide lip-service over taking action
- Use the group for selfish reasons; for example, by claiming and promoting achievements of group members as their own
- Do not see the potential and value that the group can add to the organization and its businesses
- Do not make enough time to work with the group
- Are ineffective or unwilling to support and protect the group from opposing forces.
Finally, if you have the choice, avoid the temptation to have a group of executives ‘share’ responsibility and ‘champion’ the group collectively. This tends to dilute accountability and action while increasing communication and coordination overhead.
There is much truth in the saying: ‘Too many cooks spoil the broth.’
One of us?
Often enough, sponsors are chosen or step up because they originate from the group’s affinity core, i.e. they are of the same ethnicity that ethic-focused group represents, a female for a women’s group, a gay or lesbian for an LGBT group, and so on ‑ you get the picture. I advocate against this practice for two reasons, in particular: First, with an ‘outsider’ you achieve more diversity and mutual learning experiences in the group as well as for the sponsor. Secondly, the group becomes more believable as a business driver that attracts a broader membership base instead of risking to be perceived as an ‘insider club’ limited to members with a certain ‘diversity ticket’.
For the same reasons, you may also consider rotating sponsors every few years.
Quid pro quo
What you want is an involved and effective executive sponsor. Now, this sponsor role comes with additional work, responsibility, and risks for the senior leader’s reputation and career. Therefore, this ‘job opening’ must be compelling enough to attract a senior executive to step forward and sign up.
It is important to offer a value proposition that makes clear what is in it for the executive sponsor to make this symbiosis work. It is quite similar as discussed in “What’s in it for me?” (WIIFM) for the group members.
Know your sponsor
Sponsors are humans too, so here are some thoughts on how to approach them: Get to know your sponsor first, just as you would prepare and approach to meet any other very important customer or external business partner. Find out their goals, interests, beliefs, priorities, constraints of the political and economic environment, and personal work-style. What exactly is the sponsor’s interest in your group?
Clarify your expectations mutually. Once you know your sponsor and built rapport, it becomes easy to offer what is important to them and helping the sponsor to achieve their goals too.
A value proposition that addresses the (financial) bottom line is powerful and convincing. It also enables the sponsor to communicate the benefits with the leadership team in a (business) language that everyone understands. It takes business acumen, though, to specify and articulate the financial impact. If this is not your strong suit, you need to find other compelling upsides or values that the group can bring to the business and that is close to a sponsor’s heart.
Do and Don’t: How to work with the executive sponsor
Here is some practical advice on working with an executive sponsor.
On the Do side, preparation and focus are key. Remember, this is a business meeting. The executive’s time is valuable, so be respectful of it and do not waste it. You want the sponsor to remain approachable and willing to meet with you in the future whenever you need to see them urgently.
- Schedule appointments regularly (monthly, for example, if the sponsor agrees) with an agenda of topics to discuss
- Provide background information on meeting topics ahead of time and come well prepared
- Be on time and keep meetings on schedule
- Present any problems with a proposed solution
- Inform of issues in the workplace that affect the group and propose what the sponsor can to mitigate or resolve the issues
- Be honest with your sponsor – do not sugarcoat, blame others, or cover-up mistakes
- Give your sponsor a heads-up also before taking more public and visible action so they will not get caught by surprise – if there is bad news, share it with the sponsor first
- Discuss key goals and ask them for guidance, advice or assistance – allow your sponsor to help you and the group
- Reserve your requests for sponsor appearances and events to where it counts most. For example, as a speaker at a ‘headline’ event to draw a crowd, attract new members, and demonstrate the group’s value for the business. Ask if the sponsor is willing to recruit other executives or respected business partners and customers as guest speakers or participants.
- The sponsor could host a luncheon or dinner for the group’s leadership once or twice a year to meet everyone in person, discuss, and recognize achievements of the group and individual members.
As for the Don’ts, try to avoid these pitfalls:
- Don’t come with a hidden personal agenda – it’s strictly about the group
- Don’t bother the sponsor with petty day-to-day issues – focus on the meaningful impact on the business and the group
- Don’t ask for general funding or support – be specific and have data and facts ready to support your case
- Don’t be afraid to ask for guidance and advice – but also don’t come just to commiserate.
Beyond the job description
Don’t underestimate the importance of the right chemistry between the group leader(s) and the exec sponsor; it is crucial to establish and foster a trustful, constructive, and pleasant work relationship.
For an employee group, executive sponsorship is more than the group’s endorsement by senior management: a strong sponsor becomes the lifeline when times get rough.
So when you go out to ‘hire’ your executive sponsor, also hire for the right attitude.
Starting an ERG as a strategic innovation engine! (part 3 of 3)
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’…
> For more general insight on complexity as a leadership challenge, read this: ‘Complexity’ is the 2015 challenge! – Are leaders prepared for ‘glocal’?
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.
> A previous post discusses the business model behind the ERG approach in more detail: Build ERGs as an innovative business resource!
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.
> More on the virtues of Generation Y as I experience it in NxGen under: Generation Y for managers – better than their reputation?
- 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.
References and additional reading
Do managers miss the sweet-spot of remote working?
Stumbling in the dark?
Organizations often find themselves struggling with a dilemma: The need for employees working remotely, often from home, is at rise for many business reasons that include cost savings and the competition over attracting and retaining top talent.
On the other hand, many managers have a hard time allowing their staff to work outside their proximity and direct supervision. Their reasons often include the fear of change introducing the unknown but also a certain cluelessness of how to effectively manage a remote workforce and moving beyond their personal comfort zone.
These conflicting drivers open a tension field that organizations tend to struggle with. – Does this sound familiar to you?
No silver bullet
Unfortunately, there is no ‘silver bullet’, i.e. a one-size-fits-all solution that works for everyone and in every environment. Too much depends on the nature of the work, necessary interactions and communication between team members as well as the jobs and personalities involved. It takes a close look at the individual organization to craft a remote working program that fits an organization, maximizes collaboration at a measurable performance level.
Common ground for remote working
However, we can learn from others how to establish a basis for a fruitful remote working program in your organization (if you don’t have one yet). Research offers tangible results such as the “MTI Report 09-14: Facilitating Telecommuting: Exploring the role of Telecommuting Intensity and Differences Between Telecommuters and Non-Telecommuters”. The study compares telecommuters and non-telecommuters and it came up with the following findings. (Note that I use telecommute, telework and remote working synonymously throughout this article.)
- Telecommuters show increased commitment to their organization and experience more work-life satisfaction over the non-telecommuters group. No differences between both groups though on job satisfaction and turnover intent, i.e. how likely employees are to leave the company.
On a side note, the latter two findings are quite different from my own professional studies and experience, where employees working remotely reported a 57% increase in work-life balance. Increasing workplace flexibility including remote working, i.e. giving the employee more control over their schedule and location, became a driver also for employee attraction and retention.
– What are your experiences? Do you see remote work influencing job satisfaction and employee retention? Please comment.
- Interestingly, the study explored also ‘personalities’ and found that more extroverts tend to be telecommuters, so people with a higher drive for social interaction and communication rather than the quiet ones.
This appears conclusive in the light of the simple finding that (a) telecommuting in many companies is not implemented consequently but rather as an “idiosyncratic deal” between individual supervisors and employees. (b) These supervisors prefer granting permission to telecommute to high-performers. This can explain a pre-selection of extroverts over introverts, who may not show up on the supervisor’s radar as much and therefore tend to receive less remote working opportunities.
- Generally, teleworkers commute from farther away. They find commuting more stressful and want to avoid rush-hour traffic.
- Less surprising, telecommuters were interrupted more by family members given their physical presence at their off-site work location.
This seems to suggest that working-from-home could be less effective than working in the office given more family interruptions. My own observations are quite different and based on a controlled pilot project which showed that the workers in the office feel distracted by their colleagues stopping by randomly; the workers preferred working from home when they needed focus and want to avoid distractions calling this their most productive work time.
Disruptions occur at home as well as in the office. It is the employee’s responsibility and best interest to ensure a professional work environment at their home-office so not to jeopardize their work results. Consequently, also performance needs to be measured by results and not physical presence. This levels the playing field and allows for fair comparison between all workers independent of their working location and distractions.
- In the triangle of telecommuters, supervisors and Human Resources (HR) practices the telecommuters generally view the organization differently from non-telecommuters. Most telecommuters perceive technology training is available to them and that the organizational reward system as well as their supervisors was supporting telecommuting. Telecommuters also believe that there is an underlying business requirement that drives working remotely.
Once again we see that a level playing field is viewed as an important success factor for effective teleworking. Technology serves as enabler that makes teleworking possible in the first place and connects coworkers across remote locations. Offering remote working not only becomes a business necessity but also addresses increased expectations of the modern work force to telework powered by ever improving communication and collaboration technology.
Now, the telecommuters in the study seem to understand the changed business environment that pushes organizations to open up to flexible work arrangements for competitive reasons including cost savings as well as employee productivity and retention – the supervisors ‑apparently‑ did not ‘get it’.
For most of us the times are over where workers came to the factory or office only because the resources needed to accomplishing the work were concentrated in a specific location and could not be distributed (think early typewriters, heavy production equipment, incoming mail and so on). For a growing services industry these limitations no longer exist – yet this out-dated paradigm remained present in the minds of many. People tend to have a certain picture in mind what work ‘looks like’ and where it has to happen which comes down to an office with everyone present from 9am to 5pm.
- From the supervisors’ perspective things look different than for telecommuters. Over 50% of the supervisors of telecommuter believe “that employees have to be high performers”. This view is shared by only 37% of the non-telecommuting supervisors.
This brings us to a most critical component and success factor for making remote working work…
Management attitudes – the make or break
The MTI study phrases this barrier kindly as “challenges and obstacles emanating from attitudes of individuals in the organization”. The obstacles to implementing an effective telecommuting model often originate from management itself or even the Human Resources department tasked to make a policy. The reasons for resistance can be multifold and include a lack of better knowledge, fear of change such as losing perceived control, lazy avoidance to probe outdated beliefs or taking a one-size-fits-all approach without evaluating the specific environment.
I even experienced the paradox of managers believing they can work from home just as effective as from their office desk and making use of this flexibility at their convenience while not trusting that their staff could be similarly effective or was trustworthy enough just as much. They see remote working being a ‘perk’ for their staff reserved for ‘top performers’ who deserve it – a double standard is being applied which is often enough based on murky or questionable criteria (if at all). These managers show a sense of entitlement while ignoring that (as the MTI study confirms) remote working increases employee satisfaction and commitment which tends to increase also performance; as an example, performance increased by 30% in the department I manage.
Some managers fear they may lose ‘control’ and that their staff may abuse the newly acquired freedom to control their schedule and work location. This ‘control’ is often based on the deceptive perception that staff works ‘better’ and is ‘under control’ when confined to an office location and ‘eye-balled’ by the supervisor.
More effective is the consistent application of measurable and pre-defined goals that demonstrate unambiguously, transparently and quantifiable whether an employee met the goal or not – independent from their schedule or work location. In practice, managing-by-performance showed more effective to distinguish effective performers from under-performers than a manager looking around the office space and hoping the staff is performing just by their mere presence.
What it takes to make remote working work
Implementing remote working is not exactly rocket science but takes an honest and diligent approach based on trust and clear expectations. From a practical perspective, a viable model includes:
- Put away with the ‘telecommuting-is-a-perk’ attitude
- Closely look at which jobs have remote working potential together with the affected employee
- Identify the employee’s team, i.e. the people who need to cooperate closely even across departmental boundaries (organizational, geographic, etc.)
- Include employees to model how remote working could work in their team, try it out and be flexible to improve the model
- Strictly rate all employees by their performance based on measurable and tangible results that are clearly defined
- Apply transparent standards for all employees consistently
- Treat remote and non-remote workers similarly including equal opportunities treatment and rewards
- Provide effective communication technology and adequate training
- Address manager concerns and prepare management with adequate training and guidance.
It is true that managing a remote working environment provides new challenges. They include in particular:
- Strictly managing-by-performance by setting clear expectations and exercising transparency.
- Overcoming ‘old thinking’. Questioning ones habits and beliefs to approach with an open-mind new or different ways of working. Include your staff to come up with ideas on how to make it work.
- Diversifying and mastering the spectrum of communication channels. Choosing and using the media preferred by the staff to communicate effectively and efficiently with employees.
If this includes peer-to-peer video, instant messaging or texting (SMS) then learn to master these technologies. Limit face-time for confidential or sensitive topics that should better not be communicated electronically; don’t abuse face-time for routine communication.
Most of all, mutual trust is the key component in the critical relationship between manager and employee. This can be the hardest to build. For managers, taking some temporary measures can prove helpful to establish a trustful working relationship with their staff; for example, start with documenting and reviewing weekly performance plans together with the employee until the manager develops more trust and is comfortable with exercising less timely supervision.
In general, if an organization lacks trust then remote working will hardly be implemented effectively, consistently or to its full potential – but then, remote working may not be the biggest problem this organization faces…
Build ERGs as an innovative business resource!
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.
Why too much trust hurts innovation
Research shows that too much trust decreases innovation. Read what ‘trust’ is and how it affects your workplace and innovation.
Most managers understand that trust is a key ingredient to effective collaboration and innovation yet few actively try to cultivate and nourish trust in their own organization to achieve the right mix between trust and constructive tension.
The trust gap between theory and practice
Over 80% of managers believe trust is important to have good work relationships that enable effective collaboration and superior results. So why do only 40 or so percent actually take action to build and maintain trust within their organization? Obviously, there is a disconnect between the theory and the practice. Why is that?
My assumption is that ‘trust’ is perceived as an ‘intangible’ that managers like to stay away from because they find it hard to measure and to manage. It further requires an individual to open which comes with vulnerability. Perhaps we also fall easily into the only so human trap of making over-confident assumptions when it comes to ourselves and our single-sided perception of the trust we believe to have established with people we work with….
What is trust?
Let’s take a closer look – what makes up trustful work relationships? Trust is the degree that people trust one another, so trust is an interpersonal phenomenon. It comes down to three factors that make up trust at the workplace as Karen Sobel Lojeski, NYU professor at Stony Brook and CEO of Virtual Distance International, identifies:
- Benevolence – co-workers have your best interest at heart
- Ability – co-workers have the knowledge and ability to get the job done
- Integrity – co-workers will do what they promise.
Trust is the ‘glue’
Trust is the social ‘glue’ that holds together teams and organizations. It is critical for success of virtual teams, i.e. the increasing trend of co-workers worked separated from another and spread across different countries and time zones. With a lack of trust productivity dwindles as does the willingness to share information. Instead, our energy gets wasted every day on avoiding perceived threats from others.
Innovation needs trust
High trust correlates with more successful innovation – why? When colleagues trust another they open up and share information. Besides the obvious benefit of cross-fertilization that leads to more ideas and creative approaches, by giving away your views and knowledge you become vulnerable as an individual and even more so in a competitive professional environment. This openness comes with a risk to fail that people are only willing to take if failure is acceptable among colleagues and does not come with repercussions.
Sharing ideas alone is not enough though. Asking thoughtful questions, constructive criticism and mutual support lead to better solutions while curbing hostility and competitiveness. Opening up happens when a task-related conflict will not easily deteriorate into a personal conflict. Innovation within an organization relies on trust among colleagues as a key ingredient that cannot be substituted.
Too much trust impedes innovation!
So, how much trust is needed? And can there be too much trust? The MIT’s Sloan School of Management (MIT Sloan Management Review, Summer 2010, Vol. 51, No. 4) offers some answers. An increasing level of trust leads to more effective innovation, as we expect, but the researchers also observed that there is a limit after which the correlation negates and where innovation declines with too much trust. What happened here?
Too much mutual trust deteriorates the innovative effectiveness of partners. Where trust sparked creativity and led to better solutions earlier constructive criticism and challenging each others ideas now suffers. Finding the ‘sweet spot’ is the tough part where a high level of trust consistently fuels innovation and leads to best results.
Take-home message for managers
Should managers reduce investing in trust? Certainly not!
A high level of trust remains the most crucial requirement to build a solid relationship between people that becomes the basis for effective collaboration and innovation. Most organizations seem to suffer from a lack of trust more than anything. It makes collaboration a drag and leads to poor results and mediocre solutions.
Actively building trustful relationships is an important part of a manager’s role and even more so in virtual teams, when the team members work separated by barriers of location, time, culture, language and others. Trust must be built and nurtured actively especially when face-to-face communication is not possible and becomes replaced by using less-rich digital media (video conferencing, phone, email, etc.).
When trust is getting very high, however, we need vigilance and a reality check. You do not want to lose constructive argument and challenging dialogue between team members that turn creative ideas into innovative solutions.
Driving the ROI – where to start your projects metrics?
The most compelling metrics focuses on the business impact of an ERG rather than on ‘measuring the ERG’. Here are the rationale and a generic approach to deriving meaningful and business-relevant metrics for ERG projects.
Driving the ROI – where to start your projects metrics?
So you have started your ERG and done your homework on what the business strategy of your organization is. You also found areas of need in your organization that you want to address with some serious projects. – But where to start building a project metrics? What is important, what makes sense and is meaningful?
Establishing metrics can be stressful and confusing. What metrics persuade your stakeholders? Less is often more, so focus on just a few parameters that are to the point rather than drowning in a myriad of complicated and detailed measurements that will quickly suck your precious time and bore your audience to death.
In general, your project metrics can reflect the ERG or focus on the business results that the ERG achieves – I opt for emphasizing the latter.
ERG focused metrics
Let’s look at the ERG focused metrics first. It seems the traditional approach for most ERGs that may have evolved from affinity and network groups: The basic idea in establishing this kind of metrics is to help justify the ERG by demonstrating its growth and maturity over time. The typical metrics are, for example, the number of active and passive members, the participants in meetings, how many new faces (=potential recruits) show up and how many of them signed up as members, etc. These figures are helpful to explain that there is an interest in the ERG, what happened to funds (often spent on catering) or if the organization met demographic goals of diversity, for example.
However, if you measure along these lines alone you may miss out on leveraging your ERG to get recognized and valued as a credible business resource to the organization.
Question for you: which message does an executive find more compelling? “The ERG has 300 members and meets monthly for two hours.” or “The ERG contributed to $260 million in sales last year.”
Now, this kind of metrics takes a different approach, doesn’t it? It aims at driving business results, the famous return-on-investment (ROI), the ‘bottom-line’. It easily grasps a stakeholder’s attention because it demonstrates a significant and direct value proposition for the company.
By the way, the above example is real! According to DiversityInc.com, Ford Motor Co. directly linked the sales of $260m in one year to an initiative of its InterFaith ERG!
– Look it up yourself if you like: http://www.diversityinc.com/cgi-bin/cms/article.cgi?mode=printable&id=284
Not all goals are high rolling and they also depend on the business you are in. The spectrum of possible success metrics is broad and ranges from obvious business goals such as increasing revenue, profit, market share, quality, speed and customer satisfaction to –perhaps‑ less obvious ones such as increasing employee satisfaction, intellectual property created, employee acquisition and retention or reducing turnover, waste or business risks, just to give some examples.
How to get started
For many ERG leaders, the most difficult question is how to establish a metrics when the targets appear fuzzy and are not as easy to grasp as a sales figure that was either met or not.
To find your bearings, try this: Relax. Breathe deeply. Then take a step back and use your imagination… Envision a picture of what the results look like when the project completed successfully. What do you see when you have reached the goal, what are the visible and tangible results, what has changed?
Now describe this envisioned picture in words in a demonstrative way using clear and unambiguous terms such as “By September 1st I want to be able to touch X and use to do Y with Z!”
This provides you with a great starting point to refine more specific requirements and also leads quite naturally to meaningful metrics in a simple but effective way such as the tangible deliverable (X), the target time until completion, some required feature (Y) and some input (Z) requirements in the example.
How to approach ‘metrics’?
There is confusion around why, what and how to measure. Resistance to measuring also seem to originate from a too narrow interpretation of the term ‘measuring’, a fuzzy approach and a lack of creativity on how to measure what. Douglas W. Hubbard offers guidance by asking powerful questions.
How to approach ‘metrics’?
There is much truth in the saying that comes in many variations: “What gets measured gets managed”, “Everything that can be measured can also be managed” or even “What isn’t measured can’t be managed”. ‑ If you don’t measure progress or success, how would you know you reached the goal?
Now, there is much confusion around why, what and how to measure as well as resistance to measuring that seem to originate from a
- too narrow interpretation of the term ‘measuring’
- fuzzy approach
- lack of creativity on how to measure what.
Some people associate ‘measuring’ with lab coats, values with many digits behind the decimal point or requiring complicated formulas and ways to produce valid results. This –typically- does not reflect reality nor is complexity always necessary.
There also seems misconception that measuring has to eliminate any error and that there simply is no metrics possible for less tangible problems like ‘employee engagement’, ‘employee satisfaction’ or ‘strategic alignment’ just to name a few.
It becomes much easier if you understand measuring as a means to reduce uncertainty. When stakes to fail are high in an environment with much uncertainty, then reducing uncertainty is worthwhile, as it reduces risk and provides a quantifiable value. Even a very simple metrics can often help to answer the critical question.
When it comes to how to a systematic approach to measuring, here are some guiding questions that I found in a book of Douglas W. Hubbard; find specific answers before you measure:
- What is the decision this is supposed to support?
- What really is the thing being measured?
- Why does this thing matter to the decision being asked?
- What do you know about it?
- What is the value to measure it further?
(Source: “How to Measure Anything – finding the value of intangibles in business” (p.43) by Douglas W. Hubbard; www.howtomeasureanything.com)
If you take a sharp look around, you may find that many things are being measured without adding any benefit. For example: no decisions being made based on a measurement, such as a periodic report or detailed survey results.
Other things aren’t measured but should. For example: what business value does an ERG add to a company?
Q&A – Case study for founding a business-focused ERG
Answers to questions around establishing the NxGen ERG at Boehringer Ingelheim Pharmaceuticals, Inc. in 2009
If you are planning to found an ERG or are a new ERG Leaders, you might find the attached Q&A helpful.
In an interview style, here are the answers to the following questions around establishing the NxGen ERG (Next Generation at the Workplace) at Boehringer Ingelheim (BI) in 2009:
- Where did the idea for NxGen originate?
- Why was the Next Generation at the Workplace ERG necessary at BI?
- What makes NxGen innovative? How do you think your approach to creating and growing this new ERG was different from the past?
- What is the business case for the existence of NxGen? How do you link NxGen to BI business plans/activities?
- How does the NxGen seek to drive innovation at BI?
- Are there specific requirements for project size, scope, etc that the NxGen group takes on?
- How are employees able to allocate time to create and develop NxGen projects?
- Do the initiatives that arise out of NxGen resonate with other generations in the workplace? within BI?
- What are the criteria necessary to make an ERG like yours successful? What role do NxGen members, executive management, and the overall company have in its success
Attachment: NxGen Case Study for NALC 2010
(Published also as “Expert Insights” in the Network and Affinity Leadership Handbook, Powerful tools for Employee Resource Groups, p.76-79, Diversity Best Practices, New York, NY; 2010)
How to attract an executive sponsor?
Effective executive sponsorship is a key success factor for ERGs. This posting discusses the benefits of executive sponsorship and how to attract and recruit an executive sponsor.
How to attract an executive sponsor?
All right, I take it you started building you ERG business case, as this is the first step to getting executive support to move on. (See the previous posting.)
You want to make sure the ERG’s goals are not only aligned with the company’s business strategies and are measurable! Having a clear and unambiguous success metrics at hand is the best basis for argumentation, to check your progress and finally document your success. It makes it so much easier to build credibility and trust as well as to communicate success clearly to get support throughout the organization. (Metrics will certainly be a future topic here!)
So look at the business areas, the strategic goals and high-level projects that your CEO communicates. Consider thinking along those lines to flesh out the need for your ERG, to set goals and getting ideas for projects that your ERG could work on in support of the business.
What you aim for is attracting a powerful executive sponsor that serves you and your ERG in several ways:
- Support and promote the ERG’s activities actively
- Help you navigating through the deep waters of corporate politics to keep you and your ERG out of trouble
- Build alliances
- Point out opportunities and
- Provide some basic funding to run the ERG
- Offer advice when you need it (or when you think you don’t need it but then find out you were blindsided and now are happy you sponsor picked up on it!)
Look at your executive leadership team for a sponsor that has a vested interest in your ERG and its goals. Go out and talk to them, pitch your idea! Be creative how to approach them (this is actually a nice future topic by itself!). – You may be surprised how willing executives listen to compelling business logic that you unfold in front of the.
What are the business needs of the executive sponsor? Build them into your business plan. Consider synergistic ERG projects that will also help your sponsor achieving their goals. You may even ask what you could do for them and make sure to find out what the sponsor’s expectations are.
Be very respectful of their (valuable) time. Make it easy for them to follow you (give an informative summary, for example) and prepare for them what you want them to do (such as drafting an email you want them to send out).
Remember, from the executive sponsor down to each recruit each person wants to know: “What’s in it for me?” – Prepare to deliver!