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.
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?
Measuring intelligence
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.
IQ distribution
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!
Group Intelligence is real!
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!
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.
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.
What to look for in 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.’
‘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.
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:
1. Strategy
2. People
3. Processes
4. Organization
5. Metrics/Rewards.
The five dimensions of an ERG business model
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).
1. Strategy
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).
3. Processes
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.
4. Organization
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.
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.
Do people fear change? I doubt it. See how fear relates to ‘change’ and how to harness it.
Fear of change?
An interesting discussion I got involved in recently is about ‘What gets in the way of embracing change?’
It quickly revolved passionately around whether employees like change or not.
People love change! From my experience, people love change! – Not convinced? Look around you: People love fashion, wearing different clothes and hair styles, driving a new car, using gadgets with cool new features (look at the success of iPhone, iPad, etc.!) and so on. These are all changes we embrace all the time!
Obviously, ‘change’ as such is not the issue; so what is?
Angst or fear? ‘Angst’ describes “an acute but unspecific feeling of anxiety”. There is no specific source, however, so angst is based on the abstract, the unknown.
In contrast, ‘fear’ is anxiety about a “possible or probable situation or event”. Strangely, fear of change hints at something specific and not at some unspecific angst the general term ‘change’ leads up to. Nobody seems to use the term angst relating to change. – So what is the mix-up about?
When it comes to fashion or hair styles the fear is not about the new color or cut but about how otherswill respond to it and how this will affect me.
Will the person I fancy secretly finally notice me and be attracted to me? Will I appear more daring, more professional or more ‘me’ branded – or what ever else it is you wish to symbolize or achieve through the change that you initiate.
People fear uncertainty of the consequences!
What people fear are the consequences for them that the ‘change’ entails and even more so if they have no control over the change. Translated into the workplace this comes down to what changes for the individual employee: First of all, their gotten-used-to equilibrium gets disturbed by an outside force – not by free choice of the individual. This type of change typically induces much uncertainty for an individual with little or no control over how it will play out for them. Instead, the well-established and familiar routine stops. It is replaced by something different, possibly something they don’t know or understand fully.
Now, where the fear comes from specifically for the employee is that one day the employee is competent in doing their work and delivering results, while the next day (i.e. when the ‘change’ takes effect) they may need to learn, adapt, give up comfortable routines, figure things out the hard way, may not know how, fail and struggle ‑ and be inhibited during this period to produce results again so this comes with a lack of satisfaction and appreciation or other forms of acknowledgment.
Other colleagues may adapt better, learn faster and surpass them in the ability to the work done in the new way. Then, the employee may find they got left behind and may no longer be needed by the new organization. This potential lack of professional competency is the origin of the fear possibly combined with loss of certain perks or proprietary knowledge acquired over time that helped them staying afloat and ahead of others in the good old days.
Ask yourself if you would like to be surprised today with a major reorganization, for example, that let’s you hanging in the limbo with uncertainty about your fate within the company for months or by a new process thought out in some remote ivory-tower that is unlikely to work in the reality of your workplace…
This is where the major opposing force to effective change comes from: the employee resistance. If resistance is high also the chances are high that the change will not be implemented effectively, not efficiently or not even at all.
Change as an equation Change can be expressed in an equation called Gleicher’s Formula (after David Gleicher and Richard Beckhard, 1969). Several variations of the equation exist but they all include the same three factors, which multiplied need to exceed the amount of resistance (=cost) on the other side of the equation for the change to be implemented successfully.
According to the streamlined formula (by Kathleen Dannemiller, 1992), change (C) is the product of
The dissatisfaction with the status quo (A),
The desired state (B) and
The practical steps taken towards the desired state (D).
These factors multiplied must outweigh the amount of resistance represented here by the cost of change (X). Here is the formula: C = (ABD) > X
In practice, there must be significant pressure present from dissatisfaction with the current state (status quo), a clear description of what the new state should look like in the future (vision) and effective measures taken to get from the current to the desired state (action plan).
Overcoming resistance in the changeequation Resistance may include different elements but a major contributor is the resistance originating from the people affected by the change. It is crucial for reaching sustainable results to keep this friction low by engaging these vital stakeholders actively and early on where possible.
What it comes down to in practice is having a sound plan and excellent execution of change management together with the people affected by the change. Include them to work issues out as they arise early on when alterations cost little and to buy in to the change and drive it. Don’t underestimate the impact and potential of employee empowerment and the pay-off that it can have for the organization that does it right!
Including and empowering employees effectively in organizational and procedural change projects becomes a powerful differentiator between an effective change implementation and a costly disaster.
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.
Business-focused Metrics
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.
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.
Changing the organization from within by engaging employees in business-focused employee resource groups (ERGs) – the practical “how-to” guide!
Why do companies need business-focused ERGs?
The answer can be as simple as this: Because it makes good business sense!
But what makes this answer so simple? – Well, because it’s made up of a few simple aspects:
First of all, every company, unless it is classified as a non-profit, is in business for one reason: to make money by providing some sort of product or service to its customers.
Simply put, if a company fails to rack up profits it will go out of business. That’s why focusing on the business benefits, the “bottom line”, the return on investment (ROI) makes not only sense but is key for successful employee resource groups (ERGs). It’s the bottom-line arguments, the financial benefits, that open the doors to executive support, buy-in, and funding.
Second, to take advantage of the diversity and capabilities of the human capital readily available.
Let’s look at companies, its workforce and its markets today: We live and work globally – everyone is connected. Our markets today are just as diverse and multi-faceted as our workforce should be. It takes all we know and who we are as diverse human beings (coming from different cultures and ethnicities, religious beliefs, physical characteristics, sexual orientation, and so on) to understand what our customers need and how we can give it to them.
Therefore, it makes sense not only to diversify the product portfolio to mitigate risk and seize opportunity but also to diversify the workforce for the same reasons. Not tapping into all of your workforce’s diversity and capabilities puts you at a disadvantage to companies who know how to maximize their human capital effectively.
Are you still with me? So, the next question is how to meet this goal.
Stay tuned for practical advice, keeping it simple, and examples taking you through the steps on how to build a business-focused ERG.
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