Category Archives: Company Culture

Got Culture?

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Gallup’s State of the American Workplace report is out. It’s a lot of information (214 pages!). But it’s important information and you’ll enjoy the most current data from this global collector and analyzer of work related data.

We talk about employee engagement – or some other euphemism for connecting with employees in a human, caring way – all the time. We get at our data through the famous surveys from organizations like Gallup, Great Place to Work™, Quantum Workplace, or Workplace Dynamics – or any of a hundred other providers of culture measurement and strengthening solutions. And we compete in geographical and industry competitions all over the world to claim one of the top spots in great organizational culture lists. All of this to attract and retain world class employees.

I’m a big believer that culture trumps most every other organizational dynamic in the war for talent, innovation, profitability, top line growth, competitiveness and any other thing you might measure. I’ve been quoted frequently as saying that “strong, positive  cultures improve everything we measure that we want to go up, as well as reducing everything we measure that we want to go down.” And it’s true. But intentionally creating and managing the right kind of culture is getting more difficult as the world gets more and more complex: 4 or 5 generations in the workplace; Big Data and Artificial Intelligence; globalization; nationalism; terrorism; population growth; global warming – the list of external dynamics – some might say threats – impact  our organizations’ success as well as how we relate with our employees seems to grow every day.

So, I appreciate organizations that collect data, make sense of it, and then make it available to all of us. I appreciate them a lot. And Gallup does a better job than most. This report, State of the American Workplace, has a ton of interesting data in it. You probably don’t want to read it in one sitting, but you do want to read it all.

In the executive summary, the report lays out the roadmap for leaders to follow in creating organization sustainability:

  • design and deliver a compelling and authentic employer brand
  • take employee engagement from a survey to a cultural pillar that improves performance
  • approach performance management in ways that motivate employees
  • offer benefits and perks that influence attraction and retention
  • enable people to work successfully from locations besides the office
  • construct office environments that honor privacy while encouraging collaboration
  • improve clarity and communication for employees who work on multiple teams

Sounds simple, I know; but any leader who has tried to create a stronger culture knows that this is hard stuff. It’s 3 steps forward, 2 steps back stuff. And Gallup has the data to back it up.

The executive summary ends with this:

“The one thing leaders cannot do is nothing. They cannot wait for trends to pass them by, and they cannot wait for millennials to get older and start behaving like baby boomers.”

The chapters are mini culture theses in themselves:

  1. U.S. workers: increasingly confident and ready to leave
  2. Do employees want what your workplace is selling?
  3. The real truth about benefits and perks
  4. The competitive advantage of engaging your employees
  5. A shift in managing performance
  6. A closer look at the 12 elements of engagement
  7. Making sense of matrixed teams
  8. The changing place and space of work

I encourage you to delve into these chapters and consider the data, the analysis and the conclusions in each. In chapter 2, data are shared that might motivate you to reconsider how you think your employment candidates are evaluating your organization as a potential employer:

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Increase in income potential and a well-known brand are not as important as they once were. Did you know that?

There are a number of similar “ah-ha” data points in this report. They are easily accessible, simply constructed and are potential game changers as you think about your organization’s culture and its impact on your ability to retain and acquire the talent you need.

Download it here. I think you’ll gain surprising new insights.

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Filed under Big Data and HR, China Gorman, Company Culture, Data Point Tuesday, Employee Engagement, Employee Satisfaction, Gallup, Generations at work, HR Analytics, HR Data, HR Trends, Human Capital, Talent Analytics, Talent Management, Workplace Culture

Tangible Vs. Intangible Assets

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You might not be aware of a trend in the corporate valuation world. You might not think that developments in how companies are being valued by the financial world would be of interest to HR. But, hold on to your horses! Validation of “our people are our greatest asset” is here!

Ocean Tomo LLC, the Intellectual Capital Merchant Banc™ firm, publishes an annual study of intangible asset market value. The most recent, published in early 2015, includes a rather eye-popping chart. But first a couple of definitions.

Tangible Asset (from Investopedia):  A tangible asset is an asset that has a physical form. Tangible assets include both fixed assets, such as machinery, buildings and land, and current assets, such as inventory. The opposite of a tangible asset is an intangible asset.

Intangible Asset (also from Invetopedia):  An intangible asset is an asset that is not physical in nature. Corporate intellectual property (items such as patents, trademarks, copyrights, business methodologies), goodwill and brand recognition are all common intangible assets in today’s marketplace.

Tangible assets are things. Physical things. Intangible assets are the results of human intellect and work. And the financial value of those – tangible and intangible assets – have completely reversed in the last 40 years. Completely!

Ocean Tomo provides the following chart showing this complete reversal.

Ocean Tomo Intangible AssetsIf ever the argument was made that our people are, in fact, our biggest asset, this nails it. In 1975 tangible assets comprised 83% of the S&P 500 market value; in 2015 intangible assets made up 84% of the S&P 500 market value. That means people, human beings are the greatest driver of corporate value — and not by a little bit.

So here’s the question:  if the finance/valuation world is truly valuing our organizations based on the value of our human capital, why is it so hard to talk about – much less act upon – the value of building cultures fit for human beings?

Something to think about during this week’s heat wave.

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Filed under China Gorman, Company Culture, Culture, Data Point Tuesday, Human Capital, Ocean Tomo

The ROI of Working Human

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The SHRM Foundation’s latest Effective Practice Guideline, Creating a More Human Workplace Where Employees and Business Thrive, was released just in time for the SHRM Annucal conference this week. The timing couldn’t have been more appropriate, as it follows on the heels of last month’s WorkHuman conference.

If you’ve been following Data Point Tuesday for a while, you know I’m a big fan of the SHRM Foundation’s EPGs. They are researched, written, and reviewed by leading academics in the Human Resources field, and are underwritten by some of the most innovative suppliers in the HR arena. This EPG, sponsored by Globoforce, brings a great deal of data and analysis into one easily read report. In other words, it’s chock full of validated research and data on a topic that is becoming top of mind for CEOs, boards, and all C-Suite members:  the connection between employee well-being and business success.

The business case for creating a more human workplace is made in the first section of the report. It includes Strategies that pay off, High costs of our current work culture, and Multiple benefits of a thriving work culture. A few of the gems from this section include:

  • The American Psychological Association estimates that workplace stress costs the U.S. economy $500 Billion (!) a year.

  • Workplace stress increases voluntary turnover by nearly 50%.

  • Gallup estimates that poor leadership associated with active worker disengagement costs the U.S. economy $450 – $550 Billion (!) per year.

  • 550 Billion workdays are lost annually due to stress on the job.

  • 60 – 80% of workplace accidents are attributed to stress.

The supporting data showing how detrimental most workplace cultures are to their financial success are proliferating. Even if treating employees as if they were human beings wasn’t the right thing to do, the numbers alone make it hard to understand why creating more humanity-focused cultures aren’t the leading priority for every single organization and for every single CEO!

Once past the business case, the report lays out a thorough treatment on how to fix your culture in the section, Seven Ways to Help Employees Thrive. Not rocket science, but rather simple common sense, these seven elements come with case studies, examples and specific “how tos” for you to consider in your own organization.

  1. Share Information About the Organization and Its Strategy
  2. Provide Decision-making Discretion and Autonomy
  3. Create a Civil Culture and Positive Relationships
  4. Value Diversity and Create an Inclusive Atmosphere
  5. Offer Performance Feedback
  6. Provide a Sense of Meaning
  7. Boost Employee Well-Being

Citing employers like Alaska Airlines, Genentech, General Mills, Ritz-Carlton, Microsoft and many others, author Christine Porath loads this EPG with practical tips, examples and evidence.

At its heart, however, humanity-focused workplaces start at the top. They start with trustworthy leadership and sustainable leadership behaviors. This graphic says it all:

EPG May 24 2016

This report shows, once again, that there is absolutely no downside to not only treating employees humanely, but consciously and intentionally investing in their well-being. When our employees feel respected as individuals, appreciated for their contributions, and supported in their family lives and community commitments, as well as their physical health and mental well-being, our organization missions are more likely to come to fruition and all of our stakeholders – every single one of them – will be more than happy with the return on their various investments.

Thanks to the SHRM Foundation’s newest EPG, The ROI of Working Human has never been more clear.

 

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Filed under China Gorman, Christine Porath, Company Culture, Culture, Data Point Tuesday, Effective Practice Guidelines, Employee Engagement, Employee Stress, Engagement, Globoforce, HR Data, SHRM Foundation

Should Leaders Wear Their Hearts On Their Sleeves?

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Most readers of Data Point Tuesday know that I’m focused these days on the intersection of culture, organization performance and humanity in the workplace. Deloitte’s new culture change solution unit, CulturePath, has just published a white paper that has an interesting spin on culture, organization performance and employee emotion. This statement in the executive summary of Take your corporate culture off cruise control; Power up the emotive engine in your workplace, really caught my eye:

“A variety of forces are coming together to make cultural alignment a priority for most companies… By getting deeper into how cultures work, and by pushing the emotional connections, companies can actively manage their culture to drive critical business outcomes.”

I believe “emotional connections” is another way of describing humanity. So I read the rest of the report with interest.

Deloitte reports (through its annual Human Capital Trends report) that 87% of executives cite “culture and engagement,” the highest of all HR-related challenges, as one of their top challenges – with a full 50% describing the challenge as very important. This is stunning. Whether or not 87% of executives are expressing their concern about their organization’s culture and the state of employee engagement in that organization is beside the point. Culture is becoming more than strategy’s breakfast. It’s becoming a context within which leaders are beginning to pay attention to human beings rather than skillsets. And this new report gives some insight into just why execs are paying to attention to emotion and humanity.

The section, “Putting emotion in the culture equation” is another attempt by consultants and researchers to emphasize the value of the Deloitte CulturePath 1human. The value of the heart. We need this. Deloitte’s particular push, aligning culture with business strategy, seems the right way to go and suggests that there are three primary avenues to make emotional connections with talent:

 

  • Higher purpose – pride in the mission helps lead to commitment to the organization as a whole
  • Examples from the top – the stories and actions from leaders at the top have power much greater than any “program” communication
  • Participation – by linking the deeds of individuals at every level to larger goals, meaning can be generated across the organization. If every action is linked to the higher purpose, talent will generally be more committed.

It’s becoming more and more clear that connecting emotionally to employees through their humanity is a winning approach to innovation, productivity, competitiveness, and top- and bottom-line growth. Leaders who focus on building their trustworthiness, accessibility and comfort with transparency are far more likely to appear human and to relate more effectively with the humans in their workforce. Turns out, emotions are a good thing. And wearing your heart on your sleeve just might make you a better leader – and improve your organization’s performance.

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Filed under China Gorman, Company Culture, Culture, CulturePath, Data Point Tuesday, Deloitte

The True Cost of On-Demand Talent

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WorkMarket has just published a new survey analysis, the 2016 Corporate On-Demand Talent Report. It’s got some really great information about “On-Demand” talent in our changing economy. And while a definition of “On-Demand” was never given, it’s clear that it means more than the traditional blue collar or retail “temp” definition. It clearly also includes professionals of all stripes who either prefer a more fluid and flexible on-demand employer-employee relationship, or who have been displaced and who can’t seem to find new, satisfying full-time employment.

Some interesting findings:

  • Nearly 17% — or 27 million workers – of the U.S, workforce is now part of the corporate on-demand economy

  • 88% of businesses are currently using an on-demand workforce

  • 46% of businesses are using on-demand labor for more than a year at a time

  • 42% of businesses are using the same professionals more than half the time

At 9 pages, the survey report is a quick and interesting read. The survey results are from an online survey of 1,037 adults that was fielded in November and December last year. The employers represented appear to be an appropriate cross-section in terms of revenue size and numbers of employees.

The results of this survey show an economy and workforce undergoing an even larger transition than we might have realized: more than 40% of businesses indicated their on-demand professionals comprised more than 30% of their overall workforce. WorkMarket suggests that employers are trying to shrink their fulltime workforces, with all the expenses and liabilities they entail, while trying to grow their businesses. This could mean a fundamental reshaping of the employer-employee relationship. Employers are considering how they can we grow their businesses while shrinking their commitment to their people, seems to be the message from this report.

This graphic is challenging for me:

WorkMarket 1

I guess my question is: what does flexibility mean? Does it mean having the ability to move people around when and where we need them? Does it mean being able to staff up and down during peaks and valleys? Or does flexibility mean being able to “rent” skills for as long as possible without calling the skills holders “headcount” and having to provide a full range of benefits? Is headcount a dirty word now?

Does lowering labor costs mean paying on-demand workers less than fulltime workers? Does lowering labor costs also mean not providing the full range of benefits to on-demand workers that similarly skilled and deployed full-time workers receive?

These findings are surprising to me because I’ve actually been noting a growth in the number of employers that are focusing on creating more human workplace cultures. Creating cultures that treat employees as full human beings, not just skills that clock in and clock out. The proliferation of data connecting better corporate performance with positive, employee-focused cultures seem to contradict these findings that suggest employers will go to great lengths to NOT hire full-time employees and be liable for them.

WorkMarket may have uncovered unintended consequences of the On-Demand economy. At least I hope they’re unintended. These survey results could turn our conversations away from the ever elusive quest for employee engagement to a more useful discussion about the changing nature of the employer-employee relationship in the U.S. If employers really do want skills flexibility more than they want a stable, reliable workforce to whom they are committed, we have only begun to experience the On-Demand economy.

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Filed under China Gorman, Company Culture, Data Point Tuesday, On-Demand Economy, Workforce Management, Workforce Planning, WorkMarket

Does Your CEO Have a Higher Purpose?

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Each year I look forward to the pwc CEO survey findings. And they’re just out. You can see their top ten findings here.

If you’re in HR you need to know what your CEO is thinking about. What she’s worried about. What keeps him up at night. What she’s planning to tackle in the next several years. And if you don’t have access to your CEO, this survey can help you make sure you’re preparing for what may be coming down the pike. These survey results could help you be brilliant for your organization – and for your CEO.

The top ten issues for 2016 identified by U.S. CEOs in the survey are fascinating. They cover regulation, cyber security, tax reform, doing deals, paying attention to customers, investors, employees – and understanding the organization’s higher purpose. A virtual smorgasbord for HR!

Top issues CEOs are expecting to confront in 2016 include:

  1. U.S. market prospects will outshine the low-growth world

  2. Over-regulation will continue to pose a threat to business growth

  3. Regionalization in trade and divergence in economic models and regulatory frameworks, with threats to open Internet

  4. Customers and other stakeholders will expect business to demonstrate a higher purpose over the coming years

  5. Prospects will improve for laying the groundwork for U.S. tax reform

And, in 2016, U.S. CEOs will plan to:

  1. Strengthen the technology foundation to set their business apart

  2. Do more deals, especially domestically

  3. Hold fast in China, while recognizing the bumps along the way

  4. Anticipate the needs of future customers and other stakeholders

  5. Prepare the Millennials for leadership roles

I’m fascinated that 3 of the top ten land squarely in HR’s court: demonstrating a higher purpose (that’s culture), anticipating the needs of…stakeholders (that’s talent), and preparing Millennials for leadership roles (that’s talent development). If you ever wondered whether or not your CEO thinks about HR, the answer is a resounding YES in 2016.

I’m particularly intrigued with the higher purpose issue. It’s no secret that bringing humanity into the workplace is a topic on the minds of many business leaders. Having CEOs concerned that customers, investors, employees, strategic partners all want in on the higher purpose is pretty darned interesting. What are you doing to help the organization understand and communicate its higher purpose this year?

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Anticipating the needs of customers and employees is another thought provoking issue. Addressing employee needs like wellness – physical and financial, parental leave, career development, and providing opportunities to contribute to society are clearly articulated needs of today’s U.S. employees. Are you helping your CEO provide options to meet these needs?

And preparing Millennials for leadership roles is front and center, isn’t it? Investing in their development brings a number of benefits to the organization in addition to deepening your leadership bench. Millennials frequently report that learning and skills development are as – or more – important than compensation growth. Many report that they leave their employers in search of learning and growth opportunities. Investment in their leadership development undoubtedly impacts retention in a positive way. Are you beefing up your succession plan and its supporting programs?

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My guess is that most HR practitioners and leaders are currently thinking about these 3 priorities, among a long list of others. Isn’t it nice to know that your CEO may just be ready to help you tackle these issues?

The bigger question may be, are you ready for your CEO to start asking “what’s the plan?”

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Filed under CEOs pwc, China Gorman, Company Culture, Data Point Tuesday, HR, Leadership Development, Organization Values, pwc, Strategy, Talent Management, Uncategorized, Workplace Culture

Financial Wellness is Officially a Thing

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If you’ve ever had an employee lose their home to foreclosure, if you’ve ever had an employee lose everything in a fire, if you’ve ever had an employee deal with the costs of catastrophic medical bills, then you know that personal financial pressures are not good for your workplace. The personal financial pressures beating down on one employee impact the whole workgroup. Everyone’s productivity drops. And how an employer responds (or doesn’t respond) tells a lot about the values of the organization.

There are the “social” responses: let’s raise money so Sue can pay for her husband’s medical bills not covered by our health insurance; let’s donate clothes and furniture for Bob and his family whose house burned down; or, does anyone know of a house that Beth and Mary Ellen can rent till they get on their feet?

On the surface, these are all caring and supportive organizational responses that are frequently organized by the HR Department. But let’s step back for a minute.

What if Sue and her husband had attended financial planning seminars that had delved into how to be prepared for unexpected medical costs? What if Bob had spent time one-on-one with a financial planner every year and had an emergency fund ready to go when his family lost its house? What if Beth and Mary Ellen together had spent time with an investment advisor and as a result never bought the house they gave back to the bank because they couldn’t afford it?

Financial wellness – an emerging recognition that health is about more than the physical body – is becoming more than a topic of conversation. It’s becoming a subcategory of services and benefits that employers are deploying within their total rewards packages. It used to be that only the C-Suite got financial planning support as part of their compensation. But more and more employers are recognizing that personal financial stress can be as negative in relation to employee productivity and engagement as other types of stress. And they are stepping up by providing access to apps like HelloWallet, as well as services like annual financial planning seminars and access to financial counselors all year long.

In a recent white paper, Financial Wellness, The Future of Work, Matt Fellowes and Jake Spiegel give an overview of the rise of financial wellness as an employer concern and describe the historical macro-economic context within which employers are paying attention to the financial health of their employees. It’s an interesting read and some of the data involve huge sums of money. It does an excellent job of connecting the macro (the economic trends) with the micro (your individual employees).

It’s interesting to note the birth of the Financial Wellness category as shown in the chart below:

Aug 11 2015 Hello Wallet

Born in the Great Depression (2007-2009), the steady rise of interest in this category can be understood as chronicled through media attention.

Many employers are looking for cost effective solutions that will help their employees avert personal financial disaster. Many old school benefits providers are adding programs and a great many start-ups are tackling this need as well.

Helping Sue, Bob, Beth and Mary Ellen – and their colleagues – before personal financial disaster strikes may not be just a “nice to have” in today’s complex economic environment. It might be one of the benefits features that makes your organization more attractive to prospective employees and that makes your organization more sticky for existing employees.

Join me tomorrow at 11:00amPDT/2:00pmEDT for a webinar in which we’ll take a look at the cultural values that make this kind of benefit make sense. You may register here:  http://info.hellowallet.com/2015.08Webinar.ChinaGorman.html.

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Filed under C-suite, China Gorman, Company Culture, Data Point Tuesday, Financial Wellness, HelloWallet, Total Rewards