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Understanding Your Best and Your Worst Customers

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As Covid-19 declined, a European multichannel retailer observed a decline in its online revenues, which caused alarm. But then they looked at the data a different way, focusing on transactions by individual customers. When they sliced the data in this manner, they realised that their customer base was actually healthy, but that their channel behaviour had shifted: Online purchasing, which had become unnaturally accelerated during the pandemic, was now returning to a more normal pattern of online and offline purchasing.

A European multi-brand underwear retailer was a major reseller of La Perla, a premium Italian lingerie brand. A new merchandising leader undertook a review of brand profitability and saw that the company was actually losing money on its La Perla sales. The brand had relatively low margins, a high return rate, and required expensive photography costs to capture its products’ elegance online. The company debated whether it was worth carrying a brand that consistently created losses. However, when they looked at La Perla through the lens of the customer, they reached a completely different conclusion. La Perla was often the first brand purchased by their most valuable customers, who went on to purchase a wide variety of more profitable products. Instead of cutting ties with La Perla due to its lack of profits, the retailer ended up expanding their range of La Perla offerings — and this became a critical driver of its growth.

What do these two examples have in common? Companies often look at their business by focusing on geographic regions, specific brands or products, or by sales channel. This makes sense, because this data is always at hand, and organisations are often structured around geography or channels. But by looking at data and business problems from a frame of reference in which the customer is the atomic unit for analysing revenue and profitability, these firms were able to gain a new perspective on the problem they were facing, either properly diagnosing the problem or stopping themselves from making a bad decision.

As you analyse your firm’s revenues and profits, or as you make plans for the future, what’s your unit of analysis?

At too many firms, analysing the data of individual customers gets short shrift. Management reporting systems make it easier to focus on other things, and the organisational structure can make other metrics a priority. (If you have a person in charge of online sales, it feels natural to judge his or her performance by channel metrics.) This lack of focus on individual customer data is often a mistake. Revenues are generated by customers pulling out their wallets and paying for your products and services. Revenue is the sum of the value of all the customer transactions that occurred in a given time period.

Many firms recognise the need to think differently about using customer data, but they do not know where to start. They are often trapped in an old-fashioned view of their business, structured around products or channels. How do you approach the task of getting your people to shift their perspective and start thinking about your firm’s performance using the customer as the atomic unit of revenue and profitability?

We have found that performing a customer-base audit is a fundamental catalyst for change.

What is a Customer-Base Audit?

A customer-base audit is a systematic review of the buying behaviour of a firm’s customers using data captured by its transaction systems. The objective is to provide an understanding of how customers differ in their buying behaviour and how their buying behaviour evolves over time.

  • We are not talking about “knowing the customer” through the lens of traditional market research. We are not interested in the demographic profile of our customers. We are not interested in their attitudes. We are interested in understanding their actual buying behaviour.
  • It is an unashamedly descriptive and diagnostic exercise. It doesnot involve any forecasting models, AI/ML methods, or prescriptive advice. Rather, it lays the foundation to perform these kinds of tasks more effectively after the audit has been completed.

The starting point is a list of transactions for each customer (date, time, products purchased, total spend, etc.). This will reside somewhere in your company’s operational IT system.

Traditional reports will summarise performance by product. Think of an Excel worksheet where the rows correspond to individual products and the columns correspond to time (e.g., quarter).

Now, imagine an alternative summary table — again, think of an Excel worksheet — where the rows now correspond to individual customers and the columns correspond to time (e.g., quarter). The entries in the table report each customer’s total spend with the firm in that particular time period. Another table tells us how many transactions each customer made with the firm. (For most firms, these tables will contain lots of zeros.) If you’re lucky, you’ll also have an equivalent table that summarizes the profit associated with each customer in each period.

How do we approach the task of gaining insight from such a customer-level summary? As we reflect on the various questions that are asked when leaders seriously engage with the idea of understanding the performance and health of their business using the customer as the atomic unit of revenue and profitability, five broad themes appear, which we call the five lenses of a customer-base audit.

Who are our Best and Worst Customers?

If we reflect on a single vertical slice of the table, say the columns associated with last year, the following types of questions come to mind. How many customers did we have last year? How do these customers differ in terms of their value to the firm? For example, how many customers purchased from us just once last year? How many customers accounted for half of our revenue last year? Half of our profit? If we compare, say, the 10% most profitable customers to the 10% least profitable, what lies behind these differences? To what extent are they driven by differences in the number of transactions, the average value per transaction, and average margin per transaction? Digging deeper, what about differences in the types of products they purchased?

The set of simple analyses that explore how different our customers are from each other lead to a fundamental conclusion: customers are not equal. Most people underestimate just how unevenly revenue and profit are distributed across customers.

How is Customer Behaviour Changing?

If we reflect on two adjacent vertical slices of the table, say the columns associated with last year and the year before, the following types of questions come to mind. How many customers purchased from us in both years? How does their behaviour and profitability differ from those that purchased from us in just one of the two years? How stable is customer behaviour? What proportion of our “top” customers in one year remain as “top” customers the next? What lies behind the observed changes in customer-level profitability? To what extent are they driven by changes in the number of transactions (average order frequency), the average value per transaction, and average margin per transaction?

The analyses that answer these questions help identify the changes in buyer behaviour from one period to the next and show that period-on-period variances can be explained by changes in individual customers’ average order frequency and value.

How Does a Cohort of Customers Change Over Time?

Suppose we reflect on a horizontal slice of the table. In other words, we reflect on the behaviour of a cohort of customers, starting from their first-ever transaction with the firm. (A customer cohort is defined as the set of customers acquired in the same time period, e.g., those customers who made their first purchase in January, or the second quarter of the year.) Questions that arise include how many customers appear to be “one and done”? Of those that make a second purchase, how long does it take them to do so? What is the nature of the decay in customer activity? For those cohort members that remain active over time, how does their transaction frequency, average spend per transaction, and average margin evolve over time?

The analyses that answer these questions are central to getting the firm to think about the cohort as a key unit of analysis when seeking to understand revenue and profit dynamics. A common conclusion is that the revenue for each cohort decays over time and recognizing the nature of this decay is critical for understanding long-term growth.

How Do Different Cohorts Behave Differently?

Having looked at one cohort, it is natural to look at another cohort and start questioning how and why the cohorts differ. Looking beyond a superficial comparison in terms of overall revenue or profitability, the curious manager will ask questions that seek to understand the differences in terms of cohort size, how they differ in the evolution of the percentage of cohort members that remain active over time, how they differ in terms of the evolution of spend per transaction, and so on.

Putting It All Together

The fifth and final lens sees us stepping back and considering the whole customer × time worksheet (described above), integrating the types of analyses introduced via lenses 1–4 to gain an overall customer-centric view of firm performance. The types of questions answered include

  • How “healthy” is our customer base? How reliant are we on a small group of customers? How has the “quality” of our customers changed over time? How do our “newer” customers compare to our “older” customers in terms of their behaviour? Are the differences good or bad?
  • What level of business can we expect from our current customers over the next year or two? In light of this, how realistic are our growth objectives / business plans in terms of the expectations they place on customer acquisition, retention, etc.

Conclusion

Much like Copernicus changed the way people thought about the earth’s place in the universe, we have observed that taking a view of the firm’s performance using the customer as the unit of analysis can have a similarly profound impact on the way the firm thinks about assessing performance and planning for growth. This results in a mindset shift for organizations to move from talking about “what makes us money” to “who makes us money.”

We expect that some people, lurking in various parts of your organization, are conducting ad-hoc analyses that can provide the answers to some of the questions posed above. But it is rare to find the analyses being pulled together in one place, let alone making their way to senior management and the CEO.

Yet without a solid understanding of the buying behaviour of your customers, including an appreciation of how they differ in their value to the firm and a solid understanding of how their behaviour is evolving over time, how can you be expected to ask the right questions and make informed decisions?

The customer-base audit provides this foundation for any executive wanting to gain an understanding of the health of their organisation’s revenue and profit streams and the feasibility of their growth plans.

Given our current situation knowing that your colleagues or employees are best suited for this new scenario we find ourselves in. Finding the right talent, the best fit for the job and your organisation can be a very challenging task. It is now important to find out whether your managers or your team is well-equipped of working together from various locations. It requires deep knowledge of their personalities, strengths, weaknesses, interests, work style and other characteristics. Our technology and solutions will do the work for you, helping you discover if your people are resilient during times of hardship, if they are autonomous, if they are team players, without actual human contact. Given that our platform is cloud-based, everyone can use it from home as well. Humanity finds itself at a crossroad for various reasons now, why not help people discover and develop themselves from the comfort of their own homes?

Request a free demo:

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Sources:

https://www.entrepreneur.com/leadership/5-good-reasons-to-fire-your-worst-customers/281680
https://www.merkle.com/blog/good-customers-vs-bad-customers-how-you-can-tell-them-apart-and-get-better-it
https://www.mindtools.com/arys2mu/dealing-with-unhappy-customers

What Companies Still Get Wrong About Layoffs

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Today it’s difficult to read the news without seeing an announcement of layoffs. Just this week, Morgan Stanley announced it will reduce its workforce by 2%, Buzzfeed said it would cut headcount by 12%, and PepsiCo said it plans to cut “hundreds” of jobs. The same is true at Redfin (13%), Lyft (13%), Stripe (14%), Snap (20%), Opendoor (18%), Meta (13%), and Twitter (50%). So many companies have initiated layoffs recently that tech and HR entrepreneurs launched trackers like TrueUp Tech and to Layoffs.fyi dedicated to monitoring the staff reductions across the tech sector.

Traditionally, employers resort to layoffs during recessions to save money. Companies continue to cling to the idea that reducing staff will provide the best, fastest, or easiest solution to financial problems.

As if layoffs aren’t painful enough, many companies make matters worse by handling them poorly. Handling layoffs in a humane way is important for the morale of both the impacted and retained employees, it will impact the company’s ability to hire strong talent later, it affects litigation risk (people who feel mistreated are more likely to sue), and, of course, it’s the right thing to do.

Layoff Myths and Mirages

Contrary to popular belief, there’s not much evidence that layoffs are a cure for weak profits, or, to use the current euphemism, that they reposition a firm for growth going forward.  It’s very difficult to sort out the relationship because firms that are laying off are almost by definition in trouble. The research evidence has not found any support for the overall idea that layoffs help firm performance. There is more support for the idea that where there is overcapacity, such as a market downturn, layoffs help firms. There is no evidence that cutting to improve profitability helps beyond the immediate, short-term accounting bump.

Employers also often underestimate the cost of layoffs in immediate financial terms, as well as in the lingering burden it places on remaining resources — both financially and emotionally. There is a huge problem in HR generally that the stuff that is easy to put on a spreadsheet outweighs the stuff that isn’t.

The toll of layoffs is high. In many industries, layoffs beget lower productivity and profits. When sales are slow, for instance, many retailers cut staff. But several studies show a correlation between bigger staffing and substantially higher sales.

Layoffs destroy trust

Eighty-five percent of respondents rated job loss as their top concern in Edelman’s 2022 Trust Barometer. Layoffs break trust by severing the connection between effort and reward. The premise of a layoff is that if it weren’t for the economic conditions facing the firm, employees would keep their jobs as long as they perform them well.

The fact that this is a psychological contract rather than in most cases a legal one is beside the point. In the domain of trust, what matters is that employees are being asked to willingly be vulnerable to the power their company has as an employer, and trust that the company will act in ways that don’t violate their trust. Research finds that, once betrayed, this trust is hard to recover.

Forgetting to be human

In the process of trying to do everything “right,” some managers forget to be human. It’s amazing how often people rigidly follow a script during notification meetings for fear of saying something wrong. It’s even more amazing how often they forget to mention the niceties, like the fact that they appreciate everything the employee did for the team or affirmation of the employee’s abilities. Layoffs are emotional and raw; it’s critical to show empathy when delivering such painful and often scary news.

It’s also critical to help employees maintain their dignity. That’s why having a security guard escort the employee out the door should be avoided, except in the rare cases where it’s truly needed.

Failing to plan ahead

Founders and executives at high-growth companies are often caught unprepared for layoffs. Many assume the only possible direction is up. With pressure to grow, it’s easy to hire too many people too fast, and later need to lay off employees quickly. And, even under conditions of sustained growth, layoffs can become necessary due to acquisitions.

Successfully managing workforce changes within today’s landscape ultimately requires evaluating your actions against the backdrop of trust. Your company will weather the storm of layoffs more successfully if you can maintain trust with three groups who will determine your success in the future: employees you let go, employees you retain, and employees who don’t yet work for you.

You have a great opportunity to be better at this than other companies. Keeping trust at the centre of your decision-making can lead to surprising, beat-the-odds success, as the above examples from Honeywell and Nokia show. Centring trust also offers leaders a reminder: Your actions will have consequences that are more visible than they’ve been in the past and you will be judged as trustworthy — or not — based on them.

Given our current situation knowing that your colleagues or employees are best suited for this new scenario we find ourselves in. Finding the right talent, the best fit for the job and your organisation can be a very challenging task. It is now important to find out whether your managers or your team is well-equipped of working together from various locations. It requires deep knowledge of their personalities, strengths, weaknesses, interests, work style and other characteristics. Our technology and solutions will do the work for you, helping you discover if your people are resilient during times of hardship, if they are autonomous, if they are team players, without actual human contact. Given that our platform is cloud-based, everyone can use it from home as well. Humanity finds itself at a crossroad for various reasons now, why not help people discover and develop themselves from the comfort of their own homes?

Request a free demo:

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Sources:

https://hbr.org/2022/12/what-companies-still-get-wrong-about-layoffs
https://www.entrepreneur.com/leadership/the-7-worst-mistakes-companies-make-when-laying-off/307308
https://knowledge.wharton.upenn.edu/article/how-layoffs-cost-companies/

Recession And How To Prepare Your Business For It

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Many economists predict we will enter a recession in the next few quarters if we’re not in one already. With many businesses still recovering from the effects of the pandemic and memories of the Great Recession of 2008 still fresh in most of our minds, many business owners are not prepared to face another economic recession.

What is a recession?

A recession is a prolonged period of an economic downturn that is both widespread and significant. A period of economic downturn often lasts at least six months or longer. For this reason, an economic recession is often recognized after a country’s gross domestic product declines for two consecutive quarters. According to this definition, the U.S. would currently be experiencing an economic recession.

However, as NPR reported, this is “not an official definition.” Many factors determine whether a country is in a recession, and due to job growth and foreign business investment, “The White House has pushed back against calling the current economy a recession,” NPR also said.

What does it mean to recession-proof your company?

There are two sides to recession-proofing your company. One that most employers are probably familiar with and one that’s too-rarely considered:

Recession-proofing your business is making your organisation economically resistant through actions traditionally thought to shield business during recessions: reducing expenses, scaling back ambitions, and monitoring cash flow to weather the coming storm.

Recession-proofing your workforce refers to maintaining employee morale, motivation and inspiration during economic downturn.

While most companies focus on their bottom line to survive a recession, research on how to help your business survive a recession by Great Place To Work has shown that focusing on employee engagement – particularly diversity and inclusion – helps companies thrive during a recession. In fact, our data shows that companies that value diversity and inclusion outperform other companies by as much as 400%.

1. Manage your cash flow

In easy or difficult economic times, cash is always king. Cash flow, the timing of when money flows into and out of your business, can make or break your company. When times are tough, however, cash flow challenges can be particularly difficult to overcome. With expenses higher than usual and revenue lower than usual, cash will be tight, and balancing your budget could start to feel a bit like a tightrope walk.

To get a handle on your company’s cash flow, look at your current cash flow statement daily, and start forecasting (if you aren’t already) with trailing three-, six- and 12-month cash flow forecast charts. These charts can help you anticipate times when cash is going to be tight, so you can implement strategies to prevent these challenges from occurring.

Additionally, create best- and worst-case scenario budgets that help you better prepare for unforeseen challenges or unexpected triumphs.

2. Proactively embrace your best customers

A recession is a perfect opportunity for you as CEO to strengthen your relationships with your biggest and most important customers. Remember they are feeling the threat of recession as well. Customers always want to meet the CEO of the company they have purchased from so this is an opportunity for you to hit the road, visit customers, and spend time with your salespeople. If you cannot have an in-person meeting, meet on Zoom. If you are uncomfortable selling, get over it.  I recently spoke to a founder/CEO with a technical background who told me he “learned to appreciate sales” even though he was uncomfortable selling at first. If you’ve historically thought your time was best spent on product, it’s time to reconsider: In a downturn, your best use of time is talking to customers and making sales.

Remember that it is easier and cheaper to sell more to existing customers than to land new customers. This is especially true in a recession as everyone is taking a second look at all expenses. If you are in a B2B business, visiting customers also gives you real insight into how happy your customers are and whether you are at risk of customer churn. If you run a B2C business, invest in rewards programs and other initiatives to make sure your best customers feel appreciated. Churn risk increases during recessions as companies prioritize their spending and pull back on new initiatives. High churn rates have a direct impact on company valuations. As a CEO you are in the unique position to lead by example and your employees will recognize your effort.

3. Embrace your best employees

Recessions force employees to re-think their career choices. If employees start to doubt the viability of the company, they will take the calls from larger firms in the market — regardless of their equity upside — that can pay more in current income, bonuses, and benefits.

Get ahead of this. Spend time with your best employees making sure you understand their mindset. Employees always assume their equity stake is based on the last round of funding, so down rounds create employee angst. Losing top talent will have a very negative impact on your company. Managing and maintaining your momentum is critical both in terms of retaining your top talent as well as recruiting new talent.

Several times in my career I got ahead of this issue by offering additional stock option grants to top employees to make sure they did not even take the recruitment calls. It works. It’s far easier to get ahead of retaining top talent than it is to try to counter-offer once your employees are entertaining other options.

Recessions are a natural part of the business cycles and companies of all sizes must weather them or wither. Startups face a unique challenge because until they become profitable, they rely on outside capital to fund their growth and evolution to maturity. To make it through and emerge even stronger, conserve cash, and pay close attention to your customers, investors, employees, and culture.

Given our current situation knowing that your colleagues or employees are best suited for this new scenario we find ourselves in. Finding the right talent, the best fit for the job and your organisation can be a very challenging task. It is now important to find out whether your managers or your team is well-equipped of working together from various locations. It requires deep knowledge of their personalities, strengths, weaknesses, interests, work style and other characteristics. Our technology and solutions will do the work for you, helping you discover if your people are resilient during times of hardship, if they are autonomous, if they are team players, without actual human contact. Given that our platform is cloud-based, everyone can use it from home as well. Humanity finds itself at a crossroad for various reasons now, why not help people discover and develop themselves from the comfort of their own homes?

Request a free demo:

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Sources:

https://hbr.org/2022/11/5-ways-startups-can-prepare-for-a-recession
https://www.forbes.com/sites/forbesbusinesscouncil/2022/09/01/how-to-prepare-your-small-business-for-a-recession/
https://www.jpmorgan.com/commercial-banking/insights/how-to-prepare-your-company-for-a-recession

Your Job Is Not Your Whole Identity

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Reducing yourself to any single characteristic, whether it be your title or your job performance, is a deeply damaging act. Thanks to major shifts in the labor market, workers are switching organisations, functions, and even industries much more frequently than past generations. But as our careers take these dramatic leaps, we ourselves are not wholly reinvented. We often bring pieces of our past work experiences with us, making our work selves more like a manuscript than a whiteboard that can be wiped clean with each new role. 

Are you a self-objectifier in your job or career? Ask yourself a few questions, and answer them honestly.

  • Is your job the biggest part of your identity? Is it the way you introduce yourself, or even understand yourself?
  • Do you find yourself sacrificing love relationships for work? Have you forgone romance, friendship, or starting a family because of your career?
  • Do you have trouble imagining being happy if you were to lose your job or career? Does the idea of losing it feel a little like death to you?

If you answered affirmatively to any or all of these, recognise that you will never be satisfied as long as you objectify yourself. Your career or job should be an extension of you, not vice versa. Two practices can help as you reassess your priorities.

1. Get some space

Maybe you have been in an unhealthy relationship or two in your life but only recognised this when you had a break from it, whether voluntary or involuntary. Indeed, this human tendency probably contributes to the fact that most trial separations lead to divorce, especially when they last more than a year. Space provides perspective.

Use this principle in your professional life. To begin with, it should be the main goal of your vacation—to get a break from work and spend time with people you love. As obvious as this may sound, that means taking your vacation, and not working during it at all. Your employer should thank you for doing so.

In religious traditions, rest isn’t just nice to have; it is central to understanding God and ourselves. “For in six days the Lord made heaven and earth, the sea, and all that is in them, and rested on the seventh day,” the Book of Exodus reads. “Therefore the Lord blessed the Sabbath day and made it holy.” If God rests from work, maybe you should too.

Such a practice doesn’t have to be religious, and can be done in a lot of ways besides simply avoiding all work on Saturday or Sunday. For example, you can take a small Sabbath each evening by proscribing work and dedicating all your activity to relationships and leisure.

2. Make friends who don’t see you as a professional object

Many professional self-objectifiers seek out others who admire them solely for their work accomplishments. This is quite natural—it makes you feel good when a person you meet for the first time recognises you for your work. This type of relationship can easily become a barrier to the formation of healthy friendships, which we all need. By self-objectifying in your friendships, you can make it easier for your friends to objectify you.

This is why having friends outside your professional circles is so important. Striking up friendships with people who don’t have any connection to your professional life encourages you to develop out of work interests and virtues, and thus be a fuller person. The way to do this goes hand in hand with recommendation No. 1: Don’t just spend time away from work; spend it with people who have no connection to your work.

Perhaps challenging your own self-objectification makes you feel uneasy. It can freak you out. The reason is simple: We all want to stand out in some way, and working harder than others and being better at our jobs seems a straightforward way to do so. This is a normal human drive, but it can nonetheless lead to destructive ends. There are people that would rather be special than happy.

The great irony is that by trying to be special, we end up reducing ourselves to a single quality, and turning ourselves into cogs in a machine of our own making. Our work is our medium, and it becomes our message. We learn to love the image of our successful selves, not ourselves as we truly are in life. Don’t make this mistake. You are not your job. Take your eyes off the distorted reflection, and have the courage to experience your full life and true self.

Losing a Job That is Your Identity

If your job is your whole identity, losing it can be catastrophic. “But when your personal identity is heavily tied to your job, losing that job-even through no fault of your own, such as in an economic downturn or a restructuring- can seem catastrophic, causing an existential crisis or what the authors of the book Difficult Conversations call an ‘identity quake,’” says Rebecca Zucker of Harvard Business Review.

The Cell Phone in Our Pocket Prevents Work Separation

Like many of us, you may not be able to resist checking emails, chats, or texts, even on vacation. The 24-7 access is so tempting that most can never truly disconnect. Working from home further blurs the line. When our jobs are our identities, we think that we should be doing more of what we love.

But is it possible to be creative and connected to others with a constant work distraction in our pockets? When do we hit burnout? “When you’re overworked, you’re actually less productive,” says author Jeffrey Davis of Psychology Today.  “When you get more sleep, develop a healthier work/life balance, and actually learn how to separate yourself from your work, you will find that you’re capable of not just enjoying more meaningful (and productive) work, but also of creating a more meaningful and well-rounded life.”

The ever-more-volatile state of our world means that plenty of leaps await us in the years ahead. Increasingly, our psychological health and career fulfillment will hinge on our ability to assess and execute transitions without betraying our authentic selves. The VME framework can help you predict how difficult it will be to dislodge incompatible aspects of your lingering identities, or what facets might be worth fighting to keep.

Given our current situation knowing that your colleagues or employees are best suited for this new scenario we find ourselves in. Finding the right talent, the best fit for the job and your organisation can be a very challenging task. It is now important to find out whether your managers or your team is well-equipped of working together from various locations. It requires deep knowledge of their personalities, strengths, weaknesses, interests, work style and other characteristics. Our technology and solutions will do the work for you, helping you discover if your people are resilient during times of hardship, if they are autonomous, if they are team players, without actual human contact. Given that our platform is cloud-based, everyone can use it from home as well. Humanity finds itself at a crossroad for various reasons now, why not help people discover and develop themselves from the comfort of their own homes?

Request a free demo:

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Sources:

https://hbr.org/2022/11/when-changing-jobs-changes-your-identity
https://www.artemisconsultants.net/what-happens-when-your-job-becomes-your-identity/
https://www.monster.com/career-advice/article/how-to-handle-jobidentity-loss-hot-jobs

Distrust In HR Department And What Can Be Done To Solve It

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Some crisis situations burst on the scene and are in plain view for the world to see. Others can simmer for months or years out of sight, out of mind and under the radar of corporate executives.

The distrust that employees have in their company’s HR staff is an example of a simmering internal crisis that can boil over and scald the image, reputation and credibility of organisations and their leaders.

But before business leaders can address the problem, they need to understand what’s causing it.

‘A Natural Distrust’

Rachel Fiset is the managing partner of law firm Zweiback, Fiset & Coleman. She said, ‘’Employees have traditionally had a natural distrust for human resources because the department generally prioritises the company over the employee.

‘’Human resources will often field complaints by employees — but the actual response to the complaints may look like the company is only working to ensure its own legal compliance in a given situation and not to improve the employee’s working conditions,’’ she noted.

Serving The Bottom Line

HR consultant Claire Brummell observed that, “Many HR departments can be seen to approach employees as little more than a resource to serve the needs of the corporate bottom line, where the needs of the leaders, departments and business are considered and prioritized over that of, and often to the detriment [of], the needs of the employees.

“HR Departments that function from this place of utilising humans as little more than another expendable business resource have already failed their employees and will garner their distrust.”

Insights From Surveys

Two surveys provide these important insights into the trust problem.

Human relations platform Cezanne HR recently surveyed over 1,000 workers at organisations with more than 250 employees in the UK. They found that:

  • Almost half (47%) of employees don’t trust HR to help with conflict resolution.
  • 48% don’t trust HR to make them aware of internal promotion opportunities.
  • More than two in five (45%) of respondents don’t believe HR will act impartially, while 43% believe senior staff members are favoured.

Last year, U.S.-based Zeneefits, an HR, payroll and benefits company, released a report called “Human Resources: Helpful or Horrible?” According to their research:

  • 38% of employee respondents feel HR does not equally enforce company policies for all employees, with 18% of that group believing managers get special treatment.
  • 71% of HR employees in the survey stated that less than 30% of complaints they received in the last 2 years resulted in any disciplinary action. Having less than a third of cases result in disciplinary action led employees to wonder — if they bring complaints forward, will anything even result?

Historical Bias

Lesa Hammond is a 30-year veteran of HR and was the chief human resources officer at three universities. She is now an instructor in the HR certificate program at San Francisco State University and CEO of workplace platform Attaché for Business.

She pointed out that, “Much of the distrust in HR come from an historical bias employees and management hold or a lack of transparency by the HR department. If the leadership of the company, of which HR should be a part, does not have respect for the department, it is not given much power and becomes a bureaucratic bottleneck, rather than a strategic problem solver.

“Employees also lose faith in HR when they come with a problem and it appears it is being held against them or nothing seems to be happening regarding the problem,’’ she commented.

Unequal Treatment Of Co-Workers

Employment attorney Jonathan LaCour, of Employees First Labor Law said many of the cases he handles lead straight back to problems in a company’s human resources department.

“One common reason employees distrust HR is that they see unequal treatment of co-workers due to friendships or connections within the company, or because of someone’s status as a manager. Company handbooks almost always state that human resources policies will be implemented fairly, consistently and impartially. Everyone can see when it’s not,” he observed.

Lack Of Qualifications

LaCour noted that, “Another area where companies create problems for employees and themselves is when they put people in charge of human resources who have no business being there. In one recent case, a man with no experience in human resources was hired to help run the department. He turned out to be an aggressive sexual harasser and cost the company a lot of money.

“In another case, a company with 160 employees made a payroll accountant their human resources manager — for half a day every week. This person had no prior experience in anything HR related and was impossible for employees to get hold of. And when they handed out advice, it was entirely ignorant of applicable law,” he recalled.

Visibility

Sue Lingard, marketing director of Cezanne HR said, “HR teams have to get out and get in front of employees—and do it on a regular basis. The research found that the better-known they are, the higher the level of trust, and that’s good for the way the whole business works together.

“Start with the onboarding processes, but then ensure there are other opportunities where HR can be seen by more people. Perhaps by championing diversity, equity and inclusion or climate change initiatives, hosting drop-in days or sitting in on wider team meetings,” she advised.

Transparency

Sebastien Anderson is the founding partner of Labour Rights Law Office in Canada. He recommended that HR staff be transparent about their role and refrain from misleading employees that the HR department is on their side or is their friend. “In my experience, too many naive employees believe that HR advisors are like neutral ombudspersons troubleshooting potential conflict between an employee and their manager(s),” he observed.

“HR advisors who mislead employees about their role give all HR professionals a bad name and seed distrust between employees and management,” Anderson concluded.

Given our current situation knowing that your colleagues or employees are best suited for this new scenario we find ourselves in. Finding the right talent, the best fit for the job and your organisation can be a very challenging task. It is now important to find out whether your managers or your team is well-equipped of working together from various locations. It requires deep knowledge of their personalities, strengths, weaknesses, interests, work style and other characteristics. Our technology and solutions will do the work for you, helping you discover if your people are resilient during times of hardship, if they are autonomous, if they are team players, without actual human contact. Given that our platform is cloud-based, everyone can use it from home as well. Humanity finds itself at a crossroad for various reasons now, why not help people discover and develop themselves from the comfort of their own homes?

Request a free demo:

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Sources:

https://www.breathehr.com/en-au/blog/topic/business-leadership/what-can-you-do-when-you-lose-the-trust-of-an-employee
https://techcrunch.com/2018/02/10/hr-has-lost-the-trust-of-employees-here-is-who-has-it-now
https://www.recruiter.com/recruiting/employees-losing-trust-in-employees-after-pandemic/

Goal Setting And Why You Should Forget About It

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Goal setting is one of those things that seems like it would be fundamental to success. If you’ve read any books or articles about getting ahead in your career or life, you’ve probably come across tips on setting goals (like SMART goal setting) so that you can successfully meet them.  Setting goals isn’t the be-all and end-all when it comes to managing your career.

But setting goals may not be as relevant anymore, and there may be better alternatives to managing your career–and your life. 

Part of the reason goal setting may be becoming irrelevant is because of the speed of change and the volatility of the world. When everything is moving so fast and changing, the goals you set for yourself can become redundant. 

That said, it’s very powerful to imagine yourself succeeding in the future and focus on your preferred version of tomorrow. The key is to seek to be directionally accurate, knowing that things are constantly changing in a way you can’t always predict.  

Here are five effective ways to take charge of your career when you’re operating in an unpredictable landscape. 

1. VISUALIsE THE FUTURE 

You’ve probably heard of elite athletes who picture themselves succeeding and having tremendous success. This is a process that can be effective outside of sports. For example, a study by St. Michael’s Hospital found when emergency room doctors or trauma healthcare workers imagined how they would deal with a challenging situation, they were more successful.

The practice of mental mapping–imagining the future with a lot of detail and clarity–allows you to picture what that preferred future will look like. You visualize what it’ll sound like and feel like, as well as how you might work through obstacles. Experts believe this works because you’re preparing your mind, and when you get to a similar situation in real life, you’ll be primed to respond and take the right action. This general vision is more effective than goal setting. Instead of plotting steps that unexpected events might derail, you’re imagining a fully realized picture of the future rather than your calendar or task list.

Detailed mental maps can also help you articulate the process and bring others in. Suppose you’re solving a tricky problem at work and you visualize the potential solutions and outcome in detail. You’ll be able to express what might happen and share the necessary steps with others in a more specific way, increasing your likelihood of success. 

2. ADJUST YOUR TARGET 

A twist on mental mapping has to do with how you visualize your target. This was demonstrated by researchers at Purdue University. When golfers visualized a hole as bigger, they made their shot more often. Previous research found a similar effect with football players. When they imagined wider goal posts, they were more likely to make a successful kick. 

Researchers believe that when you adjust your perception of a target, you increase your confidence, and that helps you perform better. Say your vision is to be a compelling speaker. When you imagine the audience nodding, smiling, and applauding wildly, you may enhance your likelihood of success. 

3. INTRODUCE SOME DISTANCE FROM YOUR GOALS 

Another way to think about what you want in the future is to imagine yourself in the third person. Research at York University and Wilfrid Laurier University explored the conditions for people’s success in multiple situations like school, work, and performing arts. When people imagined themselves in the third person–as if an audience were watching them succeed–their motivation levels increased. 

When people see themselves in the future, they tend to be better at solving problems, because they feel more objective and disconnected from what might be an emotional or nervous situation. Anxiety can get in the way if you’re interviewing for a new role or negotiating a high-stakes deal with a customer. But if you’re able to visualize the situation as if you’re watching it like a spectator, you’ll probably increase your odds of success. 

4. ALLOW THINGS TO EMERGE NATURALLY 

Another alternative to traditional goal setting is to set a direction and then let the specific steps emerge naturally. You may want a particular role in your organization, and a conventional approach would have you set a course for classes to take, people to meet, and a progression of jobs to get you there. But having tunnel vision can be limiting. If one of the steps doesn’t happen according to your plan, everything else can fall like dominoes. 

A better alternative is to set your course and respond as opportunities happen. Start by watching for unanticipated opportunities: There may be a job you hadn’t imagined on your path, but you consider it because it will develop your skills. Or, you might take on a project outside your normal responsibilities and create a new set of contacts who can influence your career later on. 

5. Be Aware of What’s Going on Around You

Another aspect of achieving your aims in the future is to be constantly tuning into the what’s going on around you. If you’re overly focused on your goals, you may only look for what you’ve anticipated rather than tuning into how the world is changing. Focus on the circumstances around you, and you’ll be more ready to react and respond. For example, when you notice your organization’s shifts in strategy, you can anticipate a project you might volunteer for.  The world is changing, so it’s only logical that your response should as well. In a volatile landscape of work and opportunity, it can be counter-productive to seek too much certainty. Instead, put your energy into detailed visualizations of where you’ll go, and you’ll be more likely to get there. Remember, today’s options won’t be the same as tomorrow’s alternatives.

Given our current situation knowing that your colleagues or employees are best suited for this new scenario we find ourselves in. Finding the right talent, the best fit for the job and your organisation can be a very challenging task. It is now important to find out whether your managers or your team is well-equipped of working together from various locations. It requires deep knowledge of their personalities, strengths, weaknesses, interests, work style and other characteristics. Our technology and solutions will do the work for you, helping you discover if your people are resilient during times of hardship, if they are autonomous, if they are team players, without actual human contact. Given that our platform is cloud-based, everyone can use it from home as well. Humanity finds itself at a crossroad for various reasons now, why not help people discover and develop themselves from the comfort of their own homes?

Request a free demo:

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Sources:

https://jamesclear.com/goals-systems
https://medium.com/the-mission/forget-about-setting-goals-focus-on-this-instead-c63b9ddeab1f
https://www.getabstract.com/en/summary/forget-about-setting-goals-focus-on-this-instead/31375

Are Work Friends Invaluable?

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Millions of people suffer from loneliness. More than 300 million people globally don’t have a single friend, according to Gallup data. And more than 20% of people don’t have friends or family they can count on whenever they need them, let alone any work friends.

The average person spends 81,396 hours — the equivalent of more than nine years — at work. “Americans are now more likely to make friends at work than any other way — including at school, in their neighbourhood, at their place of worship, or even through existing friends,” according to the Survey Centre on American Life.

So, people spend a lot of their lives at work, and that’s where they’re most likely to develop friendships. Yet of everything companies do to improve employees’ lives and promote their happiness, social well-being is the aspect they invest in least, according to a Gallup survey of CHROs of the world’s largest companies. Indeed, Gallup finds that globally, only three in 10 employees strongly agree they have a best friend at work.

Why Should Companies Care?

Despite claiming “people are our greatest asset,” many executives I’ve met expect employees to leave their personal lives at the door when they come to work. Yet Gallup’s data shows that having a best friend at work is strongly linked to business outcomes, including improvements in profitability, safety, inventory control, and employee retention.

Researchers at the University of Pennsylvania and University of Minnesota not only confirmed that close friendships increase workplace productivity, they also found out why — friends are more committed, communicate better, and encourage each other. And according to a global study by the International Social Survey Program (ISSP), “Interpersonal work relationships have a sizeable and significant positive effect on the job satisfaction of the average employee. Relationships rank first out of 12 domains of workplace quality in terms of power to explain variation in job satisfaction.”

If increased productivity, profitability, job satisfaction, and retention aren’t enough, Gallup’s latest findings show that since the start of the pandemic, having a best friend at work has an even greater impact on important outcomes — like workers’ likelihood to recommend their workplace, intent to leave, and overall satisfaction. With the unavoidable increase in remote and hybrid work, best friends at work have become lifelines who provide crucial social connection, collaboration, and support for each other during times of change.

Unfortunately, the pandemic not only exacerbated global loneliness, it also took a toll on workplace friendships. Among people working in hybrid environments, Gallup has seen a five-point decline in those who say they have a best friend at work since 2019.

Whether a workplace is fully in person, fully remote, or hybrid, a culture that prioritizes and encourages work friendships is good for employees and good for the bottom line. So how can managers create and maintain a friendship-friendly workplace that delivers measurable results while also helping to combat the global epidemic of loneliness? Here are some actions to take right now:

Establish a buddy system

Everyone needs a buddy, especially when they’re new to a company. Teaming up new hires with veteran employees can expedite onboarding and productivity. Workplace buddies not only give new hires tips like where stuff is and what the unwritten rules are, but they help them make connections with other people in the company. And some of these initial connections will almost certainly lead to long-term relationships.

The key to an effective buddy system is the frequency of the interactions. Microsoft found that when its new hires met with their buddy more than eight times in their first 90 days on the job, 97% said that their buddy helped them become productive quickly. But when new hires met with their buddy only once during the first 90 days, that number was only 56%.

Increase face time

Before the pandemic, work was a place where colleagues could get coffee, have lunch, and run into each other in the hallway for impromptu conversations. For people who started working remotely full time in 2020, one of the biggest changes was the sharp decrease in hours they spent engaging socially with work friends.

Building friendships requires talking to, seeing, and being with people. The best way to connect is to see each other — even if it’s on Zoom or FaceTime. But at a minimum, co-workers need to talk more and email less. Email will never live up to face-to-face dialogue. Plus, it’s much easier to misinterpret what someone means over email.

Business leaders need to set an example: Communicate in person more and email less. Further, leaders can encourage in-person interactions by revising expectations, establishing new cultural norms, and even updating workplace configurations. For example, encourage cross-training or have workers rotate job duties so they can collaborate with people in other areas of the company. Exposure to new people creates opportunities to meet new friends. Plan on-site social events, meetings, or lunches. Move people’s workspaces closer together. Where else do you spend so much time with people from different walks of life organized around a common mission? And where else are you so dependent on the efforts of others?

Jam constantly

When people share a common goal and achieve great things together, they form a connection. The joy is in working together to produce magic. Using the Beatles as an example of a high-performing team, The Economist states: “The Beatles love what they do for a living. When they are not playing music, they are talking about it or thinking about it. They do take after take of their own songs, and jam constantly.”

If you’ve ever been part of a collaborative “jam session,” you know the feeling. Your employees want to feel that too — the satisfaction and pride of creating something great while having fun. Best friends trust, accept, and forgive each other. And when they work together, Gallup research has shown that they are significantly more likely to engage customers and internal partners, get more done in less time, support a safer workplace, innovate and share ideas, and have fun on the job.

Don’t force it.

Thanks to the pandemic, the days of all-but-mandatory happy hours and “kindergarten offices” full of games and colourful toys designed to encourage workers to stay late for fun team-building activities might be behind us. According to Paul Lopushinsky, founder of Vancouver-based consultancy Playficient, “That culture isn’t really about fun; it’s about getting people to stay longer.”

You can mandate policies, training or timesheets, but you can’t make people be friends. You don’t want your employees to start hating the very thought of company parties. If your company still discourages workplace friendships despite the proven benefits to business outcomes, remember this simple premise: To ignore friendships is to ignore human nature. In the battle between company policy and human nature, human nature always wins. The evidence suggests that people will fulfil their social needs, regardless of what is mandated. Companies do far better to harness the power of this kind of social capital than to fight against it.

Given our current situation knowing that your colleagues or employees are best suited for this new scenario we find ourselves in. Finding the right talent, the best fit for the job and your organisation can be a very challenging task. It is now important to find out whether your managers or your team is well-equipped of working together from various locations. It requires deep knowledge of their personalities, strengths, weaknesses, interests, work style and other characteristics. Our technology and solutions will do the work for you, helping you discover if your people are resilient during times of hardship, if they are autonomous, if they are team players, without actual human contact. Given that our platform is cloud-based, everyone can use it from home as well. Humanity finds itself at a crossroad for various reasons now, why not help people discover and develop themselves from the comfort of their own homes?

Request a free demo:

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Sources:

https://www.nytimes.com/2022/07/14/business/work-friends.html
https://www.forbes.com/sites/katecooper/2021/09/28/the-importance-of-work-friends/
https://www.wsj.com/articles/forget-work-friends-more-americans-are-all-business-on-the-job-11660736232

Career Goals May Prolong Feeling of Overwhelmingness

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In many organisations, it’s the season for individual and team goal-setting. Deciding on career goals is generally something we want to be a rational and evidence-based exercise, combining a careful consideration of possibilities, resources, and obstacles with just the right amount of stretch. But what do you do when you feel like you have a very limited sense of what’s possible? When new obstacles seem to pop up around every corner and the sands are always shifting? When the idea of stretch seems laughable given how stressed and overwhelmed most of us are?

Setting goals in times of uncertainty and burnout can feel pointless, but it isn’t. Research shows that to engage our motivational systems and direct our brain’s energy to the right actions (both consciously and below our awareness), we need to have a clear sense of where we are, where we’re going, and whether we’re closing the gap between the two at the right rate. Without goals, we make bad choices and miss opportunities to act. But just as important, we can’t feel effective, which many psychologists believe is the most powerful source of life satisfaction and well-being humans have.

To set goals that make sense and motivate ourselves and others in such strange and often discouraging times, we need to set them with a growth mindset. And by that I don’t mean just “believe you can improve” or any of the other common oversimplifications of growth mindset. Having a growth mindset is a bit more nuanced (and more powerful) than simply believing that improvement is possible.

Your mindset is what you believe to be the larger meaning or purpose behind the work you do every day. A growth mindset is about believing that developing and making progress is the point of what you’re doing. As I’ve said before, it’s about getting better as opposed to just being good. And it’s about engaging in specific growth mindset strategies and habits to help keep you focused on the potential for growth in everything you do.

When you approach career goals through the lens of a growth mindset, you become more comfortable with uncertainty and more willing to entertain the idea of longer-term career goals. Here are two strategies to help you get there that you can use for yourself or with your team.

Use growth-mindset trigger words to frame your goals

When researchers want to study the effects of a growth mindset, one of the ways we do this is to describe the goal or task that someone is about to perform using certain words that evoke the idea of getting better rather than being good: improve, develop, over time, progress, become, and of course, grow.

These words serve as both explicit and implicit “primes” to your thinking. In other words, they shift the very meaning of the goal to being about developing, and they shift your mindset along with it. To use them, start by writing out your goal the way you would normally think about it. For example, your goal might be to “be an effective communicator” or to “increase sales by 5%.”

Then, rewrite it again using one or more growth mindset triggers. “Be an effective communicator” is now “become an effective communicator,” and “increase sales by 5%” is “develop our network of leads to improve our sales by 5%.”

This way of framing your goals isn’t about lowering the bar or being okay with poor performance. In fact, research shows that people who approach their goals with a growth mindset set more challenging stretch goals for themselves, not less. For example, in one study of medical supplies salespersons, researchers found that those who approached their work with a stronger growth mindset set more ambitious sales targets, put in more effort, engaged in more territory and account planning, and ultimately sold more units.

Establish progress and pivot points

In such uncertain times, it’s important to explicitly establish progress and pivot points on a timeline right at the outset, so you can monitor both your rate of progress and the need to shift in light of new information along the way.

It can be all too easy to lose track of your goals, or to not think much about them until you get closer to the time you expected to reach them. When that happens, you may fail to adjust when progress is slow, or cling to a goal you should have revised when resources or customer expectations started shifting. For example, you may set a goal for yourself of developing a specific skill or reaching a particular sales target by year’s end. To succeed, what should you accomplish in the first month? At six months? If you don’t know, you won’t be able to course correct and, if necessary, try a different strategy or set a revised goal to have the impact you want to see for yourself or your team.

By using these two strategies to prepare for and engage in your goal-setting conversations, as a leader or a team member, you start out with a firm growth mindset foundation that you can then sustain as you pursue your goals through uncertainty, setbacks, and challenges of all kinds — something we all need now more than ever before.

Given our current situation knowing that your colleagues or employees are best suited for this new scenario we find ourselves in. Finding the right talent, the best fit for the job and your organisation can be a very challenging task. It is now important to find out whether your managers or your team is well-equipped of working together from various locations. It requires deep knowledge of their personalities, strengths, weaknesses, interests, work style and other characteristics. Our technology and solutions will do the work for you, helping you discover if your people are resilient during times of hardship, if they are autonomous, if they are team players, without actual human contact. Given that our platform is cloud-based, everyone can use it from home as well. Humanity finds itself at a crossroad for various reasons now, why not help people discover and develop themselves from the comfort of their own homes?

Request a free demo:

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Sources:

https://story-level.com/setting-career-goals-when-you-feel-overwhelmed/
https://hbr.org/2022/09/setting-career-goals-when-you-feel-overwhelmed
https://headtopics.com/us/setting-career-goals-when-you-feel-overwhelmed-30317001

Building Everlasting Resilience

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Over the last decade, a complex web of economic, social, political, and environmental crises has challenged the conventional laws of organisational physics, calling into question our resilience and relentless pursuit of operational efficiency. As a result, many leaders who spent their careers operating and investing in relative stability were caught off-guard, and many enterprises may not have survived the Great Recession or the Covid-19 pandemic without massive government support.

However, in our research, we have discovered a category of family businesses that are naturally more resilient — those who understand the existential need for sustained investment in organisational agility, even at the expense of efficiency and profitability. Their unique approach to managing risk provides an innovative playbook for leaders everywhere as we enter what everybody is calling a new Age of Uncertainty.

Many of these families have operated for decades and even centuries in emerging and frontier markets, where uncertainty is the rule rather than the exception. In these more volatile environments, threats to property and security are more pervasive, access to capital more limited, corruption more rampant, supply chains more fragile, planning horizons much shorter, and talent harder to find. This is in addition to the familiar organizational challenges that all businesses must manage in terms of operations, finances, marketing, and leadership.

Over the last eight years, thorough research has been documented on how enterprising families survive and even thrive in the face of these chronically-elevated risks. What follows are three simple lessons that we’ve seen families deploy successfully that can help all leaders cope with the sustained uncertainty that lies ahead.

Resilience requires intention

Family businesses that operate in more volatile conditions understand and anticipate that tomorrow could be materially different than today. In these environments, public markets and institutions are often weaker, less efficient, and more opaque. There is a natural scarcity of capital, resources, and talent, since all three prefer the predictability that comes with the rule of law, freedom of information, and reliable infrastructure. Family leaders can wake up one morning to discover that their companies have been nationalized, or their profits regulated, or that their work force is facing sniper-fire on their daily commute.

Having the foresight to anticipate and plan for such volatility requires a fundamental shift in organizational design — treating operational inefficiency as a feature, not a bug. I’ve observed that family enterprises who thrive under these conditions follow the wise advice of the Stoic philosopher Epictetus that “Neither should a ship rely on one small anchor, nor should life rest on a single hope.” Their managerial mantra is “just-in-case” rather than “just-in-time.” Consequently, they actively invest in organizational redundancy — frequently observed in resilient biological systems — to ensure that they can bounce back quickly from adverse shocks and sustain operations whenever they lose access to critical capital and infrastructure.

Consider the example of a Middle Eastern family that built back-up manufacturing facilities and an entire residential neighbourhood in a nearby country in anticipation of a devastating civil war. Or the Haitian hotel operator who invested in backup generators for their backup generators and multiple internet connections to cope with persistent blackouts and network failures. Or the Japanese soya sauce manufacturer who rescued the local community from famine countless times over the centuries by sharing the company’s strategic grain reserves — earning cherished access to the Imperial Court. Or the Hong Kong family that built an expensive offshore nest egg in Canada as a hedge against rising regulatory risks to their Chinese operating business.

Though each of these investments in redundancy required substantial time and resources — precious commodities for any organization — being intentional about foregoing profits to build resilience helped these families prepare for, withstand, and recover from serious disruptions and chronic stress. Like keeping a spare tire and a jack in the trunk of the car, these adaptations become a form of continuity insurance and are particularly valuable in uncertain environments, despite their additional cost. As the old military saying goes: “Two is one, and one is none.” In other words, always have a back-up plan.

In contrast, many leaders who have spent their careers operating in relatively stable markets often view these investments as wasteful or inefficient — until they are blindsided by Black Swan events like the recent conflict in Ukraine and are forced to reimagine their global supply chains, foreign currency exposure, and interest rate risk. After all, when conditions are relatively predictable — as they have been for most of the last half-century in the world’s most advanced industrialized economies — optimizing for efficiency can be one of the most reliable drivers of profitability and prosperity, so it’s no surprise that this strategy has become ubiquitous even if it is short-sighted.

Consequently, effective leaders in the Age of Uncertainty need to be more intentional about investing in resilience — paying the “tax” of organizational inefficiency to help prepare for the broad array of risks that lie ahead. 

Resilience is a systems-level challenge

For many leaders operating in more stable developed markets, the last few years have been a painful reminder that our external context can’t be fully controlled, and many outcomes can’t be reliably predicted, despite our best efforts. These investments must extend beyond internal structures and processes and project outwardly beyond the enterprise — aligning with broader efforts to support social and environmental resilience.

In the Age of Uncertainty, enterprising families need to understand that their long-term health and continuity is even more dependent on the ecosystems within which they are embedded — a form of symbiosis often observed in resilient biological systems. As in nature, neglecting or failing to adequately support the health and development of all their key stakeholders only undermines their own resilience. In other words, retreating behind the castle walls and hoping for the world to set itself straight is not a durable strategy for surviving a political revolution or an environmental catastrophe.

Once again, all family leaders should take inspiration from their peers in developing markets who have seen this all before. These resilient family enterprises are more inclined than their peers to invest in and care for their communities, in many cases funding critical infrastructure when public institutions fail to do so. Some of our client families have built roads, bridges, hospitals, schools, community centers, housing, news agencies, and even telecommunications grids, in the absence of government investment in these critical public goods. This not only fosters a loyal and trustworthy source of local labor, but also increases the likelihood of long-term success as norms of reciprocity emerge to sustain and expand the healthy ecosystem. In contrast, when companies and citizens don’t have reliable access to these resources, or they are willfully undermined by populism and campaigns of misinformation, trust in third parties is diminished, transactional costs increase, and the economic machine inevitably slows down.

Additionally, any efforts to invest in systemic resilience must also extend inwardly — by nurturing the familial and personal resilience of internal stakeholders. Chronic uncertainty generates a particular type of psychological distress that can significantly affect the wellbeing and performance of individuals and teams. Family business leaders who are dealing with this issue for the first time should draw wisdom from the vast literature on managing prolonged stress both personally, within families, and organisationally. They must also acknowledge that not all family members and business leaders will have the same exposure to risk, or cope with stress the same way. Finally, they should take comfort in the natural resilience of their peers in emerging and frontier markets, where strong family ties are often a powerful source of both individual and collective wellbeing.

Family matters

Extended kinship networks have been the dominant socioeconomic unit since the earliest human civilizations first emerged. Our primate DNA enabled and even encouraged us to form deep relationships with genetic strangers beyond our own kin to better manage resource scarcity and existential threat — sustaining the first durable micro-climates of trust. Bad actors in this context were quickly expelled from the extended family and left to navigate a sea of uncertainty on their own, while the increased chances of survival and growth for those who remained help to reinforce norms around trust and reciprocity.

Many echoes of this ancient tribal orientation persist in emerging markets today — from guanxi in China and blat in Russia, to wasta in the Middle East and compadrazgo in Latin America. In these countries, webs of familial connection help lower the frictional costs of doing business and provide an essential lubricant for the economy — conditions we have historically taken for granted in the developed world, where institutions like the judicial system and free press are (mostly) reliable and ensure that others will (mostly) follow the rules. As public institutions around the world continue to be undermined by populism, campaigns of misinformation, and budgetary constraint, family leaders will need to increase their strategic use of familial networks to ensure continued access to capital and opportunity. In short, the Age of Uncertainty will demand a fresh approach to continuity planning — one that extends beyond the conventional strategy, operations, and leadership frameworks taught in every business school and deployed in every boardroom. To succeed, families will also need to make deliberate investments to better prepare for, withstand, and recover from frequent shocks and chronic stress, develop a systems-level view of risk that considers both outward and inward resilience, and nurture deep familial ties to local communities to help sustain an oasis of stability amidst the chaos. Despite the inherent inefficiency and material cost of these investments, in uncertain environments like the ones that lie ahead, it will be much wiser to have them and not need them, then to need them and not have them.

Given our current situation knowing that your colleagues or employees are best suited for this new scenario we find ourselves in. Finding the right talent, the best fit for the job and your organisation can be a very challenging task. It is now important to find out whether your managers or your team is well-equipped of working together from various locations. It requires deep knowledge of their personalities, strengths, weaknesses, interests, work style and other characteristics. Our technology and solutions will do the work for you, helping you discover if your people are resilient during times of hardship, if they are autonomous, if they are team players, without actual human contact. Given that our platform is cloud-based, everyone can use it from home as well. Humanity finds itself at a crossroad for various reasons now, why not help people discover and develop themselves from the comfort of their own homes?

Request a free demo:

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Sources:

https://hbr.org/2021/01/the-secret-to-building-resilience
https://hbr.org/2016/06/resilience-is-about-how-you-recharge-not-how-you-endure
https://hbr.org/2022/09/building-resilience-into-your-family-business

Quiet Quitting Is About Bosses, Not Employees

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“Quiet quitting” is a new name for an old behaviour. The authors, who have conducted 360-degree leadership assessments for decades, have regularly asked people to rate whether their “work environment is a place where people want to go the extra mile.” Their data indicates that quiet quitting is usually less about an employee’s willingness to work harder and more creatively, and more about a manager’s ability to build a relationship with their employees where they are not counting the minutes until quitting time.

Every employee, every workday, makes a decision: Are they only willing to do the minimum work necessary to keep their job? Or are they willing to put more of their energy and effort into their work?

In the last few weeks, many of those who choose the former have self-identified as “quiet quitters.” They reject the idea that work should be a central focus of their life. They resist the expectation of giving their all or putting in extra hours. They say “no” to requests to go beyond what they think should be expected of a person in their position.

In reality, quiet quitting is a new name for an old behaviour. Organisational psychologists have been conducting 360-degree leadership assessments for decades, and they’ve regularly asked people to rate whether their “work environment is a place where people want to go the extra mile.” To better understand the current phenomenon of quiet quitting, we looked at the data to try to answer this question: What makes the difference for those who view work as a day prison and others who feel that it gives them meaning and purpose?

The data collected indicates that quiet quitting is usually less about an employee’s willingness to work harder and more creatively, and more about a manager’s ability to build a relationship with their employees where they are not counting the minutes until quitting time.

What the Data Shows

We looked at data gathered since 2020 on 2,801 managers, who were rated by 13,048 direct reports. On average, each manager was rated by five direct reports, and we compared two data points:

Employees’ ratings of their manager’s ability to “Balance getting results with a concern for others’ needs”

Employee’s ratings of the extent to which their “work environment is a place where people want to go the extra mile”

The research term we give for those willing to give extra effort is “discretionary effort.” Its effect on organizations can be profound: If you have 10 direct reports and they each give 10% additional effort, the net results of that additional effort are increased productivity.

The graph below shows the results. We found that the least effective managers have three to four times as many people who fall in the “quiet quitting” category compared to the most effective leaders. These managers had 14% of their direct reports quietly quitting, and only 20% were willing to give extra effort. But those who were rated the highest at balancing results with relationships saw 62% of their direct reports willing to give extra effort, while only 3% were quietly quitting.

Many people, at some point in their career, have worked for a manager that moved them toward quiet quitting. This comes from feeling undervalued and unappreciated. It’s possible that the managers were biased, or they engaged in behaviour that was inappropriate. Employees’ lack of motivation was a reaction to the actions of the manager.

Most mid-career employees have also worked for a leader for whom they had a strong desire to do everything possible to accomplish goals and objectives. Occasionally working late or starting early was not resented because this manager inspired them.

What to Do If You Manage a “Quiet Quitting ”Employee

Suppose you have multiple employees who you believe to be quietly quitting. In that case, an excellent question to ask yourself is: Is this a problem with my direct reports, or is this a problem with me and my leadership abilities?

If you’re confident in your leadership abilities and only one of your direct reports is unmotivated, that may not be your fault. As the above chart shows, 3% or 4% of the best managers had direct reports who were quietly quitting.

Either way, take a hard look at your approach toward getting results with your team members. When asking your direct reports for increased productivity, do you go out of your way to make sure that team members feel valued? Open and honest dialogue with colleagues about the expectations each party has of the other goes a long way.

The most important factor is trust. When we analysed data from more than 113,000 leaders to find the top behaviour that helps effective leaders balance results with their concern for team members, the number one behaviour that helped was trust. When direct reports trusted their leader, they also assumed that the manager cared about them and was concerned about their wellbeing.

Our research has linked trust to three behaviours. First, having positive relationships with all of your direct reports. This means you look forward to connecting and enjoy talking to them. Common interests bind you together, while differences are stimulating. Some team members make it easy to have a positive relationship. Others are more challenging. This is often a result of differences (age, gender, ethnicity, or political orientation). Look for and discover common ground with these team members to build mutual trust.

The second element of trust is consistency. In addition to being totally honest, leaders need to deliver on what they promise. Most leaders believe they are more consistent than others perceive them.

The third element that builds trust is expertise. Do you know your job well? Are you out of date on any aspects of your work? Do others trust your opinions and your advice? Experts can bring clarity, a path forward, and clear insight to build trust.

By building a trusting relationship with all of your direct reports, the possibility of them quietly quitting dissipates significantly. The approach leaders took to drive for results from employees in the past is not the same approach we use today. We are building safer, more inclusive, and positive workplaces, and we must continue to do better.

It’s easy to place the blame for quiet quitting on lazy or unmotivated workers, but instead, this research is telling us to look within and recognize that individuals want to give their energy, creativity, time, and enthusiasm to the organisations and leaders that deserve it.

Given our current situation knowing that your colleagues or employees are best suited for this new scenario we find ourselves in. Finding the right talent, the best fit for the job and your organisation can be a very challenging task. It is now important to find out whether your managers or your team is well-equipped of working together from various locations. It requires deep knowledge of their personalities, strengths, weaknesses, interests, work style and other characteristics. Our technology and solutions will do the work for you, helping you discover if your people are resilient during times of hardship, if they are autonomous, if they are team players, without actual human contact. Given that our platform is cloud-based, everyone can use it from home as well. Humanity finds itself at a crossroad for various reasons now, why not help people discover and develop themselves from the comfort of their own homes?

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Sources:

https://www.axios.com/2022/09/07/quiet-quitting-pandemic-labor-jobs-unions
https://www.gallup.com/workplace/398306/quiet-quitting-real.aspx
https://www.cnbc.com/2022/09/02/how-quiet-quitting-became-the-next-phase-of-the-great-resignation.html