Sections

Beware The Feel-Good Work Culture

Meghan M. Biro

Screen-Shot-2016-02-08-at-8.31.02-PMHow critical is work culture to recruitment and employee retention? It’s important, I’ll give you that. But a feel-good work culture might do more harm than good. As the economy continues to grow, hiring managers and HR personnel realize how fiercely they must compete for top talent. As I recently wrote, if you’re looking to snag the best prospects, employee perks alone just won’t cut it.

Today’s modern employee is looking for much more than great benefits and a healthy 401K plan. Those recruiting for tech industries especially know that companies such as Google and Facebook have raised the bar when it comes to work culture and the lure of a fun, modern office space.

And yes, I regularly encourage businesses to think creatively, encourage a human-centered workplace, and build a collaborative and relationship-driven work culture. But there is a catch—a trap, if you will—to all these good feelings. Focusing too much on creating a happy workplace may mean you create one that’s less productive. Let’s take a look.

The bottom-line impact of an engaged workplace

It is easy to drift into Kumbaya-land when discussing how to build an engaged work culture. There is much talk of employee self-actualization and this new, seamless “work-life” way of living that impacts an individual from sunup to sundown.

But the real reason there is so much focus on employee engagement is because the numbers back up the fact that engaged employees are far more productive. Business leaders are beginning to understand that the bottom line is directly and greatly impacted by their work culture.

At the end of last year, CareerBliss released its 5th annual CareerBliss 50 Happiest Companies in America, and it is not surprising that it is populated with industry leaders. As CEO and Chief Happiness Officer Heidi Golledge says, “It is important to see how workplaces are constantly evolving and changing. Creating happiness at work is a very fluid process, building and adapting to a changing workforce, while accounting for the key factors that create happier environments.”

Too much focus on feeling good affects productivity

Employee happiness matters to business success, period. But let’s take a look at the flip side of the coin. As I mentioned, studies repeatedly show that positive work environments equal higher productivity, but I caution against going too far in the “feel good” direction. There is a big difference between creating a happy work culture and creating an environment where productivity comes second to individual happiness. Building a culture of engaged employees does not mean you create a stress-free zone where accountability and productivity take a back seat to personal needs and wants. In order to create an engaged, but successful workplace, a good portion of the “happy” culture must be connected to performance.

What good is a happy workplace if profitability is at risk? A happy employee is also an employed employee, and it is management’s job to keep the business alive and thriving. A culture of excellence, where employees and teams are recognized and rewarded for success, is a signature element of both a happy work culture and a profitable business.

Finding the balance between sound business and a positive work culture

Offering perks like free lunches, part-time remote work schedules, and flex time are benefits any employee appreciates. Paid leave and great healthcare also help to make employees feel valued. However, to build a truly positive work culture, go a step further and create a clear vision so that all employees understand your core principles. Create clear lines of open communication so both management and their reports know that they will be heard.

The danger in not having a strategy for how to achieve a positive, happy work culture is that management may make some very expensive decisions centered on perks and individual happiness without a clear connection to performance. If you’re not careful, you may create an environment where people feel that their right to be happy and not stressed out takes precedence over performance.

Getting the positive work culture right

For a good example of strategic planning for a positive work culture, we need look no further than Netflix. The slideshare presentation outlining the company’s corporate strategy lays the foundation with the title: Freedom with Responsibility. They clearly lay out that their “culture focuses on helping us achieve excellence.” There is no confusion about the goal—it’s clearly communicated right at the onset.

In the presentation, Netflix talks about values and directly connects them to performance, stating, “The actual company values, as opposed to the nice sounding values, are shown by who gets rewarded, promoted, or let go.”

The company nails exactly what I’m talking about. “Great values is not espresso, lush benefits, sushi lunches, grand parties or nice offices…We do some of these things, but only if they are efficient at attracting and retaining stunning colleagues.”

No one at Netflix can be confused about the company’s work culture and goals after watching its 124-slide presentation. They have obviously thought it through and clearly communicated their intentions.

What do you think? What is your experience with positive work cultures and strategies that create engaged employees? I’d love to hear your thoughts and experiences on this topic.

For more insight on employee engagement and creating a positive workplace culture, see 6 Surprising Insights On Successful Employee Engagement.

A version of this article was first published on Huffington Post on 12/30/15

The post Beware the Feel Good Work Culture appeared first on TalentCulture.

Photo credit: study world culture via photopin (license)

Comments

Tags:

How To Design Your Company’s Digital Transformation

Sam Yen

The September issue of the Harvard Business Review features a cover story on design thinking’s coming of age. We have been applying design thinking within SAP for the past 10 years, and I’ve witnessed the growth of this human-centered approach to innovation first hand.

Design thinking is, as the HBR piece points out, “the best tool we have for … developing a responsive, flexible organizational culture.”

This means businesses are doing more to learn about their customers by interacting directly with them. We’re seeing this change in our work on d.forum — a community of design thinking champions and “disruptors” from across industries.

Meanwhile, technology is making it possible to know exponentially more about a customer. Businesses can now make increasingly accurate predictions about customers’ needs well into the future. The businesses best able to access and pull insights from this growing volume of data will win. That requires a fundamental change for our own industry; it necessitates a digital transformation.

So, how do we design this digital transformation?

It starts with the customer and an application of design thinking throughout an organization – blending business, technology and human values to generate innovation. Business is already incorporating design thinking, as the HBR cover story shows. We in technology need to do the same.

SCN SY.png

Design thinking plays an important role because it helps articulate what the end customer’s experience is going to be like. It helps focus all aspects of the business on understanding and articulating that future experience.

Once an organization is able to do that, the insights from that consumer experience need to be drawn down into the business, with the central question becoming: What does this future customer experience mean for us as an organization? What barriers do we need to remove? Do we need to organize ourselves differently? Does our process need to change – if it does, how? What kind of new technology do we need?

Then an organization must look carefully at roles within itself. What does this knowledge of the end customer’s future experience mean for an individual in human resources, for example, or finance? Those roles can then be viewed as end experiences unto themselves, with organizations applying design thinking to learn about the needs inherent to those roles. They can then change roles to better meet the end customer’s future needs. This end customer-centered approach is what drives change.

This also means design thinking is more important than ever for IT organizations.

We, in the IT industry, have been charged with being responsive to business, using technology to solve the problems business presents. Unfortunately, business sometimes views IT as the organization keeping the lights on. If we make the analogy of a store: business is responsible for the front office, focused on growing the business where consumers directly interact with products and marketing; while the perception is that IT focuses on the back office, keeping servers running and the distribution system humming. The key is to have business and IT align to meet the needs of the front office together.

Remember what I said about the growing availability of consumer data? The business best able to access and learn from that data will win. Those of us in IT organizations have the technology to make that win possible, but the way we are seen and our very nature needs to change if we want to remain relevant to business and participate in crafting the winning strategy.

We need to become more front office and less back office, proving to business that we are innovation partners in technology.

This means, in order to communicate with businesses today, we need to take a design thinking approach. We in IT need to show we have an understanding of the end consumer’s needs and experience, and we must align that knowledge and understanding with technological solutions. When this works — when the front office and back office come together in this way — it can lead to solutions that a company could otherwise never have realized.

There’s different qualities, of course, between front office and back office requirements. The back office is the foundation of a company and requires robustness, stability, and reliability. The front office, on the other hand, moves much more quickly. It is always changing with new product offerings and marketing campaigns. Technology must also show agility, flexibility, and speed. The business needs both functions to survive. This is a challenge for IT organizations, but it is not an impossible shift for us to make.

Here’s the breakdown of our challenge.

1. We need to better understand the real needs of the business.

This means learning more about the experience and needs of the end customer and then translating that information into technological solutions.

2. We need to be involved in more of the strategic discussions of the business.

Use the regular invitations to meetings with business as an opportunity to surface the deeper learning about the end consumer and the technology solutions that business may otherwise not know to ask for or how to implement.

The IT industry overall may not have a track record of operating in this way, but if we are not involved in the strategic direction of companies and shedding light on the future path, we risk not being considered innovation partners for the business.

We must collaborate with business, understand the strategic direction and highlight the technical challenges and opportunities. When we do, IT will become a hybrid organization – able to maintain the back office while capitalizing on the front office’s growing technical needs. We will highlight solutions that business could otherwise have missed, ushering in a digital transformation.

Digital transformation goes beyond just technology; it requires a mindset. See What It Really Means To Be A Digital Organization.

This story originally appeared on SAP Business Trends.

Top image via Shutterstock

Comments

Sam Yen

About Sam Yen

Sam Yen is the Chief Design Officer for SAP and the Managing Director of SAP Labs Silicon Valley. He is focused on driving a renewed commitment to design and user experience at SAP. Under his leadership, SAP further strengthens its mission of listening to customers´ needs leading to tangible results, including SAP Fiori, SAP Screen Personas and SAP´s UX design services.

How Productive Could You Be With 45 Minutes More Per Day?

Michael Rander

Chances are that you are already feeling your fair share of organizational complexity when navigating your current company, but have you ever considered just how much time is spent across all companies on managing complexity? According to a recent study by the Economist Intelligence Unit (EIU), the global impact of complexity is mind-blowing – and not in a good way.

The study revealed that 38% of respondents spent 16%-25% of their time just dealing with organizational complexity, and 17% spent a staggering 26%-50% of their time doing so. To put that into more concrete numbers, in the US alone, if executives could cut their time spent managing complexity in half, an estimated 8.6 million hours could be saved a week. That corresponds to 45 minutes per executive per day.

The potential productivity impact of every executive having 45 minutes more to work every single day is clearly significant, and considering that 55% say that their organization is either very or extremely complex, why are we then not making the reduction of complexity one or our top of mind issues?

The problem is that identifying the sources of complexity is complex in of itself. Key sources of complexity include organizational size, executive priorities, pace of innovation, decision-making processes, vastly increasing amounts of data to manage, organizational structures, and the pure culture of the company. As a consequence, answers are not universal by any means.

That being said, the negative productivity impact of complexity, regardless of the specific source, is felt similarly across a very large segment of the respondents, with 55% stating that complexity has taken a direct toll on profitability over the past three years.  This is such a serious problem that 8% of respondents actually slowed down their company growth in order to deal with complexity.

So, if complexity oftentimes impacts productivity and subsequently profitability, what are some of the more successful initiatives that companies are taking to combat these effects? Among the answers from the EIU survey, the following were highlighted among the most likely initiatives to reduce complexity and ultimately increase productivity:

  • Making it a company-wide goal to reduce complexity means that the executive level has to live and breathe simplification in order for the rest of the organization to get behind it. Changing behaviors across the organization requires strong leadership, commitment, and change management, and these initiatives ultimately lead to improved decision-making processes, which was reported by respondents as the top benefit of reducing complexity. From a leadership perspective this also requires setting appropriate metrics for measuring outcomes, and for metrics, productivity and efficiency were by far the most popular choices amongst respondents though strangely collaboration related metrics where not ranking high in spite of collaboration being a high level priority.
  • Promoting a culture of collaboration means enabling employees and management alike to collaborate not only within their teams but also across the organization, with partners, and with customers. Creating cross-functional roles to facilitate collaboration was cited by 56% as the most helpful strategy in achieving this goal.
  • More than half (54%) of respondents found the implementation of new technology and tools to be a successful step towards reducing complexity and improving productivity. Enabling collaboration, reducing information overload, building scenarios and prognoses, and enabling real-time decision-making are all key issues that technology can help to reduce complexity at all levels of the organization.

While these initiatives won’t help everyone, it is interesting to see that more than half of companies believe that if they could cut complexity in half they could be at least 11%-25% more productive. That nearly one in five respondents indicated that they could be 26%-50% more productive is a massive improvement.

The question then becomes whether we can make complexity and its impact on productivity not only more visible as a key issue for companies to address, but (even more importantly) also something that every company and every employee should be actively working to reduce. The potential productivity gains listed by respondents certainly provide food for thought, and few other corporate activities are likely to gain that level of ROI.

Just imagine having 45 minutes each and every day for actively pursuing new projects, getting innovative, collaborating, mentoring, learning, reducing stress, etc. What would you do? The vision is certainly compelling, and the question is are we as companies, leaders, and employees going to do something about it?

To read more about the EIU study, please see:

Feel free to follow me on Twitter: @michaelrander

Comments

About Michael Rander

Michael Rander is the Global Research Director for Future Of Work at SAP. He is an experienced project manager, strategic and competitive market researcher, operations manager as well as an avid photographer, athlete, traveler and entrepreneur.

How Much Will Digital Cannibalization Eat into Your Business?

Fawn Fitter

Former Cisco CEO John Chambers predicts that 40% of companies will crumble when they fail to complete a successful digital transformation.

These legacy companies may be trying to keep up with insurgent companies that are introducing disruptive technologies, but they’re being held back by the ease of doing business the way they always have – or by how vehemently their customers object to change.

Most organizations today know that they have to embrace innovation. The question is whether they can put a digital business model in place without damaging their existing business so badly that they don’t survive the transition. We gathered a panel of experts to discuss the fine line between disruption and destruction.

SAP_Disruption_QA_images2400x1600_3

qa_qIn 2011, when Netflix hiked prices and tried to split its streaming and DVD-bymail services, it lost 3.25% of its customer base and 75% of its market capitalization.²︐³ What can we learn from that?

Scott Anthony: That debacle shows that sometimes you can get ahead of your customers. The key is to manage things at the pace of the market, not at your internal speed. You need to know what your customers are looking for and what they’re willing to tolerate. Sometimes companies forget what their customers want and care about, and they try to push things on them before they’re ready.

R. “Ray” Wang: You need to be able to split your traditional business and your growth business so that you can focus on big shifts instead of moving the needle 2%. Netflix was responding to its customers – by deciding not to define its brand too narrowly.

qa_qDoes disruption always involve cannibalizing your own business?

Wang: You can’t design new experiences in existing systems. But you have to make sure you manage the revenue stream on the way down in the old business model while managing the growth of the new one.

Merijn Helle: Traditional brick-and-mortar stores are putting a lot of capital into digital initiatives that aren’t paying enough back yet in the form of online sales, and they’re cannibalizing their profits so they can deliver a single authentic experience. Customers don’t see channels, they see brands; and they want to interact with brands seamlessly in real time, regardless of channel or format.

Lars Bastian: In manufacturing, new technologies aren’t about disrupting your business model as much as they are about expanding it. Think about predictive maintenance, the ability to warn customers when the product they’ve purchased will need service. You’re not going to lose customers by introducing new processes. You have to add these digitized services to remain competitive.

qa_qIs cannibalizing your own business better or worse than losing market share to a more innovative competitor?

Michael Liebhold: You have to create that digital business and mandate it to grow. If you cannibalize the existing business, that’s just the price you have to pay.

Wang: Companies that cannibalize their own businesses are the ones that survive. If you don’t do it, someone else will. What we’re really talking about is “Why do you exist? Why does anyone want to buy from you?”

Anthony: I’m not sure that’s the right question. The fundamental question is what you’re using disruption to do. How do you use it to strengthen what you’re doing today, and what new things does it enable? I think you can get so consumed with all the changes that reconfigure what you’re doing today that you do only that. And if you do only that, your business becomes smaller, less significant, and less interesting.

qa_qSo how should companies think about smart disruption?

Anthony: Leaders have to reconfigure today and imagine tomorrow at the same time. It’s not either/or. Every disruptive threat has an equal, if not greater, opportunity. When disruption strikes, it’s a mistake only to feel the threat to your legacy business. It’s an opportunity to expand into a different marke.

SAP_Disruption_QA_images2400x1600_4Liebhold: It starts at the top. You can’t ask a CEO for an eight-figure budget to upgrade a cloud analytics system if the C-suite doesn’t understand the power of integrating data from across all the legacy systems. So the first task is to educate the senior team so it can approve the budgets.

Scott Underwood: Some of the most interesting questions are internal organizational questions, keeping people from feeling that their livelihoods are in danger or introducing ways to keep them engaged.

Leon Segal: Absolutely. If you want to enter a new market or introduce a new product, there’s a whole chain of stakeholders – including your own employees and the distribution chain. Their experiences are also new. Once you start looking for things that affect their experience, you can’t help doing it. You walk around the office and say, “That doesn’t look right, they don’t look happy. Maybe we should change that around.”

Fawn Fitter is a freelance writer specializing in business and technology. 

To learn more about how to disrupt your business without destroying it, read the in-depth report Digital Disruption: When to Cook the Golden Goose.

Download the PDF (1.2MB)

Comments

Tags:

Global Expansion Essentials: Survival Skills Every CFO Should Know

Arlen Shenkman

Every business wants to grow revenue. And the next logical step when you’ve conquered local markets is to consider global expansion. Right? Maybe not. Not every business has the wherewithal to successfully operate a business halfway around the world.  How can you be sure of success?

In this post, I’ll share lessons learned in my experiences with companies both large and small as they’ve pursued international expansion. This topic is a natural extension of my previous blog posts on building, buying, and partnering to achieve growth.

Exporting the brand

The world is a big, complicated place. As CFOs, our role is to help determine if the business can successfully make the investments required to operate in another country. Corporations that expand globally without having a full perspective of the impact of their brand in other countries and on the public’s perception of their products and services may have a tough road to travel. Think about Google. In the United States, Google is perceived as a beloved brand in many respects. But in Europe, it’s viewed in a less favorable light because of privacy concerns.

Beyond branding, companies need to consider the impact of expansion on the company’s culture, its business model, and its pricing. All of these variables become relevant because the business will no longer be operating in a homogeneous environment.

Safeguarding stakeholders’ interests

There are risks and rewards associated with every business decision. The potential risks are much greater when pursuing global markets. CFOs are expected to mitigate these risks and ensure that the business is getting the right return on investment. This means taking the right steps to ensure that your stakeholders’ best interests are being served by an expansion. These steps begin with a fundamental premise: that the business must maintain control once it’s become a global operation. Much of that control depends on the back office and the IT infrastructure. Having this foundation helps to ensure that the business is maintaining compliance with everything from regulatory reporting to taxes to government relations, which minimizes risk and helps protect your company’s interests.

Fundamentally, there’s a tradeoff between leveraging established, proven people, assets, and brand versus duplication of some or all of these elements or functions to allow for local tailoring. The former creates the potential for much more profitable expansion through economies of scale and may provide the most oversight and control. But a one-size-fits-all approach won’t work in all markets, and this approach does carry great risk. There is no right or wrong answer. Indeed, many global companies will employ all strategies in parallel, or may look to partners to gain necessary local knowledge.

Standardizing to simplify

It makes sense to expand in manageable stages and begin with expansion in culturally or geographically close countries. Recognize that it will take capital and management bandwidth and that the expansion needs to be judged against domestic expansion opportunities through new products or sub-markets.

In a previous company where I worked, we expanded internationally through acquisition. We then let the businesses run standalone. There was very little process or control around our operations. Essentially, the business was comprised of an independent set of companies that operated under one common brand. This is one model for international growth, but it can raise compliance and control issues. Case in point, this company had a serious financial restatement that resulted in a shareholder lawsuit.

At SAP, we tend to buy companies that are regional and then globalize them. We do this by integrating the operations of the business on a common IT infrastructure and use shared service centers around the world. The businesses are able to maintain their brand and some of their own independence, but we gain greater efficiency, transparency, and control. This makes it easier to achieve compliance in the 190 countries where we do business. Imagine the complexity of this task if every business were running independently.

Running efficient operations to get it right from the start

It would be shortsighted in today’s digital world to not have a common IT platform that allows you to extend operational efficiency and transparency globally, standardizing processes, practices, and controls across the business. Technology is faster, cheaper, and better than ever. Consolidating on a common platform before expanding mitigates the effort involved in integrating disparate systems and supports a unified expansion strategy.

It also frees you to perform the kind of due diligence involved with global expansion in the first place. A common platform allows you to automate financial tasks so you can focus your time and energy on being a strategic adviser to the business that enables transformation and growth.

To continue the discussion on the pivotal role finance will play in leading growth and operational efficiency, read the Forrester report Digital and Automation Enable Finance Operations Efficiency.

Comments

Arlen Shenkman

About Arlen Shenkman

Arlen Shenkman is the CFO for SAP North America, overseeing the financial activities of Canada and the United States, including forecasting and planning, driving efficiencies, and ensuring the overall financial health of the region.