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FUTURE OF WORK & TECHNOLOGY
Nine charts that really bring home just how fast AI is growing

With so much hype surrounding artificial intelligence today, it can be difficult to know where things actually stand. Fortunately, a report (.pdf) issued by a group of AI policy researchers today collates a range of data that helps capture the state of the AI boom. 

The authors, from MIT, Stanford, and Harvard as well as nonprofits including OpenAI, look at investments, hiring, papers and patents, and even mentions of AI at government meetings. Here are some take-aways.

1. AI is being commercialized at a dizzying pace.

The amount of money being poured into AI startups is remarkable. The number of AI startups (top) is shown on the left, compared with total startups on the right. AI investment (below) is shown on the left, compared with total investments on the right. This speaks to huge opportunities to use machine learning in different industries, but also to a market that is hyped and overheated.

2. The focal points are China and the US, but also Europe.

Much has been made of China’s rising AI prowess (see “China’s AI awakening”) and its growing rivalry with the US. As the data shows, Europe is also a huge hub of AI activity. But it seems that three main centers of power are emerging.

3. There are still far more men in the field than women.

Many researchers have pointed to the inadequate number of women and racial minorities in AI research. The new report offers some data to back that up, showing a shortage of women among  applicants for AI-related jobs (top) and as a percentage of people in AI teaching roles (bottom).

4. The state of the art is improving fast.

The report includes several measures of technical progress, including the accuracy of object recognition in images, measured against average human performance (top), and the accuracy of machine translations of news articles, measured using a score assigned by human judges (bottom). These don’t mean that the field is getting closer to developing a human-level AI, but they show how key techniques have been honed in recent years.

5. Artificial intelligence is a political issue.

Mentions of artificial intelligence and machine learning in the US Congress (above) and the UK Parliament (below) have exploded in the past few years. This reflects a growing awareness of the technology’s economic and strategic importance (see “Canada and France propose an international panel on AI”).

 

For more info, and to find the data itself, check out the AI Index site.


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DIGITAL (HR & TRANSFORMATION)
Digital strategy: The four fights you have to win

Yesterday’s tentative approaches won’t deliver; you need absolute clarity about digital’s demands, galvanized leadership, unparalleled agility, and the resolve to bet boldly.

If there’s one thing a digital strategy can’t be, it’s incremental. The mismatch between most incumbents’ business models and digital futures is too great—and the environment is changing too quickly—for anything but bold, inventive strategic plans to work.

Unfortunately, most strategic-planning exercises dogenerate incrementalism. We know this from experience and from McKinsey research: on average, resources don’t move between business units in large organizations. A recent book by our colleagues, Strategy Beyond the Hockey Stick, seeks to explain what causes this inertia (strategy’s social side, rooted in individual interests, group dynamics, and cognitive biases) and to suggest a way out (understanding the real odds of strategy and overhauling your planning processes to deliver the big moves that can overcome those long odds).

All this holds doubly true for digital strategy, which demands special attention. Leaders in many organizations lack clarity on what “digital” means for strategy. They underestimate the degree to which digital is disrupting the economic underpinnings of their businesses. They also overlook the speed with which digital ecosystems are blurring industry boundaries and shifting the competitive balance. (For more on why companies often fall short, see “Why digital strategies fail.”) What’s more, responding to digital by building new businesses and shifting resources away from old ones can be threatening to individual executives, who may therefore be slow to embrace (much less drive) the needed change.

In our experience, the only way for leaders to cut through inertia and incrementalism is to take bold steps to fight and win on four fronts: You must fight ignorance by using experiential techniques such as “go-and-sees” and war gaming to break leaders out of old ways of thinking and into today’s digital realities. You must fight fear through top-team effectiveness programs that spur senior executives to action. You must fight guesswork through pilots and structured analysis of use cases. And you must fight diffusion of effort—a constant challenge given the simultaneous need to digitize your core and innovate with new business models.

In this article, we will describe how real companies are winning each of these fights—overcoming inertia while building confidence about how to master the new economics of digital. You can join these companies in that effort, thereby giving your digital strategy a jolt and accelerating the shift of your strategy process as a whole, from old-fashioned annual planning to a more continuous journey yielding big moves and big gains even when the end point isn’t entirely clear.

1. Fighting ignorance

Fight ignorance
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Many senior executives aren’t fully fluent in what digital is, much less up to speed on the ways it can change how their businesses operate or the competitive context. That’s problematic. Executives who aren’t conversant with digital are much more likely to fall prey to the “shiny object” syndrome: investing in cool digital technologies (which might only be relevant for other businesses) without a clear understanding of how they will generate value in the executives’ own business models. They also are more likely to make fragmented, overlapping, or subscale digital investments; to pursue initiatives in the wrong order; or to skip foundational moves that would enable more advanced ones to pan out. Finally, this lack of grounding slows down the rate at which a business deploys new digital technologies. In an era of powerful first-mover advantages, winners routinely lead the pack in leveraging cutting-edge digital technologies at scale to pull further ahead. Having only a remedial understanding of trends and technologies has become dangerous.

Raising your technology IQ

For inspiration on how to raise your company’s collective technology IQ, consider the experience of a global industrial conglomerate that knew it had to digitize but didn’t think its leadership team had the expertise to drive the needed changes. The company created a digital academy to help educate its leadership about relevant digital trends and technologies and to provide a forum where executives could ask questions and talk with their peers. Academy leaders also brought in external experts on a few topics the company lacked sufficient internal expertise to address.

Supplementing the academy effort (aimed at leaders) was an organization-wide assessment of digital capabilities and an evaluation of the company’s culture. This provided a fact base, which everyone could understand, about what the organization needed to build over the course of the digital transformation. As business leaders developed digital plans, they were accountable for explaining and defending them to other executives. They also had to help gather those plans into an enterprise-wide digital strategy that every business leader understood and had helped to create.

Overcoming competitive blind spots

If your company resembles many we know, it’s still stuck in some old ways of thinking about where money gets made and by whom. You’re also likely to be overlooking ways digital is changing both the economics of the game and the players on the field in your industry. If any of this sounds familiar, you probably need a jolt—something that forces you to think differently about your business. More specifically, you need to start thinking about it as digital disruptors do. In our experience, this demands a process that begins with a sprint to get everything moving, to see what your industry (and your company’s role in it) could look like if you started from scratch, and to redraw your road map.

The financing division of a European financial-services company went through such a process when it tried to understand digital’s impact on its current lines of business. For example, a conversation began in the auto-loans division with the question “how can we make it easier for people to get their loans online?” It turned into a deeper examination of “how does our business model change if people stop buying cars and start buying mobility?” Similarly, an auto insurer might move from asking “how can I sell car insurance online better” to “what does car insurance mean in the context of autonomous vehicles?” There’s no substitute for exploring such questions, which emerge when digital, regulatory, and societal trends collide with today’s value chain (for more on these collisions, see “Digital strategy: Understanding the economics of disruption”).

Once the new realities are discovered, companies should speed up the process of understanding how other players—including nontraditional ones—will respond. The financial-services provider jump-started things by holding a series of war-gaming workshops. It divided its leadership team into groups and assigned them to role-play potential attackers such as Amazon, Google, or small, cherry-picking start-ups. Seeing through the eyes of “baggage-free” attackers inspires an awareness of how players with very different core competencies are likely to act in the new landscape. It can also propel a shared sense of urgency to change the old ways of thinking and acting.

These sessions radically changed the way the company’s leaders thought about their business, their industry, and the digital shifts remaking both. The end result was a set of leading-edge ideas for deploying digital to make the current operating model faster and more effective, for investing in new digital offerings, for designing and launching a new digital ecosystem to meet the emerging needs of digital consumers, and for partnering with start-ups beginning to emerge as leading players in advanced mobility.

2. Fighting fear

Fight fear
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Getting left behind by digital first movers can be hazardous to your company’s future. But many of your executives may perceive respondingto digital—making the big bets, building new businesses, shifting resources away from old ones—as hazardous to their own future. As we’ve noted, that exacerbates the social side of strategy and breeds strategic inertia. If you want to make big digital moves, you must fight the fear that your top team and managers will inevitably experience.

From what we have seen, this kind of fight doesn’t happen organically. You need to design a programmatic effort with the same rigor you would insist on to redesign key processes across your organization. This typically involves making a clear case that executives can’t hide from the changes digital is bringing and that encouraging and accelerating change—rather than chasing it—can create more value. Then you need to give executives the tools and support network they must have to succeed as leaders of that journey. Many companies focus on the extensive detailing of digital-initiative plans but skip the critical step of building an equally rigorous program to sustain the leaders driving change.

Honest dialogue

At the industrial company we discussed earlier, the move to digital implied significant change in the characteristics leaders required to be effective. Naturally, concerns about waning influence, or worse, followed for many of the company’s 20 or so business-unit leaders. The industrial conglomerate confronted these fears head-on by organizing a top-team effectiveness program to surface anxieties, build awareness of how they were affecting decision making, and define how leaders could remain relevant. In workshops, executives discussed the specific mind-sets and behavioral shifts needed to gain “ownership” of digital initiatives as a group and to become role models for their organizations.

Support networks

Leaders also formed communities that cut across their businesses, initially to share best practices and coordinate the timing of implementation. Over time, the role of these communities grew to include skill-building activities, such as bringing in speakers with specialized capabilities and motivational messages and organizing Silicon Valley go-and-sees that reinforced the importance of leading digital change. The communities also provided peer support to help teams navigate the new landscape.

We have seen other organizations similarly coalesce around digital-leadership training (sometimes supported by digital advisory boards) that helps executives to become comfortable with—even embrace—the uncertainty of the destination and the career trade-offs needed for a well-executed digital strategy. These support networks dovetail with, and bolster, the digital IQ–raising efforts we described earlier. Indeed, we find that leaders who understand the shifting economics also understand that their careers will be affected one way or another.

3. Fighting guesswork

Fight guesswork
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Pursuing an aggressive digital strategy involves leaps into the unknown: simultaneously, you are likely to be moving into new areas and overhauling existing businesses with new technologies. What’s more, in many digital markets, the premium of being a first mover makes it necessary not only to shift direction but also to do so faster than your peers. The combination of ambiguity and the need for speed sometimes gives rise to guesswork and moves that are hasty or poorly thought out—and to anxiety about whether a move isn’t going to work or just needs more time.

Building the proof points as you go

One way to fight guesswork is to anchor your strategy decisions to a thesis about the business outcomes that different digital investments will produce. This is less about elaborate business-school modeling and more about thinking that draws fast, ground-level lessons from the data to determine whether your business logic is correct. Put another way, it means figuring out if there is sufficient value to make it worthwhile to invest something—as part of a process of learning even more. This approach increases the odds of successful implementation: a well-articulated view of the outcomes means that you can track how well the strategy is working. It also makes it easier to assess whether the new direction is worth it in terms of both financial capital and organizational pain.

Those proof points must be grounded in digital reality. Consider the experience of a global oil and gas company investigating the potential impact of several advanced technologies on its business. Rather than develop theoretical value-creation scenarios, the company’s digital center of excellence got busy exploring: How might sensors, robots, and artificial intelligence improve productivity and safety in unmanned operations? What operating hurdles, such as skill gaps among managers and frontline workers, would need to be overcome?

“Skunkworks” efforts began to give the company sharper insights into the timetables and financial profiles of different investments, so it avoided both the “finger in the air” syndrome (which dooms some digital efforts) and excessive modeling (which bogs down others). The end result was a value-thesis projection of a pretax cash-flow improvement exceeding 20 percent by 2025. That built the confidence of senior leaders and the board alike.

Pilots and stage gates

A second way to reduce the need for guesswork is to take full advantage of real-time data and the opportunities they provide for experimentation. Digital does amplify the gut-wrenching uncertainty by multiplying the strategic choices leaders face while reducing the time frame for making and implementing those decisions. But it also contains a silver lining: the potential for gaining rapid, data-driven insights into how things are going. Information on the progress of a product launch, for example, is available in days rather than months. That makes rapid course corrections possible and, ultimately, considerably improves the chances of success.

The oil and gas company mentioned earlier got a rapid bead on the impact that its digital initiatives were having on its business performance when it automated the evaluation of several business cases. Testing was more or less continuous, which reduced the level of anxiety about the investments, because executives had hard data on how things were performing rather than relying on guesses or intuition in realms they didn’t know extremely well. It also gave them more confidence to push cutting-edge solutions: they didn’t need to see how other oil and gas companies did things when they could move first and see, in near real time, what worked and what didn’t.

An important element of this nimble approach was breaking up big bets into smaller, staged investments. While the oil and gas company was ready to invest in digital, it was decidedly uncomfortable with throwing money at a problem and hoping for the best. It therefore developed a series of rigorous stage gates for investments managed by a new, central digital-transformation office. The office was charged with overseeing the portfolio of digital investments to ensure that the most promising projects were funded and others defunded before they soaked up valuable resources. In tandem, the head of the company’s digital efforts was vested with the responsibility for approving which ideas would move to initial development, basing these decisions on the organization’s overall vision for digital.

The ideas, which originated mostly with the business units, included clear requirements for testing. The “fail fast” mind-set was embedded from the outset because it allowed the company to learn quickly from mistakes and to minimize wasted funding. Another payoff was that the central team could identify synergies, which allowed the development costs of some investments to be shared rather than borne by a single business. These processes helped temper some of the risks of the bold investments the company was making, gave leaders the confidence to venture ahead as first movers, and kept open the option to correct course quickly when the data pointed in another direction.

4. Fighting diffusion

Fight diffusion
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Effective strategy requires focus, but responding to digital inevitably risks diffusion of effort, or “spreading the peanut butter too thinly.” Most companies we know are trying, and struggling, to do two things at once: to reinvent the core by digitizing and automating some of its key elements, for example, and to create innovative new digital businesses. The challenge is acute because of the dizzying pace of digital change and the uncertainty surrounding the adoption of new technology. Even if the technology for autonomous vehicles pans out, for instance, when will the majority of people really begin to use them? Given the impossibility of knowing, it’s easy to wind up with an unfocused hodgepodge of digital initiatives—a far cry from a strategy.

Two concepts can help you navigate. First, view your company as a portfolio of initiatives at different stages of seeding, nurturing, growing, or pruning. Our colleague Lowell Bryan championed this view upward of 15 years ago, and it is more relevant than ever in our digital age because the opportunities, time frames, and economics of core businesses can be very different from those of new ones—so resources and efforts shouldn’t be applied uniformly.

Second, embrace the necessity of “big moves,” such as the dramatic reallocation of resources, sustained capital investment, radical productivity improvements, and disciplined M&A. As our colleagues have shown, successful market-beating strategies nearly always rest on such moves. Making them mutually reinforcing, so that developments in the core help to support new digital businesses and vice versa, is a critical part of managing the risks of diffusion.

To understand what the application of these ideas looks like in practice, consider the experience of a global IT-services company wrestling with how much to invest in digital over the next five years (rather than use standard R&D funding across all of the company’s business lines). That meant scrutinizing which traditional businesses faced obsolescence as a result of digital, whether digital could stretch any of those lifetimes (or if immediate divestment was preferable), which new digital businesses to invest in, and how much to invest.

A portfolio approach

As a first step, the company went through its portfolio business by business, focusing on three questions: Which emerging digital products and services were missing from the portfolio? Which product offerings and elements of the existing operating model should be digitized or fully digitally reengineered to improve customer journeys? And what areas should be abandoned? The answers for the company’s healthcare markets differed from those for banking, but the company became comfortable with hard choices and more attuned to new opportunities by tying all decisions to clear use cases.

As part of this exercise, the company developed scenarios for how the value pools in each of its industry verticals would probably shift across component customer value chains. It wanted to get a sense of the types of services that clients and potential clients were likely to demand and thus might try to obtain from new suppliers or IT outsourcers. For businesses where more revenue would be likely to shift, the company was comfortable placing bigger bets on new digital offerings, in contrast with its approach to businesses where the revenue at stake wasn’t changing as much.

Big, mutually reinforcing moves

This systematic evaluation of value-pool opportunities across the portfolio generated a frank discussion of how the organization’s risk appetite had to change. It also catalyzed a greater willingness to invest in new digital businesses—which the company did, to the tune of more than $1.5 billion. As part of this strategic evolution, the company launched an aggressive program to better leverage foundational digital capabilities, such as automation, advanced analytics, and big data. These capabilities, to be sure, were key building blocks for the new digital businesses. Just as important, however, by deploying the capabilities at scale across existing businesses, the company was better able to stretch the life of its core offerings.

The portfolio strategy paid dividends both in revenue gains and cost reductions. For example, investing in a balanced fashion between core and new businesses led to faster than expected revenue streams from new offerings. The company estimated that 40 percent of its revenues would flow from them within two to three years. Moreover, its digitally improved core businesses, with a sizable base of existing customer revenues, provided additional funding for the new digital portfolio. That increased the leadership’s commitment to the strategy, bolstering confidence that the new portfolio offerings would provide growth more than compensating for the eventual decline of core businesses.


Your best digital competitors—the ones you really need to worry about—aren’t taking small steps. Neither can you. This doesn’t mean that a digital strategy must be designed or put to work with any less confidence than strategies were in the past, though. Strategy has always required closing gaps in knowledge about complex markets, inspiring executive teams (and employees) to go beyond their fears and reluctance to act, and calibrating risks when you bet boldly.

The good news is that the digital era, for all its stomach-churning speed and volatility, also serves up more information about the competitive environment than yesterday’s strategists could ever imagine. Simultaneously, analytically backed, rapid test-and-learn approaches have opened up new avenues to help companies correct course while staying true to their strategic goals. Today’s leaders need to step up by persuading their organizations that digital strategies may be tougher than other strategies but are potentially more rewarding—and well worth the bolder bets and cultural reforms required, first, to survive and, ultimately, to thrive.



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ORGANIZATIONAL DEVELOPMENT, DESIGN & LEARNING
What are the 9 factors of a great agile organisation?

Most agile practitioners and coaches will refrain from providing advice on what the perfect agile organisation looks like, because we acknowledge that every situation is different and every organisation needs a way of working that suits their people and the environment they find themselves in.

However, I believe that as we’ve learned more about agile ways of working and the modern management principles that underpin it, we can see that great agile organisations have some key characteristics in common, and will gravitate towards demonstrating them.

I believe this type of organisation will demonstrate nine key characteristics, although the degree to which they do, and how they will achieve it, may be different.

  1. Frictionless redeployment of the company strategy towards new opportunities
  2. Opportunities matched with the capability to capture them
  3. Cross-functional independent teams
  4. Team structures that reform with the changing landscape
  5. Strategy and outcome alignment at all levels
  6. Cohesion at multiple levels
  7. Disruptive thinking co-existing with a continuous improvement mindset
  8. A culture of openness and inclusion with a bias for action
  9. Risk avoidance balanced with the ability to experiment

As an organisation starts to embrace a modern agile mindset, it will begin to move towards demonstrating these nine key characteristics.

Here is the rationale as to why…

 

Frictionless redeployment of the company strategy towards new opportunities

Agile teams embrace change and acknowledge the fact that as we work, we learn more about how and what we should be doing. The lean startup streams of agile embody this mindset and results in teams that embrace opportunities to improve their product. In some cases, this may mean a complete pivot of the product and the abandonment of existing plans, but this is something that is embraced, not avoided.

Embodying the mindset that opportunities are always changing infers the need for companies to be able to redeploy their company against a new strategy, targeting new opportunities, with minimal friction. Any resistance preventing the ability to pivot the business at enterprise scale results in missed opportunities in this type of environment.

What this looks like

A great agile organisation will demonstrate the ability to rapidly pivot toward new opportunities and stop investments in unimportant activities in a frictionless way.

 

Opportunities matched with the capability to capture them

Agile teams understand that no piece of work is ever the same. Nor is the environment they work within. The combination of these two factors means that the problems they are trying to solve are ever-changing. More importantly, agile teams accept that even if their team compositions are stable and don’t change, they will need to be uplifting their skills and capabilities in order to remain relevant and effective.

In this type of environment, teams understand that they are constrained in only being able to pursue opportunities that are within their current capabilities and skill-sets. Doing otherwise leads to teams working on non-feasible solutions given the technology and skills available to them.

With this mindset, a team understands this constraint. They also keep a keen eye on the future and the capabilities that they need to obtain in order to capture future opportunities. This future focus translates into a company that is continuously enhancing its capabilities to be ready for its next opportunity, while continuing to deliver value by focusing on the opportunities it can capture here and now.

What this looks like

A great agile organisation pursues opportunities that are linked to their capability to do so, but continuously evolves its capabilities to be ready to take on future opportunities, even if those opportunities are currently unknown.

 

Cross-functional independent teams

Cross-functional independent teams are the most explicit of requirements for agile organisations. Although simple in theory it is much harder to put in place in practice. When looking at the company from a bigger picture perspective, most teams are formed as semi-cross-functional teams. This is because they are often formed around only a portion of the company’s true end to end value stream.

Teams formed this way are never truly independent because they depend on up and downstream teams to help deliver value. This occurs because we have the tendency to create teams around areas within our control and not based on the actual value-stream of the product we are working on.

Expanding our thinking to focus on a complete value stream (one that includes discovery, problem validation, concept validation, delivery, release, launch and any other activities involved in building a successful product), changes the definition of what makes up a cross-functional team.

As the ability to consume technology makes it easier, the reliance on technology specialists is reducing. This enables a broader, more diverse set of skills to come to bear in deploying technology solutions. Embracing a cross-functional team mindset means that a company will understand that the definition of a cross-functional team changes depending on the type of problem a team is trying to solve.

An agile company will continuously review the types of problems it is trying to solve for and design cross-functional teams based on the different skills required, as the problems change over time. As the ability to leverage more diverse skills increases due to the consumerisation of technology, it will continue to restructure teams to have the least dependencies possible.

What this looks like

A great agile organisation will understand that as the opportunities we are pursing change, so do the skills we require. As their ability to consume complex technology increases they will continuously review and adjust their team structure to ensure they retain truly cross-functional independent teams.

 

Team structures that reform with the changing landscape

Traditional organisations often resist changing organisational structures due to the change impact it introduces. Agile organisations understand that as our business landscape changes, the structures we have in place may not be suitable to address the new opportunities that emerge. Instead, an agile organisation looks to enable team structures that can easily reform with the changing business landscape.

Static structures age and decay over time. This means that, if a structure is fixed, there comes a time when the structure no longer fits the challenges we are facing. Agile organisations focus on reducing the resistance to organisational change by leveraging approaches such as facilitated advocacy and people led change.

Alternate approaches such as self-selection enable approaches for conducting organisational restructures that reduce change resistance and instead result in higher levels of engagement and excitement during the change.

What this looks like

A great agile organisation understands that as the opportunities we are pursing change so does the organisational structure that is best suited to pursing those opportunities. Rather than avoiding structural change an agile organisation reduces the resistance to change and encourages teams to actively reform their structure to match the changing business landscape.

 

Strategy and outcome alignment at all levels

One of the greatest strengths of an agile organisation is the ability to leverage the collective strengths of all individuals in the company. This ability to do this, however, requires team members to have high levels of alignment around what a company is trying to achieve. This enables them to demonstrate higher levels of autonomy, as well as alignment to the company’s goals. This is commonly referred to as self-organisation in the agile space, and at scale, self-organisation results in the increased ability for teams to take action in a constantly changing environment.

Because the focus is to enable autonomy and alignment towards achieving a common goal, and the expectation is that the environment will change, an agile organisation understands that it is more important to align on the strategies and the decision making process it will follow rather than the plans it produces.

An agile organisation looks to build alignment around strategy at all levels ranging from stratospheric business strategies down through to the delivery strategies a team will follow. The alignment around the decision making process increases the ability for teams to make high-quality decisions as the environment changes and continue to move in the direction the company is aiming for.

What this looks like

A great agile organisation builds alignment around the outcomes it is trying to deliver as well as the strategies it will employ to make decisions. It enables high quality decentralised decision making by ensuring every team and individual is able to make decisions that are consistent with the company’s overall goals even as the business environment changes.

 

Cohesion at multiple levels

Agile organisations are extremely good at creating highly cohesive autonomous teams; however, one of the pitfalls of building highly cohesive teams is that they can quite often result in lower levels of cohesion at department and company levels.

As agile has evolved, teams have learned that there is a need to build cohesion at department and company levels to reduce the frequency at which a team optimises their local team factors at the expense of the greater good of the company.

Structures such as Spotify’s tribe, chapter, guild model are approaches of building cohesion across a range of dimensions.

What this looks like

A great agile organisation seeks to build broad company cohesion balanced with team level cohesion to ensure that teams are highly effective but still willing to sacrifice their short term objectives for the greater good of the company.

 

Disruptive thinking co-existing with the continuous improvement mindset

Often considered to be opposing mindsets, agile organisations have grown to understand that disruptive thinking and the continuous improvement mindsets co-exist in every individual. Attempting to compartmentalise the activities into different parts of a company reduces our ability to leverage the collective power of all individuals in the company.

Instead, an agile organisation understands that each individual can contribute to both disruptive innovation and continuous improvement activities. Rather than separating the two, it is more important to help individuals understand the problems that they are trying to solve, and the type of mindset required for the given problem.

A company like Toyota values the knowledge of every individual within it. While delivering product innovations such as the hybrid electric/petrol technology within the Prius, they have still maintained their reputation as a leader in the application of the lean continuous improvement mindset.

What this looks like

A great agile organisation encourages disruptive things and a continuous improvement mindset in all individuals. It improves the ability for its team members to understand the problems they are solving for and the ability to appropriately use the right type of mindset for a given problem.

 

A culture of openness and inclusion with a bias for action

Agile environments encourage diversity in all its forms due to the improved outcomes it achieves through innovation and creative thinking. Different perspectives are embraced for the radical ideas they can bring; however, agile teams understand that this can also lead to analysis paralysis when looking for the perfect solution and requiring consensus among all individuals.

Instead, an agile organisation understands the importance of positive momentum and encourages a bias for action. An agile organisation values playing in the right ballpark rather than finding the one perfect answer. Because they work in short iterations, agile teams are comfortable in not working on the one perfect solution because they are always confident that they will be working on one of the most valuable opportunities available at any given time.

What this looks like

Great agile organisations embrace diversity and provide an inclusive working environment but also demonstrate a bias for action. They encourage the ability to commit quickly to action, even as a diverse team by ensuring it is always working on a valuable idea through the use of short decision cycles and incremental, iterative delivery.

 

Risk avoidance balanced with the ability to experiment

Although risk avoidance is valuable in some contexts, it is highly costly to do so. Agile organisations instead encourage the ability to experiment safely by making it easier and quicker to find problems and subsequently recover from them.

By making it safe to fail, agile organisations encourage the ability to experiment safely, leading to positive customer outcomes for the product sooner.

What this looks like

A great agile organisation balances the costs associated with a company’s need to avoid risks with a more targeted approach of being able to quickly detect and recover from issues quickly. Instead of attempting to guess and protect against every possible thing that could occur, they focus on learning what the real problems are, to avoid catastrophic outcomes in a cost effective way.

 

Growing an agile organisation

As a company adopts an agile mindset, they will ultimately move closer to exhibiting these nine characteristics over time but how they get there will be different. The level and pace at which they do so will also be different and is largely dependent on how much the company and its leadership team is willing to commit to shifting the culture and operating model of the company.

It requires constant support and a persistent focus in moving towards what great looks like but hopefully, these nine key factors provide enough of a view to get you started.

Agile is not always for everyone, but I believe our future working environment and the accelerating pace of change that the fourth industrial revolution will bring, will require it to be.

Good Luck!


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FUTURE OF WORK & TECHNOLOGY
What Happens in an Internet Minute in 2019?

During an average workday, a single minute might seem negligible.

If you’re lucky, a minute might buy you enough time to write a quick email, grab a coffee from the break room, or make small talk with a coworker.

But in other situations, a minute can also be quite extraordinary. Imagine being a quarterback in the Superbowl in overtime, or finding yourself in a life-and-death situation in which every second counts towards the outcome.

Visualizing an Internet Minute

When it comes to gauging the epic scale of the internet, it would seem that each minute leans closer to the extraordinary side of the spectrum.

Today’s infographic from @LoriLewis and @OfficiallyChadd aggregates the online activity of billions of people globally, to see what an internet minute looks like.

Internet Minute 2019

How is it possible that 188 millions of emails are sent every minute? How does Google process 3.8 million search queries in such a short span of time?

Simply put, the number of actions packed into just 60 seconds is extraordinary.

A Side-by-Side Comparison

The internet is incredibly dynamic, which means there are always new and interesting segments that are emerging out of the internet’s ether.

To get a sense of this, take a look at the comparison of last year’s version of this graphic with the more recent entry:

Internet Minute Comparison

Platforms such as Instagram and Netflix continue to grow at a blistering pace, while new categories such as smart speakers are quickly building a strong foundation for the future. 

Last year, for example, only 67 voice-first devices were being shipped per minute – and in 2019, there are now 180 smart speakers being shipped in the same window of time.

What will this look like in 2020?

Going Sideways or Backwards

Interestingly, even as more and more people gain access to the internet around the world each year, there are still parts of the web that are plateauing or even shrinking in size.

You’ll see that Facebook logins and Google searches both increased only incrementally from last year. Further, the amount of emails getting sent is also quite stagnant, likely thanks to to the rise of workplace collaboration tools such as Slack. 

Snap is another story altogether. In the last year, the app saw a decrease in millions of users due to the infamous redesign that helped torpedo the app’s rising popularity.

Regardless, we’re certain that by this time next year, an internet minute will have changed significantly yet again!


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FUTURE OF WORK & TECHNOLOGY
Six steps to building the business case for workplace wellbeing

Getting buy-in from the c-suite is vital if you are to succeed in delivering a successful workplace wellbeing programme. David Roomes, chief medical officer at Rolls-Royce – health, shares his lessons

Happy worker

It’s now more important than ever for companies to take wellbeing seriously, says David Roomes, chief medical officer at Rolls-Royce – health.

Some 30 or 40 years ago people joined the 110-year-old engineering company based on its brand and reputation. Today people coming into the workforce have different expectations. They want an organisation that genuinely cares about them and that makes commitments to their overall life experience, part of this being care for mental health and wellbeing.

However, it can sometimes be hard to justify the case for investment in mental health to the c-suite and chief financial officer (CFO). With a quick nod to some of the familiar stats we see today relating to the impact of mental health issues on the workforce, Roomes says that, while this is exactly the kind of information that is important, it is also the kind of information that does not engage the CFO. The issue is how to translate a bunch of massive and potentially meaningless numbers into something that really resonates with the decision makers and the resource allocators in your business.

The issue is how to translate a bunch of massive and potentially meaningless numbers into something that really resonates with the decision makers and the resource allocators in your business

Roomes offers a number of suggestions on how to do this:

Step one: Highlight the impact on commercial performance

In the United States, winners of the national health Koop Awards have outperformed the Standard & Poor’s 500 index, they have held their value better when there was a downturn in the economy and they recovered faster. It’s correlation rather than causation, but if you had invested $100 in the S&P index overall you would have seen a 105% return over 13 years, whereas if you’d invested in the Koop award winners  you’d have seen a 325% return on investment.

In 1984 Harvard Business Review started to track the 100 best companies to work for. While this index is based on a number of different areas and not just wellbeing, the top 100 firms have significantly outperformed the stock market, with a total return of $450,000 in comparison to $260,000. With wellbeing a key measure in this index, it helps your business case for investment.

Step two: Tell the story with real-life case studies

There have been some particularly high-profile case studies relating to senior executives who have been impacted by issues connected to mental wellbeing. Antonio Horta-Osorio, chief executive of Lloyds Banking Group, suffered stress in 2011. He is a seasoned business professional who didn’t take enough care of his wellbeing and who ended up being hospitalised for five weeks with exhaustion. While many will be familiar with this story, Roomes reminds us that that in real terms the effect of this one man not taking care of his wellbeing knocked a billion pounds off the market capitalisation of that business in one morning.

Ton Büchner, former CEO of Dutch chemicals conglomerate Akzo Nobel, suffered stress and fatigue as a result of not taking care of his wellbeing. This knocked 5.5% off the market capitalisation of the organisation. 

Jeff Kindler, former CEO of Pfizer, who walked off the job because of stress. Hector Sants, former chair of the Financial Services Authority (FSA) and now chief compliance Officer at Barclays, also had to take time off with stress.

The point is you can use all the statistics your like but when you start to bring the issue to life through storytelling, case studies and situations, decision makers can recognise the impact more readily and it starts to really register with them.

Step three: Consider wellbeing as part of a holistic support model

A wellbeing framework comprises five elements: physical, emotional, social, spiritual and intellectual. Roomes highlights the importance of balance and notes that the various elements of this wellbeing framework do not work in isolation.

Social wellbeing is incredibly important – the strength of people’s relationships both within work and outside it, their involvement in communities and the meaning and purpose they get from that being greatly predictive of their wellbeing in general. Spiritual wellbeing, meanwhile, is about meaning, purpose and what motivates you.

Step four: Make it simple and get employee buy-in

The Rolls-Royce wellbeing programme, Livewell, is accessible through its simplicity, which has been integral to its success. Roomes notes that: “Ultimately, if you want to get people well, it’s down to just a few things: help them stop smoking, help them to eat better, move more, sleep better and keep hydrated.”

The Livewell programme incorporates both a physical policy and infrastructure. All Rolls-Royce sites around the world have to achieve a minimum level of Livewell accreditation by 2020 and at the moment they are sitting at 72%. Each location must implement a minimum standard that enables people to make healthy choices in the workplace, such as healthy eating or quitting smoking. It’s an internal accreditation scheme, which has four tiers: bronze, silver, gold and platinum.

The company is mandating that sites get to bronze as a minimum. It already has 15 sites at silver, a number of sites at gold and three now at platinum level. Roomes explains that the sites have taken ownership for this initiative and it’s moved from a corporate push to everything being done locally around wellbeing.

Step five: Don’t ask for a large budget

If you work in a large corporate, don’t hold a large central budget for wellbeing because, if you do, the next time a big challenge comes along this discretionary spend will disappear. Instead everything is budgeted and owned locally. It’s also important that measures are externally reported. At Rolls-Royce this data goes into its annual reporting accounts and is one of its sustainability KPIs. So, says Roomes, there’s no wriggling out of it and commitment to the programme is improved.

“It’s important that people are committed to wellbeing because it’s not a journey with a final destination, it’s a continuous journey and people have to understand that.”

Step six: Prevention is key

Rolls-Royce has assumed a standard tertiary approach to mental wellbeing. Firstly it promotes mental wellbeing, then addresses workplace causes and then supports people who are experiencing issues. Roomes notes that most of the emphasis should be on interventions around preventing people getting ill. Rolls-Royce has a 10-point plan in place for this.

It has also created a mental health champions network. Mental health first aid training is readily available to people who want to do it but the mental health champions receive additional training. Extra resources are available on the intranet for line managers,  given their critical role in prevention and intervention in mental wellbeing matters.

This impressive strategy from Rolls-Royce appears to have landed well with full backing from the c-suite and equally from employees. It shows how organisations can really make a difference in the field of wellbeing and mental health. 


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EMPLOYEE ENGAGEMENT & EMPLOYEE EXPERIENCE
The Employee Experience: It’s Trickier (and more important) Than You Thought

I just finished a week of meetings discussing HR Technology and the Employee Experience and I want to give you some thoughts. This topic is enormously important, and it’s actually harder than it looks.

Why This Topic Has Become So Big

First, the phrase “Employee Experience” has become a giant vortex for everything in HR. All the programs we’ve invested in over the years (employee engagement, diversity and inclusion, leadership development, performance management) are all part of the employee experience. So in a sense Employee Experience is not a “program,” it’s a “topic.” (Or maybe a mindset.)

irresistible organization, employee experience

And wrapped around this topic we have hundreds of new technology tools to help diagnose and improve the employee experience. Every survey tool, portal tool, mobile app, and process management tool now has “employee experience” slapped on its website, telling us “this, too, will make your employee experience better.”

It turns out we are now in a stage where most companies have too much technology, and not enough time.  (Time is now the most precious resource at work.) So a major part of the employee experience is simplifying the technology experience, and designing HR programs that happen “in the flow of work.”

I’m starting a big research project to study the adoption of HR technology (hope to share findings this Fall) and I think you’ll be surprised how we’ve failed to deliver on lots of the systems we’ve purchased.  (One study just found that 59% of cloud-based HCM buyers did not achieve the business results they hoped.)

Third, while the topic is crowded with books and articles, the real methodologies to improve employee experience are just emerging. I”m working with quite a few companies on this topic so let me share what I’ve seen.

The Methodology We Are Discovering

If you want to improve your employee experience, productivity, wellbeing, and output, what should you do? Where do you start?

Here are some things I’ve discovered:

  • Design thinking: this really matters. It’s time for you to “empathize” with your employees, follow them around, survey and interview them, and sit down with them in workshops. They will tell you what bugs them at work, and you’ll hear all sorts of little things that make work difficult.
  • Start with the basics: look at the common “moments that matter” at work first, and flatten these issue completely. Onboarding, job changes, relocation, and all the little things can really bog people down if they’re difficult. Every company can look at these topics and map out better solutions.
  • Partner with IT and Finance:  as I discuss in the Employee Experience Platform report, none of these problems is HR”s alone. Bring finance and IT into the team immediately, they are going to be part of the solution.
  • Practice Co-creation: every solution you develop should be “co-created” with business people and leaders. There’s no way to improve the employee experience without employees being involved. We have to work with them to fix old and broken processes, design new systems, and make work easier. Job shadowing is a good practice to use.
  • Look at New Tools: the ERP and HCM platforms may not help as much as you think. Every client I met with in Europe told me their big HR systems project did NOT necessarily improve the employee experience. In some cases they did, but only if they looked at the platform project as an “employee experience project.” (more on Employee Experience Platforms)
  • Practice process simplification: every “process harmonization” project I uncover comes down to one thing. We have a tendency in business to make things too complicated. As your company grows, acquires, and changes people keep tacking on new steps, approvals, and branches to everything.
  • Segment the workforce:  we can’t possibly fix every employee’s experience in every way at once, so we need to segment the workforce. After we take care of the basics (ie. core HR practices, IT), we can move into specific strategies for the workforces or personas that matter most.

Becoming A Business Consultant

After you’ve covered the basics, much of this work comes down to work simplification – and it may include job redesign as well. So you’re going to become a business consultant, which is the best place HR should be.

A few tricks to consider: some companies design their organization around the customer and employee, not around the hierarchy. Southwest Airlines designs its employee experience around the airplane and crew. One of the manufacturers I talked with designs its experiences around the customer and service engineering team. UPS designs much of its business around the driver and the distribution center. Retail banks often design around the retail branch. And companies like T-Mobile design around the sales team.

This is the type of approach that gives you focus as you look at the top issues to address.

Applying Marie Kondo

As I’ve interviewed companies, I find these projects are like reading the book “The Life-Changing Magic of Tidying Up,” by Marie Kondo. Companies have to say good-bye to the processes that we don’t need, and simply keep the things they love.

As she advises in her process, if something is sitting in the back of the closet, just take it out, thank it for its service, and give it away. This “continuous decluttering” process is what we need to do in HR.

Examples Of What To Do

Let me share a few things I’ve seen to help you get started.

  • Avoid system projects without a focus. Several of the companies I met with told me “we are implementing a new system because we have too many systems and they’re not all integrated.” And guess what. The new “system” is not going as well as they hoped. Why?  They didn’t design around the employee experience, they designed around the back-end. If consolidation is your goal, that’s nice – but employees don’t care. What they want is simplicity, ease of use, and a single place to go. You may not need a new system to accomplish this – an employee experience platform sitting in front of existing systems may be far easier.
  • Create employee personas. One of the companies I met with (a large TV network) created a set of personas they now use to design solutions. They built these personas with help from the business unit and then mapped all the various HR transactions against these personas. Each persona had its own design session (co-created with the business) and they created a role called “innovation consultant” in HR to rethink the way things get done. They’re implementing many of their new ideas in ServiceNow and other tools, but it was the personas that got the business leaders excited.
  • Look at everything. One of the companies I met with (Coca Cola) found that ordering a new employee credit card required 52 different process steps. I’m sure all those steps were well intended when they were designed, but it ended up wasting hours and hours of employees’ time. Re-engineering this simple thing, coupled with a relook at onboarding, enabled them to save a million hours a year of employee time. This entire project was cost-justified immediately, and now they know how to look for other time-wasting processes.
  • Work on onboarding. Everyone I talk with tells me their onboarding process is complex and incomplete. One of the companies told me their service engineers suffer a 50% turnover rate in the first year. This is because there really is no strategic onboarding process, so managers are filling in the gap. Employee moves are a similar opportunity. (Have you ever had a job where the first week was horrible?  It sets a bad tone for a long time.)
  • Engage the people analytics team. These problems are all about measurement. Where are people wasting time? How much effort is going into doing something?  Where are people clicking and who are they emailing? If you have a good ONA tool (TrustSphere, Microsoft Workplace Analytics, etc.), a good survey system, and a good set of instrumentation on your workforce you’ll need the data. SAP’s $8 billion acquisition of Qualtrics was justified by helping to instrument employee feedback – this data and the analytics team should be part of your plan.

One of the companies I interviewed used an ONA (Organizational Network Analysis) tool to analyze employee productivity in their sales force. The data found that the low performing sales teams were spending far more time communicating with managers than their high-performing peers. As the HR team dove in, they discovered that these “low-performing” managers were micro-managing sales teams on pricing, configuration, and sales offers. The more empowered teams were outperforming their peers.

The answer?  Fix the “sales employee experience.” 

How? The team worked with sales leadership to further empower sales teams with pricing, configuration, and negotiation authority.

More to Come

I’m digging into this topic in detail and developing a whole course on it. Let me conclude that this is an essential topic in business today, and the practices and tools are now becoming clear.

Finally, consider what we’ve done for customers. Journey mapping, segmentation, and micro-targeting are well-established practices in marketing and product management. Now they’ve come to HR.

Just remember that “the customer experience is dependent on the employee experience.” Every time we make employees’ lives better, we better serve customers as well.

There’s the motivation to take this topic seriously!