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Diversity, Gender, Leadership

McKinsey Research Reveals the Secret to Diversity Success: Passionately Committed Leadership


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By Melissa J. Anderson

According to a report in this month’s McKinsey Quarterly, researchers Joanna Barsh, Sandra Nudelman, and Lareina Yee, have significant found real-world evidence to support the research the team has put forth over the past few years on the business case for women. They write:

“Encouragingly, many of the themes identified in our research over the years—for example, the importance of having company leaders take a stand on gender diversity, the impact of corporate culture, and the value of systematic talent-management processes—loom large for these companies. This continuity is reassuring: it’s becoming crystal clear what the most important priorities are for companies and leaders committed to gender-diversity progress.”

Topping the list of what makes diversity programming work is an emotionally committed CEO, who is motivated to tell the diversity story and tout accomplishments in the space not simply because it is good for business, but because he or she feels it is right.

They researchers explain, “CEOs and senior executives of our top companies walk, talk, run, and shout about gender diversity. Their passion goes well beyond logic and economics; it’s emotional.”

Diversity managers can site study after study about the importance of gender equality. But what really hits the point home is a powerful discussion of diversity by corporate leaders, and meaningful action following that guidance.

Leadership

Making CEO Succession Planning Strategic


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By Melissa J. Anderson

A new Korn/Ferry white paper suggests one big reason that firms need to focus more strategically on CEO succession planning: $40 trillion dollars.

That’s the size of the market cap of the world’s publicly traded companies, and, write report authors Alan Guarino, Vice Chairman of Global Financial Services at Korn/Ferry and David X Martin, Senior Advisor to Oliver Wyman and author of The Nature of Risk, that’s a lot of shareholder value hinging on successful CEO transitions. They explain, “Collectively, there is a $40 trillion reason why succession planning has to evolve. A more rigorous process prompts deeper analysis, longer term planning, and tough questioning from the board. That’s precisely what a board is for.”

By engaging in careful planning and bringing CEO succession out of the shadows and into the daylight as a talent management topic within boardroom risk management strategy, board members can work toward better, less risky CEO transitions – and help companies maintain their value through these sometimes-rocky events.

Leadership

Are Turnaround Companies Different for Flex Work?


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By Melissa J. Anderson

According to the new US Census data released last week [PDF], telecommuting is a rapidly growing trend across America. Between 1997 and 2010 the number of people working from home at least one day per week grew by 34 percent. And that increase should come as no surprise since the cultural acceptance of flexible work is now greater than ever before, just as the quality of telecommuting technology is better than ever as well.

But over the past few weeks two companies have ended their generous telecommuting policies. Both Yahoo and BestBuy have slashed their work-from-home allowances for employees.

Yahoo informed its workforce by email in mid-February that all work-from-home policies – even for those people who had a special agreement in their employee contract when they were hired – were terminated. For those who found the new situation untenable, they were welcome to quit.

Similarly, last week BestBuy announced that its workforce would no longer be allowed to telecommute whenever they want without clearing it with management first.

The two announcements were big news for different reasons – first, Yahoo’s announcement bucks the telecommuting trend that is prevalent at most tech firms. And BestBuy was an early pioneer of the ROWE (Results Oriented Work Environment), touting flexible work arrangements as an engagement boosting opportunity long before many other companies were.

Since then, there has been an outcry that the new policies will cause problems for working parents. There are also reams of research showing that flex work improves productivity.

But according to executives at both companies, flex work isn’t working for their cultures anymore. What’s true to both companies is that they are in turnaround situations. Is it really possible that flex work is keeping them from getting back on track?

Leadership

Is Leadership in Crisis?


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By Melissa J. Anderson

According to Edelman’s 13th annual Trust Barometer study, the past five years have ushered in a new dynamic for how people receive information, and grow to believe what they hear.

At the same time, trust in business leaders and government officials has plummeted. The survey polled 31,000 people in 25 countries around the world, and it seems as though people have a lot more trust in the institution of business than they do in business leaders themselves. Only 18 percent said they trusted CEOs to tell the truth, yet 50 percent said they trust business as an institution.

Richard Edelman, president and CEO of Edelman, commented, “We’re clearly experiencing a crisis in leadership.”

He continued, “Business and governmental leaders must change their management approach and become more inclusive by seeking the input of employees, consumers, activists and experts such as academics, and adapting to their feedback. They must also pass the test of radical transparency.”

This should give leaders a reason to reflect on the changing nature of leadership and communication.

Leadership

Three Reasons Leaders Must Focus on Values


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By Melissa J. Anderson

According to a new paper by Marya L. Besharov, Cornel University, and Rakesh Khurana, Harvard Business School, it is critical for leaders to focus on embodying institutional values.

Based on an analysis of the writings of Philip Selznick, noted 20th century organizational theorist, they explain how the embodiment of organizational values enables leaders to address both the symbolic, social aspect of organizational behavior, as well as the technical, administrative aspects. Besharov and Khurana explain that these two functions combine to produce business value. They write:

“We also seek to extend this work by focusing on the fundamental dualities and tensions between the institutional realm of values, culture, and politics, and the technical realm of efficiency, rationality, and administration. The central purpose of our chapter is to explain how these two realms are interrelated and to articulate how leaders can uphold institutional values while simultaneously meeting technical imperatives.”

Here are three ways leaders advance their companies by embodying organizational values.

Leadership

Executive Confidence Slowly Rising Globally


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By Melissa J. Anderson

New McKinsey research suggests that executives around the world are looking to 2013 with optimism. The firm conducts regular quarterly surveys of executives around the world, measuring attitudes around economic opportunity, expectations on the economy, and workforce growth.
New McKinsey research suggests that executives around the world are looking to 2013 with optimism. The firm conducts regular quarterly surveys of executives around the world, measuring attitudes around economic opportunity, expectations on the economy, and workforce growth.

As reported in the McKinsey Quarterly, over 1,500 executives around the world participated in the survey at the beginning of December. By and large, respondents were cautiously optimistic about the year to come, although they were fairly negative about the here and now. While 30 percent of respondents said conditions in their country were better than they were three months ago, more (38 percent) said conditions were worse. But the largest percentage (40 percent) said conditions were the same.

On the other hand, McKinsey says, this is actually a positive sign. In the previous quarterly survey, the largest percentage of respondents said conditions were worse. And, the report continues, “Looking ahead, executives are more optimistic: 43 percent say they expect the global economy will be better six months from now, up 17 percentage points since last December.”

The study shows that executive optimism is higher than it was a year ago – which is welcome news for the global business environment.

Leadership

Global Business Strategies Mean Global Talent Development


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By Melissa J. Anderson

According to the PwC’s 15th Annual Global CEO Survey for 2012, CEOs are dealing with a lot of uncertainty – economic crises, environmental disasters, and other challenges are causing business leaders to become a bit less optimistic than they have been in the past.

They are also eyeing growth markets like China, India, and Brazil to help boost revenues while the US and Europe continue to deal with unpredictable markets and economic turmoil. In his introduction to the report, PwC’s US Chairman and Senior Partner Bob Moritz writes:

“Customer demand is the primary driver of corporate strategy this year. Success involves understanding customer segmentation within various markets—such as rural-urban and high income-low income—and the dynamics driving it. That is why integral to CEOs’ global expansion strategies is the need to reconfigure operations at very local levels. That includes getting the product and service portfolio right across markets, nurturing talent in different locations, and encouraging free flow of ideas and innovations regardless of where they originate.”

The uncertain economic environment is driving companies to develop a global strategy – by diversifying, they can better weather the challenges erupting I specific markets. According to PwC, that means they are also building a new global talent strategy as well.

Diversity, Leadership

Discrepancy between Diversity Belief and Implementation


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By Melissa J. Anderson

A new study by executive search firm Egon Zehnder suggests that executives are gaining a firm grasp on the importance of diversity at their companies, even though they may have difficulty in implementing a plan for achieving it.

The study polled 511 global executives who are part of the firm’s “Club of Leaders,” on how they feel about diversity and inclusion and how their companies are working to increase diversity. By and large, leaders felt very positive about diversity, with 96 percent reporting that “working in a diverse and inclusive environment is personally important to them.

Almost all (99 percent) say that there is a strong business case for diversity. But when it comes to implementing corporate programs to develop diversity within their companies, the respondents were less progressive. The study highlights the challenges companies have in bridging the gap between leadership support and line implementation.

Support for Diversity

According to Egon Zehnder, the study respondents were very appreciative of the effects of diversity. Almost three quarters (72 percent) said having a diverse workforce helps them recognize how “their own biases affect their judgment of others.”

This recognition is important, the firm believes.

“Most executives appear to realize that even well-intentioned leaders can succumb to unconscious stereotyping of those who are in some way different from themselves. This finding hints at a broad awakening. Facing the fact of bias, rather than pretending it does not exist, is a critical step toward crafting a Diversity and Inclusion culture that explicitly helps people manage their inevitable biases to the common good.”

Nine out of ten respondents (91 percent) said diversity helps broaden their horizons. Four out of five (81 percent) said diversity fosters more lively discussions. And almost three quarters (73 percent) said diversity “creates an organization that shows more respect for each individual.”

On the other hand, leaders also suggested a downside to diversity. The study says:

“Although nearly all the study participants say D&I is personally important to them, less than half suggest that working in a diverse environment is easy. Many apparently wonder about the potential downsides of D&I, such as positive discrimination, slower decision-making, increased operating costs and even the risk of undermining coherence and alignment.”

These doubts could be part of the reason executive support for diversity has not yet been realized in overwhelming action for building diversity within companies.

Practical Challenges

While the executives polled for the study came out strongly in support of diversity – and 80 percent say their companies actively pursue diversity – how they intend to get there is less clear. Only half (53 percent) say their company is making good progress on diversity.

When asked how their company encourages and enables diversity and inclusion, 58 percent said “top management commitment (with 32 percent reporting to be “in progress” on this method). On the other hand, only 24 percent said performance evaluations at their company assess individual contributions to D&I (14 percent said they were in progress on this, and seven  percent said they were planning it). But a full 55 percent said they did not have any plans in the works to include D&I as part of employee performance evaluations.

The report also notes that approaches to diversity are highly “numbers oriented.” It explains, “Nearly three-fourths of participants count gender among their company’s top three diversity priorities, but only half say their company gives similar weight to the more qualitative D&I dimension: “Diversity of perspectives and thinking.”

Finally, the study says, “Fewer than a third of the respondents report that their company has publicly communicated its diversity commitment.”

This is surprising – making a public commitment to diversity seems like the easiest thing a company can do, and may suggest that business leaders are uneasy about how the public will perceive a commitment to diversity and inclusion, especially at a time of economic uncertainty. Perhaps companies won’t fully strive toward workplace diversity until they are convinced the marketplace fully believes in the value of diversity.

Leadership

Best Practices for Executive Succession Planning


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By Melissa J. Anderson

Recently, the Korn/Ferry Institute released a study on how the US’s biggest 100 companies are approaching succession planning, including interviews and case studies on how to create a smooth transition in the C-Suite.

According to the writers, Dennis Carey, Vice Chairman, Board & CEO Services, Philadelphia; Steve Mader, Vice Chairman and Managing Director, Board Services, Boston; and Jane Stevenson, Vice Chairman, Board and CEO Services, Atlanta, the key to a successful succession plan is, well, planning.

Not every company will plan the same way, but it’s important for each company to ensure they have a carefully planned succession process – for expected and unexpected transitions – that will work for the company and its culture. “It never ceases to amaze me how simultaneously simple and complex succession stories are,” Stevenson said. “There are underpinning guidelines that point the way to the right process, yet the application of that process is so widely diverse, depending as it does on the board, the CEO, the business strategy, and the type of challenges that are unique to each company.”

As the study says: “A smooth and sure succession shouldn’t be difficult to pull off. Companies that understand the right process, and apply it effectively, generally come out with a good choice.”

Leadership

Leading in a Time of Change


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By Melissa J. Anderson

How can leaders motivate their workforces to achieve strategic objectives during times of extreme upheaval? That’s one issue Virginia Rometty, Chairman and CEO of IBM, approached during her discussion with Jessi Hempel at the recent Most Powerful Women Conference.

She explained that, particularly in the technology industry, but indeed for most industries, we are working in a state of constant change and global uncertainty. For a global company like IBM, and most Fortune 500 firms, it is critical that employees latch onto their leader’s strategic vision and follow through on achieving it. But in an environment where change occurs so frequently resulting in rapid shifts of business strategy, how can employees understand what they are to achieve?

Rometty laid out her approach as the notion of “strategic belief.” She explained, “I actually think strategic belief could end up being more important than strategic planning in this day and age about how do you keep the long view sort of in your mind.”

What is strategic belief and how do leaders leverage it? She described it as directional arcs that unite a workforce. “People really do want to work for a higher purpose in addition to what they do every day,” she said.