December 19, 2019
4 Critical Developments to Company Culture in 2020
The idea that a great company culture is more than a “nice thing to have” has been around for decades. And yet, market trends are calling in debts from executives that ignored the data of the last 20 years. More and more economic experts are pointing to breakdowns in culture as the main reason that organizations diminish in the marketplace.
A Korn Ferry survey found that 72% of leaders think culture is important, yet almost a third say they’re struggling to get theirs right. Strategies aren’t landing, good people are leaving, and customers are switching to new competitors.
Your company culture faces major changes. If your culture is failing now, your current profits will likely not hold out for much longer. That being said, here are four developments that can help you get your culture on track in 2020. Anticipating these new trends will help you guide your workforce into the New Year, thus making company culture your competitive advantage.
1. Profits are linked to authenticity. Is your company “purpose washing” instead?
What is purpose washing? In short, it is corporate leadership using clever messaging to distract the public from their non-intent to become more socially responsible. It’s professional street talk for executive hypocrisy.
Tim Leberecht from Inc. observed discussion among business leaders at the 2019 Davos Conference. Most executives betrayed a longing for full automation, regardless of its impact on employees and the environment. Confronting their longing for full automation was the sentiment of customers. In other words, they know that they must sound socially responsible in order to protect their reputations. Leberecht noted:
There are only two reasons CEOs might be incentivized to err on the side of humans: One is the need for innovation, which is still an inherently human domain, enabled by hope and imagination (machines are notoriously bad at dreaming up alternative, better worlds); and the other is their concern over a rapidly dissolving social contract that might eventually result in consumer boycotts and social unrest (a Google executive told me recently that he was indeed expecting a mob at their campus gates very soon if things don’t change).
In Davos, Seth A. Klarman, a billionaire investor, sounded an alarm in a 22-page letter to his investors, including the endowments of Harvard and Yale Universities and some of the world’s wealthiest families: “It can’t be business as usual amid constant protests, riots, shutdowns, and escalating social tensions.”
Thankfully, Davos attendees don’t represent all or even most employers in North America. Gallup routinely points to employee engagement numbers as the critical indicator of a company’s innovation, profit growth, brand awareness/loyalty, and more. While the already-wealthy business leaders drool over automation as the key ingredient that will help them protect the wealth they are afraid to lose, new business leaders are making company culture their competitive advantage.
2. Productivity is moving at the pace of market disruption. Are you shifting talent accordingly?
Automation, artificial intelligence, and machine learning are making a huge impact and disrupting business as we know it. Business leaders (such as those described above) are not wrong to want to keep up with these powerful new advancements.
However, as new technology and business processes change the economic landscape, it becomes easy to forget the role of employees. Forbes addressed the growing concern that automation might kill manufacturing jobs. Two companies, Crown Equipment and Wing Enterprises, incorporated automation with their existing workforce in mind, and the results were astounding.
With a new shot of productivity from the latest technology, Crown Equipment increased its workforce from 200 to 335 workers. At Wing Enterprises, productivity rose 30 percent, leading the company to build a new facility and expand from 20 employees to 400. It confirms that automation can create jobs, and can also lead to upskilling and shifting responsibilities to manage robots on the production line.
The critical difference between the mentality at Davos and that of Crown Equipment is that automation should mean more productivity from existing employees. It allows them to do more with less. As a result, brand recognition is stronger. The increased productivity lowers per unit costs, and the brand recognition increases sales.
The profitability that these companies enjoy ironically leads to rapid workforce expansion, showing that shifting talent proactively allows automation to create more jobs rather than kill them.
3. Employees want to find joy in their work. Is your workplace a desirable life experience?
Dichotomizing one’s personal life from their work life was common for Baby Boomers and their parents. And while there is nothing wrong with separating the two, today’s workforce views work much differently. According to a Gallup report,
Millennials are a largely optimistic group, and they believe that life and work should be worthwhile and have meaning. They want to learn and grow. A full 87% of millennials say professional development or career growth opportunities are very important to them in a job.
Now, employees prefer to come to work expecting to enrich and be enriched. They seek personal and professional development. Leadership and authenticity are what they desire, even if perhaps impatiently. They consider their work a meaningful part of their existence and relish opportunities to positively collaborate with a variety of viewpoints.
Deloitte describes current workers well, “Employees are now like customers; companies have to consider them volunteers, not just workers.” Far from coddling, top employers value their employees as emotionally intelligent, passionate brand builders. In contrast, poor employers prefer to leave their employees feeling like mindless cogs in a machine, and it isn’t working.
4. There are new faces in leadership. Do your managers and employees know how to dialogue?
In a recent article by the Korn Ferry Institute, “The Millennial Managers Have Arrived,” authors noted:
The shift [of Millennials flooding the workplace] may sound ridiculous to baby boomers and Gen Xers, many of whom still hold false notions that millennials as a group are averse to working hard and have lightning-short attention spans. But it shouldn’t be a surprise. The average age of a first-time manager in the United States is about 30, an age milestone that half the millennial generation has now reached. Indeed, one recent study found that 83 percent of [North American] employees have already seen millennials managing boomers and Gen Xers in their offices.
But that is not the only trend changing the face of leadership in North America. Women are not only making great managers, they are now improving business profits as CEOs and in other executive posts. Between 2014 and 2018, women in executive roles increased from 14.9% to 22.3%. While these numbers certainly do indicate that gender equality is far from fair, a 7% increase in less than 5 years is a good, if not great, sign of progress.
Merriam-Webster recently shared its “Word of the Year”: they. The personal pronoun they is often used by people who identify as non-binary.
Merriam-Webster recently shared its “Word of the Year”: they. The personal pronoun they is often used by people who identify as non-binary.– Simone Brown
Diversity and inclusion will be a critical strategy in 2020, rather than a patronizing promise in the employee handbook.
Products, services, and brands are becoming extinct at a faster pace. Technology is changing the nature of everything in the workplace. Not only do these tools empower new and old companies to produce new products at a faster rate, they also empower individual voices, both within and without the workplace.
It’s getting increasingly more difficult for employers to get away with poor work cultures. These four developments are expected to expose poor management decisions like never before. However, employers that embrace the change and respond proactively will find their employees more engaged and productive. And not only will this significantly lower costs (fewer turnovers, lawsuits, etc.), it will increase sales with the help of happy, better-equipped employees contributing to the brand’s word-of-mouth.