The best senior teams thrive on disagreement

By: Orla Leonard, Nathan Wiita & Christopher Milane September 18, 2017

Source: https://hbr.org

Most team leaders try to build cohesion on their teams. Through team-building exercises and the careful establishment of norms and processes, leaders aim to create a culture of trust, psychological safety, and good feeling.

But should enterprise leadership teams also pursue cohesion? To explore this question, over the course of six years, we surveyed senior-most leadership teams 99 times at companies representing a variety of industries, including financial services, food and beverage, energy, technology, healthcare, and retail. Each team member responded to over 110 items that focused on their team’s capability and performance. The specific domains of capability and performance were based on previous research, including:

  • Team structure
  • Team processes
  • Team results
  • Team dynamics

Most teams (55 teams comprised of 700+ senior executives) also responded to items focused on organization performance — comparing themselves to industry peers — and included dimensions such as Sales and Revenue Growth, New Product Development, and Market Share.

We expected to replicate the importance of cohesion in this unique context. We were wrong. Results from our research indicate that while concepts like internal cohesion and psychological safety are important to team performance, they are not the most critical at the enterprise level. Rather, it is the ability to manage conflicting tensions — as opposed to seeking cohesion — that is the most predictive of top-team performance.

What are the key tensions?

Top teams need to navigate greater complexity and uncertainty than teams lower on the org chart. Perhaps that ‘s why we found the highest-performing senior teams are those that recognize and skillfully navigate three key tensions. These tensions are embraced as polarities to be managed rather than problems to be solved.

Risk vs. Results. Delivering results in the short term and taking risks that offer payoff in the long term are daily realities for top teams. The highest-performing teams excel at both. More specifically, we examined what differentiated the top 25% of performing teams from the rest of the teams we studied when it came to taking calculated risks to lead the industry. High-performing teams realize 10% greater market share and report 22% better performance when it comes to developing new products. They take a long-term view, place strategic bets, and invest money and infrastructure to systematically pursue them.

They don ‘t just take risks, however. They are also clear and knowledgeable about how to best leverage the core strengths of the business, creating circumstances where both risk and day-to-day delivery can peacefully coexist. Our highest-performing teams reported 6.5% greater profitability against their competitors and 7.5% better sales and revenue growth. As much as they strive to lead the industry and are responsible for delivering results, they also possess an ability to learn and grow from mistakes rather than judge and punish — in essence, they know where best to innovate and what to leave alone.

External vs. Internal Pull. An organization ‘s ability to look outward and upward as well as downward and inward is a well-documented success factor and one that takes on even greater importance given the pace with which our world is changing. Based on our research, one of the best predictors of high-performing teams is their ability to consistently scan the external environment for consumer, competitor, and industry knowledge and to use that knowledge to adapt. More specifically, we found that high-performing teams achieved greater sales and revenue growth (10.6%) and better development of new products (8.2%). The best teams do not lose the focus of the external world when getting pulled into internal transformations, change, and turmoil. In fact, they may use external pressures and realities as a springboard for internal execution.

David Craig, president of financial and risk business, Thomson Reuters, and a key architect of the merger between Thomson and Reuters, notes that their customer focus was critical to driving internal execution: “At a time where we needed significant internal transformation, we were lucky in that our largest customers and the financial industry were in crisis and demanding change. Our team leveraged this to align our internal transformation.”

In other words, these high-performing top teams create mechanisms to stay attuned to the internal pulse of the organization. They enable employees to expose barriers to execution that senior leaders can then address, and they are agile in shifting internal resources to respond to changing business situations. Our research found that companies who leveraged core strengths to grow the business achieved better profitability and market share. This is not to say this shift is easy, and further, it is one that requires support and engagement from the top. As Mr. Craig notes, “It was tough, demanding, and required painful choices. We ensured senior leaders took exec-sponsor roles for customers, forcing them to engage externally.”

Top-Down vs. Bottom-Up Innovation. Finally, the success of a top team rests heavily on its ability to innovate. No surprise there. However, the nuance that emerged from our research suggests that top-performing senior teams manage the tension between leading and directing innovation while also engaging and empowering the broader organization. They provide frameworks and make essential decisions but recognize that those closer to the customer often possess the best insights. Enterprise leadership teams that are highly effective at creating conditions for bottom-up innovation benefitted from greater employee engagement (9.5%) and better quality of new products (12%). Teams who effectively drive top-down innovation demonstrated better sales and revenue growth (5%) and market share (4.5%).

Schulte notes that “for innovation to happen, senior teams need to create a culture where those who are closest to the customer can share, challenge, and feel heard.” He also notes that the responsibility of enterprise leadership teams is to “create empowering cultures of micro-innovation in conjunction with clear, top-down plans to best set up organizations for success.”

How can a team embrace these tensions?

We are not tolling the final bell on the long-held notion that cohesion is critical to team performance. Indeed, for enterprise-wide teams to successfully traverse the tensions outlined above, trust and positive team dynamics are foundational. In fact, our results were consistent with this notion, in that teams with high levels of trust, transparency, a team-first mentality, and collective pride perform better along several dimensions (e.g., overall organizational performance, employee engagement).

However, in a business environment that requires a different approach to enterprise leadership, our results challenge the assumption that cohesion is the most critical. On the contrary, embracing, navigating, and living with tension is most strongly related to organizational performance.

So, how does a leader ensure their team fully embraces these tensions? Our experience suggests three key team behaviors that support a full and successful embracing of these tensions.

  • Reframe tension and dialogue openly. The best-performing teams view tension simply as a typical part of the job in today ‘s business environment. Well-managed tension is therefore an indicator of strong performance rather than a signal that something is wrong. As such, creating a clear dialogue around conflicts, trade-offs, and compromise is critical. While you want the team to operate from the standpoint of what ‘s best for the enterprise rather than what ‘s best for one ‘s individual function, often the way you get there is by people in each department laying out their concerns. Instead of seeing this as a fight, or assuming bad intentions, be clear that this is a normal part of the process.
  • Keep the customer front and center. Best-performing teams and organizations use consumer needs as their North Star. Unified customer focus provides a sense of alignment, clarity, and cohesion needed to navigate inevitable complexities and tensions. Embedding the work of the team in the world of the customer can make all the difference. You can do this through structure (e.g., customer advisory boards, executive sponsorship) as well as culture.
  • Hold the team accountable for fostering innovation. For enterprise leadership teams, we see the responsibility of fostering innovation too often taking a back seat to day-to-day minutia and firefighting. This is especially troublesome given that the need for innovation and agile adaptation has never been greater. Paddy Miller and Thomas Wedell-Wedellsborg, authors of Innovation as Usual, note that “focus beats freedom” for enterprise-wide innovation. In other words, senior leaders must first create frameworks and focus for bottom-up innovation to occur in an intentional and productive way.

 

Five things emerging economies can do to attract the best talent

By: Mauro F. Guillén December  08, 2017

Source: https://www.weforum.org/agenda/2017/12/emerging-market-companies-multinational-talent-china-india-attract

Emerging market companies need talent to be competitive in the global marketplace. They have made much progress in attracting it. Barely a decade ago, most young, bright graduates in China and India preferred to work for Western companies. These companies paid better and offered more opportunities for professional growth and advancement.

That was then. Now emerging market companies can attract some of the best talent, locally and globally. In 2016, Alibaba launched a Global Leadership Academy to offer young, aspiring managers from the US and Europe a 16-month stint at its corporate headquarters. It has already poached executives from well-established technology and financial services companies. Dr. Reddy, an Indian pharmaceutical multinational, consistently wins awards in the US for being a great employer.

Fortune magazine’s latest list of the 25 Best Companies to Work For includes Natura of Brazil, Belcorp of Peru, and Falabella of Chile. These companies have dedicated themselves to attracting and nurturing talent for years. However, challenges remain. The allure of working for a Western company is still deeply ingrained in the hearts and minds of university graduates and mid-career managers in emerging markets. Many still believe that compensation levels, bonuses and promotions are more attractive than at local firms. For aspiring managers with an essentially technical skillset, this assumption is correct.

But circumstances are different for those with so-called softer managerial skills. These include the ability to negotiate or work effectively in multicultural teams, complementing a core financial or marketing knowledge. As the service sector grows throughout Asia, the Middle East and Latin America, demand for talent in healthcare, the creative industries, and professional services will soar.

Consider South Korea, which has already made the transition from being predominantly a manufacturing hub to a more diversified service-driven economy. It has created more than four million highly-qualified service jobs in the past decade. As China undergoes a similar transition, it will require at least 40 million educated professionals in the 25 largest cities alone. In the Indian economy, which is far less dependent on manufacturing for growth, demand for this type of talent is even greater.

China has the advantage of a vibrant university system that churns out the largest number of graduates of any country in the world. But it lacks the dynamism of India’s younger population, which seems to have an almost unlimited supply of technical graduates across a number of critical fields. Brazil and Mexico are also starting to reel from smaller young age cohorts.

Competition for talent in China will be acute. This is likely to lead the country’s emerging, rapidly-growing firms to redouble their efforts at attracting talent, including from abroad. Emerging Chinese multinationals report having less trouble attracting talent for their international operations than for positions in China. To a large extent, this is due to the unpleasant living conditions in the country’s major cities. The air quality and traffic congestion deter many foreigners from considering a move. While Indian companies have more qualified locals available to them as potential hires, they will also face challenges in the future when attracting foreigners to work in India.

Future strategies for talent development in emerging markets must address at least five key areas:

– Allocating resources to education, not just in technical fields but also in soft skills

– Ensuring that employment conditions and career prospects at the largest emerging market multinationals continue to improve, so that working for them is at least as attractive as working for a Western firm

– Attracting talent from other countries to positions both in the home country and around the world

– Making life in the largest cities of the emerging world more pleasant, convenient and affordable

– Ensuring that local firms do not have to pay a premium for talent. In the long-term, this would undermine the competitiveness of both companies and the economy

Companies in emerging markets cannot win the competition for talent by themselves. A country’s physical infrastructure, education and quality of life are key factors. Only collaboration with governments, from the local to national level, will achieve the outcome these companies need.

How to teach employees skills they don’t know they lack

By: Ulrick Juul Christensen September 29, 2017

Source: https://www.hbr.org

After spending billions of dollars a year on corporate learning, U.S. companies probably assume that their employees have the knowledge and skills they need to carry out their jobs. The employees themselves probably think they’re prepared, too, having gone through these exercises. But according to data from industries including academia, health care, technology, manufacturing, retail, sports, and business services, people are actually “unconsciously incompetent” in a typical 20% to 40% of areas critical to their performance.  One global technology company my team works with, for example, discovered that, on average, its sales employees didn’t understand or know about 22% of its product features, even though they believed they did.

Unconscious incompetence can be found at every function, discipline, and level in organizations. In fact, it’s often more prominent among experienced staff, which is particularly problematic because, as the go-to people in their circles, they often pass incorrect or incomplete information and skills on to others via to peer-to-peer learning and training. This can lead to significant mistakes, dissatisfied customers and even damaged corporate reputations.

But how does a company, manager or individual employee correct a competency gap about which no one is aware?  As a physician who studies brain function, biological variation  and how people learn, I have some suggestions. The first step is to get “unconscious incompetence” on the learning agenda.

Corporate training programs need to be redesigned to better engage learners and empower them to admit what they don’t know. Too many online training modules miss the mark here because they rely on static content, which most people try to click through as quickly as possible, especially if they think they already know it. These programs also make assumptions about what students understand and where they need reinforcement, offering a “one-size-fits-all” approach that’s highly ineffective since every learner is different, with variations in knowledge, experiences, background and the ability to take in new information, even from moment to moment.

Better learning models are instead adaptive—that is, molded to each person’s needs by probing what they know and don’t know, then offering tailored content as the learner performs well or struggles. When e-learning is individualized in this way, learners can still speed through material, but only that which they’ve already mastered. And when they reach anything that challenges them, they get more support.  Education technology companies and publishers are working hard to build these kinds of systems, as are industry groups, particularly in the healthcare arena. The American Medical Association recently announced a partnership initiative to encourage innovation and flexibility in continuing education, using blended or new approaches. And our work with the New England Journal of Medicine (NEJM Group) to create courses that allow physicians to maintain certification and keep up to date in a constantly evolving field is similar.

When being tested, learners should also be pushed to rate the confidence of their answers.   Consider, for example, a trainee who scores 40 out of 50 on a proficiency test. Her trainer should make sure she focuses not just on the 10 misses, but also any correct answers that she can admit were lucky guesses. I’ve actually started to use this approach when helping my two daughters practice their spelling words. With every answer, they have to put three fingers up if they are sure, two fingers up if they’re only partly sure, and a thumbs-down if they’re just giving it a shot. Now, they’re much more conscious about when they’re guessing, and more apt to review all the words on which they felt at all unsure. When corporate learning programs prompt employees to admit to that they’re guessing in the same way, they, too, begin to see the previously hidden gaps in their skills and knowledge.

Another strategy is to promote a culture of continuous improvement.  A great example comes from the aviation industry. Pilots are trained in the latest aircraft and procedures using simulators, which test their skills and abilities, and uncover unconscious incompetence. In addition, airlines and the Federal Aviation Administration (FAA) use information from “near-miss” data (incidents or errors that nearly cause an accident) to inform training. The result is “predictive safety” that relies heavily on the reporting of these mistakes. The objective is not to punish (in fact, a lack of near-miss data is seen as questionable), but to improve safety and performance.  More companies should keep formal or informal records of—and openly discuss—errors, whether in production, customer service, or other areas because they can yield invaluable insights about employees’ knowledge gaps and make everyone more aware of what they don’t know.  The goal is to make people more comfortable about acknowledging previous mistakes and any doubts they may have going forward about trying to do their job. Emphasize that saying “I don’t know” is always better than pretending to know something.

Unconscious incompetence is a pervasive and escalating problem, especially in fast-paced industries where knowledge and skills need constant updating.  Organizations can only address it with more adaptive, individualized corporate learning programs and by promoting a culture of continues improvement.  With a mindful approach that allows learners to probe their knowledge, uncover what they don’t know, and admit when they are unclear, incompetence is uncovered and, thus, no longer unconscious: Employees know what they don’t know and their employers can do something about it.

5 reasons to dream big, even when you think you have no business doing so

By: Marty Fukuda January 11, 2016

Source: https://www.entrepreneur.com/article/254798

“Do not allow a thought to enter your mind about where you are at today when you are deciding where you are headed. “I jotted down the quote above more than a decade ago at a business conference. I do not know to whom it is originally attributed, but I have thought about it often over the past several years. At some point in time, we have all asked ourselves, “Where am I headed?“ At moments, I’ve found myself in wonderful career situations and was obviously very bullish on my future. After all, it’s easy to view the years ahead through an optimistic lens when you’re riding high. However, other times I’ve found myself at a crossroads — faced with a decision to change roles, companies or even industries. In fact, I’ve even had to start over completely more than once. At those critical junctures, it’s easier to be conservative or cautious or even jaded about one’s future. The trick is not to be.

Here are five reasons why you shouldn’t let your current situation and surroundings impact your vision for the future.

  1. Limiting yourself is a sure-fire way to not reach your potential.

If you aren’t where you want to be professionally or personally, the temptation to dampen your life’s ambition is strong. In fact, others may advise you to go conservative with your dreams to soften the blow should you fall short. While setting big goals doesn’t ensure you’ll reach them, not setting them will almost guarantee you don’t. Historically, those who have achieved the most are the ones who set out to do huge things against all odds, logic and probability.

  1. Everyone needs something that stirs his or her soul — especially top performers.

When was the last time something you sought to accomplish gave you chills or goose bumps? When you’ve found your true compelling stretch vision, there’s magic behind it. It will help you navigate the route to get there and power through the toughest obstacles. Still, this vision has to be so exciting to you personally that nothing short will be acceptable. A sensible or practical goal will not get you there. As Victor Hugo said: :Each man should frame life so that at some future hour, fact and his dreaming meet.”

  1. It’s not relevant.

Where you are at today has little to do with what happens moving forward. Some people allow their current positions to dominate their thoughts about future advancement. Sadly, they are unlikely to accomplish all that you will.

Those who make big things happen do so by accepting where they are today but simultaneously refuse to let this limit them. They realize they have far more control over their destinies than that. They stop focusing on what they don’t have and pour their energy into what they want.

  1. Understand the power of momentum and how it can work for you.

The key to conquering the biggest obstacles is to dissect them into smaller challenges. The fastest sports car in the world doesn’t go instantaneously from 0 to 100 miles per hour. First, it goes from a complete stop to 1 mph. As it picks up speed, accelerating becomes easier — the engine is warm, the gas pedal pressed, and forward momentum is on your side. Some people are daunted by a stretch goal, because it seems so distant. Keep your eyes on the prize, but focus your daily attention on closing the gap just a little. The power of momentum engages — first steps become hops, jumps and then leaps.

  1. Thinking and aiming big forces you to be more creative, work harder and develop a bias towards action.

The people who achieve the biggest goals are often the people you’d least suspect. Superficially, on paper, they don’t have the perfect resume, but the pursuer knows they deliver their absolute best every day. This positive self-pressure generates growth. Mediocre goals never bring out greatness.

What everyone must know about Industry 4.0

By: Bernard Marr June 20, 2016

Source: https://www.forbes.com

First came steam and the first machines that mechanized some of the work our ancestors did. Next was electricity, the assembly line and the birth of mass production.  The third era of industry came about with the advent of computers and the beginnings of automation, when robots and machines began to replace human workers on those assembly lines. And now we enter Industry 4.0, in which computers and automation will come together in an entirely new way, with robotics connected remotely to computer systems equipped with machine learning algorithms that can learn and control the robotics with very little input from human operators. Industry 4.0 introduces what has been called the “smart factory,” in which cyber-physical systems monitor the physical processes of the factory and make decentralized decisions. The physical systems become Internet of Things, communicating and cooperating both with each other and with humans in real time via the wireless web. For a factory or system to be considered Industry 4.0, it must include:

Here are five reasons why you shouldn’t let your current situation and surroundings impact your vision for the future.

  • Interoperability — machines, devices, sensors and people that connect and communicate with one another.
  • Information transparency — the systems create a virtual copy of the physical world through sensor data in order to contextualize information.
  • Technical assistance — both the ability of the systems to support humans in making decisions and solving problems andthe ability to assist humans with tasks that are too difficult or unsafe for humans.
  • Decentralized decision-making — the ability of cyber-physical systems to make simple decisions on their own and become as autonomous as possible.

But as with any major shift, there are challenges inherent in adopting an Industry 4.0 model:

  • Data security issues are greatly increased by integrating new systems and more access to those systems. Additionally, proprietary production knowledge becomes an IT security problem as well.
  • A high degree of reliability and stability are needed for successful cyber-physical communication that can be difficult to achieve and maintain.
  • Maintaining the integrity of the production process with less human oversight could become a barrier.
  • Loss of high-paying human jobs is always a concern when new automations are introduced.
  • And avoiding technical problems that could cause expensive production outages is always a concern.

Additionally, there is a systemic lack of experience and manpower to create and implement these systems — not to mention a general reluctance from stakeholders and investors to invest heavily in new technologies.

But the benefits of an Industry 4.0 model could outweigh the concerns for many production facilities. In very dangerous working environments, the health and safety of human workers could be improved dramatically.  Supply chains could be more readily controlled when there is data at every level of the manufacturing and delivery process. Computer control could produce much more reliable and consistent productivity and output.  And the results for many businesses could be increased revenues, market share, and profits.

Reports have even suggested that emerging markets like India could benefit tremendously from Industry 4.0 practices, and the city of Cincinnati, Ohio has declared itself an “Industry 4.0 demonstration city” to encourage investment and innovation in the manufacturing sector there.

The question, then, is not if Industry 4.0 is coming, but how quickly. As with big data and other business trends, I suspect that the early adopters will be rewarded for their courage jumping into this new technology, and those who avoid change risk becoming irrelevant and left behind.

One of our best 2016 MBA theses on authentic leadership and work engagement

Investigating the mediating effect of perceived organisational support on the relationship between authentic leadership and work engagement

By: Vermeulen, Theresa, 2017

Source: https://repository.up.ac.za/handle/2263/59796

ABSTRACT:

Using positive psychology and the theory of organisational support and reciprocity, we examined whether perceived organisational support (POS) mediates the relationship between authentic leadership and engagement. Authentic leadership and engagement have been investigated extensively however not in relation to POS within the same study.

Given the context of the world of work today, there is a need to move beyond the direct association between leadership and engagement to study how other variables may strengthen or weaken this relationship. Data was collected from 202 employees, working in an international information technology organisation and results were analysed at the group level.

Regression analysis was used to test for mediation, followed by statistical tests of the indirect effect as well as bootstrapping. Differences between subgroups were also investigated and model fit analysis to establish whether the suggested model was a good fit. The results showed that POS partially mediates the relationship between authentic leadership and engagement. Further practical implications of the findings are discussed, together with limitations and ideas for future research.

Keywords:

  • Authentic leadership
  • Work engagement
  • POS