Monthly Archives: March 2013

Are You Positioned to Succeed in the Third Industrial Revolution?

The risk of being an innovator is that you’re often the first one in the room with the next big idea.  It can be a lonely place while you’re waiting for the mainstream to catch up.  Trust me, we know.  We’ve been at the very forefront of thought leadership for nearly five years, but the wait was worthwhile as study after study is hitting the mainstream business press validating our approach with one salient, statistically-signficant point after another.

Here’s another study that supports our perspective.  The SHL Talent Report is monumental, having canvased data from more than one million professionals, executives and associates from around the world to gather insights into People Intelligence and the strategic role this perspective is already playing in organizational success or failure.  The study focuses on several key facets of Leadership for Today, Leadership for Tomorrow, Innovation, Talent Management and Behavioral Risk, Gender & Generational Diversity in Leadership, and the Global Race for Talent.  I think you’ll find it to be an informative and eye-opening weekend read!

Here are some of my thoughts on the major points brought to light in the study ~

First, an opening word on People Intelligence.  SHL defines this as, “The intelligence that is delivered through reliable, scientifically valid and objective measures of people’s talents, ranging from their potential to be an effective leader to the specific skills and knowledge required for the thousands of daily transactions that make or break an organization.”  As a former member of Naval Intelligence and a seasoned Executive Strategist, this is why our firm is in the sector we chose to be in…human beings are the raw material of value creation in the New Economy.  It’s also why we partnered to bring Talent Sprocket (Talent Sprocket Performance Transformation Toss Sheet eVersion) and Democrasoft® (How One Simple Step Can Solve Your Engagement, Inclusion and Collaboration Challenges eVersion) into our open network partnership.

Leadership for Today ~ The great disconnect continues between leaders and associates.  Only 1 out of 4 associates believe their organizations have the leadership necessary to succeed in the future.  Only 1 out of 3 associates believe their firm has the the top leadership available from within their industry.  Leaders are equally concerned about the pool from which they can find the successors to the 76 million Baby Boomers that will be retiring in the coming years.

The study goes on to identify both the transactional skills and transformational skills necessary for effective leadership.  These skills include the ability to build effective relationships, analytical and organizational skills, adaptive ability to navigate change, effective communication skills, collaborative influence, lateral creative thinking to deliver new insights, and the drive to see things through.  Notice a theme?  These are primarily the soft skills that many still roll their eyes at the mention.  Feel free to continue to roll your eyes, but take a moment to notice what happens to your field of vision when you do so.

Takeaway ~ Only 6.7%, or 1 in 15 managers, professionals, or global executives have the skills and potential for effective leadership today.

Leadership for Tomorrow ~ Take heart, fore herein lies our future success.  One out of three professionals from Gen-X and Gen-Y display some potential (same criteria as above) for effective leadership tomorrow.  The challenge lies in identifying the right high potentials and investing in their training and development to translate potential into actuality.  U.S. firms best beware, however, because emerging economies have a greater pool on which to draw upon.

Takeaway ~ The question isn’t whether or not their is potential leadership talent, but how intelligent your enterprise is in recognizing that talent and developing it.  Currently, only 1 in 15 managers or executives have the potential to become a top leader, but why?  A recent CEB study identified that the vast majority of firms overlook the right high potentials because they don’t understand or recognize the contributory skills and aptitudes that are cogent for today and the future.  They’re caught looking for the attributes of yesteryear.

Innovation ~ Today’s buzzword, right?  We all know this is the key to survival in the future.  However, companies are often missing both the recognition of true innovators and cultivating the fertile soil of organizational culture necessary for innovation to translate into commercially viable products and services.  The study identifies the behaviors that drive effective innovation that evolve around a mix of focus, insight, networking and collaboration.  These include, ability to reason, capacity to think laterally, focus, adaptability, persistence, a capacity to build effective relationships, ability to navigate social networks, influential communications skills, and the ability to impart excitement and passion for the innovation.  Pretty similar theme to the leadership attributes listed above, wouldn’t you say?  Again, soft skills and creativity reign.

Takeaway ~ Innovation is a strategic imperative.  Innovation is, at its very core, about change.  Yet 70% of traditional change management programs fail. In addition, only 1 out of 17 graduates and professionals, or 5.8%, have the capacity to become true innovators.  How are you going to attract, recruit, retain, reward and acknowledge these rare talents?  This is why culture is key.  According to a report published by The Economist, this will be the driver of The Third Industrial Revolution.  If traditional change management fails, why would you look to traditional organizational and leadership development approaches to drive innovation?  It’s a recipe for failure.

Behavioral Risk ~ People take risks, not processes and Talent Management must be seen as a part of Risk Management.  Risk comes from hidden biases that stem from a lack of self and social awareness.  Again, developing soft skills, at all levels of the organization are key.

Takeaway ~ As the speed of change continues to accelerate, authority and trust must move deeper into the organization.  Developing self and social awareness throughout the business mitigates organizational risk.

Gender & Generational Diversity ~ The study demonstrates that the difference between leadership potential for women and men is less than 1% (and it slightly favors women, by the way), yet on a global level men enjoy senior leadership positions by a ratio of 3:1 over women.  In the U.S. the figures are exceptionally poor, with 83% of leadership roles held by men.  Only places like Japan and countries in the Middle East fare worse.

Generationally, only 30% of Gen-Y’s plan to spend their entire career with one firm.  They’re mobile.  And they embrace intrinsic values (personal and professional development, authentic relationships, purposefulness, being a part of something larger than themselves) over the extrinsic values of the Baby Boomers (money, power, prestige).

Takeaway ~ I’ll leave the gender diversity issue for Warren Buffett to answer.  As to generational diversity, if you’re not strategizing how you’re going to leverage intrinsic values over extrinsic values, you’re holding the door open for your technology natives and future innovators to walk out the door.

The Global Race for Talent~ I’ll let you read this for yourselves.  The point I wish to make here is the U.S. ranks 23rd in the world for professionals with the right talents to succeed globally in the coming years.

Takeaway ~ Simply put, the traditional approaches for leadership and organizational development in our country have failed.  It’s time for a breath of fresh air and if innovation is important to you, perhaps it’s time to embrace an innovative approach to leadership and organizational development.

© 2013, Terry Murray.

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Filed under Diversity & Inclusion, Leadership Development, Organizational Culture

How One Simple Step Can Solve Your Engagement, Inclusion and Collaboration Challenges

Many organizations seem to be mired in employee disengagement, seemingly at a loss as to how to reignite passion amongst their workers. At the same time, CEOs know they must spark cross-functional, and even cross-organizational collaboration, capturing and leveraging diverse cultural and generational experiences and perspectives in order to maintain their competitive edge and improve productivity. So why is it companies seem to be handcuffed in stasis, unable to break out and innovate in the manner they seek?

Barriers of Hierarchy.001Much of the inertia comes from the very structure of the organization itself; its hierarchy.  Several years ago I wrote in my book, “How we structure the organization is a reflection of how we perceive function, and once established, how we function is highly influenced by our structure.”   Hierarchical structure is ideal for creating economies of scale and wringing out variability of processes (think Six Sigma) in pursuit of quality through standardization.  But it comes at a price.  Hierarchies also introduce layer upon layer of barriers to communication and cooperation resulting in silos of thought and the defense of symbolic, if only imaginary, turf.  Years of downsizing and cost cutting has exacerbated these barriers as associates keep their heads down and dig in their heels with their peers and direct reports.

Source: Library of Congress

Source: Library of Congress

Hierarchies have been the dominant structure for so long it may seem this form of organization structure is the de facto, natural form of large organizations.  This hasn’t always been the case.  In fact, a recent discovery of what is quite likely one of the first corporate Org Charts, created by an executive for the New York and Erie Railroad, circa 1855, shows an entirely different perspective.  Instead of the top-down pyramid of hierarchical structure, we see a bottom up organization that resembles a tree.  The board of directors are represented at the roots and executive management moves up into the trunk while line managers branch out along the various front lines of the railroad.  This places leadership at the base and reflects a perspective of senior leadership’s role in nurturing and providing strength for the growth of the corporation, empowering front line management with the authority to make immediate decisions in real-time.  This was no small issue when trains ran in two directions on the same tracks.  Any miscommunication, in the age of the telegraph, would result in horrific, head-on collisions.  Not good for the paying customers or the shareholders, to say the least.

John Kotter's Strategy Accelerator

John Kotter’s Strategy Accelerator

This network empowered the rapid information flow and immediate decision making necessary to safely and efficiently move freight and passengers up and down the line; the very source of the railroad’s value creation.  In many ways, it foreshadowed client/server information systems and the internet.  It is also very similar to the Strategy Accelerator John Kotter wrote about in the October, 2012 edition of the Harvard Business Review.

Professor Kotter is a pragmatist, with a deep understanding of change management and the seemingly endemic resistance to change most organizations demonstrate (historically, 70% of change management initiatives fail).  Realizing one cannot toss out the baby with the bath water, Professor Kotter recommends creating a concurrent, open network to reside alongside the hierarchy.  One comprised of Affective vs Traditonal Leadership Graphic.001volunteers and guided by a coalition of cross-functional leaders.  Strategic initiatives are spun out into the network to be acted upon and associates are asked to participate.  This not only sidesteps hierarchical barriers, it provides fertile soil for Next Gen leaders to emerge.  Leaders that influence and inspire through their ideas and actions.  Leaders that can arise from any corner of the organization.

Collaborize Open Network SlideWhile this initiative is promising (and Kotter has implemented it successfully in several organizations) we saw the need to add infrastructure to the architecture.  Our open network partner, Democrasoft®, brings innovative, content collaboration and knowledge sharing technology to this organizational design.  It opens up the network for transparent communication, eliminating the dependency on emails for content sharing (knowledge workers spend an average of 81 days per year reading, writing, and searching for information on endless email threads), and capturing tacit knowledge for the support of Big Data and the application of predictive analytics.  In effect, it represents both the telegraph wires and railroad tracks of the New Economy.  It also enables senior executives to see collaboration in real-time.  The structure enables open discussions that tag Great Ideas™ to their initiators, enabling entirely new incentives to be adopted and leveraged to drive desirable, collaborative behaviors.  The platform can also reach outside of the brick and mortar to engage customers and ideas from beyond the walls of the organization.  All while maintaining the day-to-day efficiencies of the established hierarchy.

Organizations that adopt this innovative, cost effective approach and supporting technology can quickly sidestep the organizational barriers to communication and collaboration while sparking engagement (especially with Gen-X and Gen-Y), authentic inclusion of diverse ideas, and the significant productivity gains necessary to stay competitive in the New Economy.  You’re welcome to download a PDF white paper fully exploring this approach: An Integrative Approach to Igniting Sustainable, Competitive Advantage in Our World of Accelerating Change eVersion.

Great Ideas is a trademark of Democrasoft, Inc.

© 2013, Terry Murray.

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March 12, 2013 · 12:49 pm

Want to Lead and Innovate Like Google ~ Look to Their HR Practices

In case you may have missed it, Google’s stock price recently broke $800 per share, making them the third most valuable company in the world.  Outside of multi-national petroleum companies, the other leading firms on this list of value include Apple, Microsoft, IBM, GE, J&J, and Pfizer.  Companies that are all driven by innovation and their ability to effectively commercialize the creative collaboration of their most valuable resource…people.

DecisionsAn interesting article was recently published detailing Google’s approach to what is being called people analytics.  The fact is, human beings are the the raw material for value creation in the new economy.  This is something we’ve been speaking about for five years, but is just now starting to gain traction in the mainstream business community.  This doesn’t just apply to information technology companies, but all companies, because innovative thinking at every touch point in the organization is the key driver of competitive advantage.  To refer back to a term once bandied about in corporate circles; HR can no longer be viewed as a cost center, it is truly a Center of Excellence in today’s hyper-competitive world.

Google is reinventing the HR practice to reflect the strategic imperative of fully engaging passionate people to collaborate and innovate on an unprecedented level.  The article quoted two points that reveal their strategic perspective towards reinventing the HR practice:

1. “All people decisions at Google are based on data and analytics.”

2. Their focus is to “bring the same level of rigor to people-decisions that we do to engineering decisions.”

The article goes through ten, distinct steps that differentiate Google’s approach to the Human Resource function.  I’ll refrain from rehashing them here, but I will touch on the highlights of their approach.

~ Google is focused on identifying the top, currently relevant leadership competencies that fit their culture and business objectives.  Coaching and frequent employee feedback are at the core.

Google is employing a retention algorithm, an effective hiring algorithm, calculating the business value of top performers, and using predictive analytics to drive the value-creating, HR flywheel.

~ Google is applying experimental pilot initiatives to determine ‘best practices’ in people leadership that fit their business and strategy.

~ Google is focused on improving diversity, creating innovative and collaborative workplace design, and migrating from traditional ‘training’ to discovery, novelty and learning opportunities for their employees.

Google is using the resulting, forward-looking data these initiatives are generating to influence and convince internal managers of the wisdom and business value of these people-centric practices.

You’re probably thinking, “Yeah, well of course Google is using analytics and sophisticated algorithms.  These skills are core competencies that built their dominance in the search engine business.  But we don’t have those competencies…how do we adopt these new competitive practices?”

This is part of the beauty of the new economy we live in.  You don’t need to own competencies in order to take full advantage of their being out there in the landscape.  Our firm is a great example.  We’ve adopted an open-network structure (i.e. innovative and collaborative workplace design) that taps into the competencies we need, when we and our clients need them.  We’ve invested in partnerships that deliver platforms that deliver hiring and retention algorithms, machine learning systems for people practices, predictive analytics, and content collaboration platforms that accelerate value creation at a surprisingly reasonable cost.  Firms no longer need to buy these advanced competencies by hiring the brightest mathematicians hailing from MIT or Stanford.  They can lease the tools they need, when they need them.  Our firm integrates and adds value by providing the leadership development (experiential learning programs that create a shift in perspective; i.e. rewriting the human software running in our heads), aligned pilot program initiatives (i.e. Google’s experiments), and the metrics (i.e. forward looking data) to fully leverage these evidence-based approaches that will revolutionize Human Resource practices to fully drive competitive advantage.

The fact is, any firm can begin to lead and innovate like Google, Apple, IDEO and other thought-leading companies that understand the value of their human talent.  There’s a certain irony here, too.  The same dynamics that are driving such unprecedented, accelerating change are the same dynamics that are affordably delivering the practices and tools that any firm that wishes to lead the disruptive wave of the new strategic imperative of innovation, collaboration and value creation!

© 2013, Terry Murray.

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March 5, 2013 · 11:44 am