Interview with Charlene Li, Part 2: Disruptive Growth Begins from Within
This is the second half of a two-part series based on our interview with Altimeter Group founder and Senior Fellow, Charlene Li ahead of the release of her new book, The Disruption Mindset: Why Some Organizations Transform While Others Fail. In Part 1, we discussed how courageous leaders take bold risks in the face of uncertainty. Today, we look at how these leaders must engage their people in order to bring their disruptive ideas to life.
“Culture eats strategy for breakfast.” – Peter Drucker, renowned management consultant whose principles shaped the way organizations have been run for the past 75 years
“There has to be a strategy for it to eat.” – Charlene Li, renowned business analyst whose principles are reshaping the way organizations are run in the midst of modern digital revolution
Charlene’s addendum to Drucker’s quip is as savvy as it is witty. In this case, it relates to the type of environment we discussed in Part 1 of this series wherein courageous leaders encourage their people to move outside their comfort zones. This, in turn, leads to what she calls “aha moments” that blaze the trail toward disruptive growth.
Her point is that this sort of culture, while certainly important, doesn’t move the ball downfield on its own. It’s the connective tissue that sets the tone and guides how they conduct business, but it doesn’t tell people what to do. That’s where strategy comes in.
“Strategy says ‘We could do anything, but we can’t do everything,’” she explains. “Leadership then says ‘Everybody go this way—not that way, go this way.’”
In working with hundreds of executives and managers across industries, Charlene finds that these terms tend to be used interchangeably. So, often when people say they don’t have the right culture, it’s just as likely they don’t have the right strategy.
When roles and goals aren’t clear to everybody up and down the chain, it’s not necessarily because of cultural barriers. It’s because there’s no plan in place to properly engage employees and communicate these things in today’s workplace, therefore stifling a chance for disruptive growth.
Why is this the case? Well, in business as in life, old habits die hard.
Traditional HR Approach
In Charlene’s experience, many businesses that find themselves stuck in one place do so because they can’t get out of their own way. She fittingly refers to these as “stuck organizations” since they’re essentially mired in outdated mindsets and methods.
This starts with people ops. While employers’ intentions are noble when it comes to engaging their people, those intentions rarely have teeth. According to Deloitte’s Global Human Capital Trends, 84 percent of executives rate employee experience as important and 28 percent believe it’s among the top three issues for their businesses. However, only 9 percent feel they’re actually ready to address it.
This is due to a fragmented, top-down, company-centric approach to forming their employee experience. The process tends to be led by traditional HR departments whose role has been primarily focused on workplace transactions such as recruiting, onboarding and offboarding, promotions, and so on. If you apply a similar one-size-fits-all model to day-to-day life, it comes off as cold and distant.
It’s therefore no surprise that when management unilaterally introduces new elements to “build culture”—think free food in the break room, complimentary gym memberships, casual dress days, etc.—they’re appreciated but quickly lose their impact. Others point to digitizing various employee processes to create what they perceive to be a great employee experience. Again, nice and convenient, but it ultimately falls flat if employee experience and disruptive growth is truly the goal.
“That doesn’t change anything about my experience and, more importantly, my relationship,” concludes Charlene.
And of course, she nailed it. Leaders aren’t looking at their people from a relationship standpoint. Perks and benefits are great, but what are they doing to tap into the human side? Although not deliberately, this as the sole driver of the “experience” treats employees like cogs in the wheel to be oiled now and then so they don’t squeak.
Companies trapped by the inertia of historic HR-led engagement would do well to consider a new model that prioritizes long-term rapport over one-off incentives.
New Mindset, New Strategy
What’s the opposite of stuck? How about flux. “Flux organizations,” as described by Charlene, embrace change and are capable of dealing with many moving pieces at once. They hold three beliefs in particular that guide their business:
•Openness: Fostering a culture of sharing is healthy. Transparency builds trust, and people are clear on how they and others are contributing to organizational objectives.
•One Agency: Everyone has a sense of ownership and the ability to dictate the outcome. Unlike empowerment, which is bestowed by management, agency comes from within.
•Bias for Action: Employees never sit still. They follow courageous leaders who don’t drag their feet waiting for the perfect solution. They’re always moving forward and reaching towards disruptive growth.
Such a philosophy shows that flux organizations better understand how the employee experience embodies all the interactions their people have with them from recruitment to retirement. This is an important insight because of the way employees view the big picture. With work/home boundaries thinning thanks to rapidly-evolving digital technology, they’re seeing life in and out of the office becoming more integrated. That means they want the same sense of engagement and wellbeing they constantly experience at home to transfer to the job.
As an employer, offering a holistic experience at this level goes beyond enhanced benefits packages or novelty perks. It requires a measurable plan. An experience strategy.
Employee experience strategies compel leaders to put themselves in their people’s shoes. They ask less tactical and more existential questions. “What sort of experience do I want to have with my workplace environment? With my coworkers? With the technology that will help me do my job?”
Deloitte has identified five main factors that contribute to positive employee engagement and should be considered for any employee experience strategy:
•Meaningful Work: Autonomy, empowerment, small teams
•Supportive Management: Clear goals, coaching, investment in people
•Positive Work Environment: Flexibility, culture of recognition, inclusivity
•Growth Opportunity: On-the-job training, learning culture, facilitated mobility
•Trust in Leadership: Mission and purpose, transparency, inspiration
Employee experience architecture rests on open channels that provide continuous feedback and ensure alignment top to bottom. In other words, strong communication. Previous models that defaulted to annual reviews (or even quarterly ones) supplemented by occasional sit-downs as necessary don’t allow for this type of ongoing dialog.
They can also pay off in even bigger ways down the line.
A New Competitive Advantage
When it comes to hiring in today’s job market, evaluation is a two-way street. Not only are the employees playing the role of candidate, so too are the companies themselves. Attracting and retaining talent goes beyond simply flashing a sexy brand and waiting for the line to form.
In fact, a company’s brand in the eyes of the workforce is heavily influenced by what current and former employees say about it. This can directly affect your next potential rockstar’s decision to either apply or look right past you.
With the Glassdoors and Comparablys of the world making such feedback readily available, an employee experience strategy that cultivates a happy employee base becomes a strong recruiting advantage. It also leads to people who want to work for you, not just for a paycheck.
As Accenture can attest, there’s nothing subtle about that difference. Companies with great employee experience outperform the S&P 500 by 122 percent, and those with highly-engaged workforces are 21 percent more profitable than ones with poor engagement. A good employee experience can pave the way for disruptive growth.
The aforementioned Deloitte study from 2017 included a compelling aha moment from an executive participant that puts this data into context: “We used to prioritize our stakeholders as shareholders first, customers second, and employees third. We now realize we had it backward. If we put employees first, they in turn take care of our customers, and they in turn take care of our shareholders.”
This line of thinking closely mirrors that of Charlene concerning the influence of employee experience on CX. “In most cases, employees are creating the customer experience, so they have to be tied together.”
What’s more, modern employee experience and CX strategies are strikingly similar in formation. Both of these:
• Put oneself in others’ shoes and ask the bigger questions about what the overall experience should be.
• Break down blanket segmentation and consider people as individuals.
• Offer personalized, relevant engagement opportunities, not mass solutions.
• Use next-gen tools, design thinking, and empathy maps to better connect with individuals throughout their lifecycle.
• Take care of today’s audience while constantly looking ahead to the needs and expectations of tomorrow’s.
• Create a competitive edge through genuine human experiences in an era that values these far more than superficial initiatives.
And, like the results of an effective employee experience, Accenture reports an uptick in valuable customer KPIs such as loyalty (+17 percent) and revenue (+11 percent) for companies with a strong CX. The lesson here, Charlene argues, is that leaders seeking disruptive growth must begin to think about the key pieces of their business as part of the same puzzle.
“Strategy, experience, and brand. All three things are many times measured in completely different ways that are not necessarily complementary to each other. But, if you center all of them on relationship metrics, then you actually have a fighting chance.”
No question. You know what else you have? A delicious strategy to go with your morning coffee.
Charlene expands on these themes and many others in her upcoming book, The Disruption Mindset: Why Some Organizations Transform While Others Fail. Her decades of experience in technology, media, and strategy are enriched by interviews with some of today’s most forward-thinking leaders to offer invaluable insights for any executive striving for disruptive growth. The Disruption Mindset will be available on September 24, 2019.
David Mizne is Communications Manager at 15Five, continuous performance management software that includes weekly check-ins, objectives (OKR) tracking, peer recognition, 1-on-1s, and 360 reviews. David’s articles have also appeared on The Next Web & The Economist. Follow him @davidmizne.