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Don’t Confuse Strategy with Lofty Goals

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Most companies communicate strategy as a set of aspirations and platitudes. But aspirations aren’t strategy, and that mode of communication leaves employees in the dark. Strategy is a set of hard-to-reverse choices and explaining what these choices are and why they were made is what strategy communication should be.

Most companies communicate strategy as a set of aspirations or good sounding platitudes. For example, a major European multinational had this to say in its annual report: “The key elements of our strategy are to continue our focus on delivering operational excellence, leverage the benefits of our integrated model, reinforce our technological leadership and make intelligent and disciplined investments.” In a similar vein, a U.S. global operator declared that: “Our strategy is based on four pillars: winning with our customers, leading with our culture, expanding our network and maximizing our performance.”

But these grand claims provide no guidance to employees on their company’s direction. No wonder that employees in many companies claim to have little knowledge or understanding of their organization’s strategy. One recent academic study reported that even in high-performing companies with clearly articulated strategies, only 29% of their employees knew what their company’s strategy was. Similarly, in a survey that I undertook in five European companies in 2019, only 35% of the employees claimed to know their company’s strategy and fewer than 20% said that they understood why they were following the strategy that had been communicated to them.

Strategy is not aspirations, objectives or wishful thinking. It is a set of hard-to-reverse choices and explaining what these choices are and why they were made is what strategy communication should be. A good example is provided by the new strategy adopted in response to the digital disruption of the early 2000s by DPG Media Group, the leading media company in Belgium and the Netherlands. At the time, the market for newspapers and other traditional print and broadcast media was being overwhelmed by digital giants such as Google and Facebook and customers as well as advertisers were moving to digital offerings in droves. The cover story of The Economist in August 2006, headlined “Who killed the newspaper?,” was representative of the mood at the time.

In that context, the then CEO and now Chairman of the Group, Christian Van Thillo, organized an offside with his top 10 managers and editors to develop the company’s new strategy. According to Van Thillo, the starting point of strategy is to first decide what business the company is or should be in, a point also made by Professor Derek Abel more than 40 years ago. It was essential, therefore, for DPG Media to decide whether it wanted to stay in professional journalism or exit the business altogether.

According to Van Thillo, this meant answering the question: “Is there a future for high-quality, professional journalism? Do we believe that in the digital age, people will continue to want to be informed, entertained, and inspired by professional media or is the market moving to citizen journalism, blogs, and influencers?” The team answered this question in the affirmative which immediately set DPG Media down the path of focusing and investing its resources in professional journalism and reinventing it for the digital age rather than exit it as many of its competitors were doing at the time.

According to Van Thillo, this was the most important decision the company had made in its entire history. At the time, it represented a huge gamble. Ever since, he always uses this decision as the starting point to explain why the company exists and why it’s taking the strategic decisions that employees see it taking every day.

Once the decision was made to focus on professional journalism, the question that arose was: “what do we need to do to succeed in professional journalism in these digital times?” The answer was that size will matter a lot. According to Van Thillo:

“We never talked about size before because we used to compete with local competitors. Now, all of a sudden, we had to compete with Google and Facebook. We therefore needed to be big enough so that advertisers as well as consumers would have us at the top of their mind, like they did with Google and Facebook. That implied that we had to be the local multimedia undisputed leader so that people will think of doing business with Google and Facebook and then us.”

The need for size led DPG Media to two other key choices. First, what countries to compete in. Given its limited resources, it could not be big in too many markets. And given its size, it had to avoid big markets where giants like Google would operate. They therefore decided to focus on just two geographic markets, Belgium and the Netherlands. Second, they decided to engage in acquisitions to grow to critical size quickly. This was, again, something new for the company. Traditionally they grew organically whereas now acquisitions became a necessity for them. But given their emphasis on quality journalism where consumers would be expected to pay a subscription price to access this journalism, their acquisition targets were media companies that relied more on subscription rather than advertising for their revenues. According to Van Thillo, “If the potential acquisition target depended on advertising for its revenue, I would walk away.”

The need for size and the focus on subscription revenue led the company to another choice: focus on market-leading brands (or power brands as they call them) and disinvest in or sell laggard brands. The brands that remained in the portfolio were reinvented for the digital age — newspapers and magazines were transformed into news media, television developed streaming, radio built up podcasts — and new online services that were complementary to the media business, such as platforms for jobs and cars, were built. Any time a decision had to me made on whether to offer a new product or not, the choice was made by asking whether the addition of the new product will support the company’s new mission, which was to become the local, multimedia champion in the countries it chose to compete.

The final choice to be made was how to do all this. The company opted to operate with two business models. For their premium brands, they targeted affluent customers, offering them ad-free content on a subscription model. For their mass-market brands, they opted for a freemium model that relied mostly on advertising revenue. In addition, they chose to adopt a dual transformation strategy: continue to build on their size by undertaking only acquisitions that had the potential to impact their market power in the local market while reinventing the core for the digital age and developing new digital services.

The hard-to-reverse choices that DPG Media had to make revolved around three issues: why do we exist, what do we do, and how do we do it? These may not be an exhaustive list of choices that need to be made but making these three will go a long way towards defining the organization’s strategy. The real problem that most organizations face is not whether they need to make three or four or five choices but how to get their senior managers to make any choices at all! The biggest strategic mistake that organizations make is not that they miss one or two choices in their decision-making; it is that they do not make choices at all, something that Michael Porter alluded to long time ago.

For any organization to succeed, it must first make the difficult choices that strategy requires and then communicate these choices to employees in an effective way. Unfortunately, if we go by what companies communicate in their annual reports or by what CEOs say at company conferences, the bulk of the communication is focused on the organization’s goals and aspirations rather than its choices. This mode of communication leaves employees in the dark and limits their emotional connection to their organization. A little bit more effort in improving our communication of strategy can lead to major benefits in how employees execute our strategy.

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Hiring a Remote Worker? It Takes More Than an Internet Connection

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Federal data continues to show near-record numbers of job openings across the country. As of April 2022, 33.4% of business owners were still having trouble hiring paid employees, according to the most recent Small Business Pulse Survey from the U.S. Census Bureau.

If your business has an open seat for a work-from-home job — or one that could be — a remote worker may help fill it. But before that can happen, you’ll need to handle more than just basic barriers, like equipment or cybersecurity. Here’s what you need to know to hire a remote employee.

1. Figure out the logistics

If you hire an employee in a new state from wherever your small business currently operates, you’ll be subject to that state’s employment laws and payroll taxes. You’ll also need workers’ compensation insurance in each state where you have employees.

The more far-flung your team gets, the more likely you may need to hire a human resources staffer, consultant or vendor — eating into your budget for new roles.

“If you want to keep things simple, stay within your state,” says Megan Dilley, communications director at Distribute, a consulting firm that specializes in remote work.

You can also turn to a freelancer-for-hire service like Fiverr or Upwork to simplify the hiring process.

Tessa Gomes, a Hawaii-based wedding planner, hired a team of five contractors through Upwork earlier this year.

“It just makes so much more sense than me trying to do it individually,” Gomes says. “It’s like [my] pool of human resources just grew tenfold.”

2. Define your company and the role

When writing your job description, make sure it includes details about your remote-work environment.

“The definitions [of ‘remote’] are all pretty fuzzy,” Dilley says. “So as much as you can, be very clear and transparent from the get-go.”

For example, if you expect employees to clock in at 9 a.m. Eastern time each day, to come to the office twice a week or to travel for a quarterly meeting, say so on the job listing.

Polish up your company website and social media profiles as well. Consider adding some information about your employees and your work environment.

Each company should make sure its online presence explains “who they are, their brand, what their culture is like, how they treat their people, DEI,” says Victoria Neal, an HR knowledge advisor at the Society for Human Resource Management.

You can list job postings on LinkedIn and other job board websites, but Neal says to try sharing job postings through social media or email among people who already follow your work.

“A lot of employers are really utilizing their current user bases” to find new hires, she says.

3. Redesign your interview process

Because interviewers may no longer see candidates in person, you’ll need to educate them about new things.

“Virtual recruiting and virtual interviewing can eliminate some biases,” says Allan Platt, CEO of business consulting firm Clareo. But he adds that they can introduce a whole new set of assumptions, for instance around candidates’ internet connection and home office setup.

To help with this, Platt says his company’s interviews are highly structured and candidates are evaluated on consistent matrices.

“The way that we structure and organize our interviews when we’re doing remote interviews is really important,” Platt says. “Candidates are evaluating us as much as we’re evaluating them. They’re looking for every clue they can get.”

You may also want to tweak your interview structure. For instance, remote workers need to be excellent communicators who can meet deadlines. Asking behavioral interview questions and assigning sample work can help you find candidates who demonstrate those skills.

4. Prepare for day one

Before your new hire joins the team, make sure your workplace operates well asynchronously. Online tools for remote work like Slack can help employees help each other, so a new hire’s manager doesn’t have to field every question — especially if their working hours don’t line up.

On day one, you can help your new employees feel welcome and fully prepared by planning an onboarding program. If you don’t already have documentation for common processes, try to create it before your new hire starts.

Schedule frequent meetings with your new employee at the beginning. As those meetings taper off, Dilley encourages over-communication as the norm.

Spend some time thinking about your own mindset, too. If you’re used to having constant contact with a new employee — especially during their first few weeks — prepare to give up some control.

With remote work, “trust is assumed and not earned,” Dilley says, “which is a bit of a difference in what people used to talk about.”

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To Make Better Hires, Learn What Predicts Success

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Hiring the best talent remains a persistent struggle for many companies. That’s because they are doing it wrong — often looking at the labor pool for carbon copies of people who are already successful in their roles. But that is being too demanding, particularly during a tight labor market. Instead, employers should borrow an approach from baseball, in which top teams track the performance of new hires and then search for the one or two skills or experiences that predicted their future success. For digital journalists, for instance, it might be the social engagement with published articles. To do this, companies must better connect hiring with performance management.

The current talent struggles of U.S. companies are hardly a new trend. A PwC survey dating 15 years back cited that 93% of CEOs recognized the need to change their strategy for attracting and retaining talent. If organizations have been trying to improve their hiring outcomes for so long, then why are so many still struggling? The short answer is that companies often spend too little time improving how they define and track performance.

A Lasting Problem

Recently, a number of executives have asked us if they still need to worry about recruiting as much given the signs of the economy softening. It’s true that economists expect the Federal Reserve to increase interest rates in an attempt to curb inflation, which is expected to increase unemployment. However, as Covid-19 has taught us, not every downturn is the same, and there are strong indications that hiring will continue to be a large obstacle for many companies.

In 2017 the U.S. Bureau of Labor Statistics issued a press release, stating that the number of unfilled jobs had reached 6.2 million, a historical high. That record was then surpassed in 2018 and then again in 2019 when the number of unfilled jobs reached 7.5 million. That number is now at 10.7 million, 43% higher than the prior record. As a result, there are currently two job openings for every person who is unemployed.

It seems unlikely that such a vast imbalance in the labor market will be resolved by even a recession. This is especially true for certain pockets of the economy that have a backlog of open roles due to Covid-19, and also for parts of the labor force, such as college graduates and other highly skilled professions, that have historically experienced relatively low unemployment even during economic downturns.

Companies have no choice — they must learn to hire better. So, how?

Emulate Moneyball, Not Frankenstein

In a knowledge-based economy individuals can contribute to organizations in an increasing number of ways. Envision a tech company with three successful product managers; Kate, John, and Aditi. Kate’s key to success is her data-driven approach to understanding customer needs, while John’s strength is an intuitive approach to product design and Aditi’s is her ability to empower her teams. As long as all three are successful, their employer is happy and gives them the freedom to do their work as they please.

The problem arises when their employer wants to hire a fourth product manager. Recognizing that all three product managers bring valuable skills to the organization, the tech firm writes the Kate+John+Aditi job description. This results in a Frankenstein talent strategy, focused on candidates who check the box on all dimensions as opposed to those with one clear superpower.

Compare this to the Moneyball approach to recruiting. While baseball players could contribute to the team in a number of ways, Billy Beane questioned the age-old quest for players who contributed to all of them. Instead Beane sought a portfolio of players, each making unique contributions. In other words, he reduced the number of criteria he expected his recruits to excel at. He did this by giving a lot of thought to what constituted success in each role. Note that he did not go with the broad definition of success, such as “helping us win the game in a variety of ways,” but instead focused on how each player could contribute to the team in a narrower dimension, such as how good their on-base percentage was. He then applied a razor-sharp focus to finding players who were net-positive contributors by outperforming on one or two criteria, even if it meant lacking in other dimensions.

A Case Study from Graduate School Admissions

We recently collaborated with a large U.S. university to reengineer its MBA admissions process. There was a long-standing belief in this school that the best predictor of a “good student” was the quantitative component of the GMAT. It’s a business school, after all, with rigorous requirements in courses like statistics, economics, and finance. Indeed, some faculty believed everything in the admissions process but quant GMAT was a waste of time. But we followed Billy Beane’s example and, instead of relying on this conventional wisdom, turned to historical data.

The first challenge was to articulate how the school defined performance. For example, should we define good performance as a student with stellar academic achievement or a good career outcome? Should we use starting salary as a proxy for a good career outcome or try to collect their compensation after a few years? How about students that go into meaningful jobs in sectors that don’t pay as well? Discussing these questions made us realize that desirable performance is multi-dimensional, with some dimensions easier to measure than others. We ended up using multiple proxies for even seemingly simple dimensions like academic performance.

In the end our team’s analysis found that quantitative GMAT scores are indeed a reliable predictor of applicants’ academic performance, but it also showed that verbal GMAT scores are as good if not better! Putting more weight on verbal tests scores was a simple shift in the admissions process, but one that lead to admitting a somewhat different student body. And doing things differently provides a competitive advantage relative to schools blindly following conventional wisdom.

How to Get There

Some business leaders we’ve spoken to recognize the need for a more analytical approach to hiring but are intimidated by how to get there. Defining and tracking performance doesn’t need to be a complicated, multi-year project where you start producing troves of new performance data. You often have the data you need; it just requires some hard thinking around how to utilize it.

Start by defining the outcomes you want to see for your team or organization. Then work creatively to measure those results and how to attribute those outcomes to the work of various individuals. The initial reaction from many executives, particularly in white collar industries, is that attributing such results to any single individual will be nearly impossible in their profession. However, more often than not we’ve been able to find ways to do this. A digital news site we worked with, for example, argued that a good news piece could come in many shapes and forms and therefore only relied on the instincts of their senior team to identify and try to recruit up-and-coming talent. We collaboratively came up with a few hypotheses on how to better identify future stars, and after testing these were able to show that the number of social media comments on previously published articles was a strong predictor of future success.

Where output data on desirable organizational results is truly not possible to define, input data on employee activities can be useful. A chair manufacturer we worked with was giving up revenues as it could not hire enough people to fulfill their orders. They also struggled with high employee attrition and high absence rates. Using their internal data, we were able to show that female workers — a heavily underrepresented group in the factory — had the least absences and were the most loyal workers. This helped them realize the root of their problem was that their recruitment process overlooked women and other qualified candidates, while favoring less productive men.

Yes, implementing the steps above will require your organization to set aside time to tackle complex topics that don’t have obvious answers. For example, should you define financial success for your company as revenue growth, margin growth or an increase in your share price? But in our experience these are conversations you should be having anyway. Because it’s work, not enough organizations do it. As in Moneyball, if you want significantly different results, you have to apply a significantly different approach to looking for talent. This seems obvious but it is in fact rare. To find better talent, begin at the end.

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Designing Hospitals that Promote Staff Wellbeing

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Even before Covid-19, rates of behavioral health illness were on the rise. In the third year of the pandemic, mental health has accelerated into a crisis, with health care workers in particular facing high levels of stress and burnout. Although mask mandates have been lifted and restrictions have been eased in many areas, caregivers are still in the throes of treating infected patients, while also coping with the fallout of the past two years. This convergence of factors has led to an uptick in mental health issues among health care workers, many of whom report experiencing record-high rates of anxiety and depression compared to the general population.

Previously, designing clinical spaces for well-being was focused primarily on the patient. Now, taking care of patients is table stakes; caring for the people who serve them is crucial to creating and maintaining a high-performing hospital system.

Designing buildings for the well-being of health care staff is not just necessary to curb the mental health crisis among the profession. It’s also critical to buttress the financial fallout that ensues with high turnover, preventing additional strain on a system already taxed from financial losses due to differed treatment during the pandemic.

During Covid, hospitals have seen increased rates of turnover among employees, which is both costly to morale and the bottom line. According to Becker’s Hospital Review, in 2020, the turnover rate for registered nurses increased 2.8 percentage points to 18.7% industry-wide. Each percentage point change translates to approximately $270,000 lost or saved per hospital.

These numbers have prompted hospitals to rethink their approach to the physical environment and incorporate research-based design strategies that improve well-being for both patients and the staff guiding their recovery. Below, we outline three lessons for designing hospitals and clinics based on current projects NBBJ is working on with Massachusetts General Hospital, Atrium Health, Loma Linda University Medical Center, and Montage Health.

Lesson 1: Employee mental health can be part of a building’s identity.

Massachusetts General Hospital (MGH) in Boston is currently building a 482-bed expansion called Cambridge Street that focuses on staff and patient satisfaction, operational efficiency, and environmental stewardship. Several years ago, NBBJ also oversaw the creation of MGH’s 150-bed Lunder Building. Both facilities offer key insights into how seemingly simple design interventions can have a significant impact on the mental well-being of staff members.

It’s important to note that what we recommend are not amenities, even if some may call them that. Rather than focusing on the “nice to have” perks found in tech company headquarters, many of the spaces in MGH’s facility are “must haves” given the fact lives are on the line: stairwells flooded with light, deliberately quiet patient floors, and safer working conditions, for example.

The Lunder building offers plentiful access to daylight through a glass-encased stairwell used only by staff, who have adopted the corridor as a de facto meeting space (nicknamed the “stair conference room”). Staff also use this stairwell as a place to “be alone together” and report that they find comfort watching employees traverse the stairwell while they use the space to think and decompress.

The building further expands staff’s exposure to daylight — which impacts work-related stress and job satisfaction and is found to affect clinician burnout — through corridors that allow staff to access rooms from an exterior wall. Since less noise can reduce stress among caregivers and also help patients recover from illness, the Lunder building uses a variety of sound-absorbing materials and techniques to make the patient floors 35% quieter than typical health care buildings. Other features designed to minimize noise include sliding doors, distributing work zones for clinical staff across the floor rather than in a single location, and elevators and visitor waiting areas located away from patient rooms.

Finally, staff safety is perhaps the most critical “amenity” of all. For example, overexertion — in the form of repetitive routine physical tasks such as bending, stretching, and standing — account for 45.6% of all injuries occurring to nurses, according to a 2018 article published by the U.S. Bureau of Labor Statistics. These injuries can result in musculoskeletal disorders such as sprains and strains that accounted for 8,730 days away from work among nurses in the private industry in 2016. Features such as motorized overhead patient ceiling lifts or full-height glass doors that provide greater situational awareness can help reduce injuries.

Designing buildings in this fashion makes a difference. For example, post-occupancy data from new inpatient units and staff work areas NBBJ designed for Atrium Health indicates that vast majority of employees feel safer and more at ease in the workplace. In the same post-occupancy evaluation, employees mentioned “the collaborative nature of the research floor,” “increased interaction with colleagues,” and “improved team collaboration” as positive aspects of the new building, further illustrating that opportunities for collaboration and interaction improve employee satisfaction.

Lesson 2: Design features can reduce stress in core working spaces.

Many hospitals are embracing support spaces that enable people to choose how they spend their precious break times. These spaces, both “offstage” (where staff can gather or be alone) and “onstage” (where caregivers see patients), allow staff to spend less time navigating a building and more time recharging.

Loma Linda University Medical Center’s expansion in Southern California boasts an open-core design. It features wide corridors, access to daylight, and the distribution of patient and supply rooms along the wings, which allows staff to connect better with each other and patients. In open-core hospitals, major support functions such as staff lockers, break rooms, and conference rooms are in a centralized hub that connects to patient wings along the exterior. This layout reduces the need for staff to travel between patient and supply rooms, the type of inefficient and repetitive physical tasks that can lead to burnout.

In addition to open-core designs, collaborative clinician rooms — such as the new examination rooms at MGH’s Cambridge Street project, which are sized to allow for multidisciplinary consults — reflect the evolving nature of medicine. Collaborative clinician spaces decrease the load on caregivers and their teams while also providing patients with a new, more effective way to navigate their medical journey.

In the future, these recharging spaces could take different forms, which would acknowledge that everyone refuels in a different way. For instance, because the availability of private spaces has been shown to reduce caregiver stress some hospitals are exploring restorative zones with nap areas for their staff that would be located close to the patient unit for ease of use.

Lesson 3: Good design is ultimately good for business.

Health systems such as Montage Health on the Monterey Peninsula are taking advantage of their less-densely-populated location by incorporating nature into the design of their buildings. For example, Montage’s Ohana Center’s garden-like environment and private patios for staff are designed to lower levels of arousal fatigue — the psychological exhaustion that results from sustained stimulation without breaks. Arousal fatigue is one of the key factors contributing to burnout among behavioral health caregivers, who have an annual turnover rate of 40%.

Other organizations are exploring solutions such as satellite food lockers, mobile ordering apps, and meal programs that offer discounts for nutritious food options. These types of design interventions are investments in staff longevity; they help to reduce stress and encourage positive lifestyle choices, ultimately supporting the mental and physical well-being of the people charged with helping others recuperate.

Behavioral health challenges existed before the pandemic and will persist after it’s over. Consequently, as health care systems navigate the lingering impacts of the pandemic, it’s more important than ever that they shift towards a more caregiver-centric mindset. Only by creating spaces and implementing solutions that promote staff well-being and patient healing at the same time can they effectively retain and recruit staff and reduce the financial impact of burnout and turnover. Designing buildings to enhance employees’ well-being will help keep them satisfied and productive.

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