Thinkbox edition 07 2016 by Karian and Box

edition 07: 2016

PROVOKING THOUGHT GENERATING DISCUSSION ENGAGING EMPLOYEES DELIVERING RESULTS

TURN TO CLEAR VISION

How to see your workforce – and their future – more clearly than ever before

edition 07: 2016

Produced by Karian and Box Ltd First Floor, 22 Lendal, York, YO1 8AA

01904 654454 info@karianandbox.com www.karianandbox.com

Guest editor in chief: James Dalton Editorial lead: Rachel Gartner

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Editorial Team: Myriam Day Matt Midgley

Contributors: Ian Barrow Paul Jones Ghassan Karian Roger Steare Jo Swinson Jessica Wiegand

Design: Ed Clews Alice Mullin Steve Raw

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“ We cannot hide our heads in the sand and fail to look ahead to future trends and risks in our workforce.”

“ There is a disconnect between employees’ day-to-day experience and the view from the boardroom, driven by the glossy vision and values of many companies.”

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Introducing this issue of thinkBox James Dalton (MCIPD, MEEA) leads FirstGroup’s Global Employee Engagement and Health function. He is one of the country’s leading experts in operational employee engagement, culture change and the field of behavioural neuroscience. He is a Chartered Member of the CIPD and actively involved with the UK’s Engage for Success movement and the Employee Engagement Alliance.

It is time to be brave. It is time to take a reality check and wake up to what is happening in the world of work. For too long now, businesses have created a rosetinted view of their culture fuelled by the desire to write a convincing Annual Report for their investors. How many people read their Annual or CSR reports and say ‘sounds like a great company, but it’s not where I work!’? There is a disconnect between employees’ day-to-day experience and the view from the boardroom, driven by the glossy vision and values of many companies. To create a really vibrant and exciting workplace where employees will enjoy their work and give great service to their customers, leaders must face and accept the real culture they are creating through their business strategy and behaviours.

But how to do this? How do I know what I need to change? Certainly using employee insights from surveys and other business metrics can help you see the wood from the trees. Our article on page 8 explains what big data really means and gives you a blueprint for using it to help transform your workplaces. Accepting the ‘here and now’ is also key to transforming the workplace. Businesses spend enormous amounts of time trying to predict the future, and rightly so, as this determines the decisions that will ensure success, but too often they miss what is under their noses right now. Did Woolworths, Comet and BHS have their eye on what was going on? Can you afford not to take an honest look at your business, right here, right now? This edition’s article on predictive analytics (page 16) will help guide you along the path of using your data proactively and in the right way.

“Can you afford not to take an honest look at your business, right here, right now?” Do your predictive business models look 81 years into the future? Probably not. But based on our current performance in the UK, this is how long it will take women in the workplace to reach a level of equity with men. Jo Swinson – former Minister in the Department for Business – gives us her take on what needs to happen to improve gender equality where it counts – in the board room, in progression and in take-home pay on page 34. Is it right that it will take two generations for this to be fixed? Above all, it is time to remember that at the heart of all businesses are people. People who are impacted by what they see going on around them every day, the way they are managed and the way they see their leaders behave. What is the ‘say-do’ gap in your business? Is it time for you to take off your rose-tinted spectacles and take a brave step into really making your business a great place for people to work? Will you accept the challenge? I hope you find this edition and the articles in it as full of rich insight and practical thinking as I do. Happy reading.

James Dalton

Guest editor

Introducing this issue of thinkBox

In this issue... 05

Letter from the editor Facing the uncomfortable truth

Latest thinking Recognition that works Smart workplaces The truth about dishonesty in employee surveys Engagement leads to improved business performance â&#x20AC;&#x201C; right?

Big data What many companies describe as big data in fact is nothing of the sort. Here Matt Midgley breaks down what big data actually means and provides a blueprint for using it in employee research

Looking into the future Jessica Wiegand considers why predictions are often wrong and offers advice on how to avoid error and make accurate forecasts for the future

One business strategy or many? Breaking down how employees interpret business strategy

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Changing the culture of the culturechange industry

The office 2.0 Automation, robots, the fourth industrial revolution – Rachel Gartner looks at what is coming next in the world of work

Dancing with dinosaurs

How to turn employees into advocates Making engagement count when your employees talk about your products and services

Bottom-up engagement at Heathrow Find out how empowered employees are driving success at Heathrow

Ghassan Karian – Managing Partner at Karian and Box – exposes the biggest lie dominating the culturechange industry and proposes a revolutionary rethink on how to approach business culture

The corporate philosopher Roger Steare considers what influences employee behaviour and the role that leaders play in building a successful culture

Book reviews Black Box Thinking by Matthew Syed The Signal and the Noise by Nate Silver

Equality pays: so why are we still waiting for change? Leading political thinker Jo Swinson gives us her take on what needs to happen in organisations to improve gender equality where it counts: in the boardroom, in promotion and progression and in take-home pay

Big Data by Victor Mayer-Schönberger and Kenneth Cukier

The last word Some final thoughts from Ian Barrow, Client Services Director at Karian and Box

In this issue...

Recognition that works How to make the most of your investment Recognition schemes are the bread and butter of employee engagement, but one of the trickiest parts to get right is the rewards employees receive for going the extra mile. Recent research carried out within global financial services businesses shows a number of counterintuitive findings that should make you think twice about how you appreciate your employees’ hard work and commitment – and steer clear of off-theshelf packages from rewards providers.1 Cash bonuses are not always that effective Surely no one could find fault with a cash bonus? Well, leading behavioural economists advise that financial incentives can actually ‘crowd out’ the intrinsic motivation employees feel for doing a job. Studies suggest that when individuals are given a cash reward for work, they automatically infer that the task they are doing is unpleasant – hence the need for compensation. Economists claim that this perception is particularly acute in hierarchical organisations, when an employee perceives the person giving the bonus knows more about job difficulty or the agent’s abilities than he/she does.

Experiences and relationships matter We have found that employees tend to favour meaningful and memorable experiences over more functional rewards of gifts or cash. Of course, it makes sense to consult your employees and find out what they would specifically like – whether it is for a long-service award, an annual awards scheme or just an informal thank you. But it is the emotional rewards – a memorable experience given by a line manager who knows you and what you would like – which make a real difference to employees. Peer recognition works One of the most memorable and effective forms of recognition is being saluted by an equal. It is something we all experience virtually every day on social media – well, depending on how funny your posts or tweets are.

Our thinking on this has been shaped by our work with HSBC, analysing data from the Appreciation Project, which supports peers to thank each other directly through an online system. Other examples include Google – who operate a system called Peer Bonus, which allows Googlers to send a small cash bonus to a colleague as a thank you – and O2’s ‘Fan club’ app, which allows employees to collect ‘likes’ from their colleagues. One big challenge is helping more traditional, offline businesses to benefit from this power of social media recognition. We’re currently supporting Anglo American to take the power of online peer recognition offline for a hard-toreach operational population. 1 The research was carried out within five large multinational businesses in the financial services, energy, retail and transport sectors, incorporating the views of 400,000 employees.

g n i k n i h t t s Late

Smart offices: how the internet of things is changing our built environment For those unfamiliar with the term, the internet of things is the idea of everyday objects with built-in network connectivity. That means your fridge, washing machine or even your desk is hooked up to the internet and is performing all sorts of functions designed to make life easier – such as ordering washing powder or milk for you automatically when you are running low.

Unsurprisingly, the world of work is about to get smarter in just the same way. There are a number of innovations already out there driven by this increased connectivity. The lowhanging fruit, such as smartphoneactivated personalised climate controls for individual working spaces, are already on the market and have the potential to generate sizeable efficiency savings on office energy bills.

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Others, such as wireless planters that send a message to your smartphone when the plants need watering are more frivolous applications. Some are simple but ingenious: one office building has windows and panels that can channel rainwater to be reused in flushing toilets. Some businesses are going so far as to install sensors that track workers’ movement and productivity. These sensors provide startling insight into working patterns and have the potential to revolutionise how we work. These futuristic offices are not to everyone’s liking, however. Privacy is one of the ethical issues currently under debate around these new technologies: whether they offer convenience or impose surveillance is a matter of interpretation.

The truth about dishonesty in employee surveys And how to obtain more objective feedback from employees The book The Honest Truth about Dishonesty by Harvard behavioural economist Dan Ariely (published in 2012) has put a flame to how many organisations ask and interpret employee engagement survey questions. Ariely has shown how people subconsciously (if not consciously) lie in surveys when the questions are about what they know or do. Taking this insight one step further, Karian and Box has conducted analysis in the last 12 months which corroborates this finding. Analysis of data from over half a million employee survey responses was conducted on specific types of questions. Asking employees what they know or do through firstperson perspective questions has been shown to elicit subjective feedback that is overly positive. ‘I know’ and ‘I do’ questions have unconscious bias built into them and do not reflect the actual state of employee understanding or behaviour.

Honesty increases when you are one step removed from yourself. Such questions are better asked about what an individual’s work colleagues ‘know’ or ‘do’. These questions have been shown to be answered mostly from the individual’s perspective and, when aggregated across the organisation or division, more accurately reflect levels of employee understanding and action. These findings put into question the validity of many employee engagement survey findings where employees are asked, for example, how well they know the business strategy or priorities or whether they are putting the organisation’s values into practice.

Recent analysis shows that it is more complicated

The link between engagement and performance is evident. Analysis carried out by Karian and Box over the last three years across multiple sectors links higher engagement and improved business performance. Whether it is in financial services, retail, food manufacturing or in the oil and gas sector, the same types of relationships have been found between engagement and performance metrics such as colleague absence, customer service and financial performance. This builds on and corroborates the insight and evidence provided by the MacLeod Report. However, there is growing evidence that the link between engagement and performance is a two-way street.

“Evidence from a number of FTSE 100 listed businesses has highlighted a visible link between share price performance and employee engagement.”

It is becoming clearer that engagement can also be a reflection of how a business is performing. People like being on a winning team and their perceptions of success or failure directly impact their morale. This applies equally to studies into local team performance and their sentiment regarding their employer. The ‘morning paper’ effect on the story we tell ourselves also influences pride and a sense of belonging. Share price is a case in point. Evidence from a number of FTSE 100 listed businesses has highlighted a visible link between share price performance and employee engagement (as well as sentiment on business strategy and leadership). Employees (especially senior ones) with higher shareholdings have levels of engagement that fluctuate in line with share price. This insight illustrates the complex landscape of employee sentiment and its drivers. 75

Are your engagement surveys worthy of Kim Jong-il?

Engagement (%)

Share price

North Korean levels of positivity do not necessarily mean things are tickety-boo. It is more likely that the questions were pre-loaded with personal bias.

Engagement leads to improved business performance – right?

55 2010

2011

2012

2013

2014

2015

2016

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Matt Midgley is an engagement consultant at Karian and Box. He works across both insight and campaigns, specialising in storytelling and narrative development. He has a PhD in Theatre, Film and Television from the University of York.

Not just a number

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How big is big? “ In 2013 the amount of stored information in the world is estimated to be around 1,200 exabytes… there is no good way to think about what this size of data means. If it were all printed books, they would cover the entire surface of the United States some 52 layers thick. If it were placed on CD-ROMs and stacked up, they would stretch to the moon in five separate piles.” Viktor Meyer-Schönberger and Kenneth Cukier, Big Data

How big data pioneers exploit information holds some important lessons for the future of employee research.

As if trying to imagine the sheer scale of all the information in the above description was not enough to scramble your brain, think about this: in the three years between 2013 and 2016, the amount of stored information has probably doubled. It is impossible to overlook the fact that we are living in the information age. You only have to look at the hard drive capacity in your work PC, which is probably around a million times what it was during the 1990s, to see how quickly data has expanded.

Big data

Many of us have more storage capacity in our smartphone than the average laptop did in 2001. The term ‘big data’ is one which has been bandied about a lot in business circles in recent years, most often linked to predictive analytics, driven by the success of companies like Amazon. Amazon’s rise – from small online bookseller to colossal online seller of everything – has been driven by successfully using data that shows which other books customers bought based on their purchase of a particular title. Ever noticed those ‘customers who bought this also bought’ selections that now appear on most large retail websites? Amazon was one of the pioneers in using this information to more accurately predict what other products a customer might want based on their interest in a particular item.

Big data and engagement

0110 Based on some high-profile success stories, big data and predictive analytics have been vaunted as a silver bullet with which to defeat the competition by gaining a competitive edge. While this silver bullet description has been true in a handful of cases – Amazon’s rise has been a huge challenge for book shops, music shops and is even starting to cut into supermarket profit margins – most sectors and industries cannot hope to generate anywhere near the same amount of data or be able to find such high-impact applications for it.

It was the data gathered from every transaction that enabled Amazon to become the world’s biggest online retailer, and we are talking about incredible volumes of ones and zeros. The more data, the more accurately it can predict what people will want to buy, and what new ventures – such as its Prime video streaming service – will be financially viable.

The volumes of HR data that most mid- to largescale companies hold are, unsurprisingly, nowhere near the volumes that leading web companies hold. Does this mean that big data, and the predictive capabilities that feed on it, does not apply when it comes to engagement or other HR-related activities? Technically, that is not the case. In theory, any data can lead you a little closer to reliable insights, and the more you have the more accurate your predictions or insight will be. But volume is not the only factor – it also depends upon the quality and type of data held.

Large multinationals, for example, are prone to having complex legacy systems issues, often as a result of mergers and acquisitions over the years when two or more businesses were incorporated into one. This legacy can mean that the data held comes in various formats or is of different types, with the consequence that the long-term trend analysis at the heart of prediction becomes much more difficult. This ‘messy’ data means seemingly simple variations in recording – the format of employee length of service, for example – makes direct comparisons trickier. It can also include inexplicable anomalies.

One company picked up that one of its ‘employees’ had been on the payroll for several years even though they were deceased.

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‘Clean’ data is rare, except in those companies like Amazon that are built upon data. These trailblazers recognised early on the need to collect information in a disciplined manner – and to collect lots of it. The other problem that most companies have is that no data exists for a given enquiry. It is little use having average length of service data if few other data sets exist that might shed light on why employees tend to leave after a certain number of years. Though many companies are recognising the need to improve their data gathering and analytic capabilities, efforts are often without focus – gathering data for the sake of gathering it with little idea how it will be used. In the 2014 Deloitte Human Capital Trends survey, over two thirds of companies rated themselves as ‘weak’ at using HR data to predict workforce performance. In many cases, companies are at Year Zero data-wise – all they can do is begin collecting the right data in the right way, building up their predictive capabilities over time. The effort required to clean existing data may not be worth the potential rewards.

Another fundamental tenet of big data analysis is that while it can highlight correlation, it cannot reliably reveal causality. Number crunching can tell you what, but not why. This might not be a problem for a query such as ‘what other books do people who bought this book buy?’ However, it is rarely so simple when trying to solve the kinds of problems that are highlighted by employee engagement research – or trying to identify those problems in the first place.

Not knowing the reasons behind a particular problem is also rarely good enough to go to your boss or company executives with.

As human beings we have an innate desire to know why something happens the way it does – just watch any strategy announcement that does not have a clear rationale behind it utterly fail to convince the intended audience.

010 This last point is also crucial. No matter how big or how clean your data, it requires a degree of imagination and specialist knowledge to come up with theories to test or guess at what the problem might be. Say a company is experiencing considerable turnover among employees in a particular part of the business; all the usual causes linked to attrition, such as low pay, long hours or uninteresting work are not an issue. Where do you go next? It is at this point that you need experts to get their thinking caps on and come up with theories for the data analysts and predictive modellers to test.

When it comes to employee engagement, it is also not enough to generate credible insight. In order to make a difference, insight must lead to action. Ultimately, these findings need to be translated into behavioural or structural change in order to gain the desired results, be that improvements in individual performance or stemming the flow of valuable employees leaving the business.

The human touch

Big data

“ Because employee data is often self-generated, there is a real danger of survey-fatigue setting in and sources of valuable data drying up.” While the rest of us are catching up with the Googles and Amazons of this world in terms of how we perceive, collect and use data to drive business performance, there are still plenty of ways that currently held information can be used to better prepare for the future.

Volume Increasing the amount of employee data has an obvious drawback – it means, more than likely, more surveys to complete. Because employee data is often self-generated, there is a real danger of survey-fatigue setting in and sources of valuable data drying up. Scaling up is not necessarily all that useful. But broadening question sets to measure more diverse aspects of how employees feel and act at work, alternating which questions are asked to accommodate the larger set, will enable a larger number of theories to be tested down the line. Collecting more employee ‘metadata’ – that which is generated as a matter of course, such as their length of service, can also be very useful.

Velocity How regularly information is collected can make a huge difference to what can be done with it. Real-time data can have distinct advantages over that which is measured less frequently, such as when safety is a factor. Particularly in high-risk jobs like mining, recording how safe employees feel at work more frequently can highlight dangerous patterns emerging much earlier – wait too long between measurements and it may be that you have not only missed the growing concern about a situation, but the chance to avert the worst-case scenario.

Variety Think about the diversity of data sources available. ‘Stitching’ very different data sets together could turn up some surprising results. Beyond the usual databases of performance ratings, absenteeism and all the usual employee engagement metrics, what other information might be useful? Creating a log of all media coverage of a company, for example, might not seem immediately worthwhile – but smash this log up against pride scores from quarterly surveys broken down by demographic and you might find that what the papers say is having a huge impact on morale for particular populations.

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This means that the bank of data on any and all individuals will grow over time. Fred and Mary join the business and any information about them will be added into the database.

And, if and when they leave, what did they say about their time here and what were their reasons for leaving? All of these questions can be answered if the right data is there. Any and all feedback from workplace surveys can show how employees think and feel on a range of issues and at different points in their career.

What did they first think about the business on joining? How have they performed against personal goals? How often are they off ill?

Add the data for thousands more Freds and Marys and the business has started to acquire a rich repository of insight.

One large financial services multinational has taken the bold step of placing all data on its employees in one place.

Mary Fred

Join

What’s their first impression?

How quickly have they set performance targets?

X,000

What attracted them?

How was their onboarding experience?

What’s their manager’s view of their performance so far? (soft)

How do they view the culture here?

What is the data saying about their performance? (hard)

How often are they off ill?

What’s their team’s view?

Who/what type of colleagues... performed and stayed? failed to perform and stayed? performed but decided to leave? failed to perform and decided to leave?

For example, analysis of engagement surveys across a range of businesses shows that 40-50% of those who say they plan to leave a business in under two years actually do leave within six to ten months.

Another financial services business has integrated this data to produce a clear picture of this risk, identifying where there is a higher than average proportion of high performance employees who are disengaged and who say they plan to leave in under two years. This is enabling a more targeted approach to talent planning and management.

fin

Y,000

What were the reasons?

Team example of integrated data In this team’s results, only one in five high performance / potential employees plan to leave. This compares positively with half of low performance / potential individuals planning to leave.

Intention to leave in under two years HIGH

Potential

However, it can and is beginning to support strategic decision-making in relation to talent attraction, performance management and talent retention.

50-70% will have left within a two-year period. When this data is joined together with performance review ratings and engagement scores, it provides a powerful predictor of talent flight risk.

Leave

What factors are most common in... high performance individuals here

What can it be used for? It is not about aiding the prediction of whether a specific Fred or Mary is going to perform or leave the business. That would raise major alarm bells for data privacy, confidentiality and, very likely, ethics.

What’s their view of the place and how engaged are they?

LOW

34% 36% 20% 34% 31% 28% 47% 39% 21% LOW

HIGH

Performance

Big data

n t o i g t h n i e k

e . r . . u t u f ... thinking holistically about workplace prediction

L o o 16

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Jessica Wiegand has a strong academic background in economics, business and environmental management. She has a Masters in Research and, since completing her PhD in 2010, has led on a range of Karian and Box projects. She has most recently successfully managed major quantitative and qualitative research projects for clients such as HSBC, Nationwide and Heathrow.

Predicting the future – for most of us – feels unfathomable. How do you begin? How can you possibly make accurate predictions about the future – especially when it comes to the important stuff – when you cannot even be sure about what the weather will be like tomorrow?

“ We produce thirty-year projections of oil prices without realising that we cannot even predict these for next summer – our cumulative prediction errors for political and economic events are so monstrous that every time I look at the empirical record I have to pinch myself to verify that I am not dreaming. What is surprising is not the magnitude of our forecast errors, but our absence of awareness of it.”

As ‘Big Data: not just a number’ has shown, big data is making big waves in the predictive space and is helping us make more accurate predictions about the future – be that in the workplace, in the marketplace or in our day-to-day lives. But is data enough? And where do people fit into this equation?

assim Nicholas Taleb, N The Black Swan

Looking into the future

Reality check: why do we need to be cautious about prediction? In a world where the pace of change is increasing exponentially, it is natural to want to know what will come next. It is unsurprising, then, that we have started to put more faith into prediction, trusting statisticians, forecasting experts and polls to give us an accurate idea of the outcomes of major events. This need to know what is coming next is not just affecting how we make decisions in our personal lives, it is also affecting the world of work – imagine the impact of being able to prevent your top talent from walking out the door, or being able to make better hiring decisions so you get the right people into the right roles from the outset. But forecasting for the future is a tricky business. While the insights gleaned from predictive analytics can reap massive rewards, we need to be careful and realistic about our forecasts because the truth is that even with a really strong data-set and limited variables, there is always the chance of error.

“ Imagine the impact of being able to prevent your top talent from walking out the door, or being able to make better hiring decisions so you get the right people into the right roles from the outset.” For those of us in the UK and US, it is not hard to think of recent examples of predictions that were very, very wrong – the 2015 UK General Election, Brexit and the rise of Donald Trump in the Republican primaries are just a few examples. This holds true in the business world as well. Tesco has long used big data analytics to drive their marketing strategy, but their share price has been declining year on year since 2014. It is no surprise then that people are beginning to question polls and the expertise of forecasters. Nate Silver – probably one of the most widely recognised forecasters of the twenty-first century – has come under particular scrutiny recently. While he has been able to predict the outcomes of the past three US elections, his forecasts for the primaries this time around were not just a bit out – they were downright wrong. Not only that, but Carl Diggler – a fictional political pundit created by two journalists at the Washington Post – made much more accurate predictions about the primaries, calling the exact results of the Iowa presidential caucuses, Bernie Sanders’s surprising win in the Indiana primary and all the Democratic winners on Super Tuesday.

Their predictions relied on nothing more than educated guesses.

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Retention is the biggest issue facing many businesses today In our recent research in the financial services sector we have found a worrying trend. Of employees who say they intend to stay for less than two years:

30 % to %

leave within 10 months

50 to % %

leave within 20 months

So why do things go wrong with predictive analytics and how can we avoid the pitfalls?

Implications for the world of work

Over-confidence Some argue that the reason that Nate Silver was so wrong in his predictions for the primaries was because he relied only on maths – a version of it that doesn’t account for grey areas. Silver claims that the key to his success is that the model he uses is entirely objective. Opinions, gut instincts and bias have no place in his predictive model. But there is a strong argument that over-confidence and a lack of consideration for the outside chance contributed to Silver’s more recent misfires. The renowned statistician and scholar Nassim Nicholas Taleb has often pointed out that the apparent precision of models like the one that Silver uses make their users over-confident and consequently more prone to error. This type of over-confidence can have serious implications. Perhaps one of the best examples of this is the burst of the housing bubble in the US and the financial crisis that followed in 2009. The values-at-risk models used by Wall Street bankers to determine their potential losses from a market downturn weren’t able to realistically model a crash on the scale that it happened. Taleb has often suggested that the problem here was not just that the value-at-risk model could sometimes be wrong, but rather that those using it had too much faith in its accuracy.

When looking at trend data in employee research, it can be difficult to be objective. Karian and Box discovered this recently in its research into how colleagues assess the impact of business strategy. Patterns emerged in the long-term trends and demographic data for strategy-related questions in surveys, and our first instinct was that fluctuations in share price and negative press were the influencing factors. But further investigation showed that the way colleagues interpreted strategic success was influenced by a multitude of factors. Not only that, but these factors changed according to demographic – the way colleagues assessed the impact of strategy changed based on length of service, grade and geographic location. Some colleagues were influenced by external media and share price, while others were focused on the impact on their customers and workloads. Not only that, but each group relied on very different communications channels to guide their assessment. Going with the first assumption, Karian and Box might have misdirected its clients by suggesting that they focus their efforts on the wrong communication channels and areas. While this research did not involve prediction, it does show the importance of questioning and testing conclusions before taking action.

Data limitations Silver’s methods of prediction are predicated on data – lots and lots of data. But as we know already, quantitative data gives an incomplete picture of what is happening. Would Silver have second-guessed his primary predictions if he had gone out and talked to voters? The same issue holds true for the 2015 UK general election. In the days after the Conservative landslide, the news media tried to unpack what went wrong. Several themes emerged: poll samples were not large enough, the samples needed to be more random, the ‘shy Tories’ did not come out until election day… These risks are also at play in employee research. When considering the numbers you see in quant surveys, it is always critical to be aware of your margin of error and remember that the data only tells you so much.

Looking into the future

Keeping it confidential

Focus on teams, not individuals

Perhaps one of the biggest challenges for using big data analytics in the workplace is maintaining confidentiality. This is a unique challenge in the employee space. When using predictive analytics to determine who is going to win an election, or what shopping decisions consumers are likely to make tomorrow, the need for confidentiality doesn’t really come into the frame. But if you want to determine which of your most talented employees are going to leave in the next two years, this becomes a very real issue. How do you target action to reduce the risk of these individuals walking out the door without breaking confidentiality?

“ Using only maths and hard science does not provide a clear picture because the real world is not a Petri dish in a science lab where all variables can be carefully controlled.”

The truth is that to take meaningful action on the risk of talent flight and attrition, it is not necessary to go down to the individual level. You can just as easily take a segmented approach – determining where the attrition risk is most acute in high-performing teams. Doing so allows you to take focused action at a team level – addressing the attrition risk without identifying individuals.

Striking the right balance: using prediction in employee research All of this is not to say that mathematically focused prediction techniques are without merit, or that relying on experience, gut instincts and knowledge alone is a better bet. This style of prediction comes with its own set of dangers – unconscious bias, overconfidence and a lack of good evidence are all at play in this space. It’s a contentious debate. On the one hand, you have the argument that the only way to make accurate forecasts is through data and lots of it, with gut instincts and foresight to be avoided at all costs. On the other, you have the argument that using only maths and hard science does not provide a clear picture because the real world is not a Petri dish in a science lab where all variables can be carefully controlled. The fact is that making good predictions lies somewhere in the middle of these two extremes – striking a balance between data analytics and hard-won knowledge and experience. It is also critical to be aware of and accept the fact that even when these skills are used in combination, you still might not get things exactly right.

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The

Get the data right

Minimise bias

As we have seen from ‘Big data: not just a number’, one of the keys to making accurate predictions in employee analytics is having a good data set. To this end, it is important to acknowledge that you may not be able to start using predictive analytics until your data is in good enough shape to do so.

This might be one of the most challenging issues to overcome in using big data analytics in the world of work, but there are some steps that can be taken to help reduce bias in employee analytics.

2 Avoid becoming Big Brother

critical factors needed to enable effective workplace predictions

Maintaining the confidentiality of your employees is key. Focusing on teams rather than individuals will allow you to react to what your data is saying without naming names. Unlike consumer predictive analytics, you will not be able to know and communicate to Ms Smith about her likely intentions inside the business. You can, however, identify trends for specific teams and likely areas of risk or action.

3 Be prepared for the outside chance It’s important to remember that data is tidy(ish), but people are not. When we analyse quantitative data, it can be all too easy to forget that behind the numbers are human beings who sometimes behave in surprising ways.

Algorithms often mimic the biases of their creators. A study from Carnegie Mellon showed that Google was more likely to advertise high-paying executive jobs if it thought the user was a man rather than a woman. To make better algorithm-based hiring decisions, Sorelle Friedler and Suresh Venkatasubramanian – researchers looking into how to reduce bias in algorithms – suggest looking at different groups (based on gender, race etc.) separately and then creating a universal average. Doing so would allow you to take the top scores for each group and derive a median that applies to all of the candidates.

5 Context is king While it is natural to want to immerse yourself in the numbers and hard data, this can be limiting. Your data will give you a fairly clear picture of what is happening, but it will not point to why. This is where qualitative followup research comes into play. You can learn a lot just by listening to what your people are saying, which in turn will allow you to take more meaningful action to offset the issues your predictive analytics identify. Putting qual meat on the quant bones of your survey data will ensure you have the information you need to make sensible budget allocations.

As Nate Silver’s fall from grace has shown, prediction and forecasting are challenging and fallible, even when using complex data analytics. If used in the right way, however, they can help us to improve recruitment decisions, reduce talent flight risk and allow us the opportunity to be more responsive to what is happening with our employees.

Looking into the future

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One business strategy or many? Most employee engagement surveys ask questions which measure whether employees understand and support their businessâ&#x20AC;&#x2122;s strategy. But can they see the benefits of this strategy?

The challenge is whether it is clear what employees are thinking when answering questions on business strategy. Recent research in large multinationals provides a ground-breaking insight which has major implications for the way strategy feedback is interpreted. It also points very clearly to the need for a more targeted and segmented approach to how businesses communicate with employees on strategy.

There are many influences on perceptions of strategy

15 in

The research highlights that employees consider different factors when assessing the impact their organisational strategy is having.

employees think about the businessâ&#x20AC;&#x2122;s values

Some employees consider whether there has been an improvement in customer experience, while others may assess the current share price.

Critically, these different factors each correlate closely with varying levels of positivity about the strategy.

Growth is front of mind for

1/4

The factors which employees consider when assessing the impact are influenced partly by their level within the organisation, the part of the business they are in, their tenure and whether or not they are shareholders.

2/5 13 1 10 1/5

Service for customers is important to

think about their employerâ&#x20AC;&#x2122;s reputation

employees

think about cost controls

think about improved pay and benefits

Over

consider share price

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Over

are concerned with career opportunities

“ Employees influenced by external media are more likely to consider share price and/or the organisation’s reputation as their benchmark for strategic impact.” How colleagues hear about strategy correlates with higher positivity towards it There is an association between the factors colleagues consider when assessing the impact of the strategy and the sources of information they cite as influencing their opinion. For example, employees influenced by external media are more likely to consider share price and/or the organisation’s reputation as their benchmark for strategic impact. The impact that different information sources have on an employee’s opinion on strategy are also dependent on demographic factors. For example, more junior, frontline (and often customer-facing) employees are more influenced by internal channels and talking to customers, while other populations are more affected by external media.

25 in

1/2

use customer feedback

rely on messages from senior leaders

External media is used by

1/3 of employees

1/4 use internal media

rely on their line manager

Implications for action Given the variations in what colleagues consider when assessing the impact of the strategy, and the influence of the different sources of information used, Karian and Box suggested developing a more targeted, segmented approach for communications with employees on its priorities and plans. For example: Target specific messages from the CEO and senior leaders to MDs and others who have larger shareholdings. Create colleague profiles based on tenure, performance / potential and other demographic factors to enable clearer understanding of evolving expectations and needs. These can then be used to develop targeted communications.

One business strategy or many?

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Ghassan Karian began his career in PR, for the Labour Party and as Head of Media Relations for Saatchi and Saatchi PR agency, Rowland Communication. After spending 12 years in-house, with roles including Director of Internal Communication for British Gas, ICI plc and Rolls-Royce plc, Ghassan founded Karian and Box in 2006.

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Changing of the

the culture

culture change

industry There is a big lie haunting our profession. You will have heard it repeated many times: on the lips of many a proud CEO or MD, in the pages of respected journals, from trusted advisors on conference podiums. It will have caused you to misspend your budget, misallocate your resources and mistrust your instincts.

Changing the culture

What is this big lie? That you can change culture through a programme and campaign focused on shaping an organisation’s values and behaviours. At the heart of this lie is a deliberately perpetuated misunderstanding and mystique about what drives organisational culture, motivated by an unholy trinity of personal ambition, organisational politics and PR. In my twenty years in this industry, I have often observed a curious phenomenon. When culture goes right – be it Microsoft’s recent transformation or the start-up culture many aspire to replicate – there is usually a culture campaign or an organisational vision statement (“Be less evil”) ready to take credit. When culture goes wrong, often very publicly – be it Toshiba’s implosion, the malaise surrounding emissions testing in the car manufacturing industry or the working environment at Sports Direct – it is inevitably accounted for by deeper systemic and structural issues in the business, like an ill-conceived strategy rubbing up against the wrong operating model, or a broken performance management system. When culture is broken, the ‘campaign’ is never the culprit. We have all done it. It is human nature in a competitive world to take credit for wild success and dodge blame for existential crisis. But for those who want to search a little deeper, it poses the troubling question: what truly determines organisational culture? If words and conversations alone do not change the values and behaviours employees demonstrate all day every day, what management levers do?

“ When culture is broken, the ‘campaign’ is never the culprit.”

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“ Culture is the outcome of an evolving business strategy.”

Rethinking culture It is time to challenge the dominant myth that a unitary culture can be ‘embedded’ in an organisation or that employees should be solely encouraged to ‘live the values’. Culture is, of course, crucial to business success, but it is an outcome of the fundamental decisions about the way a business is managed that leaders make. Culture is a result of the evolving business strategy you adopt to meet the evolving challenges you face in the market and the tactical levers you pull in response. It is caused by your operating model, by where decisions are made in your organisation, by your performance management system. Words like ‘diversification’, ‘hierarchy’, ‘decentralisation’, ‘silos’, ‘incentives’ are the true drivers of culture, not ‘accountability’, ‘innovation’, ‘care’, ‘sustainability’. The reality of the situation shows that our profession needs to advise businesses to focus on the business first and foremost: to understand the consequences – intended and unintended – that strategy, system and process decisions and actions leaders are making might have on culture, and how that culture will in turn drive employee behaviour and the resulting performance of the organisation against its business objectives. Organisational culture is a heterogeneous, evolving, highly contingent and temporary beast – just like the market of today – which a values and behaviours campaign cannot tame.

Changing the culture

Microsoft’s PR team, the strategy chicken and the culture egg A recent article in the FT shows the newspaper working in partnership with the Microsoft PR machine, as it praises the organisation for its ‘transformation to openness’ under Satya Nadella, the CEO appointed in February 2014, who has introduced a shift in ‘mindset’ that has ‘replaced fortress walls with porous membranes’, and allowed Kirk Koenigsbauer, vice-president of Microsoft’s Office 365, to appear on stage at an Apple product launch. The FT argues that this ‘cultural transformation’ is in line with Nadella’s strategy to move to cloud-based technology in which Microsoft’s products can easily talk to any and all technology products, Apple or otherwise. Michel Van der Bel, chief executive of Microsoft UK, is quoted as saying ‘transformation has to begin with you’, and he details the changes in personal behaviour he has adopted to be more open and aware of what is going on outside Microsoft.

“ The real ‘chicken’ in Microsoft has been the strategy and process changes approved by CEO Satya Nadella. The ‘egg’ has been the subsequent changes to Microsoft culture.” But I’m not so sure. From the outside, it seems as though transformation at Microsoft has really begun with Nadella’s strategy, and the resulting shifts in business systems: the investment in partnerships with other tech companies, for instance, or the changes to the mergers and acquisitions process and the conceptualisation of the value absorbed entrepreneurs can offer Microsoft. I can understand why Van der Bel might want to position himself and other leaders as the shift-in-mindset chickens laying the egg of cultural transformation, but I’m inclined to suspect that the real chicken in this case is Nadella’s strategy and his systemic changes to business operations. Of course, that isn’t half as good a story. We are hard-wired as humans to seek out narratives of success driven by the actions of heroes (or tragedies driven by the poor decisions of anti-heroes), and it’s no different in the world of corporate PR. As professionals, though, we need to be clear-eyed about the true relationship of cause and effect.

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What really drives the everyday behaviour of employees If there is one thing we have learnt from behavioural economics over the last ten years or so, it is that everyday behaviour is not something considered – it is something instinctive, and driven by our largely automatic use of biases and rules of thumb to navigate the world around us. Our minds save crucial energy by forming habits to avoid expending ‘effortful’ thinking on everyday tasks – which could well mean interacting with a customer or colleague, or making a decision on which supplier is offering the best deal. This auto-pilot model casts serious doubt on the ability of corporate values programmes to change employee behaviour in a systemic way. Sure, people will quote the values – especially if they need to provide evidence they are ‘living’ them for performance management and progression purposes – but it runs counter to the evidence to believe that their fundamental, everyday behaviour is changing in any meaningful way. It seems much more likely that their judgements and choices are driven by the biases and rules of thumb operating within a business environment of systems, structures and processes. It is often likely that those business fundamentals create their own systematic biases, which have a magnified and persistent impact on the way decisions are made in an organisation.

“ Business should be exploiting the systematic biases and automatic behaviours they are introducing.”

Furthermore, the psychological world of work is much richer than the traditional single agent models that behavioural economics uses to talk about decision-making, often in a consumer context. The team thinking that is fundamental to business involves the forces of social conformity and comparison, the way people recognise what is valuable and attribute blame, all of which complicate the picture and make it more difficult for articulated values and behaviours to have any real impact. This insight calls for a radical shift of focus in the way we conceptualise, measure and try to change organisational culture. Instead of the usual model, in which organisations try to repair a broken culture by seeing employees as logical agents who have the time to consider carefully their day-to-day actions, businesses should be attempting to foresee the consequences of the management levers they pull, to mitigate the impact of undesired consequences but, most of all, to exploit the systematic biases and automatic behaviours they are introducing. Perhaps the main reason that behavioural economics has not really been fully applied yet to organisational culture is due to the difficulty of gathering rich data sets on decisionmaking and comparative data sets between organisations. But it is not impossible. Karian and Box have been using approaches aligned to behavioural economics in cultural measurement and resulting change programmes. Instead of starting with the question – ‘what qualities do I want people to think about and value in order to guide their behaviour at work?’, we are helping business answer the real exam question: ‘how might the strategic and business changes we’re introducing reinforce or change behaviours and decisionmaking?’ The concurrent critical question is how you can mitigate against the Law of Unintended Consequences.

Changing the culture

Predicting side effects Every medicine in existence has its side effects – and it’s no different when organisations introduce a strategic ‘cure’ for their business challenges. These examples – from beyond the world of business – highlight how easy it is for ‘cultural’ action to backfire, and how important it is to foresee the possible unintended consequences of business decisions and cultural campaigns on employee behaviour.

Please don’t steal the beautiful petrified wood that everyone else is stealing The Petrified Forest National Park in Arizona had a problem. Visitors were coming to marvel at the fossilised wood of million-year old trees and then chipping off chunks to take home as a mantelpiecetopping souvenir of their trip. The Park employed a team of psychologists to help them stop this behaviour, and they recommended putting up signs telling people not to take the wood, along with a sign explaining that ‘many past visitors have removed the petrified wood from the park, changing the state of the Petrified Forest.’ To their surprise, after the signs were installed, three times as much petrified wood started disappearing. Why? Because of a systematic bias that behavioural economics is keen to emphasise: if you perceive that everyone else is doing something, you believe the action to be less morally suspect and are more likely to do it. If you want to ‘fix’ a broken culture, it might not be the best strategy to highlight what a lot of people in your organisation are doing wrong and tell them not to follow the crowd.

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The Pelzman effect The introduction of safety measures can have a counterproductive effect on rates of injury and mortality, because they can cause individuals to believe they are safer and to ‘compensate’ by engaging in more risky behaviour. The Australian state of Victoria introduced a compulsory cycle helmets bylaw in 1990, only to find that rates of cyclist death in road accidents increased, because of the Pelzman effect on risk compensation. For organisations aiming for zero harm and prioritising safety as a key strand of culture, awareness and understanding need to be supplemented with a keen awareness of how business processes and systems – like safety procedures – might be undermined by risk compensation and other perceptions.

Reducing alcohol and sugar consumption In nineteenth-century Ireland, Theobald Mathew led a Temperance campaign which saw thousands taking ‘the Pledge’ and swearing to abstain from drinking alcohol for the rest of their lives. This saw the perverse consequence of many hundreds suffering poisoning from drinking the noxious substitute diethyl ether, in order to become intoxicated without breaking their word. Likewise, more recent attempts to introduce a sugar tax to improve the public diet have seen increases in household consumption of beer, as people compensate for one vice with another. Where organisations want to remove employee behavioural ‘vices’, it’s critical to watch out for the substitutes that could fill the gap and, if possible, to mitigate the systemic cause of the behaviour.

“ There needs to be a sea change in the way we analyse and intervene in organisational culture, and one which is fuelled by foresight and thinking ahead.”

Rewarding vandalism In 1980-81 the French government introduced a reward for those handing in lost fishing nets in Normandy, in order to reduce the overall government subsidy for fishing. They were inundated with nets – but it quickly became clear that the people of Normandy were deliberately vandalising government-funded nets and handing them in as ‘lost’ nets in order to claim the reward, while also reporting their nets as ‘lost’ to receive more government funding for new nets. Behavioural economics has much to say about the perverse and unintended consequences of incentives – and performance management and reward is one of the most important levers an organisation can pull to influence behaviour, but also one of the trickiest. The emissions scandal across the car manufacturing industry (fuelled by the unspoken need to meet targets any which way) makes this clear.

There needs to be a change in the culture in the world of culture consultancy. For too long a set of frankly incorrect assumptions have prevailed, driven by the selfish needs of leaders, industry experts and consultants, and not by the needs of organisations themselves. If we are to get rid of this big lie and begin to provide the advice organisations truly need – on how their business decisions shape their

cultural realities and what they can fundamentally do about it – then we need a sea change in the way we analyse and intervene in organisational culture, and one which is fuelled by foresight and thinking ahead. It is time we showed integrity, innovation, accountability and sustainability as an industry – and more care and respect for the future success of the organisations we advise.

fin Changing the culture

How to turn

employees into advocates Every business wants its employees to be advocates. People who will sing its praises â&#x20AC;&#x201C; not just as a place to work but also for the products and services it provides.

Your first thought might be that they need to know what your products are and believe that they are worth their salt. However, recent research into the drivers of product advocacy paints a much more complex picture.

1 2 3 4

Visible progress on your strategy is the linchpin for product advocacy Employees need to see the positive impact of your business strategy to have confidence in the future, take pride in the business and trust what your senior leaders say and do. Trust in the business and its leaders and the belief that the business cares about its people is also critical. For employees to feel proud and confident they need to see leaders acting with integrity, taking employees into account when making decisions and communicating honestly. They also need to see the impact your strategy is having. If your employees are confident and proud then theyâ&#x20AC;&#x2122;ll be advocates for your business â&#x20AC;&#x201C; both for its products and as a place to work.

Where does this insight come from? This insight is based on detailed correlation analysis of data from over half a million employee participants in 2015 research by Karian and Box. This was conducted with UK and global businesses in a range of sectors (including banking, insurance, transport, retail and food manufacturing).

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Seeing the benefits of the strategy

lly mutua s e c r o reinf

builds

Pride, confidence and advocacy for the business as a place to work

Trust in the business and its leaders correlate s with

drives

Advocacy for products and services

Critical finding Understanding is useful, but not essential Employee understanding of a businessâ&#x20AC;&#x2122;s strategy or its products/services is not a fundamental influencer of advocacy for them. The most important factor is whether employees feel proud of the company they work for and are confident of its future performance.

fin How to turn employees into advocates

Equality pays: so why are we still waiting for change?

Jo Swinson is Chair of the CIPD Policy Forum and Director of Equal Power Consulting, working to change organisations so that both women and men can thrive. As a Government Minister in the Department for Business from 2012 to 2015, Jo introduced shared parental leave, extended the right to request flexible working, and secured government support for mandatory gender pay gap reporting.

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Jo Swinson, the prominent former minister and a leading voice in debates on the workplace and gender equality today, gives us her take on what needs to happen in organisations to improve gender equality where it counts: from the shopfloor to the boardroom and from take-home pay to the bottom line.

Imagine the workplace of the future Fast-forward to 2040. The sun has just set on the Paris Olympics, one of the few cities still able to host the summer Games as climate change pushes temperatures to dangerous highs. High speed rail has cut journey times between Edinburgh and London to just over two hours, but it feels rather irrelevant given the huge amount of time we spend in augmented reality: whether that is a Matrix-style horror story or an exciting new dawn depends on your perspective. The Spice Girls are drawing their pensions, but what of the â&#x20AC;&#x2DC;girl powerâ&#x20AC;&#x2122; they championed? As we anticipate massive technological change in the next few decades, will workplace equality be similarly transformed, or will the only familiar thing about the future workplace be the stubborn gender gap?

Equality pays

Equality is good for business This level of progress on gender equality is absolutely possible, but it is by no means inevitable. “Men have had every advantage of us in telling their own story. Education has been theirs in so much higher a degree; the pen has been in their hands” – these words were written by Jane Austen in 1816.

Just for a moment, imagine a working culture where gender is irrelevant Women and men are equally represented in senior leadership, and across sectors like engineering, science and care. The gender pay gap no longer exists. When a couple has a baby, both parents take time away from work to care for the child, and no one bats an eyelid – in fact, it is seen as a little odd to be rushing back to work a few days after your newborn arrives. In any event, the workplace is not one physical building with the associated ‘jacket on the back of the chair’ presenteeism culture. Most people do at least part of their work remotely, in a way that fits around the rest of their life, whether it is spending time with their ageing parents, caring for children, or playing in their local PokemonGo league. The big data explosion means the impact of your work can be demonstrated much more clearly, so it really is results that matter. Employers recognise that human beings are people, not automatons in a corporate machine. There are plenty of automatons too of course: robots have taken on roles as professional analysts, advisers and content providers. People cannot compete with machines in these tasks, but artificial intelligence still struggles to match humans when it comes to reading and responding to emotions, and interacting with people. Society places more value on the types of professions that, back in the early part of the century, were lower-paid and employed more women than men, like nursing, teaching and caregiving. Blending huge computing power with people skills is how companies succeed. So they need their people to be energised and enthusiastic, bringing their individual, unique identity to their work: an inclusive working culture is seen as a business imperative. After all, it was the lack of diversity which caused the groupthink and blindness to new ideas that did in the old banks and corporate behemoths in many industries.

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The education gap has been closed in developed countries, but two centuries on the pen and the power is still in the hands of men – politically, financially, and culturally. The glacial pace of change to date means instead of a marked shift in gender equality, it is more likely that we will pootle along, cutting the gender pay gap by a couple of percentage points every few years, promoting a few more women into boardrooms and running endless programmes to inspire schoolgirls to aim high, only for them to be knocked down later. If we carry on as we are, just chipping away at the rock, progress will be painfully slow. Gender equality will probably happen…eventually. Projections from the World Economic Forum say we can expect economic parity in 2095, and that is purely for developed countries. How do I tell my six-year-old niece that she won’t have equality until her eighties?

“ The education gap has been closed in developed countries, but power is still in the hands of men – politically, financially, and culturally.” Morally, you need no more reason than that to act now. Many women and men want the girls of today – their daughters and nieces – to have an equal opportunity of workplace success. They also want this generation of boys – their sons and nephews – to be freed from tired and constraining stereotypes about masculinity, for suicide to no longer be the leading cause of death for men under the age of 40, and for men to be able to embrace their role as fathers without people looking at them suspiciously in the children’s playpark. Even if this were not enough, the business case is beyond doubt. When you have a diverse group of people sitting around a boardroom table, in management and in the C-suite, they bring different perspectives, adding more market value and economic growth for businesses. From enhancing employee engagement to increasing market share, better governance to improved creativity, gender equality and diversity are good for business.

How gender inequality persists Why is the pace of change so slow? Gender inequality in business culture stems from a complex web of interlinked factors, and it will take a concerted effort to uproot all of them, especially considering that some biases are deeply embedded.

“ We need to keep changing the attitude that permits the routine harassment of women, whether they’re walking down the street or daring to go online. We need to keep changing the attitude that teaches men to feel threatened by the presence and success of women.” Barack Obama, ‘This is what a feminist looks like’, Glamour

Often we are unaware, and the bias is unconscious – where judgements, expectations and decisions are influenced by our cultural and social backgrounds. From a very young age, society ‘teaches’ us the way things are done.

1 It is in the language we use You only have to look at how we talk to children, for instance, to see differences between speech directed at boys vs. girls. Linguistic research has found that parents use more ‘cute’ words like doggie and kitty when talking to girls than boys, and they tend to talk more about emotions and feelings with girls – instilling a split between genders well before this generation grows up and enters the workplace. Socialisation is incredibly powerful, not just for children but for adults too, and we should not underestimate its influence on shaping our outlook.

2 Our expectations for our children are gendered When I visited schools as an MP, I was struck by the common pattern that, nine times out of ten, the first child to stick their hand up to ask a question was one of the boys. At school, where everyone has the same chance to sit the same exam, girls are rewarded for keeping their head down and getting the right answer. Out in the workplace, where opportunities and performance are not always objectively assessed, those who push themselves forward tend to win.

3 We think we need to fix women – not the systems that push them down Some approaches to achieving diversity implicitly assume that the underrepresented groups are the ‘problem’ and need to be ‘fixed’, through special training, networks and mentoring. While these initiatives can be valuable and are part of the solution, on their own they ignore the fundamental truth: it’s the endemic sexism across society – and by extension the organisations within it – that is the problem. The structures and culture are what need to be fixed, not the women.

4 We are complacent One of the biggest barriers to action is complacency. Some people might think that workplace inequality is behind us – something for the history books, alongside the suffragettes. In the words of Kevin Roberts, the ex-Executive Chairman of Saatchi & Saatchi, the debate on gender equality is ‘all over’. If he had been as good at analysing numbers as making adverts, he might have avoided being sacked: while almost half of the staff in ad agencies are women, only just over one in ten of the creative directors are. Dismissing that as purely down to women not wanting promotion relies on pretty shaky logic and a lot of chutzpah.

Equality pays

What can businesses do to address gender inbalance in the workplace? Measure Collecting the hard numbers about gender equality in your organisation is the first step to solving the problem. Not only does this give you a benchmark to measure progress, it guards against complacency and senior leaders blithely declaring that there is nothing to worry about. Careful analysis can pinpoint particular functions, geographies or levels in the organisation where there are specific issues. Are men more likely than women to be promoted? Do attrition rates differ? Do you disproportionately attract one group in the recruitment process?

“ That’s why I moved mountains in government to secure support for mandatory gender pay gap reporting, to pierce the bubble of complacency.” On their own, quantitative measurements do not give you the full picture. Through measurement in your organisation, you might find that the gender gap has widened or narrowed, but the numbers alone cannot tell you why this is the case. For that reason, it is crucial to ask people and get their thoughts and experiences through focus groups, interviews and qualitative open text questions on surveys. Qualitative measurement of equality and diversity allows you to gather data on perceptions, attitudes and awareness.

Gathering hard numbers and people’s views together in a mixed-methods approach is the most valuable way to achieve insight into your organisation. Quantitative data collection makes it possible to survey a large proportion of your company population, while qualitative methods offer a finegrained, rich narrative to supplement the wide-ranging quantitative story.

Who’s holding the baby? The imbalance of responsibilities in the home is another driver of the pay gap, leading to women taking more time out of the labour market through maternity leave and reduced hours on return. The IFS recently reported that the pay gap shoots upwards after women have a child. Discrimination also plays a part, on a shocking scale: EHRC research published earlier this year found that 54,000 women are forced from their jobs each year as a result of pregnancy discrimination.

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Having the right policies in place is a good start, but often the problem is in implementation, and a lack of training for line managers. Are you certain that this is not a problem in your organisation? I chair the charity Maternity Action, and some of the experiences we hear on our advice line from people working in blue chip companies are horrifying.

Mind the gap I remember one senior executive at a forwardthinking company telling me that they had done an equal pay audit, more to cement their reputation than to uncover any issues. They were very confident that they were hiring, promoting and paying on merit. They were shocked by the results of their pay audit, which uncovered a messier and somewhat uglier truth. That is why I moved mountains in government to secure support for mandatory gender pay gap reporting, to pierce the bubble of complacency. A key date for the workplace equality diary is 30 April 2017 – that is the first day when a gender pay snapshot will have to be carried out in all organisations with more than 250 employees. The UK Government will collate the results on a website, enabling comparisons across and within sectors.

Again, I have heard assertions that certain firms don’t have a gender pay gap, which invariably stems from a misunderstanding of what the pay gap is. Since the Equal Pay Act of 1970 it has been illegal to pay men and women differently for doing the same job, so being confident that there is no unequal pay in your organisation is good, but no more a badge of honour than submitting accurate tax returns or making sure you pay workers at least the legal minimum wage. Your gender pay gap is the difference between the average hourly pay of men and women in your organisation. Across the whole country it is 19.2%, or 9.4% if you only compare full-time workers, which demonstrates how part-time work is undervalued in the UK and the dearth of senior part-time roles. Part-timers, both men and women, are more likely to work in low-paid and low-skilled sectors, and about a third of the pay gap is due to sectoral and occupational segregation – think men dominating STEM and women dominating retail or care.

Only 10% of men have a part-time job, but 40% of women currently work in part-time roles, often not by choice but because this is their only option after taking a career break. Joseph Rowntree Foundation research estimates that 1.5 million people are working in a role for which they are over-qualified because they need to work flexibly. Workplace hierarchies and working patterns were originally designed by men in a society that was very different from today. A case in point: the classic nine-to-five workday only took hold after Henry Ford introduced it in his automotive factories in the 1920s. Offering flexible working patterns can help to boost the number of women in management roles. If your company holds on to a fixed nineto-five working culture, consider how that can be made more flexible.

How we compare The Scandinavian model, which has enjoyed shared parental leave for four decades, shows a completely different picture.

It’s not just about women The way you treat men in your workplace is also important. My proudest achievement in government was introducing shared parental leave (SPL), which means that as of April 2015, couples have been able to choose how they share time away from work to care for their new baby. As well as being good for families and good for children, enabling dads to spend more time with their new baby is good for equality in the workplace by resetting the assumptions and stereotypes about who does what at home. We predicted that between 2-8% of new fathers would take up this leave in the first year, and while there are no official figures, take-up seems to be broadly in line with expectations.

In Sweden, paid leave replaces between 80-100% of earnings for nine in 10 men, and fathers (affectionately known as “latte papas”) are expected to take 90 days of parental leave. The culture does not change overnight, but employers and business leaders have an important role to play. When people at the top of the organisation are seen to make time for their families in addition to their work, it empowers employees at lower levels to do likewise.

We know from other countries that pay and culture are key barriers. Many companies have already matched their shared parental leave benefits to their maternity benefits, which can help remove a financial barrier to men taking leave. Coupled with a positive employer attitude, take-up rates rocket to well above the government estimates. For example, PricewaterhouseCoopers had 43 employees taking shared parental leave in the first year. Lots of new fathers have cited a perceived risk to their careers as the reason why they haven’t gone on leave – unsurprising when they see the workplace penalty mothers pay.

Equality pays

“ For true and lasting change to take place, we need leaders who are prepared to ask difficult questions, speaking up about unwritten expectations and assumptions.”

Challenging the status quo should start from the top, with leaders who are prepared to implement change and role-model behaviours for colleagues Unspoken attitudes – feelings of obligation and judgement – are one of the hardest, most insidious things to counteract. Even if your company does offer family-friendly policies and flexible working options, is take-up low? Do your employees worry that using these policies, even though it is their right, will be detrimental to their careers and the way they are perceived? ‘Presenteeism’ is as much an issue for gender equality as it is for working culture. As the Swedish model illustrates, it is refreshing to think that there can be another way; indeed, that there is another way to do things. Ellen Langer, Harvard Professor of Psychology, says that one of the key business issues is a tendency to apply yesterday’s solutions to today’s problems. Just rolling on in the same old groove, without questioning whether things can be done differently (and better), is a barrier to effective change. The technological revolution that has begun, and will be truly unleashed in the coming years, gives us an opportunity to rethink the workplace more widely. Just as whole industries are being disrupted, the way we work can – and should – change. So many elements of work are stuck in a 1950s mindset, whether it’s the assumption that you’re only working when you’re visible in the workplace, or that workers with family responsibilities will have a stay-at-home spouse.

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Seven things businesses can do to promote equality in the workplace

Measure

De-bias hiring

Carry out qualitative and quantitative measurement and reporting on equality and diversity in your business. Develop a workplace diversity and inclusion strategy, feeding in your findings from measurement to inform the strategy.

Use work-sample tests which are much better at evaluating potential than interviews. If you do interview, keep it structured: ask everyone the same questions and score each answer immediately.

Look the part

What do the images on your company website and reports say about how you value diversity? Walking into your premises, are there lots of photos of middle-aged white men? At internal meetings and conferences, what is the mix on the stage? Audit and change how your business is projecting its identity.

Flex

Sponsor

Lead

Challenge sacred cows

Make flexible working and work-life balance part of the working culture at your organisation, and shout about it as part of your recruitment process. Offer a range of options, such as job shares, compressed hours and part-time working. Currently, only 6.2% of quality job vacancies are advertised with opportunities for flexible working (Timewise). Developing a supportive working culture helps people with caring responsibilities to senior management roles, and it is now a legal right for employees to request flexible working.

Networking and mentoring initiatives are great, but men are still more likely to benefit from sponsorship in organisations. Sponsors advise, encourage and guide, but they also smooth the path for people to break out of middle management to senior roles. Leaders should make a point of sponsoring talent from underrepresented backgrounds.

As a leader and manager, walk the walk, don’t just talk the talk. Role-model the flexible working mindset and cultural behaviours you want to encourage, and seek out a diversity of opinions.

Ban “we’ve always done it like this”. Be prepared to challenge and rethink basic assumptions about your organisation, working patterns, client ‘demands’ and employee wishes. Disruption is the new certainty: embrace it and harness it in a positive way.

For true and lasting change to take place, we need leaders who are prepared to ask difficult questions, speaking up about unwritten expectations and assumptions. Leaders need to be personally invested in change within their business, cascading it through the different levels from the top to the most junior new starter. And this change must be more than an occasional press release or glossy report: you need practical action like measuring

the balance of men and women in staff and leadership roles and setting targets to improve, developing a change strategy to counter unwritten rules and attitudes of “that’s the way we do things here”, rigorously reviewing existing processes to root out unintended drivers of inequality, and making a senior executive accountable for delivery. Think the unthinkable, re-examine your models of working and engage your employees in finding new answers.

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The office 2.0: what the

workplace future of the

looks like

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Rachel Gartner is an engagement consultant at Karian and Box and leads the thinkBox editorial team. She works for a range of clients, from BP to HSBC, Aviva, Nationwide and The Co-operative Bank, specialising in finding the stories behind qualitative and quantitative data to generate actionable insight.

What did the future look like fifty years ago? Films and fiction from the period suggest that, to many people, by now we would have undergone a technological revolution, with robots catering to our every need, video â&#x20AC;&#x2DC;phonesâ&#x20AC;&#x2122; and teleporters for transportation. There are no teleporters, sadly, and it looks unlikely that they will ever be a reality. But amazing inroads are being made in robotics and automation is increasing every day. Most people own smartphones, tablets and use video-chat. We can send and receive messages instantly. There is a world of information at our fingertips. All of these changes have had a huge impact on the way we navigate our lives. Unsurprisingly, the way we work has changed too. Search engines like Google allow us to learn constantly. Twitter provides us with news in real time. Email is not just a useful instant communication tool, it is also a nuisance. Videoconferencing with colleagues an ocean away is common. Working from home is made possible by all these things.

But what is going to happen next? With increasing automation and constant innovation in the tech space, will robots eventually replace the average employee? Are people going to become less focused on long-term careers in favour of more fluidity in their jobs as a result of these changes? While some of the advances we are set to experience will seem small, others are quite significant and could have a major impact not just on our working lives, but in everything we do. Here, we consider some of the approaching innovations that will revolutionise the world of work.

The office 2.0

“ If you want a picture of the future, imagine a boot stamping on a human face – forever.” George Orwell, 1984

The impact of the fourth industrial revolution and automation A report published by the Swiss bank UBS in early 2016 argued that we are in the midst of a new industrial revolution brought about by innovations in the tech industry. Driverless cars, smart robotics and 3D printing are the cornerstones of these advancements, with automation underpinning all the changes taking place. These changes have significant implications for the world of work. One report from Oxford University has estimated that

at least 47% of jobs are at risk in the US and 35% of all jobs in the UK could be automated in the next 20 years. It is not just manual and skilled workers who are going to be put out of work – automation is likely going to hit white collar workers the hardest.

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A universal wage has been proposed as one way to combat this – redistributing wealth more evenly across the population to help offset the job losses that come with automation – and the Swiss have recently voted in a national referendum on this issue. Another solution put forward by Richard B. Freeman – Chair of Economics at Harvard University – is employee ownership. If we own the robots doing the work we would be otherwise be doing, we have the freedom and economic stability to refocus our attention on other tasks. Tech historian John Markoff proposes a less catastrophic future, suggesting that humans will evolve alongside automated technologies through continuous learning, creativity and innovation. Rather than resulting in lost jobs, automation could change the jobs we do, making them more creative and abstract in their focus. If this is the case, then the fight for talent will continue, but there will be a major shift in the skills businesses should be looking for, with a greater focus on critical and creative thinking.

Increased fluidity and evolving working environments Many employers are already moving to more contract-based working, putting less emphasis on long-term careers. This is set to continue and escalate, especially with the changes that will result from increased automation. Not only that, but people’s attitudes are shifting. One might naturally assume that the risks for job losses from automation are making us more fearful and conservative in our attitudes; however, for some the opposite is true. Millennials and Gen Z have very different approaches to work than their forebears. These generations recognise that their options are different than those of their parents and no longer expect a job for life, choosing instead to embrace freelance, contract and flexible working patterns. They are also pushing back against presenteeism and long-hours cultures, demanding a better work-life ‘fit’. They are selective about who they work for and are driven by high moral and ethical standards. Employer brand is going to be crucial to attracting and retaining top young talent. Total transparency is also key, with platforms like Glassdoor allowing prospective employees to be selective about who they work for by performing a background check on their employer.

With this demand for transparency and integrity, there is also going to be a need for a rethink in how we communicate with employees. Many are already calling out for more followthrough from business leaders and this will be intensified. The technological advances coming into the frame will also have a real impact on communicating with this sceptical audience, with segmentation and predictive analytics enabling us to better target and personalise messages.

“ Companies are going to have to become very adept at creating supportive and inspirational workplaces and workplace cultures to attract and retain talented people who no longer feel tied to one particular place or business. Paradoxically, businesses will have to learn to make the biggest investment ever in human beings and human capital at a time when those human beings have the weakest-ever formal ties to their company.” Mark Sear, CTO at EMC

The office 2.0

â&#x20AC;&#x153; Optimism is a strategy for making a better future. Because unless you believe that the future can be better, you are unlikely to step up and take responsibility for making it so.â&#x20AC;? Noam Chomsky

Wellbeing will be more important than ever

In 2014 alone, UK businesses lost 131 million days to sick leave. Last year, these figures were up, with every employee in the UK taking nearly 7 days of sick leave (up from 6.5).

Stress and anxiety brought on by work accounted for two-fifths of absences in 2015 according to a report by CIPD. It is unsurprising, then, that businesses are beginning to recognise that health and wellbeing play a critical role in engagement and reducing absenteeism. This trend is set to continue, especially with the increasingly sophisticated technologies available to help monitor and track health. More and more businesses are providing their employees with fitness trackers and encouraging them to get active with in-house gyms and fitness subsidies. But if businesses really want to tackle the days lost to stress and anxiety, more focus is going to need to be given to mental well-being. This is perhaps one of the hardest things to swallow for business leaders because it means putting people before profit. A study by CIPD showed that the causes for most work-related stress and anxiety are overwork and pressure to deliver often unreasonable demands. If we really want to promote wellbeing in the workplace, we need to change our attitudes about working patterns and productivity, giving employees the space and time they need to work in a way that minimises work-related stress and anxiety. Research also indicates that long hours donâ&#x20AC;&#x2122;t result in increased productivity. A study carried out by Erin Read at Boston University showed that managers were unable to differentiate between the work of employees who put in 80 hours a week and those who just pretended to. In fact, overwork has in some cases been shown to reduce productivity and there is an increasing body of evidence for working less, but working more effectively.

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The terror of automation “ A large constituency of working-class voters feel that not only has the economy left them behind, but so has the culture. The sources of their dignity, the dignity of labour, have been eroded and mocked by … globalisation, the rise of finance, the attention that is lavished by parties across the political spectrum on economic and financial elites, [and] the technocratic emphasis of the established political parties.” Michael Sandel

The projections for job losses resulting from automation are potentially terrifying. We are already seeing the effect that mass unemployment is having in the UK and the United States. Job offshoring has disenfranchised large swathes of the population – with skilled labourers finding themselves out of work as manufacturing has moved overseas.

We are feeling the effect of this very acutely right now. The Brexit vote in the UK was strongest in those communities that were hardest hit when the manufacturing industry moved offshore. This choice to isolate ourselves from our neighbours, while perhaps misguided, was a protest to a government and businesses that have forgotten and ignored the people they most need to support.

We can see a similar trajectory in the rise of Donald Trump in the US. His brand of politics appeals to an angry section of the population that want change in any form – good or bad. Imagine what will happen when more than 40% the workforce finds itself without prospects. It’s not a pretty picture.

It is hard to know what the future will look like, but with the technological developments we are seeing at the moment, we can at least surmise that the workplace in five to ten years from now will feel very different from today. While some of the changes we can expect to see could have cataclysmic effects, there is still hope for a better future. If we want this though, we need to be prepared to make some fundamental changes to how we think about employment, profit and equality.

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The office 2.0

In the film “Jurassic Park”, the character Ian Malcolm, played by Jeff Goldblum, used chaos theory to predict that the attraction was a bad idea that would end in tears – and certainly not crocodile tears! He explained that all biology was inherently complex, unstable and unpredictable. His theory was quickly proved when a Tyrannosaurus Rex broke out of its compound and proceeded to eat anything that moved.

So what does chaos theory have to do with human communities, including the ones we create and participate in at work? The answer is that it is a phenomenon entirely at odds with the neat, hierarchical organisational charts that some of us like to draw. It contradicts the belief that people can be cleverly managed with predictable outcomes. Or that we can and must have a rule, process or system for everything. It also clashes with the notion that we can somehow control and predict financial performance a year or more ahead, when we are unable to predict our weather – a much simpler system than humanity – more than a few hours ahead. Professor Roger Steare is a Corporate Philosopher in Residence at Cass Business School and workstream leader on Culture and Values, Purpose and Meaning for the CIPD’s The Future of Work is Human project. Roger advises the senior executive teams of large listed firms such as Barclays, BP, BT Openreach and HSBC, as well as public sector employers, including the NHS, the British Armed Forces, the police and regulators. His book Ethicability and his MoralDNA™ Profile have been licensed for use with over 600,000 employees worldwide.

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Who would have thought that Volkswagen, the iconic brand that owns Audi and the excellence and certainty of “Vorsprung durch Technik”, would contain within its engineering organisation a deception that has led to the destruction of billions of euros of stockholder value. On the other hand, when we look at a business like Google, how do we explain its growth from nothing to a US$500bn business in just 20 years? On the surface, Google looks like a business built on the predictability of digital, binary thinking. But underneath the surface, Google’s leaders have understood the difference between a finely engineered product and the complexity of humanity.

We are highly evolved biological life-forms that are driven in part by the visceral reptilian impulses of T-Rex, but also by the empathic emotions common to all mammals. We are collaborative as well as competitive. We are imaginative and creative. We make mistakes and learn from them. We are an adaptive species. In evolutionary terms, species that thrive in a changing environment are those that collaborate and adapt.

“ We are collaborative as well as competitive. We are imaginative and creative. We make mistakes and learn from them. We are an adaptive species.”

These biological forces are at play in our workplaces – they are the reason behind Google’s meteoric rise and Volkswagen’s fall from grace. Where Google evolved and adapted in a way that was collaborative and creative, Volkswagen was driven down by corruption and fear. In 2015, Google published a short paper that explained the qualities of its best performing teams over time. These qualities are psychological safety, dependability, structure and clarity, meaning of work, and impact of work. The other insight Google reports is that it is all about the team, not about any individual superstar geek.

What are the motivators which drive behaviours at work? Also published in 2015 was Primed to Perform by former McKinsey consultants Neel Doshi and Lindsay McGregor. In this book they explain three direct, positive motivators and three indirect, negative motivators. I have alliterated a couple of these so that we have three P words in each column. They are: Direct Positive Motivators

play purpose

potential

Indirect Negative Motivators

pay prestige

pressure

Now ask yourself, if you had to identify which group of motivators were dominant in your organisation, which one would it be? The vast majority of executives I work with say that the indirect, negative motivators dominate their thinking, their leadership style, their performance management systems and their culture. Now ask yourself which of the three direct, positive motivators is the one that generates the highest performance? Most people say “purpose” but in fact, Doshi and McGregor say that it is play!

Dancing with dinosaurs

So where is the connection between Google’s “psychological safety” and “play”? In order to play, we need to feel safe. Play is all about exploration, imagination, creativity and collaboration. This is how we learn as young children, but then our really badly designed education and workplace systems turn us into anxious but compliant robots.

Our purpose in life becomes succumbing to pressure by acquiring status and stuff through prestige and pay. Not only do we stop playing, we also stifle our potential. While play is absolutely critical, it has a dual role with purpose.

In this world ruled by chaos, purpose has a fundamental role in guiding and focusing play. In the work I do advising boards and senior executive teams, I spend some of my time working with visionary, observant leaders who want everyone to be at their best more often.

Through these four simple questions, we explore how leaders’ behaviours affect their teams.

What’s our purpose?

What will we do for others to achieve and sustain our purpose?

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With both groups, I invite them to ask and answer four very simple but profound questions. We explore whether they and their teams are driven more by fear of not performing under pressure or by a desire to understand and serve others – the root of family, friendship and community.

The four questions individuals can ask themselves...

However, I have also spent a lot of time with leaders who have destroyed lives and financial value because they have never challenged what I describe as this feudal, mechanistic ethos that dominates most workplaces.

What values do we believe in?

How do we decide what’s right together?

Power and fear in financial services by leadership level Fear – driven by internal politics and top-down leadership – stands in direct opposition to play and purpose. The two cannot coexist. The MoralDNA™ diagnostic tool provides insight into levels of fear within an organisation and within teams. In many traditional businesses, fear is stronger further down the management layers (we call this feudal fear). In this context, employees on the frontline are driven by a fear that is instilled in them by their leaders – they are afraid to speak up and are more susceptible to corruption.

CEO

Feudal fear

18 % 21 %

41 % 47 % 48 % 52 49% Ex e

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Crisis paralysis

However, fear can also permeate all levels of an organisation – from its executive leadership to its frontline employees (we call this ‘crisis paralysis’). The end result of this is a highly bureaucratic working environment in which decision-bycommittee reigns supreme and colleagues are both disempowered and disengaged.

People can also explore their personal character and their collective culture using the MoralDNA™ diagnostic tool. This helps individuals and teams to understand the values they believe in and how they decide what constitutes the right collective decisions. MoralDNA™ identifies how a workplace culture might change how we think and feel, and also the degree of fear we experience.

When it comes to developing an answer to the ‘What will we do for others?’ question, it is important to explore how we are at our best more often. Top-down ‘culture transformation’ programmes inevitably fail because they are based on the same false assumptions. In Jurassic Park, the film studio rightly saw the opportunity for a series of sequels. In each of these films, the designers of Jurassic Parks 2, 3 and 4 clung to the belief that things would be fine if only we could build bigger, stronger cages. They could not or would not understand that you cannot contain biological complex adaptive systems unless you ultimately destroy them. On the other hand if you watch the balletic grace of shoals of sardines or flocks of starlings, you cannot see a single guiding mind. Each fish or bird simply focuses on the position, direction and speed of the fish or birds closest to them. Using this analogy, I suggest to leaders that in order for people to be at their best more often, we should focus on how each of us work together in our local teams. This may be the Board or it may be a retail store team. It does not matter. We simply need to create a micro-culture of psychological safety, so that individuals can play, explore, challenge and collaborate with each other so that we make sound decisions. We need to be ‘safe and sound’ from the monsters we find within our own Jurassic Parks.

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Dancing with dinosaurs

Influencers

building bottom-up engagement at Heathrow

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Paul Jones leads on many engagement projects at Karian and Box, providing insightbased consultancy, strategy development and creative campaign delivery for clients across a range of sectors, including financial services, mining, retail and transport.

Recently, Heathrow has been achieving its best ever passenger experience figures, with employees on the ground driving this success. We spoke to Jane Smith, Head of Performance and Engagement at Heathrow, to find out more. ‘We’re focusing on making Heathrow a great place to work through our ‘Get our MOJO back’ campaign,’ Jane told us. ‘It’s really about engaging and empowering people to make a difference at a local level by using the untapped energy and enthusiasm of colleagues across the business.’ Jane introduced us to Tamar Amin, who works as a technician within the Engineering function at Heathrow. Tamar noticed that there was a lot of disillusionment about the annual Pulse survey, with colleagues feeling they should not bother participating, because no action ever resulted from their feedback. Determined to change the way people felt, Tamar presented to teams across Engineering, challenging perceptions about the engagement survey. He emphasised that feedback was anonymous, and worked with senior management to make the link between the survey results and resulting action more transparent. Tamar, along with the network of influencers he has helped create, have had a huge impact, boosting survey response rates from 65% to 81% across Engineering. This is a massive improvement that outperforms both the Heathrow and external benchmarks for comparable businesses.

“ It’s really about engaging and empowering people to make a difference at a local level by using the untapped energy and enthusiasm of colleagues across the business.”

‘People definitely trusted what I said more because I am their colleague, not a manager or leader,’ Tamar told us. ‘Our network of champions across Engineering meet with senior managers throughout the year to discuss follow-up action on the survey results.’ As Jane puts it, ‘Tamar’s great work shows how we are building accountability at every level to change our culture. There is absolute commitment from the top to drive real engagement – but it’s up to all of us here to act on it.’

Bottom-up engagement at Heathrow

Black Box Thinking: Marginal Gains and the Secrets of High Performance Matthew Syed has followed up the bestselling Bounce: The Myth of Talent and the Power of Practice with another insider account of success, focused on how top-performing teams from the worlds of sport, business and politics thrive, compete and win when the pressure is on. For readers working in the corporate sphere, Syed begins with a particularly resonant account of learning from failure. Sounds obvious: when something goes wrong, you diagnose what happened and learn the necessary lessons. That is what the black box recorder carried by airplanes enables aviation companies to do when disaster strikes: listen back to the recording of what happened, identify the cause and introduce procedures to improve the percentages next time. But it almost never happens that way in real life. Syed highlights the prevalence of preventable harm in healthcare and, crucially, the way a blame culture impacts on openness and prevents learning. We even make our targets and definitions of success vague, he argues, so that it is never too obvious exactly whether we are failing. Matthew Syed

What we need instead is ‘black box thinking’ – the ability to put our plane crashes under the microscope, pick through the wreckage and hold up the offending part and scrutinise it without fear or favour. As well as anatomising failure, Syed also provides practical insight into what makes top-performing teams tick. If you are anything like me, you would have started this review enchanted by the phrase ‘marginal gains’. But while acknowledging the power of this popular new concept Syed is wary of the unintended consequences of this kind of thinking. If you were CEO of Blockbusters, he writes, you might have been feeling fairly confident in 2007, and improving your business through a marginal gain here and there. But, as the DVD-lovers among us know well, that was not enough: Blockbusters closed in 2013, wiped out by the content-streaming competition using new devices like tablets. Blockbusters needed marginal gains, sure, but it also needed disruptive innovation. The business turned down the opportunity to buy Netflix in 2000 for a measly $50 million. Open the black box recorder on this plane crash, and there is your moment of calamitous error. This kind of disaster can only be avoided in the future by organisations that think big and small simultaneously.

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The Signal and the Noise: The Art and Science of Prediction The back cover of The Signal and the Noise gives some sense of the author’s cult status. You would be unlikely to predict the fall from grace of the “Galileo of number crunchers” and “a 34-year-old Delphic oracle” – unless you knew anything about forecasting and the sweet benefit of hindsight.

Nate Silver

Being wrong is all in the game when it comes to predicting real life. Chapter Two of Silver’s book includes an ironic account of how Fox News commentator Dick Morris wrongly predicted that Donald Trump would ‘run for and stand a damn good chance of winning’ the Republican nomination in 2011. In 2016, Morris’s prediction looks less wrong than early, while in 2015 Silver was called out for getting it so wrong on Trump – whose chances he had put at well below 20 per cent.

In his defence, Silver acknowledges phenomena like personal bias that make prediction so difficult. It is understandable that someone so opposed to Trump would give him little chance of winning. The argument that predictions most often fail because of overconfidence is one that Silver also makes convincingly. The overarching theme of the book, in essence, is about the importance of recognising the gap between what we know and what we think we know. The solution, according to Silver, is data – the more the better. Using highly readable anecdotes and a precis of Bayesian theory and probability, Silver sketches out how each new piece of data brings forecasters a little closer to the right result. Whatever odds Silver’s predictions may be given today, The Signal and the Noise remains one of the most balanced, informative accounts of the implications of big data for our world.

Big Data: A Revolution That Will Transform How We Live, Work and Think Big Data, written by two leading thinkers and researchers in the field, promises that the data revolution has the power to change almost every aspect of daily life. From developing sensors in your car that use data to apply the brakes automatically, to getting cheaper plane tickets through an analytics system that tells you the best time to buy, the capacity to gather and mine mindblowing amounts of data has a capacity far beyond what we can imagine now.

Victor Mayer-Schönberger and Kenneth Cukier

The authors do not ignore the dark side of big data, namely the risks of collecting and storing huge amounts of personal information, but they also do not over-simplify it. They acknowledge the risks of data, using powerful examples of where it has been used to abet evil – such as the use of the Netherlands’ detailed citizenship records to identify and round up Jews in World War II.

But as they point out, not all big data is personal. Sensors in BP’s Cherry Point Refinery, which constantly measure the stress on pipes rather than intermittently spot-checking, do not need any personal data. It is clear that big data has huge potential, as well as huge implications for human beings. Society has traditionally used human judgement to regulate people’s behaviour, but what happens when an algorithm goes wrong? If we are going to rely on judgements made by machines, who is ultimately responsible? And how can we prevent human bias from creeping into big data analytics? Mayer-Schönberger and Cukier’s book explores these questions in an insightful, perceptive style – although the suggestion that we should shift from causation to correlation will leave the more statistically-minded reader questioning the limitations of big data. More is not necessarily better.

Book reviews

Ian Barrow has spent nearly 25 years in HR-related research and consulting, having worked previously at Harris Interactive, Hay Group and Engage. He is recognised as a leading authority in employee engagement and has worked with organisations in the public and private sectors on assignments in local markets and across the world.

The last word…

‘connection’ The world of work is changing – there But connection is nothing new, really. is no doubt about it. Technologies are This is a basic human need – just above speeding things up – from our interactions safety if we go back to Maslow. And it with our peers to how we get and process is absolutely critical to what makes us information. Big data analytics is giving us perceive our working lives as worthwhile. a window into the future and allowing us It is fair to say that many organisations to better understand how people behave. know this. But the mistake I see Increased automation is set to completely businesses make, day in and day out, alter the fabric of the modern workplace. is underestimating what connection But even with all this change, truly means. Too often, they see narrowly – some things stay very constant. say, in terms of an employee’s connection with their specific job role, or their specific line manager. Important as these things are, connection in the workplace is much bigger than this. It is about belonging to a community of people who fulfil a purpose in society that is a lot bigger than any one person or any one team.

“If there is a single word that sums up the twenty-first century so far, a word that is never far from anyone’s lips these days, it is ‘connection’.”

It goes deep. Just think about that word, If there is a single word that sums up the ‘belonging’. You feel that you belong twenty-first century so far, a word that is somewhere just as you feel that your most never far from anyone’s lips these days, it intimate possessions – your belongings is ‘connection’. It is the phenomenon that – are an extension of who you are and defines the digital revolution disrupting our belong to you, belong with you, belong everyday lives, it underpins all our sharing, in the same place as you. Strong mutual likes and comments, and, let’s face it, it is ties bind you to the organisation through the thing we are most likely to moan about your relationships with the people around any point of the day (‘what’s happened to you. Together, you share not just rapport, my damn connection?’). camaraderie and friendship, but even more: values, a vision, a mission, a sense of purpose.

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“Connection means you and your colleagues ‘get’ what your organisation is trying to achieve in a visceral way; you feel special, supported, motivated – stronger together.” Connection means you and your colleagues ‘get’ what your organisation is trying to achieve in a visceral way; you feel special, supported, motivated – stronger together.

Take a temperature check and listen to what your employees say. Do you hear ‘we’ a lot? As in, ‘we’re getting it done’ or ‘we’re working with the guys in IM’? Then great. Your people are taking ownership. They are connected.

If you feel this is a bit soft, then give me a call and let me talk you through But what if you are hearing ‘them’ our research. By surveying millions of or ‘you’? As in ‘they are not doing employees we can see the bigger picture: anything about it’ or ‘you have no idea when employees feel a deep, strong what it feels like for us.’ Then it might connection, they are more likely be time to foster a real sense of to expend extra energy for one another, connection with your people. to give more to the organisation and to be Before employees will believe in – or more positive in the things they say both care about – the long-term vision of the at work and away from it. Effort, attention company, its culture, or its success, they to quality and detail, and morale go up… need to feel the connection at a personal, and generally, so do profits. Connection team and corporate level so that they can make a team more than the sum of simply do not feel like a number. its parts, and create an army of product advocates singing your praises on all the forums, digital and otherwise, that our connected world now offers us.

The last word