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How to future-proof your firm

To survive in a rapidly-changing world, companies need to attract and retain the most talented people. But how?

By Lynda Gratton . 04 September 2017

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The nature of work is being transformed.. It is not the first time in recent years that trends such as technology have changed the way people work, but this time it’s happening more quickly – and it’s global. So, more than ever, leaders need to think deeply about who they want to attract and how they can best retain them. What are the key issues that today’s employers can’t afford to overlook if they want to be future-proofed?

First, the role of diversity in corporations is fundamentally changing. Gone are the days when it was simply a box-ticking exercise. Creating and managing diverse employee groups is fast becoming an essential part of a hiring and retention strategy. There is no doubt that both age and gender diversity will be key to any organisation’s future success. It is also clear that increases in longevity will see many people working into their seventies and eighties. Factor in juvenescence – people retaining youthful qualities and characteristics right through their lives – and it becomes imperative to drop age stereotyping. Instead of defining people by their age, companies need to be age-agnostic.

When it comes to gender diversity, one of the enormous sociological trends that most corporations have yet to catch up with is that most women – and most mothers – are working. Yet the stereotypical family unit is a man focusing totally on his work, whilst his family is cared for by the woman. The reality is most men and women are now trying to balance work and home by creating dual careers. It is clear that this balance can be difficult and stressful – and organisations need to be much more sensitised to it.


Intangible assets


The second issue employers need be aware of is the growing value that talented people attach to the intangible elements within their overall compensation package. Of course, tangible rewards – a fair and equitable salary, healthcare, pension, a bonus – still matter. But intangibles are becoming crucial. These can take the form of developing an employee’s skills so he or she can remain productive and grow; or having the flexibility to create healthy living; or being given opportunities to build the diverse networks that help us cope with and profit from changes in the employment landscape.

Taking more control of how and why people work has a fundamental impact on the psychological contract between the individual and the organisation. I believe we are in the midst of a transition from a traditional parent-to-child contract to one that’s much more adult-to-adult. This requires organisations to treat employees like adults, in terms of what sort of life they want and what they find important and meaningful.
In part, the parent-child relationship was mediated by tangible assets: “I pay you and you do what I want.” Now that people are interested in intangible benefits, every leader has to ask whether their organisation positively supports employees to build their intangible assets, or whether these are simply being maintained– or even depleted.

It is important to realise that tangible and intangible assets have different value to an employee. Being paid more allows someone to retire early, but building intangible assets creates opportunities for people to work longer – and in an era of longevity, this is what many people are going to need to do.

Another aspect of the emergence of a stronger adult-to-adult relationship is honesty about the contract. For example, if a firm requires its employees to work extremely long hours in an inflexible way, they should be honest about that and not hide it. Then it becomes an adult-to-adult transaction. Potentials employees may be willing to work incredibly hard at certain points in their life – but they need to know from the start that that’s the deal. An adult-to-adult relationship is based on openly sharing information and giving commitments that will then be adhered to.


Changing attitudes


Some of the most interesting future-proofing activities can be found in small companies: they are often very focused on their human capital and they haven’t yet succumbed to some of the inertia of large corporations. It is possible, for example, for a small Californian company with 10 employees to say, “Come to work when you want! – it’s okay to work from 8.00am to 13.00.”

For large organisations, it’s more difficult. For them, the preference is homogeneity and predictability. Put simply, it’s easier to manage HR practices across a large group of employees if the practices are built for cohorts rather than to meet the needs of an individual. Just to say: ‘You’re a 30-year-old woman so you need x’, or ‘You’re a 60-year-old man so you need y’ may be simpler: stereotyping creates predictability. But it’s to the detriment of the individual.

That said, some large corporations are working hard to be more responsive to individuals. Sometimes this is enshrined in their founding principles – as in the case of the UK retail chain John Lewis. At other times it is the CEO who is leading the debate – as Paul Polman, the CEO at Unilever, is doing, or Natarajan Chandrasekaran at Tata Consulting Services. For others, it is simply that human capital is their most important asset, so professional service firms like KPMG and Deloitte put a great amount of effort into changing the deal.

So whilst the practices of small companies may be inspirational, the path can be a great deal more complex for large firms. Here, the focus is less on importing “best practice” from others but rather developing something internally that works uniquely for the individual company concerned. I call it a “signature practice”.

Thinking hard about diversity, creating more adult-to-adult relationships and building signature practices are all crucial to future-proofing a company. Most managers are intelligent and they are quick to understand these ideas around future-proofing their talent. But doing it proves to be more difficult because often it requires deep attitudinal change. (Take for example negative attitudes about age or gender stereotyping which can be very deeply held, just as they used to be around gay people.) So part of the challenge is about management attitudes and behaviours. Large corporations were never really set up to deal with individuals; they excelled at fitting people into cohorts – and that’s just not very useful any more.

The other barrier to progress is money and resources. Using superficial labels is seen as easier and cheaper than treating each employee as an individual. At a time of low growth, corporations are trying to take costs out of the business, not risk adding to them by increasing the sophistication and complexity of HR functions. It’s not easy for a company to change how it recruits, but it’s essential for organisations to move towards this approach if they want to survive.


Beyond the job spec


There are fundamental changes happening in the way the job market works. Traditional CVs are a limited recruitment tool. We are becoming much more insightful about understanding someone’s reputation and what they do thanks to big data analytics and social media. This will enable corporations to recruit from a much more diverse range of people rather than having to insist on rigid criteria.

Job descriptions are also looking increasingly outmoded. In most organisations today, it is tasks and projects that are as important as jobs. Hence the focus is on competencies – the specific combination of attitudes and values that the organisation likes plus some specific skills. Employers will need to be more thoughtful about what somebody’s potential is and how they might develop that.

What is also clear – coming back to the importance of intangible assets – is the increasing focus on on-the-job training to keep people’s skills fresh and the imperative of investing in lifelong learning. Certainly, some of this learning will be digitally enhanced, but much will rely on face-to-face interaction to build an individuals’ skills and develop their knowledge.

This raises an intriguing question about who will pay for this lifelong learning. Right now, this is a focus of discussion by decision-makers at every level. Governments need to consider lifelong development and education allowances, rather than putting all their resources into educating people at the start of their lives. It is not just who pays; it is also about providing the flexibility for people to learn. There is no doubt that although some learning can be part of the job, other deeper learning requires time out from the normal working schedule. So corporations need to think about how they create flexibility and give people time off. That means that inevitably flexibility won’t be an unusual perk; instead, it will be acknowledged as being vital and normal – on a daily, weekly and annual basis.

This leads into one of the most profound challenges for understanding the future of work: how can we figure out what humans really want and, as importantly, what they can do?

Future-proofing is not just about what people do – it is also about how they work. There is no doubt that the workplace itself is evolving. There is much debate about the pros and cons of the open-plan office. Some people who are creative, introverted and innovative don’t necessarily want to be surrounded by colleagues all the time. Others love it. Some people enjoy working from home; others thrive in shared work spaces such as Somerset House, where my Future of Work Consortium is based.

These new workspaces are hotbeds of innovation where hundreds of small, creative businesses work alongside each other and often pool office resources as well as ideas. There are challenges, without a doubt, but I’m optimistic that our future work life will focus upon the opportunities for great creativity and personal growth.

Comments (2)

David Nohé Sánchez 1 months and 9 days ago

I believe, the debate about who should account for the development of skills of the talent, must be share accountability. On one hand, the business should align the training with its expectancy about future behaviour/performance of its workforce taking into account the people's interest. On the other hand, every single individual must pursue the trainings he or she believes will help to be more collaborative in the achievement of both the business and personal goals. Business should either partially or completely cover expenses according to the nature of the capacitation. But when the training is solely of the interest of the collaborator, in which case, should allow limited free time for attendance.

cagbakwuru978 2 months and 14 days ago

The basic interest of every success motivated company is to attract and retain talented and hardworking employees who however have demonstrated beyond reasonable doubts their wholesome abilities in contributing to the general growth of the company.

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