Most of us spend the majority of our days on our phones, computers, tablets, and in front of our TVs. We also spend the majority of our days sitting or reclining, whether in our cars, at our desks, or on our couches. Just as humans are not meant to be wired all the time, we are not meant to be sedentary for most of our days. It’s not a coincidence that we are restless, stressed, anxious, and suffer constant back and pains.
Yoga can alleviate the stress, anxiety, and aches and pains that come with the digital age, says Peter Mico, a yoga leader and studio owner in Idaho. One of his specialties is training and teaching students with chronic pain. He is also the operator of Blue Earth Yoga, an institute for yoga, health, and longevity which holds retreats around the world that include Blue Zones principles and education. Some of these retreats are also held in blue zones regions. We recently talked with Peter about yoga, the Blue Zones lifestyle, and the yoga moves you can do anywhere, even at work.
How do you see yoga and Blue Zones research intersecting?
PETER MICO: Yoga is more than just a good workout. Just like some of the daily schedules and habits of the elder inhabitants in blue zones, yoga combines movement and stress relief. It’s about being mindful, being in the body, and being in the moment. In my experiences in the blue zones, the older generation is wonderfully grounded and present. So the practice of yoga helps brings us to a place that these cultures have achieved through their way of life, and one that is very different from our own modern lifestyles of constant distraction and stress.
In our society, it’s common for older people to fall and break a hip. Not so often in the blue zones regions. As Dan Buettner has showed us, centenarians in the world’s blue zones are gardening, weeding, and doing yard work well into their 90’s and 100’s. They haven’t spent their lives sitting in cars and desks, they’re regularly getting up and down from the ground. In this way, it’s as if they are practicing yoga all day and every day, promoting good muscle tone and strong bones with full-body movement.
Also, even though yoga is not a religion, it can be a spiritual practice. Even the practice of learning to breathe slowly and deeply from your diaphragm as you do in yoga is like meditation, besides being invigorating and helping to relieve stress. Blue Zones centenarians had spiritual lives even though they came from different religions, and reaped the benefits of regular prayer, meditation, and spiritual rituals.
Besides stress relief and learning to breathe properly, what are some of the other benefits of yoga?
PM: Driving in cars, sitting in the lounge chair watching TV, or hunched over a computer all day creates multiple problems for the spine. That’s a big reason why probably 80% of Americans suffer from lower back pain. Yoga can be very helpful to people with lower back problems, and as a preventive measure so you don’t develop back problems. Its emphasis on posture and alignment, particularly in the sacral complex, is the perfect remedy for these ailments of pain and discomfort. People come to us with major maladies of herniated disks, scoliosis and chronic muscular pain, and find relief after a steady practice of yoga.
The same is true of ‘mouse arm’ and the effects on the cervical spine, which is a big deal. Allowing the head to hang forward toward the screen, then tilting to look up, then extending the mouse arm forward, and then holding the pose for hours is a recipe for disaster for the cervical spine, especially the C4, C5, and C6 vertebrae. Yoga is a powerful practice for promoting healthy neck care.
Office, Desk, or Cubicle Yoga: 4 Essential Moves to Reverse “Computer Crouch” and “Mouse Arm”
For a typical office job of answering telephones and working at a computer, there are a couple of poses that you should do often.
Every 15 Minutes, Sitting Moves:
1. Elbow Hold:
Put your arms up over your head and hold your opposite elbows. Then move your held elbows in four directions: forward and backwards, from side to side, and in small back and forward bends. Do this for 20-30 seconds every 15 minutes.
2. Arm Twists:
Put your arms straight out to the sides with your thumbs up. Rotate our arms forward and then backwards so your thumbs are moving in a circular motion. Do this 10 times. Then repeat with your arms rotating in opposite directions from each other. Do this 10 times as well.
30 Minutes, Standing Moves:
1. Baby Backbends: Stand up and clasp your hands behind your back. Arch backwards gently as you open your chest and roll your shoulders back and behind you. Then turn your head side to side, 5 times. Then bend your ear towards your shoulder, 5 times on each side.
2.Arm Circles: Put your right hand on your right shoulder. Extend your left arm straight out to the side and bend your wrists so your fingers point towards the floor. Move your left arm around in a circle about 5 times each way. Then repeat this on your right side.
What are some yoga myths that you want to debunk for our readers?
PM: One is that yoga is just for women. Many women have flexibility and come to yoga for strength. Often men come to the studio with some strength, but are seeking or needing flexibility. People seem to think they shouldn’t come to class unless they are flexible. But class is where you get flexible. It would be like saying you won’t go to the gym because you don’t have muscles.
Another myth is that yoga means contortionism. I don’t believe in celebrating just the big crazy poses or the yoga competitiveness of this body-centric society we live in. I once overheard Richard Freeman (a master yogi) tell another teacher that the most beautiful pose he ever saw was an 80-year-old man doing a backbend. No airs, just a simple backbend with mindfulness. Beautiful.
Digital is driving major changes in how companies set and execute strategy. New survey results point to four elements that top performers include in their digital-strategy operating model.
For many companies, the process of building and executing strategy in the digital age seems to generate more questions than answers. Despite digital’s dramatic effects on global business—the disruptions that have upended industries and the radically increasing speed at which business is done—the latest McKinsey Global Survey on the topic suggests that companies are making little progress in their efforts to digitalize the business model.
The online survey was in the field from May 15 to May 25, 2018, and garnered responses from 1,542 C-level executives and senior managers representing the full range of regions, industries, company sizes, and functional specialties. Respondents who participated in this year’s and last year’s surveys report a roughly equal degree of digitalization as they did one year ago.
As measured by the shares of the organization’s sales from products, services, or both sold through digital channels; of core products, services, or both that are digital in nature (for instance, virtualized or digitally enhanced); and of core operations that are automated, digitized, or both, as well as the volume in the organization’s supply chain that is digitized or moves through digital interactions with suppliers.
The previous survey was in the field from June 20 to July 10, 2017, and garnered responses from 1,619 C-level executives and senior managers representing the full range of regions, industries, company sizes, and functional specialties. Of those who completed the survey in 2017, 345 also completed the 2018 survey. suggesting that companies are getting stuck in their efforts to digitally transform their business.
The need for an agile digital strategy is clear, yet it eludes many—and there are plenty of pitfalls that we know result in failure. We have looked at how some companies are reinventing themselves in response to digital, not only to avoid failure but also to thrive. In this survey, we explored which specific practices organizations must have in place to shape a winning strategy for digital—in essence, what the operating model looks like for a successful digital strategy of reinvention. Based on the responses, there are four areas of marked difference in how companies with the best economic performance approach digital strategy.
We define a top economic performer as one that has, according to respondents, a top-decile rate of organic revenue growth (that is, of 25 percent or more in the past three years), relative to other respondents. We also looked at respondents in the top decile for growth in earnings before interest and taxes (EBIT) and have made note of any practices for which the top-decile revenue and top-decile EBIT results correspond or differ. compared with all others:
The best performers have increased the agility of their digital-strategy practices, which enables first-mover opportunities.
They have taken advantage of digital platforms to access broader ecosystems and to innovate new digital products and business models.
They have used M&A to build new digital capabilities and digital businesses.
They have invested ahead of their peers in digital talent.
Increase the agility of creating, executing, and adjusting strategy
One of the biggest factors that differentiate the top economic performers from others is how quick and adaptable they are in setting, executing, and adjusting their digital strategies—in other words, the velocity and adaptability of their operating models for digital strategy. Both are necessary for companies to achieve first-mover (or very-fast-follower) status, which we know to be a source of significant economic advantage.
So how do they do it? We looked at the frequency with which companies follow 11 operational practices of digital strategy. With the exception of M&A—which typically requires a much longer time frame than the other ten, often due to regulatory reasons—respondents in the top revenue decile say their companies carry out each one more frequently than their peers (Exhibit 1). The link between frequency and performance also holds up when looking at earnings before interest and taxes (EBIT).5 5.In our analysis, we looked at the relationship between frequency and economic performance in multiple ways. The results indicate that when these digital strategy practices are carried out more frequently, revenue and earnings before interest and taxes (EBIT) are greater. The inverse also is true: when companies carry out these practices more slowly, their revenue and EBIT performance is worse. Exhibit 1
That speed in strategy links with financial outperformance is not surprising and is consistent with our other work on strategy planning. As the pace of digital-related changes continues to accelerate, companies are required to make larger bets and to reallocate capital and people more quickly. These tactical changes to the creation, execution, and continuous modification of digital strategy enables companies to apply a “fail fast” mentality and become better at both spotting emerging opportunities and cutting their losses in obsolescent ones, which enables greater profitability and higher revenue growth.
Invest in ecosystems, digital products, and operating models
The companies that outperform on revenue and EBIT also differ from the rest in their embrace of the economic changes that digital technologies have wrought. Based on the results, they have done so in three specific ways: taking advantage of new digital ecosystems, focusing product-development efforts on brand-new digital offerings, and innovating the business model. We know that digital platforms have enabled the creation of new marketplaces, the sharing of data, and the benefits of network effects at a scale that was impossible just a few years ago. As these factors have converged, the digital ecosystems created by these platforms are blurring industry boundaries and changing the ways that companies evaluate the economics of their business models, their customers’ needs, and who their competitors—and partners—are.
The top EBIT performers are taking better advantage of these ecosystem-based dynamics than other companies—namely, by using digital platforms much more often to access new partners and customers. Respondents at these companies are 39 percent more likely than others are to say they do so. And while the share of global sales that move through these ecosystems is still less than 10 percent, other McKinsey research predicts that this share will grow to nearly 30 percent by 2025, making platforms an ever more critical element of digital strategy. The needs of customers become broader and more integrated in an ecosystem-based world, and the companies that are already active in their respective ecosystems are better positioned to understand these needs and meet them (either on their own or with partners) before their peers do. It makes sense, then, that the top performers seem to be developing much more innovative offerings than their peers.
On average, companies’ digital innovations most often involve adjustments to existing products. Yet respondents at the top-performing companies say they focus on creating brand-new digital offerings (Exhibit 2). What’s more, these respondents are about 60 percent more likely than others are to agree that they are more advanced than peers in adopting digital technologies to help them do so. This result is consistent with our previous findings that first movers and early adopters of digital technologies and innovations also outperform their peers. Exhibit 2
Last, innovation of the business model is more common at the top-performing companies. In our past survey, only 8 percent of respondents said their companies’ current business models would remain economically viable without making any further digital-based changes. In the newest survey, we see that the companies that have embraced digital are well ahead of their peers in their preparation for digital’s new economic realities. At the top performers, respondents say they have invested more of their digital capital in new digital businesses, compared with all other respondents (Exhibit 3).
Our research also shows that companies overall invested a greater share in new digital businesses as the overall digital maturity of their sectors increased. The more successful companies appear to be the ones that made these moves earlier than their peers, rather than being forced into making such investments late in the game.Exhibit 3
Use M&A to build digital capabilities and businesses
According to the results, M&A is another differentiator between the top-performing companies and everyone else. Not only are they spending more than others on M&A, but they are also investing in different types of M&A activities (Exhibit 4). At the winners, respondents report spending more than twice as much on M&A, as a share of annual revenue, as their counterparts elsewhere.
Includes only respondents working at privately owned companies, n = 767. Respondents working at publicly owned companies (n = 318) were asked how much their organizations invested in M&A as a percentage of market capitalization over the past three years. The same is true of respondents reporting top-decile EBIT growth, relative to respondents at other organizations. Exhibit 4
Given the pace of digital-related changes and the challenges companies face to match that speed through organic growth alone, this isn’t so surprising. What is surprising, however, is that top economic performers take a different approach to their M&A activities. While top performers and their peers have used some part of their overall digital investments to acquire new digital businesses in recent years, the top performers are investing more in acquiring both new digital businesses and new capabilities. By contrast, other respondents say their companies focus most of their M&A spending on nondigital ventures—an area where lower-performing companies seem to be doubling down.
Invest ahead of peers in digital talent
From earlier work, we know that getting the right digital talent is a key enabler for digital success—a point that our latest findings only reinforce. Talent is also a major pain point: qualified digital talent is a scarce commodity, as the pace of digital still outstrips the supply of people who can deliver it. But the top economic performers are making a greater effort to solve this problem. Compared with others, these respondents say their companies are dedicating much more of their workforce to digital initiatives (Exhibit 5).
It’s not just the degree of investment that distinguishes top performers, though. They are also much nimbler in their use of digital talent, reallocating these employees across the organization nearly twice as frequently as their peers do. This agility enables more rapid movement of resources to the highest-value digital efforts—or to clearing out a backlog of digital work—and a better alignment between resources and strategies.
Make your strategy process more dynamic. By definition, a digital strategy must adapt to the digital-driven changes happening outside the company, as well as within it. Given the breakneck pace of these changes, such a strategy must keep up with the pace of digital and enable first-mover opportunities by being revisited, iterated upon, and adjusted much more frequently than strategies have been in the past. Companies need their digital strategies to act as a road map for ongoing transformation—a living organism that evolves along with the business landscape. In other work, we laid out the four main fights that companies must win to build truly dynamic digital strategies.
Organizations must educate their business leaders on digital and foster an attacker’s perspective, so people are more likely to look at their business, industry, and the role of digital through the eyes of new competitors. They must galvanize senior executives to action by building top-team-effectiveness programs. Organizations also must leverage data-driven insights to test and learn—and correct course—quickly. And they must fight the diffusion of their efforts and resources—a constant challenge, given the simultaneous need to digitalize their core business and innovate with new business models. These steps will put companies in a better position to move first in delivering new products and meeting customers’ and partners’ evolving needs in the new ecosystems that platforms are creating.
Invest in talent and capabilities early and aggressively. Talent is already known as one of the hardest issues to solve as companies transform themselves in their pursuit of digitalization. The results confirm that companies need to embrace this reality and then look at how they can solve it best, whether through smarter, more dynamic allocation of these resources or the use of M&A to accelerate the building of new digital capabilities. Digital is driving an ever-faster pace of innovation, and companies can take advantage of the potential benefits only if they have the capabilities to harness it. For the survey’s top performers, one way forward is leveraging M&A to help build their digital capabilities, rather than trying to build them through a slower, organic approach. These companies are also getting the most from their digital capabilities and investments by deploying them in much more agile ways and creating a more flexible, responsive operating model.
Redefine how you measure success. The digital era requires that companies move nimbly in order to succeed. Yet many are still measuring performance with the same metrics they used previously—which were designed for a slower pace of business and a rigid strategy-setting process. Companies must move away from old metrics (market share, for example) that are no longer meaningful indicators of economic success. With markets becoming ill-defined due to shifts in industry boundaries and shrinking economic pies within a given sector, market share is no longer a gold-standard metric or even relevant. Companies need to hold themselves to new standards that will indicate whether or not they are truly leading the pack on innovation, productivity, and the adoption of digital technologies. In our experience, outcomes such as being first to market with innovations, leading on productivity, and working with other businesses in the ecosystem (that is, moving from an “us versus them” mind-set on digital to one of partnership) are better indicators of future digital success.
About the author(s)
The survey content and analysis were developed by Jacques Bughin, a director of the McKinsey Global Institute and senior partner in McKinsey’s Brussels office; Tanguy Catlin, a senior partner in the Boston office; and Laura LaBerge, a senior expert in the Stamford office.
They wish to thank Soyoko Umeno for her contributions to this work.MeasureMeasure
Agile organizations—of any size and across industries—have five key elements in common.This article was written collaboratively by the McKinsey Agile Tribe, a group of over 50 global colleagues bringing expertise from the digital, operations, marketing, and organization disciplines. They integrate their deep experience and thought leadership to extract the best from McKinsey’s global experience as it helps organizations transform themselves into agile organizations.
Experience and research demonstrate that successful agile organizations consistently exhibit the five trademarks described in this article. The trademarks include a network of teams within a people-centered culture that operates in rapid learning and fast decision cycles which are enabled by technology, and a common purpose that co-creates value for all stakeholders.
The old paradigm: Organizations as machines
A view of the world—a paradigm—will endure until it cannot explain new evidence. The paradigm must then shift to include that new information. We are now seeing a paradigm shift in the ways that organizations balance stability and dynamism.
What is an agile organization?
The dominant “traditional” organization (designed primarily for stability) is a static, siloed, structural hierarchy – goals and decisions rights flow down the hierarchy, with the most powerful governance bodies at the top (i.e., the top team). It operates through linear planning and control in order to capture value for shareholders. The skeletal structure is strong, but often rigid and slow moving.In contrast, an agile organization (designed for both stability and dynamism) is a network of teams within a people-centered culture that operates in rapid learning and fast decision cycles which are enabled by technology, and that is guided by a powerful common purpose to co-create value for all stakeholders. Such an agile operating model has the ability to quickly and efficiently reconfigure strategy, structure, processes, people, and technology toward value-creating and value-protecting opportunities. An agile organization thus adds velocity and adaptability to stability, creating a critical source of competitive advantage in volatile, uncertain, complex, and ambiguous (VUCA) conditions.
First, the old paradigm. In 1910, the Ford Motor Company was one of many small automobile manufacturers. A decade later, Ford had 60 percent market share of the new automobile market worldwide. Ford reduced assembly time per vehicle from 12 hours to 90 minutes, and the price from $850 to $300, while also paying employees competitive rates.1 1.“100 years of the moving assembly line,” Ford Motor Company, ford.com.
Ford’s ideas, and those of his contemporary, Frederick Taylor, issued from scientific management, a breakthrough insight that optimized labor productivity using the scientific method; it opened an era of unprecedented effectiveness and efficiency. Taylor’s ideas prefigured modern quality control, total-quality management, and—through Taylor’s student Henry Gantt—project management.Gareth Morgan describes Taylorist organizations such as Ford as hierarchical and specialized—depicting them as machines.2 2.Gareth Morgan, Images of organization, Beverly Hills, CA: Sage Publications, 1986. For decades, organizations that embraced this machine model and the principles of scientific management dominated their markets, outperformed other organizations, and drew the best talent. From Taylor on, 1911 to 2011 was “the management century.”
Disruptive trends challenging the old paradigm
Now, we find the machine paradigm shifting in the face of the organizational challenges brought by the “digital revolution” that is transforming industries, economies, and societies. This is expressed in four current trends:
Quickly evolving environment. All stakeholders’ demand patterns are evolving rapidly: customers, partners, and regulators have pressing needs; investors are demanding growth, which results in acquisitions and restructuring; and competitors and collaborators demand action to accommodate fast-changing priorities.
Constant introduction of disruptive technology. Established businesses and industries are being commoditized or replaced through digitization, bioscience advancements, the innovative use of new models, and automation. Examples include developments such as machine learning, the Internet of Things, and robotics.
Accelerating digitization and democratization of information. The increased volume, transparency, and distribution of information require organizations to rapidly engage in multidirectional communication and complex collaboration with customers, partners, and colleagues.
The new war for talent. As creative knowledge- and learning-based tasks become more important, organizations need a distinctive value proposition to acquire—and retain—the best talent, which is often more diverse. These “learning workers” often have more diverse origins, thoughts, composition, and experience and may have different desires (for example, millennials).
When machine organizations have tried to engage with the new environment, it has not worked out well for many. A very small number of companies have thrived over time; fewer than 10 percent of the non-financial S&P 500 companies in 1983 remained in the S&P 500 in 2013. From what we have observed, machine organizations also experience constant internal churn. According to our research with 1,900 executives, they are adapting their strategy (and their organizational structure) with greater frequency than in the past. Eighty-two percent of them went through a redesign in the last three years. However, most of these redesign efforts fail—only 23 percent were implemented successfully.
The new paradigm: Organizations as living organisms
The trends described above are dramatically changing how organizations and employees work. What, then, will be the dominant organizational paradigm for the next 100 years? How will companies balance stability and dynamism? Moreover, which companies will dominate their market and attract the best talent? McKinsey’s article “Agility: It rhymes with stability” describes the paradigm that achieves this balance and the paradox that truly agile organizations master—they are both stable and dynamic at the same time. They design stable backbone elements that evolve slowly and support dynamic capabilities that can adapt quickly to new challenges and opportunities. A smartphone serves as a helpful analogy; the physical device acts as a stable platform for myriad dynamic applications, providing each user with a unique and useful tool. Finally, agile organizations mobilize quickly, are nimble, empowered to act, and make it easy to act. In short, they respond like a living organism (Exhibit 1).Exhibit 1
When pressure is applied, the agile organization reacts by being more than just robust; performance actually improves as more pressure is exerted.4 4.We include in our sense of agile the idea—coined in the work of Nicholas Taleb—that it is “anti-fragile.” Research shows that agile organizations have a 70 percent chance of being in the top quartile of organizational health, the best indicator of long-term performance.5 5.Michael Bazigos, Aaron De Smet, and Chris Gagnon, “Why agility pays,” McKinsey Quarterly, December 2015. Moreover, such companies simultaneously achieve greater customer centricity, faster time to market, higher revenue growth, lower costs, and a more engaged workforce:
A global electronics enterprise delivered $250 million in EBITDA, and 20 percent share price increase over three years by adopting an agile operating model with its education-to-employment teams.
A global bank reduced its cost base by about 30 percent while significantly improving employee engagement, customer satisfaction, and time to market.
A basic-materials company fostered continuous improvement among manual workers, leading to a 25 percent increase in effectiveness and a 60 percent decrease in injuries.
As a result agility, while still in its early days, is catching fire. According to the results, few companies have achieved organization-wide agility but many have already started pursuing it in performance units. For instance, nearly one-quarter of performance units are agile. The remaining performance units in companies lack dynamism, stability, or both. However, while less than ten percent of respondents have completed an agility transformation at the company or performance-unit level, most companies have much higher aspirations for the future. Three-quarters of respondents say organizational agility is a top or top-three priority, and nearly 40 percent are currently conducting an organizational-agility transformation. High tech, telecom, financial services, and media and entertainment appear to be leading the pack with the greatest number of organizations undertaking agility transformations. More than half of the respondents who have not begun agile transformations say they have plans in the works to begin one. Finally, respondents in all sectors believe that more of their employees should undertake agile ways of working (on average, respondents believe 68 percent of their companies’ employees should be working in agile ways, compared with the 44 percent of employees who currently do). The rest of this article describes the five fundamental “trademarks” of agile organizations based on our recent experience and research. Companies that aspire to build an agile organization can set their sights on these trademarks as concrete markers of their progress. For each trademark, we have also identified an emerging set of “agility practices”—the practical actions we have observed organizations taking on their path to agility (Exhibit 2).Exhibit 2
The five trademarks of agile organizations
While each trademark has intrinsic value, our experience and research show that true agility comes only when all five are in place and working together. They describe the organic system that enables organizational agility.Linking across them, we find a set of fundamental shifts in the mind-sets of the people in these organizations. Make these shifts and, we believe, any organization can implement these trademarks in all or part of its operations, as appropriate.
1. North Star embodied across the organization
Mind-set shiftFrom:“In an environment of scarcity, we succeed by capturing value from competitors, customers, and suppliers for our shareholders.”To:“Recognizing the abundance of opportunities and resources available to us, we succeed by co-creating value with and for all of our stakeholders.”
Agile organizations reimagine both whom they create value for, and how they do so. They are intensely customer-focused, and seek to meet diverse needs across the entire customer life cycle. Further, they are committed to creating value with and for a wide range of stakeholders (for example, employees, investors, partners, and communities).To meet the continually evolving needs of all their stakeholders, agile organizations design distributed, flexible approaches to creating value, frequently integrating external partners directly into the value creation system. Examples emerge across many industries, including: modular products and solutions in manufacturing; agile supply chains in distribution; distributed energy grids in power; and platform businesses like Uber, Airbnb, and Upwork. These modular, innovative business models enable both stability and unprecedented variety and customization.
To give coherence and focus to their distributed value creation models, agile organizations set a shared purpose and vision—the “North Star”—for the organization that helps people feel personally and emotionally invested. This North Star serves as a reference when customers choose where to buy, employees decide where to work, and partners decide where to engage. Companies like Amazon, Gore, Patagonia, and Virgin put stakeholder focus at the heart of their North Star and, in turn, at the heart of the way they create value.
Agile organizations that combine a deeply embedded North Star with a flexible, distributed approach to value creation can rapidly sense and seize opportunities. People across the organization individually and proactively watch for changes in customer preferences and the external environment and act upon them. They seek stakeholder feedback and input in a range of ways (for example, product reviews, crowd sourcing, and hackathons). They use tools like customer journey maps to identify new opportunities to serve customers better, and gather customer insights through both formal and informal mechanisms (for example, online forums, in-person events, and start-up incubators) that help shape, pilot, launch, and iterate on new initiatives and business models.
These companies can also allocate resources flexibly and swiftly to where they are needed most. Companies like Google, Haier, Tesla, and Whole Foods constantly scan the environment. They regularly evaluate the progress of initiatives and decide whether to ramp them up or shut them down, using standardized, fast resource-allocation processes to shift people, technology, and capital rapidly between initiatives, out of slowing businesses, and into areas of growth. These processes resemble venture capitalist models that use clear metrics to allocate resources to initiatives for specified periods and are subject to regular review.Senior leaders of agile organizations play an integrating role across these distributed systems, bringing coherence and providing clear, actionable, strategic guidance around priorities and the outcomes expected at the system and team levels. They also ensure everyone is focused on delivering tangible value to customers and all other stakeholders by providing frequent feedback and coaching that enables people to work autonomously toward team outcomes.
2. Network of empowered teams
Mind-set shiftFrom:“People need to be directed and managed, otherwise they won’t know what to do—and they’ll just look out for themselves. There will be chaos.”To:“When given clear responsibility and authority, people will be highly engaged, will take care of each other, will figure out ingenious solutions, and will deliver exceptional results.”
Agile organizations maintain a stable top-level structure, but replace much of the remaining traditional hierarchy with a flexible, scalable network of teams. Networks are a natural way to organize efforts because they balance individual freedom with collective coordination. To build agile organizations, leaders need to understand human networks (business and social), how to design and build them, how to collaborate across them, and how to nurture and sustain them.An agile organization comprises a dense network of empowered teams that operate with high standards of alignment, accountability, expertise, transparency, and collaboration. The company must also have a stable ecosystem in place to ensure that these teams are able to operate effectively. Agile organizations like Gore, ING, and Spotify focus on several elements:
Implement clear, flat structures that reflect and support the way in which the organization creates value. For example, teams can be clustered into focused performance groups (for example, “tribes,” or a “lattice”) that share a common mission. These groups vary in size, typically with a maximum of 150 people. This number reflects both practical experience and Dunbar’s research on the number of people with whom one can maintain personal relationships and effectively collaborate.7 7.Drake Bennett, “The Dunbar Number, From the Guru of Social Networks,” Bloomberg, January 2013, bloomberg.com. The number of teams within each group can be adapted or scaled to meet changing needs.
Ensure clear, accountable roles so that people can interact across the organization and focus on getting work done, rather than lose time and energy because of unclear or duplicated roles, or the need to wait for manager approvals. Here, people proactively and immediately address any lack of clarity about roles with one another, and treat roles and people as separate entities; in other words, roles can be shared and people can have multiple roles.
Foster hands-on governance where cross-team performance management and decision rights are pushed to the edge of boundaries.8 8.David S. Alberts and Richard E. Hayes, “Power to the Edge: Command and Control in the Information Age,” Command and Control Research Program Publication Series, April 2005 reprint, dodccrp.org. It is at this interaction point that decisions are made as close to relevant teams as possible, in highly-productive, limited-membership coordinating forums. This frees senior leaders to focus on overall system design and provide guidance and support to responsible, empowered teams that focus on day-to-day activities.
Evolve functions to become robust communities of knowledge and practice as professional “homes” for people, with responsibilities for attracting and developing talent, sharing knowledge and experience, and providing stability and continuity over time as people rotate between different operating teams.
Create active partnerships and an ecosystem that extends internal networks and creates meaningful relationships with an extensive external network so the organization can access the best talent and ideas, generate insights, and co-develop new products, services, and/or solutions. In agile organizations, people work hands-on and day-to-day with customers, vendors, academics, government entities, and other partners in existing and complementary industries to co-develop new products, services, and/or solutions and bring them to market.
Design and create open physical and virtual environments that empower people to do their jobs most effectively in the environment that is most conducive to them. These environments offer opportunities to foster transparency, communication, collaboration, and serendipitous encounters between teams and units across the organization.
Like the cells in an organism, the basic building blocks of agile organizations are small fit-for-purpose performance cells. Compared with machine models, these performance cells typically have greater autonomy and accountability, are more multidisciplinary, are more quickly assembled (and dissolved), and are more clearly focused on specific value-creating activities and performance outcomes. They can be comprised of groups of individuals working on a shared task (i.e., teams) or networks of individuals working separately, but in a coordinated way. Identifying what type of performance cells to create is like building with Lego blocks. The various types (Exhibit 3) can be combined to create multiple tailored approaches.
The three most commonly observed agile types of performance cell today include:
Cross-functional teams deliver ‘products’ or projects, which ensure that the knowledge and skills to deliver desired outcomes reside within the team.These teams typically include a product or project owner to define the vision and prioritize work.
Self-managing teams deliver baseload activity and are relatively stable over time. The teams define the best way to reach goals, prioritize activities, and focus their effort. Different team members will lead the group based on their competence rather than on their position.
Flow-to-the-work pools of individuals are staffed to different tasks full-time based on the priority of the need. This work method can enhance efficiencies, enable people to build broader skillsets, and ensure that business priorities are adequately resourced.
However, other models are continuously emerging through experimentation and adaptation.
3. Rapid decision and learning cycles
Mind-set shiftFrom: “To deliver the right outcome, the most senior and experienced individuals must define where we’re going, the detailed plans needed to get there, and how to minimize risk along the way.”To: “We live in a constantly evolving environment and cannot know exactly what the future holds. The best way to minimize risk and succeed is to embrace uncertainty and be the quickest and most productive in trying new things.”Agile organizations work in rapid cycles of thinking and doing that are closely aligned to their process of creativity and accomplishment. Whether it deploys these as design thinking, lean operations, agile development, or other forms, this integration and continual rapid iteration of thinking, doing, and learning forms the organization’s ability to innovate and operate in an agile way.
This rapid-cycle way of working can affect every level. At the team level, agile organizations radically rethink the working model, moving away from “waterfall” and “stage gate” project-management approaches. At the enterprise level, they use the rapid-cycle model to accelerate strategic thinking and execution. For example, rather than traditional annual planning, budgeting, and review, some organizations are moving to quarterly cycles, dynamic management systems like Objectives and Key Results (OKRs), and rolling 12-month budgets.The impact of this operational model can be significant. For example, a global bank closed its project-management office and shifted its product-management organization from a traditional waterfall approach to a minimal viable product-based process. It moved from four major release cycles a year to several thousand-product changes monthly; it simultaneously increased product development, deployment, and maintenance productivity by more than 30 percent.There are several characteristics of the rapid cycle model:
Agile organizations focus on rapid iteration and experimentation. Teams produce a single primary deliverable (that is, a minimal viable product or deliverable) very quickly, often in one- or two-week “sprints.” During these short activity bursts, the team holds frequent, often daily, check-ins to share progress, solve problems, and ensure alignment. Between sprints, team members meet to review and plan, to discuss progress to date, and to set the goal for the next sprint. To accomplish this, team members must be accountable for the end-to-end outcome of their work. They are empowered to seek direct stakeholder input to ensure the product serves all the needs of a group of customers and to manage all the steps in an operational process. Following this structured approach to innovation saves time, reduces rework, creates opportunities for creative “leapfrog” solutions, and increases the sense of ownership, accountability, and accomplishment within the team.
Agile organizations leverage standardized ways of working to facilitate interaction and communication between teams, including the use of common language, processes, meeting formats, social-networking or digital technologies, and dedicated, in-person time, where teams work together for all or part of each week in the sprint. For example, under General Stanley McChrystal, the US military deployed a series of standardized ways of working between teams including joint leadership calls, daily all-hands briefings, collective online databases, and short-term deployments and co-location of people from different units. This approach enables rapid iteration, input, and creativity in a way that fragmented and segmented working does not.
Agile organizations are performance-oriented by nature. They explore new performance- and consequence-management approaches based on shared goals across the end-to-end work of a specific process or service, and measure business impact rather than activity. These processes are informed by performance dialogues comprised of very frequent formal and informal feedback and open discussions of performance against the target.
Working in rapid cycles requires that agile organizations insist on full transparency of information, so that every team can quickly and easily access the information they need and share information with others. For example, people across the unit can access unfiltered data on its products, customers, and finances. People can easily find and collaborate with others in the organization that have relevant knowledge or similar interests, openly sharing ideas and the results of their work. This also requires team members to be open and transparent with one another; only then can the organization create an environment of psychological safety where all issues can be raised and discussed and where everyone has a voice.
Agile organizations seek to make continuous learning an ongoing, constant part of their DNA. Everyone can freely learn from their own and others’ successes and failures, and build on the new knowledge and capabilities they develop in their roles. This environment fosters ongoing learning and adjustments, which help deliverables evolve rapidly. People also spend dedicated time looking for ways to improve business processes and ways of working, which continuously improves business performance.
Agile organizations emphasize quick, efficient, and continuous decision making, preferring 70 percent probability now versus 100 percent certainty later. They have insight into the types of decisions they are making and who should be involved in those decisions.9 9.Aaron De Smet, Gerald Lackey, and Leigh Weiss, “Untangling your organization’s decision making,” McKinsey Quarterly, July 2017. Rather than big bets that are few and far between, they continuously make small decisions as part of rapid cycles, quickly test these in practice, and adjust them as needed for the next iteration. This also means agile organizations do not seek consensus decisions; all team members provide input (in advance if they will be absent), the perspectives of team members with the deepest topical expertise are given greater weight, and other team members, including leaders, learn to “disagree and commit” to enable the team to move forward.
4. Dynamic people model that ignites passionMind-set shiftFrom:“To achieve desired outcomes, leaders need to control and direct work by constantly specifying tasks and steering the work of employees.”To:“Effective leaders empower employees to take full ownership, confident they will drive the organization toward fulfilling its purpose and vision.”
An agile organizational culture puts people at the center, which engages and empowers everyone in the organization. They can then create value quickly, collaboratively, and effectively.Organizations that have done this well have invested in leadership which empowers and develops its people, a strong community which supports and grows the culture, and the underlying people processes which foster the entrepreneurship and skill building needed for agility to occur.Leadership in agile organizations serves the people in the organization, empowering and developing them. Rather than planners, directors, and controllers, they become visionaries, architects, and coaches that empower the people with the most relevant competencies so these can lead, collaborate, and deliver exceptional results. Such leaders are catalysts that motivate people to act in team-oriented ways, and to become involved in making the strategic and organizational decisions that will affect them and their work. We call this shared and servant leadership.
Agile organizations create a cohesive community with a common culture. Cultural norms are reinforced through positive peer behavior and influence in a high-trust environment, rather than through rules, processes, or hierarchy. This extends to recruitment. Zappos, the online shoe retailer acquired by Amazon changed its recruiting to support the selection of people that fit its culture—even paying employees $4,000 to leave during their onboarding if they did not fit.10 10.David Burkus, “Why Amazon bought into Zappos’s ‘pay to quit’ policy,” Inc., June 2016, inc.com.
People processes help sustain the culture, including clear accountability paired with the autonomy and freedom to pursue opportunities, and the ongoing chance to have new experiences. Employees in agile organizations exhibit entrepreneurial drive, taking ownership of team goals, decisions, and performance. For example, people proactively identify and pursue opportunities to develop new initiatives, knowledge, and skills in their daily work. Agile organizations attract people who are motivated by intrinsic passion for their work and who aim for excellence.
In addition, talent development in an agile model is about building new capabilities through varied experiences. Agile organizations allow and expect role mobility, where employees move regularly (both horizontally and vertically) between roles and teams, based on their personal-development goals. An open talent marketplace supports this by providing information on available roles, tasks, and/or projects as well as people’s interests, capabilities, and development goals.
5. Next-generation enabling technology
Mind-set shiftFrom:“Technology is a supporting capability that delivers specific services, platforms, or tools to the rest of the organization as defined by priorities, resourcing, and budget.”To:“Technology is seamlessly integrated and core to every aspect of the organization as a means to unlock value and enable quick reactions to business and stakeholder needs.”
For many organizations, such a radical rethinking of the organizational model requires a rethinking of the technologies underlying and enabling their products and processes, as well as the technology practices needed to support speed and flexibility.Agile organizations will need to provide products and services that can meet changing customer and competitive conditions. Traditional products and services will likely need to be digitized or digitally-enabled. Operating processes will also have to continually and rapidly evolve, which will require evolving technology architecture, systems, and tools.
Organizations will need to begin by leveraging new, real-time communication and work-management tools. Implementing modular-based software architecture enables teams to effectively use technologies that other units have developed. This minimizes handovers and interdependencies that can slow down production cycles. Technology should progressively incorporate new technical innovations like containers, micro-service architectures, and cloud-based storage and services.In order to design, build, implement, and support these new technologies, agile organizations integrate a range of next-generation technology development and delivery practices into the business. Business and technology employees form cross-functional teams, accountable for developing, testing, deploying, and maintaining new products and processes. They use hackathons, crowd sourcing, and virtual collaboration spaces to understand customer needs and develop possible solutions quickly. Extensive use of automated testing and deployment enables lean, seamless, and continuous software releases to the market (for example, every two weeks vs. every six months). Within IT, different disciplines work closely together (for example, IT development and operations teams collaborate on streamlined, handover-free DevOps practices).
Your attention may be your most precious resource, and you only have so much of it to spread around each day.Work and social obligations demand a portion of it. And it’s easy to occupy whatever is left over with stimuli of one kind or another—whether it’s listening to a podcast or watching a show. For many people, time spent in the shower or trying to fall asleep at night may be the only remaining scraps of the day when their mind is wholly free to wander.None of this may seem like a problem.
After all, why waste time doing nothing when you could be doing something fun or productive?
As long as you’re occupying your mind with (mostly) high-quality content, what’s the harm?“. The research on learning is extremely clear,” says Loren Frank, a professor at the Center for Integrative Neuroscience at the University of California, San Francisco. “To learn something well, you need to study it for a while and then take a break.” Frank points to the evidence on educational training, which has shown again and again that people retain new information best when their minds are given time off to encode and consolidate.
Even outside of study contexts, taking small breaks after digesting new material—whether it’s a news article or an important email—appears to help your brain parse and memorize what you’ve just learned.
To better understand how brains process new information, Frank has conducted brain-scan experiments on rats. He and his colleagues have shown that when rats are allowed to rest after completing an unfamiliar maze, their brains appear to automatically replay the experience of navigating the maze. Confronted later with the same labyrinth, the rats find their way through it more quickly. On the other hand, when rats are immediately confronted with a new challenge after completing a maze, their brains don’t have the chance to replay what they’ve learned, Frank says. Later, when challenged again with the same maze, these rats aren’t able to navigate it any faster than they did the first time.Frank says the human brain seems to work in a similar way. “The brain needs free time to process new information and turn it into something more permanent,” he says.How much free time? That depends.
“We know the brain can get into its downtime state very quickly, and the education research suggests just a few minutes—five to 15—are enough to aid learning,”
The says. The amount of time a mind needs to construct a durable memory probably varies from one person to the next, and also depends on the complexity of what that person is trying to learn, he adds.Experts say idle time likely also helps develop mental processes that are far more complicated than memory storage and retrieval. “The deeper reflective states, where you make meaning of what’s going on and connect it to self and identity and integrate knowledge together into coherent narratives—these kinds of processes only happen when you’re not focused on some in-the-moment activity,” says Mary Helen Immordino-Yang, a professor of education, psychology, and neuroscience at the University of Southern California.When your brain is bombarded with novel stimuli or information, she says, it can struggle to generate purposefulness and meaning. Too much of this can you leave you feeling aimless—or worse. “If you’re stuck in this feed-me stimulation loop, we know that this is associated with the feeling of being out of control,” she says. “It’s associated with anxiety and disconnectedness, and a feeling of, what’s really real?”
Mental idle time, meanwhile, seems to facilitate creativity and problem-solving.
“Our research has found that mind-wandering may foster a particular kind of productivity,” says Jonathan Schooler, a professor of psychological and brain sciences at the University of California, Santa Barbara who has studied mind-wandering extensively. He says overcoming impasses—including what he calls “a-ha!” moments—often happen when people’s minds are free to roam.Schooler mentions the common experience of not being able to recall a word that’s on the tip of your tongue—no matter how hard you try to think of it. But as soon as you move onto another mental task, the word pops into your head.
“I think it’s very possible that some unconscious processes are going on during mind-wandering, and the insights these processes produce then bubble up to the surface,” he says. It’s also possible that depriving the brain of free time stifles its ability to complete this unconscious work.
“I think we need to recognize that the brain’s internal train of thought can be of value in itself,” Schooler says. “In the same way we can experience a sleep deficit, I think we can experience a mind-wandering deficit.”“Many people find it difficult or stressful to do absolutely nothing,” he adds. Instead, Schooler says “non-demanding” tasks that don’t require much mental engagement seem to be best at fostering “productive” mind-wandering. He mentions activities like going for a walk in a quiet place, doing the dishes, or folding laundry—chores that may occupy your hands or body but that don’t require much from your brain.While a wandering mind can slip into some unhelpful and unhealthy states of rumination, that doesn’t mean blocking these thoughts with constant distraction is the way to go.
“I think it’s about finding balance between being occupied and in the present and letting your mind wander—[and] about thinking positive thoughts and thinking about obstacles that may stand in your way,” says Schooler.
There may be no optimal amount of time you can commit to mental freedom to strike that balance. But if you feel like it takes “remarkable effort” for you to disengage from all your favorite sources of mental stimulation, that’s probably a good sign you need to give your brain more free time, Immordino-Yang says.
“To just sit and think is not pleasant when your brain is trained out of practicing that, but that’s really important for well-being,” she adds.
Frank recommends starting small—maybe take a 15-minute, distraction-free walk in the middle of your day. “You might find your world changes,” he says.
In the 21st century workplace, company culture will be more important than ever. The future will be defined not just by constant change, but a constantly accelerating rate of change. Success won’t just mean being able to adapt to any one particular moment, but to the idea of accelerated change itself. This is why, more than ever, company culture will function like a company’s immune system. A healthy culture is resilient, able to manage external challenges, identify internal weaknesses, root out toxic elements and allow both the business and the employees to grow and flourish.
At Thrive Global, we believe the key to building a healthy and resilient company culture, one that will serve as the foundation for sustainable success, is something we call “Compassionate Directness.” We both teach it to other companies, and it’s the centerpiece of our own internal cultural values.
We define it as empowering employees to speak up, give feedback, disagree, and surface problems, pain points and constructive criticism. And to do this immediately, continuously, and with clarity, but also to do it with compassion, empathy and understanding. With this as the foundation of company culture, both employees and the business can course-correct, overcome challenges, grow, evolve, achieve peak performance, reach their highest potential and truly thrive.
Too many companies believe we have to choose between being direct and being compassionate, between being honest and effective and being considerate and understanding. But we don’t. Compassion and directness are not mutually exclusive — they’re independent qualities that can be nurtured. And when brought together, the sum is greater than the parts.
The key is the unique, transformative power that both qualities have when combined. But only when combined. As we’ve seen in many of the companies we’ve worked with, when only one quality is present or is overvalued in a company culture, the result will be toxic, with damaging consequences for both employees and the company.
According to a poll from H.R. management platform 15Five, 85 percent of employees are dissatisfied with the level of communication in their workplace. And the quality of communication isn’t just about what is or is not being communicated, but about how information is being communicated. And that makes all the difference. The number one reason, according to Gallup, that employees leave their companies is the quality of their managers.
This can obviously be for many reasons, but we’ve seen what happens in the many companies in which directness without compassion is prized. Employees feel talked at instead of talked to. They become demoralized and disengaged. Feedback is met with defensiveness and resentment. Turnover goes up. Teams break down. And so do employees. One study showed that workers who felt that their managers were unjustly critical or ignored them had rates of heart disease one-third higher than employees who felt valued and listened to.
At Thrive Global, we’ve had a lot of experience with companies built on hard-charging cultures that focus on short-term growth and revenue at all costs. And yes, it can work — until it doesn’t. It’s the kind of short-term growth that sacrifices company culture, and along with it the prospects for long-term growth. Instead of growth built on expanding outward, it’s growth built on the company eating itself. And it’s not sustainable.
The idea that tough bosses who lead by fear and intimidation drive better performance is still believed in some quarters. But, as researchers have found, it’s a myth. “We’d love to find out if there are good aspects of abusive leadership,” Rebecca Greenbaum, a professor at the Rutgers School of Management, said. “There’s been a lot of research. We just can’t find any upside. Productivity may rise in the short term. But over time the performance of the staff or team deteriorates, and people quit.”
It also breeds what we call a culture of “brilliant jerks,” which arises when companies overvalue a narrow definition of performance. Creating a cult of the top performer leads to tolerance of otherwise unacceptable behavior. The collateral damage, often in the form of lower rates of retention and increased difficulty recruiting, might not be immediately obvious. But over time, as growth slows and appears to hit a glass ceiling, the costs become too great to ignore. It’s a phenomenon that’s difficult to root out. A study by researchers from The University of Central Florida’s College of Business confirmed that bullies who are thought to be top performers are much more likely to have their behavior overlooked.
Likewise, company cultures that undervalue directness have their own set of problems. When employees and managers are reluctant to speak up, whether it’s out of fear of being “the bad guy,” or rocking the boat, or because feedback is discouraged and disincentivized, ordinary challenges and setbacks are allowed to take root and fester. Opportunities to course-correct (“Captain, we appear to be headed for an iceberg”) are missed — often until it’s too late. Not every missed opportunity sinks the ship, but they’re still costly. One study found that every time an employee sidesteps raising an important issue, the costs to the company are an average of $7,500. It also becomes impossible to iterate and improve. And it sinks morale. Employees see things that aren’t working and become disengaged when there’s no acceptable way to say so.
And, worst of all, it’s not just the company that won’t grow and evolve, but the employees. Feedback is how we improve and get better. There’s nothing wrong with failure or mistakes. They’re inevitable. But being able to learn from them isn’t. And ignoring them or not giving employees honest, constructive feedback isn’t polite, it’s disrespectful — it doesn’t acknowledge their potential or help them reach it. It’s not supportive, it’s indifferent.
But for feedback to be given — and, even more important — received in a constructive way that leads to real growth, it has to be done not just with directness but with real compassion and empathy. This isn’t about being soft or solicitous, it’s about acknowledging the way humans work and that we bring our whole selves to the workplace. And this can only be achieved if the company cultivates a culture of trust and psychological safety.
As Emma Seppälä, science director of Stanford University’s Center for Compassion and Altruism, says, it’s also good for business: “A new field of research is suggesting that when organizations promote an ethic of compassion rather than a culture of stress,” she writes, “they may not only see a happier workplace but also an improved bottom line.”
But to be able to flourish, compassionate directness has to be undergirded by a strong sense of trust. Once that trust is there, feedback is taken not defensively, but in good faith. Employees and colleagues know their best interests are being taken to heart and they’re being supported. They know it’s not about the person, but the job. Problems can be surfaced in a way that’s not about blame. Companies can course-correct in real time. Employees and teams are much more likely to take risks, innovate, think unconventionally, and approach problems creatively. And they become much more deeply engaged.
That’s when the much buzzed about concept of “psychological safety” can take root. The term was coined several years ago by Harvard Business School professor Amy Edmondson, who defines it as “a shared belief that the team is safe for interpersonal risk taking.”
This is why compassionate directness just can’t be a top-down policy — it’s an on-going, two-way conversation. But it does have to start at the top. As research by Dacher Keltner, professor of psychology at the University of California, Berkeley shows, as people gain more power in organizations, they actually become less empathetic. “We often underestimate, once into positions of power, the effects we have on other people,” he says. That’s why compassionate directness requires that leaders and managers model it themselves, and work hard to be just as open to immediate and honest feedback and as willing to grow as every other employee. This requires courage, transparency and vulnerability.
Compassionate directness isn’t just another way to do performance reviews. To harness its unique power, it has to be a 360 company value — baked into every part of the company, its mission and its long-term goals. That’s why it’s first on Thrive Global’s list of cultural values — it creates the conditions for all of our other values. It’s the foundation of our ability to grow, scale and achieve our ambitious goals.
When a culture of compassionate directness is created, people respond. They want to be empowered to make their voices heard and they want to be respected enough to get the honest feedback they need to realize their full potential. Changes in technology, workplace culture and the culture at large have ushered in a new era of expectations. Today’s workers place an unprecedented value on engagement, transparency and workplaces that offer the opportunity to grow. And when we learn to be better communicators, we’re more creative, we take more risks, and we’re far better able to identify problems and course-correct before they become crises.
Competing in today’s world requires recruiting talented employees, being able to retain them once they come aboard, and then being able to unlock their full potential. Compassionate directness doesn’t just make a company a more pleasant place to work — it drives better business outcomes, provides a competitive advantage and creates the resilient culture necessary to navigate constant change.
For many of us, compassionate directness may not come easily at first. And that’s ok. What’s important is finding ways to put it into action. When you flex your compassionate directness muscle, you’ll not only begin to see the benefits – you’ll see that it gets easier with practice. To help you get started, here are three of my favorite compassionate directness Microsteps:
Before your next one-on-one, pause to reflect before giving feedback.
If you’re stressed or rushed, you’re more likely to deliver feedback without compassion or empathy — even if that’s unintentional.
Each time you notice a problem, find a way to surface it immediately.
Don’t just hope a problem will go away, or assume someone else will fix it. When you speak up with compassionate directness, everyone benefits.
Each time you have constructive feedback, share it with compassion.
Giving compassionately direct feedback is how we course-correct and grow as individuals. It’s also how many of our best ideas come to light.
To unleash productivity, innovation, and growth in the 21st century, we must realign discussions about the future of work to recognise the importance of aging and longevity – unprecedented, accelerating trends that are reshaping economies, societies and individual lives around the globe. Human history has never seen such a dramatic demographic transformation, with a billion over 60 – doubling by mid-century – lives reaching 100 as a matter of course and a world that has more old than young. This megatrend opens an opportunity to power historic prosperity, but only if employers and others across global society lead innovative strategies to transform the future of work for the era of longevity. As the World Economic Forum put it over a decade ago in their seminal Peril or Promise, the paths are clear and stark.
Despite the wide-reaching impacts of aging and longevity, conversations about the future of work typically focus on other trends. These are certainly important, but they’re not the whole story. Digitalisation is changing how we work – new tools enable virtual work, and artificial intelligence and other advanced technologies drive automation that is creating, disrupting and changing how we work and at what. There’s also an ongoing transformation of who works, as women have entered the workforce in huge numbers and employers focus on diversity and inclusion. Additionally, new types of enterprises are changing what work people do, with the rise of new industries like home care and new work models like the gig economy. Twentieth century manufacturing is being replaced by 21st century services.
Each of these reflects a broader trend in society, yet expert discussions still too often ignore perhaps the most fundamental shift in today’s world. This is population aging – a historic shift that impacts nearly every aspect of life and is only now picking up speed. As S&P Global warned in their equally prescient report about the same time as WEF’s, “No other force is likely to shape the future of national economic health, public finances, policymaking [and markets] as the irreversible rate at which the world’s population is aging”.
Though this demographic shift has often been framed as an economic and workforce challenge, it actually opens up a number of opportunities. According to Aegon’s global survey of more than 16,000 people, nearly 70% of respondents envision working in some capacity later in life – transforming the traditional retirement model to create a new period for productivity and income. In fact, OECD countries could realise a cumulative USD 2 trillion long-term increase in GDP if they raised the employment rate for those over 55 to match that of Sweden, the best in the OECD.
Research has found that these older workers bring different perspectives, important institutional knowledge and valuable mentoring skills. They can drive innovation and help to design products and services for the massive “silver market” of older consumers. And by extending their careers, they can support the fiscal sustainability of public and private institutions. Moreover, as the data around activity and healthy aging accumulates, working longer is also good for people’s health, and therefore societies’ exploding health costs.
However, there are several barriers to this longevity opportunity. To shape the future of work through the lens of aging, employers and partners in government must implement forward-looking responses to address three challenges.
First, while a growing number of employers recognise the demographic shift, few are actually taking action. Workplace policies that support later-life employment – new and creative benefit structures and innovation on work itself, such as phased retirement and new roles for older workers – have been adopted by some innovative organisations, but remain relatively rare.
Second, ageism is widespread in both the workplace and society. According to Deloitte’s global survey of business leaders, just 18% said that age is viewed as an advantage at their organisation, and 20% see it as an outright disadvantage. This reflects ageist attitudes across society, where it’s often assumed – falsely – that a 70 year old should not be working, is a drag on their employer and is taking the job of a younger person. Wrong, but a persistent myth.
Third, our underlying societal and policy structures are not aligned with aging and longevity. Consider education: currently, our institutions support learning until our early 20s, but then stop entirely. In the era of longevity, we need new models to support lifelong learning. And we need to reinvent a number of other social structures, including work and retirement, healthcare delivery and housing. In short, we need a new social contract.
Employers can overcome these challenges, and there are rich incentives to do so. Leaders in this area will tap into an underutilised, valuable talent pool, reach a huge consumer market and realise key competitive advantages. In the near future, not having an aging strategy – guided by principles for the multi-generational workplace – will seem as outmoded as not having a digital or green strategy.
The opportunity – for employers, policy-makers and society – is to design a new social contract that aligns to our 21st century’s demographic realities. Reimagining the future of work in light of aging, and then translating that vision into concrete changes, is an essential step forward.
We need a new conversation about aging and the future of work – including voices like yours.
How do you think work, jobs and careers will change as a result of aging and longevity?
What are the most important changes that employers and employees can take?
What are the wider social and policy efforts needed to realise the economic potential of longevity and the silver economy?
What are the most important opportunities and challenges for workers, employers and other stakeholders?
Where does the balance stand between employer and employee responsibilities for action?
“Wallowing in that state of not knowing is not easy, but it’s necessary.”—David Kelley
Since founding IDEO 40 years ago, David Kelley has never stopped pushing the boundaries of how design thinking could be used to navigate complex problems. He’s helped shape a culture at IDEO with a deep appreciation for using empathy to relate to people, designing small scrappy solutions to learn what works, and gradually iterating and upping the fidelity until an elegant and desirable solution is reached.
Over this time, forward-thinking CEOs and leaders looking to solve crazy challenges — think the future of mobility or how to educate a growing middle-class population in an emerging market — have been drawn to David’s pragmatic approach.
These leaders are increasingly very aware of the need for creative thinking as the level of uncertainty grows. David says “the number one strategic thing on their agenda is “How do I make my company more creative?”Historically, he’s led them to design thinking as a “way for companies to routinely come up with new-to-the-world ideas.”
But design thinking, like the scientific method, is a process, not a solution. The solution lies in developing the creative capabilities of people.Carissa Carter, director of teaching and learning at the Stanford d.school, says early practitioners often use design thinking like a recipe in a cookbook.
“The order and process of a recipe helps new cooks get started,” she says, “but it’s only with practice, inventiveness, experimentation, and constraints that you might begin to call yourself a chef.”
8 Core Design Abilities
David and his colleagues at the d.school are helping students develop a deeper appreciation of the eight core design abilities necessary to solve problems creatively and expertly maneuver within the design thinking methodology.
The bedrock of the design abilities, those who are comfortable navigating ambiguity know that “if I’m going to get to a new place, I’m going to have to live in this state of feeling ambiguous about what’s going to happen.” Ambiguity arises when the problem is not well defined, which, David points out, is when many companies turn to IDEO and design thinking for help. You can only get comfortable with ambiguity from experience — having felt it before and knowing it turned out well. “Wallowing in that state of not knowing is not easy, but it’s necessary,” David says.
Learn from Others (People and Contexts)
There’s a general feeling these days that you have to do it all yourself. That if you just go back to your desk and work harder, that the solution will reveal itself. In design thinking, it’s critical to get over that fear of talking to others and shift to a mindset of learning from and with people. Better ideas come from working with others and being open to their improvements.“The main mistake I think we make in trying to innovate is we get wedded to our first ideas,” David says. Showing your ideas to others helps break through early cliched solutions and get to the real exciting stuff.
Build and Craft Things Intentionally
The best way to engage somebody is to show them something. It’s a skill to know the right time to share your ideas, how to be light and fast with how you build things, and to be comfortable with those ideas not being completely polished.When David’s students at Stanford were working on an interface for buying train tickets, they created a prototype that required users to press enter after each screen. It seemed like the obvious solution, but passengers really didn’t like it, which they only discovered by testing their prototype. “If you got to that point in the first week, you could fix it really easily. If you got to that point in the first year, it would already be baked in.”
“Storytelling has become one of the real skills designers have been building over the last few years”David Kelley
In David’s eyes, “in some ways, it’s our job as designers to paint a picture of the future with our ideas in it.” The ability to understand your audience and communicate your ideas in a way that will activate that audience is a skill that’s critical to a project’s success. In doing work for a hospital, for example, you may think of doctors and patients as your audience, but hospital administrators are the ones making purchase decisions.“Storytelling has become one of the real skills designers have been building over the last few years,” David says.
Design Your Design Work
Instead of thinking of a decision as work, if you think about it as a project and a design problem, you get to apply all the benefits design thinking. “Driving everything to be a project is another ability that is empowering to students and designers because once it’s a project we feel more comfortable,” David says.Three more design abilities — Synthesize Information, Experiment Rapidly, and Move Between Concrete and Abstract — round out the core skillset of a design thinking practitioner. Read more about each on the Stanford d.school’s site.
Human-Centered Thinking at the Leadership Level
As mentioned above, David has worked with many of the world’s most innovative leaders and developed friendships with them in turn. He often provides advice and council and values these relationships for the many lessons he’s learned as well.How these leaders are utilizing design thinking can give valuable insight into ways you can apply the methodology in your own workplace.
Jim Hackett, CEO of Ford, and David set up a wormhole for direct access to each other. Jim often turns to David for advice on hiring the right people to lead human-centered design work.
Carlos Rodriguez-Pastor, Peruvian entrepreneur and CEO of Intercorp, embodies a growth mindset and appreciation for creativity. “He believes that working harder is the way to come up with good ideas,” David says. “And he’s right.” The challenges he’s working on — poverty, education — are “so big they hurt your head.” David sees Rodriguez-Pastor’s ability to break large problems down into smaller ones where progress can be made as a key factor in his success.
For those looking to engage senior leadership in a discussion around design thinking, David’s advice is to first understand what is meaningful to these leaders and then see how design thinking can help them make progress toward those goals. Today’s leaders are looking to build innovation engines within their companies — so help them do that. Begin putting some ideas on the shelf and be ready to go when they’re inevitably needed in the future.