The Point: A program that encourages productive behavior and skills in employees can be a powerful tool for boosting the organization’s productivity. It is also an important element of any successful business transformation. So why do so many leaders get it wrong? In this series, we’re going to explore building employee capabilities, or skills for business transformation… Enjoy!
Business Transformation Building Blocks
Capability building transforms the way people do their jobs. This helps to break down the workday and create new habits around old tasks. These lessons can be as simple as how to have a meeting last 30 minutes, or how to write effective emails. Or they can be more complex, such how to prioritize responsibilities, and how you can anticipate and prevent poor project outcomes. They may also be technical or operational in nature. Employees can develop capabilities in demand planning, forecasting, segmentation, inventory management and other areas to help create a supply-chain organization. Although many of these core ideas seem simple, we have found that they are not always used consistently across organizations.
This disconnect is ultimately behavioral, so we turned to behavioral science for answers. A program that builds effective capabilities requires three key elements: leadership role modeling, employee engagement, and virtual delivery.
“What makes for a successful Business Transformation?” This was the question we asked the leaders that we work with. The answers, typically came down to Leadership leading and investing in the future.Sam Palazzolo, Managing Director @ Tip of the Spear Ventures
Business Transformation | Leadership Role Modeling
Research shows that people copy the actions of others, both consciously and subconsciously. Senior leaders can be a great way to encourage employees to adopt new behaviors and mindsets. Transformations that are successful are roughly 5x more likely when leaders model the behavior changes they ask employees to make. It’s often beneficial for senior leaders to participate in a capability-building program.
This was true for a multinational manufacturing corporation. One of their divisions was in the bottom quarter of company rankings when it first took pulses from its employees. Further surveys and discussions revealed that employees had lost trust in top management as the company’s financial situation deteriorated. Leaders didn’t communicate clearly their goals and progress, and nobody was held accountable for their results.
Senior leaders were able to rebuild trust and confidence in the organization, as well as the transformation itself. This included capability building. They signaled to their organization that the change was real by changing their behavior, thus building trust.
Looking to transform your business?
Download our 37 page | 128 question Business Transformation Self-Assessment Workbook!
A former leader of the company recalls that only after employees learned they could trust their managers, did they believe that building capability was worthwhile. “Management needed to do things differently, show evidence of change, and take some risks.”
The CEO also attended many of the capacity-building workshops and interacted with employees from all levels. The CEO was able to see/hear the employees up-close and respond in kind. It was a virtuous circle of encouragement and appreciation that resulted. When employees did well or displayed the behavior the program was trying for, the CEO began calling them directly. Frontline employees initially expressed disbelief at this. Many employees thought the CEO was playing a joke and hung up. Employees proudly shared the story with one another when it became apparent that it wasn’t a prank.
However, not all organizational leaders were open to the idea. One of the key players in the company was its head of talent development. She felt that the skills were too basic and that the company was already doing enough. When she realized how simple these capabilities were, she changed her mind. The organization was not consistently applying the skills effectively. This dragged down productivity and reinforced silos. It also slowed down the value building process, which threatened the ultimate goal: the successful broader business transformation.
Business Transformation | Employee Engagement
Participation in transformation programs must be widespread for capability building to take place. Capability building must be scaled beyond a few rounds of participation with a select few. Employees who aren’t involved in a transformation feel disconnected, disengaged and left behind, even if it is supported by high-level buy-in. Any less engagement is detrimental to the goal.
We have found that in order to make a difference, the capability-building program must engage at least 25% of the workforce. Based on behavioral-science research and our own experience, this is the threshold at which a small percentage of employees can create a new culture norm.
A capability-building program should start with the top influencers of an organization in order to inspire behavior change at all levels. These people should be the first to experience it, regardless of their rank. These influencers are supposed to be evangelists for new ways of working. Through compelling arguments and personal stories, influencers can encourage their colleagues to make changes.
One technology company asked each department’s head to complete the capability-building program of the company and then led workshops in person on skills for employees. This was before the COVID-19 epidemic limited in-person learning. Although most of these department heads had never been trained as facilitators or public speakers, their influence was felt at all their departments. One frontline worker later stated that the power of the program was more than just the fact that they allowed me to be in the same room as the department head. They were also supporting me to grow, encouraging me to do my job better and helping me improve.
Our first example was a struggling multinational manufacturing company. It also adopted the influencer approach. It ensured that workshops were held in many locations across the globe and that at least two members from its executive committee attended each one. It was sending out a message that we care about your development and you.
Business Transformation | Virtual Delivery
Another important part of capability building is creating a learning environment. Capability building is a must in the age of the COVID-19 epidemic, and likely going forward. Virtual learning is a great option for capability building.
There is evidence that virtual environments can offer experiences that are comparable to or even better than traditional in-person workshops and programs. In recent months, 87 percent of those who participated in new-adapted virtual experiences agreed that they were as effective or better than traditional in-person events.
The most important aspect of a virtual capability building program is its global reach. Multi-location companies must ensure that all employees have the chance to learn new skills and are able to embed them. The traditional in-person workshop protocol is very difficult to implement because logistics and cost are prohibitive. Imagine flying hundreds or thousands of people between regional hubs?
Building Capability program’s digital evolution has been a game-changer for the head of talent at a technology company. It solved any doubts about the participation level of all associates. “People were knocking on my door asking for access after the first few workshops in person. It was no longer simple or intuitive for me to use the program.”
Live virtual learning is possible due to its transnational nature. This allows for deeper and more meaningful feedback. Chat functions on videoconferencing platforms allow participants to communicate easily and ask questions in real-time in ways that are not possible in a conference room setting. You can also configure and tailor virtual formats. The digital program to building capability was launched by the company that transforms manufacturing. Lessons were translated into many languages to reinforce the message: Leadership is leading, and they are investing in the future.