Welcome to our Team Talks Series. Candid conversations on current events recorded on May 1st, 2020.
In this second CEO.works Team Talks (WFH Edition), our founders share several trends emerging in the Talent to Value space in the last few weeks.
On the value side, attention is now on stakeholder alignment, new sources of advantage and opportunity, and new definitions of success. On the talent side, there is a fresh focus on talent alpha, personal sustainability, and productivity, as well as resets in how we work, behave, lead and manage.
Watch the complete 30-minute video or read the transcript for details.
The first few weeks, I thought, “Okay, this is it. This is the new reality...continue.” Now, more often than not, I’m telling myself, “Hey, I’m on the Autobahn in Germany. I don’t have any speed limits, and there is nothing to stop me from continuing. Days will blend into weeks, [which] will blend into [months]... so just [keep] working throughout. [Now] I have to figure out a way to exit the motorway, take rest, and come back.” I’m hearing some of that from some of our friends and clients. This is different from a couple of weeks back.
I think actually there are two parts to it. In my life, I see people who are in the Autobahn and saying, “Take rest.” And there is a second category of people who are saying, “Have time.”
There’s a “Take rest” category and a “I have a lot of time” category. Then throughout both these categories are people who are just uncertain and insecure. “I am seeing the thing coming closer and closer. It has gone from being a newspaper report to a movie coming to a cinema close to me. [This] first round was the medical piece. I read about it, now I know people [infected by it]. The second wave is the economic piece. I read about—and I’m still reading about it—but I can see it coming closer, faster.”
There is “take rest”, “have time”, and “I am uncertain of what this means”.
Over the last three weeks across CEOs and clients that I’m working with...I have seen there was the shock of the shutdown and [that] moved to actually getting themselves organized and doing a really good job of the shutdown. A good job defined as: “Do I have enough cash?”, “Am I looking at my cost base carefully?”, “Am I taking care of my employees?”, “Am I taking care of my stakeholders?”, and “Am I communicating with them?” In the last 10 days, they've gone from a deer-in-the-headlights world to this phase [of] feeling more in control. “I’m doing the right things. I’m planning different scenarios.”
I can see a gear shift happening for CEOs in the shutdown phase. [They] are beginning to think, “How do I get ready to reopen?”
The big human piece to solve here is the crisis of alignment. I think CEOs have never been under greater duress to make bigger judgments with lesser amounts of information. The gap between the size of my judgment and the size of the information available has never been bigger. People are working through that.
The really big moving part in all of this is the alignment of the stakeholders. If you take a business (the management team, the employees, the owners, the communities), there are incredibly fast-moving, divisive demands that stakeholders have at this point. Driving alignment, if you think of yourself as a human capital practitioner, is something you have to be continuously doing. It feels like you’re in a privileged position to serve because [you] can do something here which we as human capital practitioners are really good at and [which] the world really, really needs.
It's interesting that, every two or three weeks, the needs and the issues are different. The knowledge we have, as it relates to this specific crisis, is almost like produce. You have to do something with it or else it spoils because the world has moved on and something else [has taken its place]. And it happens really quickly. A few weeks ago, everything was about the medical part and cutting things down. Now I feel like people are talking about the shutdown almost in reflective mode. “What happened? And what if it happens again? What did we do? Did it work?” If we have to apply it again, then we learned something.
Now I see a bifurcated energy: one on reopening, [and one on] the notion of coming out of this in an advantaged position. What are the sources of advantage that you can get by the way that you shut down, the way that you reopened, and the other opportunities that this could create? You see people beginning to say there are going to be distressed businesses. Do we have a war chest that we can go and buy some of those distressed businesses? There are clients that are going to be under-served. Can we sweep in and gain share as a result of this? Then there are these technology-related things. We’re going to get permission to do stuff surrounding new technology that wasn't easy to do before, but [which we can now] do.
Some regret that [they] knew that [they] should have been putting more energy on this, this, or this. Now if [they] had, they would be advantaged coming out of this. But [they] didn't do it. I think there is this vulnerability/advantage dichotomy.
People, in the background, were feeling quite vulnerable in different ways and now they're looking for ways to really take advantage or to be “advantaged” on the way out.
I still see, though, a lot of uncertainty about the shape. What is the shape of the curve in the down and what is the area under the curve? How long is it going to last really? And is it going to start and stop [again]?
Like you say, I see people are, like the Autobahn analogy, going like crazy. But I do see people getting on the off ramp, stopping, playing a board game, stopping, having a movie night, or whatever. And not feeling like they, therefore, have to be 100% engaged in every opportunity every minute. I think this is a very different working rhythm [in] that it starts early, it ends late. There are breaks that you can build in during the day. But weekends seem to be just more of the same. It’s not like you're transitioning from one thing to the other.
I completely agree. I think it’s really interesting, the point you make, Sandy, about the shutdown, which two to three weeks ago was a shock, [and which] has within two to three weeks become a little bit of a reflection [on] where do I go from here. I think that's one thing that is happening everywhere. I do believe this piece of the new moving demands of the different stakeholders is another interesting thing that CEOs and clients are working with.
And to your point, Shefali and Sandy, the conversation around how do I manage my personal energy. Because the old rules don't work. I used to go to work, I used to come back. There were some built-in transitions. So how do I manage my personal energy in terms of when I’m switched on and when I’m not?
I have a dear friend who runs a large business in Germany looking after Europe. He, at a personal level, is now looking for a new definition of success. He knows that his business is not going to make their numbers. No chance. It’s impossible. Everybody’s business is the same way. He knows the P&L is shot from a profit point of view, but he also knows that the table is getting reset. Yes, he was supposed to grow 3% top line and he was supposed to grow 5% bottom line, but he won't do that.
What he’s beginning to struggle with is, “How do I create a new definition of success? And how do I do it in a way that I don’t come off as some sort of a jerk or as a greedy person in any way?” While people are going through a difficult time, he’s thinking of what success looks like for a business. It is something that CEOs are thinking about. The best ones are actually saying, “I need to give my people a new definition of success because the budgets and all this are gone. Now, [in] 2020, I need a new definition of success, which is short-term and tangible."
To mobilize, you need some idea, something to go after.
We talked about, last time, that you need the team around you to be rowing to the same place. I think that [allows you to] give [your] energy to each other as well.
That’s one piece I’m finding people are mobilizing around and creating: the new definition of success.
The other thing I find people are mobilizing around is “new alpha”. And the new alpha is not just business opportunities like distressed businesses I can buy, underserved clients I could go after, a new revenue opportunity.
The new alpha is also around talent. People are rising and doing things in businesses [to] which leaders are saying, “Wow, I didn't know Michael could do that, and look how he came in and he sort of grabbed this.” People are creating alpha. Not businesses. Not big CEOs. In the length and breadth of organizations, I’m beginning to see that people are just rising to the occasion. There’s talent alpha happening. There’s business alpha also happening. I personally find that, as a human capital practice, very energizing.
In a world where we have just announced 20% unemployment in the U.S. [and] we’ve lost 10 years’ worth of jobs (which I hope is temporary), I can see a CEO battling their optimism bias. In the middle of all this, these stories are fantastic stories of how people are pivoting and the human spirit is creating alpha in the middle of a giant beta wave.
I think that’s a really interesting point about the talent alpha. Going into this, I thought for a long time that connecting talent to value is an important idea. When the world is going up and to the right and you can show that this is the positive disruption that we’re trying to make with this particular strategy or investment thesis, if you can get enough talent around the hotspots that are there, that can help to push it forward. Then you see this shock—and the curve goes down in many businesses. Boom, shut down. It stays down, and then it starts to come back. [Now] how [are] we going to connect talent to value?
I think value is a very interesting thing to focus on. What is the relative value that we have created or destroyed in a particular thing? We were always saying “up elevator”, or you were always saying to me “up elevators” and “down elevators”. Well, this is a serious down elevator.
As a management team, if we act appropriately when there is a precipitous down, we can influence it. We can actually not just bend the curve: we can shape it with the things we do. And we have a few levers we can use to help shape it.
The other interesting thing is when you see individuals going, “Whoa, the value really shifted. I can connect my talent to that value.” So now we’re referring to them as alpha.
In other words, they are seeing and we're discovering a superpower in them that we didn’t see before because the value shifted. That’s what we need and that person can really do that. Isn’t that interesting [that] in the midst of all this, [there is] the human spirit, the new alpha and talent alpha, people exercising imagination. Their energy shifts from “Oh, my God!” to “Wait a second, what if we did this...or what if we did that? That could be interesting.” And now all of this re-imagining things starts to happen, which I find pretty energizing.
I’m always energized by these human stories. Reckitt Benckiser and their manufacturing unit [where] suddenly all the workers who make Lysol [have] a huge purpose...I just read about it. I think this is what humanity is: the ability to connect and say, “I have a purpose. I’m doing something which is helping.”
Personally I’m amazed that really, really busy people are taking time out to do things for the community. There’s a group of moms I know in our town and they're sending food to all the healthcare workers and nurses and doctors. All of these women are working 14-hour days and they're finding time to give back to society. We're also in an epicenter where COVID-19 is more prevalent. I'm just amazed at what people do.
Doing 14-hour professional jobs. And this is on top of that.
They're working full days, like in Amazon. Not easy jobs, and then they’re finding time to give back. I’m like, “Wow.” That’s very inspiring.
Another interesting story from just last night, Sandy. The CEO I was talking to, he runs a healthcare IT services firm, and he basically said his firm just became more valuable because he was able to move [people], within a 30-day period, [from] 10% to 90% working from home in a BPO environment.
We’ve talked about agility for a long time. It is now a new value on agility, and he says, “My company’s value has just gone up, because I can prove to my investors that we are far more agile for this new, uncertain world. [Just] look what I did. In 30 days, I took 11,000 employees spread across the Philippines, Guatemala, the U.S., Bangalore and so on, and I got them to work from home like that.” [snap of fingers]
One of the things that a lot of people are getting their minds wrapped around is what are going to be the permanent shifts. Whether this thing is a V, U, W, X, Y, or Z curve doesn’t matter. When it is over—which it will be—what would have shifted maybe permanently?
Will we ever go back to five-day workweeks for sure? Will we travel as much?
[Just consider] the number of very senior deal partners, operating partners, CEOs, CHROs, et cetera, who are telling me, “I’m sitting here wondering why did I travel so much?” I mean just yesterday, Sandy, you and I were with an old friend in London who looks after 36 companies. He said, “I’m on a call with 50 people on Zoom. Actually it works perfectly fine, and I‘m trying to understand why was I traveling so much? Why did I go onto these planes that much?” Now, this might be a reflection, but you know the story about how much time it takes to form a habit. There is some research [that says] it’s probably around three months of working differently becomes a [new] habit. There are going to be some permanent shifts in habits.
If you are in the business of following the value buck, some of the best people I know who don’t follow trends but who get ahead of them, they are beginning to say, “I’ve got to think about two things: consumer habits and digital.”
What will shift permanently because of COVID? I find that to be an exciting piece. Shefali, you have a point of view about how this is going to help diversity. Why don’t you tell us a little bit about that?
You guys travel[led] because you could. It’s going to change. Leadership is going to ask that question, “Why do I need to travel?”
It will be a level playing field for many people who couldn't travel before. The way it was expected (which was never about efficacy, it was just expected behavior) that you get onto a plane on a Sunday night and reach the Philippines or Hong Kong or wherever.
I think there’s a second-order effect here.
There definitely is a second-order effect here in positive ways.
The other thing I would say that I’m beginning to see is about leadership traits. Of course, you must be resolute to fight something like this, which is such a big disruption. But as [much as] you're resolute, you also have to have so much empathy. Both these are so important in leadership today.
I know leaders and CEOs are asking, "Am I being empathetic enough to the people around me? Am I taking people along with me?" I just love that you can be highly resolute and you can be highly empathetic, both at the same time. It could redefine leadership.
That's exactly the question that our German CEO friend is asking: “When is it too soon for me to start talking about business success to my employees?” Because he’s being empathetic to what they are doing.
But before we move on, I want to come back to the diversity point. I think it’s not just about travel. If you think about how much work happens outside meetings.... You have a meeting, but someone may have been excluded because of their gender, because of their ethnicity, because [they] didn’t play golf, because [they] didn’t go out for a beer.
Now all the work happens right here on this Zoom call that I’m on.
And the breakout areas.
This shift can actually reset what performance management and diversity will look like because you have to work when you are meeting like this, not at the golf course. Now I am sure golf will come back into fashion in three months or six months or whenever. But if you buy the theory of some permanent resets in how we work, I think it'll have some really interesting impact on what great performance looks like.
Diverse talents can deliver more easily because they are not getting caught in the crossfires and the cobwebs of relationships and travel and that drink at that bar.
I don’t know. I’m hopeful that COVID might create a better world for Nadia, my 18-year-old.
I’m sure that some of these habits [will] shift. It's going to be interesting to see the short and long-term effects.
I was on the call listening to the technology person from Facebook, and he said that a lot of their work is done by developers. They had a belief that the developers needed to be together in order to produce, and they were kind of adamant about it. They also thought that they needed to be watched in order to produce. Everybody was sent home. They were all enabled with the right kind of stuff to do their jobs, and their productivity was not up a little bit. He said it's an unarguable upward shift in productivity of the developer community, with the exception of the people who have young children. If they have young children and the children are at home, you have to pay attention to them, so their productivity was not less, but it was not more. As they talked to the people, the difference in the productivity is almost directly correlated with the amount of time that they used to spend coming and going—and all the process that goes into coming and going.
If I bring that to our kind of work and you think about all the waste that goes into getting into cars, going to airports, going through security, getting on planes, flying on planes, getting off planes, getting into cars, going to hotels, going from hotels to the client site, and all of that, that’s just waste. It’s a lot of waste. On the one hand, is it a waste of productivity? [On the other hand,] is it a waste of life? I’m wondering, should the drive be [toward] really understanding the waste, not only what is the cost of it but also what is the impact of it?
I thought Marshall [Goldsmith] was crazy when he told me, “I’m not stepping on a plane at all. The earliest I will step on a plane or get into a limo or anything is the 1st of January...and I’m considering the 1st of June." I said, “Oh, that's interesting.”
Then I started thinking about it. That actually sounds pretty good. I don't see any reduction in the impact that we can have. [There isn’t] any difference that would have been made by sitting together with those people. I just don't see it, and I've been thinking about it a lot. Gee, wouldn’t it be better if you were there? By the way, if you’re there to shake hands, nobody’s going to shake hands anymore.
You do this [bowing with palms together]. Namaste.
When I say nobody, [I mean] there will be people who are going to refuse to shake hands. I can see it coming. And I think there will be people who will practice social distancing from now on.
The Facebook guy said we’ve changed the rules now: only come to the office if it is mission-critical. And if your job does not require that, then [that will de-densify] the workspace. Because nobody wants to come back into a [space] where people are close together in the open plan. I don't think that is only a COVID activity. I think people are going to be more aware of germ transmission. We've always had these germaphobes running around. I think there's going to be a whole army of germaphobes who are going to come out of this thing.
The other thing the guy said was, “We're going to have no meetings of 10 or more people until June of 2021 and we're going to evaluate from there.” No meetings! “And we’re thinking about how do you do conferences virtually, not only with our employees but also with customers.”
How do you have a customer conference that is virtual with 1,000 people? What does that look like? Do you actually get real benefit out of a conference where 1,000 people come?
All of these kind of changes are going to be interesting.
I think the truth will lie obviously somewhere in between. There's never going to be a substitute for the need to meet my friends. I’m actually spending more time with them in a very frictionless way through exactly what we are doing right now. Sandy, you and I used to meet twice a week taking a 40-mile drive each way. Just yesterday you were saying, “Why would you ever drive up to Connecticut? And why would you ever drive up to Montclair?”
For Victor. That doesn’t apply to me. [laughter]
But my point is this is a jolt to the system. It’s like we were all treading along on a certain path, vaguely talking about notions of working differently. It’s like somebody’s taken a cricket bat and...“Bang! Come on, wake up.” I think that’s going to create a shift.;
I really don’t believe people will not need to meet [in person]. I mean, we are social beings. We need to and like to be with each other. That’s not just true in our personal lives. It has to be true in our professional lives as well. But I think we’ve overdone it. There is [an] incredible amount of waste in it. There is [a] tremendous amount of human cost to it, and all of that suddenly became visible.
The longer this goes, the more the [new] habit kicks in.
Six months to form a habit. We’ve already been disrupted for two to three months. [If] this goes on for another three months, I’m really interested to know what the new habits [will be] that get formed and how they are going to shift the rest of my life. I think it’s an interesting thing to think about.