Dear Culturati Insider,
Welcome to this week’s edition of On Culture where we explore strategies to support your leadership and strengthen your workforce.
In McKinsey’s latest quarterly, data reflecting six shifts across purpose, leadership, decision making, employee experience, technology, and social responsibility is shown to be driving top-quartile performance and sustainable growth.
Further to organizational success, research finds traditional KPIs fall short in guiding transformations. Embracing Key Behavioral Indicators (KBIs) helps leaders address emotional and team dynamics, significantly enhancing outcomes by focusing on psychological safety and collaboration.
Additionally, in an aging yet increasingly digital workforce, age diversity emerges as a strategic asset. Harnessing intergenerational wisdom can boost retention, satisfaction, and productivity. Tapping into the “longevity economy” through the the Age AWARE Audit framework, can also help businesses better serve and engage the over-50 demographic, unlocking their substantial economic contributions and ensuring inclusive organizational growth.
Lastly, we look at the hidden costs of layoffs, revealing how strategic alternatives like furloughs can mitigate productivity losses and turnover costs, preserving long-term stability.
Building stronger, healthier organizations together,
Myste Wylde
COO
Healthy Organizations Keep Winning, But The Rules Are Changing Fast
McKinsey & Company By Aaron De Smet, Arne Gast, Drew Goldstein, Richard Steele, James Rappaport, and Nicolette Rainone
Summary: To elevate organizational health and performance, today's leaders must adapt to shifting paradigms by fostering employee empowerment, integrating technology to enhance value creation, and evolving leadership styles. McKinsey's updated Organizational Health Index (OHI), grounded in two decades of research, underscores that organizations in the top quartile of health metrics deliver three times the shareholder returns compared to those in the bottom quartile. The index now highlights six critical shifts: emphasizing a common purpose to align and motivate employees, moving away from authoritative leadership to more empowering and decisive approaches, leveraging data-driven decision-making over intuition, enhancing employee experience to boost engagement and productivity, aligning technological investments directly with business performance, and broadening the scope of social responsibility to strengthen external relations and customer loyalty. These modern practices are essential for long-term success, with data showing healthier organizations are less likely to face financial distress and more likely to achieve sustainable growth and high employee endorsement. |
The One Factor that Leaders Overlook When They Focus on KPIs to Measure Success
Fast Company By Errol Gardner
Summary: In today's dynamic business environment, traditional Key Performance Indicators (KPIs) often fall short in capturing the full spectrum of a transformation's progress, particularly in terms of team dynamics and emotional health. Research by EY and Saïd Business School highlights that while 72% of leaders struggle to identify early warning signals in transformations, nearly three-quarters acknowledge the frequent oversight of emotional support. To address this, Key Behavioral Indicators (KBIs) have emerged as important tools. These indicators focus on emotional and behavioral competencies like communication, creativity, and teamwork, providing predictive insights that allow leaders to intervene effectively before issues escalate. This shift towards a people-focused approach, emphasizing psychological safety and collaborative innovation, can dramatically enhance transformation outcomes—potentially increasing the value by twelvefold. Recognizing and harnessing the emotional energies of their teams enables leaders to drive successful transformations, proving that the real power of transformation lies in the people involved. |
Why “Wisdom Work” Is the New “Knowledge Work”
Harvard Business Review By Chip Conley
Summary: Amid significant demographic shifts in the workforce, where the number of older employees and younger senior managers is increasing, leaders face the challenge of harnessing age diversity as a strategic asset. Despite apparent generational tensions, these changes present a unique opportunity to foster intergenerational wisdom transfer, strengthening the workplace overall. With people living and working longer Baine & Co. estimates that by 2031, employees aged 55 and older are expected to make up a quarter of the global workforce. Concurrently, the rise of digital intelligence has placed younger digital natives in more influential roles. Effective management of this dynamic can lead to increased employee retention, satisfaction, and productivity. Companies like Airbnb have successfully integrated wisdom-sharing practices, emphasizing the benefits of mentorship across age groups and utilizing the diverse experiences of multigenerational teams to drive innovation and adaptability. This approach not only addresses the needs and motivations of a diverse workforce but also positions companies to better compete in a knowledge-driven economy increasingly influenced by AI. |
Uncover the Ageism Hiding in Your Organization
MIT Sloan Management Review By Matthew Lifschultz
Summary: To capitalize on the "longevity economy," companies can address the underleveraged economic contributions of the over-50 demographic, which controls 80% of U.S. household wealth and contributes $8.3 trillion annually, a figure projected to grow to $12.6 trillion by 2030 per AARP research. Implementing the Age AWARE Audit framework—focusing on Accessibility, Workplace, Adaptability, Representation, and Engagement—enables businesses to tap into this demographic effectively. This strategy involves enhancing product and service accessibility for age-related needs, creating inclusive workplaces that value and leverage the experience of older workers, authentically representing older adults in marketing to reflect their diverse lifestyles, and engaging this demographic in product development and customer service strategies. By addressing these critical areas, organizations can combat ageism, expand their market reach, and fully harness the economic power of older adults, ensuring they are not only included but seen as crucial contributors to the economy and workforce. |
The True Costs of Layoffs
Bloomberg Businessweek By Matthew Boyle and Mathieu Benhamou
Summary: The complexities of managing layoffs extend far beyond the immediate severance costs, demanding a strategic approach from leadership to mitigate wide-ranging consequences. Severance often equates to a few weeks of pay per year of service, but indirect impacts such as diminished productivity and increased voluntary turnover can substantially escalate overall costs. Per data from ActivTrak, productivity losses can exceed $50,000 monthly per 100 employees, with recovery times spanning up to six months. Additionally, academic research of 200 companies shows that layoffs can trigger nearly a 50% increase in voluntary turnover, translating into significant expenses in rehiring and training, potentially costing upwards of $75 million for a 10,000-person firm. The aftermath also sees a rise in unemployment insurance tax rates and substantial legal costs, including fees for statisticians and lawyers to navigate and defend against potential discrimination lawsuits. These hidden costs underscore why alternatives like temporary furloughs may be more economically sensible in maintaining long-term organizational health and stability. |
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LEADERSHIP AND CULTURE
C-SUITE
EMPLOYEES
A.I. AND TECHNOLOGY
CORPORATE RESPONSIBILITY
INCLUSION, DIVERSITY, EQUITY, BELONGING
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