Why does great corporate storytelling enable employees to be great ambassadors for their firm?

What differentiates Human-Powered-Organizations from traditional companies? Why are those individuals that want to be a boss often not great leaders? How do HR teams engage with their stakeholders effectively? Those are some of the topics of this week's Building Corporate Soul newsletter. Enjoy the read.

High-Performing Teams Excel At Productive Conversations

It does not come as a surprise – but it′s reassuring to see research that confirms that the way teams communicate is a clear lever to high-performance. The Productive Conversation Matrix by Tijs Besieux, PhD and Amy Edmondson is a helpful reminder as it helps to:?

1. Focus on what matters
2. Increase the quality of decision-making
3. Optimize the meeting's return on time investment for every team member

It helps teams to distinguish different conversation styles and to identify factors that hinder or support productive conversations – but most of all it helps to improve the overall quality of conversations. In doing so, it fosters a more collaborative and effective work environment.

What Differentiates Human-Powered Enterprise From Traditional Organizations

First of all: they consider the creation of conditions for human success at work to be the foremost priority of HR and a strategic pillar for the organization's success. That′s one of the latest pieces of research published by Gartner . The definition of Human-Powered Enterprises includes the focus of those organizations who prioritize treating 'employees' as 'people', not merely 'workers', at the core of their strategy.

There are six elements that differentiate human-powered enterprises from other organizations:

1. Why' we work: Employee Value Proposition (EVP)
2. How' we work: Embedded well-being
3. Who' we work with: Integrated with Diversity and belonging
4. Who' we work for: Leadership
5. Where' we work: A human-centric workplace
6. What' supports our work: A Human-AI partnership

The following characteristics that distinguish human-powered enterprises from traditional organizations - they

• Base their Employee Value Proposition (EVP) on "feelings"
• Embed wellness into their work culture
• Integrate diversity and belonging into their operational framework
• Remove emotional barriers to leadership
• Define the workplace as a space where people can perform at their best
• Foster human-AI partnerships

When starting the journey to become a Human-Powered Organization, there are 18 recommendations that are worth considering:

1. Make radical flexibility natural, easy and expected: Establish guiding principles to create a culture of flexibility within the workforce to ensure everyone can take advantage of flexible work.
2. Build inclusion — and deeper connections — into workflows: Create personas, based on employee feedback and stories, to provide tangible proxies for employee segments and more fully understand others’ experiences.
3. Support the personal growth of all employees: Partner individuals — irrespective of tenure, location or performance history — with neutral and unbiased career coaches whose primary responsibility is to the individual.
4. Create norms that promote proactive rest: Instill an ethic of embedding proactive rest into work by helping teams to manage workloads and build in recovery time.
5. Adapt your organization to encourage flexibility: Support employees and teams to decide together how they will use their flexibility as a group to prevent collaborators from making misaligned choices.
6. Guide employee agency to support high performance: Make expectations for high performance more clear and transparent, and recognize performance as it occurs.
7. Partner to deliver an EVP that makes employees feel cared for: Partner with other leaders — including total rewards, talent management and middle managers — to deliver a human deal EVP.
8. Inventory your talent processes to understand the presence of bias: Interview HR leaders and employees to understand whether your recruiting, performance management and succession processes support a more diverse workforce.
9. Measure the sense of belonging your employees feel: Measure your organization’s current state of belonging and the extent to which it is integrated in business processes. Employee engagement pulses and surveys — especially with questions focused on psychological safety — can help measure belonging.
10. Publicly recognize and celebrate different leadership styles: Identify whether your organization has a widely recognized common style of leadership. Ensure that communications, rewards systems and senior leaders celebrate a variety of leadership styles and models across the organization to support authenticity for all current leaders, aspiring leaders and employees.
11. Equip leaders with powerful questions: Support leaders in demonstrating sincere empathy through targeted questions to understand employees’ unique needs and help them move forward. Emphasize the importance of not just asking questions, but also helping employees take action to overcome challenges.
12. Expose leaders to the hardest parts of a leader’s job: Avoid accidental leaders by ensuring aspiring leaders understand and experience some of the most challenging aspects of leaders’ jobs.
13. Enable human skill-centered jobs through AI: Align HR and enterprise business goals around current and future job skills needed.
14. Deploy the human-AI partnership in the HR function: Incorporate transformation building blocks into your technology roadmap and create opportunities to inspire HR staff to think beyond its traditional roles.
15. Drive positive employee engagement and performance: Take concrete steps during technology implementation to reduce fatigue.
16. Co-create workplace guidelines and allow employee choice: Create workplace autonomy by partnering with business leaders to develop employee workplace guidelines, not requirements, based on the level of flexibility employees need to complete work tasks.
17. Identify components of frontline jobs that can be done virtually: Frontline employees also benefit from increased flexibility and autonomy. Determine which activities within their roles can be done from different locations and provide choice and flexibility when possible.
18. Provide guidance on how to use different office spaces for different types of work: Be intentional in workspace design strategy by determining how employees use different spaces and what spaces they need. Partner as needed with real estate and business leaders

Companies with soul know this already, but for all others it′s a great guide on their way to become an organization that is ready to outperform its peers.

Ethical Investing Can Deliver Impressive Risk-Adjusted Returns

The Soul Index already showed that companies that put a strong emphasis on corporate culture deliver significantly higher returns than the top indices like Dow Jones or even Nasdaq. Recent data from JUST Capital and Axios confirm that result. “What if the best companies, judged on a moral level, were also, broadly speaking, the best companies judged by the stock market?” is the title of the chart below which suggests that it might actually be the case:

“Since 2018, Just Capital has been surveying tens of thousands of Americans, asking them what traits they value in a company, and then ranking the biggest U.S. companies by those criteria. This isn't an ESG ranking: Combating climate change, for instance, only has a 2.2% weight, while paying workers fairly has a 17.7% weight and treating workers well more broadly carries a 42% weight. Interestingly, Americans show very few partisan divisions in the answers to Just Capital's questions — what CEO Martin Whittaker calls "kitchen table" issues like job creation and treating customers fairly turn out to be top of the list of corporate priorities for Republicans and Democrats alike. Between the lines: While Americans' attitudes shift slowly over time, changes in the rankings are much more likely to be a function of what's happening at the level of individual companies, which can improve their performance on any given metric or at least measure it better and report that performance to investors.”

Their summary: “The bottom line: The investment strategy of ′buy the companies you most admire′ turns out to have been a very good one.” Here are more details.

You want to be boss. You probably won’t be good at it.

That thought provoking thought is the headline of the latest piece of the U.S. National Bureau of Economic Research. Co-authored by David Deming, Isabelle and Scott Black Professor of Political Economy at Harvard Kennedy School Executive Education , the study concludes that companies are better off when they select managers based on two measures highly predictive of leadership skills. This is what they discovered: “We found that people with the greatest preference for being in charge are, on average, worse than randomly assigned managers.” Here are a few excerpts from an interview that was published recently:

“What are the qualities that make a good manager, and why is it so hard to find them?

Being a good manager requires many different qualities that often don’t exist in the same person. First is the ability to relate well to others, to create what Amy Edmondson and others have called psychological safety, meaning the ability to make people feel stable and secure in their role so they are comfortable with critical feedback. That’s a key component of being a good manager. Communication skills are also essential. As a manager, you should know that there’s not one good way to deliver feedback to your workers because the words you use and the way you frame your statements also matter.

At the same time, you must also be analytically minded and open to different ways of doing things and be able to take a step back and reassess whether your team or organization is working as well as it could be. Overall, being a good manager requires both interpersonal skills and analytical skills. You also need to have a strategic vision — which is something that our study does not capture. Managers must have a sense of what their organization is trying to accomplish. Any one of those skills is hard to find. Having all three, and knowing when to use them, is even more difficult.?

One of the paper’s most surprising findings is that people who self-nominate to be managers perform worse than those randomly assigned. Why is that?

In the study, we randomly assign the role of manager. That was half of the experiment. In the other half, we asked people which role they wanted, and we assigned the role of manager to the people with the greatest preferences for being in charge.

We found that people with the greatest preference for being in charge are, on average, worse than randomly assigned managers. It’s hard to know exactly why because there are a lot of factors in play, but we show evidence in the paper that they are overconfident in their own capabilities, and they think they understand other people better than they do. We all know people like that.

This was a surprising finding. And it’s important, because interest in leadership plays a big role in how companies pick managers. Companies have their own hiring and employee evaluation policies of course — they don’t pick managers randomly like we did — but it’s surely true that preference for leadership plays a big part in who gets promoted to management. For example, we find that men are much more likely to prefer being in charge, but they aren’t any more effective than women in the role of manager.

The main lesson I take from this finding is that there’s a big difference between preferences and skills; just because you want to be a manager doesn’t mean you’re going to be good at it. Organizations that take more scientific or analytical approaches to identifying good managers are going to come out ahead.”

Here′s the link to the entire interview.

Engaging Employees And Building An Organization Of Storytellers

“The best CEOs harness the full potential of their teams, enabling them to express and amplify a common purpose and singular narrative.”, that′s the summary of the third episode of the?McKinsey CEO Insights?series. Senior partner Joydeep Sengupta speaks with Laurel Moglen , 麦肯锡 ’s managing producer, to discuss the art and science of storytelling, fostering an inclusive, collaborative culture through communication, and leading with humility. Here are some noteworthy thoughts:

Laurel Moglen:?What do the best CEOs do to make sure their team understands the company’s story really well?

Joydeep Sengupta:?What I’ve observed is good leadership likes to rally the organization around one big idea or audacious goal. And once you have that idea in place, I think the question is around, how do you translate that into a simple story? What are the values? What is the strategy? And importantly, what are you not going to do? And lastly, when you do something like this, you do it together, right? You don’t do it on your own. Many organizations who have created cohesion successfully, take the top team, sometimes even the entire organization together, to try and build this story.

Laurel Moglen:?How important is it for CEOs to role model the behavior that they are asking their employees to emulate?

Joydeep Sengupta:?It’s really important. Our research shows that 86 percent of CEOs believe they’re acting as role models for such inclusive behavior. But we found only 50 percent of their direct reports say they’re watching?the CEO?do that, so there is a real disconnect. And I think the disconnect stems largely from self-awareness, and what it takes to give up, quote, unquote, “your power.” For example, CEOs often invest a lot of time in developing the strategy, the approach, the story, and they want to be in the limelight telling the story. (…)

Laurel Moglen:?So, there’s a degree of humility that comes with a CEO who is able to do that. How do we encourage this quality if it’s so important?

Joydeep Sengupta:?I would say that CEOs increasingly realize that there are many?forms of leadership: being authentic, inclusive, collaborative, and having the humility to sometimes admit that there may be others in the organization who might do things better than them or may have something interesting to say, and in fact, compliment their strengths. This attitude makes them even more effective and more powerful than if they needed the credit as the one person driving change. And I think our research increasingly continues to see that more and more CEOs are embracing this notion."

Here′s the link to the entire interview.

Amy Edmondson & Steve Brass On Psychological Safety

“I cannot think of a place where lower psychological safety would help you in any way,” says Harvard Business School Professor Amy Edmondson, known for her pioneering research on the topic. “Lower psychological safety would make you take fewer risks, but not necessarily better risks. So having anxiety about what other people think of you isn’t a great state for optimal performance.”

This bonus episode of The Culture Kit with Jenny & Sameer, Edmondson, along with WD-40 CEO Steve Brass, joins hosts Jenny Chatman and Sameer Srivastava to discuss how to create a culture of psychological safety—and why it matters. It′s definitely worth listening to. This is the link to listen to the podcast straight-away.

Effective Stakeholder Management From An HR Perspective

Hacking HR recently published their view of 7 successful strategies for HR-professionals to apply when it comes to managing their often diverging stakeholder groups. This is a great synopsis. Here′s what they say: “Stakeholders are individuals, groups, or organizations that can affect or be affected by a project's outcomes. In the case of HR, there are many groups of stakeholders, often with competing priorities, motivations and needs. They may include employees, managers, executives, union representatives, vendors, and even regulatory bodies. Effective stakeholder management is the process of identifying these parties, understanding their needs and influence, and strategically engaging them throughout the project lifecycle.”

They have identified 10 key components of effective stakeholder management in HR projects:

1. Stakeholder Identification: This component involves systematically identifying all relevant stakeholders who may impact or be impacted by the HR project. It includes mapping out internal stakeholders such as employees, managers, and executives, as well as external stakeholders like vendors, union representatives, and regulatory bodies. A thorough identification process ensures no key stakeholders are overlooked, reducing the risk of unexpected resistance or roadblocks during project implementation.
2. Stakeholder Analysis Matrix: Developing a stakeholder analysis matrix helps prioritize and categorize stakeholders based on their level of influence and interest in the project. This tool allows HR project managers to tailor their engagement strategies, allocating appropriate time and resources to each stakeholder group. The matrix typically categorizes stakeholders into four quadrants: high influence/high interest, high influence/low interest, low influence/high interest, and low influence/low interest.
3. Communication Channels: Establishing clear and efficient communication channels is vital for maintaining open lines of dialogue with stakeholders throughout the project lifecycle. This component involves selecting appropriate communication methods for different stakeholder groups, such as regular email updates, face-to-face meetings, or digital collaboration platforms. Effective communication channels ensure timely information sharing and facilitate prompt addressing of stakeholder concerns or feedback.
4. Engagement Strategies: Developing customized engagement strategies for different stakeholder groups supports gaining and maintaining their support. This component involves creating targeted approaches based on stakeholders' interests, concerns, and preferred communication styles. For example, executive stakeholders might require high-level project updates focused on strategic impact, while frontline employees may need more detailed information about how the project will affect their daily work.
5. Stakeholder Expectation Management: Managing stakeholder expectations is key to preventing misunderstandings and maintaining positive relationships throughout the project. This component involves clearly communicating project goals, limitations, and potential outcomes to all stakeholders from the outset. Regular check-ins and updates help ensure stakeholder expectations remain aligned with project realities, reducing the risk of dissatisfaction or resistance as the project progresses.
6. Stakeholder Feedback Loop: Implementing a continuous feedback mechanism allows HR project managers to gather insights, address concerns, and adapt project plans based on stakeholder input. This component involves creating formal and informal channels for stakeholders to provide feedback throughout the project lifecycle. Regular surveys, focus groups, or suggestion boxes can be valuable tools for maintaining an open dialogue and demonstrating responsiveness to stakeholder needs.
7. Stakeholder Influence Mapping: Understanding the complex web of relationships and influence among stakeholders helps navigating organizational dynamics. This component involves mapping out how different stakeholders influence each other and the project outcomes. By identifying key influencers and opinion leaders, HR project managers can strategically leverage these relationships to build broader support and overcome potential resistance.
8. Stakeholder Risk Assessment: Conducting a thorough stakeholder risk assessment helps identify potential challenges or opposition that may arise during the project. This component involves analyzing each stakeholder group's potential impact on the project, both positive and negative. By anticipating potential risks, HR project managers can develop proactive mitigation strategies and contingency plans to address stakeholder-related issues before they escalate.

1. Stakeholder Involvement in Decision-Making: Involving key stakeholders in relevant decision-making processes can significantly increase buy-in and commitment to the project. This component involves creating opportunities for stakeholder input on important project decisions, whether through advisory committees, working groups, or consultation sessions. By giving stakeholders a voice in the process, HR project managers can foster a sense of ownership and shared responsibility for project outcomes.
2. Stakeholder Recognition and Appreciation: Acknowledging and appreciating stakeholder contributions throughout the project is essential for maintaining positive relationships and encouraging ongoing support. This component involves recognizing both individual and group efforts that contribute to project success. Whether through formal recognition programs, public acknowledgments, or personal thank-you notes, showing appreciation for stakeholder involvement can strengthen relationships and set the stage for future collaborations.

Beyond those 10 components, they have identified 7 strategies to engage and manage diverse stakeholders in HR initiatives:

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1. Develop Stakeholder Personas: Create detailed profiles of your key stakeholder groups, including their needs, motivations, and communication preferences. This strategy allows for more personalized and effective engagement.
2. Implement a Multi-Channel Communication Plan: Use a variety of communication channels to reach different stakeholder groups effectively. This might include a mix of email newsletters, intranet updates, town hall meetings, and one-on-one sessions. Tailor your message and medium to each stakeholder group's preferences and needs, ensuring that information is accessible and relevant to all.
3. Conduct Regular Stakeholder Pulse Checks: Implement periodic surveys or quick check-ins to gauge stakeholder sentiment throughout the project lifecycle. This strategy helps identify potential issues early and allows for timely adjustments to your engagement approach. Use tools like online surveys or brief in-person discussions to gather feedback on project progress, communication effectiveness, and overall satisfaction.
4. Create a Stakeholder Advisory Board: Form a diverse group of stakeholders to act as an advisory board for your HR project. This board can provide valuable insights, help validate decisions, and serve as project ambassadors within their respective areas. Select members from various levels and departments to ensure a well-rounded perspective on project impacts and challenges.
5. Leverage Influencer Networks: Identify and engage key influencers within each stakeholder group to help spread project messages and gather support. These influencers can be formal leaders or informal opinion makers who have the trust and respect of their peers. Work closely with these people to ensure they understand the project goals and can effectively communicate benefits to their networks.
6. Offer Stakeholder-Specific Training and Support: Provide targeted training and support to different stakeholder groups based on their role in the project and how it will affect them. This might include technical training for users of a new HR system, leadership workshops for managers implementing new processes, or change management sessions for employees affected by organizational restructuring.
7. Celebrate Milestones and Quick Wins: Regularly communicate and celebrate project milestones and quick wins to maintain stakeholder enthusiasm and support. Share success stories, highlight positive impacts, and recognize stakeholder contributions. This strategy helps maintain momentum and demonstrates the tangible benefits of the project to all stakeholder groups.

These are incredible powerful ways to improve the effectiveness of HR in the context of corporate performance. Here′s the link.

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This has been the 72nd edition of the newsletter - let′s ?make soulless companies a thing of the past this year! The next edition of the Building Corporate Soul newsletter will be in your mailbox on September 29.?