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It’s Official: Mergers and Acquisitions are Back

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SONY DSC2015 was a record year, with $4.2 trillion of transactions pending or completed at the end of December. This news leaves shareholders and Mergers and Acquisitions (M&A) bankers gleefully rubbing their hands together, however history has repeatedly shown us that after too many mergers employee engagement is lost. So what should you do if you’re the person left with the herculean task of curating these two very separate groups of people into one cohesive body with a shared purpose, values and community?

Let’s take a look at why disengagement sets in. Organisations have an unnervingly brief window of opportunity after announcing a merger to create a single community with shared values and purpose. If they don’t act fast, this opportunity is lost and the “us and them culture” sets in; individual employees ask “where do I fit in?”; and the values of the dominant company swallow up those of the smaller company. This makes the chance of cementing a truly joint purpose, from an engaged community with shared values, unobtainable.

So what should you be doing to avoid this? Well for a start it is fundamental that organisations engage employees from both sides of the merger in the co-creation of shared values as soon as possible after the merger announcement. This must be an engagement at scale, and in a way that enables them to contribute to the discussion and formulation of the shared values. The very act of focusing your people on co-creation establishes a sense of community across both sides of the merger. This sense of community in turn pushes the newly formed organisation over a tipping point of engagement. You can capitalise on the renewed energy created by heightened engagement to rapidly sense-check shared values across the organisation and enable employees to feel ownership over these values. This process creates a sense of belonging, motivation and engagement on an individual level, to maintain the energy and drive needed to push through the stress of the merger.

By following a process of acting both rapidly and inclusively you ensure that, instead of creating a sense of loss at the changes made by the merger, you’ve created a community. This is a community with a shared purpose, driving engagement, around the values of your newly formed company. This engagement has the added bonus of contributing to the success of the merger, ensuring your shareholders are still happy.

Do you need to cement values across silos? Contact harriet@hotspotsmovement.com for further information on how to achieve this.

5 Trends to Watch in 2014

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Lynda - Hot Spots Movement - Portrait by LK - web size 72dpi

By Lynda Gratton
The start of a new year is a natural point for thinking ahead and planning for the future.  Just before 2013 ended, I sat down for an interview with the BBC’s Peter Day, continuing a conversation he and I have been having for over 20 years.  During the interview I talked not only about the changes I’ve observed since he and I last spoke, but also about the five trends I see emerging in 2014 and beyond.

The shade of your future depends on where you are

Something that has become abundantly clear in recent years is that whether your future seems bright or dim depends on where you live. Young people in Europe, for example, are facing an extremely tough time and face the prospect of being less prosperous than their parents generation. But for their counterparts in India or China, expectations are entirely different, with many of them looking forward to a higher income than their parents.

It’s my belief that the youth unemployment we see affecting many countries is structural not cyclical. The past few years have been marked by the hollowing out of work, by which I mean that the  middle-skilled jobs traditionally taken on by graduates have been outsourced or being replaced by technology, leaving only low-skilled jobs or  high-skilled jobs which require more experience and education than the average twentysomething has to offer. This can leave young people adrift, without that very first job role from which to move upwards.

Online education

One major game-changer which I see having a huge impact in 2014 is online education. Online courses are becoming widely available – and they are revolutionising the scope of what people can aspire to. Suddenly, people all over the world are enrolling on courses that were previously only available to affluent individuals in specific locations. I saw a living example of the impact this is having at the World Economic Forum at Davos in 2013.  There I watched a panel with Bill Gates, the head of Stanford, the head of MIT – and a 13 year-old Pakistani girl. If you’re wondering why this girl was invited to join these eminent figures, the reason is simple: this young teenager came top in Stanford’s online examinations. This struck me as an outstanding example of how the world is changing: here is a girl who even five years ago would have had no opportunity to leave Lahore, but thanks to a world-class university putting its courses and examinations online, she has the world at her feet. There is no doubt that this will create huge competition for young people in the West.

Quotas for women?

It’s astounding to think that while 50% of graduates are women and 30% of managers are women, only 10% of business leaders are women. For someone who thought that the glass ceiling was about to shatter 20 years ago, this is extremely disappointing. Despite all our hopes to see more women at the top of leading organisations, the speed of change has been glacial. It seems that large organisations remain hierarchical, bureaucratic and have a tendency to pay lip service to the concept of having women in the boardroom. Frequently, they are not places where women feel comfortable holding senior positions. One solution that has been put forward is that of female quotas, but this is an issue which divides opinion amongst senior women. For my part, I’m on the side that thinks quotas are a good thing. The way I see it, if you are in a situation where nothing seems to be moving, a shock is what’s needed.

The business side of social media

I also think we’ll start to see organisations using social media within their businesses as elegantly as people use it in their everyday lives. A trend that has emerged in the last year or two is that there is technology that connects every single person in an organisation in a very sophisticated way. For example, I’ve seen this happening at Tata Consulting Services, a business that employs over 150,000 people under 24 and connects them to each other using social media. The result of this is that people naturally form communities to get things done, to discuss ideas, and to have fun. Since their Knome platform was launched, TCS employees have formed themselves into 3,500 communities. My team at the Hot Spots Movement helps companies do this in a more targeted fashion with their FoWlab jams: facilitated online conversations which companies can use to engage their employees on issues as diverse as brand values, job design and meaningful work.  I see this becoming a model that many other companies will follow. 2014 promises to bring some interesting organisational changes led by technology, particularly the kind that allows people to communicate on a many-to-many basis. This kind of communication model will have a huge impact on how people work together – and on the role of leaders.  In fact, it has the potential to change the very nature of what we call leadership. After all, if information is flowing easily and horizontally – what does a leader do?

Reconsidering trust

Both online education and social information sharing rely enormously on trust – something that will prove challenging for some. For those of us who are Baby Boomers or from Gen X, building trust has always been based on face-to-face interaction – and building trust in a virtual environment can prove challenging. People from younger generations, on the other hand, have grown up working online and playing games virtually, which gives them the advantage of being able to develop trust easily without the need for face-to-face contact. A workforce is emerging where humans can build trust in a virtual environment and this promises to revolutionise how information is shared and how knowledge and expertise flow within organisations.

Why Enterprise Social Networks Fail

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Companies have understood the benefits and pitfalls of using social media to engage customers for some years now, with Facebook and Twitter now commonly used as platforms for identifying new customers, fostering brand recognition, and building or harnessing engaged communities. However, few companies have successfully replicated the success of these social platforms internally.

Engaging employees and motivating them to embrace new ways of working often proves difficult, with companies often seeing low uptake rates of enterprise social networking platforms such as Microsoft’s Yammer and Salesforce’s Chatter.

Though enterprise social networks can take off, they tend to end up supporting a small group of core users, whose interest in the platform ebbs over time. We have spoken to a number of companies who have been frightened away from internal social media after they have failed to gain traction.

The problem with internal social networks is that they often lack purpose, they are rarely facilitated, and they tend to lack sponsorship from leaders. Providing a platform is a prerequisite for enabling new ways of working, but it is rarely sufficient. People need to have a reason for engaging.

The importance of purpose

One of the most successful enterprise social networks we’ve seen, Tata Consultancy Services’ Knome platform, creates engagement by encouraging people with common interests to share their experiences. Building on people’s preexisting passions is a quick way to create engagement with a platform, as it taps into a nascent desire to connect.

Uniting a large and more diverse audience often requires the identification of a broad challenge that everyone in the organisation has a vested interest in addressing. For our FoWlab Jams, we always identify a big strategic challenge, and try to tie the Jam itself to an existing organisation-wide change program. This frames the platform as a vehicle for change, and as a unique opportunity for employees to contribute to high-level strategy.

Facilitation

Personally, I don’t like networking events because I’m rubbish at striking up conversations with people I don’t know. I’m sure it’s a common trait, and one that I know translates to the online world. Though we’re often given a confidence boost by a cloak of anonymity on certain online platforms, most if not all enterprise social networks build on our existing work identities and reputations.

To avoid everyone lurking around the canapés or pretending to check their phones, you need someone facilitating interactions. Someone to introduce them to others and reveal common interests they can talk about. We’ve found that facilitators in online platforms are almost a prerequisite for engaging a diverse audience. They may not be expert in the area under discussion, but they are expert in creating exciting questions and connections between ideas and people.

Motivated sponsorship

Unlike customers, employees have a reason to be scared of sharing their opinions. They think they are being observed by people who want an excuse to fire them. This is the default assumption, and the mentality arises even in the absence of overt authority. It’s something that needs to be actively and continually refuted by leaders in order for their employees to feel they can be honest and open.

Transparent and authentic leaders, who value and act on the opinions of those working for them, are invaluable in getting employees to embrace enterprise social networks. Even for those lucky enough to work in ‘flat’ or ‘horizontal’ organisations, there needs to be a shared understanding that your opinions matter, and that you won’t be penalized for openly collaborating with others.

By providing enterprise social networks with purpose, facilitation, and sponsorship, the chances of people engaging with them will increase dramatically. In our FoWlab Jams, we tend to see 50% of our target audience engaging with the conversation – and that’s just over three days. Employees won’t naturally transition to these new ways of working, but if you give them a reason, guidance and leadership support, you’ll remove the main barriers in their way.

Insights from the New Ways of Working Masterclass

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by Emma Birchall, Head of Research, Future of Work

We started this week with a bang by hosting one of our Future of Work masterclasses on the subject of New Ways of Working. Here are some of the highlights.

The impact of social networks

It’s no surprise that social media was a major discussion point. As Lynda pointed out in her keynote, social media has already had a huge impact – but it isn’t quite as entrenched as other habits. While 70% of companies now use social structures and communities internally, with 90% reporting benefits, email remains dominant and many companies struggle to exploit social media’s collaborative potential. Most businesses are only just realising that online communities are becoming just as important as physical communities and many-to-many communication hold great value for the future. Increasingly, social media is becoming the only way to ensure disparate groups of employees make the connections that will help boost productivity and strengthen teams.

Guest speaker Darren Keegan of Tycoon Systems expanded on this theme by highlighting the value of virtual reality workspaces – and why they shouldn’t be ignored as a tool for enabling geographically diverse teams to collaborate effectively.

Global talent pools and hyperspecialised work

Our speakers also focused on job design and the trend towards complex work. With many of the most talented workers choosing portfolio careers and virtual working becoming embedded in corporate culture, companies are waking up to the fact that they can acquire specialist skills virtually instead of hiring experts full-time. By allowing employers to share the most talented workers rather than competing for them this model offers huge benefits such as enabling businesses to carry out complex projects at a reasonable cost. However, it also poses some unique challenges, including the question of how best to assemble teams when some workers are remote, and how to ensure employees stay motivated. Guest speaker Gary Swart, CEO of oDesk – also a renowned expert on the future of work – provided practical insights into this new way of working by describing how oDesk’s business model helps workers build more meaningful, varied and lucrative careers while at the same time enabling businesses to streamline hiring processes and access high-quality work at the best price.

New ways of managing performance

As job design changes, performance management methods have to be updated accordingly. In a world where teams aren’t necessarily co-located, employees frequently work on many projects with different leaders and peers, performance management is following the same patterns as communication and evolving from a one-to-one model to a many-to-many model.

As with communication, social media would seem to be a great solution to this – platforms like Work.com are already offering such services. The real issue around performance management, however, is behaviour. There is no escaping the fact that remote workers receive lower performance appraisals than co-located team members and that people give feedback based on how well they like someone rather than their skill level. Once again, Gary Swart’s take on this provided a glimpse into the future: freelancers on oDesk are already assessed based on their skills rather than what a manager thinks of them.

Finally, we invited members to think outside the box by looking at ways in which human resources professionals can learn from marketing firms when it comes to observing and influencing behaviour. Jonathan Chippindale of Holition provided unique and fascinating insights into how concepts such as augmented reality and gamification are revolutionising consumer behaviours.