From the 2008 economic crash to the COVID-19 pandemic, commercial sustainability in the 21st century is continually challenged by forces outside of businesses’ control. In a radically different and rapidly changing world, businesses have to be prepared to adapt in order to thrive. As well as technological changes, globalisation and climate concerns, employee expectations are also changing, and public scrutiny growing.
To balance the diverse needs of their shareholders, customers and employees, many businesses need to make significant transformations today to make sure they remain resilient tomorrow. What some businesses fail to realise is that a lever to change and competitive advantage already lies within — their greatest asset and vehicle for transformation is their people. By working together to open up conversations and collaborations about purpose with their employees, businesses can create a culture of change and resilience.
Regardless of the industry sector, the way a business operates is under increasing public scrutiny, which is one reason why many employers have moved to formulating and implementing meaningful environmental, social and governance strategies (ESG). Organisations’ ability to live up to the expectations of the wider population, which includes tomorrow’s employees, can have a real effect on their ability to attract the talent that they need for the future.
Ensuring your company values and culture align with your employees’ expectations and beliefs will not only help to show a commitment to professional wellbeing, making employee recruitment easier, but could also ensure you can attract the type of person you really need.
A lack of meaningful or relevant values, or an inability to articulate them clearly, can make attracting new talent difficult, as well as having an impact on employees already in role. A workforce that is not inspired by, or connected to, your values could lead to an expensive and counter-productive brain-drain.
But what if the company value set itself needs to change? Global tobacco company Philip Morris International (PMI) understands that the future of their business itself was at stake unless true, meaningful change happened.
Rudi van Kleeff, Head of Project Management Office & Strategic Governance for Benelux at PMI, explains how the company has been transforming from the inside out, not only in response to market forces but primarily because company values have fundamentally changed:
‘We want to continue to be a company that people are proud to work for. Providing a sense of purpose for employees is more important than ever. People want to be part of a company that offers this sense of purpose and reflects their values.’
«Our transformation towards a smoke-free future, which we started some years ago, not only includes the development of less harmful products but it also includes a change of our organisational set-up and ways of working. This conviction and belief in a smoke-free future have revolutionised our business and our relationship with our employees as well.»
Rudi van Kleeff, Head of Project Management Office & Strategic Governance for Benelux at PMI
From a commercial point of view, the impact on the public perception of a company and its brands can also have a huge effect on its value. Ensuring companies have strong corporate social responsibility (CSR) and environmental, social and corporate governance (ESG) credentials — that they are fundamentally seen as ethical, socially-responsible players — ensures that businesses are maximising saleability, referral, and ultimately their bottom line. Rudi says:
‘The question we are asking ourselves is ‘who do we want to be seen as’. That has to be based on what employees need if we want a connection between our workforce and the future of the business. While we have a strong history and legacy, there has also been a lot of soul-searching in the business, looking for who we intend to be as we move away from a cigarette-only business towards a smoke-free business. We need to make that connection if our employees are to play a central role in that journey.’
Managing change in partnership with employees
Naturally, making the changes required does not come easily; less than 30% of companies that undergo a people transformation strategy succeed. And the immediacy of the need to change can in itself cause difficulties for employees. Asking people who have had stable, uninterrupted employment to change can cause real stress, and the difficulty in going through that process can be unnerving. Rudi has experienced this first-hand:
‘We have been in a privileged position over the years as we have been growing steadily and competed successfully in the tobacco business by selling some of the world’s most famous cigarette brands. However, we’re looking at a future where people won’t smoke traditional tobacco products anymore. Where our people had previously felt protected their whole careers, now we are asking them to change. Major changes can be disruptive and affect peace of mind – that’s not easy for everyone.’
Having a clear path forward is important, not just so the business has a route to making the changes necessary, but also so the business can communicate this clearly and convincingly to its staff. Employee engagement is a crucial part of ensuring the strategy is received, trusted and enacted by everyone in the business.
The devolution of decision-making can empower employees to shape the nature of their being at work, not just their working environment. By connecting change with individual purpose, it gives a route for those already in the business, as well as a clear roadmap for those new to it.
Where some would attribute poor communication as the biggest factor in failing transformation strategies, PMI understood that their people needed to feel involved in the journey, not just be taken along for the ride. An opportunity to feel that they belong to something and that their contribution matters. Rudi explains:
‘What we realised is that by communicating openly and inclusively; and by continuously explaining what we were doing, people were more receptive to change and understood the benefits for them in the long run. Because this was less of a top-down approach, the change was refreshing for many people, and they welcomed it. By opening the conversation and involving our employees, they are providing a lot of new ideas. Because we are collaborating, there is a growing sense of belonging.’
Building an adaptable workforce
Making the changes companies need to stay relevant, especially when the market environment shifts very suddenly, can be a real challenge. Fundamentally, the power behind a business is its people and the reality can be that the current workforce itself has to undergo change urgently if the business is to survive.
Winanda Nuyttens, Head of People and Culture, Benelux, at Philip Morris International, explains that their aim towards sustainable employability will improve employee and organisational resilience, allowing more fluid and valuable, working relationships:
‘We want our people to find a context where we encourage lifelong employability, rather than lifelong employment, which is a more sustainable position to be in for both employee and the company.’
This approach not only ensures that the future workforce is flexible but – and more importantly – that people remain in control of their professional track. Winanda agrees that people have their own ambitions and that shepherding individuals out with financial packages cannot only be costly for the business but also damaging for the individual:
‘It is easy to create early retirement plans, but that might not be what is best for the person. We should open people to new opportunities or other options, they need to have a market value to feel their self-worth, and/or be in control over their lives. To make sure we’re doing the right thing for everyone we’re moving to an employment model that is responsible, rather than transactional.’
Diversity of thought, and inclusive support
Ultimately, the aim of most people strategies is to develop a workforce that changes and adapts with wider market factors. By aligning your values and company purpose with your employees’, you can foster motivation and shared direction. But when that direction needs to shift to adapt to new circumstances, how can businesses ensure that their workforces are inherently resilient to change?
The type of workforce you create holds the key to this question. Many organisations suffer from a myopic view of the type of person they need in their organisation — assuming people should be hired to fit the culture that exists. However, organisational performance has shown that a more diverse mix of people will result in improved business performance.
Katherine Conway, Head of Diversity & Inclusion, EMEA, at Aon, agrees that the hiring process is key in creating a diverse and inclusive workplace, and that legacy workforces may not be future-proof:
‘There is a tendency to hire ‘sameness’. People stick to what they know because it is familiar — whether that be a known educational background or perceptions of what ‘fits’ a certain role — but businesses do not learn anything by doing this and they limit their diversity of thinking. HR departments have to accept that to create a transparent working environment people crave, the ‘fitting the mould’ approach is over.’
That said, if diversity and inclusion is the key to business performance, it needs to be central to the design of business strategy. It has been shown that long-term value creation can be achieved through diversity of thought, and Winanda agrees that this has to be done in the right way for it to result in positive change:
«We want everyone in the organisation to think and help in a really inclusive way, and we want it to enable change. We want employees who talk, feel and think differently and who challenge us to understand whether we are really listening to the different opinions around the table. That is the key path to growth.»
Katherine Conway, Head of Diversity & Inclusion, EMEA, at Aon
But diversity also has its challenges. By hiring people who are unlike those you are used to working with, it may not be as easy to manage them, so you will need to develop your managers to improve their understanding of a wider group of characteristics. In addition, from the new starter perspective, if their characteristics are very different to the workforce around them they may not immediately think they have made the right choice, making culture and a strong team dynamic a crucial part of the onboarding process.
Getting managers involved in this process by helping them exhibit the right behaviours and putting the right processes in place is also crucial. Inclusivity is not as simple as opening the same doors for everyone — different people need different doors. In the context that ensuring employees have the right kind of support to unlock their potential, inclusivity may involve helping people to speak their minds in a constructive and safe environment, or giving them the tools they need to do their jobs or communicate in a larger group, especially in organisations which have a deep-rooted hierarchy or dominant personality types.
Katherine agrees that a broad view must be taken to ensure inclusivity thrives:
‘Some people don’t need any coaching — some need lots. The manager needs to know when to step in and when not to, but stepping in isn’t necessarily a sign of someone struggling — just that they like to work in teams in a different way to others. Perhaps they prefer bouncing ideas around in a group setting or maybe they prefer a more formal approach. The aim should be to create equity in teams by offering different things based on individual needs, rather than equality which offers the same things regardless of what people need.’
Winanda believes that by taking a holistic approach, looking inside the organisations at key competencies, skills and perspectives, there can be a great match between organisation and employee:
«There is real potential in our workforce, including those who have been with us for many years. If we can understand who they are, what they are doing, what their assets are, and how they can help, then we can involve them in creating a new future together.»
Winanda Nuyttens, Head of People and Culture, Benelux, at Philip Morris International
Harnessing the power of your people is a route to real competitive advantage. Empathy and the capacity to relate to others directly translate to the ability to assess customer challenges and can improve team performance too.
Having a team that works together and listens to each other, has been shown to be better performing in the long-term, once they have established relationships around their inherent differences. Katherine comments:
‘Cultural competence is crucial in ensuring diversity of thought can thrive, to break down barriers and get a wider range of perspectives into working situations. Getting to know your colleagues more personally, allowing entrepreneurial characters space to think and do, and allowing diversity of thought where people can create their own groups will provide businesses with a range of new perspectives, and allow the individuals to thrive. The freedom to be creative and innovate is what large organisations fail the most at and that is why they may become stagnant and entrenched.’
Shaping the future
Philip Kotler, regarded as the father of modern marketing, famously once said; ‘within five years, if you’re in the same business you are in now, you’re going to be out of business.’ In the context of an ever-changing business environment, the ability to adapt is the keystone of survival.
Organisations that place a high value on working closely with the employees and democratise the decision-making process by prioritising collaboration have a competitive advantage when innovating for tomorrow. The diversity of thought that arises as a natural outcome of a diverse and inclusive workforce gives businesses the potential to generate broader ideas and perspectives for their future. Winanda goes one step further, saying that aligning values to direct business change can make an even bigger difference:
‘Our move to smoke-free products has required us to create a different mindset for the business. We have chosen to look at our values and at who we are and to reflect on the type of people we want to be. We have an obligation to change in order to survive, but it is a deliberate choice to do this the right way and alongside our employees. By moving towards co-creation in this way, people are growing in stature, learning and becoming more engaged.»
Katherine has also embarked on a similar journey in deploying the Aon United initiative, delivering growth through colleague, community, and client collaboration that results in innovation and improved solutions for clients:
‘At Aon, we run business support groups and networks and have rolled out an allies program.
We want people to understand what it means to be an ally so they can build stronger connections and relationships with their colleagues, enabling them to find expertise and other people in the business that can help them succeed. This enables people to be their best selves, allowing the Aon United initiative to thrive, and ultimately, clients will benefit.’
Leadership still plays a big role in the development of innovative business strategies. Without the HR function, there is no centralised hub for communication and managing the process, and without senior leadership’s buy-in to make sure the trajectory stays the course, and direction remains transparent, the changes required may fail. Winanda explains that this is a challenge, where an evolution rather than a revolution is required:
‘We’ve seen a real willingness amongst our senior leaders to lead by example: A curiosity about the different options, attention on the existing challenges and the freedoms they are granting us. Top-down decision making is dissolving, and silos and hierarchies are being broken, as management is gaining trust in the co-creation process. This has positively influenced how our employees take ownership of the change.’
There is a swathe of potential difficulties facing the economy, notwithstanding the ones no one saw coming, such as a global pandemic. It means that businesses must pre-empt the future to make sure they continue to exist, rather than waiting for the inevitable to happen and falling behind their competitors. Change is always on the horizon, it just sometimes takes wider external forces to speed up the pace at which that change is embraced. Katherine agrees:
«Many senior managers have had very fixed working styles and have not been prepared for a situation like this. They may never have believed that working from home could be as successful as it has been, and while they have had to adapt quickly, many of them have done so very well. They will need to continue to adapt and flex their working style so that they can drive a more inclusive and supportive culture where there is no place for controlling behaviours and office politics.»
Katherine Conway, Head of Diversity & Inclusion, EMEA, at Aon
By directing a business based on values that resonate with the type of worker the business needs, it can create a bright future that weathers any storm. Rudi says this has to be authentic, and it has to be based on strong ethical grounds if people are to remain on that journey with them:
‘Behind all of the changes at PMI is a real commitment to be different. We want to change because it’s the right thing to do. We’re becoming a business that will survive in the future because we have a sustainable revenue philosophy, as opposed to a ‘next revenue’ approach. For it to work, this philosophy has to be based on strong ethical values, allowing our employees to join us on that journey.’
To achieve similar success, there are some key actions that you can incorporate into your people strategy, which will help you to ensure your people are fit for the future of your business:
- Understand the external factors impacting your business and how changing direction can help you develop sustainable business growth
- Align with employees on shaping the future purpose of the business
- Create management principles that involve collaboration with your workforce
- Assess your employee skills and attributes, and consider their role as a lever to change and competitive advantage
- Deploy a recruitment strategy that attracts people who complement business direction
- Develop an employee engagement and communications strategy with openness and inclusivity at its core
- Ensure employee development is aligned to both company and individual needs
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