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Check out this white paper for more insights into turning your company’s culture into your competitive advantage.

Originally published through FirstPerson Advisors and presented at the 2015 YPO/WPO University Day: Building Culture on Purpose.

The decade of human capital is upon us. Your company’s culture is the single greatest differentiator you have. Treat it that way.

The World Economic Forum states that talent, not financial capital, is the “key to innovation, competitiveness, and growth in the 21st century.” The Economist Intelligence unit found that more than anything, organizations need people management strategies. CEOs around the globe named human capital as their most critical challenge.

As HR expert Dave Ulrich says (and has been saying since 1998, by the way), the “soft stuff” like culture, emotional intelligence, and intellectual capital matters. In fact, we shouldn’t even call it “soft stuff” anymore. Traditional forms of competitiveness – pricing, distribution, product features – are assumed and can be copied. But, in our ever-shifting workplace, it’s the organizational capabilities – agility, human capital, and dare we say, culture, that distinguish the goods from the greats.

The way we work is changing. Gone are the days of the traditional 9-to-5 under a central office management structure. We’re entering a new era of work, and it’s rich with opportunities to drive growth – by cultivating talent, streamlining processes, and capitalizing on collective intelligence.

1. Cultivate diverse and dispersed talent.
83% of organizations believe they are losing the war for talent. In our increasingly globalized and freelance economy, talent is borderless. We need to expand our thinking of where and when work gets done and who does it. Currently, there are 53 million Americans – 34% of the US workforce – working as freelancers, and it’s predicted that by 2020, half of the talent required by organizations will not actually work for the organization. Companies are no longer only outsourcing roles like delivery drivers, custodians, and food service, but also software engineers, accountants, and graphic designers. Projects can be fragmented, with different people assigned to different aspects of it. These freelance workers get to pursue more meaningfully independent lives, and businesses get access to precise skills at the exact time they need them, even if the best candidate lives in another state or country.

Practical Tip: New categories of talent acquisition are emerging. Create a framework for how to recruit from such diverse talent pools, how to manage freelance or outsourced staff, how to engage contingent workers in the company culture, and how to divvy up the work as needed. Take the lead on providing direction, motivation, and reward, and driving results from an increasingly dispersed and diverse employee base.

2. Streamline processes for collaboration.
Workers can look at their phones 100 times a day and spend up to 40% of their days responding to emails. In 2014, 64% of the US population had a smartphone, up from just 18% in 2009. And in 2014 and 2015, US adults spent more time on the internet via their phones than on their laptops. Millennials are now the largest generation in the workforce, representing 35% of workers. In addition to having distinct expectations of their working life (innovative environments, rapid career progression, freedom of opinions, autonomy), they also work differently – 45% of them use smartphones for work purposes, compared to 18% of older generations. Technology is moving at rapid-fire pace, and if harnessed, can have a huge impact on your people management strategies by fostering collaboration. Financial outperformers are 57% more likely than underperformers to use collaborative and social networking tools to enable teams to work more effectively together.

Practical Tip: In this information age, many workers are always on the clock, doing mentally engaging work, with social media just a touch away. We see more sides of each other in today’s workplaces than ever before. In such a collaborative marketplace, innovation is more than a single person’s creative application of skills – it’s the sum of an organization’s capabilities, experiences, and knowledge. Innovation hinges on an organization’s ability to streamline processes and technology to adapt to the needs of a quickly-changing marketplace.

3. Capitalize on collective intelligence through engagement.
It’s not enough to just have top talent, you also have to engage them to drive top performance. Leaders are the caretakers of the largest investment of the company (60-70% of total costs), responsible for nurturing that investment and helping it grow. The collective intelligence of your people – intellectual property, brand, talent – accounts for the largest share of market valuation for publically traded companies. How you engage talent matters and can have huge impact for your bottom line. Companies with high employee engagement have 3.9 times the earnings per share of their competitors. It’s also important to note that the #1 motivator for employees to go the extra mile at work is not money or benefits, but camaraderie with other people.

Practical Tip: Move from simply saying “our people are our greatest asset” to being able to describe the value that asset brings in a way that helps investment decisions. Find new ways to connect people to each other and to information, both internally and externally, through your organizational culture. And ultimately, remember that when we talk about talent management, it’s your employees’ talent, not yours, and they are loaning it to your company. So, how will you engage your talent?

Marketing, operations, financials – these are table stakes for today’s business leaders. More than ever, leaders are evaluated on their ability to manage organizational challenges like talent, agility, and culture. No matter what business you’re in, you’re always in the people business.

Continued from Part 1 . . .

Recently, we explored the brainy side of what we know about our employees. Our unconscious intuition, rather than reason, drives most of our thinking, we judge people based on their warmth and competence, and for leaders, warmth is often more overlooked but also more critical than competence. All this to say, neurological evidence shows that knowing and caring about your employees makes a difference for the bottom line. This is the scale we’re looking at:

  • 83% of highly engaged employees say their supervisor cares about them as a person, while only 4% of disengaged employees would say the same.
  • Managers account for as much as 70% of the variance in employee engagement scores.
  • Employees whose managers hold regular meetings with them are almost three times as likely to be engaged as those whose managers don’t.
  • 92% of highly engaged employees say people in their departments work together as a team, while only 5% of disengaged employees agree.
  • Peers account for 70% of workplace fun, while the nature of work is 22%, and perks only 8%! Pinball machines and happy hours are great and encouraged, but remember that they are means to the end of boosting camaraderie – people are the real motivator!
  • The #1 motivator for employees to go the extra mile at work is camaraderie with other people. Money and benefits don’t even make the top 5 on the list!

How do I get people to trust and collaborate with me?

1. Listen. In his book How to Win Friends and Influence People, Dale Carnegie writes, “You can make more friends in two months by being interested in other people than in two years by trying to get other people interested in you.” Listen to what people say, and seek to understand what they need. Know what makes your employees unique. Show interest in their lives and remember details about what they tell you.

2. Ask. After listening, ask more questions. Maybe start with, “What would you like from me?” or “What can I do to improve your experience?” or “How is your life outside of work?” Be invested in your employees as people, too, beyond work responsibilities. Care for the whole person.

3. Engage. Be warm. Level with people. Try lowering the pitch and volume of your voice, as if comforting a friend. Throw in the occasional personal story. Validate feelings and worldviews. Smile and mean it. Smiling is evolutionarily contagious, because it triggers mirror neurons in others and suppresses the control we usually have on our facial muscles.

4. Communicate. In many cases, the effectiveness of a group is not determined by the IQ of the group, but by how well they communicate. Some form of daily communication is ideal – phone, email, face-to-face, or a combination of those forms.

5. Support. Make workers feel safe and comfortable talking about anything – safe to experiment, challenge, share information, fail, and help each other. Management consultant Margaret Heffernan advocates that organizations need to develop enough trust that employees can safely disagree. We need thinking partners who aren’t echo chambers, and to get this kind of candid conflict, we need high levels of trust and support. She’s found in surveys that 85% of European and American executives acknowledge they have issues or concerns at work that they are afraid to raise because of conflict. Which means these organizations are not thinking together effectively. Which means that the leaders who run these organizations, who go out of their way to find the very best people they can, mostly fail to get the very best out of them. Show your employees that you support them as people – this is the core of a culture of trust.

How you engage people, what you know about them, and what they know about you have a profound impact on your workplace. Not simply because being nice to people is what your mother taught you, but because our brains actually unconsciously pick up on things like kindness, warmth, care, and engagement, and they affect tangible outcomes like performance, retention, creativity, and collaboration. So next time you go to interact with someone at work, make sure you think twice about what kind of culture you want to create. How you treat people matters.

We talk a lot about culture, which we can work to shape and involve everyone in. But at its core, much of culture comes down to how people interact. As a leader, what do you know about your employees, and what do they know about you? How well do you know them? How do your coworkers think? How do they communicate? What motivates them? Do they see you as warm and engaging? Do they see you as competent? Do they trust you? Ultimately, what kind of culture are you creating with your people?

Take a look at these examples of companies and executives that have caught on to the importance of knowing and trusting each other:

  • The CEO of Campbell’s Soup writes 10-20 personal notes a day to his employees, handwritten about something specific that they have contributed. Over 10 years, that’s been more than 30,000 notes. And they only have 20,000 employees! All over the world where he goes for business, he sees his notes taped up in employee cubicles. He does this to let people know that he’s paying attention. To top it off, every day he puts on a pedometer and walking shoes and walks all over the office for at least thirty minutes, maybe an hour, just talking to people and engaging them. He says, “You can’t expect to perform at a high level unless your employees are personally engaged. And they’re not going to be personally engaged unless they genuinely believe that you are engaged in trying to make their lives better.”
  • As Zappos grew, they created the Face Game, where every time they logged into the internal system, they would see a coworker’s face and have to guess their name and say how well they did or didn’t know them. It would give a short description of the person, and then continue on to their work.
  • The CEO of Prezi insists on knowing his employees outside of the office context. He has a policy where he’ll go to dinner with any of them and talk about anything – as long as it doesn’t involve work.
  • Every Friday at their TGIF party, Sergey, Larry, and other Google execs stand on a stage and candidly answer any question by an employee, because they believe trust is built on transparency and sharing.
  • General Stanley McChrystal, the former commander of US and International forces in Afghanistan, says that “personal relationships are the sinew which hold an organization together. . . A leader isn’t good because they’re right; they’re good because they’re willing to learn and to trust.” This is a four-star military general saying that engaging people is fundamental. He summarizes part of the daily-recited Ranger Creed as a promise that “no matter what happens, no matter what it costs me, if you need me, I’m coming.” Wouldn’t we all like to be on that kind of team?

Here’s why it’s important to get this right.

1. Intuitions come first, strategic reasoning comes second.
Moral psychologist Jonathan Haidt (whose doctoral dissertation is titled, “Moral judgment, affect, and culture, or, is it wrong to eat your dog?”) has found that humans are far less rational than we are rationalizing. In other words, we are primarily intuitive creatures whose gut feelings drive our strategic reasoning. We have automatic, instant reactions to things, and then we reason to defend those reactions. We are often led to believe that reason is the highest of our faculties, but in actuality our unconscious mind does most of our thinking. The human brain can take in millions of pieces of information every minute, of which it can be consciously aware of only about 40. Our unconscious processes – emotions, intuitions, sentiments, gut feelings – these are at the center of our thinking, handling the millions-minus-40 things to think about. They are the foundation of our reason because they tell us what to value.

Why this matters for business: Firstly, before people decide what they think of your message, they decide what they think of you. Intuitions, then strategic reasoning. Secondly, trust and cooperation aren’t instructions, they’re feelings. I can’t say, “trust me” and expect you will. Instead, I must appeal to your unconscious intuition.

2. What happens between two brains when they interact:
When we interact with people, our brains make snap judgments about them. Harvard Business School psychologist Amy Cuddy has found that we primarily gauge two characteristics: how lovable they are (warmth, communion, trustworthiness) and how fearsome they are (competence, strength, agency). With these two dimensions of social judgment, we answer two critical questions: “what are this person’s intentions toward me?” and “is he or she capable of acting on those intentions?” If someone is competent but not warm, that elicits respect and resentment – we want to cooperate or affiliate ourselves with that person, but we also feel vulnerable to them. If someone is warm but not competent, that elicits pity and lack of respect – we help people we pity, but when it becomes difficult or inconvenient, we ultimately neglect them. These two dimensions account for more than 90% of the variance in the positive or negative impressions we form of the people around us, and you can bet it’s happening all the time in the workplace. The catch is, these are unconscious snap judgements made in the amygdala and hippocampus, parts of the brain that control emotion, decision-making, and memory, but not language.

Why this matters for business: The parts of your brain that account for 90% of how you feel about the people around you are parts of the brain that are deeper than language or conscious thought. In business, this means that, more than your background, your message, or your ideas, how you interact with people matters – a lot.

3. Are you warm or are you competent?
Ideally, of course, the answer is both – but in moderation, like a well-balanced social judgment diet. Interestingly, though, our brains process warmth before competence. The first thing we look for in others is evidence of trustworthiness, based on their warmth. But when we present ourselves to others, we often mistakenly try to show our competence first, establishing strength before trust. We want to tackle challenges, work the longest hours, present innovative ideas in meetings. But it seems that warmth, at least right off the bat, matters much more than strength. In a study of 51,836 leaders, only 27 were rated in both the bottom quartile of likability and in the top quartile of overall leadership effectiveness. In other words, the chances that a manager who is strongly disliked will still be considered a good leader are about 1 in 2,000.

Why this matters for business: As a leader, you have to show warmth. Competence is assumed – warmth is what makes the difference. Strength, without a foundation of trust, elicits fear. Fear undermines cognitive potential, creativity, and problem solving, and causes employees to disengage. In short, people will obey, but they won’t follow, engage, take ownership, or help others. Warmth, on the other hand, facilitates trust and influence. Trust increases information sharing, collaboration, and creativity. When we trust people, we naturally combine talents and strengths and work tirelessly to seize opportunities. How can you show warmth? By knowing and caring about your employees.

To be continued in Part 2 . . .

If you’re plagued by infobesity (the never-ending stream of information), the last thing you want to do is read another article. So, I’ll keep it brief.

Infobesity is an epidemic.

IBM released these stupefying figures in 2013: 90% of all the world’s data has been produced in the past two years. CSC (Computer Sciences Corp) extrapolated these numbers and said that in 2015, 90% of all the world’s data is about equal to 7.9 zettabytes. That’s right, zettabytes. One (1) zettabyte = One (1) trillion gigabytes. Is your head spinning yet?

As HR leaders, your role is to sift through the barrage of information thrown not just at you, but also at your employees, customers, and prospects. It’s your responsibility to distill the necessary from the noise.

Here are five ways you can help your constituents avoid infobesity.

1. Not everyone needs to know everything about everyone. Cross-functional teams are only helpful until they become counter-productive. Not everyone has to know everything that’s happening. As long as you know who knows what, that’s usually enough. At some point relaying all information becomes excessive and actually clouds important messages.

2. Personal time ≠ work time. Just because you can check work email first thing when you awake and right before you fall asleep doesn’t mean you have to – or should. Give yourself and your employees some free, restful mental space to recover. Set clear expectations about when employees should be accessing data and when they can be disengaged. Allow employees the opportunity to be freed from the electronic ties that bind them.

3. Lists, lists, lists. Whatever’s distracting you, write it down somewhere so you don’t have to remember to remember it. Staying organized frees your brain to focus on those things that are important right now. Don’t hesitate to create lists for your employees either. By doing so, you and your employees can better discard the excessive noise and focus on your goals.

4. Too many choices make it too hard to choose. People who are overwhelmed by choices often choose nothing at all (i.e. paralysis). Consider cutting the bottom 10% of your products–they’re probably just distracting people from your best goods. Studies show that people are much more likely to buy things when their options are more clear-cut. If you need help determining which options are important, ask your employees. If they can’t articulate the value, neither can your consumers.

5. Simplify your brand. Your marketing materials are too long if you can make them any shorter. A cluttered website leads to user disengagement. In the age of infobesity, clear and crisp messaging is more effective.

By implementing some or all of these best practices, you can stave off infobesity in your workforce and customer base and enhance overall engagement.