In 2021 we will still lack a historical “playbook” for how to navigate business. Dramatic and lasting effects of the past year have required shifts in every level of organizations. To bring the greatest value to their companies, smart board members are already educating themselves about what’s next. Here are three business blind spots that should concern board members right now: the hybrid workplace—specifically team dynamics, communication and recruiting—accountability in DEI, and cancel culture. All of these intertwine and pose potential costly risks to revenue, retention and loyalty.
1. Hybrid workplace
The savings most companies will realize by shrinking their physical office footprint will not come without hidden costs and risks.
Team dynamics in a fully virtual and in a hybrid format create conditions for siloed thinking and actions. Last year while fully remote, communication for most organizations improved. Hybrid should concern board members because there are four distinct groups of employees: those that must return, those who want to return, those who cannot return (because of schools and other family issues) and those who do not want to return to the office for fear of contracting Covid. All of these variables will create communication gaps.
• The natural exchange of ideas and decisions between those onsite will require additional steps to communicate with the rest of their teams.
• Proximity or geography bias will become an issue when “micro teams” form based on who is physically present in the office. It won’t be malicious or intentional, but in the interest of speed and proximity, decisions will be made and assignments given to those on hand.
• Opportunities for promotion and recognition will naturally occur in the same way.
• Both siloed thinking and proximity bias can cause details and communication to fall through cracks which can negatively affect business outcomes. Worse, it will cause those who are left out to become disenfranchised. This can disrupt high performing teams and drive talent away.
• Recruiting in a fully virtual or hybrid workforce is challenging because it is very difficult to maintain and fully convey a company’s culture. To a job candidate culture can look and feel different when seen only by zoom, or represented by only a fraction of the employees in the office. This can cause employee retention challenges and costs.
• In a virtual workplace top talent can be recruited without geographical limitation. But this also makes those valuable high performers a greater flight risk for the same reason. Such changes further impact culture, brand, productivity and ability to meet business goals.
2. DEI Accountability
A priority for most organizations in 2021, DEI initiatives must have actions behind the words and goals. Years ago when the voice of the customer (VOC) emerged as a serious business consideration, most companies claimed they would prioritize customer centricity. Yet many organizations still struggle in this area because they fail to truly act. Today DEI is the priority leaders realize that cannot be ignored. However, it remains to be seen which companies will succeed. Even important priorities often get derailed or distracted by the latest crisis. And when conversations are hard, it is easy to want to shy away from the necessary work that will go into this scope of organizational change. Outside accountability will make the difference for many companies in this case. NASDAQ and Fortune plan to have DEI metrics associated with listings, not only for employees, but for their boards. Glassdoor, Indeed and other job sites will no doubt also monitor for diversity, equity and inclusion. Employees, candidates, customers and investors all monitor and observe which companies get this right. When outside forces can potentially expose organizational shortcomings, it will drive progress and change faster than if there is a lack of accountability.
3. Cancel Culture
If you’re unfamiliar with the term or think it applies to only politics and pop culture, here’s why it should concern boards and their organizations. In the past, company actions or inaction remained generally private. However now any company is at risk to have real or perceived shortcomings used by others as an aggressive practice of “cancelling” or “calling out” to create change. I have been approached by leaders both in the U.S. and abroad to educate them about how to mitigate risks from this costly, dangerous threat which can come from the outside as well as inside from employees. Unfortunately this will not fade away any time soon because of the power, reach and anonymity of social media and the complex workplace, societal and economic climate. The irony is this aggressive practice, used to force others to change a position or policy they disagree with, is the antithesis of inclusive thought. Companies, organizations, higher education institutions are all vulnerable both from customers and the general public and inside from staff. Strong, clear internal policies are needed to establish guidelines for employees. Since the potential damage is so costly to brand image, succession planning, company culture, customer and investor relations, this could be the next category of business insurance needed.
What directors can do now:
• Look closer for vulnerabilities in the plans and practices already in place for these three topics.
• Bring in subject matter experts to illuminate and educate members on these new workplace threats.
• Don’t dismiss the ongoing ripple effects from the pandemic. Customer and employee expectations dramatically changed and will continue to shift. Therefore awareness and ongoing dialog with both is essential to keeping a competitive edge.
• Use predictive data and analytics about your people to hire better for your culture and to build stronger teams, diagnose friction points before they erupt, and better predict how well teams are likely to communicate and perform against their business goals at hand. This can be particularly valuable in the hybrid workplace.
Business as usual today must come with increased vigilance for the evolving workplace, customers, employee behaviors and expectations. In many ways the dramatic shifts of 2020 made so many organizations stronger by the opportunities they seized upon, and those they created. Board members who are armed with knowledge for today’s rapidly changing landscape will keep those organizations at the top of their market in 2021.