The characteristics of great leadership

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In our work across a range of businesses, we’ve seen the powerful effect of great leadership. When leaders create a positive culture of trust and empowerment, employees are more likely to be invested in the organisation’s strategy, future and values.

We’ve also seen what happens when employees aren’t convinced by their leaders. They can become frustrated, disengaged and lack confidence in the business.

Usually, issues start to take root when leaders are disconnected from front-line colleagues. This disconnect can either be through a lack of visibility or, conversely, through leadership communications which aren’t positioned well. Communications that miss the mark can be as damaging as no communications at all.

While they don’t always come into regular contact with employees, senior leaders set the tone for the rest of the organisation, and the key to being a great leader is having empathy and trust.

New research shows that when employees work in organisations with a high-trust culture, they are significantly more engaged and productive. They also take fewer sick days, experience less stress and are less likely to burn out from stress or exhaustion.

The scientific explanation for this is the release of oxytocin in the bloodstream. Known as the ‘trust hormone’, oxytocin promotes bonding between humans. It makes us more likely to show empathy and build a rapport with others, which is key for strong working relationships and successful collaboration.

Empathy and trust go hand in hand, and in an age of increasing automation, we need these uniquely human characteristics more than ever.

So, what can leaders do to start creating a high-trust, high-empathy culture in their organisation?

Be honest

Open and direct communication with employees helps to build trust and confidence in the future of the business. Giving employees the chance to feed back also shows that leaders care about what their employees think and helps people make a tangible difference in the company.

Empower managers and employees

Make sure that your people have enough resources and aren’t continually working under too much pressure. High stress inhibits oxytocin production and isn’t conducive to a healthy working environment.

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Encourage collective action

When people come together to work on a common goal, collective action strengthens social connections. Enable managers to set achievable but challenging tasks for their teams, without micromanaging.

Create a culture of psychological safety

Defined by Harvard Business School professor Amy Edmondson as “a shared belief that the team is safe for interpersonal risk taking“, psychological safety gives people a safe space in which they can share ideas and disagree, while knowing that other people have their back.

This also means that people will feel confident about speaking up if they see wrongdoing. Trust is the building block. Without trust, people will not feel safe, and a lack of psychological safety contributes to an environment where rivalry, conflict and backbiting are endemic.

The politics of presenteeism

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UK employees are taking fewer sick days than ever before. Last week, the Office for National Statistics (ONS) broke the news that an estimated 137m working days were lost in 2016 – equivalent to 4.3 days per worker. In 1993, when records began, the average was 7.2 days per worker.

Clearly, something’s behind this. Are people getting healthier? Are more people signing up to fitness schemes, taking better care of their health and reducing the likelihood of getting sick? Or are people actually getting sick at the same rate as 1993 but dragging themselves into work anyway, for the sake of presenteeism, where they proceed to cough and splutter and infect half of the people around them?

I’m betting on the latter. And it would seem that the TUC general secretary, Frances O’Grady, agrees with me. After the ONS figures emerged, she dubbed the UK as “a nation of mucus troopers”, people who are more likely to go to work sick than stay home, rest and recover.

The situation is said to be even worse in the US. Last year, Hillary Clinton attempted to work through a pneumonia diagnosis, hitting the campaign trail and attending a 9/11 memorial service despite being certifiably too sick for work. Granted, she had a presidential campaign to run. But not taking sick leave when you need it isn’t smart, given that it will probably cost you and your employer more in the long run – in the form of lost productivity.

But what if not everyone feels they have that option? ‘Presenteeism’ – defined as the practice of staying at work for more hours than required or being on the job when sick – is the scourge of modern business culture. Cary Cooper, Professor of Organizational Psychology & Health at MBS Manchester University, reports that it costs employers twice as much as absenteeism. He emphasises that longer hours don’t mean more productivity – obvious, right?

But many workers remain under the iron fist of presenteeism. They show up when sick or consistently work overtime, reflecting insecurity about their jobs or a business culture where working long hours is a competitive game to impress others. In our culture, we tend to revere a work ethic that emphasises working longer and harder than anyone else, even if it means that your work encroaches on your personal life.

If you work in a business where you feel pressured to turn up even when sick, changing this culture can only come from the top down. Senior leaders and managers need to promote the importance of wellbeing, recognising the evidence that working longer and not taking time off when needed (around a third of us don’t even use all our annual holiday allowance) is harmful to our health and our productivity.

Fintech: the changing face of banking

b78qoyix1ae-katherine-mccormackIn the financial services sector, there is an indisputable need to adapt to the fast pace of the rapidly changing fintech environment – and banks are rising to approach this as a challenge. The danger, otherwise, is being overtaken by digital disruptors.

Many firms are scrambling to catch up, buying up fintech start-ups by the dozen. No bank wants to be the Nokia of financial services: a trustworthy staple overtaken by the gleaming simplicity of Apple.

Mark Carney, the Governor of the Bank of England, is encouraging financial services to engage with fintech innovation. In a move to combine the power of long-standing financial institutions with the dynamism of new technology, the Bank has set up a FinTech Accelerator.

The Accelerator offers a way of partnering with financial technology start-ups for the Bank to enhance knowledge and develop new ways of carrying out its operations. As the face of the industry changes, banks are stepping up the pace to meet customer demand.

The generation who have grown up with Google are ‘digital natives’, soon to reach adulthood. They’ll expect a totally different banking experience than the generations before them – Apple Pay and contactless cards are just the beginning.

HSBC, one of the fintech frontrunners, has introduced voice biometrics for customers, allowing them access to their accounts with a verbal phrase that is recognised by sophisticated voice recognition software. And there is increasing demand for smartphone-based banking, like Barclays’ latest innovation for mobile phones – using your smartphone for contactless cash withdrawals at ATMs.

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But in the middle of the excitement around fintech, there are stumbling blocks too. In our work with financial services businesses, we’ve seen the difficulty of implementing new technology with banks’ legacy systems. Migrating data from legacy infrastructure to new fintech platforms isn’t simply a matter of pressing a button. It’s hard for banks to catch up when they’re facing digital firms who start from scratch, without the cumbersome legacy of outdated systems dragging them down.

All this talk of technology misses the human story too. With increasing automation and the democratisation of technology, footfall in bank branches is falling. Why go to all the time and trouble of going to speak to a bank employee in-person when it takes seconds to do the same transaction on your phone?

Customer satisfaction rates may be soaring, but that does little to reassure employees who could face the possibility of losing their job due to increasingly sophisticated automation.  An Oxford University report forecasts that “about 47 percent of total US employment is at risk” from jobs that can be automated.

This is happening now; the new age is already upon us and jobs are being taken over by computerisation – in 2014, Lloyds Bank announced 9,000 job losses ‘to aid digitalisation’. The challenge, then, is in how to keep up employee morale and engagement even as their future looks uncertain.

Is fake grass always greener? Astroturfing and ethical internal communications

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Now more than ever, social media is an essential source of news for people around the world – as is evident in Twitter’s rebrand as a news platform earlier this year. Absolutely anyone can set up a twitter account and get tweeting in a matter of minutes, weighing in on topics from local to international importance.

In 2010, politically minded Toronto residents took to Twitter to defend their chosen mayoral candidate under the hashtag #voteto. On the face of it, @QueensQuayKaren was just another concerned voter. Describing herself as a ‘downtown Toronto gal who likes politics, my cat Mittens, and a good book’, Karen Philby seemed constantly engaged in political combat, steadily losing faith in her chosen Toronto mayoral candidate George Smitherman and turning to his rival, Rob Ford.

Looking at the @QueensQuayKaren profile now, it’s hard not to be struck by its artificiality. But it was convincing enough to persuade Dieter Doneit-Henderson into handing over an incriminating audio clip. Set up by Ford’s deputy communications director, this social media ‘sock puppet’ enabled the safe retrieval of the clip, and then continued to weigh in heavily on the debate, gradually turning to Ford and influencing the opinions of legitimate voters.

Although in no way a new issue, astroturfing – where the impression of support for an idea or person is created using fake profiles (or ‘sock puppets’) – has been a pertinent issue for politically troubling 2016. An article published by Oxford’s Computational Propaganda Project estimated that 15% of the twitter accounts that engaged in the Brexit debate were partly, or entirely, automated. The same worries shrouded the presidential debate, with both sides accused of artificially bolstering their ranks.

Clearly, astroturfing is having a worrying impact on public opinion. But what influence would astroturfing have on employee engagement if businesses started to use it in their internal comms? Is falsifying employee opinion on the next big merger, the next structural or strategy change, the way to go to get colleagues on side?

Practically, astroturfing doesn’t need to be costly. Granted, some huge organisations have reportedly piled large investments into persona management software, which is capable of creating believable sock puppet profiles that can be set to churn out likes, favourites and retweets. But some instances of small-scale astroturfing have been orchestrated by just one person, as was the case with @QueensQuayKaren. Clearly, somewhere in between these two extremes lies something which is easily accessible, and devastatingly effective.

So what’s stopping comms teams from taking this route? It could certainly be tempting to ‘soften the blow’ – to mask an impending change with positive responses to attempt to sway negative reactions. But such practice is not only dishonest, it breeds distrust. To lie about sentiment, or to try to influence opinion by avoiding the facts, only serves to widen the gap between those in charge and those on the front line.

Moreover, if internal comms teams have the means to synthesise engagement among their colleagues and create imitation support for products, strategy, anything – then why would they bother investing in genuine colleague happiness? This worrying move to artificial happiness has the capacity to change the face of employee engagement – but it really shouldn’t.

One of the corporate practices that is most damaging to employee engagement is denying the negativity of a situation – sugarcoating the facts and denying any wrongdoing. Astroturfing is yet another tool in the arsenal for those unwilling to accept accountability. In our own research, we find time and time again that honesty and openness from leaders is invaluable to employees. Astroturfing is a quick fix, but in the long run it will only lead to mistrust and apathy.

The sense of an ending

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The business world loves a launch. Every freshly appointed CEO wants to get started by starting something. And many leaders have a sophisticated understanding of how to begin their reign with a crafted, credible, down-to-earth organisational narrative that draws employees into their business strategy and empowers them to be part of the living story of the organisation.

But too many businesses give people a ‘living’ story without thinking about what comes next. Because everything that lives must die. And, as humans, we love an ending. Especially because, like many novels which begin in the shadow of death (Great Expectations starts in a graveyard; White Teeth with a failed suicide attempt), the sense of an ending is often the cue for the beginning of something new.

The great literary critic Frank Kermode highlighted this tendency in his book The Sense of an Ending. He charts how we all – individually and collectively – find ourselves constantly in the middle of a story, and we yearn for endings as milestones that help us to think about who we are, what we are doing – and guide us to pivot towards something new, the next thing.

Behavioural economics underlines this need for finality; as Robert Cialdini points out in his recent book Pre-suasion, we have a demonstrable ‘craving for cognitive closure’. It’s called the Zeigarnik effect (after the Lithuanian psychologist Bluma Zeigarnik) and it means our attention is strongly channelled towards unfinished tasks we’re committed to, leading to improved recall compared to completed tasks. Zeigarnik studied a Berlin waiter with a perfect memory for orders before he had distributed the beer and bratwurst, but who couldn’t recall a single detail the moment after he had served his customers.

What does all this mean for organisational storytelling? We find that while businesses are often strong at launching a strategy story (the beginning), and maintaining the drumbeat through progress updates and milestones (the middle), it is the ending that is often neglected. This is for a variety of sensible reasons: strategies come to an end because of failure, or a change in leadership, or a change in market conditions – all of which usually necessitate a new strategy.

But, when launching that new strategy, it is vital you bring the old one to a close, in order to help shift attention and emotional focus away from the old and on to the new. We’ve all experienced shock and surprise that an employee is still clinging onto a strategy slogan months or years after it has become obsolete; however, there is a good and totally human reason for that – the story hasn’t finished for that individual. They are waiting for the next chapter; they are waiting for the sense of an ending, so they can begin anew.

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Prediction or projection? How bias skews data

Many of us will usher 2016 out of the door with a sigh of relief. The year has been a tumultuous one, and the two biggest predictions that were forecast didn’t come to pass. In June, the UK shocked the world by voting to leave the EU, and political pundits were left nursing their wounds this month after Donald Trump’s success in the US election.

The pollster Nate Silver, who has made a successful business out of his forecasting website FiveThirtyEight, successfully predicted the past three US elections. But on this one – and on the election primaries – he got it wrong.

To be sure, Silver’s model built in more uncertainty about the outcome of the presidential campaign – mainstream news outlets like The New York Times and The Washington Post gave Clinton an almost certain chance of winning, while FiveThirtyEight pointed out that the race was close, too close to be 99% sure of a Clinton win.

Nonetheless, the events of the past few months have been a reality check for prediction. It’s tempting to believe in a reassuring reality where algorithms and data can provide all the answers. However, as we discussed in our recent article on workplace prediction, data is valuable, but we do need to be cautious about this way of thinking.

Statisticians can build objective, data-driven models and still human bias can have an impact. Ironically, considering that predictive analytics is designed to reduce human error, algorithms and forecasts can reflect the biases of their creators.

“Software making decisions based on data can reflect, or even amplify, the results of historical discrimination” – The Atlantic.

Looking at Brexit and the US election, it’s likely that cognitive bias played a part in polling inaccuracies. Humans are easily swayed, often subconsciously, and this can lead to beliefs being shaped by the ‘bubble’ surrounding them.

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As well as influencing voters, this can have an impact on political forecasts. Nate Silver’s colleague Harry Enten calls this ‘herding’ – when pollsters produce results that are very similar to each other, but in effect they are ‘the blind leading the blind’.

And that’s before all the other human and statistical factors that play a part in polling inaccuracy – lack of a random sample, response rates, margins of error, voter unpredictability and last-minute changes of mind.

In short, there are few straightforward answers, but one thing is for sure: humans can’t resist trying to see what will happen. We don’t cope well with uncertainty, so I’ll leave you with one way to approach the future:

“I know that history is going to be dominated by an improbable event, I just don’t know what that event will be.” – Nassim Nicholas Taleb, Black Swan: The Impact of the Highly Improbable.

Want to read more thought-leading articles on employee engagement, data and workplace trends? Request a copy of thinkBox, our annual publication, by getting in touch with us at thinkBox@karianandbox.com

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Goodwill is not just for Christmas: it’s time to stand up to hate

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By Ghassan Karian

This is a year that will undoubtedly go down in the history books.

A little over a week ago, a man who preaches hate – hate for women, hate for Mexicans, hate for Muslims, hate for ‘the other’ – was elected as president of the United States. A few months earlier, Britain watched as half its population voted to turn its back on the EU. Choosing isolation and nationalism instead. Right wing extremism is on the rise. Refugees fleeing Syria – a country in the midst of a horrific civil war – are being left stateless. Countless countries are closing their doors, refusing help to those who most desperately need it.

2016 is a year I would rather see erased from the history books. It has not been a good year.

Every November, John Lewis releases a beautifully produced Christmas advert that sets the tone for the festive season. Goodwill to all mankind. Warm fuzzy feelings all around. And these advertisements help to influence our opinions on John Lewis – most people see this as an ethical, forward-thinking brand. They’re employee owned and in their principles, they vow to ‘obey the spirit as well as the letter of the law and to contribute to the wellbeing of the communities where [they] operate’. Their Christmas adverts bring even the steeliest among us to tears.

But John Lewis – and countless other retailers who claim to have high ethical standards –  advertise in The Daily Mail, The Sun and the Daily Express. Newspapers which have been instrumental in propagating racism, bigotry, misogyny and nationalism and in doing so giving power and legitimacy to people like Nigel Farage and Donald Trump. Newspapers which have given legitimacy to hate.

A new campaign, ‘Stop Funding Hate’ is seeking to address this. It’s encouraging businesses to put their money where their mouth is and start living the values and ethical standards that they claim to uphold by ending their advertising relationships with these publications.

There are signs that the campaign is starting to take a foothold. LEGO recently announced that they would no longer be running toy giveaways in the Daily Mail and the Co-operative Group will be reviewing its advertising policies in the coming year. But why aren’t more businesses coming forward and making this choice? In his article in The Spectator Brendan O’Neill makes the argument that doing so is an act of censorship rather than ‘a cry for tolerance’.

John Lewis has indicated that they support this position, saying that they ‘never make an editorial judgment on a particular newspaper’. But is this really an editorial judgment?

To my mind, this is first and foremost an issue of ethics. You can’t be ethical on a part time basis. If you say you intend to ‘contribute to the wellbeing of the communities in which you operate’ (John Lewis) or ‘make a positive difference in our community’ (Sainsbury’s), then this should underpin all the decisions you take as a business.

Advertising in newspapers that preach hate isn’t ethical. Now more than ever, we need to act. We need to be brave. We need to speak up against intolerance. As business leaders, we have a huge amount of influence in our communities – it’s time to stand up to hate.

Equal Pay Day and why 50% of your colleagues might not be in tomorrow

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Today is the day when all of us women can pop on our coats, grab our bags and face the cold, horrible commute home for the last time this year.  And let’s face it, this year has been pretty terrible. With Brexit, yesterday’s US election results and what seems like the death of most of our favourite celebrities, I’m not actually that opposed to calling time on 2016. I’d quite like to set up camp at home, with my slippers, a vat of tea and the new John Lewis advert on repeat until 2017 appears.

But why should women get to pack up for the rest of the year and leave our male colleagues to battle on working through the cold winter months? Well, it’s simple: they’re getting paid for it. And we’re not.

In the UK, the difference between the average salaries earned by male and female workers means that women pretty much stop getting paid today. On average, we earn 13.9% less than our team mates or 86.1p for every £1 they earn.  A survey by the Chartered Management Institute and XpertHR shows that the average salary for a full-time professional woman is £30,612, while a male colleague in the same job takes home £39,136.

Considering women won the right for equal pay in 1970 (a whole 47 years ago), it seems a bit strange that in 2016 we’re still struggling with a pretty large gender pay gap. Big legal cases are still hitting the news in both the public and private sector, showing that women are still having to fight for the right to earn the same salary for doing the same job.

Some critics suggest that the gender pay gap is weighted by an increased tendency for women to work in low-wage jobs, but, for us, that begs the question of what organisations are doing to boost diversity and help women to work in higher-paid jobs – no matter what biological imperatives might mean in our personal lives. It’s worth looking the article in our last thinkBox magazine by Jo Swinson  – the prominent former minister and leading voice in the debates on workplace and gender equality. We know that equality is good for businesses across the globe and we know what we can do to start making the shift towards a more equal and fair society – so why isn’t it happening? I’ll leave it to her to explain.

These statistics are driving people like Jo to urge the government to hurry up on releasing the detail behind the legislation forcing businesses to report on their own gender pay gap which will become law from April next year. Hopefully, when businesses are made to publicise their own performance on pay equality, we’ll start to see a lot less talk, and a lot more action to make it disappear. I really don’t think we can afford to wait another 50 years.

I must say, I was looking forward to taking the rest of the year off and getting all my Christmas prep done in time to truly enjoy the 24/7 showings of Christmas films on the dedicated True Christmas channel. But, I’ve looked to it and discovered that at K&B we don’t have a gender pay gap, so I will be scraping the ice off my windscreen at 7am tomorrow just like my male colleagues.

What will happen to workers’ rights in post-Brexit Britain?

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Great Britain is leaving the EU. There will be consequences on almost every level of our society, from the economy and our political commitments on the continent, to the various EU directives that may no longer form part of our domestic law.

One of the areas likely to be affected is workers’ rights – an issue we wrote about on the day of the EU referendum. Though it is difficult to know exactly what will happen in this central part of our working lives in the post-Brexit future, here we look at some of the possible implications moving forward.

Before the referendum, Trade Union leaders expressed dismay at the idea of a government uninhibited by EU basic minimums. These minimums guarantee maternity and paternity rights, equal treatment for full-time, part-time and agency workers, and the right to paid leave, among others. They predicted that, in the wake of a Leave vote, a Conservative government would remove these rights which are enshrined in European law.

This fear does not seem misplaced. Like their plans to renounce the Human Rights Act, the government has previously tried to implement legislation that would ‘cripple workers’ rights to take strike action’ and remove the Working Time Directive which limits the working week to a maximum of 48 hours on average. But they were prevented from doing so by the EU. Now Britain has left, these efforts could be back on the table, with the one guaranteed protection for workers’ rights – the EU – taken out of the equation.

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EU membership ensures the UK has, among other things, a minimum level of protection around health and safety in the workplace, prevention of discrimination, equal opportunities, and labour laws protecting part-time workers and young people. Already the UK was one of the least regulated EU members, with workers having the right to opt out of the Working Time Directive, fewer protections for agency workers and weaker employment protection regulating dismissals.

As things currently stand, the UK government complies with or exceeds these minimums, but, now they are no longer in place as EU law, they can, and may well be amended or repealed. If the Conservative Party shifts its political position with a change of leadership, further to the right perhaps, Jason Heyes, Professor of Employment Relations at the University of Sheffield, says ‘there would be little to prevent a far more substantial attack on employment rights’.

The crucial fact to understand is that, without any precedent or plan for exiting the EU, no one knows for sure what will happen. The fear is, however, that a UK government without the guaranteed minimum rights and the checks and balances the EU offers would be free to re-legislate. Based on previously declared intentions and the negative prospects from Trade Unions, the future is far from certain and far from bright when it comes to workers’ rights in post-Brexit Britain.