Have you ever been at an event with someone else, they bumped into someone they know, and you were left wondering what to do?
Do you stay put? Do you go with them? Do you start talking to someone else? Without a clear idea of the expectation, it’s hard to make a decision.
This confusion happens frequently in business—strategy changes and employees are left wondering what to do. Without a clear plan of action, they’re in a holding pattern until clarity arises.
I see it all the time with my clients.
I’m The Predictive Index’s Talent Optimization Architect. In this role, I spend most of my time talking to senior leadership teams about their hopes and dreams for their business–and the people strategy they need to get there.
A recent conversation with a growing company started on the topic of candidate selection, but soon a new COO asked for a private sidebar to ask a few questions.
She was hired to improve reliability after a service outage made national headlines, but getting enough budget to be more proactive about preventing future issues was a challenge. “All of the budget’s tied up in sales and new R&D,” the COO said. “I have to tread carefully because I’m new, but it feels like we’re all trying to move the company in different directions.”
Her company lacked strategic alignment. She was stuck.
World-class teams rely on working in the same direction.
At the beginning of 2020, PI released Design, its one-of-a-kind solution for measuring and increasing alignment between business strategies and people strategies—as well as informing world-class leadership teams as they navigate changes in strategy and realign their workforce to execute those changes.
For the first time, companies of all sizes can reveal and strengthen strategic alignment.
The Brandon Hall Group Excellence in Technology Awards 2019 recognized The Predictive Index’s new product “Design” as a winner in the category for Best Advance in Unique HR or Workforce Management Technology.
The Brandon Hall Group is a leading human capital management analytics and research firm. Winners in other categories include technology behemoths Adobe and Ceridian, as well as PI clients Skillsoft and VMware.
To learn more about the Design solution and the science that went into developing it, I recently interviewed our Director of Assessment Research, Dr. Austin Fossey.
First of all, congratulations to you and your team!
Dr. Fossey: Thank you! Winning this category recognizes that we’re doing something no one else is doing: providing a simple, elegant way to meet the needs of people who are trying to align talent and business strategies.
In your mind, what made the Design product worth submitting to the Brandon Hall Group?
Dr. Fossey: We did a lot of research in creating the Design product.
We found that, so far, no one’s had a framework to measure and compare alignment between business strategies and talent strategies. Some companies consult in this area, and some large companies have tried to build their own solutions, but there was no accessible, empirical framework that companies could easily deploy. It was hard to find anyone quantifying strategies and mapping it into the talent domain.
With the Design product, senior leaders can confirm strategic agreement to make sure they’re all on the same page about organizational objectives. From there, the tool helps align the talent strategy with the business strategy in a simple, convenient way. After all, business strategies don’t execute themselves; people execute strategies.
PI has broken down the barrier to entry to help all businesses—including smaller businesses—create better workplaces. It’s very encouraging that Brandon Hall Group has recognized what we’ve accomplished.
How did you create Design, then, with no blueprint?
Dr. Fossey: In the absence of experts, “The Wisdom of Crowds” by James Surowiecki essentially says: If it’s a novel thing that no one’s done before, then expertise is useless. You can turn to what you want instead, and to a diverse group of informed opinions.
We recruited a working group of ten volunteers with diverse backgrounds, personalities, and fields of expertise. These ten volunteers worked in a variety of fields—including sales, customer service, software development, finance, and operations. Before field testing, the Design solution went through a final review with five subject-matter experts with advanced degrees in business, industrial/organizational psychology, or related fields.
The group was asked to consider what a senior leader might want to focus on in any given year. What strategic activities are they choosing?
They came up with more than 200 ideas. That’s what we wanted. We wanted to cast a broad net, then start working down from there. We found about 54 common themes, then worked to rank order them.
There’s more to it than that, of course, but that was a big part of the process. We had a really intense timeline. Our science team devoted 600-700 work hours to development.
Most American employees work in SMBs, so I can see how making Design accessible to SMBs is key to the mission of “Better Work, Better World”. Can you help me understand the challenge in bringing a way to align talent and strategy to small businesses?
Dr. Fossey: Small businesses don’t have talent analytics departments or in-house IO psychologists—not even all larger businesses do. So it’s harder for them to gain access to the tools that can help them do this. As a result, they’re at a competitive disadvantage.
For companies of all sizes, leaders may know on a subconscious level when they’re contending with a lack of strategic alignment, but without a common framework and vocabulary to diagnose and treat, they struggle to get in lockstep.
What are some examples of those subconscious, unnamed things?
Dr. Fossey: Leaders often have a clear impression of what they need to do—fix bugs in the product, corner a new market, modernize their offerings, improve engagement, outfox the competition, etc. But saying it and doing it are different things. This is because of a lack of alignment between the talent of the company and that strategic goal. It may be that the leadership team themselves aren’t behaviorally well-suited for the strategic move that needs to be made. Or perhaps the culture of the company will never be able to support the strategic initiative well. Or it may be that the strategy can be done, but the negative impact on the people who work there will ripple out and be costly and counterproductive. These are often things that an executive team might sense, but they might lack framework or critical discussion space to air that concern and address it—if they even acknowledge it at all.
Consider this example: A major, multi-international company has grabbed a large segment of the market over decades. They’re very successful, but they now carry a lot of technical baggage from years of acquisitions, older systems, and technology. Yet the market is pushing them to modernize and be more data-driven, using AI and data science in their work and as a new offering. They need to be more efficient and organized, but this will likely mean laying off many employees and outsourcing their jobs.
At the same time, they want to suddenly move like an innovative tech company. The leadership team agrees that this is all true, but they each feel uneasy. Why? None of them have any behavioral drive to run an innovative tech company. They’ve succeeded for decades by running a large, hierarchical, and very structured company. To run more efficiently, big shake ups are going to happen to their employees, and the employees who stay will probably be nervous or disengaged. They don’t have a culture of innovation, nor have they encouraged technological innovation from their staff, and the way they work doesn’t support this.
Without critically thinking through a talent optimization path for this radical strategic change, they’ll likely miss their goal—even though the leadership team all agreed with each other on the strategic need.
In businesses of all sizes, I see a lot of chaos and a little bit of outright failure—more mediocrity than total collapse. How does Design help businesses excel?
Dr. Fossey: Strategic changes don’t necessarily fail, but they often don’t hit the lofty goals that inspired them. In fact, the 2019 CEO Benchmarking Report found that 52% of businesses didn’t reach their 2018 strategic goals. That’s a lot of people who didn’t achieve what they set out to achieve. The 2020 State of Talent Optimization Report surveyed 600 secutives and found that, on average, companies were only successful in 3 out of 4 of their strategic initiatives.
When people do talent optimization practices, strategy and business outcomes improve. The 2020 State of Talent Optimization Report found that companies that utilize some talent optimization practices increase their rate of strategic success by 16%. But we can’t practice talent optimization—which is the discipline of aligning business and talent strategies—unless we know what talent strategy is needed for the business strategy.
Our SVP of Product, Dr. Matt Poepsel, has said that the last frontier of competitive space in business is talent. We all have easy access to technology, information, and markets. We can’t differentiate ourselves on those things much. The last thing we can compete on in order to have a strategic edge over competitors is talent.
What makes Design so crucial in aligning the highest-level talent in an organization–the executives?
Dr. Fossey: Some research shows that executive teams perform better when they’ve worked together longer and they’re similar to each other. (There are some exceptions to this, such as in the technology sector.). New executives who haven’t worked together are often in a tougher spot, but awareness of their team dynamics can help them navigate those early years.
The more important awareness comes from showing executives how their company’s strategic position is aligned or misaligned with their own leadership preferences, which are heavily influenced by their behavioral drives. A team a leadership team can function effectively for years and bring success to their company, but if a change in the environment—be it technology, competitors, regulations, or something else—forces them to take a new strategic position, their leadership style, organizational culture, and general talent strategy may need to adjust as well to successfully navigate those changes.
Design helps bridge the alignment gap between a well-established team in a stable strategic position and a company in flux.
Need help aligning your business and people strategies?
Try the PI Design solution for yourself.