Why Your New Year’s Resolution Should Be Prioritizing People and Innovation

Organizations should enter 2022 with plans to act on the issues that their stakeholders care about.

We’ve spent the better part of the last 20 months pulling back from social interactions and reacting to the consequences of COVID-19, including human capital disruptions, business shutdowns, governmental mandates, and recovery programs. The natural reaction for some companies has been to cut costs and delay capital investing. Others have accelerated digital technology innovation. Our conversations are still preoccupied with when—or if—we’ll return to “normal.”

But perhaps the biggest change, and the one that will have impacts for years to come, is the rapidly evolving demands of the workforce. A wide array of human capital matters are at the forefront of all conversations as businesses compete for talent and address a structural shift in a workforce that’s demanding flexibility and an alignment of values with their employer. That’s where we’ll spend the bulk of this conversation, focusing on people, purpose, and how companies will need to make innovative changes to integrate the beliefs and needs of their workforce into business as usual.

People-First Policies

While the concept of “people first” sounds simple, it places a focus on employees over other stakeholders, a concept that many management teams still struggle to reconcile and a situation I don’t think is temporary.

Employees have been indicating for years that purpose, impact, and diversity are critical components of a desirable work environment. While money and time conflicts are certainly some of the reasons employees are resigning, the mass exodus is also driven by employees who want to be part of an organization where they feel valued and can have a real impact. Individuals have spent the pandemic evaluating how they want to live in accordance with their values, and they’re willing to take a leap to find that visionary alignment. Companies can embrace transparency and share their strategic planning process and future vision with their employees to better align with their employees’ expectations and create excitement about what can be achieved together. And the employees must be part of the planning, not just the implementation.

Embracing Employee Activism

As we’ve seen in the headlines about Amazon, Facebook, Netflix, and other major employers, employee activism is on the rise, which makes sense given employees’ increased focus on purpose and impact. Some companies ignore or silence employee voices, forgetting that in today’s social media world anyone’s post can be a reputational hit to a business. Companies that recognize the need for employee input have adopted a formal policy and process for keeping communication open with employees and listening to outspoken representatives. Megan Reitz, John Higgins, and Emma Day-Duro wrote about the “optimism bubble” in “The Wrong Way to Respond to Employee Activism” in the Harvard Business Review, their term for the phenomenon where leaders underestimate the challenges employees face while overestimating the degree to which employees feel safe to speak up. Among other actions, the authors advise resisting a rush to quick fixes. Instead, they recommend the implementation of reverse mentoring and shadow boards that can help get the voices of activist employees in front of company leaders. Early communication creates an opportunity for mutually beneficial communication and action instead of misunderstandings.

DEI Initiatives

Diversity, equity, and inclusion (DEI) initiatives are about more than just benefit programs and pay. DEI is expected by employees at all levels, but it can only be achieved with very intentional policies and procedures that are patient, seek potential as much as experience in an employee, and are focused on building an ongoing pipeline. Where policies and programs are misaligned with values and vision, cultural norms must shift. Regular reporting on internal statistics and ongoing conversations with employees about their experiences are essential parts of an effective DEI program. Managers need to resist the urge to always bring the same person into projects, rather than the person with great promise who hasn’t benefited from the same experience. Sometimes the right person is within arm’s reach, but their potential hasn’t been highlighted. However, employees themselves may not see where they can fit into another part of the organization, so an active evaluation of current and future positions combined with training will reach a greater percentage of employees looking for advancement. Build flexibility into role definitions to ensure that employees aren’t overlooked because of a lack of current experience.

ESG Expansions

Environmental, social, and governance (ESG) policies and regulations will continue to escalate in importance. Climate change is driving an emphasis by all stakeholders on holding firms accountable for their sustainability decisions in investments, vendors, DEI initiatives, and customer/client choices. For instance, CVS stopped selling tobacco in 2014 and has continued to expand efforts on smoking cessation and prevention by working with insurers on Medicaid plan policies. Walgreens is currently evaluating a similar effort.

Banking is also looking beyond internal sustainability initiatives. ING, a global banking leader with a mainly European base, has focused on financing billions in green energy projects—including issuing green loans, green bonds, and other innovative products—as it plans to reach a client portfolio with net zero greenhouse gas emissions by 2050. Expect to see other influential big businesses make major ESG moves in the coming years as their stakeholders demand it.

Mental Health

If there’s one benefit area to focus on, it’s mental health programs. Demand for therapists has spiked so much during the pandemic that therapists have waitlists of 10-15 people each. There has been a proliferation of online mental health apps such as Talkspace, Headspace, Mindshift, Calm, and My3.

The Wall Street Journal recently reported that some investors in startups are pledging an additional percentage above seed money funds to support the founder’s wellbeing, hoping that the entire organization will benefit in the long run. Overall, companies are becoming more open to discussing mental health matters in seminars and group meet-ups. Being honest about personal mental health matters sets the stage for employees to feel comfortable talking about their own challenges.

Gamification

Gamification has become an ethical minefield after the recent review of Robinhood’s investing platform brought criticism of its gamification of orders and trading. While gamification has been around for a while and can lead to greater sales in almost every form, there needs to be an ethics discussion around its application. Does the end always justify the means? Is there a difference between using gamification to solicit donations for a charity versus incentivizing individuals to trade more or gamble longer? Expect to see further conversations about this topic and make sure you’re aware of where gamification is used or is planned to be used at your company.

Overall, 2022 will see us all moving forward with new and deepening understanding of the human issues that surround us and the realization that these issues don’t disappear when we cross the threshold into the office. Organizations that commit resources to their employees and look for innovative ways to respond in these important areas will impress their stakeholders and make real headway in the battle for human capital and innovation. Now is not the time to stand still.