The People Equation Prescription

The People Equation is simply this: provide a culture where risk taking is encouraged and psychological safety enables people to innovate. This culture consists of four elements:

Two states of equilibrium exist today. One is where individual people seem less important than the hierarchy. This is an organization where everyone is trying to get into the first-class cabin of the train. The other state is one in which people and their ideas are more important than the hierarchy. This is an organization in which everyone is working to make the train go faster. The focus on people is greater than the importance of the hierarchy.

THE PEOPLE EQUATION FRAMEWORK

Why do people matter in an increasingly technological and automated world? This is the perplexing question we set out to answer. The People Equation asks you to seek answers to these soul-searching questions:

• Do you want to innovate and grow at a rate constrained by the corporate strategy and the ideas of a few top managers, or do you want to harness the ideas of the entire organization so that you can leverage what’s on the minds of your employees and develop incrementally to perhaps the next big idea?

• Do you want to thrive in the fluid economy and take risks, or is it more comfortable for you to play it safe (and possibly observe the company’s slow, but inevitable decline)?

• Do you want to retain your best people or watch them jump ship and do their own entrepreneurial start-up?

• Do you want to focus on short-term profitability or do you want to create a more valuable company?

If you’ve answered yes to any of these questions, we believe that to do an effectual shift toward the People Equation, Figure 1, will require organizational changes in your process, structure, and mindset. In the People Equation, a cerebrally engaged set of people becomes the most important driver of success because there are certain things that only people can do.

Psychological Safety: The Enabler of Innovation

The bedrock of a people-centered institution is one where those in it feel a sense of psychological safety. This is the sense that regardless of what may happen, individuals in the organization will be respected and will not be penalized for honest attempts to improve the organization that perhaps don’t work out. Psychological safety is the feeling created when the organization is supportive of taking risks. It is a state of mind that all the individuals in the institution contribute to, and it arrives when the organization makes a conscious choice not to use either explicit or implicit threats as a way to motivate people. When people feel this sense of psychological safety, it unlocks the higher-order thinking that we all possess to lead to more creative and meaningful interactions. In chapter 1, we show that unless you respect the individual and create an environment for psychological safety, the people in that environment cannot be distinctively creative.

Process for Breakout Innovation

In the People Equation, you have to provide a regular innovation process that democratizes participation rates, where anyone in any corner of the company can partake in bold and incremental experiments, irrespective of their age, experience, education, pay grade, and so on. You need a formalized process with a clearly defined time line in which people can share their ideas, passions, and interests in a trusted environment—one that will benefit the company in the short- and long-term and reward individuals as though they were building out their own entrepreneurial venture. As you will read in chapter 2, Improvisational Innovation™ establishes a pipeline that draws in ideas and people from the company itself, and then trains those people and develops the ideas until viable teams emerge that can run these new internal start-ups. These innovative and dynamic teams understand the company but are not bound by its constraints and are empowered to push boundaries to grow the organization. Improvisational Innovation enables growth for the corporation, but is a bottom-up approach that also engages, develops, excites, and retains the company’s most valuable employees.

Inverted Organization: Raise Up Your Innovators

If corporations want to be part of the fluid economic future, they must set up other parts of their organization that are oriented toward the needs of their innovators and create the conditions to nurture them to achieve success. As you will find in chapter 3, a devolved organizational structure—what we call the inverted organization—will be critical here, as the attempt to control people, as we have seen, is loaded with either explicit or implicit notions of threat. This causes at best disengagement and at worst the active pursuit of a poor idea that was enabled through the superior position of an individual rather than because the best minds were thinking hard about the problem. To get there, senior managers have to embrace the benefits that a people-centric enterprise will bring. They are the ones who must, through devolving power downward or through growing part of the organization to be nonhierarchical, create an organization that is focused on the needs of those on the front line.

A Mindset That Makes the Train Go Faster

The People Equation enables the self-actualization of the employee by helping them build value from their inward or outward passions and interests. Only the organizations that concentrate on the mindset of making the train go faster rather than encouraging people to push their way into the first-class cabin will succeed and win in a fluid economy. You will have a stronger engine for innovation and growth. In this environment, as we detail in chapters 4 and 5, you embrace trust and collaboration and celebrate successes and failures. Reprogramming senior-management behaviors, from control to empowerment, is required. Using a language of “Yes and . . .” rather than “No” will help. Building environments where interpersonal interactions are devoid of explicit or implicit threats, so that people can take measured risks and grow, will result in a workforce that is more capable of tackling the rigors of the fluid economy. In the fluid economy, where there will be a need to respond creatively to rapid changes, we will need risk-taking leaders who can embrace and understand risk and enable others to take risks. As we move into a fluid economy, where more of the routine, automatable processes are and will continue to be taken up by machines, the childlike, creative instinct, accompanied by other uniquely human capacities, will become more central in one’s organization’s ability to innovate.

A Corporate Culture of How

A Corporate Culture of How is not about what you do but how you get things done. In getting things done, you need to give people time, an environment for them to bring new ideas to the table, and a process to execute. How ideas are improved upon can only happen through taking an idea and allowing other people to build on it. In chapter 5, we discuss what this Corporate Culture of How looks like, the vernacular associated with that culture, and what some of the tools are to create an engaging culture. We recognize that constructing cultural change is hard, and we suggest that if your culture is deeply rooted in bad behaviors, you need to first disrupt the current culture before trying to grow a Corporate Culture of How. We propose some formal mechanisms that may be useful in the construction of a new culture, but we recognize that, as always, the personal leadership qualities of those who head the organization are the decisive factor for a fruitful cultural shift.

It Only Takes One

People respond to other people in unique ways. Sometimes, to move your organization to new heights, what is required is as simple as role modeling. In hierarchical organizations, mavericks often struggle to conform and succeed, yet these mavericks are exactly the type of people you want in your organization if you want novel and creative problems to be solved. In chapter 6, we talk about the impact that these trailblazers can have and suggest that you need to highlight the achievements of these pioneers rather than suppress them.

What It Means for the Individual

In the fluid economy, the front line consists of knowledge workers who drive innovation. In this environment, the frontline worker needs to have the freedom to make innovative decisions that can affect the course of the company’s progress. This requires a high degree of personal responsibility and a strong commitment to the success of the organization, and it requires the competence to ensure that these front liners don’t let the organization down. Developing your people, and then rewarding them for the groundbreaking or cost-cutting work that they do, becomes critical not because they are motivated by the money but because if you refuse to share the rewards of good work, you devalue them. In chapter 7, we talk about the importance of careful cultivation of the individuals who make up your institution so that it can prosper in the long term.

The Art of the Ask

People are social animals, and for an innovative culture to emerge, people have to engage with other people and build on each other’s ideas. Those people need to engage in reflecting about problem solving, opportunity spaces, and underaddressed needs—all contributing their own thoughts, feelings, and desires so that the result is greater than the sum of the parts. It is only when a group of people collectively engage in a culture of possibility that we can innovate at the maximum possible rate. In chapter 8, we discuss the art of collaboration and being cognizant of your ask (what do you need to bring forth a good idea and execute?) and your offer (what can you provide to someone else who may need your support or expertise?).

Can you think out of the box?