Reframing organizational structures- Heather McGowan [Interview]

About Heather Mcgowan

Heather Mcgowan is a world-renowned keynote speaker on the Future of Work and the author of the book, The Adaptation Advantage. She is a contributing author for Forbes and an adjunct professor at the Swinburne University of Technology. She also guides corporate executives to re-think and re-frame their business models, and her clients include start-ups like publicly traded, Fortune 500 companies, including Autodesk and BD Medical. We are extremely happy to have someone of her expertise on our interview series today. 

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Vanessa Rose

We have the pleasure of welcoming Heather Mcgowan today to our interview series. I’m Vanessa Rose from the peopleHum team. Let's begin with just a quick intro of PeopleHum -  peopleHum is an end-to-end, one-view, integrated human capital management automation platform, the winner of the 2019 global Codie Award for HCM that is specifically built for crafted employee experiences and the future of work.

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We run the peopleHum blog and video channel which receives upwards of 200,000 visitors a year and publish around 2 interviews with well-known names globally, every month.

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Vanessa

Welcome Heather, We’re thrilled to have you! 

Heather

Thank you for having me. 

Vanessa

So Heather, could you tell us a little bit about your book, 'The Adaptation Advantage'?

Heather

Sure, I happen to have it right next to me here. So here is the book. (Shows the book in the video) It's called The Adaptation Advantage. It came out in the U.S. on April 14th. It should be available around the world shortly. I know digital copies are available at least in English. And it's something that Chris Shipley, my co-author, and I started writing in some form or fashion in 2015.

As we've been looking at the changing nature of work. I've been looking at it for more than a decade. And Chris and I've been collaborating for about five years. And this summer was about when we got to an agreement with the publisher about the exact format and formulation for the book. And then it came together very quickly. And the book is divided into three parts. 

1. The first part talks about accelerated change, technology, globalization. The virus is not in there because it was written prior to the virus. But everything we predict to happen over 3 to 5 years is happening over 3 to 5 months. So we say the virus is an accelerant to the future of work.
2. The second part talks about how identity comes into play with learning and adaptation.
3. And then the third part is, how do you lead in this new normal?

So our thesis is The future of work is learning an adaptation. It requires you to let go of all the ways you have always done things and to rethink who you are and then leading in this new normal requires comfort with ambiguity, vulnerability, being wrong, learning from failure, and establishing trust and psychological safety in your teams. 

Vanessa

That is very interesting and...

Since you spoke about the new normal what do you think will be the new normal for the future of work now?

Heather

Well, the latest stuff that I'm working on is sort of trying to figure that out. So first, I think the virus has been an accelerant to the future work. So universities that struggle to get all of their faculty online or all their courses online, in a matter of weeks got their entire university online, Companies that struggled to establish remote working or if you're comfortable with people working from home across different geographies, did it in a matter of weeks and are doing it successfully. 

Only 29% of us, according to the World Economic Forum, can work from home. So we've got a huge part of the economy that's on pause, and a number of employees that are on pause or in the United States, it's 26 million. So that's not a new normal. That's just a temporary state. 

But some of the things that may continue are, we may have far fewer of us coming into the office on a regular basis. We may have work from home or work from anywhere, globally distributed teams, and that requires a different kind of leadership but also requires a different kind of screening for employees because you can't screen them based upon past skills and experience in a world that's changing this quickly and that a lot of that is covered in the book. 

The book has 78 graphics in it because I use visual frameworks to help people understand things, and I think that will go back to gathering because I think we're social beings and we like to be near each other as a species. When I speak, I keep keynotes in front of people, so I'm doing a lot of that virtually now. 

But I suspect when we get to a vaccine and therapeutic's and antibody testing that some of us will gather again, I mean, whether it's sporting events or college classes or graduations or concerts or conferences, I don't think those things are going away forever. I think they're going away for a period of time. 

"One of the things that I hope will endure from this is that companies that have really focused on developing their culture so that people feel like they're part of something, and that gives them a touchstone in the crisis and a focus on capacity."

So if I look at my company and I say well, we used to deliver value this way, but now in the pandemic, whether it's from a change in the global supply chain or a change in how customers can access us, we have to rethink our business models. That requires a culture that creates the safety to experiment and a relentless pursuit of capacity so you can acquire the new skills to deliver that value. 

So the CEO's that I think are doing really well, say, 'What are we good at, what are our customer needs and how are we gonna deliver value for them today? Not fighting against this or waiting for this pause to be over but trying to figure out how to serve both their customers and employees today. And that kind of agility should endure past the virus, and it would do us all well. 

Vanessa

So you are saying, how easily organizations thrive will drive depends on how fast they adapt to this change.

Do you think companies can be role models? Could you give us a few examples? 

Heather

Yeah, I think some companies can be role models. I think that the companies that have stood up and said, for as long as we can, you know the CEO is gonna either not have pay or have less pay, we're gonna figure out how to distribute the revenue that we do have to keep as many people employed as possible. 

There's a couple of CEOs in the U.S. that have done that. One CEO stood up and said, this is our economic reality, it's a smaller company that serves smaller businesses and then they said, we make our revenue on small business transactions, and right now there are very few small business transactions. So I can lay off half the company, or you guys can help me figure out how we're going to survive the next X number of months. And he left it to the employees. 

The employees came back one by one and said, you know what, I can live on 50% of my salary, where someone else says, you know what, I can't take a pay cut cause right now I support my parents and my children. And they collectively came to a way to keep the company open for X number of months without laying anybody off. That CEO will never have a problem with employee loyalty. 

And I'm seeing stats now on how we look at retail and how we might no longer just shop on price.

"We will shop on price if there's a depression, for sure. But we'll also be looking at who are the companies that treated their employees well in this crisis, in this moment because those are the brands I want to support."

We've had, one airline in the US Southwest said they're gonna try not to lay off any employees, which is very hard to do right now. Those kinds of stands the employees that come out and make as much as they can, a moral commitment to say the reason we exist is to serve our employees and our customers, not just our shareholders. I think they will endure.

Vanessa

In trying times like these, I think it matters most, as to how employers really show how much they care about their people 

Heather

Absolutely. 

Vanessa

You have been at the forefront of the academia-industry globally. Can you tell us about the differences you see in the adoption of people practices across countries and industries?

Heather

Yeah, I don't know that I'm an expert on by country in terms of who's doing it well again, I think the examples are coming out sort of in pockets and not necessarily tied to a particular geography. They're just people who are rising up in becoming role models as I said. And I think that we ought to shine a spotlight on more of those. And I saw somebody in Forbes was keeping track of companies that were making a commitment either to their employees or their stakeholders. 

Like in the United States, I know AT&T has banded together with a number of telecom companies that said we’re not going to turn off broadband for people who can't afford to pay. So, anybody who needs to access the Internet can because it's the public good for both work and also for education. So I think companies that are doing that sort of moral commitment, I see more examples of that on a company basis than differences between countries. 

I can say differences between countries in terms of how they handle the pandemic with New Zealand being just outstanding at how quickly they looked at it, they locked it down and now they're saying they've almost eradicated it. So we're seeing this is a real leadership moment and I think it's really fascinating. 

Vanessa

That's a really interesting example.

What do you think are the matters that management should keep in mind while setting organizational goals?

Heather

Generally, it's hard to extract it from this moment because I think they're both the same and this moment creates more of a pressure on it, but at the end of the day, a company is a group of people, and for some, somehow along the way we lost sense of that.

We saw people as dehumanized units of productivity. We focused on efficiency. Instead, as technology can assume more and more routine and predictable tasks, humans are going to do more of the human work. Humans can decide for intent.

"Humans can dream, humans can be creative. So rather than demotivating people by treating them as depersonalized units of productivity, we've got to inspire human potential."

And that's a different approach to recruiting talent. It's also a different approach, the leading talent. 

So when it comes to recruiting talent, recruiting based upon past skills and experience is increasingly insane. In general, you want an employee who can fit and add to your culture so not just fit, because then you get sort of more of a cult. But add to your culture someone who has cognitive diversity that can see around your blind spots, has agreed terms of values to establish trust and psychological safety. 

And then leaders who can model vulnerability to bring out the best in their teams. So if I'm a leader and I hide my weaknesses or things I don't know because I think that if I lead with impression management, I'm gonna be successful, I'm signaling to everybody on my team to hide the things they don't know, and it's gonna come out sooner or later. 

So, Dr. Amy Edmondson coined the term psychological safety when she studied medical groups and the ones that had fewer catastrophic failures, disclose their mistakes as soon as possible, and learned from them, and that became the model. So what I'm thinking about a large organization setting goals, it's gotta be started with, 'What are our assets in terms of human capability? How are we expanding those capacities? How are we creating a culture that allows more people to thrive and then start from there as opposed to just driving for efficiency?' Because I think that's a race to the bottom. 

Vanessa

So speaking about hiring talent and satisfying them,

What do you think about the gig economy, how do you think it is relevant with respect to the future of work? 

Heather

I think the gig economy is an inevitable part of the future work. In the book I go through, there are, I think, five types of talent. Reid Hoffman, who founded Linkedin, wrote the book Startup of You. He also wrote The Alliance, and I think in the Alliance, he referred to three types of talent he saw, which was you could be a:

1. Foundational employees, which means you're hired to be part of the company, and you're probably going to be a part of the company your whole life, you and the company grow together. 
2. You could be a rotational employee, which means you're there to fill a role like you're there for a junior program, and after two years, three years, however long it goes you either advance to another role, like a foundational employee or you spin-off to somewhere else. 
3. Then he had transformational employees, which come in to make a state change like they were part of a team to drive a particular transformational project, could be a new business model, could be a new product, and then they move on to another project.

He said that all three of those should be thought of as 'tours of duty'. So rather than thinking about your job forever, you think about your mission for the next 3 to 5 years, and then will you have another mission? 

I added on top of that, contingent workers which are gig workers and executive producers. So executive producers are people who come to you, and they have just like in the movie business, they can bring the entire team, the entire network to get a new product, new business model, new service. And so they're similar to gig workers, but they come with a whole network. And then gig workers are people who are like a tool, you're hiring them, it could be a lawyer, it could be a delivery driver. It happens at all levels. 

I think it's a really big part of the future work, it's part of the current work. Well in the United States, I don't know what the situation is in India, presume it's similar, if not even more so. We don't have a social safety net for gig workers.

So if we want a really flexible workforce where you know half the people or 1/3 of the people work on a contingent basis, we need to provide healthcare and access to resources like that so that people aren't in a constant state of panic because there's a learning zone, the panic zone and the comfort zone and you can't do you anything in the panic zone. 

So if you want a flexible workforce that you can sort of on-demand tap into different companies, you need to create a learning infrastructure, universal health care, access to benefits so that the individual is comfortable enough so that they can continue to learn, adapt, even if they're contributing to companies on an ad hoc basis.

Vanessa

So are they any reasons that organizations are not really accepting these gig workers?

Heather

No, I think probably more than anything, companies are a bit over-reliant on gig work in ways that I think could be detrimental, because if your company is operating under your business model that was created three years, five years, ten years ago, even a year ago, your gig workers can help you execute on your existing business model because you bring them in like a tool to execute it in all skill levels. 

But it's hard to get gig workers to help you plan your next business model, that requires some safe space, some room for failure, and a lot of tacit knowledge. So explicit knowledge is what can be codified and transferred. It means something that could be automated, and a lot of gig workers work in the world of explicit knowledge. But tacit knowledge is that sort of deep understanding of the company, deep understanding of the market, deep understanding of the customers and how those pieces come together in a new business model. 

And I don't know if that can work solely with gig workers. So we have an over-reliance on that, and I think that especially without the social safety net so people can feel safe to experiment, you're not going to get people to make the leaps you can need them to make to build your next business model. 

Vanessa

So you might get productivity but not all the other factors.

Heather

Right!

Vanessa

Okay, So Heather do you have any important soundbites you would like to leave our audience with?

Heather

Ah! So many! 

I was speaking on a conference last night with some folks from California and I was talking about how I mean increasingly seeing the moment we're in like we're standing on the edge of a raging river and we're looking at the river, and we're looking at all the choppy water and the eddies that you can get caught in.

And you know, this sort of swirling around and getting really overwhelmed, and everybody's trying to sort of lockdown and wait for the river to start raging. But what we need to do is help people see that...

"There are rocks in that raging river that we can step on to move across and on the other side of the river, things could be a lot brighter than they are today."

There are a lot of really positive things happening in this world of hurt. Companies are stepping up and taking care of employees in a way that hadn't been before. We're housing homeless people because it's a way of stopping the virus spread. We could have housed homeless people before, why didn't we? 

You know, we're paying frontline workers so much more and you know, the people who deliver groceries and work in the grocery stores. In the U. S. we struggled to pay them. The federal minimum wage was $7 an hour, and now we're paying them $19 an hour. Why can we pay them that now, but we couldn't before the virus?

The way we're working from home and flying less, the planet is healing. Can we do that on the other side of this. So there's a lot of things in this cause that's helping us rethink lots of things about work, and I feel like people are getting the only thing moving faster than the virus is our collective sense of empathy and our ability to collaborate.

The way companies are pivoting their product lines to make hand sanitizer and personal protection equipment and ventilators, we have so much inherent adaptability which is what the book is essentially about. It's ironic we wrote it before the virus because it's really relevant now. 

And we just need to tap into that, we have to realize how adaptable we are as a species. And if you look at us, all humans, we've got about 5000 years of a documented human history. But in the last 70 years, we've taken more people out of global extreme poverty. We have elevated more people into literacy, and for a short period of time, with the Internet, we've connected more than half the globe. 

So we have done more to improve the human condition in the last 70 years. Now we have all these technology tools that enable me to speak to you in India. And then I'll tell your audiences which we didn't have 25 years ago. So with all of these things together, I'm very optimistic about humanity. I just hope we don't lose the lessons we're learning at this moment, which is making us more human, I think. 

Vanessa

It makes so much sense. It is just changing the way we look at everything. Thank you so much Heather for joining us today. 

Heather

Thank you very much for having me. It was my pleasure.