Why culture is a proven key to future readiness
This article was authored by Jen Colletta, Managing Editor of HR Executive, and was originally published in HR Executive.
As organizations lean into the AI age, HR is rising to the forefront of AI transformation strategies. For instance, companies like Lumen, Moderna and ServiceNow have all given their CHROs leadership responsibility for their organizations' AI transformation.
"More than anything, AI is impacting workflows, workforce planning and workforce strategy—who better to oversee that than HR?" said Kevin Oakes, founder of the Institute for Corporate Productivity, during a keynote at the HR Strategy Summit at HR Tech this week in Las Vegas.
Core to HR's work leading transformation, Oakes said, needs to be attention to culture.
i4cp research finds that organizations with healthy cultures are nine times more likely than others to have excellent Net Promoter Scores, 4.5 times more likely to have higher engagement scores and 4 times more likely to have improved retention.
"Leaders of top organizations recognize that when we have unpredictable times, the one thing that gets them through and keeps them successful is their organizational culture," Oakes said.
Habits of healthy cultures
i4cp research points to seven habits organizations with healthy cultures share:
- More flexible work arrangements: Organizations that empower their people to work flexibly generally have healthier cultures, Oakes said.
- A learning mindset: Employees should be encouraged to be continuously learning and sharing those outcomes.
- Boards that care about culture: Oakes said boards are increasingly looking at culture not as "fluffy or ethereal," but are "catching on to how important this is."
- Leaders leading by example: Employees aren't going to do what's framed on the wall or written in a PowerPoint; they will emulate the behaviors of leaders.
- Leaders are held accountable for employee outcomes: Organizations with healthy cultures tend to hold their leaders accountable not just for business outcomes but also for people outcomes—like promotions, retention, internal mobility, development.
- Leaders regularly communicate values: Leaders at organizations with healthy cultures agreed with the prediction that their employees could recite company values if they were stopped in the hallway and asked what they were, Oakes said. "Those tend to be higher-performing organizations; low-performing organizations said, 'No, they'd probably get it wrong.' "
- Poor behavior is addressed immediately: The means is just as important as the ends at organizations with strong cultures, which root out and address toxic behaviors.
Culture as one piece of future readiness
To truly become future-ready, organizations need three components: culture readiness, AI readiness and skills readiness. The three need to work in concert with one another, Oakes said.
"A lot of organizations look at these as separate agendas as opposed to one integrated agenda," he said.
A change-ready culture entails adaptability, cohesion across teams and employee empowerment. Meanwhile, AI readiness involves strong governance, AI embedded into workflows and roles that are reimagined. Being skills ready, Oakes said, requires the ability to forecast the skills needed going forward—which he acknowledged companies are increasingly challenged by—upskilling initiatives, creative sourcing and the identification of skills across the entire talent ecosystem, which could include gig and contract workers.
Looking ahead, Oakes predicted that organizations on the leading edge when it comes to building future-ready workforces will prioritize skills over degrees, effectively determine tasks best performed by humans versus AI and catalog skills.
"These will become more important in the future," he said.
3 As of agility
As companies weather change and uncertainty, there are "3 As," Oakes said, they need to keep at the forefront to stay agile:
Anticipate: View change not just as expected and manageable but as an opportunity to disrupt. Organizations doing this well are doubling down on scenario planning, providing people leaders with on-demand access to workforce data and running exercises like "kill the company"—wherein a cross-functional team strategizes for how to break the organization in order to drive innovation.
Adapt: Break down silos and hierarchies to enable knowledge sharing, continuous learning and teamwork, Oakes said. This can ensure board-level decisions are made with workforce insights, the analysis of which roles can be augmented by AI and the rapid reallocation of resources like skills, budget and knowledge to support new initiatives.
Act: Take advantage of change. Redefine critical roles based on scenario planning, engage employees in identifying tasks that can be supported by AI and ensure employees are trained in AI fluency.