In nearly every industry, a small number of companies are capturing the majority of the profits.
A McKinsey Global Institute study revealed that the top 10 per cent of companies in the world capture 80 per cent of economic profits. This leaves very little for the companies at the bottom.
The middle 60 per cent of businesses earned close to zero economic profit from 2014 to 2016, according to McKinsey, while each of those in the bottom 10 per cent recorded economic losses of $1.5 billion on average.
These companies are also among the world’s most sought-after employers and most valuable brands. Apple, which is highly coveted for its iPhones and MacBooks, is the most valuable company in the world, with a market cap of US$2.54 trillion. It is followed by Microsoft at US$2.09 trillion.
What makes these companies so successful while the majority struggle? Research studies have shown that successful organisations do these key things really well.
Company culture to enhance productivity
Productivity matters — not just by itself. 66 per cent of C-suite executives believe culture is more important to performance than the organisation’s strategy or operating model, based on the findings of PwC’s Global Culture Survey 2021.
If we dig deep into a company’s culture, it will reveal both the written and unwritten rules that people in an organisation follow. The visible parts of a company culture include the vision, strategy, shared values and goals. The invisible parts, which are very crucial and often overlooked, include beliefs, feelings, norms and traditions.
Employee morale declines when the workers do not feel a connection to the organisation, which leads to a greater challenge in achieving the company’s goals.
Engaged employees experience significantly less stress, anger and health issues. Unfortunately, most employees remain disengaged at work. In fact, low engagement alone costs the global economy US$7.8 trillion, according to workplace consultancy Gallup’s State of the Global Workplace: 2022 Report.
It’s a reality check for companies. How do management teams create a platform where employees feel safe to voice out their opinions and concerns? It’s important that the organisation keeps employees engaged through active dialogue.
Workplace design is a powerful yet underutilised tool for creating engaging, innovative, flexible and creative work environments through a deep understanding of the needs of employees and the companies’ workflows, communication and collaboration patterns.
66 per cent of people feel that a positive work environment is imperative for them to do their best work, and 41 per cent of people agreed that mental well-being at work greatly influences their performance. Studies also show that flexibility is the top priority for employees to return to work. These are high-level indicators of how workplace design impacts people — by building flourishing communities at work, people thrive, and organisations succeed.
Also Read: Skate to where the puck will be: How category design gives you a breakaway
Global reinsurer Scor realised the need for their business to have a more collaborative, connected and engaged workforce post-pandemic, a problem they chose to solve through their workplace design by creating an engaging workspace. The idea was to create a flexible workspace design around social interaction, collaboration, and relationship building.
Their workspace, a 20,000 sq ft office in the heart of the commercial district in Singapore, was transformed to encapsulate and amplify the ‘One Scor’ spirit. The design halved the provision of traditional ‘me’ workspace, whereas community spaces saw a four times increase to support collaboration and facilitate conversations. Think more shared desk areas and small meeting spaces for team huddles or just employee get-togethers.
The new workplace design also boasts of a six times increase in alternate work points, lending employees the flexibility to work the way they want. Scor’s new workplace is a true testament to how workplace design encapsulates an organisational culture and drives behaviour change.
Research and development to drive innovation
Secondly, they allocate research and development budgets to drive innovation.
Never underestimate the power of Research & Development (R&D). Investments in intangible assets such as software and training have become critical to a company’s strategy and growth trajectory, research has shown.
Any top company would actively invest in R&D to generate new knowledge to create new technology, products, services and systems that it will either use or sell. Top companies spend two to three times more on R&D than their peers, accounting for 70 per cent of total R&D expenditure.
Companies need to revisit their roadmap and think about the percentage of time and money to be allocated to R&D. Companies that do not innovate often lag behind peers. To remain relevant, companies need always to ensure that they are at the forefront of innovation and thinking a few steps ahead.
For example, tech giant Microsoft has R&D centres globally. Microsoft is famous for spending vast amounts of money on R&D to hail breakthroughs in artificial intelligence, computer systems, speech recognition and more.
Collaboration space in SCOR, one of the world’s largest insurance companies in Singapore
A positive company culture and a commitment to innovation are essential ingredients for establishing a thriving organisation. When combined, they form a potent success formula that increases employee engagement, improves customer satisfaction, and drives long-term profitability.
Recipe for success
Research studies have shown that strong organisations do four other things really well.
Also Read: Embracing workplace flexibility: The new era begins
They have leadership teams with clear vision and priorities. Business leaders can create a workplace where employees feel valued, motivated, and inspired to bring their best selves to work every day by prioritising these factors. They can also foster an innovative culture in which employees are encouraged to think creatively and take calculated risks, resulting in new ideas and breakthroughs that drive growth and success.
They have clear roles and accountabilities for decisions. Good decision-makers recognise which decisions matter to performance. They think through who should recommend a path, who needs to agree, who should have input, who has ultimate responsibility for making the decision, and who is accountable for follow-through, according to Harvard Business Review.
They have superior execution of programmatic work processes, as well as effective and efficient support processes and systems. Productivity is driving output with the same or less input while nullifying the negative impact from the variables related to a demotivated workforce or cognitive overload — a point of paralysis of information where employees are not able to process and then act on what is heard.
Lastly, there are performance metrics and incentives to attract and retain talent. Performance measures motivate workers to work towards improving productivity. When employees are appreciated for their contribution through incentives, they are motivated to work towards organisational goals.
There is no absolute recipe for success. It is an amalgamation of experimentation and innovation. In order to stay relevant in today’s dynamic business landscape, companies must constantly strive to be on the cutting edge of innovation and possess the foresight to anticipate future trends by being open to experimentation. Ultimately, workplaces and organisation cultures that allow for creative disagreements and friendly “co-opetition” are the ones that ultimately thrive.
—
Editor’s note: e27 aims to foster thought leadership by publishing views from the community. Share your opinion by submitting an article, video, podcast, or infographic
Join our e27 Telegram group, FB community, or like the e27 Facebook page
Image courtesy of the author
The post Optimising workplace design for employee engagement and organisational success appeared first on e27.
