Olivier van Duüren: Finding the Balance Between Transforming and Performing in Business

We speak with Olivier van Duüren, transformer, executive whisperer, trend Sensemaker and former Microsoft executive, about his first book, The Dualarity, and his second book, Transforming While Performing, co-authored with Kristof Braekeleire to be released in May 2023.   

 
Don’t miss Olivier van Duüren’s opening keynote speech on Transforming While Performing at ME Executive Day in Belgium on 25 April 2023. Join now.
 

What was the inspiration behind your first book and business, The Dualarity?

My business adventure started on 14 August 1994 when I joined Microsoft. I had no idea how powerful that decision would be or how it would flavor my future life. So many experiences, so much personal growth. 

In July 2016, after 22 years, I was ready to cut the umbilical cord with Microsoft. I followed my passion, made room for something to grow while ending an era, and gave birth to The Dualarity, a book and a business. As an independent entrepreneur, I also wrote this first book, about personal and business transformation, which probably has been in the making for 22 years. It provides a comprehensive overview of what is happening in the world, with a big focus on digital transformation, and I thought deeply about how you can respond as an individual and as a business in your transformation. 

I put my heart, body, and soul into this book. It became an imprint of my observations of the world, people, and how I see it shaping. It’s fed with facts, research, and personal learnings of my personal transformation as a person and in business. Writing it helped me to structure my thoughts and experiences, and almost felt like therapy leaving the Microsoft ship. 

 

Your second book, Transforming While Performing, will be released in May 2023. Is it a continuation of The Dualarity or does it cover something new?

The premise of the book is how to Transform while performing by finding your North Star and getting everyone to act faster. This book will help organizations find their North Star, develop a strategic plan, and get everyone aligned in days, not months. We’ll also talk about how you can see the world and how to transform as an individual and as a business.  

Now more than ever there is pressure on any organization to transform while performing. It is extremely challenging to keep an open mind to refresh your future vision and define a direction of travel. How can you harvest the collective human intelligence to build your strategy and align all stakeholders in a co-creative and inspiring way, so they feel it is their plan, not someone else’s? How do you get everyone to act in days not months? How do you turn transformation into a strategic capability? That’s what this book is about. 

What is special about this book is the strong combination of writing and visualization: half of the book will be visuals.  

I’m co-authoring this book with Kristof Braekeleire, who is a visual facilitator and visual strategist. We believe in the power of visualization. Over the last six years, we’ve had many meetings using large murals and saw how graphic facilitation enhanced group learning and increased participation. Visuals also create a collective memory of an event. So, we’ve used lots of visualization in this book to explain things and give practical tips that keep the readers engaged. It’s a book about transforming while performing that is powered by inspiration, visualization, and co-creation. 

 

What is the difference between performing and transforming?

It’s a real balancing act for individuals, teams, and businesses to make a distinction between the two.

  1. Performing is delivering on your commitments. It’s the performance of today, what you produce, sell and deliver in a given period, like the fiscal year. It’s where you are trying to optimize productivity, efficiency, and effectiveness. We call this operational excellence.   
  2. Transforming, on the other hand, is where you build your future in the long run. It is the true power of an organization. It’s what you do now to perform in your future. Employees, customers, partners, and investors will stay with you if they believe you can bring them into the future and deliver value that will improve their lives. That’s what we call innovation excellence.  

Innovation excellence is not just digital or technology, it’s how you build your business model, how you relate to your customers, how you organize yourself, how you treat people, how you change the structure in your organization, how you build the ecosystem, and having an open mind. Technology is just one of the elements that can help you as a company.  

The challenge is how to balance performing while transforming. Many companies that have been around for a while tend to spend so much time performing that they are killing creativity and innovation.  

You know, start-ups probably have too much transforming and not enough performing. At some point, they will need to close deals and sell their products and services.  

It’s such a challenge finding that performing-transforming capability in an organization. Having the power of operational excellence and innovation excellence drives people and businesses to become the best versions of themselves. 

 

Having held top management roles at Microsoft for over 20 years, what are the key capabilities leaders should possess to ensure successful transformation in their organizations?

The power question here is how you can turn transformation into a strategic capability? 

Leaders must be willing to challenge every aspect of their organization. This includes their North Star, business model, operating model, people, culture, and also themselves. The legacy still serves present performance, but you’ll need to sacrifice parts of it to help the transformation come to life. Leadership models and approaches of the 20th century are no longer fit for purpose in the 21st century. Today, more than ever, a leadership team must have the right mix of performing and transforming capabilities. That is a condition to succeed in any major transformation. 

Leaders need to surround themselves with people who are more visionary, innovative, and able to inspire the troops and navigate them on the ship. But they also must be supported by strong performers who are the operational masters behind the buttons able to execute that vision.  

Here are some important questions leaders should ask themselves:

  1. Do I have the right skills for transforming and performing in my leadership team? 
  2. How can I build a capabilities-focused leadership model?  
  3. Do I have diverse leadership talent and styles in my team?  
  4. How do I operate day-to-day performance while transforming for the long term?  
  5. Do I have a culture of trust powered by collective leadership and a strong CEO?  
  6. Do I manage the tension that transforming and performing creates? 

Many organizations struggle with the tension between transforming and performing. On the one hand, there is a need to value learnings from experimentation and failures while valuing outstanding performance. Meanwhile, you have to manage well-being while hardcore showing results. We are convinced great leaders can openly and transparently acknowledge that tension to people.

 

What are the characteristics of organizations that have successful transformation initiatives?

When you look at the top 20 business transformations of the past decade published by Harvard Business Review you can observe some clear patterns. Companies like Netflix, Development Bank of Singapore (DBS), Microsoft, and Philips made that list. 

These companies had the following in common:  

  1. Ready to reinvent themselves with a new future North Star: Not afraid to let go of the legacy and leverage the core capability to reposition its core while entering new growth areas. 
  2. The right leadership capabilities to transform: Striking the right balance in operational and innovation excellence. Able to operate at a fast speed in reviewing strategies or relocating resources. 
  3. Turned transformation into a strategic capability: The ability to stay young, hit refresh, future-proof or re-imagine their North Star (purpose, ambitions, value, culture), strategy, and leadership ready for the fast-paced world. 
  4. Saw digital as the oxygen of the company: These companies seized the digital opportunity. Made data-driven decisions and leveraged digital for new platforms and superior business models. 
  5. Put customers at the heart of the company: They always keep the customer in mind. Instead of thinking about customers, they think like customers. 
  6. Value people as the soul of the company: They saw culture as the backbone of the organization with people being part of the transformation. If you take care of your people, they will take care of your customers. People are loyal to a culture, not a strategy.   
 

You talk about the need to re-balance existing or add new investments in products, services, processes, markets, platforms, and business models to iterate, innovate or disrupt. What do you mean by this?

A business transformation is a strategic capability when it offers… 

  • the ability to stay young, hit refresh, future proof or re-imagine your North Star (purpose, ambitions, value, culture), strategy, and leadership ready for the fast-paced world,  
  • by re-balancing existing or adding new investments (iterate, innovate, disrupt) in products, services, processes, markets, platforms, and business models  
  • to drive future profitable growth and sustainable value in the customer, employee, and ecosystem, while taking care of the planet. 

Depending on where you are with this, you’ll need to look at where to invest.  

Let’s simplify innovation and categorize it into three types of innovation, using the machine metaphor: 

  1. Iterative innovation: It is oiling the current machine to make it more productive, more efficient, or effective. Your focus is to make a better version of what you have today.  
  2. Innovative innovation: It is adding a new part to the existing machine. Your focus is to create something new that wasn’t there before. 
  3. Disruptive innovation: It is about building a new machine. Your focus is to build something radically new that changes the rules of the game, that disrupts someone else or even yourself.  

How much effort — time, resources, money, people — do I currently put into each of the 3 buckets?

  • Many companies will spend 90% (commercial) to 95% (public entities) in the iterative buckets and 5 to 10% in the innovative bucket. 
  • In contrast, if you want to be transformative you will need 70, 20, and 10% in each of the respective buckets. High Tech companies even go beyond and spend around 50, 30, and 20% in each respective bucket.  

A very useful exercise is to categorize your running and planned projects and resources over those three buckets and see what consumes the most resources. You’d be surprised about the outcomes. It will mirror how well you are balancing transforming and performing. 

  • If you truly want to be transformative you will need 70, 20, and 10% in each of the respective buckets.  
  • A CEO that is not spending 30 to 40% of his time on the innovative part is not really serious about it.  
  • The same goes for the entire leadership team. 
 

What are three things you hope attendees will take away from your session at MED Belgium?

I’ll speak about how to balance transforming and performing to build a soulful, highly energized, future-proof organization. I also want to help attendees see what’s happening on the outside, understand how to transform and perform as a person and as a business, and how to find the balance between innovation excellence and operational excellence. My keynote will be visually recorded on stage by Kristof, my business partner at Visual Senseformers and co-author of the new book. Looking forward to it. 

 

 *The answers have been edited for length and clarity. 

Donnie SC Lygonis: Why Innovation Culture Starts With Leaders

We speak with Donnie SC Lygonis; innovation strategist and business coach at KTH Innovation, entrepreneur, and TEDx speaker; on the inspiration behind his non-profit organization, the characteristics of strong innovation culture, the misconceptions of sustainable innovation, and more.  

 
Don’t miss Donnie SC Lygonis’ session on Building a corporate culture that fosters innovation at StrategiTorget Bank & Försäkring Sweden 2023. Join now.
 

What inspired you to start your non-profit organization, Entrepreneurs Without Borders (EWB)?

I’ve been working with entrepreneurship for the past 25 years — starting my own companies or helping others start their own, teaching entrepreneurship at schools, mentoring entrepreneurs, or judging entrepreneurship competitions, so I have a long and diverse experience in the field, and all of that came to fruition at one defining moment during a trip to India back in 2012.  

I was presenting how we work at the innovation office at the university, and after the talk, one person from the audience came up to me and said: “I’m an engineer here in India and we need what you are building in Sweden. We have people with incredible ideas, but we don’t know how to develop them.”  

On the flight home, I was thinking to myself, “How can I make that happen? How can I start an innovation office in India?” and then I thought “why stop there? Why not start 100 innovation offices worldwide that are connected to each other, so we can spread good ideas faster?”  

From there I then embarked on a journey to get this started, and in 2016 I gave a TEDx talk on this new idea that I then called “Entrepreneurs Without Borders” – shortened EWB, and from there on we have tried and done several different things.

 

How has the journey with EWB been like so far?

It has been a roller coaster ride with a number of trial projects leading up to 2020 when we were just about to start our first big accelerator program down in Kenya together with another NGO, Hand in Hand. They work with grassroots entrepreneurship and help mostly women start a livelihood company for themselves and their families. 

Together with them, we were going to run a project working with the 3,000 people they’ve helped over time, and run the most suitable ones through a 10-month program to help them grow and scale sustainable businesses, all with the goal of creating more jobs, sustainably. Getting people into jobs is key, and has a huge multiplying effect, one person can support up to five people in their social circle.  

Then of course in March 2020 the world turned upside down and all financers pulled out, so that project, together with all other activities, was put on hold.   

Over the course of the pandemic we redefined how we do things, but our why is still the same; to help entrepreneurs create a living for themselves and their families and at the same time try to reach the UN’s Sustainable Development Goals. Job creation and sustainability are the two main goals of EWB today. 

 

What do people get wrong about entrepreneurship vs social entrepreneurship?

I’d say we need to redefine the word entrepreneurship. At EWB we don’t talk about social entrepreneurship as one thing and then all other entrepreneurship as another. We mean that all entrepreneurship (and all business as such) needs to be sustainable, period.  

Sustainable entrepreneurship should be the only kind of entrepreneurship out there.  

By calling some entrepreneurs “social” you automatically create a divide between them and all the others that call themselves entrepreneurs, which also means that we burden the social entrepreneurs with fixing the world by being socially responsible and the rest don’t have to care.  

We don’t mean that all entrepreneurs need to have a UN SDG goal to reach, but ALL entrepreneurs need to relate to the UN SDGs so they ensure that they don’t make things worse by having a negative impact on the world.  

And this goes for everyone in business today — you don’t need to have a specific goal in mind to reach, but you need to make sure you’re not breaking any of the other ones.  

So yes, all entrepreneurship and all businesses need to be sustainable, and when I say sustainable I don’t only mean environment or climate, I mean sustainability in its full sense, so running a business in an ethical way with fair wages, no corruption, equal and diverse workforce, and understanding contextually your part of society and taking the consequences of that, being socially responsible.  

I often use the quote “Always leave it better than you found it” which applies to life in general and also entrepreneurship and innovation as well. Innovation can get quite carried away. It’s cool to come up with new ideas but we also need to take responsibility for the ideas we bring to life. We need to understand that we’re all part of the same planet, and that planet is not doing very well right now and it needs all the help it can get.  

 

What are the characteristics of organizations with a strong innovation culture?

The most important characteristic is curiosity. Fostering an honest, transparent mindset of curiosity within the organization where people are curious about how to build better products for customers and becoming better versions of themselves. Trust is also very important. Organizations need to trust their people and vice versa. For example, employees need to be able to voice out great ideas and trust that no one else will take credit for them. There’s also freedom. Not only freedom of speech but freedom of ideas too. It’s about creating an environment where people can express different opinions and question how the organization does things without being criticized for it. Those three are fundamental to address in order to become a better and more innovative organization.  

 

Does innovation culture start at the top?

Yes, it starts there, it is a leadership, top-down effort. Leaders need to be honest and open about what they want to see happen, and when they start initiatives, they need to follow through on their promises.  

I’ve seen too many examples of creative workshops and Dragon’s Den events that end up only for show, with little or no follow-through, which leads to it actually being counter-productive since people get disillusioned and unwilling to try again next time.  

And it is also not only about what you say, but also how you say it, organizations make this mistake all the time — they go out and say, “We ARE a curious organization!”, and the employees call their bluff because it comes across as management mumbo jumbo. Instead, I’d like an executive to say, “Look, we know we are an old and tired organization. Let’s all work together to become a fun, playful, curious six-year-old looking for new and fun things to do.” 

 

What are the three things you hope attendees will take away from your session at StrategiTorget Bank & Försäkring 2023?

Firstly, I hope to convey the basics of what makes an organization creative and innovative. I will also be talking about the importance and beauty of ideas; large organizations tend to get scared of new ideas because they think they will take time and cost money. But if we don’t have a dialogue about new ideas, then how will we ever get them? Understanding and being able to separate the two processes; going to work, serving customers, and making money today doesn’t have to be opposed to asking “What are we going to do tomorrow? Where will we be in 10 years? Then of course I want to end by saying: “Now you know how things work – Go talk to your people and make it happen!”.  

 

*The answers have been edited for length and clarity. 

Simon Sinek: 9 Key Takeaways for Great Leadership

Leaders set the tone for how an organization operates; they are part of the foundation that makes up the culture and are key to building an effective team. But what is it about great leaders that separates them from the rest of the pack? Simon Sinek, renowned leadership expert, speaker, and author of three global bestsellers, The Infinite Game, Start with Why and Leaders Eat Last shares 9 key insights that make great leadership. 

“Leadership is a team sport. None of us are strong enough or smart enough to do this alone.”

1. Empathy is as important as ever 

A trait that still ranks highly in leaders is empathy. When COVID struck, many leaders – even ones who seemed ineffective before – leaned on their own humanity and started checking in on their teams in earnest.  

We don’t need a global pandemic for us to express empathy and check in on our people,” said Simon, adding that this is simply good leadership.  

He added, “What I really hope is that the skill, that very human skill of leaning on our own humanity remains in a post-COVID world. Actually, worrying about our people as people rather than just cogs in a machine.” 

2. Leadership is a team sport 

Explaining the concept of finding and living your ‘Why’, Simon noted that your ‘Why’ is the sum total of your experiences that make you who you are. The rest of your life offers opportunities for you to make decisions that either keep you in balance with that ‘Why’ or not.  

As leaders, it’s important to be aware that if you’re feeling an imbalance in fulfilling your why, you should be honest about it to your team and lean on your friends for support. After all, leaders are the ones who set the tone. 

Relaying a story about his own experience with this challenge of feeling imbalanced in his ‘Why’ and how it affected his work, Simon said he managed to stay inspired and jump back from a rough patch by talking to his friends and being honest to his team about being off his game.  

3. Stay away from toxic positivity 

Leading into his next point, Simon explained that leaders who express their humanity and are honest about the challenges they are facing will create an environment where their team feels able to reach out when they are struggling as well.  

Toxic positivity – where a leader sees a team struggling or having a high workload but only talks about how everything is going great – can really backfire. If people are struggling but they only see positivity around them, they may think something is wrong with them. They would also feel the need to lie or hide their own challenges. Instead, Simon emphasizes the need for leaders to show their own humanity as it encourages others to do the same.  

“It creates an environment in which other people feel safe to tell us they make mistakes or tell us that they’re struggling, and then we can be there to support them, which is ultimately what we want to do as leaders,” he explained.  

4. Leaders Eat Last 

As he talks about in one of his bestselling books, Leaders Eat Last, Simon explained that good leaders are those who are willing to sacrifice their own interests or bonuses to protect their team in hard times.  

“Running a company is an ongoing experience. There are going to be highs and there are going to be lows. And I think as a society we’ve over-indexed on selfishness we’ve over-indexed on prioritizing our self-interest,” he cautioned. 

Even so, balancing your own self-interest with that of your team or business remains a paradox, according to Simon. Sometimes, you have to put your own oxygen mask on first. Sometimes, you have to help those around you first. It’s up to you as a leader to figure that out in your own context.  

5. Leadership is a choice 

On the topic of how to encourage leadership accountability, Simon stressed that anyone can be a leader regardless of their official title or position in the formal organizational hierarchy.  

“Leadership is a choice. Whether we’re the assigned leader or not, we still have the opportunity to practice all of the leadership skills that we’ve learned, one of which is making sure that our people feel seen, heard, and understood, and take that awesome responsibility to see those around us rise. That’s what leadership is,” Simon emphasized. 

Following that, Simon stressed the importance of rewarding leadership behavior instead of just titles and outcomes to encourage more leadership-like qualities and behaviors in the entire team. 

“If someone is showing initiative, stepping up and playing the leader leadership role, then we have to recognize them and reward them regardless of the outcome in the short term.”

6. Business is an infinite game 

No one wins in education or learning or even business. Citing philosopher and theologian Dr. James Carr, Simon explained that there are two types of games – finite and infinite. A finite game has fixed parameters and an agreed-upon objective where there is a necessary winner and loser. Importantly, there is a beginning, middle, and end in finite games. On the other hand, infinite games have known and unknown players who can leave or join at any time. The rules are also changeable at any time. The objective, however, is to stay in the game as long as possible to perpetuate it.  

When leaders approach business as a finite game but with an infinite mindset, there are some consistent and predictable outcomes such as the decline of trust, cooperation, and innovation.  

But if leaders accept that business as an infinite game that no one can win, that sparks a crucial change of mindset in how they operate.  

“The purpose of business is to do something and go somewhere, and money is the fuel to do it,” Simon said, explaining that the most successful companies or not ones that are purely driven by making a profit.  

7. Leaders must earn trust 

Talking about trust, Simon noted that it is important for people to be able to trust those around them as that breeds confidence that they will be supported. In a work environment, people need to feel able to admit their mistakes or that they are struggling to find the answer without fear of being humiliated or having their career impacted in a negative way.  

Simon cautioned, “Trust is a very human feeling. It’s not an order.” 

He added, “I get a kick out of leaders who say to their people ‘prove to me why I should trust you’. It’s actually the opposite. It’s actually the leader who has to prove why their people should trust them. That’s how an effective organization works. Trust is earned. And it starts with the leader.” 

8. Be careful with labelling quiet quitting 

Quiet quitting is gaining some buzz recently – the idea that people are doing the bare minimum at work. Simon noted that it’s important to make a distinction between those who are disengaged at work because they are actively making that choice, and those who are going through a hard time. In the latter case, leaders have to step in and check on their teams.  

Either way, leaders must lead with empathy in both cases.  

We have to be very, very careful labeling these things as quiet quitting because it is kind of a pejorative,” Simon cautioned.  

“People are quiet quitting at every level, and people are just trying to find work-life balance at every level. We have to be able to discern the difference and support,” he added.  

9. Business is human 

As his final takeaway, Simon reminded leaders that business is made up of people at every step of the way. Ultimately, it is about people, not profit or products.  

He said, “Remember that 100% of customers are people; 100% of employees are people; 100% of investors are people. It’s not about the profit, it’s not about the product. When you become obsessed about those things, you’re ignoring the very fact that business is human. And the more you understand human beings, the better you do at business. And by the way, it turns out you’re human too. So, all leaders are people too.” 

Customer Trust: Why It’s Important in B2B Sales

You have a great product and an effective marketing plan, but you are not generating the desired sales figures. Maybe a crucial ingredient is missing – customer trust. However, building customer trust is easier said than done. 95% of CMOs say establishing trust between their brand and the consumer keeps them up at night (BrandKeys).  

 

Here are four reasons why customer trust is essential in B2B sales: 

 

1. Customer Trust is the Convincing Factor in Purchasing Decisions  

There is a good chance that your potential customers already know about your product.  Decision-makers only dedicate 17% of their total purchase process to talking to potential suppliers (Gartner). This is because information is readily available at their fingertips – through your website, ads, social media pages, eBooks, reports, and more. The convincing factor to purchase your product is not its benefits or competitive price. It’s the ability to nurture a trusting relationship with decision-makers at every stage of the sales cycle. 

 

2. Customer Trust Builds Confidence in Your Product

The combination of great customer service and trust will decrease feelings of risk in your customers and make them more confident in purchasing your product. Beyond ROI and numbers, trust is key in helping customers understand the value of your service. In addition, emotionally connecting with your customer is important. Empathize with their challenges and reassure them that your product or service will solve their short-term and long-term needs. As the B2B sales cycle is long, you need to have as many touchpoints as possible with prospects. There is also a high chance you will be interacting with more than one representative – from sales directors to marketing managers to C-levels. 

 

3. Customer Trust Leads to Rewarding Referrals  

Picture this: You’re on the fence about buying a product but then you hear a close friend raving about it. Are you more likely to buy the product? The answer is most likely yes. Decision-makers feel the same way too. In fact, 76% of C-level B2B buyers prefer to work with vendors that have been recommended by someone they know (IDC). Not only that, 91% of B2B purchasers’ buying decisions are influenced by word-of-mouth (Useful SocialMedia). Customers who trust your business are more likely to refer your company to their peers, expanding your customer base organically.  

 

4. Customer Trust is Essential in the Era of Online Purchases  

In the current digital-first world, it’s no surprise that more decision-makers are making purchases online. According to a survey, 89% of decision-makers have made an online purchase since 2020 (Avionos). However, this does not mean that they are happy with the services provided by suppliers. In the same survey, 45% of decision-makers encountered pain points when interacting with sales representatives. Additionally, 77% of C-levels stated that their last purchase was complex and difficult (Gartner). With higher expectations for virtual buyer experience and supplier relationships, customer trust is paramount. 

Winter is Coming: The Cause and Effect of the European Energy Crisis 

Ana Maria Jaller-Makarewicz shares much-needed insights on the cause of Europe’s energy crisis, the EU’s efforts in alleviating this crisis, the viability of finding alternative energy sources, and more in the session, Decoding the Energy Crisis: The Fight of a Price War Against a Cold Winter

 
Ana Maria Jaller-Makarewicz is an international energy consultant with more than 20 years of experience in the natural gas and power markets. She is currently an energy analyst for IEEFA’s Europe team, focusing on topics related to gas and liquefied natural gas (LNG), as well as other relevant European energy issues. .
 

What is the core cause of the current energy crisis?

The gas crisis has led to the energy issues we’re experiencing now. It’s the dependency of Europe on fossil fuels and Russian gas. The problems with the gas supply from Russia started earlier this year. Europe had already reduced the amount of gas coming through Ukraine and intensified the flows through Turkey, hoping that the Nord Stream 2 pipeline would be operating. In the last decade, Europe has depended too much on one supplier for gas and has not thought of diversifying sources. Why? Because it’s easier and cheaper to buy gas from Russia. Europe has led itself into this dependency. Last year, 37% of gas consumption in Europe was imported from Russia. Even though there’s an ongoing energy transition in place, it’s not happening fast enough.  

Europe chose to rely on the easy option of importing gas at a cheap price. It focused on finding short-term solutions, which is a very human way of reacting. There could be other geopolitical or technical issues that could affect gas coming into Europe. However, I think Europe has made some right decisions this year. For example, filling and taking control of the gas storage. Even the gas storage in Germany was controlled by Russia. Now Europe is reclaiming that control, at least for the winter. The long-term solution for Europe is to diversify energy sources and look for alternatives. 

 

What measures have the EU taken to mitigate the energy crisis?

There have been some good measures like the gas storage I’ve mentioned before. Also, Spain and Portugal have put a price cap on the gas used for electricity. This has helped reduce electricity bills for consumers. I believe the EU is in negotiations to buy gas in bulk. I think we are in a seller’s market right now and the EU needs to work together to make better deals as a buyer. Not all the measures are perfect, but the EU is aiming to help the consumer by offering security of supply and continuing with energy transition goals. 

The challenge is that the energy market is volatile, and we cannot predict anything. Gas storage is already almost 95% full in all of Europe. Also, there are so many industries where demand has been disrupted. The volatility of the energy markets affects the prices that consumers are paying.  

 

Do you think that the U.S. should be allowed to dominate the global energy market?

Since the U.S. has entered the international market, gas prices there have gone up too. There are people in Europe who are suffering from high gas prices because the U.S. is selling. Unless Europe reduces its gas demand, there will always be LNG sellers trying to break the European market. Other than the U.S., Qatar, and Nigeria are expanding their LNG export terminals. Sadly, it’s a crisis and we shouldn’t be where we are. At the same time, the U.S. is just playing the mechanisms of the market. 

 

Are there any hidden business opportunities amid this energy crisis? What is your advice for business leaders?

There has been a growing interest in taking control of the supply chain of solar panels. In addition, I am very much in favor of replacing gas boilers. For example, around 70% to 80% of homes use gas for heating. The heat pump industry is growing in Europe. So, there are business opportunities there. In fact, several Nordic countries have transitioned to heat pumps even before the crisis.  

Any business investment in the energy sector must have three components – energy security, control of energy prices, and energy transition goals. The investments have to result in a sustainable future and help consumers in the long run. There must be a balance between those three components. Smart business leaders in the industry can accelerate technologies taking those three components into consideration.  

My advice to business leaders is to not panic and keep calm. I think any decision made from desperation could have long-term implications. Continue with the energy transition goals that were put in place prior to the crisis and try to find opportunities to invest in other parts of the economy. 

 

How has the energy crisis affected the well-being of consumers?

People in Europe are worried about the possibility of energy poverty. Consumer confidence is going down and they fear economic collapse. The current uncertainty and being bombarded with news every day is affecting their well-being. Right now, we need to find quick solutions because winter is coming. People are going to suffer if their homes are not heated. Not only will there be not enough gas or electricity, but it will become unaffordable. People are concerned that they may have to choose between buying food and buying gas for heat. 

 

Do you think the energy crisis will be solved after the winter season?

I don’t expect the energy crisis to be solved after winter is over. Nothing can be guaranteed because things change all the time. But I think the energy sector will evolve in terms of consumer behavior with guidance from governments and industries. I’m also concerned that we’re talking too much about supply issues. If we can change our demand patterns, maybe we won’t need the same amount of Russian imported gas. While finding other energy sources, we need to work immediately on the demand side. For instance, demand side management, energy efficiency, and replacement of gas boilers. 

 

*The transcript has been edited for length and clarity.  

Raisa Ghazi: What’s the Long-term ROI of Diversity, Equity, and Inclusion (DEI)?

In this exclusive interview, Raisa Ghazi reveals the challenges and long-term benefits of diversity, equity & inclusion (DEI) initiatives; provides insight on the rising importance of ethics in technology, and why female leaders are essential in the 5th Industrial Revolution.

 
Raisa Ghazi is a public speaker and executive coach focusing on inclusive and ethical leadership in technology as well as women’s leadership. She is also a member of the Forbes Coaches Council and the Dutch Social and Economic Board for high-achieving women. She was recently awarded Best Ally Europe by the international non-profit organization WOMEN IN TECH – Global Movement for her work as a public speaker, entrepreneur, and activist.
 

What are the common challenges faced by organizations with DEI initiatives?

There’s a lot of resistance from the people who attend workshops on DEI. They are confronted with something that’s very hard to deal with — the fact that they are probably biased. What doesn’t help is that many of these workshops and talks, even the ones I give, are forced on employees by HR, and people don’t want to be there. Some speakers will also criticize the company a lot and leave them just like that, with no suggestions for improvement. That creates a negative attitude towards DEI.  

So, there are techniques to make them understand what it’s like to be discriminated against. It’s very important to work with a speaker who can also spark that empathy. For example, as a speaker, I need to also be honest about my own biases. The way some speakers talk can cause a lot of aversion from the dominant group in the workforce, which are men, sometimes even attacking them verbally.  

On the other hand, companies must not make DEI a single event. It needs to happen back-to-back and be visible in the behavior of leaders, company policy, and employees. Just like how big tech companies like Microsoft and Google promote the growth mindset to thrive and be successful. There are reminders of the growth mindset everywhere in their offices. If you want to imprint something positive on your employees, you must go beyond having one Diversity Week or having just one talk.   

 

What are the long-term benefits of consistent DEI efforts for organizations?

There’s been so much research on this. Companies that are more inclusive and diverse make more money. They are also more innovative and ethical.  The fact that I have to mention money to convince a company to do the right thing, to be decent human beings, is unfortunate. But I also understand how the world works and C-levels need concrete results to report back when it comes to DEI.  

In addition, DEI has to go beyond recruitment. It must have a bigger commitment. It’s a vision for how you want your products to be built, how you want your people to behave, and how you want them to market themselves. When it’s not done in a genuine way, it’s always visible one way or another. If it’s not an employee who messes up, it will be a product or event or marketing message that completely misses the boat. If companies don’t want to do DEI the right way, they will be forced eventually. I am sure about that

 

In your Forbes article, Why the World Needs More Women in Leadership, you wrote that companies with more women on the board make more ethical decisions. Can you elaborate on that?

Women are more risk-averse, and that makes them more ethical because they’re going to think twice before risking someone’s life for example, or the environment. But women are also more community driven. After a decision is made, they will think about all the stakeholders that could be affected, not just their partners but people in general who are affected by their work. When it comes to the 7 global tech revolutions such as IoT, cloud computing, and blockchain, women consider the dangers that are associated with these technologies.  

What’s important is that we take the right precautions to make sure people are safe, and that’s why women are needed. It’s very important that they are involved, but it’s also for their own benefit. If you look at virtual reality and augmented reality, which are used a lot in education, women can’t use them well because they have been made for men. Therefore, women need to be involved to make sure that these technologies are developed in an inclusive way.  

 

You specialize in helping companies and governments develop more ethical and inclusive technologies. Can you tell us more?

The ethics in technology field is so new. Stanford University, in the heart of Silicon Valley, only started teaching this in 2018. Therefore, companies that hire me usually want to discuss the basics of DEI. It’s nowhere near getting into the ethical side of technology, and I don’t think they will unless the government forces them to.   

The Dutch government has been a trailblazer in this area over the years that I’ve hosted conferences and training for them. They are discussing inclusion and diversity on a level most companies are not. They’ve been doing the work for years and it’s not a one-time thing. Most companies will just ask me to speak at their Diversity Day and it ends there.  

I’m very interested in measuring DEI outcomes in companies but in the Netherlands, there’s a lot of legislation that prevents effective assessment of inclusion and diversity. Another challenge with measuring DEI outcomes is that it’s an in-depth process that requires plenty of effort and money. Most companies don’t think it’s worth it.  

 

What do you hope attendees will take away from your presentation at ME Executive Day?

I hope to inspire the decision makers and show them a different side to diversity and inclusion. I want to spark a curiosity in what is about to happen in the next century and the changes to expect when it comes to diversity and inclusion in technology. These people are the best of the best and they want important information. I want to give it to them so that they are prepared to be visionaries in their organizations.  

 

*The answers have been edited for length and clarity. 

The Global Inflation Crisis: What Will It Cost Your Business?

In the session, The Rise of Global Inflation Crisis: At What Cost to Your Business? Carsten Brzeski answers burning questions on the short-term and long-term effects of inflation on businesses, which industries will inflation hit the hardest, whether a recession is around the corner, and more.  

 
Carsten Brzeski is the Global Head of Macro Research and Chief Economist Eurozone at ING. Previously, he worked at ABN Amro, the Dutch Ministry of Finance, and the European Commission. He is also a member of the Advisory Council on International Affairs for the Dutch government and parliament.
 

What are the short-term and long-term effects of inflation on businesses and consumers?

Costs are increasing — energy, commodities, food, and input prices. If your cost position goes up, you will feel it as a business. If you’re in services, you will see the long-term effects in terms of wages. If you’re in manufacturing, you will feel it in input goods. Interestingly, in Europe, at least until this summer, businesses were able to pass most of their costs to other businesses or consumers. There was so much demand and people were buying everything they could.  

However, we have seen a turning point, prices have increased too much that buying something has become unaffordable. Businesses can’t buy input goods at this extremely high price because they can no longer sell them. We even have anecdotal evidence of production facilities closing because costs have increased. Inflation is clearly affecting businesses in different sectors.  

I think Europe is sliding into a recession because these costs can no longer be passed to consumers. High energy and commodity prices are here to stay, maybe not exactly at the same level as they’re currently, but they will be higher than before the war. The war in Ukraine is more of an economic game changer than two years of COVID have ever been.

What should not be underestimated is the possible shifts in the global economy — moving away from just-in-time delivery towards new supply chains and the end of globalization as we know it. A world that is dominated by more regional trade agreements. In this case, companies will have to restructure the production and processes of supply chains, and this comes with higher costs.   

During the stagflation crisis in the 1970s, there was the so-called price wave spiral: inflation goes up, wage growth goes up, and inflation increases again. Soon we will see higher wages as compensation for the loss of purchasing power in employees. Most of the western world, especially Europe, has an aging population. This results in a shrinking labor force and with inflationary pressure, we will see employees have more power to ask for higher wages.  

Unless you’re able to completely optimize or digitize labor, businesses must prepare for higher labor costs. My advice to employers is to invest in your workplace to make it an attractive place for people to stay and be open to innovation. The younger generation also values work-life balance so that has to be part of the job package.  

 

Besides oil and gas, which industries are most impacted by inflation?

Industries that are energy intensive such as chemical, automotive, and manufacturing. Energy has become expensive, which means businesses need to start or continue the transition to greener alternatives.    

All sectors will eventually be hit with inflation. The services sector will not be hit initially because it is less exposed to direct energy costs, but it will face the loss of purchasing power by consumers. While most sectors felt the heat from higher energy prices in the first half of the year, services were thriving because people were spending the money they saved during the lockdown. Let’s fast forward to the coming months when the heating season starts again. Energy bills will multiply fivefold, which will affect the services industry in the long run. 

 

How does the current economic situation compare to the stagflation crisis in the 1970s?

Other regions that are important for the global economy are not experiencing the same inflation crisis as the U.S. or Europe. The world has become much more fragmented with economic power being more spread out across the globe compared to the 1970s.  

It’s similar to the 1970s in the western world, namely higher energy prices and inflation rates. We are starting to see the difference between the U.S. and the Eurozone. In the U.S., we see the effects of higher wages which has not happened in Europe yet. Wage growth was strong in the 1970s. The happy ending would be from negative real wage growth, purchasing power declines, leading to weaker demand and lower inflation rates.  

In the 1970s, central banks were required to offer double-digit interest rate levels to kill inflation. Central banks today react faster, even the ECB. I have doubts about whether central banks can bring down inflation by changing business and consumer expectations. If they can, the recent interest rate hikes would already be sufficient to lower inflation.  

 

What actions should a business take to minimize risk during times of high inflation?

I don’t think businesses can fight inflation. Governments can lower inflation rates by introducing price caps and energy rebates. Secondly, central banks can help by hiking interest rates. Businesses cannot actively bring down inflation. They need to adapt.  

This means purchasing managers and procurement must be more efficient to save costs. When it comes to labor costs, it’s a very tough balancing act. On one side, businesses can consider a one-off wage increase to offset higher inflation. Additionally, businesses that are exposed to high energy costs can find alternatives. This can hardly be done without upfront investments which means more initial costs.  

 

Policies to reduce inflation like tighter fiscal policies and wage control have fared poorly in the past. What are your thoughts on this?

We have a supply side revenue inflation with higher energy and commodity prices. Tackling this is impossible to do in a year, but what needs to be done is finding new energy sources that are not from Russia and providing commodities that are not exposed to supply chain problems in Asia. Of course, that means tighter fiscal policies. That’s what we hear from central banks now.  

They will bring economies down on their knees by hiking interest rates, which will then lower demand and eventually inflation. It can be a painful process. We’re listening to the Fed and the ECB and on what they’re currently willing to do. Another angle with tighter fiscal policies is to support the demand side by giving subsidies which could support the economy in the short run but increase the risk of a longer period of inflation. 

 

Is the world heading into another recession? How will Europe compare to the rest of the world?

The IMF defines a global recession as global GDP growth of below 2.5%. But considering what’s going on in other countries, I do not expect a global recession. The U.S. is still going strong and there’s a good chance we might see a soft landing there. China is slowing down, but we need to see how it will deal with its Zero-COVID strategy going into winter. My assumption is China will not slip into recession. The most exposed region is Europe and I predict a winter recession. The severity of this recession will depend on how much additional fiscal stimulus we will get in the coming weeks. 

 

Will the U.S. dollar become stronger than the euro?

We will see more rate hikes by the Fed than the ECB, which will result in the further weakening of the euro. I also think the recession in Europe will be more severe than any slowdown in the U.S., which will favor the dollar. We would need to see a resolve in the Ukraine war for the euro to improve, but I do not see this realistically happening. That means the dollar will strengthen further at least up until the summer of 2023.

 

When will we see inflation rates reduce in Europe?

Government measures over the last month have blurred the inflation picture. Every time a government measure to bring down prices expires; prices will go up again and have an imminent impact on inflation. The so-called passing on of market gas prices to consumers and companies takes a while. Consumers have been hit by high prices of food, gasoline, and energy. This means inflation in Europe will still accelerate. Several countries in the Eurozone already have inflation rates above 10%.  

I think the rates will remain until Q1 2023 and then we should start seeing inflation gradually coming down. Obviously, a lot depends on the war in Ukraine and how gas prices will develop. I see the average inflation rate for 2022 coming in at around 8% and 5% in 2023.  

However, prices will remain high even if inflation goes down. I do not think there will be enough wage growth over the next two years. The loss of purchasing power will mean that Europe will lose economic wealth and international competitiveness due to higher cost pressures on the business side and high inflation on the consumer side. 

 

Are there any hidden opportunities for businesses during this economic crisis?

We have so many crises, particularly here in Europe. We are amid a perfect storm. The wild card is how will governments react. What we learned from the pandemic is that governments can cushion any economic slowdown via fiscal stimulus. Currently, Europe has an average fiscal stimulus measure of around 2% to 3% of GDP, aimed at bringing relief against high energy prices. During the pandemic, we had fiscal stimulus from European governments between 10% and 15% of GDP.  

I think the silver lining is when you get to investigate the reasons for inflation. The main reason is energy prices. Prior to the war, there was the European Green Deal initiative. This transition offers enormous business and investment opportunities for organizations. There will also be opportunities for some regions in Europe if organizations decide to reshore production processes and supply chains closer to home. In addition, financial services and fintech providers could thrive in the upcoming years as consumers want to be more efficient with their money.  

 

*The transcript has been edited for length and clarity.  

Christoph Matschke: Rewe International’s Roadmap to IT-Business Synergy

Christoph Matschke, Board Member of Rewe International AG, provides insight into the importance of looking at IT through a business lens, strategies for successful IT-business collaboration, and ways to tackle the IT labor shortage. He also speaks about the organization’s new and exciting IT modernization project, sPORT.  

 

In the recent 90minutes IT Insights session, you spoke about “How Much IT Is Too Much IT?”. Do you see many companies struggling to find a balance between not having enough automation and too much IT?

At first sight, the answer is no. Investments are increasing. Both business and IT departments seem to be aligned here. There are probably cases where too little automation is an issue. For example, we are adopting our IT to the needs and specifics of our organization, not the other way around. As for too much IT, I haven’t seen this yet. What I do see sometimes is a lack of resources. 

 

What do you think is needed to build an IT strategy that is fully aligned with the business goals?

First of all, you need a strong business strategy, which is developed together with all relevant parties right from the start. Of course, both business and IT must understand each other’s needs. IT must not be a mere service provider but a proactive partner of the business by being able to talk to them on the same level. On the other hand, some managers must not use IT like drunks using streetlamps – not looking for light but for something to hold on to. They must work together to find the best solutions and not just quick fixes for day-to-day problems. 

 

Tell us more about the recently launched sPORT project. How will it change the IT landscape at REWE Group?

sPORT stands for “strategic development of processes, organization, and technology”. It is a project that will significantly change our IT and business processes. In the past, our IT always focused on providing the best services on a small budget. This created some development and innovation backlog. The processes are not ideally supported and thus the business is limited in its operations. sPORT will be responsible for steering the modernization over the next few years and ensuring its success.  

Of course, technological modernization is key. But this transformation of our IT gives us the opportunity to also fully rethink our process landscape, which will have a significant impact on the organization. As a consequence, our project team will gather processes, and assess and reshape them into state-of-the-art end-to-end processes with which business and IT will be able to harmonize and standardize the historically diverse landscape of our IT systems. Naturally, we will also roll out variants across our countries and business lines.  

 

How did the IT team collaborate with the business side on this project to make sure both sides are aligned and working on the same goal? Are there any steps you could name that are crucial for effective collaboration?

It is simple – You have to prepare all relevant parties, get both IT and business ready and make sure there is collaboration. It is crucial that there is an understanding of each other’s roles so you can talk on the same level. Also, you must win the hearts of all participants for this project – not only top management. Finally, you must make sure that both sides are equally represented. For this reason, the sPORT program has two heads, a “power couple” you could say – one person for IT@sPORT and one person for Business@sPORT. 

 

What do you hope sPORT will achieve for REWE Group three years and five years from now?

The IT department in Austria is responsible for 12 organizations in nine countries all over Europe. Those organizations operate supermarkets with BILLA, IKI in Lithuania, discount stores with PENNY International, and also BIPA as a drugstore – so there are a lot of stakeholders. It is our aim in this project to create unique and optimal processes for the entire organization. It is not about merely changing applications, but changing the organization as well as developing and using standards for the whole group. To sum it up, in three to five years we will have achieved this: 

  • IT is an acknowledged technology competence center 
  • Business and IT work together on the same level, jointly improve the processes and develop the most effective tools  
  • We focus on standardized systems for all our organizations – as much as possible and of course only when it makes sense 
  • We will have gained speed and efficiency in our business approach and will have a system of constant process optimization. 

We do not merely hope to achieve these goals, but we know that we will get there. 

 

What are the biggest challenges you’ve encountered with sPORT and how do you plan to solve them?

Of course, it is a huge challenge to change central IT applications as well as the process design of an organization. You need commitment, transparency, participation, and centralized decisions at the same time. To illustrate the importance of transparency, our way of standardizing means that people can voice their special wishes, but most often they will not be fulfilled according to the original intention. At the same time, it is crucial that our first solutions address the needs of the organization. Consequently, we will have to communicate in a very transparent way by involving and informing the people. 

 

How has REWE Group built resilience against ongoing retail and supply chain disruptions over the last three years? What was the role of the tech team in building up these capabilities?

We operate in a very competitive environment where you have to be resilient at all times. In this way, we deal with these disruptions well. We have an amazing tech team who are there for their line tasks in developing and running the IT systems. They have also shown incredible dedication and work ethic during these times of stress and disruptions. 

 

Many industries have been hit with an IT labor shortage. How does REWE Group attract and retain the right IT talent?

We have taken all measures here that you can think of. For example, we have installed a task force which is completely focused on getting the best people for our IT department. Of course, with supply being low and demand being high in the job market, you have to offer more attractive salaries among other benefits like flexible working hours. We have also clarified the roles and development paths within IT to offer perspective. Lastly, we emphasize the following whenever possible – our colleagues have the chance to be part of creating the new IT system for REWE Handel International which will be the basis for thousands of people in the coming decades. This is one of the biggest projects in Austria and an amazing challenge for motivated people who want to show their excellence and be part of an exciting new development. 

 

*The answers have been edited for length and clarity.

CFO Planning for 2023: What Finance Leaders Must Prioritize

The past three years have seen CFOs increasing efforts in digitalizing financial tools and processes. They also had to ensure operations ran smoothly amid unprecedented economic disruptions, shifts in the workforce environment, and fluctuating consumer and investor expectations. As 2022 comes to a close, what should CFOs prioritize for the coming year?

 

Recession

The worsening energy crisis in Europe may lead to a severe recession in 2023, according to JPMorgan. It will be the biggest economic risk CFOs have to tackle – potentially facing a slowdown in manufacturing, reduction in consumer spending, and loss of jobs.  

How CFOs manage their cash flows and reserves will impact how well the company survives during an economic downturn. Campbell Harvey, a professor of finance at Duke’s Fuqua School of Business, says, “Often when a company goes into a slowdown or a recession, they effectively have to spend the cash that they’ve got. A company that has been really wise in terms of its debt management and cash management, they can seize that opportunity. A very bad strategy is to make cuts that are relatively easy to do but damage your long-term position.” 

There are finance leaders who are on the same page as Harvey, like Bill Betz, CFO of NXP Semiconductors NV. When asked how he is preparing for a recession, he says, “It’s all around protecting our free cash flow. Our actions would potentially include reducing variable compensation, discretionary spending, and noncritical capex.” 

CFOs are also ramping up scenario planning initiatives. According to CFO of Shell PLC, Sinead Gorman, the company is stress testing each investment in high scenario, low scenario, and base scenario environments, “and that allows us to be prepared.],” she says. This is in line with our findings in the CFO Investments 2022 report, where 69% of surveyed CFOs are cultivating organizational resilience by investing in rolling forecast tools and scenario planning.  

 

Business Intelligence

High-quality data is essential for forecasting and scenario planning – this is where business intelligence (BI) comes in. Findings in the CFO Investments 2022 report support this, with 53% of CFOs citing the need for advanced BI tools for better data-based forecasting, and 68% of finance leaders investing between €100,000 to €500,000 of their annual budget in BI. Here’s how BI is utilized in:  

  • Planning and analysis: BI dashboards collate historical and real-time data to provide insights on business trends, cash flow, scenario modeling, and variance analyses, to help finance teams compare current performance with what was forecasted. SKF, a Sweden-based global manufacturer, implemented BI as a solution to solve product demand forecasting challenges. They no longer had to rely on outdated Excel spreadsheets as BI allowed them to centralize data assets and improve forecasting efforts between departments.

In addition, BI is a game changer when it comes to:  

  • Customer retention: BI gives a comprehensive view of a company’s customer data and financial performance. This is especially important in the financial services industry when it comes to customer retention. For instance, American Express utilized BI to produce new products and offers to customers, as well as protect them from credit card fraud.  
  • Financial efficiency: Finance leaders can tap into important business insights using BI platforms to make strategic decisions on the company’s short-term and long-term financial needs. For example, international cement company Cementos Argos invested in an entire business analytics center and hired business analysts to harness BI to streamline decision-making and finance processes. With BI, the company applied BI to gain insights into customer behavior which yielded higher profits.   
 

Environmental, social, and governance (ESG)

Sustainability continues to be a focus area for finance leaders, as investors, shareholders, and consumers take a company’s ESG initiatives into consideration when making purchasing decisions. ESG compliance is a new responsibility for the CFO and has transformed their role from pure finance leader to a more strategic business partner in their organizations.  

Interestingly, there seems to be a disconnect between how organizations perceive their CFO’s duties towards ESG, and how CFOs view themselves in that area. According to this study by Anaplan and Deloitte, 78% of CFOs expressed weakness in addressing ESG initiatives, even though 91% of organizations named it one of their CFO’s top three successes. 

Although 53% of CFOs are keen to make long-term investments in ESG, they face difficulty making finance operations greener due to inconsistent ESG reporting frameworks. A solution has been tabled by the EU in the form of the Corporate Sustainability Reporting Directive (CSRD), which is expected to roll out in October 2022. The directive is part of the larger Sustainable Finance package which aims to channel private investments to transition to a climate-neutral economy. European CFOs will be pressured to produce more regular ESG reports as the directive applies to more companies operating in EU-regulated markets.  

The Hybrid Workforce: How to Master and Manage the Future of Work

Remote workers are predicted to make up 32% of the global workforce by 2024 as hybrid workplaces continue to rise. In the session, The Future of Work: How to Master the Vision and Execution of a Hybrid Workforce, we spoke with multi-hyphenate thought leader Ira S. Wolfe, to uncover his insights on hybrid work, the best practices to attract and retain talent, the skills needed to excel in a hybrid workplace, and more. 

 
Ira S. Wolfe is a Top 5 Global Thought Leader in the Future of Work and HR, Workplace Futurist, TEDx Speaker, and best-selling author. He is also known to his peers as the Certified Prophet of Workplace Trends.
 

The Never Normal Environment 

Terms such as the new normal, the next normal, and future normal were used to describe the post-pandemic workplace. Wolfe says those terms imply returning to the status quo, to how things were prior to March 2020. He speaks about the never normal concept instead, which was introduced by his colleague and friend, Greg Verdino.  

In the U.S., he started talking about this never normal. It resonated with everybody living in the summer of 2022. Expectations that life would go back to being peaceful and predictable were not going to happen.” He adds that the perception of normal is false because what is deemed normal differs from individual to individual. “Our perception of normal is a self-perception. It’s an addiction to the status quo. We just don’t want to change.”  

Wolfe himself has been working remotely since 2004 and his office followed suit three years later.  

I moved away from my office so I couldn’t stop by on a regular basis. My full-time assistant and office manager moved to another state, and I haven’t seen her in almost 13 years. The world caught up to us and I was excited about that.” 

However, the feasibility of hybrid work is dictated by industry and geography. According to Wolfe, around 30% of the U.S. population didn’t change the way they worked. 100 million people were still going to work normally, especially those working in healthcare, manufacturing, and transportation. 

When we talk about hybrid work, we’re talking about a segment of the population and not its entirety.” 

 

The Hybrid Workplace is a Giant Experiment 

The 2022 Everywhere Workplace Report by Ivanti found that 87% of employees do not want to return to the office full-time, with 42% preferring a hybrid work model and 30% favoring working from home. “There are millions of variations in between remote work and going back to the office. Hybrid is all the variations we’re still working out,” Wolfe says.  

He cites Dropbox as a company that has succeeded in evolving where and how it worked. In late 2020, Dropbox allowed all employees to work remotely permanently, as 90% of them said they were more productive working from home. Dropbox rebranded itself as a virtual-first company with remote work as the default for all employees. The company also converted existing offices into Dropbox Studios, flexible co-working spaces that employees can utilize for team building and collaboration.   

When it comes to hybrid work, Wolfe says it’s a giant experiment with different ingredients and perspectives. “Everybody’s going to make mistakes because the concept of hybrid is relatively new and will change once technologies evolve. What we think is a great model today may not work as well tomorrow.” 

Does hybrid work make us better? 

Yes and no. Wolfe says not having to commute to work allows for more family time, and “that’s certainly made us better.” On the other hand, Wolfe adds there are also remote workers who work around the clock and are never disconnected from their jobs.  

 

Will Blue-Collar Jobs Ever Become Remote? 

Going remote or hybrid is easy for individuals who do professional, creative, managerial, and administrative work. Although it may be hard to believe, remote blue-collar jobs are not completely impossible, especially with developments in autonomous technology, robotics, and 5G. However, it may be many years until the technologies are scalable and accessible enough to turn all blue-collar jobs remote. Wolfe adds, “Until we have a ton of autonomous vehicles, I don’t know how we can transport all the goods and services that we’re buying and manufacturing.” 

He adds that the blue-collar jobs in construction and trade will be more prepared if a pandemic like COVID-19 occurs in the next 10 to 20 years. “With the new technologies that are available, it’s certainly going to impact many occupations in those industries positively. But it’s not going to happen overnight. There’s still going to be a skill shortage because people are needed to maintain the technology. White-collar jobs will continue to evolve as more people will go hybrid or remote. For blue-collar jobs, it’s going to be a much slower curve.” 

 

When Does the Hybrid Workplace Fail?

The objection CEOs always bring up is that employees working remotely are not productive.” 

Wolfe also refers to Elon Musk’s return-to-office announcement where employees have to be at the office 40 hours a week or consider themselves resigned. What are some of the other challenges or concerns leaders face when trying to implement the hybrid work model? 

Measuring employee performance 

People don’t quit companies, they quit managers,” Wolfe says. One of the challenges managers have is measuring employee performance remotely. Studies show that 78% of employers are using monitoring software despite strong resistance from employees due to ethical and privacy concerns. Wolfe says employee performance should not be measured by attendance alone but by the utilization of technology as well. When it comes to productivity, the responsibility does not wholly fall on the employee. “Some of that productivity may be linked to a leader’s ability to manage a remote or hybrid workplace, he adds.  

Managing employee stress levels  

According to Gallup’s State of the Global Workplace 2022 Report, stress levels of employees worldwide have reached an all-time high. Whether they are working remotely or at the office, stress is present. “People who spent the last two years working remotely reported a 35% increase in stress levels. After people started returning to the office, their stress levels increased by anywhere between a third and a half. There’s a 50% increase in stress levels for those who never left the workplace,” Wolfe says. 

Therefore, it is imperative that leaders prioritize employee well-being no matter where they are located. This is because overall well-being influences life at work and vice versa. In addition, Gallup found that 49% of workers who are stressed are not thriving or engaged at work. “If your stress levels are increasing, you’re not going to be productive,” Wolfe emphasizes.  

Lack of technology and communication 

Sometimes, creating a hybrid workplace fails due to a lack of skilled employees, demand, and technology. The hybrid and remote work models are not universal. Wolfe advises leaders to ask themselves two important questions: What jobs can be remote? and What jobs should be remote?   

Involving employees in the hybrid work transition and listening to their needs is also imperative. “By having that conversation with the employees and not just having a dictum that comes down from the top that says no, maybe a win-win solution for hybrid work can be found,” Wolfe adds. 

 

Skills to Maximize Hybrid Work on an Individual and Organizational Level 

Wolfe relies on a model called ACE – abilities, character, and environment. In addition, Wolfe also cites an important finding from McKinsey – adaptability is the top distinct element of talent (DELTA) that is linked to a higher chance of employment.

He also identified five key skills to succeed in a hybrid workplace:

  • Growth mindset – the willingness to make mistakes and learn from them 
  • Grit – the strength to move forward and bounce back 
  • Resilience – having the right tools in place to tackle unprecedented challenges  
  • Unlearning – to be comfortable unlearning old ways and to be more agile  
  • Mental flexibility – the ability to sift through the misinformation in a VUCA world 
 

What is a Conducive Environment for Hybrid Work? 

To create an agile environment for hybrid work, Wolfe says that company support, team support, and colleague support are essential.  Company support is the simple answer. Do the employees feel that the company is doing enough?” 

Without a supportive environment, employees are less likely to express their challenges and emotions or raise important concerns regarding their work. “You can hire the right people but if you don’t have an agile environment that allows them to make mistakes and challenge your norms, it’s going to be a problem,” Wolfe adds.  

According to Gallup’s State of the Global Workplace 2022 Report, the U.S. and Canada ranked the best in terms of employee engagement, job opportunities, and employee well-being. On the other hand, only 11% of employees in Asia are thriving in the workplace and have the lowest well-being in the world. Wolfe says there is a lot of work to be done, and if the U.S. and Canada are benchmarks for workplace environment, “employers are in trouble.” 

Employees, companies, schools, and parents need to take responsibility for becoming more adaptable. We have to create an environment that allows change to happen. 

 

Can Hybrid Work Reverse Zero Employment? 

There is an abundance of positions in the tech and IT industries and not enough people to fill them. Jobs such as database administrator, software developer, information analyst, and security analyst are high in demand.  

In addition, the cybersecurity sector has reached zero unemployment and is on its way to negative employment. “There are currently 600,000 open-source cybersecurity jobs, that number is estimated to be 3.5 million by 2025,” Wolfe says.  A labor shortage is inevitable and is going to continue becausepeople who have the desired talents, skills, attitudes, and mindsets are going to have choices.”  

Wolfe stresses, “This is where remote and hybrid fits in. There’s talent but they may not be in your region, state, or country.” With a remote or hybrid work model, companies can hire potential employees regardless of their location. 

 

How to Attract and Retain Talent in a Hybrid Workplace   

According to Wolfe, many employees leave for better career opportunities, work-life balance, compensation, and benefits. Leaders should not take resignations personally, but help former employees find opportunities elsewhere. “It doesn’t mean they’re disloyal. They may not be on your payroll anymore, but they have an opportunity to learn new skills or recommend other talents. And there’s a chance of them returning to the company in the future,” Wolfe adds.  

Other than that, leaders should focus on retaining existing employees by improving work-life balance, recognizing their work, and treating them with respect and dignity. Wolfe emphasizes the need for strong employee-manager relationships.  

People are leaving the workforce for compensation, fairness, and opportunity. But they stay because of respect, dignity, and recognition from managers.