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Wal-Mart Closes 63 Sam's Club Stores, Leaving 11,000 Employees Without Work

14/01/2018 23:09 | Share

Without notice 63 Sam’s Club stores closed Thursday, leaving up to 11,000 employees without work. Sam’s Club is owned by Wal-Mart, which announced yesterday a raise in employee wages. NPR’s Ari Shapiro speaks with Business Insider reporter Hayley Peterson, who broke the Sam’s Club closure story yesterday.

How to Make Sure People Won’t Hate Your New Open Office Plan

14/01/2018 23:08 | Share

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Organizations are rushing to implement open office spaces in hopes of retaining talent, encouraging cross-functional collaboration, enhancing exposure to different kinds of expertise, and accelerating creativity and innovation. Sometimes this works, but often it doesn’t. In our research, we discovered that success with open offices may have as much to do with how people feel about the space — something called place identity — as with the space itself.  When place identity is higher, employees report more engagement in their work, more communication with their peers, and a stronger connection to the company. Our study uncovers three things that leaders can do to increase place identity when moving to open office spaces.

Organizations such as Google, Facebook, Genentech, IBM, and Microsoft have devoted millions of dollars to the redesign of their workspaces, replacing cubicles and traditional private offices with large open spaces, smaller team spaces for collaborative work, and pods for private conversations. Furniture is adjustable so that it can be moved and modified to meet an employee’s needs and adapt to rapidly changing work demands. The hope is that these spaces will enhance the sharing of ideas, expedite decision making, and engage employees, ultimately driving more-innovative products and services. As Facebook’s Chief People Officer said about the company’s 430,000 square-foot open office design, “It really creates an environment where people can collaborate; they can innovate together. There’s a lot of spontaneity in the way people bump into each other, just a really fun collaborative creative space.”

Despite optimistic assertions about the benefits of open office space, outcomes are mixed. In some cases, open-plan office designs are reported to increase collaboration, employee satisfaction, and communication, but in others these new spaces are criticized for creating distractions, reducing privacy and autonomy, and undermining employee motivation and satisfaction.

In our research, we found that the problem may go beyond the physical features of the space itself, and come down to whether employees feel the space aligns with their self-image and enhances their sense of belonging — their place identity. The concept of place identity was first introduced by environmental psychologists who found, for example, that identifying with a particular national park led to more conservation behaviors, volunteering, and a willingness to pay higher entrance fees.

We examined the roll-out of open office spaces in a global Fortune 500 company. In concert with our coauthors, Sara Värlander, Bobbi Thomason, and Heather Altman, we talked with workers and collected survey data from over 300 employees in five different countries – France, Israel, India, the U.S., and China. We discovered that employees who felt a greater sense of place identity (as measured by the degree to which workers perceived the space as being important to them and a meaningful place to work, felt a sense of connection to the space, were proud to be a part of the space when visitors arrived, and felt the space was a reflection of them) perceived the physical features of the space differently. For example, they experienced the space as more collaborative, social, flexible, energetic, and comfortable, while those who didn’t develop place identity saw the space as noisy and cluttered. Workers who felt a greater personal connection to the space were also more engaged and enthusiastic about their work, believed their communication with colleagues and managers was of higher quality, and felt a greater attachment to the organization.

As one engineer told us, “It’s our place! It’s like another entire thing…. There’s a sense of my stuff, our stuff.” Another worker said, “In a traditional office, we might talk, but not as freely. [This space] is ours. It is our space.” These sentiments were shared again and again.

We also uncovered three important things leaders can do to build place identify and transform workers’ response to new open workspaces.

Convey the Vision Beforehand

While one might assume that the development of place identity begins after workers move into the space, we discovered that communicating the vision and purpose of the new office space prior to move in was a key predictor of employees’ connection to the space. In one of the most successful implementations we observed, Omer (names have been changed), a manager of a team in Israel, explained to the team ahead of time that the firm was investing in the new space in the hopes that it would spur more collaboration, deeper connection to the company, and better products for customers. Omer invited people from other locations where the redesigned workspace had already been implemented to share their experiences. He facilitated small group discussions between the team members and organized a forum where members could communicate with the facilities team so that workers understood what the space would look like and what to expect when they made the move.

In another example, a designer in the U.S. told us that her leaders communicated clearly that an open office design would improve the way the team worked together and the products they produced. Specifically, she told us, “The executive leadership believes that if you sit in a space which is more collaborative, where you are able to see and reach out to people in much quicker cycles, this will translate into how employees think about the products they sell.”

When leaders explicitly describe how the new space will help achieve the organization’s mission, workers are more enthusiastic about the space, have a better sense of how they should be using it, and feel more place identity. Our survey data revealed that workers who believed the space was designed to foster creativity, increase collaboration, enhance flexibility, and promote informal communication had more place identity. After moving in, they were more likely to say that they were proud of the space and that it was a meaningful place for them to work.

In contrast, when workers were not prepared with a clear vision of the space beforehand, they were more likely to perceive the space as a way to cut costs and expressed more resistance and dissatisfaction. As one team member in India said, “We expected a clean cubicle that is comfortable with carpet. The [space] is more of a garage startup with the floor like a garage.… It’s frustrating…. Why should we have this?” The employees in this location were so dissatisfied with the space that the company had to start from scratch by bringing in leaders from one of the other locations to help bridge the gap between the vision of the organization and the understanding of the employees. The new leadership team spent time communicating with employees to clarify how the space supported their work and listened to the needs of workers. This resulted in a redesign of the space that helped workers to see how the new space could enable them and the organization to achieve more innovation and collaboration, as well as meet their functional and aesthetic needs.

Be Enthusiastic About the Space

In addition to preparing employees prior to move in, a leader’s attitude about the space after the transition to the new space provides a critical source of information about how the new space aligns with the work and whether a new office arrangement is desirable, and it affects whether employees believe the new physical environment can benefit their work. Our survey data show that when leaders were positive, place identity flourished. When they were neutral or negative, place identity suffered, and workers were less likely to embrace the new office space.

Many of the employees in our study were engineers who were initially worried that the new space would threaten their traditional way of working — independently and with minimal disruptions. In many cases, the leaders themselves were also transitioning from private offices, which had historically conveyed status and power, into the open office space, where they would sit with team members. We noticed that when leaders made a point to convey positive messages about the space and express enthusiasm upon moving into the space, workers felt better about it.

As one employee said, “The transition was difficult because we had a routine [as he gestures toward the cubicles]. I ended up having a really great experience in the new space because I knew my leaders and got along with them well.” Another member of this same team told us, “Attitude matters. I think the [positive] attitude should come from the managers.” When leaders exhibit frustration or resistance to the change, this trickles down to the employees and reduces their sense of pride in the new environment. Kim, one of the managers in China, for example, felt frustrated in having to give up his private office, and made his resentment clear. When asked why, he disclosed, “I’ve been working my whole life to have my own office. Why would I want to sit with the team?” In Kim’s case, the new space didn’t align with his view of himself and his role, so place identity was never established. The employees he managed were similarly resistant to the new space. Eventually, Kim’s team returned to traditional cubicles until a new leader was hired who believed that an open office design could enhance the way in which the team designed and engineered products. In the end, with the support and enthusiasm of this new leader, a new team was formed that embraced the open office space.

Encourage Workers to Adapt the Space to Their Needs

We found when workers believed they had the latitude to personalize the space, they felt more place identity. The spaces tended to be more colorful and have more personal artifacts — pictures, drawings and playful elements such as kites or decorations hanging from the ceilings. The placement of the furniture was less systematic and reflected the needs of the team. Some teams even regularly rearranged their desks in different configurations to meet their evolving needs for collaboration or privacy.

As David, a leader in one of the U.S. locations, told us, “There are some things we thought would be a good idea and didn’t really work. We originally thought, ‘Let’s maximize the collaboration between teams and have one team sit in this room, the other sit in another room.’ It turned out that some people liked the sunlight on their back [and] some people liked music and the coolness. And so, we said, ‘Yeah, great, let’s try it out and see how it works.’ And it’s actually been good. You don’t necessarily want to sit with your team 24/7…and you get the cross-fertilization across projects. And you are still close enough where you could just walk across the hall. And if you need to, you can even pull the desk over and sit there for a day and work together. So, allowing people to select where they sit [and move the furniture] has been a kind of an unexpected learning.”

Omer, the manager in Israel, told us, “It’s a fine balance between helping people learn how to use the space [while also helping them] to think about what they can do to make the space better for them.” If, for example, an employee felt the space was too noisy, instead of complaining, Omer encouraged them to modify the space to better suit their needs.

When leaders encouraged adaptation and teams felt comfortable claiming the space as their own, they reported more place identity and generally felt better about the objective features of the space, like privacy, noise, and lighting.

Finding the perfect solution for the design of a new office space is complex. Our study reveals that while physical attributes matter, leaders need to pay attention to place identity as well. Place identity affects not only how people feel but also how they perceive the physical features of the space. When leaders communicate the value of the space beforehand, proactively help workers acclimate, and give employees leeway to adapt the space, organizations are much more likely to reap the benefits of the investment in redesigned workspaces.

How Automation Will Change Work, Purpose, and Meaning

14/01/2018 23:08 | Share

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The vast majority of humans throughout history worked because they had to. Many found comfort, value, and meaning in their efforts, but some defined work as a necessity to be avoided if possible. For centuries, elites in societies from Europe to Asia aspired to absolution from gainful employment. Aristotle defined a “man in freedom” as the pinnacle of human existence, an individual freed of any concern for the necessities of life and with nearly complete personal agency. (Tellingly, he did not define wealthy merchants as free to the extent that their minds were pre-occupied with acquisition.)

The promise of AI and automation raises new questions about the role of work in our lives. Most of us will remain focused for decades to come on activities of physical or financial production, but as technology provides services and goods at ever-lower cost, human beings will be compelled to discover new roles — roles that aren’t necessarily tied to how we conceive of work today.

Part of the challenge, as economist Brian Arthur recently proposed, “will not be an economic one but a political one.” How are the spoils of technology to be distributed? Arthur points to today’s political turmoil in the U.S. and Europe as partly a result of the chasms between elites and the rest of society. Later this century, societies will discover how to distribute the productive benefits of technology for two primary reasons: because it will be easier and because they must. Over time, technology will enable more production with less sacrifice. Meanwhile, history suggests that concentration of wealth in too few hands leads to social pressures that will either be addressed through politics or violence or both.

But this then raises a second, more vexing challenge: as the benefits of technology become more widely available — through reform or revolution — more of us will face the question, “When technology can do nearly anything, what should I do, and why?”

Insight Center

Particularly since the Industrial Revolution, technology has transitioned a widening portion of humanity away from the production of life essentials. While many people remain trapped in a day-to-day struggle for survival, a smaller percentage of humans are thus burdened. As AI and robotic systems become far more capable and committed, work will increasingly hum along without us, perhaps achieving what John Maynard Keynes described in Economic Possibilities for our Grandchildren as technological unemployment, in which technology replaces human labor faster than we discover new jobs. Keynes predicted this would only be “a temporary phase of maladjustment,” and that within a century, humankind might overcome its fundamental economic challenge and be freed from the biological necessity of working.

This is an immensely hopeful vision, but also a winding, perilous path. Keynes cautioned, “If the economic problem is solved, mankind will be deprived of its traditional purpose… Yet there is no country and no people, I think, who can look forward to the age of leisure and of abundance without a dread.”

With trepidation, Keynes wondered how people would focus their attentions, interests and fears when absolved from making a living. As we unmoor from traditional pursuits, how will we avoid a nihilistic, Huxlian future? How will we define our own sense of purpose, meaning, and value?

We can explore this question through the work of philosopher, historian, and journalist Hannah Arendt, who in the 1950s designed a far-reaching framework for understanding all of human activity. In The Human Condition, a beautiful, challenging, profound work, Arendt describes three levels of what she defines, after the Greeks, as the Vita Activa.

Labor generates metabolic necessities — the inputs, such as food, that sustain human life. Work creates the physical artifacts and infrastructure that define our world, and often outlast us — from homes and goods to works of art. Action encompasses interactive, communicative activities between human beings — the public sphere. In action, we explore and assert our distinctiveness as human beings and seek immortality.

Over the next 100 years, AI and robotic systems will increasingly dominate labor and work, producing necessities and the physical artifacts of human life, enabling more of us to ascend (Arendt did present this as ascending — this is a qualitative value judgment) to the realm of action. Of course, some people might engage in labor or work by choice, but choice is the essential distinction.

Most ancient Greek philosophers prioritized contemplation over action as the pinnacle of human endeavor. Arendt did battle with this notion, arguing on behalf of action. Contemporary culture appears to agree. Ultimately, though, action and contemplation function best when allied. We have the opportunity — perhaps the responsibility — to turn our curiosity and social natures to action and contemplation.

We’ll face dramatic adjustments to our Vita Activa over the coming decades, each of us asking what to do and why. Hopefully our grandchildren will be free to pursue a life of engagement and exploration — or to garden or cook. If we are fortunate, this will be a choice rather than a necessity.

Arendt opened The Human Condition with a caution about “a society of laborers which is about to be liberated from the fetters of labor.” The danger? That “this society does no longer know of those other higher and more meaningful activities for the sake of which this freedom would deserve to be won.” Arendt particularly focused this challenge on the Communist ideology which so glorified labor. It could equally be leveled at us.

When our machines release us from ever more tasks, to what will we turn our attentions? This will be the defining question of our coming century.

Why People Really Quit Their Jobs

14/01/2018 23:08 | Share

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People don’t quit a job, the saying goes — they quit a boss. We’ve heard it so many times that when we started tracking why employees leave Facebook, all bets were on managers. But our engagement survey results told a different story: When we wanted to keep people and they left anyway, it wasn’t because of their manager…at least not in the way we expected.

Of course, people are more likely to jump ship when they have a horrible boss. But we’ve spent years working to select and develop great managers at Facebook, and most of our respondents said they were happy with theirs. The decision to exit was because of the work. They left when their job wasn’t enjoyable, their strengths weren’t being used, and they weren’t growing in their careers.

At Facebook, people don’t quit a boss — they quit a job. And who’s responsible for what that job is like? Managers.

If you want to keep your people — especially your stars — it’s time to pay more attention to how you design their work. Most companies design jobs and then slot people into them. Our best managers sometimes do the opposite: When they find talented people, they’re open to creating jobs around them.

Working with our People Analytics team, we crunched our survey data to predict who would stay or leave in the next six months, and in the process we learned something interesting about those who eventually stayed. They found their work enjoyable 31% more often, used their strengths 33% more often, and expressed 37% more confidence that they were gaining the skills and experiences they need to develop their careers. This highlights three key ways that managers can customize experiences for their people: enable them to do work they enjoy, help them play to their strengths, and carve a path for career development that accommodates personal priorities.

Crafting Jobs for Enjoyment

Many of us have unanswered callings at work — passions that we didn’t get to pursue in our careers. Whether we lacked the talent, the opportunity, or the means to make them our occupations, landing in a different career doesn’t make these passions disappear. They linger, like the professional version of the one who got away. And since we spend the majority of our waking hours at work, there isn’t always time to pursue these unanswered callings as hobbies. So we look for ways to bring our passions into our jobs. Personally, we know a lawyer who missed his dream of being a pilot and so sought out aviation cases, and a teacher who walked away from a music career but brings a guitar to class. But inside organizations, people often need support to craft their jobs.

Managers can play a major role in designing motivating, meaningful jobs. The best go out of their way to help people do work they enjoy — even if it means rotating them out of roles where they’re excelling. A few years ago, one of Facebook’s directors, Cynthia, was leading a large team of HR business partners. She realized that she wasn’t spending her time doing what she enjoyed most: solving problems with her clients. She had taken on more responsibilities managing a large team because of her strength as a trusted adviser to some of Facebook’s key leaders. But once she was in the job, she realized it meant doing less of the work that energized her.

With her manager’s support, Cynthia hired someone new onto the team, with the long-term vision of asking her to run the team and then moving back to an individual contributor role. Cynthia wasn’t just hiring a direct report; she was hiring her future boss. Once the new hire was ramped up, and it was clear that she enjoyed the organizational and people management elements of her job, she and Cynthia made the switch. Cynthia is now thriving, solving problems with the clients she loves so much, and her new hire is leading the team. Keeping Cynthia at Facebook was much more important to her manager than keeping her in a particular role.

Too often, managers don’t know enough about what work people enjoy. It spills out in exit interviews — a standard practice in every HR department to find out why talented people are leaving and what would have convinced them to stick around. But why wait until they’re on their way out the door? One of us, Adam, has worked with companies in multiple industries to design entry interviews. In the first week on the job, managers sit down with their new hires and ask them about their favorite projects they’ve done, the moments when they’ve felt most energized at work, the times when they’ve found themselves totally immersed in a state of flow, and the passions they have outside their jobs. Armed with that knowledge, managers can build engaging roles from the start.

Bringing in Underutilized Strengths

In a world dominated by specialization, we’re long past the era of the Renaissance Man. Once in a blue moon we see one. Marie Curie won a Nobel prize for her pioneering work in physics, and then earned another in chemistry. Richard Feynman transformed electrodynamics, decoded Mayan hieroglyphs, and cracked safes in his spare time. Although few reach this level of accomplishment in multiple fields, many talented people are polymaths. At Facebook, our head of diversity is a former lawyer, journalist, and talk show host; one of our communications leaders used to sing in a rock band; and one of our product managers is a former teacher. Sadly, the narrow job descriptions that companies create stifle their ability to use the full range of their employees’ skills.

Smart managers create opportunities for people to use their strengths. To see how that can play out, let’s consider Chase, who was recently working as a software engineer at Instagram. About six months ago, when his team went through rapid product iteration to introduce new tools and formats, Chase helped lead the team to exceptional results. But he finished the project drained from the extensive coding and cross-functional work — and started wondering whether there were other ways to contribute. Talking with his manager, Lu, he realized that while he had a strong technical background, where he really excelled was building prototypes to help prove concepts quickly and then iterating. But Instagram didn’t have any roles that blended this skill set, and Chase didn’t have a track record in traditional design work.

Lu convinced the design team to take a risk and allow Chase to try a new role for a “hackamonth.” During that time, Chase partnered with Ryan, a product design lead, to quickly build several prototypes that tested novel ways of capturing and sharing. His success not only landed him in a brand-new role that leveraged his strengths but also created the conditions to build a broader team of collaborators with similar skills and interests. According to Lu, “A shift to this role was a no-brainer for Chase and a win for Instagram. All that was missing was the push to make this happen.”

Creating new roles isn’t the only way to let people play to their strengths. In a connected world, a huge part of getting work done is seeking and sharing knowledge. Some estimates suggest that knowledge workers spend more than one-quarter of their time searching for information. It’s up to managers to help them figure out where to turn. As managers learn who knows what, they can connect the dots — or better yet, build a searchable database of experts. The goal is to put employees’ strengths on display so that people know whom to contact.

Making It Possible to Lean In at Work and at Home

In too many situations, opening a door in our careers means closing one in our personal lives. The special project that takes date nights away from our partners. The big promotion that takes weekends away from our kids. The new role across the country that takes us away from our families.

At Facebook, our best managers work with people to minimize these trade-offs by creating career opportunities that mesh with personal priorities. Here’s an example.

Shona, an agency lead, was coming back from maternity leave to a global role where time zones directly conflicted with her parenting. With her manager, Shona developed a prioritization plan for travel. For anything that was important but not essential, she worked with regional colleagues to set up meeting coverage. Shona’s manager also connected her with a mentor in a global role who guided her through her transition. In Shona’s words, “This deep level of support gave me the confidence to return to work fully present and also be there for my daughter.” Managers who give this kind of support find that their people not only deliver but also stay longer — they’re proud of where they work.

People leave jobs, and it’s up to managers to design jobs that are too good to leave. Great bosses set up shields — they protect their employees from toxicity. They also open doors to meaningful tasks and learning opportunities — they enable their people to be energized by their projects, to perform at their best, and to move forward professionally without taking steps backward at home. When you have a manager who cares about your happiness and your success, your career and your life, you end up with a better job, and it’s hard to imagine working anywhere else.

If Retailers Want to Compete with Amazon, They Should Use Their Tax Savings to Raise Wages

14/01/2018 23:08 | Share

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Walmart announced today that it is raising its starting wages in the United States from $9 per hour to $11, giving employees one-time cash bonuses of as much as $1,000, and expanding maternity and parental leave benefits as a result of the recently enacted tax reform. It is part of Walmart’s broader effort to create a better experience for its employees and customers. The new tax law creates a major business opportunity for other retailers as well — if their leaders are wise enough to take advantage of it.

The U.S. corporate tax rate is dropping from 35% to 21%. Retailers, many of whom have been paying the full tax rate, are going to benefit substantially. Take a retailer that makes 15% pretax income. Assuming its effective tax rate goes from 35% to 21%, it could save the equivalent of 2.3% of sales. Specialty retailers with higher pretax income will save even more.

Retail executives have a choice in how they use these savings. I believe the smartest choice — one that will help them compete against online retailers like Amazon — is to create a better experience for customers and to achieve operational excellence in stores. For most retailers, doing both requires more investment in store employees — starting with higher wages and more-predictable work schedules. My research shows that combining higher pay for retail employees with a set of smart operational choices that leverage that investment results in more-satisfied customers, employees, and investors.

Retailers that do not provide a compelling draw for their customers may not make it. In 2017, according to Fung Global Retail and Technology, there were nearly 7,000 store closing announcements, the second-largest number since 2000. There were 662 bankruptcy filings in retail, according to bankruptcydata.com, up 30% from 2016. This year is expected to be even worse. What’s more, two of my MIT Sloan MBA students analyzed store openings and closings from 2015 to 2017, looking at department stores with more than 50 stores and over $100 million in revenues, and found a positive correlation between customer satisfaction, as measured by Yelp ratings, and the net change in the number of open stores.

Many companies can no longer grow profitably just by adding stores — they need to get more out of their existing stores. Operational excellence makes that possible by ensuring that merchandise is in stock and well displayed, checkout is efficient, stores are clean, and employees are responsive to customers. Operational excellence also makes it possible to provide a better omnichannel experience by linking digital and brick-and-mortar channels. For instance, retailers are increasingly expecting in-store employees to serve customers who order online, by shipping products to those customers or enabling them to pick up their orders in the store. If that doesn’t work smoothly — that is, without operational excellence — it’s going to waste a lot of employee and customer time and convince customers they’re better off shopping online than in the store.

Creating a great customer experience and achieving operational excellence both require a capable and motivated workforce. You need knowledgeable employees who are cross-trained to manage customers’ needs wherever they arise. You need employees who can empathize with customers, are empowered to solve customer problems, and can spot opportunities to improve operations. You also need a capable and motivated workforce that can embrace and leverage new technologies.

Yet most retailers are far from having that kind of workforce. In 2016 the average employee turnover in retail was 65%. It’s hardly surprising, given that most retailers do not meet their employees’ basic needs, such as a living wage or a predictable schedule, let alone offer the conditions for motivation and engagement. In 2016 the median hourly wage of the country’s nearly 9 million retail workers was $10.37, below the poverty threshold for a family of four. Many retailers provide employees with their schedules only one or two weeks in advance, and might change them at the last minute. It is hard to focus on your work and empathize with customers when you can’t put food on the table or manage your life.

If we assume that payroll is 10% of sales — which is not atypical in retail — and if retailers use half of their tax savings (about 1.15% of sales) to increase wages, employees’ hourly wages would increase by 11.5%, putting them slightly above the poverty threshold. That increase, along with more-predictable schedules, would signal the company’s higher commitment to its employees and help create a more stable workforce. Once a company has workforce stability, it can start working on other changes such as empowering and cross-training employees and engaging them in continual improvement. As other companies have found, those changes will improve service and productivity, which will improve profitability. In short, the initial investment in employees will — if followed up — more than pay for itself.

Investing in store employees is not just the smart thing to do. It’s the right thing to do. “We didn’t want to build a low-cost business on the backs of employees,” Costco cofounder Jim Sinegal told my students last year. I don’t think he’s the only retail leader who feels that way.

The tax cut offers executives a unique opportunity to combine their moral reasoning with competitive forces in the retail industry to create an organization that is stronger today and better prepared for tomorrow.

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