Five Insights From Davos on the Future of Work

MIT Sloan Management Review
Mon, 11 Feb 2019 15:36:03 +0000

In the 10 years since I launched the Future of Work Consortium, the topic has become increasingly important to the agenda at Davos, the annual meeting of the World Economic Forum. During that time, we have gained clarity about some aspects of the future of work (for instance, that technology will have an impact on tasks, not jobs), become more optimistic about others (for instance, that there will be relentless job creation), and have grown certainly more fearful about the significance of growing threats (for instance, the impact of mid-level job destruction on the rise of “popularism.”)

This year, as a steward of the World Economic Forum’s System Initiative on Shaping the Future of Education, Gender and Work, I attended council meetings and stopped by many other presentations and panels on this topic. Here are my five big insights about the future of work from Davos 2019:

1. We’re in the middle of a major transition. I think we are only just beginning to realize the scale of the transition taking place right now — simply put, most people around the world will need to upskill and re-skill. As one person remarked, “It could be an ugly transition.” Another reminded us that in a recent survey in Asia, more than 40% of respondents were concerned about the impact of technology on their jobs. People spoke of the need to shorten pathways to new skills and for leaders to create a positive narrative for workers. But beneath this sentiment was a real fear of complacency — and a feeling that it is hard to create the sense of urgency that will be required to make such a colossal shift.

2. It is vital that we create fast upskilling and re-skilling. There is no doubt that skills are the currency of the labor market. Yet right now, as a labor economist pointed out, there are mismatches in needs and capabilities, as shown in a recent CEO survey that reported that many CEOs were concerned about the lack of available skills. In a panel on education, people pointed to the disconnect between what business wants and what education is creating, in part caused by a lack of understanding and dialogue between these two entities.

There is wide agreement that we need a massive push to prepare people for new jobs and skills, but right now, no one is doing enough to prepare people for those future skills. As one Nobel Prize-winning economist ominously remarked, “Now school does not mean you will learn; learning does not mean you will have the skills for the labor market; and having the skills does not mean you will have a job — it’s a more complex route.”

3. We have to address the gender gap in technology jobs. There was a general feeling of frustration that the gender gap has remained so stubbornly in place (only 23% of Davos participants this year, for instance, were women). Much of the conversation about gender focused on technology: Many new jobs are in data analytics, where women are significantly underrepresented. One tech leader noted that it could get worse: “Right now, 20% of women in a technology career are considering leaving.” This lack of diversity is reflected in the way in which the industry is developing, down to the creation of the algorithms that are behind AI.

It’s crucial for women to advance — and stay represented — in STEM careers. As one participant said, “Women are an underutilized potential. Technology favors credentials, and more women need to believe these are credentials they are prepared to invest in.”

4. Flexible working is becoming the norm. There is an ever-greater variety of workers in the labor force — more parents, more people over the age of 60, more carers, more lifelong learners — and they all want flexibility. Working conditions, of course, differ around the world: In some countries, like Australia, flexible working is available for many, while in others, like Japan, the corporate culture punishes flexibility. As one tech entrepreneur said, “I want control over my calendar,” and that’s rapidly becoming the norm as technology underpins mobility and collaboration. Another remarked that once you’ve had flexibility, “it’s hard to take it away.”

5. The great hope is (inclusive) education. In panels and groups, inevitably, one of the common opening questions was: “…and what are you most optimistic about?” Many people answered “education,” but noted that it has to be inclusive. I heard about a number of amazing initiatives in India and Africa to bring learning to all. But there are challenges: Much of sub-Saharan Africa, home to some of the poorest people in the world, has very little internet connectivity. Education credentials remain a challenge in these areas, where branded establishments are often favored. While technology-based education could and will increase networks and pathways of learning, there was a general feeling that it has not yet delivered on the promise.

Education is potentially a key propeller to advancement, but social mobility, we heard, is actually decreasing, as elites “opportunity hoard” — that is, stockpile future opportunities for their own children. One academic remarked: “Education is creating an empire on the back of credentialing, and we need to turn away from this. We need methods that deliver not credentials, but skills.”

Overall, conversations and ideas have moved a long way from the simple “robots will take your job” headlines of a few years ago. There is a growing awareness that we have to act now, and at scale.

And who are “we”? “We” includes many of those who were at Davos: government ministers, who have to prepare to provide economic support to people in transition; educators, who must drop their focus on credentials and instead help people prepare for a lifetime of learning; corporate leaders, who must reverse the current trend of spending ever less on training and development; and civil society, which must work with communities to bring the promise of education to all.

The future of work is one of the most burning platforms of the next few years. Time alone will tell whether the anguish will convert to action.

Mon, 11 Feb 2019 18:10:05 +0000

Most organizations fail to derive value from their performance management systems. Top talent feels underappreciated; the typical worker feels alienated; and management feels the outcomes not worth the effort. New digital tools, coupled with behavioral economics/choice architectures, invite a fundamental rethink about creating high-performance performance management. How can organizations better align assessment and development for individuals and teams alike?

Please join Jordan Birnbaum, chief behavioral economist at ADP, and Michael Schrage of the MIT Sloan School for a lively discussion on the state of performance management and why so many companies get it so wrong. Birnbaum will provide a case study of Compass, a new tool ADP is using to advance employee development and improve team performance.

In this webinar, you’ll learn:

The crucial difference between evaluative and developmental assessments and why they cannot be combined. How to remove managers’ biases and subjective opinions from performance management conversations. How to overcome cultural resistance to new kinds of performance management. What is required to scale performance management initiatives.

New research confirms that ESG can create competitive advantage.
How to Set (and Conquer) the Right Professional Goals in 2019
Mon, 11 Feb 2019 07:00:00 -0800

Sure, goal setting seems like something that you only do once a year on the first of January, but by continuing to set goals and conquer them throughout the year, you'll find that you are able to maintain progress in a much more sustainable and successful way. In fact, small steps toward a goal and small successes can help motivate you to keep going, particularly if you are working toward a professional aspiration. 

Since everyone's goals are different, it can seem daunting to set professional intentions that speak to you. Setting goals offers an opportunity to become more confident and motivated according to Psychology Today, and if you follow these five steps, you'll set and conquer the right goals for you in the new year. 

Start with "why" and find your passion

Setting a goal just to have a goal is never a good idea. Your progress toward your goal will largely depend upon how badly you want to reach it, because that's what fuels you when it gets grueling. To determine the right goal and whether it's worth pursuing or not, you need to ask yourself a few questions: 

How committed am I to this goal? Why do I want to attain this goal? What will attaining this goal be like? What will it feel like? (more on this later) Do I love what I am pursuing? Why? If not, what do I love? How can I pursue that? Will attaining this goal be worth it for me? What metrics should I use to determine my success? 

Working through these questions helps you build a rational and emotional commitment to the goals you make and simply take them deeper into your psyche. The more difficult the goal, the more commitment will be required (and the more deeply you should feel a connection to the goal you establish). If you don't feel connected to your goal, don't attempt it. 

Once you have answered these questions, you can narrow down your specific goals and start getting an idea of what it will take to achieve them. 

Get very clear on what you want and how you plan to get there

According to a recent Marist Poll on resolutions, 68 percent of Americans who made resolutions at the start of 2018 were able to keep them for at least part of the year. The bad news is that 32 percent were not. Another study by psychologist Richard Wiseman showed that only 12 percent of people who made New Year's resolutions actually achieved their goals. 

So why is there such a high failure rate? Science says that one factor that contributes to the failure to achieve a goal results from a lack of clarity around that goal. Clarity can come from a simple change of phrasing around your goal. After all, the language we use to describe the world around us has a profound influence on how successful we are both in life and in work. 

For example, say that you want to get a promotion in 2019. That may sound like a great goal, at least on the surface, but without a clear plan of action to achieve that goal, you are far more likely to fall short of it. In fact, the language you use around establishing that goal can even stop you from achieving it. 

A better way to phrase a similar goal would be to say, "I aim to get a promotion in 2019 by improving my communication in email and in person; delivering required work on time, every time; and taking on projects that I feel may be a bit out of my comfort zone at least once per quarter." 

Alternatively, you can also change your mindset around a goal by reframing it. Many career coaches recommend framing a goal in a way that tricks your brain into thinking you have already achieved it. Using the example above, you could reframe your goal by saying, "I am the senior director at my company because I am clear in my communication; I deliver the required work on time, every time; and I take on projects that demand more of me." By framing a goal this way, you foster an expectation of success and can help make the goal become more real. 

Regardless of which method you choose, it also pays to employ SMART goal-setting: Goals that are specific, measurable, attainable, relevant, and timebound are more likely to be achieved. Check your goals against each characteristic and see if the goals meet the SMART criteria before moving on to the next phase. 

Write down your goals and become accountable

Writing down your goals may seem elementary, but research has shown that the act of writing your goals down has a profound impact on how successful you will be at achieving them. Part of committing to goals means making them both tangible and, in some cases, public. 

In fact, according to Richard Wiseman's study at the University of Hertfordshire and cited by the Harvard Business Review, men were 22 percent more likely to achieve their goals if they wrote them down, while women were 10 percent more likely to achieve their goals if they made them public or shared them with friends. By doing a mix of both, Wiseman says, you increase your chances of success regardless of your gender. 

When you write down your goals, include those actionable stepping stones that you want to hit in order to move closer to achieving the goals. 

It also pays to have someone who you can check in with and who will help keep you accountable at this stage. Perhaps you check in with a mentor on a weekly or monthly basis, or you talk to a friend or loved one about the progress you've made. At this stage, it's important to build a support system of people who will help you continue to move in the direction of your dreams. 

Ask for help

Having a support system that you can count on to answer questions, help you assess stumbling blocks or just provide a helpful ear can be the linchpin that determines whether or not you achieve your professional goals. Why? Because we are human beings, and humans are social animals. To be successful in business and in life, it's crucial to lean on others who have succeeded before us. 

So find a trusted mentor, a good friend, or a family member who can give you clear, reliable, and supportive feedback – and you'll be sure to move closer to achieving your professional goals in 2019. 

Stay focused

One of the most common reasons that goals fail is because we become distracted from them. Some research shows that success through multitasking is largely a myth, so remaining focused on your goals from day to day is key.

One way to do so is by referring to your written goals on a regular basis. Depending on how specific you've gotten about your goals, you may want to check in daily, monthly, or quarterly, but by checking in, you can refocus your energy, time, and attention on the goals that you worked so hard to set up at the beginning of the year. 

By staying focused, you can also break your larger goals down into smaller pieces and highlight the small successes along the road to the larger goal. Celebrating small successes along the way can help you see your progress to keep you motivated to continue moving forward. 

If you follow your heart, get clear about what you want, remain accountable, ask for help, and stay focused, you'll ensure that you set and conquer the right professional goals in 2019.

How Should E-Commerce Merchants Fight Back Against CNP Fraud?
Mon, 11 Feb 2019 07:00:00 -0800

The latest fraud news is not great for merchants who sell in card-not-present (CNP) environments. A new Juniper Research report projects that CNP fraud will grow by 14 percent each year through 2023. That’s faster than the year-over-year growth of CNP transactions.

The cost of CNP is increasing, too. LexisNexis found that fraud costs as a percentage of revenue have been on the rise since at least 2013 and jumped by 13.9 percent from 2017 to 2018.

Juniper says that CNP fraud is rising so quickly because it’s big business for criminal gangs who are getting more sophisticated with the schemes they launch against online and mobile merchants. There are also millions of consumer records for sale now on the black market, after years of data breaches at retailers, banks, and government agencies, that fraudsters can use to impersonate real consumers.

Merchants, Juniper says, have not adapted to the threat landscape yet by investing in stronger fraud protection, and many remain focused on transaction screening to the exclusion of other fraud indicators. It’s also true that while more merchants are comprehensively monitoring fraud attempts and successes in all their sales channels, many merchants still operate in the dark when it comes to understanding and reducing their specific fraud risks.

This is dire-sounding news, but there is a bright spot: Merchants can protect themselves, if they’re willing to adopt best practices tailored to the new fraud landscape. Here are the most important steps to take.

Add layers of fraud protection

Screening transactions for flags like address mismatches, known stolen card numbers and other data discrepancies is an important part of the fraud prevention process, but it’s not the only solution. Because so much consumer data has been breached and put up for sale on the dark web, it’s possible for criminals to place orders with data that’s complete and accurate enough to get past basic transaction screening tools. It’s also possible for criminals to simply hijack customer accounts and go shopping without raising any transaction flags.

That’s why it’s important to look at additional elements to assess each order’s risk of fraud. The user’s IP address, device identity and behavior on the site can all provide clues. Is the customer placing orders from an IP address or device that’s been used for fraud in the past? Are they located in or shipping to a zip code that’s a known hotspot for fraud? Is a repeat customer suddenly ordering from another country or making much larger purchases than in the past? 

All these factors and more help determine the likelihood that an order is legitimate. With each additional layer of real-time screening, merchants stand a better chance of weeding out even sophisticated fraud. But it’s also important for merchants to look at their big picture, too.

Track fraud and stopped attempts by channel

The number of mid/large and large merchants who track their fraud costs by channel and by payment method increased substantially from 2017 to 2018, according to LexisNexis data. This is progress, but 60 percent of e-commerce and m-commerce merchants with less than $10 million in annual sales still don’t track their fraud costs this way. The data is important for pinpointing the areas of highest risk for individual merchants and developing more effective fraud screening processes. 

However, tracking fraud costs gives merchants only part of the picture. It’s also important to track prevented fraud as well, to show what fraud-prevention methods are working well. In 2018, LexisNexis found that roughly half of large online and mobile sellers were tracking both completed and prevented fraud, and only 22 percent of small merchants were doing so.

Avoid false declines 

There’s another important fraud-prevention metric to track: false positives. Mistaken declines of good orders cost merchants more than actual fraudand they can drive away customers permanently. Nearly 9 out of 10 customers take their business elsewhere if they feel poorly treated by a merchant. After all, who wants to be insulted with a rejection?

Often, false declines and legitimate declines are grouped together in tracking data, so merchants have no idea how much money and long-term customer value they lose to false declines. Proper tracking is a must to evaluate and reduce false decline rates. Another important tool for reducing false declines is manual screening of all flagged transactions to avoid rejecting loyal customers whose behavior (ordering while traveling, shipping to new destinations, ordering high-value items with rush delivery) may raise fraud flags.

Keep up with CNP fraud trends

Because CNP fraud is an expanding criminal industry, tracking and prevention are not one-time or annual tasks. Fraudsters are always trying out new methods for exploiting the customer-merchant relationship, and when they find something that works, word spreads quickly among their associates. Methods that were a serious problem in one quarter may be replaced with a new threat in the next quarter. 

Regular review of fraud tracking data and the news is a must for merchants who want to protect their revenue from organized CNP fraud. This knowledge, combined with adequate layers of fraud screening and manual review of flagged orders, can help merchants stay ahead of the rising tide of CNP fraud.

Start Building Your Employer Brand With These 7 Tips
Mon, 11 Feb 2019 08:00:00 -0800

It’s never too early in the life of your small business to start thinking about your brand. Not your product branding or your personal brand, but the brand of your business as a place to work — also known as your employer brand.

As you scale, your employer brand will play an increasingly larger role in attracting talent and improving retention. Your brand is your company culture, reputation, and values, and it has an impact on both your internal team and your external standing among potential candidates (and even customers).

You don’t get to choose whether you have a brand. Either you take the helm of deciding what it will be, or the people you employ and interact with will do it for you. Better to get out ahead of the process of building a brand by taking a few proactive steps—and defining it for yourself.

Here’s how to start building your employer brand and using it to become a better small business:

Recognize the value of an employer brand

The first step in building your brand is to fully grasp just how important it is to your business’s future growth and success.

As of late 2018, the unemployment rate is about as low as it has been in 50 years. That means talent is scarce, and there’s a bonafide war going on to hire the best people for your critical roles.

Creating a strong and positive employer brand will be a major asset when convincing candidates to come work for you. A few years ago, 69 percent of people said they wouldn’t take a job with a company that had a bad reputation, even if they were unemployed. Expect that number to be even higher now that competition for talent is so fierce.

If you’re able to quickly hire people to fill job openings, you will cut the cost of recruiting. And if you are able to successfully assimilate those hires into your culture and keep them happy, your turnover rate will slow, further cutting costs. Simply put, an investment in your brand is an investment in your bottom line.

Craft your internal messaging

Though most people think of their brand as outward-facing, it all starts with internal messaging. You can’t push your brand out until you know who you are, what you stand for, and how you go about doing it.

The first part of your brand is defining your company’s values and mission. These should be codified, easily accessible, and a major part of what drives your daily, monthly, and long-term actions. What is the endgame for your company, and how do you want to get there?

Once you’ve decided on your values, set up business operations and processes that help you live those values. Things like transparency, openness, and flexibility are good buzzwords, but they’ll be little more than that if you don’t provide the means and environment for people to be transparent, open, and flexible in the workplace.

Gather input from and about your team

If you’ve got a sizeable team, they are already playing a major role in your company’s brand. You can use both internal and external resources to gather input about the current culture of your business.

Internally, use tools like employee opinion surveys, new hire surveys, and exit interviews to review all operations—from hiring to onboarding to day-to-day workflow. How are your business’s working conditions? Do employees feel the company is invested in them through learning and development opportunities or benefits? Is pay equitable?

Externally, businesses have more resources than ever for collecting data on company culture. Use sites like Glassdoor and The Muse to gather unbiased feedback on what it’s like to work for your company. You can also look on social media networks like Twitter and Facebook for opinions that may be less visible, but stronger and more forceful in tone.

These responses will all contribute to how you ultimately shape your messaging. See what your company does well and what it can improve on, and how that fits into your vision for the brand. Keep in mind that a good company culture will be fluid, not rigid—everyone that you hire will bring something new to the culture that alters it in some way.

Treat candidates like customers

The vast majority of candidates agree: Their overall candidate experience with a company indicates to them how that company values its employees.

In order to create the best possible candidate experience, start by creating a seamless job application process, complete with a powerful description of the role. When interviewing candidates, be transparent, respectful, and communicative. And whether you choose to hire someone or move on from them, they should feel as though you were considerate of their time and effort from start to finish.

More companies are starting to invest in applicant tracking software (ATS) to help streamline the hiring experience. ATS automates administrative tasks, filters resumes, sends reminders, and keeps you up-to-date with the latest details of an opening. This kind of software speeds up the hiring process, allowing your HR team to quickly identify the best candidates for a given role.

Keep in mind that every interaction with a candidate can be taken out of context and shared via Glassdoor or social media. Make a concerted effort in your interactions to treat each candidate like you would a customer and give them little reason to put you on blast.

Seek third-party recognition and validation

Many people seek well-reviewed companies and restaurants the same way: If you receive a lot of positive feedback from everyday people, that’s great. But validation and recognition from more established parties—the media, industry associations, or end-of-year awards—carry more weight.

Make sure you’re in the running for awards from all the major review sites, like Glassdoor. To be considered as a Best Place to Work by Glassdoor, as a small business, you need at least 30 ratings across the eight workplace attributes from U.S.-based employees. Apply for opportunities to speak or present at community events, or for awards presented by niche groups. Engage in public relations by making yourself available for comment to reporters or writers seeking input for their stories.

The more accolades, positive press and overall goodwill you can rack up, the better.

Address negative feedback and incorporate suggestions

No company is perfect. The question is, how do you address the occasional ding to your Glassdoor score or bad interview feedback?

First, if the criticism is public, address it. Ignoring a critique allows other people to shape your narrative. By responding to and acknowledging an issue with empathy and understanding, you maintain your cultural capital. And second, regardless of where the criticism comes from — an anonymous employee survey or a rant on Twitter — consider it honestly. Does this person have a point? Can you incorporate this feedback into how your business operates?

It’s up to you whether you want to take action on what you hear, but just being open to the feedback and letting people know their voice will be heard is a powerful tool for building a strong brand.

Walk the walk

Finally, all of these steps should culminate in your business actually living the values you espouse. If branding is what people say about you when you leave the room, then you need to make sure that all of your actions give people the right impression—so that when you do turn your back, they are delivering honest praise rather than exasperated relief.

Train your employees to live your employer brand, and encourage them to be ambassadors by delivering referrals or sharing news of the company on social media. Discuss how your interactions with candidates can remain on-brand, from how you greet them in the office to the way you sign off your emails. And never stop improving your operations to meet the expectations of the people you’ve brought on, and the people you hope to hire in the future.

Employer brand develops regardless of the role you choose to play in it—and often, if you choose to play no role, it takes a turn for the worse. It’s much more difficult to transplant a brand on to an existing company that it is to cultivate one as a small business and watch it grow along with you — so start building it today.   

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