Why Culture Matters For The Future of Work?

    Written by Raymond Koh, Research Director for Future of Work Practice at IDC Asia/Pacific

    As younger generations join the workforce and digital business models become mainstream, peoples’ expectations from businesses, governments and institutions are undergoing major shifts. Together with the advent of artificial intelligence (AI), which is fuelling both hope and fear, the key question now is, what is the future of work? 

    In my view, the future of work (FoW) is a broader topic than just the advent of AI. We need to take a fresh look at all aspects of work in the wake of new expectations and technology advancements. IDC defines the future of work as a fundamental change to the concept of work, which transforms worker behaviors and skills as well as organizational culture, supports a dynamic work environment not bounded by time of day or physical space, empowers teams and a diverse workforce, and fosters human-machine collaboration.

    The future of work discussions should consider three interrelated pillars- workforce, workspace and work culture. In the previous article we discussed the implications for workforce, here we will discuss work culture. 

    So, why is work culture so important? Mahatma Gandhi famously said “A nation’s culture resides in the hearts and in the soul of its people.” That’s so true for a country, binding multiple cultures, diversities, beliefs and thoughts together. Now think about corporates today that operate globally earning 100s of billions of dollars and employing 100s of thousands of people, and working with partners and suppliers – what could bind them together for a common purpose?

    If the answer in your mind is culture, you are right, but creating and sustaining a culture that people can connect with and rally behind is one of the most complex business problems. In addition, culture may often take a backseat or seem like a trivial discussion, in the broader context of business complexities and technology transformation priorities.

    However, with newer generations at work and their changing expectations from an employer besides just a paycheck, and more importantly social media giving a voice to everyone, work culture is increasingly becoming an area of focus. 

    In IDC’s Asia Pacific Future of Work Survey 2018, where we interviewed more than 1400 business and IT decision-makers, 45% of the respondents indicated they recognize the need to bring changes in their work culture due to millennials entering the workforce. Also, 38% said that their organization is already making efforts to make the work culture friendlier, collaborative, as well as fun.

    However, transforming a culture is easier said than done. So, let’s understand first what it constitutes. 

    The future work culture refers to the distinctive beliefs and values of an organization and talent management practices and how effectively they achieve and retain a highly engaged and motivated workforce that is aligned to corporate strategies and goals. It encompasses the development and institutionalization of policies, metrics, and key behavioural indicators (KBIs) that are aligned with the FoW vision.

    Today, companies across all industries are increasingly adopting a borderless and agile culture. Talent sourcing models are evolving and the rise of gig economy, remote working, coworking and skills marketplaces are challenging the established employer-employee relationship.  

    Credit: IDC

    With all things in flux, the key work culture imperatives organizations should focus on are:

    Worker/employee experience. For an organization, it is critical to create superior experiences for its workers to keep them engaged and motivated. These workers, in turn, deliver great services and experiences to their end customers.

    In IDC’s Future of Work FutureScapes 2019, IDC predicts, by 2021, at least 60% of Global 2000 companies will actively monitor and manage, employee experience, and utilize employee experience as a key differentiator to build and maintain B2B and B2C relationships. 

    Talent management. Getting the right people and developing the skills needed for the future will be crucial for companies to succeed over time. In our Asia Pacific Future of Work Survey 2018, 48% indicated they are running training programs specifically designed to meet the digital skills needed for future projects, while 46% indicated that they are increasingly utilizing and training employees on Design Thinking and agile methodologies to create a digital and innovation-focused mindset.

    FoW metrics and KBIs. Metrics that go beyond traditional productivity and ROI, focus on workers motivations, engagement, and measurement of skills in problem-solving, design thinking, and collaboration will be extremely crucial for organizations to gauge their overall performance and define their work culture (e.g. innovation, workforce effectiveness, and other operational needs).

    In IDC’s FoW FutureScapes we predicted that by 2022, 35% of businesses will have replaced traditional KPIs with KBIs (key behavioral indicators) to measure collaboration, communication, problem-solving skills, deliverables, and objectives. And now with AI coming in, organizations also need to think about new metrics for managing and measuring the success of bots and robots. So, IT /systems KPIs could also include cultural and behavioural aspects as bots speak to customers and work alongside human employees.

    Organizational structure. Borderless, agile, and flat companies are organized for speed, adaptability, and to source and deliver innovation, along with ecosystem partners, much faster than traditional organizations. Organizations are utilizing several tactics here such as real-time feedback management, crowdsourcing platforms, as well as moving employees to coworking spaces so that they can collaborate and innovate with the broader ecosystem. The coworking adopters include many large companies such as Adidas, HSBC bank, UBS bank, Microsoft, etc.

    Conclusion: 

    While there are many moving parts for culture, the key focus should be centered on superior experiences and developing, retaining and attracting the best talent. Most successful companies innovate faster than traditional companies because they value human capital, create an open and collaborative work culture that promotes new ideas but also allows failures to speed up learning.  Amazon and Google are good examples of companies who are very successful but also had some failures along the way.   

    Therefore, a great work culture will not just improve employee retention rates and help innovate faster, it can also improve the customer experience as a highly engaged workforce, ensures customer success and delight, without being told. 

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    IDC is looking closely at developments around Future of Work, examining the business cases and monetization models in Asia/Pacific. For more information, contact rkoh@idc.com  

    Raymond Koh is the Research Director for Future of Work Practice at IDC Asia/Pacific.