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Why an inclusive, sustainable culture is the biggest driver of performance

Michael Fenlon, PwC
Michael J. Fenlon
Michael J. Fenlon, Ph.D., is chief future of work officer for professional services firm PwC. In this newly created role, he develops thought leadership, shares PwC perspectives on disruption and megatrends, drives strategic leadership development and advises Fortune 500 C-suite clients on the future of work. Prior to this role, he was the firm's chief people officer with CHRO responsibility for PwC US and Mexico, plus employee centers in India, China, Argentina, the Philippines and Indonesia

Nearly 40% of CEOs and 33% of employees do not believe their organizations will be economically viable in a decade if they continue on their current path. We have entered the era of reinvention—and the pressure to drive rapid change is felt by both our leaders and our people.

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The future of our work—our ability to transform and thrive—is interconnected with our organizations’ ability to foster and sustain an inclusive culture. Here are four key priorities HR leaders can focus on to help drive performance and progress today and in the future:

1. Developing inclusive, trust-based leaders who value diverse perspectives, while simultaneously fostering strong common bonds across differences

2. Building AI-enabled, internal skills-based talent marketplaces

3. Upskilling and offering continuous learning opportunities for all

4. Fostering flexibility and wellbeing

Developing inclusive, trust-based leadership

Inclusive leadership means all members of a team can experience a shared sense of belonging and are able to contribute to their fullest potential. In an inclusive culture, trust is reinforced through the free exchange of ideas and differing perspectives, ultimately improving decision-making, innovation and performance. For many organizations, leaders and employees often see this very differently. For example, only one-third of employees think their manager encourages dissent and debate or tolerates small-scale failures.

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Inclusive, trust-based leadership can drive personalization—valuing diversity and demonstrating care for people as individuals—while promoting a sense of unity, shared identity and purpose within teams and across the organization. Leaders can take practical steps to build these attributes, including:

  • Define specific leadership behaviors that help foster inclusion, belonging and a common bond that enables collaboration, sharing and teamwork at all levels of the organization and tie to feedback, assessment and promotion.
  • Practice organizational listening and use data and real-time dashboard reporting to help drive transparency and awareness to address issues, recognition and accountability.
  • Build personal self-awareness through feedback and data, integrated with formal coaching and development.
  • Align people processes and analytics (e.g., talent attraction, performance management, progression and succession) with enabling behaviors.
  • Embrace leaders as teachers in role modeling, sharing development goals and challenges, and developing these skills in others.
  • Raise awareness of the potential for blind spots and the importance of objectivity in decision-making.

For example, at PwC, as part of our My+ people strategy, we introduced a number of technology and AI-enabled tools to help promote a culture of inclusion. One of these tools, the Inclusive Mindset Badge, is available for everyone in the firm to help build and practice inclusive leadership skills—e.g., developing relationships across differences, increasing awareness about potential blind spots, as well as inclusive behaviors that support idea generation, decision-making and team execution. The training is flexible and relevant across roles.

Skills-based internal talent marketplaces

New skill requirements are rapidly disrupting employers’ workforce needs and planning. A recent study from Burning Glass Institute, BHEF and Wiley reported that 37% of the top 20 skills requested for the average U.S. job have changed since 2016, and in the quartile of jobs with the greatest disruption, more than 75% of the requested skills have changed; AI/ML, cloud computing and data science are naturally some of the fastest-growing skills.

The displacement and demand for new skills puts culture on the front burner—employees should know their role in transformation and how their employer will support their development. Developing an inventory of skills that integrate with learning systems for personalized development, such as curated suggestions for developing new or adjacent skills in valuable areas, can feed into internal talent marketplaces with AI-enabled engines to match employees with opportunities based on relevant skills and interests.

See also: What will HR leadership look like in 2024?

The combination of a skills inventory and internal talent marketplace can offer a line of sight into readiness and possible gaps across the workforce for delivering the business strategy. The internal talent market can help drive inclusion and trust through open opportunities, a sense of personal agency and responsibility in pursuing opportunities, and insight into personal skill relevance in the market.

At PwC, we are introducing a next-generation talent marketplace. “My Marketplace” is a digital platform that connects people, skills and opportunities across PwC, helping to personalize development and career paths. Using intelligent curation, employees will be able to explore and express interest in opportunities for client work and other projects that align with their skills profile and interests. Similarly, leaders and project managers will be able to search for and identify talent to fill their open needs.

Personal skill portfolios will likely become the basis for maintaining and updating skills in the face of changing market requirements. Organizations can then become more dynamic internal talent markets to match project and role opportunities with greater transparency and trust while supporting broader transformation initiatives.

Upskilling and continuous learning in the age of AI

It’s clear that AI will continue to have a pervasive impact on how work is done across industries. While the majority of workers have a positive outlook on the impact AI will have on their jobs; two-thirds do not have a clear sense of how the skills required to do their job will change in the next five years—a sense of anxiety and distrust that can negatively impact culture.

Leaders should make skill development a priority, particularly in areas such as AI, to not only drive transformation and progress but to sustain an inclusive culture. Investments in skill development that are accessible to all employees help build trust while enabling organizational adaptation and change.

Employees can start the AI journey with an understanding of their current skills and gaps. Employee skills inventories and internal talent marketplaces should be integrated with learning platforms, enabling employees to upskill and earn credentials in areas of emerging relevance. Intelligent automation can serve as the engine that curates and customizes learning content based on available data from the employee skills inventories and marketplace.

Within PwC, we have introduced a program called My AI to transform this upskilling agenda at scale, which includes curated content based on role, level of interest and technical capability. We have adopted a holistic approach to this transformation, including the introduction of “accelerator” roles to serve as change champions and team influencers, gamification to drive engagement and personalized learning pathways across our workforce.

Flexibility and wellbeing

Delivering sustained business outcomes requires a sustainable experience for employees, in which people can not only avoid burnout but flourish to their potential. In addition to benefits that support mental health and wellbeing, leaders should take practical steps to redesign the work experience to foster energy and focus. Practical steps for leaders may include:

  • Use AI to promote flexibility. For example, PwC developed an AI-enabled chatbot called Astro, which helps employees plan and communicate protected time for vacations and has many other capabilities to simplify the employee experience. Reporting platforms and data analytics identify issues and drive behavior change.
  • Design flexible work strategies that include the practice of creating protected time by reducing disruptions from emails, calls, unnecessary meetings and enable focus.
  • Adopt hybrid schedules for knowledge workers, which have proven to be highly valued by employees. Stanford economist Nicholas Bloom has documented benefits for employees and employers, including reduced commuting that lowers stress, creates more time and flexibility for childcare and other personal and professional priorities, while employers benefit from lower costs, improved retention, access to talent and reduced carbon footprints. Hybrid and flexible work schedules create a more inclusive and sustainable employee experience.

Building an inclusive culture is an immediate leadership opportunity for creating stronger teams that perform at higher levels. To gain a competitive advantage, leaders should adopt a holistic mindset in driving transformation that includes leadership behavior, investments in reskilling, alignment of people processes and a culture that drives sustained business outcomes.