Do you speak Chinese?
Investing in your people for future growth
In Chinese, the word crisis is frequently said to be composed of two characters signifying "danger" and "opportunity". Whilst our translation in Western cultures isn’t strictly correct, our sentiment is true enough: a crisis presents a choice.
McKinsey has recently surveyed more than 200 organisations across industries and found that more than 90 percent of executives said they expect the fallout from COVID-19 to fundamentally change the way they do business over the next five years.
This change of course offers as an opportunity for growth.
To seize this opportunity, executives need to commit to innovation. However, in responding to the global pandemic, organisations are focusing on the short-term challenges rather than supporting innovation-led growth. McKinsey’s research suggests that this short-sighted decision could have lasting consequences for their ability to grow in years to come.
The response to past crises show that by investing in innovation companies can outperform the market average – by 30 percent in the 2009 financial crisis.
So how do they do it?
McKinsey identify Eight Essentials of Innovations, one of which is Mobilise, i.e. to put in place the appropriate talent and incentives to activate the innovation plans.
https://www.mckinsey.com/business-functions/strategy-and-corporate-finance/our-insights/the-eight-essentials-of-innovation
At a time when companies are cost cutting, making employees redundant and continuing to use the furlough scheme, other forward-thinking companies are investing in their people. They are recognising the importance of supporting their most important asset – their human capital – so that they are achieving optimum performance despite the uncertainty and fears that the pandemic has brought with it.
Wellbeing is vital for successful innovation and improving productivity in the workplace – whether that be physical wellbeing, mental wellbeing or social wellbeing.
There is a substantial body of work that demonstrates that positive emotions in the workplace contribute to good functioning and high performance. Plus, there are a number of studies specifically demonstrating that positive emotional states result in higher creativity and problem-solving skills, and build resilience and the ability to handle failure – all essential requirements for innovation. (Miller/nef: Innovation & Wellbeing: Sept. 2008)
Companies often say that their people are their greatest asset. They are also the most expensive. Perhaps that is why they are the first cut to be made in a crisis. Instead, by investing now, companies can realise the true value of their human capital. Rather than hunkering down to weather the storm, be brave and ride the wave.
If you'd like to learn more about investing in wellbeing please get in touch.
eileen@rippleandco.com