Building SimplerCorporate CulturesSimplicity Drives Engagement

The Future of Work Demands Simplicity

Report by The Jensen Group

Building Simpler Corporate Cultures research findings are a partnershipin exploring simplicity’s role in employee engagement and the future of work© The Jensen Group, 2015

The Future of Work Demands Simplicity

Creating a simpler company culture is not a “nice to do.”

With ever-increasing volatility in change, technology, marketand customer demands causing ever-increasing complexities…Building simpler companies and simpler cultures is the only wayto survive and thrive in the future.

To better understand how to create simpler corporate cultures,SAP partnered with The Jensen Group, a recognized global leaderin corporate simplicity. This ebook reports our findings.

Simplicity is the New Competitive Advantage

There is a crucial difference between marketplace complexityand company culture complexity.

Complexity in the marketplace is an opportunity to be seized.Increased change, volatility and disruption in markets createongoing opportunities for entrepreneurs and companies tocreate market value — new ways to take friction and costs outof the system and new ways to delight customers. Breakthroughinnovations always make things simpler and most senior teamsare quick to jump on these opportunities.

There is no corresponding upside to complexity within one’scorporate culture. Complexity within companies is the elephantin the room: Everybody knows the damage it causes —

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“Simplicity isthe next big thing

in business and HR.”Human Capital Trends Research,

Deloitte, 2015

Large companies arelosing 10.2% of profits

(EBITDA)due to complexityGlobal Simplicity Index,

Henley Business School, 2015

destructive implementation friction, demoralizing impact onhard-working managers and employees — but talking about itraises inconvenient truths. We must face how hard we make itfor many of our people to succeed and do great work. And noone who experiences cultural complexity will be patient whilewe work it out. “Solve it now, or I’m out of here!”

Simplicity Is Power

The only way to succeed in creating simpler corporate culturesis to understand this timeless dynamic: Simplicity is power.

Since the dawn of civilization and differing stakeholder needs,those with more power have had things made simpler for them.Those with less power experienced far greater complexities.This is a universal rule of human interaction. Simplicity isalways about power – how easy or hard it is to control one’sdestiny and make a difference.

This makes simplifiction so important to employee

satisfaction, that it becomes an HR issue in and of itself.

For the workforce, making things simpler is about the powerto get their work done, the power to make a difference andthe power to control their own destiny. This begins withlistening with empathy, understanding ease or difficulty throughtheir eyes.

Simpler company cultures make it easier for everyone

to do and be their best.

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Only 13% of employeesaround the globe arefully/actively engaged

Gallup, 2013(Jensen Group studies found decreased simplicity

correlates to decreased engagement)

Highly engaged employeesare 87% less likely to leave

their companiesGallup, 2013

(Jensen Group studies found increased simplicitycorrelates to increased trust, engagement)

81% of Millennialsbelieve that simplification

leads tohigher engagement

Simplification, Engagement, Trust StudySAP and Baylor University, 2015

Only 49% of employeestrust

senior managementLeadership Now, 2009

(Jensen Group studies found increased simplicitycorrelates to increased trust, engagement)

67% of business leadersbelieve simplicity will bestrategically important

in the futureFuture of Work Study,

SAP, 2014

Simplicity is vital toremoving the remaining

friction withininternal tools, processes

Future of Work Study,The Jensen Group, 2015

Simpler Culture Defined

A company’s way of doing thingsthat creates the most valueand engagement for all,with the least effort by all.

A work environmentthat makes it easier

for people to be their bestand do great work.

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Three Drivers of a Simpler Culture

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Most Value and Engagement,with Least Effort for

The Difficult Truth

Current Statefor Most Large Companies

Most Value andEngagement,with Least Effort for

Most Value andEngagement,

with Least Effort for

Ideal Balance

Currently, simplicity for every individuallags behind company and customer needs —

leaving very little room for simplicityas an organizational competitive advantage.

Each stakeholder gets equal attentionto its needs,

maximizing simplicity as anorganizational competitive advantage.

Creating a Simpler CultureWhat’s Different

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Commitment to Designing and Maintaining Balance

in Ease of Use, Ease of Effort

PERFECTING THE ART AND SCIENCE OF DESIGNING FOR...

ORGANIZATIONAL PRODUCTIVITY Least amount of resources, effort, energy and time requiredto produce maximum value for customers and the company

PERSONAL PRODUCTIVITY Least amount of personal effort, energy and time requiredto produce maximum value for self and others

We are just beginning the era of designing for each individual worker’s simplicity needs.A simpler company culture is one that strives to keep all ease-of-use

and ease-of-effort needs in balance,dedicating itself to meeting all three sets of stakeholder’s needs equally.

Understanding and Commitment That Personal Productivity

is as Valuable as Organizational Productivity

Simplicity Is a Purification Process

“You are filtering out all the unnecessarythings until you get to the essence ofwhat’s really important and necessary.

“It’s a user-centered process.Understanding who you are designing forand then making that the focus of all yourdesigns.”

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SAM YENSAP

Chief Design Officer

Simplicity Creates Clarity, Saves Energy

“Simplicity begins with each individual’sactions which either complicate orsimplify other people’s work.

“In a simpler culture, everyone must beable to answer: ‘This is why we’re inbusiness and this is how I add valueto why we’re in business.’ Role clarityis an important part of simplicity.

“Simplicity gives and saves peoplethe energy they need to keep onkeeping on.”

EILEEN McDARGHChief Energy OfficerThe Resiliency Group

Creating a Simpler CultureCultural Impact

Simplicity for Every Individual Matters

As we move deeper into the knowledge and service work and digital economy,every individual has the power to quickly create new value and innovations and

to satisfy customers — as well as the power to, unknowingly, create problems through misstepsdue to complexity or confusion.

We must make it easier for every individual to do the right things and makethe right decisions, in the right way, at the right time.

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Current Statefor Most Large Companies

Ideal Balance

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Simplicity Is Easy to Use Structures

“Culture is an outcome that comes fromprocesses policies and structure.How those are designed, implementedand perceived drive how employeesand organizations behave.

“A simpler company culture is one thathas an easily defined, easy to usestructure.”

DARREN GIBSONEY Partner,

Global People &OrganizationalChange Leader

Simplicity Lets Go of Where Power Sits

“It’s not about going three levels upthe chain of command to get approvals.

“People come to work because theywant to see that their contributionmatters and see how they directlycontribute to organizational outcomes.If they see that, they’re more engagedand more courageous in making adifference.”

SINA WENDT-MOORECEO,

Leadership New Zealand

When Individual Simplicity Shrinks:Trust, Diversity, Innovation

Also Shrink

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GREATEST CHANGES REQUIRED IN HR STRATEGIES, 2015-2018

Employees’ lack of interest in assimilating organizational values (cited by 60% of HR execs)

Conflicting values across multi generational workforce (cited over 50%)

Unrealistic expectations from millennial employees (cited by 47%)

Value-Based Diversity Study, SuccessFactors, 2014

Overall: Only 4 in 10employees trust their bossBut trust-leaders enjoymore innovation,better performanceInteraction Associates/IDG,

Building Workplace Trust, 2014-2015

65% of managersare not engagedin their jobs

Gallup, State of American Manager

(Jensen Group studies found decreased simplicitycorrelates to decreased trust, engagement)

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Simplicity Is Trust and Empowerment

“That includes diversity of thinkingand ways of being and working.Let’s be honest: In the beginning,diversity adds complexity. In thebeginning, we need a little more timeto understand different and uniquepoints of view. But in the long-term,that diversity helps us to be moreinnovative and more successful.”

ANKA WITTENBERGChief Diversity andGlobal People &Inclusion Officer,

SAP

It’s Time for Different Conversations

“We have to educate people on howto have conversations with end-usersof corporate systems — how workis getting done.

“Design thinking is a major solution.We need to use more tools that helpus get to the bottom of the problemswe need to solve, and how bestto solve them.”

GEOFF SCOTTCEO, ASUG

Measuring a Simpler CultureSuccess

Top Quartile (or better) in Three Core Metrics:

1. Satisfaction 2. Ease of Execution 3. Success

for All Three Stakeholder Groups

Most Value and Engagement,with Least Effort for

Most Value andEngagement,with Least Effort for

Most Value andEngagement,

with Least Effort for

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INDIVIDUAL SIMPLICITY METRICS

• Individual Engagement/Happiness Score• Measurement of Ease of Accomplishing Work

• Achievement of Personal, Career and Learning Goals

CUSTOMER SIMPLICITY METRICS

• Customer Satisfaction Scores• Product/Service Ease of Use Scores

• Customer Success Scores

COMPANY SIMPLICITY METRICS

• Organizational Engagement Scores• Productivity Scores• Achievement of Organizational Goals

Creating a Simpler Culture:Most Crucial First Step

Open and (Possibly) Difficult Conversations

About Designing and Maintaining Balance

in Ease of Use, Ease of Effort for All

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Meeting all stakeholder’s simplicity needs will require tradeoffs,willingness to take empowerment and employee-focus to new levels,and a deep dedication by the executive team that this approach

is required to succeed in the future.For some companies (not all), this may require a new and different set of deep conversations.

Launching a

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SENIOR EXECUTIVEENGAGEMENT, ALIGNMENT

Will a simpler cultureyield sustainablelong-term advantages?Degree of change/effortrequired?

SWOT ASSESSMENT

What are our currentsimpler culturestrengths/weaknesses?What is our organizationalreadiness?Identify potential roadblocks

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Simpler Culture

TOOLS, STRUCTURES,

PROCESSES

How must we modifyour current tools/processes?What new training/developmentis needed?

ORGANIZATIONAL

CHANGE ROLLOUT

Whose roles/responsibilitieswill change?Whose will stay the same?What is our changecommunication planand development plan?

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Starter ChecklistIndividual Driver

Designing With Empathy

Understanding Workforce Needs, Wants, Desires

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Senior executive alignment and commitment that ease-of-use,ease-of-effort creates corporate ROI

Train mid-level managers to make simplicity for all a priority

Evaluate all current people management systems using simplicity criteria

Design work tools, communication, training and developmentusing simplicity criteria

Design new assessments, feedback and measures using simplicity criteria

All technology must reflect new Consumerization of IT /user-centered standards

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Most Value and Engagement,with Least Effort for

Starter ChecklistOrganizational Driver

Enhancing Ability to Change,

Innovate and Succeed

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Create an environment that values diversity of thinking, of being,of communicating

Create an environment that values and encourages risk-takingand innovation

Create an environment that constantly eliminates approvalsand reduces bureaucracy wherever possible

Make it easier for people to stop doing low-value activities

Create an environment that values learning from failureand makes it easier to fail forward

Recognize and incorporate multi-generational needs,values and perspectives

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Most Value and Engagement,with Least Effort for

Starter ChecklistCustomer Driver

Listening and Designing With Empathy

Helping Customers Succeed More Easily

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Eliminate friction in every area of the customer experience

All technology must reflect new Consumerization of IT /user-centered standards

All solutions/products/services must save customers time,attention, energy and effort

Make it easier for customers to manage constant change and maketransitions from what they have to what’s next

Make it easier to maintain and enhance relationships with customers

Make it easier for customers to share their ideas, stories andexperiences with others around the world

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Most Value and Engagement,with Least Effort for

Creating a Simpler Culture TakesDiscipline

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SIMPLER COMPANY CULTURE

A company’s way of doing things

that creates the most value and engagementfor all

with the least effort for all.

An environment that makes it easier

for people to be their best

and do great work.

The Hard Work of Creatinga Simpler Culture is the

Future of Work

While there are many drivers and changes leading organizations into the future of work —Jensen Group’s study, Future of Work: 2015-2020, found two over-arching changes

crucial to creating simpler organizational cultures…

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Reimagining Organizational Hierarchies

Simplicity in all work begins with how people andwork are structured. Organizational hierarchies,and how they coordinate and control resources,must be reimagined for the 21st century.As long as we maintain 20th century hierarchies,work complexity will likely continue.

Reimagining the Relationship

Between the Workforce and Companies

The future workforce is changing the lens…They see companies as vehicles to achievetheir goals and dreams — vehicles that can amplifytheir passions, achievements and communityrelationships beyond what they could have doneon their own or elsewhere.Many corporate definitions of engagement do notcurrently incorporate this view.

Creating a Simpler Culture

Building a Simpler Culture research findings are a partnershipin exploring simplicity’s role in the future of work.

The Jensen Group and SAP have created a workspace of multiple Simpler Culture tools,including additional research to support the findings in this report,

for your use at http://bit.ly/SAP-Engagement

© The Jensen Group, 2015 23 / 24

Report byThe Jensen Group

www.simplerwork.comBill Jensen, bill@simplerwork.com

The Future of WorkDemands Simplicity

Building Simpler Corporate Cultures

Report byThe Jensen Group

www.simplerwork.com