30 Sep 5 Trends That Will Shake Up How Work Works in 2023
The Design Gym is a strategy and innovation consultancy helping leaders to grow their business by fully unlocking the power of their most important asset: their people. We work at the intersection of business strategy, experience design, and change management to engage the people that matter most to your work: your customers, your leaders, and your employees. Andy Hagerman is one of the co-founders and partners at the organization and is based in Beacon, New York.
See something that resonates with a project or challenge you’re working on? Shoot me a note at [email protected]. I’d love to connect.
The benefit of being a consultant is that we get to see intimately inside dozens of organizations every single year. As a result, perhaps the most common question we get asked is ‘what are you seeing that me and my leadership team should be aware of?’. With teams in the thick of 2022 year end and 2023 planning, I’ve pulled together a few of my top predictions for what that world might look like.
TL;DR: Put a smile on, and buckle up!
In short, I’m anticipating continued volatility and uncertainty as we look towards at least the beginning of 2023. This alone isn’t worthy of proclaiming as a prediction – it’s just the reality that’s already upon us. As inflation, supply chain challenges, interest rates, oil prices, the Ukraine war, ongoing political and social polarization, blatant attacks on equality and civil liberties, and the still-kicking pandemic (somehow this is at the back of the list now?!) continue to shake any chance at a foundation of normalcy, there is no question we’re still in a predictably unpredictable moment in history.
But when zooming in a bit and considering what makes this moment particularly interesting, it’s not necessarily how volatile the environment is, but rather the fact that we’ve been under sustained volatility for nearly 3 years. It is the ongoing, long term pressure to maintain some sense of resilience and grit that is actually going to create the seismic shifts I anticipate over the next 6-18 months. Unfortunately I think it is likely going to get a little worse before it gets better, but the landscape that emerges from it will be a healthier and more sustainable one for us all.
Coming into 2022, the world had more control over the pandemic than we’d had to date. It signaled a hopeful return to a more stabilized world and a high-energy, celebratory year ahead. But in reality, many of us never realized a shift back to a happier, more balanced way of life. An overall boom at the end of 2021 ended up translating into a flurry of work that made most organizations frantic for the first half of 2022, and in the midst of an unprecedented talent crisis to boot. Yet despite all of this, corporate demands for continued growth were higher than ever as workers and leaders alike began to realize the symptoms of severe burnout and mental health ailments.
These are my predictions for how I believe these challenges will manifest in the coming 6-18 months:
We will see a (continued) mass exodus amongst leadership and executives.
When I began outlining this article in July, this prediction was simply a result of early signals I was seeing within my own client network, but over the past few months various research has validated this trend is well under way.
A recent Deloitte study showed that:
- 70% of high-level executives are seriously considering quitting their jobs, largely due to help with their emotional well-being.
- 57% said they were fed up enough to quit
- 76% pointed to the pandemic having a negative impact on their overall health
- Over 80% replied that improving their mental health was more important than their career.
I’m sure many will eye-roll at the sentiment of a highly paid executive not being ‘inspired enough’ to maintain the wheel, but in many ways the executive role has been a thankless one amidst the pandemic. Leading through the challenges of the past 6 years has been unprecedented, and wrought with situations you can’t learn about in even the finest business schools. But in addition to the challenges already outlined, the humans that make up those organizations were also trying to figure out how to navigate life with an utter lack of control, and I believe much of that anxiety was then brought to the workplace and attributed to poor leadership. We were all looking for any type of answers to questions that had never been answered before. We didn’t have the words to describe what we were feeling, but we knew it sucked and work was an easy place to direct our energy.
At its core, the job description for most business leaders over the past 3+ years was less about playing to win and more about playing not to lose. While most survived on adrenaline and the necessity to stabilize their organizations amidst the great resignation, now will be the time that the overwhelming burden of the past few years will appear with immense weight and encourage many to tap out, reset, or seek seemingly greener pastures just as many of their employees did in the past 12 months.
At this moment, it is up to CEO’s and executive teams to stop trying to keep up with the insane pace being set, and instead publicly recalibrate a new pace and way of working for their organization. They must leverage their power to reclaim the narrative and strategy, not just for the sake of their employees but for their own well-being. This is the final step for leadership teams who navigated their companies through some tough times, but it will surely be the most important and at a moment when executive engagement and alignment is at an all time low.
Questions to Ponder:
- If the highest echelons of leadership are not able to withstand the pressures being placed on them, then who is left to address the inadequacies and exhaustion of the current working model?
- What is the opportunity cost to your organization if it continues at the unsustainable pace at which it is moving? What are we sacrificing by operating at this pace?
Focus and prioritization will be the single most important leadership muscle to exhibit in the coming year.
The problem with priorities is that they’re hard to prioritize, but that is the single most important role of a leadership team right now. As we look towards the year to come, I believe most leadership teams need to go through a recalibration and get back to the basics of clearly defining for their people:
- Where the organization is going?
- What are the first 2-3 priority objectives we will focus on to start?
- What are the curveballs we might anticipate?
- How do we clearly communicate how employees can plug-in.
This is leadership foundations 101, but it is still shockingly hard for most teams and especially at a cross-functional level. The leaders who continue to advocate for trying to get everything done all at once will continue to create organizational floundering and see an exodus of their top talent. Some more publicly announced initiatives, like Google’s recently announced ‘productivity sprint’, are examples of this trend coming to fruition.
A recent study conducted by CultureX and Revelio Labs analyzed the online profiles of 34 million people to better understand the motivations behind folks who had left their jobs. One of the most surprising insights they uncovered was the meaningfully high correlation between ‘highly innovative organizations’ and ‘higher than average levels of attrition’. As many organizations rapidly transitioned from ‘survival mode’ in 2020-2021 into ‘growth mode’ in 2022, most organizations struggled to prioritize work and, as a result, saw their organizations overwhelmed with the initiatives, hours, and goals being put upon them. Many organizations lost substantial amounts of talent and saw very little progress made against an overly ambitious and unstrategic volume of priorities.
As leaders reorient on where they should be focusing (and not), I would recommend prioritizing the places where human experience is clashing most drastically with business success, both internally and externally. Many large organizations seized the moment to execute substantial strategic moves over the past 2 years, only to now find that their organization was not in a sound state to actually fully realize the value of those moves. With burnout rampant, employee engagement and organizational trust low, and talent on the move, these efforts will be harder than ever and must receive specific prioritization over other initiatives to get it right. Here are a few examples of where I see the tension between human experience and business success showing up most right now:
- Mergers and acquisitions that did not follow through with proper culture and team integrations
- Public commitments to social causes that have seen minimal action or investment (ex. climate change, diversity and inclusion, gender parities, etc.)
- Maintaining a backbreaking pace of work while employee and executive engagement scores are tanking
- Substantial investments made in new products or technology that were not properly rooted in customer research or insights
Questions to Ponder:
- If you had to cut your list of priorities for the next 12 months by 50%, what would you focus on? What would be de-prioritized?
- If you could move the needle on only one priority for the next 6 months, what would it be? Are your employees aligned on it?
- What is one shared initiative you could rally your team around and complete in the next week? The next quarter? The next month?
- What bold strategic moves were made over the past 3 years that are at risk of failing due to human level breakdowns? How might the organization re-prioritize to focus on fixing them?
Leadership teams will need to think in scenarios, not strategies.
With nearly every organization going through some level of transformation, it’s never been more important for leadership to provide a clear vision of where the organization is going. However, the way in which we plan, communicate, and achieve that vision must radically shift. Despite the proliferation of ‘agile’ ways of working, a long-term waterfall approach to strategy definition still prevails at most organizations – identify an aspirational and often ambiguous destination some 5 to 10 years out, launch a highly orchestrated internal communications plan, and then slowly start working our way in the general direction of that vision.
A McKinsey study from 2019 shows that ~70% of corporate transformations fail due to fairly obvious reasons, so I would argue that this model of visioning and strategy execution has already been ineffective for quite some time. As most organizations keep experiencing volatility in not just one, but all of the most important aspects of their business – their customers, their leadership, their employees, and their supporting global infrastructures – I confidently believe that a traditional approach to strategic planning will prove wildly ineffective.
Leadership teams will need to transition to a scenario planning based approach which requires more comfort with thinking divergently, getting comfortable with being wrong (a lot), engaging more diverse perspectives in your planning, and building a well oiled set of rituals for organization wide reflection, learning, and adaptation.
The futures planning exercise outlined in this HBR article (Living In The Futures, HBR 2013) is one of my favorites, and an exercise we’ve done successfully with many clients in the past few years.
Questions to Ponder:
- Exercise: Visually map out your strategic planning rituals on a year-long journey map. Along with your leadership team, facilitate a conversation on new ways of working you can experiment with going into 2023. Knowing that things will continue to be uncertain, there’s never been a better time to test some new approaches. As the team what would need to exist for these changes to be implemented, and attach concrete deadlines and metrics to each.
- What have you learned over the past 3 years about what best supports your organization or hurts it when it comes to strategic planning? How can you use this learning to inform pivots for the coming year?
- How might you invite your employees into this new mindset for planning and experimentation? In many organizations, it is the exact mindset they have been trying to embed across teams. Now we get to see which leaders are actually ready to model it.
Purpose and vision will be imperative for talent retention, but leaders will need to reframe what it looks like.
Employees are seeking purpose and meaning in their work more than ever, but many leadership teams are mistaking this as a need to proclaim an overly ambitious, and often over promised, sense of mission.
In its simplest form, I define purpose as a group of people collaborating effectively towards a shared objective – and either accomplishing it or getting better trying. Leaders have the unique ability, and power, to create purpose for their teams every single day by clarifying where we want to go and creating the conditions for their teams to succeed in getting there. As such, creating a shared objective (or 3 at the most!) and letting your employees experience a win is what most of us are craving these days. It doesn’t need to be a 10-year plan – it can be over the next 6 months, the next quarter, or simply the next week – just give the team something clear, aspirational, and achievable and watch them rally.
I experienced this most personally when our team was navigating the woes of being a small, service based business in the pandemic. As the leader of our team, I only had one certainty: that we had no idea what was around the corner. Rather than trying to create false sense of comfort or confidence in the team, instead we rallied around a shared 6-week sprint to ‘pivot our services and brand into virtual as effectively and efficiently as possible’. Everyone had a clear role, and knew what was at stake. We put clear boundaries in place (i.e. no selling for 6 weeks, just building) and told them what to de-prioritize in favor of this shared objective. Never in our 10-year history have I been more proud of our team or seen a deeper sense of employee engagement. Humans like to work together on tough challenges – lucky for all of us, there are an infinite collection to choose from right now. Just think a little more incrementally.
Note: I also hope to see more radical versions of vision setting and norm breaking in-line with the recent Patagonia restructuring to fight climate change, but anticipate that will be an outlier example for most organizations in the coming year (but hell – let’s cross those fingers and toes!).
Questions to Ponder:
- Where do I want the organization/team to be in 10 years? What could we do in the next 12 weeks to send us in that direction?
- What would be the single most impactful thing we could accomplish in the next 6 months? What can we de-prioritize in favor of knocking that single priority out of the park?
- If you asked each member of your team what the 2-3 most critical priorities were for your organization, how consistent would their answers be? Why?
The employee/employer contract will shift, starting with what it means to be “high performance.”
With headlines abound on the Great Resignation and Quiet Quitting, it’s easy to begin questioning if the employee talent landscape will ever ‘stabilize’ again coming out of the pandemic. I anticipate it will in 2023, but with some new models of value exchange and personal boundaries in place. I’m hopeful that many of these changes will actually be positive in the long term and lead towards a more sustainable and healthy workforce, particularly in the United States.
Much of today’s workforce grew up in an era of ‘hustle harder’ and ‘live to work’ mindsets. The overall ethos that emerged was an unhealthy relationship with work and self that has led to a burgeoning mental health crisis and general sense of distrust for the system in which we live and work. When I look at the ‘quiet quitting’ trend and talk to my network of peers and clients, the movement is not an ‘anti-work’ movement – it’s one of creating healthier boundaries between self and work. It’s about embracing a personal identity that is bigger than our job or salary. It isn’t a conversation of going from 100% productivity down to 60% – it’s a conversation of going from 150% down to 100%. It is a shift towards knowing that if we fail at something at work, we as individuals are not failures. The system was burning too hot, and amidst the pandemic it officially burnt out.
In 2023, the thing to pay attention to will be how leadership teams and organizations respond to this changing social contract with their employees. The past few years has brought mental health and balance to the agenda of many executive teams, but 2023 will be the moment to see how comfortable leaders are building it into their operating models. This will be monumentally difficult for most leadership teams, but it will usher in a new era of employee engagement and talent philosophy and the organizations that embrace it sooner will undoubtedly have a strategic advantage. For those that don’t agree, then I also hope they can name that and communicate it for themselves so the employees can choose the working culture they want to operate within.
Questions to Ponder:
- What is the talent philosophy of our organization? Why do people come to work here and stay (or not)? What parts of that philosophy need to evolve?
- Who is currently celebrated in our organization and why? Who are the populations of people in our organization that are being left behind but are actually exhibiting healthier behaviors and models (i.e., parents)?
- What behaviors and narratives am I consistently emphasizing that are informing unhealthy working norms in our team?
- Can someone still be seen as a “high performer” without bieng on-call or plugged in at all moments?
- Can your most valuable team members still be seen as such if they also embrace a mentality of “my job is just a job, and it is serving its purpose?”
- What new executive language, mindsets, and behaviors will meet employees where they are and embrace a healthier relationship with work?
So what does it mean for 2023?
There is no doubt we are in a better place than we were in 2-years ago, but ultimately the systemic engine is running too hot right now. The off-the-rails pressure to ‘do more’ combined with the global human fatigue means that many organizations will quite literally overheat in the near term. As with all fires though, there will be an opportunity on the other side for regrowth and new life, but the test will be in how organizations and leaders choose to rebuild the engine or if they will go back to driving the way they always have. Put a smile on – we’re more resilient than ever and we’ve prevailed as a society through a lot. Then buckle up – the ride isn’t over.