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Essential HR Strategies for Effective Employee Management

In today’s rapidly evolving business landscape, effective employee management is crucial for organizational success. Companies that excel in human resources (HR) strategies are more likely to attract top talent, maintain a motivated workforce, and achieve their goals. In this article, we’ll explore the essential HR strategies that not only streamline employee management but also contribute to a positive workplace culture. So, let’s dive in and discover how HR can play a pivotal role in shaping the future of your organization.

The Role of HR in Employee Management

HR is often referred to as the backbone of any organization’s employee management efforts. It’s responsible for a wide range of tasks, from recruitment to conflict resolution. By understanding the role of HR, you can better appreciate its significance in the workplace.

Recruitment Strategies

Recruitment is the first step in effective employee management. To build a high-performing team, you need to attract the right candidates. HR professionals employ various strategies to make sure they find the best fit for the job.

One effective strategy is to create a compelling job description that clearly outlines the responsibilities, qualifications, and expectations for the role. A well-crafted job description not only attracts potential candidates but also helps filter out those who aren’t a good match.

Additionally, HR teams are increasingly using technology and data-driven approaches to recruitment. Advanced applicant tracking systems and algorithms help identify candidates with the skills and traits that align with the organization’s culture and objectives.

Onboarding and Orientation

Once the right candidates are hired, it’s essential to provide them with a seamless onboarding experience. Effective onboarding sets the tone for an employee’s entire tenure with the company.

A structured onboarding process includes orientation sessions that introduce new hires to the company’s culture, values, and expectations. It should also cover essential administrative tasks, such as completing paperwork and setting up access to necessary tools and systems.

HR plays a significant role in facilitating this process, ensuring that new employees feel welcomed, informed, and ready to contribute from day one. A well-executed onboarding program not only boosts morale but also reduces turnover rates.

Performance Management

Performance management is an ongoing process that involves setting clear expectations, monitoring progress, and providing feedback and support to employees. HR professionals are central to this process, ensuring that it runs smoothly and effectively.

Regular performance evaluations, conducted by HR or department managers, are essential for employee development and growth. These evaluations help identify strengths, areas for improvement, and goals for the future.

HR also plays a role in training and development initiatives. By identifying skill gaps and organizing relevant training programs, HR ensures that employees have the tools they need to excel in their roles.

Employee Engagement and Retention

Employee engagement is a critical factor in retaining top talent. Engaged employees are more likely to stay with the company and perform at their best. HR strategies that foster engagement are essential for long-term success.

Organizations often use employee recognition programs to boost morale and motivation. HR can implement and manage these programs, ensuring that they are fair, consistent, and aligned with the company’s values.

Moreover, HR professionals work to create a supportive work environment where employees feel heard and valued. This includes addressing concerns, offering opportunities for professional growth, and promoting work-life balance.

Conflict Resolution and Mediation

Conflicts are an inevitable part of any workplace. How these conflicts are handled can make a significant difference in employee morale and productivity. HR plays a vital role in resolving disputes and mediating disagreements.

HR professionals are trained in conflict resolution techniques and can provide a neutral perspective on the matter. They listen to both sides, gather information, and work towards a mutually satisfactory solution.

Unbiased mediation by HR not only resolves immediate conflicts but also helps prevent future issues by identifying root causes and recommending necessary changes to policies or procedures.

Promoting Diversity and Inclusion in the Workplace

Importance of Diversity and Inclusion

Diversity and inclusion are integral to modern organizations. HR fosters a workplace culture where employees from diverse backgrounds feel included, valued, and heard.

Diversity and Inclusion Strategies

HR takes proactive steps to promote diversity and inclusion initiatives. They organize workshops focusing on cultural awareness, gender equality, and LGBTQ+ inclusion, promoting understanding and empathy. Encouraging employees to engage in community service aligns with corporate social responsibility and strengthens community ties. HR also hosts open discussions on diversity and inclusion, occasionally tying them to relevant events such as Martin Luther King Jr. Day to provide context and inspiration. Recognizing and celebrating employees actively contributing to diversity and inclusion efforts, including how to celebrate MLK Day at work, reinforces these values. Furthermore, HR develops a comprehensive diversity and inclusion plan with specific initiatives that resonate with relevant events, ensuring a year-round commitment to diversity and inclusion in the workplace.

Compliance and Legal Considerations

Understanding Labor Laws and Regulations

Compliance with labor laws is essential. HR professionals must stay up-to-date with labor laws and regulations, ensuring the organization adheres to wage and hour regulations, anti-discrimination laws, and workplace safety standards.

Consequences of Non-Compliance

Non-compliance can lead to significant consequences. HR addresses the potential legal and reputational risks associated with failing to comply with labor laws and regulations.

Technology and HR Management

In the modern era, technology has revolutionized HR management. HR professionals have access to advanced software solutions that streamline processes, save time, and enhance decision-making.

Applicant tracking systems (ATS), for example, automate and streamline the recruitment process, making it easier to manage candidate pipelines and track their progress.

HR software also supports payroll processing, benefits administration, and employee record management, reducing administrative burdens and ensuring accuracy.

Additionally, data analytics tools enable HR to make data-driven decisions regarding employee performance, engagement, and retention. By harnessing the power of data, HR can identify trends and make informed decisions that benefit the organization.

Conclusion

In conclusion, HR strategies are indispensable for effective employee management. From recruitment to conflict resolution, HR professionals play a pivotal role in creating a productive and positive workplace environment. By implementing these essential HR strategies, organizations can attract top talent, retain their best employees, and thrive in an ever-changing business landscape.

Remember, effective HR is not only about compliance and administrative tasks but also about creating a culture of support, recognition, and growth. Embrace these strategies, and your organization will be well on its way to achieving success in managing its most valuable asset: its people.

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7 Key Trends Shaping Startup Finance Management in 2024

In the dynamic world of startups, staying ahead of the curve is not just an advantage; it’s a necessity. As we move into 2024, several key trends are emerging in the realm of startup finance management. These trends are not only redefining how startups approach financial strategies but also shaping the future landscape of entrepreneurial success. From innovative funding models to the integration of cutting-edge technologies, understanding these trends is crucial for any startup looking to thrive in today’s competitive market.

1. Rise of Decentralized Finance (DeFi)

The surge in decentralized finance (DeFi) has been nothing short of revolutionary. In 2024, DeFi is not just a buzzword; it’s a viable alternative to traditional financial systems for startups. With the ability to offer more accessible funding options and democratize financial transactions, DeFi platforms are enabling startups to bypass traditional banking hurdles. This shift is particularly beneficial for startups in regions with less developed financial infrastructures or for those looking to leverage blockchain technology’s transparency and security features.

2. AI and Machine Learning in Financial Forecasting

Artificial Intelligence (AI) and Machine Learning (ML) are transforming startup finance management, particularly in forecasting and decision-making. These technologies enable startups to analyze vast amounts of financial data, predict market trends, and make informed decisions with greater accuracy. In 2024, we see a significant increase in startups adopting AI-driven tools for budgeting, cash flow management, and risk assessment. This not only enhances efficiency but also provides a competitive edge in strategic planning.

3. ESG (Environmental, Social, Governance) Investment Strategies

Environmental, Social, and Governance (ESG) considerations are now at the forefront of investment strategies. In 2024, startups are increasingly evaluated based on their ESG impact, with investors looking beyond financial returns to consider broader societal and environmental benefits. This shift has prompted startups to integrate sustainable practices into their business models, influencing everything from product development to operational processes. For startups, adopting ESG principles is no longer just about corporate responsibility; it’s a strategic move to attract a new wave of conscientious investors.

4. Enhanced Focus on Cash Flow Management

In the volatile startup world, effective cash flow management is more critical than ever. As we step into 2024, startups are placing an increased emphasis on maintaining healthy cash flow. This trend involves not just meticulous tracking of inflows and outflows but also strategic planning to ensure liquidity in the face of unforeseen challenges. Tools and platforms that offer real-time financial insights and predictive analytics are becoming indispensable for startups aiming to navigate the uncertainties of the market.

5. Crowdfunding and Community-driven Funding Models

Crowdfunding continues to evolve as a vital funding source for startups in 2024. Beyond traditional platforms, we are witnessing the rise of community-driven funding models, where startups tap into their user base or community for financial support. This approach not only provides a financial lifeline but also strengthens customer relationships and builds brand loyalty. It’s a clear indication of how the power of community engagement is reshaping startup finance.

6. Financial Automation and Integration Tools

The automation of financial processes is not a new concept, but in 2024, it has become a cornerstone of efficient startup finance management. The integration of advanced software solutions that automate invoicing, payroll, accounts payable and receivable, and even tax compliance, is a game-changer. This trend significantly reduces manual errors and administrative overhead, allowing startup teams to focus more on strategic activities rather than getting bogged down by routine financial tasks. The integration of these systems across different business functions also ensures a cohesive and streamlined approach to financial management.

7. Strategic Diversification of Revenue Streams

Startups in 2024 are increasingly exploring diversified revenue streams to build financial resilience. This strategy involves identifying and developing multiple sources of income, which could include a mix of product lines, subscription models, service offerings, or even digital assets. The rationale is to mitigate risks associated with relying on a single revenue source and to capitalize on various market opportunities. By diversifying their revenue streams, startups can better navigate economic fluctuations and maintain a steady cash flow, crucial for long-term sustainability.

Conclusion

In conclusion, these trends reflect a broader shift in startup finance management towards more innovative, sustainable, and community-focused approaches. As startups navigate these changes, they need partners who understand these dynamics and can offer tailored support. In this context, companies like Levy play a pivotal role. With expertise in back office operations and a keen understanding of emerging financial trends, Levy is well-positioned to assist startups in adapting to these evolving landscapes.

2024 is poised to be a defining year for startup finance management. By embracing these trends and partnering with the right experts, startups can not only survive but thrive in this ever-changing environment. Whether it’s leveraging DeFi platforms, integrating AI in financial planning, aligning with ESG values, focusing on cash flow, or exploring crowdfunding opportunities, the future of startup finance is dynamic and full of possibilities.

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Osaka’s Integrated Resort: A Game-Changer for Japanese Tourism

Osaka, a major port city and economic hub in Japan, is making significant strides in the tourism industry with the launch of the first Japanese integrated resort. The mayor, Hideyuki Yokoyama, stated that an ambitious proposal to establish Japan’s first integrated resort (IR) under the banner of MGM Osaka Integrated Resorts is already in the works. This groundbreaking project aims to draw a staggering 20 million tourists annually to the region.  The highly anticipated resort’s opening is currently slated for 2029, although it seems more likely to occur in the autumn of 2030.

Full certification of the Osaka Integrated Resort

The journey towards the legalization of gambling in Japan has been a lengthy and contentious one. However, a significant milestone was reached when the Ministry of Land, Infrastructure, Transport, and Tourism approved a trial integrated resort (IR) zone in Osaka.  This certification was officially issued in April 2023, designating the development plans for Yumeshima, Osaka. Subsequently, Orix Corporation and MGM Resorts collaborated in late September 2023 to commence planning for the prestigious casino resort. The actual construction is scheduled to begin in the summer of 2024.

In a statement, MGM Resorts’ CEO stated, “We are excited and passionate about this project. In collaboration with Orix, we plan to provide world-class gaming, top-tier retail experiences, gastronomy, and modern entertainment to Osaka and the rest of Japan. Our strategy is to harness MGM’s considerable industry experience to establish Japan as the future of resort entertainment.” 

Japan’s Transition to Legalized Gambling

Traditionally, Japan has not been one of the world’s countries that allow legal gambling.  The accreditation of Osaka IR is the culmination of years of effort. Only in 2018 did the Japanese Diet parliament pass legislation allowing for the exclusive building of IR resorts in designated entertainment districts around Japan. This measure did not become law until mid-2021. Among the various factions competing to lead the project, MGM won the contract to build the resorts in collaboration with Japan’s Orix business. The flagship project in Osaka was expected to cost up to $2.09 billion, or 1.8 trillion Japanese yen. However, unprecedented conditions have increased the construction cost and resulted in a one-year delay, shifting the anticipated completion date from Autumn 2029 to Autumn 2030.     

Responsible Gaming in Osaka: Measures and Initiatives  

Although the Integrated Resort will encourage tourism, generate jobs, and boost the local economy, Osaka is equally focused on promoting responsible gaming practices. To address gambling addiction, the city is implementing a new ordinance in line with the National Law on Measures Against Gambling Addiction. You can read more about Osaka’s new gambling prevention measures at casinosnavi.com. This new ordinance will establish a counter-addiction Promotion Department in Osaka that will raise public awareness about gambling addiction.

Increased Construction Costs

The Osaka integrated resort (IR) project administrators faced a significant challenge as the initial construction cost skyrocketed by $1.29 billion, equivalent to 190 billion Japanese yen, reflecting a substantial 17.6 percent increase. This increase stemmed from ongoing negotiations and discussions regarding land-related issues on Yumeshima, the designated manmade island for the project. To cover the elevated budget, both the MGM-Orix collaboration decided to increase their share ownership from 40% to 42.5%, resulting in a 5% reduction in share value for minority investors, decreasing from 20% to 15%. According to Hirofumi Yoshimura, governor of Osaka Prefecture, one of the reasons for the project’s delay is the national government’s sluggish approval of new plans. 

The amended Osaka IR agreement, influenced by increased expenses and altered share values, needed some time for the government to ratify. The agreement now includes the independent developers’ right to terminate the contract if business criteria are unmet. The document also included provisions on the project’s tax regime, land improvement, and fundraising structures. If the independent developers decide to stop their involvement in the project, they will not be required to pay any fees or damages. 

Soil Remediation at the Osaka IR Site             

The Osaka prefecture reported in September 2023 that the project would require an additional $174.6 million, or ¥25.7 billion, to develop land on the site and prevent soil liquefaction. The artificial island required substantial ground preparation before building could begin in the summer of 2024. The financial responsibility for these expenses will ultimately fall on taxpayers. Still, their allocation is deemed necessary to prevent potential future losses and mitigate hazards associated with constructing on soft ground, soil contamination, and subsurface impediments. The city swiftly gathered ¥78.8 billion to support the land reclamation activities. The budget reportedly included ¥41 billion to address soft ground issues on the artificial island. By late September, the city had begun convening specialists to budget and plan for project preparation. 

Recap

The Osaka integrated resorts will soon become a reality based on the commitment to the ambitious project shown by its various implementers. The project has the potential for significant profits, which justifies the large investment capital. Experts predict 10 million tourists in the first year of operation, boosting consumption in Osaka by a whopping ¥1.1 trillion. Even before the casino resort’s official inauguration, Osaka is considering hosting the Expo 2025 Osaka Kansai on the artificial island, highlighting the necessity to hasten construction plans. 

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BIN Sponsorship is a Smart Way to Grow your Business

Launching your card program is the right step in the development of any business. Payment cards help to facilitate mutual settlements with suppliers, customers and employees. Thanks to them, budget management is greatly simplified. The main problem is that launching a card program alone is complicated, time-consuming and financially costly. It is much easier to utilize the services of a BIN sponsor and launch your card project in a matter of weeks.

What is BIN sponsorship?       

A BIN sponsor is an organization that is a full member of the payment system and has fulfilled all the necessary conditions to obtain BIN numbers and make them available to its clients. BIN-sponsor Wallester is a member of the Visa payment system; BIN-sponsors cooperate with the MasterCard system and other payment services. Thus, BIN-sponsor partners can perform various functions of a financial institution, such as issuing cards, without being direct participants in the payment system of their choice.

BIN-sponsor or launching a card program on your own?

If you want to set up branded card issuing on your own, you will need to do the following:

  • hire an entire staff of specialists who can create the software to run the card program;
  • gather a package of documents and apply them to the payment system for a BIN number;
  • create and configure all the necessary infrastructure;
  • obtain licenses to issue payment instruments and comply with all regulatory requirements;
  • ensure the security of all transactions and your cardholder data;
  • maintain and upgrade the software designed to manage your card program.

Meeting these requirements will take a lot of effort, time and money. Getting a card project up and running with a BIN sponsor is much easier and faster. He takes care of all administrative, legal and technical issues, and the company only has to develop its product and profit from it. It takes 6 to 12 months to launch a card program on your own, sometimes longer depending on how long the payment system considers the application. BIN-sponsor will help to launch the project in just 1-3 months.

What tasks does the BIN sponsor solve?

You first need to get a BIN number to launch your own card program. It is a number that identifies the issuer in the payment system. Thanks to it, the service identifies the company that issued the card during the authorization and processing of card transactions. It can take from several months to six months for companies to independently obtain this number. BIN sponsorship allows you to save time and money and become the owner of a BIN number immediately after signing an agreement with a BIN sponsor.

BIN-sponsor does not just provide BIN numbers but also undertakes several important functions:

  • Card issuance. BIN-sponsor provides a platform for issuing cards of any type. These can be virtual or physical cards, credit, debit or prepaid. They can be used to pay for goods and services in retail and online stores, to make transfers and instant transactions;
  • Tokenization. Tokenized cards increase the security of payments. They can be added to any of the most popular digital wallets;
  • Payment security. BIN sponsors use modern data protection protocols. One of them is 3D Secure – a protocol that implies the use of an additional step of cardholder verification and identification during the transaction;
  • Fast payment processing. Payments in any quantity are processed in the shortest possible time, as there is no need to obtain approval from banking organizations;
  • KYC/AML compliance. BIN-sponsor helps identify individuals and legal entities per international anti-money laundering regulations. It allows new users of the card program to be safely enrolled;
  • Fraud monitoring: BIN-sponsor monitors all transactions and identifies and prevents fraudulent card transactions. It helps to reduce the company’s financial losses significantly.

The BIN sponsor is responsible for developing, maintaining and upgrading the software to issue cards and manage the card program. Solid companies offer White Label solutions that allow issuing cards with individual designs rather than standard payment means.

BIN sponsorship is a smart way of business development, as it allows companies of any size and from any sphere of activity to launch their card program with minimal resources.

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The Tax Benefits of Real Estate Investing

Not only does real estate investment present potential for financial growth, but it also proffers a plethora of tax benefits that can dramatically influence an investor’s profitability. Thus, comprehending the Canadian tax landscape stands as an imperative task for any investor aiming to optimize returns and foster informed decision-making. Indeed; in Canada–real estate investors have access to numerous advantageous tax opportunities: hence wise navigation through these prospects is critical.

Capital Gains Exemption for Principal Residences

The capital gains exemption for principal residences stands as a prominent tax benefit offered to Canadian real estate investors: upon selling a property they designate as their principal residence, any profit earned is exempt from taxation. This powerful incentive—significantly reducing the potential financial burden of property appreciation through eliminated taxes—is an attractive feature that entices homeowners into investment opportunities without fear or hesitance. Investors, however, must strictly adhere to the eligibility criteria; only then can they fully capitalize on this benefit.

Tax Deductions for Mortgage Interest

Canadian real estate investors can exploit tax deductions for their mortgage interest payments. Generally, they can deduct the interest paid on income-generating property mortgages to reduce taxable income. This deduction proves valuable as it enables investors in optimizing cash flow and boosting profitability of their ventures within real estate. To make informed financial decisions, one must understand the specific rules and limitations that govern mortgage interest deductions.

Depreciation and Capital Cost Allowance

Canadian real estate investors can explore Depreciation and the Capital Cost Allowance (CCA) as additional tax benefits. Through Depreciation, these investors are able to allocate a property’s cost over time; CCA allows for deducting a portion of the capital cost of said property. Such mechanisms present opportunities – particularly with income-generating properties – to minimize taxable income. Maintaining compliance with the guidelines set by the Canada Revenue Agency is crucial; this ensures proper utilization of deductions.

Professional Guidance

Navigating the intricate landscape of real estate tax benefits can prove invaluable with a real estate investment mentor or professional guide: indeed, their expertise becomes indispensable. Specifically, an expert in Canadian real estate taxation offers insights; shares experiences – guiding investors through the complexities of tax planning. By leveraging this knowledge base, investors not only make informed decisions but also optimize potential tax advantages and circumvent possible pitfalls—thus establishing a robust financial foundation for their ventures into real estate: it is graduate-level punctuation at its finest!

Tax-Deferred Exchanges

Real estate investors can utilize Section 85 rollovers as a tax-deferred exchange option for property transfers. This provision permits the deferral of capital gains taxes during related-party property transfers, such as within families or between corporate entities. Comprehending Section 85 rollovers’ complexities empowers investors to unlock strategic opportunities that enhance estate planning and asset management effectively.

Tax Credits for Energy-Efficient Upgrades

Not only does investing in energy-efficient upgrades benefit the environment, but it can also trigger tax credits for Canadian real estate investors. By offering specific incentives on certain energy-saving improvements to properties, the government actively promotes sustainability; this serves as an encouragement for investors. If eligible renovations are undertaken by these individuals, they may qualify for tax credits – a scenario that simultaneously enhances property value and contributes towards environmental conservation: truly a win-win situation.

Strategic Use of Tax Credits and Deductions

To optimize tax credits and deductions, real estate investors must prioritize strategic planning and thoroughly understand the Canadian tax code. A proactive financial approach and collaboration with tax professionals are essential for developing strategies that align with investment objectives, maximize deductions, leverage tax credits, and facilitate efficient property transfers under favorable terms for all parties involved.

In summary, investors who comprehend Canadian real estate tax benefits can make informed decisions for potentially high returns. The Canadian tax system offers various opportunities, such as principal residence exemptions and energy-efficient credits. Effective use of these benefits requires strategic planning, expert advice, and compliance commitment. By staying informed and wisely navigating the tax landscape, real estate investors can achieve optimal financial results and build a successful portfolio – a core principle of advanced finance.

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Mastering the Game: Lessons in Leadership from Rugby to the Boardroom

By Darren Cassidy

Mastering the Game: Lessons in Leadership from Rugby to the Boardroom explores the parallels between high-performance rugby and successful business leadership. Drawing from personal experiences on the pitch, Darren Cassidy delves into shared purpose, adaptability, a growth mindset, and motivating teams as key principles that drive success in both arenas.

Watching the recent Rugby World Cup, I found myself absorbed in the leadership, decision-making, skill, strategy and team camaraderie that underscore the game. Sport has played a significant role in my life, especially driving and delivering strong team performance, shaping my approach across various aspects of my career. Drawing first-hand from my experience on the pitch, I see a striking resemblance between high-performance rugby and successful business stewardship. While the spotlight often shines on individual brilliance, the collective effort, underpinned by a shared purpose, adaptability, a growth mindset and motivation, powers success on the field and in the boardroom.

The game of rugby is rife with business leadership lessons, ranging from preparation and planning, team alignment, visibility, and communication to how we face success and failure, which cultivate shared accountability and commitment among team members. Both adrenaline and nerves peak in the pre-game environment, shaping individual and team experiences. In turn, the post-game environment is charged with emotions from joy to frustration, reflecting encounters in the business world, offering learning opportunities from every win or loss, and aiding the ability to refocus and adapt to the next challenge.

On the pitch, when players are in the ‘‘zone’’, often described as a ‘‘flow’’ state, as defined by Csikszentmihalyi, they are fully immersed, with a singular focus on the game’s demands rather than the scoreboard. Team players know that standing on the sidelines and staring at the results board does not change the score; they are deep in the game. In business, a key observation is that being preoccupied with outcomes, for example, the profit and loss (P&L) and sales metrics, or saying results are needed won’t miraculously transform numbers. Strategic insight, action, and execution, drive and deliver results. Preparation and planning are a given. However, leading with purpose, exhibiting adaptability, and fostering a growth mindset and motivation are critical to team success.

Power of Shared Purpose and Belief System Can Propel Team towards Collective Success

Preparation, planning, and strategy in rugby are analogous to decision-making and planning in business. Often, coaches are heard saying, ‘‘It’s a must-win game’’, and business leaders say, ‘‘It’s a must-win deal’’. Yet, without a clear ‘‘how’’, such directives can leave players and employees puzzled. This outcome-focused approach requires an underpinning strategy that clarifies the process. It’s the ‘‘how‘’ – the game plan – that transforms a daunting challenge into a navigable path in the right direction. Moreover, whether on the pitch or in a boardroom, clarity of purpose guides our approach to action. This clarity aligns teams, enabling them to move as one towards their common goal.

The game of rugby is rife with business leadership lessons, ranging from preparation and planning, team alignment, visibility, and communication to how we face success and failure, which cultivate shared accountability and commitment among team members.

For leaders, understanding and communicating their purpose is not about providing direction; it’s about inspiring confidence and fostering an environment where each decision, each play, contributes to a larger vision. As a leader, purpose is not what you do; it’s ‘‘how’’ you do your job and ‘‘why’’ and the inherent strengths you bring to a business or sports team. In various realms, I recognise that my purpose is to empower and guide people to excel and reach their fullest potential. In pressurised environments, well-articulated purpose cuts through the noise, focusing hearts, minds and efforts. It’s the light that guides teams through ambiguity.

I joined the Henley rugby team after the tenure of Clive Woodward. As a team, we held regular sessions on building our game plans and defining our purpose. We had game plans dependent on certain conditions, for example, our opponents or the weather. Our purpose was to play entertaining rugby, and we had specific ideals to guide us. It was a way of bringing a team together. A strength in bonding teams around a belief system drives and energises a team, whether in rugby or business.

At Xerox, in a similar vein, our approach to leadership and strategy is based on collaboration and clarity of focus. Every year, I bring my team together to build our team strategy. We believe in the power of inclusivity and open discussion. In these sessions, we delve into our purpose and dissect key performance indicators (KPIs) and focus areas. The goal is to create a blueprint to guide us through the challenges and opportunities of the year ahead. It’s a one-page plan that encapsulates our strategy; it’s simple but effective because it’s easy to communicate and rally a business around.

In recent years, particularly in the wake of the pandemic, wellness emerged as a recurring theme brought up by our management team in our sessions. As a result, wellness now forms a key pillar of our business. We recognise that the well-being of employees is a fundamental cornerstone of success. By elevating wellness to a key pillar, we’ve made a clear statement about our commitment to the health of our employees.

Adaptability on and off the Pitch

Powerful teams adapt to the situation in front of them. Most of the situations we face in business or rugby are foreseeable. Great rugby teams and companies have contingency plans for various predictable scenarios. Sports teams and companies must have their antennae finely tuned to signals of change from the external environment, decode them, and quickly adapt or refine their play or business strategy.

For example, in rugby, a team may not play well, not get a quick ball, or the referee’s decision goes against them, and it’s raining and slowing them down. These factors could stop a team from playing at a desired tempo, but they’re foreseeable events. If you’ve planned and trained as a team and tuned into these signals, it makes sense to revert to an adapted game plan. I have played in teams that have changed tactics to turn a slow ball into a quick ball, playing tighter to the forwards to gain control before you try and expand in the wider channels again – being deliberate in making changes in the heat of a game and as a collective is a decisive move.

Agile thinking is a competitive advantage in sports and business amidst dynamic environments. However, teams require rules to facilitate interaction, help individuals make trade-offs and set boundaries for decision-making. Preparing others, understanding the game (or the market), and pivoting strategy with confidence at a moment’s notice is imperative.

Exceptional leaders and teams harness a growth mindset on and off the pitch. They quickly shift their attention to what can be controlled and changed to improve and resolve a situation.

In the business world, adaptability comes to the forefront when game-changing opportunities emerge. We recently encountered such an opportunity – a deal with the potential to reshape industries and set new benchmarks. We gathered together our pursuit team and selected individuals with unique strengths and expertise. We poured our collective knowledge and creativity into developing a solution that met and exceeded the brief. We were excited, but then reality struck that the solution didn’t meet the budget criteria set for the deal, and it was a moment of pause and reflection. We took this as an opportunity for growth and adaptation. We huddled and re-evaluated our strategy and began the process of refining it. This experience serves as a reminder that success in business and sport is rarely a straight line. Instead, it’s marked by twists and turns that demand flexibility and agile thinking.

Cultivating a Growth Mindset: Approaching Challenges and Controlling Reactions

rugby game

How we respond to challenges and setbacks can significantly hamper our success. Assigning personal blame, viewing the situation as unfair, or pointing fingers at others can hinder the ability to address and overcome these challenges. In my experience, exceptional leaders and teams harness a growth mindset on and off the pitch. They quickly shift their attention to what can be controlled and changed to improve and resolve a situation.

As defined by Dweck, a growth mindset centres around the belief that we can grow our brain’s capacity for learning and problem-solving. It is considered a developable skill that supports adapting to dynamic environments. Such a mindset empowers individuals to control their responses and approach challenges effectively and proactively, serving them well personally and professionally.

Powerful teams adapt to the situation in front of them.

Today, organisations are constantly transforming, driven by societal and technological shifts. Cultivating a growth mindset is needed to create, lead and support change. For multiple generations, currently in the workplace, a growth mindset was not taught in school. Schools often prioritised and rewarded results over learning and progress, which is required today in many aspects of life and work.

To support teams within my organisation, I have collaborated with Gazing Performance, introducing their Red2Blue model, a mindset technique that empowers and supports developing mindset as a skill. In the Red2Blue model, ‘‘Red head’’ is the feeling of being tight, inhibited and anxious, whereas ‘‘Blue head’’ is calm, clear and accurate. The All Blacks New Zealand team even embraced this practical approach to mindset development in their 2011 and 2015 Rugby World Cup preparations. The link between a growth mindset and the Red2Blue model lies in the latter’s ability to help individuals from a limiting “Red head’’ mindset to an empowering “Blue head’’ mindset aligning with the principles of growth, adaptability and proactive problem-solving. This technique can be instrumental in fostering a growth mindset required to thrive in an ever-changing world.

Motivating Teams in High-Pressure Environments: Recognising Individual Strengths and Fostering Collective Commitment

As a captain on the pitch and a business leader, my core strength is motivating teams around a shared purpose in dynamic environments. Recognising the inherent diversity in individuals – their internal drivers in terms of goal-directed thoughts and behaviours – and the influence of external factors such as environment and team dynamics on their well-being, is critical. Understanding internal motivations (intrinsic factors such as personal passion and values) and external motivations (extrinsic factors such as recognition or rewards) can enhance overall team performance and help uncover that elusive extra percentage of effort that makes a substantial difference and changes the game. Understanding your team is non-negotiable. As a leader, you’re rolling up your sleeves and on the pitch with them. Leading from the front gives a crucial viewpoint.

In rugby and business, the parallels are undeniable, offering a trove of insights and strategies for achieving peak performance. The common thread across both domains is the power of shared purpose.

However, as a mentor wisely counselled me, this position requires balance. The ability to step back and zoom out is critical to ensuring sustainable performance for you and your team and checking that efforts are focused on vital tasks. This skill contributes to achieving long-term goals and overcoming challenges. We had a complex contract riddled with technical challenges and involved deploying devices in a highly secure environment. Gathering my team, I knew this endeavour was special. As their leader, I wanted them to understand that I saw them as individuals. I addressed the team, acknowledging the complexity of the task. At that moment, I emphasised our collective importance and each team member’s unique contributions. It’s not just a project but a testament to our collaborative capabilities. Recognising their individuality and valuing their expertise created a sense of unity and purpose.

In rugby and business, the parallels are undeniable, offering a trove of insights and strategies for achieving peak performance. The common thread across both domains is the power of shared purpose.

A rugby team rallies around a common goal, and businesses thrive when their teams are united by clarity and purpose. Purpose ignites confidence and fosters an environment where every decision contributes to a larger vision. Success hinges on seeing change on the horizon and pivoting and refining strategies as needed. Teams and companies that prepare for the unexpected can move swiftly in dynamic environments.

Cultivating a growth mindset empowers individuals and organisations to face challenges head-on and drive continuous improvement. Such a mindset is indispensable in business transformation and dynamic environments. Motivating teams is an art that requires understanding the motivations of individuals and the influence of external factors. Purpose, adaptability, mindset, and motivation propel teams and organisations in sports and business. As leaders, it’s our responsibility to embrace these principles and inspire our teams to reach their potential and guide them through the ever-changing landscape.

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About the Author

Darren CassidyDarren Cassidy is the managing director for Xerox UK & Ireland and senior vice president for the Global Document Services business across Europe, the Middle East & Africa (EMEA). With 31 years of experience at Xerox, he has held various roles across Xerox Europe and Global, including direct sales management and leadership in channels, learning, and development. Darren’s expertise lies in delivering document services and digital transformation solutions across EMEA. He is a sports enthusiast, having played national league rugby and semi-professional football, and in recent years, he has embraced Transcendental Meditation (TM) as a dedicated practitioner.

Why the Ethical Use of AI Matters for Your Career

By Jack McGuire, David De Cremer, Leander De Schutter, and Yorck Hesselbarth

In the contemporary digital era, innovations such as artificial intelligence (AI) are profoundly transforming the business landscape (De Cremer, 2020). The buzz surrounding ChatGPT, coupled with recent assertions about the sentience of Google’s LaMDA, a large language model, underscore the prominence of chatbot technology in these advancements (Adamopoulou & Moussiades, 2020; Ryu & Lee, 2018; Tiku, 2022). Customer-oriented chatbots, an emergent application of this tech, offer unparalleled efficiency and cost-effectiveness, operating ceaselessly and responding to client inquiries in real time (Salesforce, Research, 2019). Yet, amidst these advantages lies an ethical conundrum. Customers cherish genuine human interaction and can become quickly disillusioned when they realise they’re communicating with a bot, not a person (Ciechanowski, Przegalinska, Magnuski & Gloor, 2019). Balancing this desire for authenticity with the allure of operational efficiency poses a challenge, making it tempting for businesses to deceive customers by blurring the lines between human and machine. 

Specifically, organisations nowadays are confronted with a reality where chatbots demonstrate remarkable human-like qualities (Collins & Ghahramani, 2021; Leviathan & Matias, 2018). This reality makes the choice to cut costs by adopting human-like chatbots a rational one. However, this choice is not so straightforward for organisations to make. After all, customers prefer the real thing (i.e., interactions with a human) over the artificial one, and therefore making the rational choice requires organisations to adopt a strategy of deceiving their customers by not disclosing to them that chatbots are used. 

However, what are the risks when firms use chatbots without disclosure? What happens to the reputation of organisations engaging in these deceptive acts when customers find out what is really happening? And, even more important, what happens to the employees working for those organisations? When deception is found out, organisations are likely to suffer reputational damage, but will it also tarnish the careers of their employees? Several high-profile tech companies have faced backlash over the unethical use of emerging technologies. 

Consider the fallout from the Theranos fraud and misconduct scandal. While the company suffered legal and reputational damage, employees faced a backlash, too. Several of them reported difficulties in job transitions, with potential employers associating them with the scandal (Lapowsky, 2021). As companies carry responsibility for their employees, it is imperative from an accountability point of view that they are aware of any potential effects on the careers of their employees before succumbing to the allure of deploying chatbots under a veil of deception. To test whether employees indeed suffer in their career prospects when the organisation they work for engages in deceptive chatbot practices, we conducted several experimental and field studies (McGuire, De Cremer, De Schutter, Hesselbarth, Mai & Van Hel, 2023). 

The Ripple Effect on Careers 

First of all, our research unsurprisingly finds that organisations employing undisclosed chatbots are perceived as less ethical by customers when found out. Obviously, if you work for an organisation that is seen as unethical in its use of emerging technologies, it will affect your work identity. If this is the case, how will it affect the judgements and subsequent actions of these employees? The Uber scandal involving the suppression of sexual harassment allegations presents some useful insights regarding how to respond to that question. Employees at Uber, even those uninvolved, experienced that the company’s ethical breaches overshadowed their individual reputations and motivated many of them to resign (Kosoff, 2017). 

Organisations that deceive their customers by pretending to have humans handle customer enquiries are judged to be unethical by both customers and the employees working for those organisations.

To validate this idea, we ran a series of experimental studies where employees in a simulated company were asked to facilitate deceptive chatbot use. Putting employees in this situation made them more likely to perceive their organisation as cultivating a culture of making unethical requests to their workforce. In turn, because of these perceptions, we found that those employees wanted to quit their job more. 

So, organisations that deceive their customers by pretending to have humans handle customer enquiries are judged to be unethical by both customers and the employees working for those organisations. As a result, customers will show no loyalty to those organisations, and employees want to leave them. But where can those employees go? Are they contaminated for the job market? With today’s rapid transmission of information online, a company’s unethical practices can become widely known, and thus impact employees’ professional trajectories. 

To study this phenomenon, we conducted two more studies, where we assessed how those employees are seen by recruiters. Our results showed that employees that had worked for an organisation known to use chatbots deceptively were perceived by recruiters to be less trustworthy, were less likely to be offered a job, and were given a lower salary when offered one. The deceptive use of chatbots therefore has widespread repercussions. It harms not only the company, but also the people who work there. 

The Responsibility of Tech Professionals: A Call to Action

The case is clear. Tech professionals must champion ethical AI use. The broader societal implications of our creations cannot be ignored. Advocating for transparency and ethical guidelines protects both the company’s reputation and your own professional standing. The findings from our research offer two actionable takeaways: 

  1. The role of leaders. Leaders must recognise the lasting harm of deceptive practices. Ethical technology use can bolster company reputation, morale, and customer trust.
  2. The role of employees. Employees should be proactive, voice concerns about unethical technology use, and leave companies using deceptive practices before those deceptions are revealed. Communicating these concerns anonymously, in private with your manager, or publicly in team meetings and town hall sessions are all useful and should be considered. 

In conclusion, as AI’s role in business grows, its ethical use is critical. It’s not merely about company profits; it’s about the careers and reputations of those who make up the organisation. Prioritising ethical AI practices isn’t just a business imperative; it’s a career necessity. 

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About the Authors

Jack McGuireJack McGuire is Jack McGuire is a Postdoctoral Research Associate at the D’Amore-McKim School of Business at Northeastern University (Boston). He received his PhD in Management & Organization from the National University of Singapore Business School and his MSc from University College London. Prior to this, he was an Experimental Lab Manager and Research Assistant at the University of Cambridge, Judge Business School. Jack’s research examines the psychological consequences of artificial intelligence and its increasing application in the workplace. This work has been published in Journal of Business Ethics, Computers in Human Behavior, International Journal of Human–Computer Interaction, and Harvard Business Review, among others. 

decremerDavid De Cremer is currently the Dunton Family Dean of D’Amore-McKim School of Business and professor of management and technology at Northeastern University (Boston), and an honorary fellow at Cambridge Judge Business School and St. Edmunds College, Cambridge University. Before moving to Boston, he was a Provost chair and professor in management at National University of Singapore and the KPMG endowed professor in management studies at Cambridge University. He is the founder and director of the Center on AI Technology for Humankind (AiTH) in Singapore, which was hailed by The Higher Education Times as an example of interdisciplinary approaches to AI challenges in society. He is one of the most prolific behavioral scientists of his generation, and a recognized global thought leader by Thinkers50. He is a best-selling author, including “Leadership by algorithm: Who leads and who follows in the AI era?”, and his newest book “The AI-savvy leader: 9 ways to take back control and make AI work”, which will be published by Harvard Business Review Press in 2024. 

Leander De SchutterLeander De Schutter is assistant professor at the Vrije Universiteit Amsterdam, the Netherlands. He is interested in leadership and decision-making in the workplace. 

York HesselbarthYorck Hesselbarth is building foundational models with European values at Nyonic AI, contributing to digital sovereignty on the continent. Previously, he conducted research in the field of human-computer interaction and led several cutting-edge AI projects for the German Armed Forces. 

References 

  • Adamopoulou, E. & Moussiades, L. (2020, June). “An overview of chatbot technology”. In IFIP International Conference on Artificial Intelligence Applications and Innovations (pp. 373-83). Springer, Cham. 
  • Bogost, I. (2022). “Google’s ‘Sentient’ Chatbot Is Our Self-Deceiving Future”. The Atlantic. Retrieved from: https://www.theatlantic.com/technology/archive/2022/06/google-engineer-sentient-ai-chatbot/661273/ 
  • Collins, E. & Ghahramani, Z. (2021, May 18). “LaMDA: our breakthrough conversation technology”. Google Blog. Retrieved from: https://blog.google/technology/ai/lamda/ 
  • De Cremer, D. (2020). Leadership by Algorithm: Who leads and who follows in the AI era. Harriman House. 
  • Kosoff, M. (2017, March 20). “Uber’s President Resigns as Employees Head for the Exits”. Vanity Fair. Retrieved from: https://www.vanityfair.com/news/2017/03/ubers-president-resigns-as-employees-head-for-the-exits 
  • Lapowsky, I. (2021, August 31). “What became of Theranos employees?”. Protocol. Retrieved from: https://www.protocol.com/newsletters/sourcecode/theranos-on-trial 
  • Leviathan, Y. & Matias, Y. (2018, May 8). “Google Duplex: an AI system for accomplishing real-world tasks over the phone”. Retrieved from: https://ai.googleblog.com/2018/05/duplex-ai-system-for-natural-conversation.html 
  • McGuire, J., De Cremer, D., De Schutter, L., Y. Hesselbarth, Mai, K.E. & Van Hiel, A. (2023). “The reputational and ethical consequences of deceptive chatbot use”. Scientific Reports, 13, 16246. 
  • Ryu, H. S. & Lee, J. N. (2018). “Understanding the role of technology in service innovation: Comparison of three theoretical perspectives”. Information & Management, 55(3), 294-307. 
  • Tiku, N. (2022). “The Google engineer who thinks the company’s AI has come to life”. The Washington Post. Retrieved from: https://www.washingtonpost.com/technology/2022/06/11/google-ai-lamda-blake-lemoine/ 

How To Incorporate Artificial Intelligence Into Learning And Development Strategy?

By Mostafa Sayyadi

Only identifying problems for senior managers is not enough today. They need to be able to develop and implement an AI-powered learning and development strategy. Artificial Intelligence (AI) has placed senior managers in what is known as a dual role. In this article, I examine the challenges of the development and implementation of an AI-powered learning and development strategy and provide an alternative way for companies to re-emerge with sustenance.

Introduction

As organizations enter the new age of artificial intelligence there are a plethora of unique opportunities. One opportunity is to create an AI-powered learning and development strategy. Developing a technological infrastructure is one important component but there is another that will likely make or break the traditional organization. Success in the era of artificial intelligence does not only require money and investment in technology infrastructure, but it also requires a change in the way leaders think about their learning and development strategy. In this article, I call this new approach the AI-powered learning and development strategy and provide corporate leaders with the best practices for the development and implementation of this effective strategy.

The best practices for the development and implementation of an AI-powered learning and development strategy depend on how senior managers can create a rapid technology change program. There needs to be a strong emphasis on maximizing the performance of the artificial intelligence development and implementing a human resources development project to begin developing and implementing a new form of learning and development strategy, what I call an AI-powered learning and development strategy.

AI-Powered Learning and Development Strategy 

With the introduction of AI to a company, the learning and development strategy will change, and a new learning and development strategy cultivation and implementation process will be redefined based on data analysis and digital applications. [1] [2] [3] [4] The first step is to assess human and technological infrastructure capabilities for AI, avoiding pitfalls in data analysis and further elaboration. Secondly, implementing an effective knowledge management system is one of the most significant technological and human infrastructures companies need before developing AI. [5] [6] Insights related to data analysis are usually available at operational levels, but the lack of an effective knowledge management system causes these insights to not pass through the bottlenecks of communication channels and are not available to upper levels. Here, developing chatbots and using other AI tools can lead to developing a data-oriented approach in companies and eventually strengthen the data analysis side in AI-powered learning and development strategy.

Another critical pillar of AI-powered learning and development strategy is the digital core knowledge, which refers to the software on which algorithms derived from data analysis are applied. [7] [8] This step creates a more scientific baseline for decision-making, and algorithms for hybrid automated processes are presented. It is advisable to avoid software and technology choices that can act on the current CEO’s perception and research of rapid transformations and adoptions. The accelerated decision about technologies could create errors in the data to be utilized in learning and development strategy and delays in effective AI implementation. AI requires processes redesigned to get advantages of automation along critical processes using chatbots. [9] [10] This part of AI implementation is the opportunity to make the participation of internal resources effective, especially those at the bottom line, to work on RPA coding and algorithmics. This can happen if a hybrid change process is allowed, which, under an effective and active sponsorship from the top, can remove the fear of technology from internal resources. The CEO’s role is to communicate technology’s scope and benefits with employees. As said earlier, a bottom-up approach with employees’ participation and decision-making power can lead to minor resistance and create a culture that, in addition to considering experimentation, can better align people and technology, leading to the successful implementation of a learning and development strategy.

Unlearning and Learning

The unlearning and training activities are a great way to learn through experience, and we experienced that “action learning” is the best way. Removing or, better, identifying what is not working anymore, with an effective reality check, allows new learning with experimentation.

Action Learning “learning by doing” involves actively engaging with real-world challenges and reflecting upon them to gain new knowledge and insights. [11] [12] When combined, people can effectively draw from experience to address complex problems and reflect if they are applicable. [13] [14] [15] They benefit from supportive peers who offer new perspectives to explore emerging issues through novel inquiries and probes. 

I present a view of the approaches with and without AI and Chatbots:

AI and Chatbots:

AI-powered Decision Support System (DSS) effectively supports unlearning outside real-life decision-making scenarios. We can design specifically to learn how to provide a safe space for employees to unlearn old habits and learn new ones. 

Unlearning Process (With AI and Chatbots). The same approach is used with DSS, only different in the use of technology.

Without AI and Chatbots:

Scenario Planning and Future-back Thinking. It involves envisioning possible futures and working backwards to let trainees use their skills to identify the skills, knowledge, and behaviors needed in those scenarios. 

Negative Learning. It is a powerful tool to challenge pre-existing beliefs and assumptions, facilitating unlearning and opening the door to new learning. This is particularly effective in extreme cases where existing behaviors or mindsets may harm existing or future leaders, particularly in negative situations.

In Conclusion

AI will transform and enhance decision-making and organizational processes. These transformations will bring extensive benefits to companies. Companies that use this AI have a higher competitive advantage when compared to companies that only focus on one of the two aspects of machines and humans. The change in the approach of CEOs as well as structural and cultural changes will become a basis for developing an effective implementation learning and development strategy to better respond to new learning needs. This AI-powered learning and development strategy, relying on data analysis and AI and digital technology, has a high potential to respond effectively to the emerging learning needs of today’s evolving business environment.

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About the Author

Mostafa SayydiMostafa Sayyadi works with senior business leaders to effectively develop innovation in companies and helps companies—from start-ups to the Fortune 100—succeed by improving the effectiveness of their leaders. 

References

  1. Davenport, T., Guha, A., Grewal, D. et al. How artificial intelligence will change the future of marketing. J. of the Acad. Mark. Sci. 48, 24–42 (2020). https://doi.org/10.1007/s11747-019-00696-0
  2. Niemi, H., Pea, R.D., Lu, Y. (2023). Introduction to AI in Learning: Designing the Future. In: Niemi, H., Pea, R.D., Lu, Y. (eds) AI in Learning: Designing the Future. Springer, Cham. https://doi.org/10.1007/978-3-031-09687-7_1
  3. Mirbabaie, M., Brünker, F., Möllmann Frick, N.R.J. et al. The rise of artificial intelligence – understanding the AI identity threat at the workplace. Electron Markets 32, 73–99 (2022). https://doi.org/10.1007/s12525-021-00496-x
  4. Enholm, I.M., Papagiannidis, E., Mikalef, P. et al. Artificial Intelligence and Business Value: a Literature Review. Inf Syst Front 24, 1709–1734 (2022). https://doi.org/10.1007/s10796-021-10186-w
  5. Huang, L., Peissl, W. (2023). Artificial Intelligence—A New Knowledge and Decision-Making Paradigm?. In: Hennen, L., Hahn, J., Ladikas, M., Lindner, R., Peissl, W., van Est, R. (eds) Technology Assessment in a Globalized World. Springer, Cham. https://doi.org/10.1007/978-3-031-10617-0_9
  6. Zhao, J., Gómez Fariñas, B. Artificial Intelligence and Sustainable Decisions. Eur Bus Org Law Rev 24, 1–39 (2023). https://doi.org/10.1007/s40804-022-00262-2
  7. Huang, MH., Rust, R.T. A strategic framework for artificial intelligence in marketing. J. of the Acad. Mark. Sci. 49, 30–50 (2021). https://doi.org/10.1007/s11747-020-00749-9
  8. Ng, D.T.K., Leung, J.K.L., Su, J. et al. Teachers’ AI digital competencies and twenty-first century skills in the post-pandemic world. Education Tech Research Dev 71, 137–161 (2023). https://doi.org/10.1007/s11423-023-10203-6
  9. Herm, LV., Janiesch, C., Helm, A. et al. A framework for implementing robotic process automation projects. Inf Syst E-Bus Manage 21, 1–35 (2023). https://doi.org/10.1007/s10257-022-00553-8
  10. Adam, M., Wessel, M. & Benlian, A. AI-based chatbots in customer service and their effects on user compliance. Electron Markets 31, 427–445 (2021). https://doi.org/10.1007/s12525-020-00414-7
  11. Bernert, P., Wanner, M., Fischer, N. et al. Design principles for advancing higher education sustainability learning through transformative research. Environ Dev Sustain (2022). https://doi.org/10.1007/s10668-022-02801-w
  12. Goolsby, J.B., Cravens, A.E. & Rozance, M.A. Becoming an Actionable Scientist: Challenges, Competency, and the Development of Expertise. Environmental Management 72, 1128–1145 (2023). https://doi.org/10.1007/s00267-023-01863-4
  13. Schoonenboom, J., Johnson, R.B. How to Construct a Mixed Methods Research Design. Köln Z Soziol 69 (Suppl 2), 107–131 (2017). https://doi.org/10.1007/s11577-017-0454-1
  14. Morrison-Smith, S., Ruiz, J. Challenges and barriers in virtual teams: a literature review. SN Appl. Sci. 2, 1096 (2020). https://doi.org/10.1007/s42452-020-2801-5
  15. Duchek, S. Organizational resilience: a capability-based conceptualization. Bus Res 13, 215–246 (2020). https://doi.org/10.1007/s40685-019-0085-7

Develop Social Capital to Effectively Enter the Age of Corporate Social Justice

By Mostafa Sayyadi and Michael J. Provitera

A few months ago, alarming news of Russia’s invasion of Ukraine spread through official news agencies. Many people across the globe were watching this great crisis with concern for their future. This crisis may be a terrible spark for much bigger crises such as hunger and war over available resources. The dread of an imminent nuclear war may satisfy a small population. The last resort is unwelcomed by any means. Without social justice, these hungry and frustrated people may never be able to cope. They do not have an airplane to board, nor hope to even hang on to its wheels. An example of what happened to desperate Afghans fleeing the situation is a statement that appears in the minds of many. Without social justice, perhaps the world is getting closer to realizing this dream.

At the organizational level, how important is social capital to social justice? Social justice is the apropos word today with the way the world is attempting to take care of the poor and keep people safe, happy, and secure. [1] [2] [3] Agility is a key component of business success in today’s hypercompetitive world. [4] [5] [6] To achieve a high level of agility, organizations need to create a high level of social capital to support social justice. Our article emphasizes the address of this issue to show how organizations can achieve a new order that is necessary for innovation and survival. We need a new form of social capital-based organizational structure that supports social justice.

Organizations today must strive to be agile. [7] [8] [9] The sad reality is that as organizations grow in their business environment, they move away from helping the society, because their main incentive is, in general, to prosper, and, in other cases, they place their focus on survival. Survival sometimes brings inertia and less agility. Innovative and creative ideas in this bureaucratic environment are quickly suppressed and efforts of the organization are focused only on achieving a high level of efficiency. A handful of companies like Apple are still focused on the original idea of helping society through technological breakthroughs. Social capital manifests itself in the form of trust, interaction, and the sharing of ideas and concerns of not only the people in the organization but also the community at large. [10] [11] [12] [13] Social capital can play a very important role in achieving agility and reducing the gap between external changes and the proper response to these changes. Building a social capital-based organizational structure that strengthens trust and interaction between organizational members should become the task of innovative and transformational leaders in today’s business environment.

To support efforts leading to social justice, social capital-based organizational structures factor into this complex equation by designing the power of trust and interaction between human resources and society. This type of organizational design increases the exchange of ideas among employees and leads to the growth of knowledge flow and causes the realization of the learning organization. Some organizations must redesign the organizational processes and events to maximize the interaction of human resources from all parts of the organization to achieve a systemic approach among them to volunteer, give, and offer support to the communities that they serve.  The organization becomes more compatible with its business environment, through more effective, timelier, and more innovative responses to the external changes in society.

Redesigning organizational processes and events to further align volunteer and donation ideas, other resources, and key individuals to lead the cause to meet the needs of social justice, the transformation of human capital into social capital is necessary. Through the more effective sharing and application of organizational knowledge, social capital can be enhanced and utilized today more than ever. Human capital is a vital and necessary factor in achieving agility and reducing the gap between changes and the response time to them, it is social capital that uses this human capital and ultimately leads to agility. The analogy between human capital and social capital is what we call power and politics in organizational behavior which is an interesting perspective of management. Power is the same as human capital and politics to use the right sources of power to enhance social capital coupled with social justice. Referent power is the true power of reaching the masses and potentially helping solve some of the problems of social justice.

In closing, while many organizations do not suffer from a lack of ideas (human capital), they do not have effective mechanisms for sharing these ideas and using them (social capital). Most importantly, without an adequate amount of human and social capital, social justice is hard to manifest, and the society goes unnoticed and is left to fend for itself. Thus, the social capital-based organizational structure is the missing link for realizing the potential of improving social justice and turning human capital into social capital.

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About the Authors

Mostafa SayydiMostafa Sayyadi works with senior business leaders to effectively develop innovation in companies and helps companies—from start-ups to the Fortune 100—succeed by improving the effectiveness of their leaders. 

Michael ProviteraMichael J. Provitera is a senior faculty professor of Management and Leadership, in the Andreas School of Business at Barry University, Miami, Florida, USA . He is an author of Level Up Leadership: Engaging Leaders for Success, published by Business Expert Press.

References 

  1. Vehar, J. (2013). Creativity and Innovation: What Is the Difference?. In: Carayannis, E.G. (eds) Encyclopedia of Creativity, Invention, Innovation and Entrepreneurship. Springer, New York, NY. https://doi.org/10.1007/978-1-4614-3858-8_10
  2. Serrat, O. (2017). Harnessing Creativity and Innovation in the Workplace. In: Knowledge Solutions. Springer, Singapore. https://doi.org/10.1007/978-981-10-0983-9_102
  3. Bonanno, G., Ferrando, A. & Rossi, S.P.S. Do innovation and financial constraints affect the profit efficiency of European enterprises?. Eurasian Bus Rev 13, 57–86 (2023). https://doi.org/10.1007/s40821-022-00226-z
  4. Simons, T., Gupta, A. & Buchanan, M. Innovation in R&D: Using design thinking to develop new models of inventiveness, productivity and collaboration. J Commer Biotechnol 17, 301–307 (2011). https://doi.org/10.1057/jcb.2011.25
  5. Durst, S., Edvardsson, I.R. (2013). Knowledge Creation and Entrepreneurship. In: Carayannis, E.G. (eds) Encyclopedia of Creativity, Invention, Innovation and Entrepreneurship. Springer, New York, NY. https://doi.org/10.1007/978-1-4614-3858-8_490
  6. Kim, K.H., Pierce, R.A. (2013). Adaptive Creativity and Innovative Creativity. In: Carayannis, E.G. (eds) Encyclopedia of Creativity, Invention, Innovation and Entrepreneurship. Springer, New York, NY. https://doi.org/10.1007/978-1-4614-3858-8_21
  7. Nakao, B.H.T., de Andrade Guerra, J.B.O.S. (2021). Creativity, Innovation, and Sustainable Development. In: Leal Filho, W., Azul, A.M., Brandli, L., Lange Salvia, A., Wall, T. (eds) Decent Work and Economic Growth. Encyclopedia of the UN Sustainable Development Goals. Springer, Cham. https://doi.org/10.1007/978-3-319-95867-5_55
  8. Kabir, M.N. (2019). Innovation. In: Knowledge-Based Social Entrepreneurship. Palgrave Studies in Democracy, Innovation, and Entrepreneurship for Growth. Palgrave Macmillan, New York. https://doi.org/10.1057/978-1-137-34809-8_6
  9. Chemma, N. Disruptive innovation in a dynamic environment: a winning strategy? An illustration through the analysis of the yoghurt industry in Algeria. J Innov Entrep 10, 34 (2021). https://doi.org/10.1186/s13731-021-00150-y
  10. Rösel, A. (2016). Are We Ready for Disruptive Improvement?. In: Kuhrmann, M., Münch, J., Richardson, I., Rausch, A., Zhang, H. (eds) Managing Software Process Evolution. Springer, Cham. https://doi.org/10.1007/978-3-319-31545-4_5
  11. Chiffi, D., Moroni, S. & Zanetti, L. Types of Technological Innovation in the Face of Uncertainty. Philos. Technol. 35, 94 (2022). https://doi.org/10.1007/s13347-022-00587-3
  12. Jönsson, B. Disruptive innovation and EU health policy. Eur J Health Econ 18, 269–272 (2017). https://doi.org/10.1007/s10198-016-0840-z
  13. Gallanis, T. (2020). An Introduction to Design Thinking and an Application to the Challenges of Frail, Older Adults. In: Celi, L., Majumder, M., Ordóñez, P., Osorio, J., Paik, K., Somai, M. (eds) Leveraging Data Science for Global Health. Springer, Cham. https://doi.org/10.1007/978-3-030-47994-7_2
  14. You, X. Applying design thinking for business model innovation. J Innov Entrep 11, 59 (2022). https://doi.org/10.1186/s13731-022-00251-2
  15. Thienen, J.v., Noweski, C., Meinel, C., Rauth, I. (2011). The Co-evolution of Theory and Practice in Design Thinking – or – “Mind the Oddness Trap!”. In: Meinel, C., Leifer, L., Plattner, H. (eds) Design Thinking. Understanding Innovation. Springer, Berlin, Heidelberg. https://doi.org/10.1007/978-3-642-13757-0_5

Fan Power: Unlocking Revenue Potential in Professional Sports

By Tianyi Zhang

Professional sports teams operate in a highly competitive and performance-demanding industry, where success is measured by both a team’s on-field performance and their off-field financial performance. In recent years, the sports world has increasingly focused on the influence of fan engagement on driving the economic success of sports teams. Highly engaged fans contribute to the exciting atmosphere during games and play a pivotal role in helping teams sustain and generate revenue through various streams. 

Analysis of Sports Fan Engagement and Economic Performance

Sports fan engagement
Money flow in professional sports

Professional sports teams rely on several revenue streams to support their businesses including media rights, ticket sales, and sponsorships, with the significance of each largely depending on the sport, team size, and market.

However, the recurring theme is that ticket sales and media rights take up the largest percentage of the revenue pie for the vast majority of leagues and sports teams. Since fans are the basis for generating revenue, it is not surprising that traditional forms of revenue generation such as ticket sales and media platforms allow for substantial financial returns, making them a primary focus for teams seeking to maximize their revenue potential.

The Relationship between Fan Engagement and Ticketing Revenue 

The relationship between fan engagement and ticketing revenue in sports is influenced by various factors, including price elasticity, ticket demand, and fan spending. In sports, price elasticity determines how sensitive fans are to price changes and how their behavior is affected by those changes. 

demand
Difference between elastic and inelastic demand.

When the demand is inelastic for tickets such as NBA courtside seats, consumers are less sensitive to changes in price. This means that for inelastic demand, total revenue increases when price is increased and vice versa. When the demand is elastic for tickets, such as nosebleed seats in a low stakes game, consumers are more sensitive to changes in price. 

Since the relationship between price elasticity of demand and total revenue is complex and very difficult to determine, the most reliable strategy for sports teams to increase their revenue is to increase fan engagement to reduce price sensitivity, thereby increasing the demand for their tickets, merchandise, or other sources of revenue.

According to the Deloitte, self-described fanatics spend six times more than self-described casual fans annually. Fans who exhibit a deep and passionate commitment to a team or sport are more willing to invest in tickets, merchandise, and other related expenditures like quality breakaway banners. Deloitte also found that season ticket holders spend five times more annually compared to non-season ticket holders. Season ticket holders also demonstrate a higher level of commitment and loyalty to their favorite teams, leading to increased spending on tickets and other associated expenses throughout the season. Moreover, fanatics are about seven times more likely than casual fans to have a high engagement level. Highly engaged fans, even with similar income levels to casual fans, are more likely to spend more and have a greater impact on the revenue streams of sports organizations.

Fan Engagement in Action: WNBA “IsoFan” 

“IsoFan” is a unique challenge faced by the Women’s National Basketball Association (WNBA). “IsoFans” are fans who attend games alone and do not have anyone to share their fandom with. A study conducted during the 2019 season surveyed approximately 700 WNBA fans, revealing that up to 28% of respondents identified as IsoFans, meaning that they lacked connections to other fans of the league.

However, the study challenges the assumption that fandom is social and highlights the significance of creating positive experiences for IsoFans. The research suggests that normal fans are more likely to have a higher level of identification with their favorite team, making them more likely to become fanatics.

Currently, WNBA teams are looking to cater towards IsoFans to improve their engagement, elevate their fan experience, and reach the objective of increasing total revenue. Methods to accomplish this include identifying IsoFans at the time of ticket purchase or through fan surveys and creating targeted experiences for them. For example, virtual platforms such as social media spaces can be used to connect geographically dispersed IsoFans.

Value of Media Rights and Impact on Sports Teams

Media rights play a pivotal role in the economic performance of teams and represent a significant portion of their revenue. These rights include broadcasting, streaming, and distribution agreements, which allow teams to showcase their games and events to a wider audience. 

The value of media rights is typically impacted by the popularity and demand for the particular sport and league, as well as the size of the fan base. Additionally, the team success, level of talent, and likability of a sports team can also contribute to the value of media rights. To increase the value of their media rights, sports teams can employ various strategies, including increasing fan engagement by expanding global reach and therefore viewership. 

“Drive to Survive,” a popular Netflix series about Formula 1, has been influential in increasing fan engagement in the league across broadcasting platforms. For example, the debut week of Season 5 attracted nearly 570,000 viewers, a 40% jump from the Season 4 debut. When factoring in viewers catching up on past seasons, the total viewership exceeded 643,000 viewers. The series is credited with boosting live race viewership on ABC and ESPN, leading to increased sponsorship revenue. A poll conducted among U.S. Formula 1 fans revealed that 53% of respondents attributed their viewership of F1 races to the influence of “Drive to Survive”, which is an unbelievably high percentage.

The increase in U.S. fan growth since the debut of the Netflix series indicates a positive trend. Moreover, the addition of new races, such as the Miami and Las Vegas Grand Prix, further enhances the potential for growth in race viewership. Experts anticipate another ratings growth spurt of 15-20% because of the success of “Drive to Survive” and the subsequent increased presence of Formula 1 in the United States.

Success Stories in Maximizing Fan Engagement

1. Ajax Melted Trophy

Football team Ajax melted down their championship trophy into 42,000 stars and distributed a piece to each season ticket holder. Not only did this unique strategy capture fans’ attention, but it also earned prestigious recognition through winning the grand prix and sports category at The Drum Awards in 2021.  

Other teams can take inspiration from Ajax’s success and replicate their approach by offering customizable, unique, and sentimental items to their most loyal fans. This establishes a deep connection with the fans, recognizes and rewards their loyalty, and creates emotional ties with the team. Tactics like this make the price elasticity of demand more inelastic, meaning that an increase in price will lead to an increase in revenue. 

Lastly, participating in industry awards and recognition can bring visibility and prestige to fan engagement initiatives, as well as drive overall brand awareness among existing and new audiences. By submitting these initiatives for consideration, sports teams can gain positive publicity and enhance their reputation. 

2. The Fan Loyalty Rewards Program

One strategy that comes from outside of sports is the Fan Loyalty Rewards Program: a unique fan engagement strategy that aims to incentivize and reward fan’s loyalty with the end goal of generating a significant impact for sports teams. 

Much like customers of an airline or restaurant, fans can earn points for various activities such as attending games, purchasing merchandise, engaging with the team’s social media content, participating in fan contests, and referring new fans to join the program. These points could be redeemed for exclusive rewards, including VIP experiences, meet-and-greets with players, merchandise discounts, and priority access to tickets.

While loyalty reward programs are quite widespread, the unique concept of dynamic valuation of points in these programs has rarely been considered. For instance, teams can offer more points to drive fan behavior at unpopular game times, similar to how teams dynamically price their tickets. This can provide meaningful incentives for fans to attend and engage with the team during low-stakes games. 

The Fan Loyalty Rewards Program is supported by previous research that demonstrates the positive impact of loyalty programs on fan engagement and revenue generation. It leverages gamification to motivate fans to actively participate and earn points, resulting in heightened fan enthusiasm, word-of-mouth promotion, a sense of exclusivity that drives fan loyalty, and a more inelastic demand curve. Loyalty programs can also tap into the trend of personalized experiences and customized offers by tailoring awards to individual fans, enhancing their satisfaction and emotional connection with the team.

Future of Fan Engagement in Sports

The NHL has implemented an AI platform called Greenfly, which streamlines the process of sharing digital media content across various social media channels. This platform allows teams and players to quickly and easily access and distribute personalized content, such as photos and videos, to engage with fans on social media. With AI algorithms that automatically tag and categorize media assets, teams and players can quickly find and share relevant content, providing fans with more frequent and timely updates.

  1. By using AI-driven data analytics, the NHL can gain insights into fan preferences and behavior, allowing them to tailor content recommendations and engagement initiatives to individual fans’ interests. Fans are now more encouraged to create and share their own content, which can be curated and amplified by the league and teams through the Greenfly platform. The use of tools like AI to increase fan engagement will quickly become widespread, benefitting teams and leagues all around the world.

All the photos in the article are provided by the company(s) mentioned in the article and are used with permission. 

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References

  1. Bain. “How Investment Is Changing Sports,” July 22, 2021. https://www.bain.com/insights/how-investment-is-changing-sports/.
  2. Deloitte United States. “A Game Plan for Enhancing Fan Engagement,” n.d. https://www2.deloitte.com/us/en/pages/consumer-business/articles/sports-loyalty-scoreboard.html.
  3. Sports Business Journal. “Solving the Mystery of the WNBA ‘IsoFan,’” July 27, 2023. https://www.sportsbusinessjournal.com/SB-Blogs/OpEds/2023/07/27-isard-katz-melton-agha.aspx.
  4. ———. “F1’s ‘Drive to Survive’ Effect: Inside the Show’s Ratings and Its Impact on Race Viewership.” The Athletic, September 5, 2023. https://theathletic.com/4402239/2023/04/13/f1-formula-one-drive-to-survive-ratings/.
  5. ———. “5 of the Best Sports Campaigns That Won in 2021, Including Ajax and AB InBev.” The Drum, December 27, 2021. https://www.thedrum.com/news/2021/12/27/5-the-best-sports-campaigns-won-2021-including-ajax-and-ab-inbev.
  6. ———. “The NHL Leads with AI to Power Digital Media Access.” Greenfly, November 17, 2023. https://www.greenfly.com/resources-category/customer-showcase/nhl-ai-power-digital-media-access/.
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