Optimizing Human Potential:
How Next-Gen Companies Outperform Their Competition
Much has been written about the war for talent – the direct link between density of top performers and superior corporate performance. This battle still plays out on the major corporate campuses and in the recruitment fairs of top schools. But, more recently, this has been accompanied by a somewhat different battle: the war on talent.
Globally, 87 percent of employees feel emotionally disconnected from their work.
Simply amassing talent isn't a strategy for success. Even companies with dense talent are increasingly hobbled by workflows and processes that were designed to optimize mechanical labor, not human creativity and ingenuity. According to the Leading-Edge Forum, “We have sleepwalked into the 21st century with 20th-century business models, organization structures, talent, strategies, leadership styles and infrastructures.”
The war on talent has tragic consequences.
This doesn’t simply manifest itself in lower productivity — it can be debilitating for workers themselves. Reports indicate that up to 60 percent of all workers suffer from mental illness related to work, which costs the global economy $1 trillion a year. And it has disastrous implications for company longevity and survival. According to a recent study, the average lifespan of a company has shrunk to 20 years, down from 60 in the 1950s.
As this conversation gains volume, so does the conversation around AI and automation. While couched in human-friendly language around freeing people to do more valuable work, history has shown automation is typically a strategy to minimize or eliminate human capital in the pursuit of standardization, predictability and efficiency.
However, we see a trend moving in the opposite direction: the maximization of humanity and human potential.
This strategy is led by Next-Generation businesses, who aren’t bound by industrial-era mental models, and instead optimize around creativity, flexibility and speed.
It’s often difficult to spot the differences, as the language most companies use is identical. Everyone says they align people around mission rather than process. It’s on-trend to value autonomy and initiative over hierarchy and responsibility. But look deeper, and the practices in legacy companies are very different from those in Next-Gen businesses.
It starts with differing mindsets around change.
Next-Generation companies are in a constant state of evolution. They know that keeping pace with culture is essential, and because they're often engaged in Category Creation, speed is a given.
Legacy companies see change as something that must be overcome in order to get back to a point of stability, from where they can execute a plan. As a result, "change" for them is about digital or large-scale transformation. A big leap that gets them back in the game. Yet this is exactly why these initiatives fail: because they're too big and unwieldy to implement.
Next-Generation businesses understand that progress is made through small change, continually applied. They don’t try to tackle more than can be done, but are very careful to make sure initiatives will actually land before moving onto something new. This emphasis on getting things done also shapes how they approach teamwork.
Legacy companies use cross-functional collaboration as a default; Next-Gen companies prefer small, focused teams with clearly defined responsibilities. Next-Gen teams collaborate only when necessary and prize action and initiative over inclusion. This also shapes how an individual’s time is spent, with Next-Gen workers putting the majority of their time toward creating, building, discovering and testing. Legacy workers, by contrast, spend the majority of their time aligning, planning, and executing — and they execute far less frequently, and often much more slowly.
Next-Generation companies run further and faster.
The cumulative impact of these differences is that the gap between Next-Generation companies and their legacy competitors gets wider and wider over time. In many cases, the gulf between them becomes impossible for legacy companies to overcome.