MBA Research

Action Briefs

We learn a lot from the business community and want to share that with you in our Action Briefs that highlight business trends and their impact on the workplace and curriculum.

Have you ever thought: “If I just didn’t have to spend so much time on (insert dull, routine tasks here), I’d have time to really excel at my job”? Soon, many of those mundane activities will become automated. Automation saves time, effort, and money. The ability to automate tasks and processes is increasingly important to businesses’ efficiency and competitiveness. Plus, with advances in technology, it’s becoming much easier to do so.

What does automation look like?

The level of automation varies, depending on technology and the complexity of the tasks. It could be as simple as setting automatic replies to emails, or as complex as programming robotic process automation software to analyze data. About half of the activities that workers do today have the potential to be automated. Current technologies are best suited for routine tasks that require little creativity or higher level thinking. These include physical labor, data processing, and data collection.

Who does it affect?

The first fully-automated businesses have emerged—businesses that have no human employees at all. Read more about these businesses here: While this isn’t possible for most companies, automation has affected or will affect most occupations and industries. Financial services, customer service, manufacturing, and health care will be particularly impacted. Employees at all levels, even at the highest levels, will see their jobs change due to automation.

In a recent focus group with executives from the financial industry in Kentucky, a debate broke out about the future of bank tellers. Some in the group felt the job would become fully automated; others saw an even more important role for tellers beyond automation. The Wall Street Journal frames the issue by identifying a trend in which some bank tellers are getting raises as they deal with higher level consumer issues. OceanFirst now has a “certified digital banker” course to help tellers become more comfortable with automation and prepare themselves to help customers address increasingly complex financial issues.

The idea that jobs will be replaced by automation has sparked fear. It is true that 15% of the global workforce could be displaced by 2030 due to automation. However, only about 5% of occupations could be fully automated with current technology. It is much more likely that certain tasks will become automated, freeing up workers’ time to be more creative and strategic. Less than half of all companies expect to decrease their workforces due to automation in the next five years. Furthermore, many new jobs and industries will be created, leading to labor demand growth of 21–33% of the workforce. The growth will presumably offset any jobs lost. Around 3% of the workforce will need to change their occupations by 2030 to fill the opportunities created by automation.

Benefits of automation

  • Improved efficiency
  • Reduction of errors
  • Better understanding and use of data
  • Reduced costs
  • Ability to focus on higher level tasks, creativity, and innovation

Challenges to implementing automation

  • Mastering the technology
  • Retraining workforce
  • Cost
  • Integration with existing processes and systems
  • Resistance to change

What should businesses do to prepare?

  • Fully understand the processes that are being automated
  • Involve everyone who will be affected
  • Plan ahead
  • Focus on biggest opportunities for ROI
  • Consider security risks
  • Stay dynamic and promote growth
  • Invest in education, learning, and retraining employees
  • Develop employees’ higher cognitive skills, social and emotional intelligence, and technological abilities

For more:

Classroom Implications

Students should understand the ways that jobs are going to change with widespread automation. This will help them focus on developing the skills that will become even more important in the workforce. These include creativity, interpersonal communication, emotional intelligence, and strategic thinking—as well as the technological skills to work with automation.

Links for further learning:

Action Brief Update

Rusty Poeppelmeier, A Bond Manager with Liberty Mutual Surety in Cincinnati, Ohio shared these comments in relation to our last Action Brief on automation:

Do you have other thoughts, or questions for Rusty? Let us know—we’ll keep the conversation going!

Automation will continue to move into different areas of the economy.  It is important students understand it isn’t all bad.  Some areas of the economy have historical labor shortages that are ripe for the investment of more automation.  I have seen it move into areas such as a farming and customer service. 

There are other areas where automation may create significant cost savings that ultimately could be passed on to the consumer.  The more complex the task the longer it will take to implement but the payoffs could also be larger.  Picking fruit in a variety of conditions is going to be more challenging than painting the same object over and over again in a controlled environment.  

We also have a demographic issue with the baby boomers headed into retirement creating a labor shortage.  So there will likely be job opportunities in this area, as the need for this technology will increase during the coming years.  That said, there is a cost to implementing this technology and one of the items difficult to overcome is change.  It takes the average industry a long time to adapt and change partly due to the cost of development and implementation.  Sometimes implementation does not work out as planned.  Customer service being one example.  Some things are not quite ready for AI but with time and resources those challenges can be overcome. 

I think the biggest piece of advice I have would be don’t let the pursuit of automation or process efficiency undermine the success of whatever business you are in.  It is very easy to start down this path and compromise too much ultimately putting the business itself at risk.  Change is hard but blind change is deadly. 

A supposed great system with a dwindling customer base has the same probability of failure as a poorly managed business.  So don’t let the pursuit of automation or a “better” process cause you to lose sight of the business itself.  If it is truly a great idea, you won’t have to sell it.  People like to finish things and claim success but don’t be blind to the reality of the actual needs of your customers.  Remember, you need the customer, the customer doesn’t need you!

Have you heard the phrase “the Internet of Things” and wondered what exactly it meant? This term has grown increasingly popular in the last five years and is an important one to know. The Internet of Things (IoT) refers to the digitalization and connectivity of any item or device. Your smart phone and laptop aren’t the only things that can connect to the Internet anymore. Anything from your refrigerator to your lightbulbs can be enabled with internet access and controlled wirelessly. These types of devices have been around for several years now: smart watches, at-home security systems controlled via app, and virtual assistants such as Amazon Alexa and Siri are now in millions of homes.

However, the future of IoT goes way beyond what we see today, and that future is coming soon. According to a HubSpot report, there will be 31 billion IoT devices in the world by the year 2020—more than four for every person on earth. Clearly, Internet-enabled devices are here to stay, and the possibilities are endless. Businesses that can capitalize on this trend will be better prepared for a future where everything is connected. IoT is already impacting business in several key areas.

Product development. Almost any business has the potential to add internet connectivity (and, therefore, interactivity) to its products. Appliances such washing machines and dryers, coffee machines, and cash registers are being programmed to sense and respond to the environment around them. Medical devices, factory equipment, and transportation are all areas that are delving into the realm of IoT as well. Businesses that are able to find creative ways to implement IoT into existing products will be a step ahead as consumers start to expect their devices to be “smart.” Technology from companies such as Arduino make it easy for anyone to add interactivity to existing products.

Production and inventory management. Manufacturing and inventory management are already incorporating IoT. For example, sensors on packaging automatically alert employees about changes in temperature, weight, condition, etc. Also, inventory tracking can be automated, which means that companies can more efficiently get products to consumers and keep track of shipments. Order fulfilment is another aspect of the IoT that will likely be prevalent in homes within the next couple of years. The Amazon Dash Button is a Wi-Fi-connected device that automatically reorders products such as soap, toilet paper, and plastic wrap with one press. As these devices become smarter, they will be able to automatically sense when a reorder is needed. Companies will need to have the ability to manage this type of instantaneous order fulfillment.

Data. Data generation is another aspect of IoT that has massive implications for business. Every device that is connected to the internet is constantly collecting data about usage and users. For example, if a washing machine can automatically sense that your family uses a load of detergent every two months, companies could use that to market detergents to you right as you run out, giving you a promotional discount right when you need it. This type of data increases the level of customizability of marketing campaigns and the ability to directly target customers. IoT will help companies get to know their customers better than ever.

Marketing. One example of IoT in marketing is in the retail space. Technology called “beacons” send notifications to shoppers based on their location. A shopper walking by a department store might receive a notification telling her/him that the store is having a 20% off sale this weekend. This can help improve sales and get customers through the doors.

Customer relationship management. The current state of customer relations is fairly passive—customers come to companies when they have a problem, and companies attempt to solve the issues. However, with the Internet of Things, companies will know when service is needed. They can reach out and solve the issue without customer involvement or action. This will build customers’ expectations that their needs will be fulfilled before they become aware of them.

Increased efficiency. The Internet of Things also offers companies improved internal efficiency in areas such as energy savings, employee effort, and productivity. Businesses can monitor processes and operations digitally, determining where productivity and costs can be made more efficient.

Need for employees. If the Internet of Things becomes as prevalent in the workplace as anticipated, most companies will likely see a need for fewer employees than they currently have. Many of the routine tasks completed by people will become automated. Meanwhile, employees who are skilled in IoT processes and knowledge will become more valuable.

Security concerns. The Internet of Things, with all of its benefits, also leaves us more vulnerable to hackers and malware. As the Internet of Things amasses more information about people and businesses, this information becomes vulnerable to hackers. It is important to consider the country (or countries) in which the product is made. Many supply chains are global, but regulations around technology are local. Products are often not made with security features in mind, which can save time and money. This past September, California enacted the United States’ first Internet of Things security law which mandates “reasonable” security features on “smart” devices.

Classroom Implications

Ask students what types of IoT devices they have in their homes. How have these devices changed the way they live, shop, or complete routine tasks? What IoT devices are used in school or in their workplaces? Use these questions to spark a discussion about the potential for new “smart” devices. Ask students to brainstorm products that they think could be effected by the Internet of Things within the next few years. Also, lead the class in a discussion about the ways that IoT can improve business operations and efficiency.

Links for further learning:

Many companies are struggling to sell material goods to customers—or even to attract their attention. Consumers have too much “stuff” already. The sheer amount of products (and advertisements) are hard to break through. It is difficult to reach customers through traditional media, especially when the product does not offer significant value. Customers can easily and cheaply obtain the material goods they need and want. Unless a company has the lowest price and the quickest delivery, they aren’t likely to be swayed based on the products alone.

So how do brands stand out? By providing a unique experience. Experiential marketing means immersing customers within the product and allowing them to form an emotional connection with the brand. It means selling more than a material item—instead, companies are offering memories.

Over 75% of millennials prefer to spend money on experiences rather than material things. But it’s not just millennials. In the past 10-15 years, consumer spending on cars and household goods has decreased, while spending on travel, recreation, and eating out has increased. Companies such as Airbnb have bloomed because of the desire to travel and experience the world.

Social media is a significant reason why experiences are so powerful. Studies show that consumers are much more likely to support brands that offer value—and they place a high value on unique, social media—worthy experiences. People seek ways to attract attention with aesthetically—pleasing snapshots of their lives. The desire to “keep up with the Joneses” hasn’t gone away. Instead of competing with neighbors’ cars and houses, though, consumers want to show that they are having the best time at the best places.

The companies that have excelled in this area have a unique combination of physical product, experience, and brand power. Consider Starbucks. When customers spend $5 on a cup of coffee, they are getting so much more: the warm, inviting atmosphere of the coffee shop, the iconic cup emblazoned with the logo, and the feeling they get when hundreds of people “like” the photos they post of their decadent drinks.

Steve Weaver, owner of The Candle Lab, who recently spoke to High School of Business educators and MBA Research staff, understands the value of marketing an experience rather than just a product. Steve knew that people wanted candles, but the market was saturated. He decided to do something that he hadn’t seen before—offer candle lovers the experience of making their own candles. Steve has achieved great success by giving people the opportunity to have an enjoyable night out—and take home a candle, too. To learn more about selling experiences and the future of marketing, join us at Conclave 2018 in Kansas City, MO, where Steve will be our closing keynote speaker.

FRANK (which stands for “frankly speaking”) is a new brand and concept of OCBC (Oversea—Chinese Banking Corporation) in Singapore. FRANK is geared toward providing members of Gen Y with positive banking experiences. The FRANK retail store is designed to provide fun and relaxing banking experiences for customers, including the option to design their own debit and credit cards. Customers who bring in three friends to open bank accounts win $50 worth of free Ben & Jerry’s ice cream. Thanks in part to tactics such as these, OCBC already owns 26% of the total youth market in Singapore.

What can companies do to provide more experienced-based interactions with customers?

  • Figure out what sets them apart
  • Use video to create experiential-value ads
  • Engage brand ambassadors (influencers)
  • Integrate existing products with experiences

Keep in mind that while it may take a number of positive experiences to build brand loyalty, it only takes one bad experience (in many instances) to lose a customer to a different brand.

Classroom Implications

Have students provide examples of experiences that they have bought into—and shared on social media. Ask them to share why they were motivated to spend money on the experience and whether they felt it was worth it.

Ask students to take an existing product and brainstorm ways that it could be combined with an experience to make it more valuable.

Learn more:—modern—marketers—guide—to—selling—experiences/—experiences/—and—the—business—of—selling—experiences——buy—experiences—not—products

The #MeToo movement is challenging social norms and making some companies pay attention to the real risks of sexual harassment and misconduct. The media have publicized the movement, helping it obtain attention and momentum. Their coverage has encouraged people to speak out about the way they have been treated. This highlights the rampant and unaddressed problems with workplace harassment.

Companies are increasing their harassment discussion and reporting. They are working to change their policies and codes of conduct to address these concerns. Required anti-harassment training is becoming more common, both at companies and from a legislative standpoint. Entrepreneurs are developing new businesses to facilitate better harassment reporting.

Unfortunately, some people believe that the movement’s impact has been minimal. This feeling is escalated by large companies protecting themselves financially and legally by settling or covering up harassment claims, thus leaving the perpetrators largely unscathed. A recent study found that only 18% of Americans have admitted to personally changing their behavior because of the movement.

Many female employees still feel powerless because things aren’t changing quickly—particularly in low-wage environments. Self-employed workers and employees in industries such as childcare, house cleaning, and food service feel that there is nothing they can do about harassment. Federal law only covers workplaces with 15 or more employees. Short statutes of limitations and caps on damages make women wonder whether the harassment-reporting process is worth it.

Others are struggling to clarify what constitutes assault and harassment. Some men feel uncertain when socializing with female coworkers, not knowing what is considered inappropriate.

Companies are also unclear as to what punishments should be for different types of misconduct. They recognize the need for well-defined antidiscrimination policies and procedures as well as for fostering a culture of civility and respect that helps to reduce harassment. Overall, the movement is still in its early stages with its full impact yet to be seen.

What employers can do going forward

  • Work with HR professionals to create or tighten up anti-harassment policies which include an established reporting protocol for potential violations
  • Provide regular, small group training for all employees about the policies which includes information for bystanders
  • Set a company culture and tone of mutual respect and civility with zero-tolerance of harassment/discrimination
  • Encourage employees to report violations and launch formal investigations when appropriate, according to policy
  • Find advocates for employees who can separate themselves from the interests of the company

Classroom Implications

A study by the American Association of University Women found that 85% of girls and 76% of boys at the middle and high school levels have experienced some sort of sexual harassment. Talking with students about the negative effects of harassment, and promoting values centered around civility in school can help students begin to mirror the behavior that will be expected in the workplace. Teachers can use real-life scenarios and examples to help students determine what is appropriate behavior. To further the conversation, students could create a campaign to stop harassment at their school.

Discuss with students the impact of social/political movements: do they make a difference? What are worthy causes for students to take up? What are responsible ways for them to use their collective power? What are potential negative consequences of social/political movements?

Discussion Questions:

  • Why do you think it is important to talk about sexual harassment?
  • What are the consequences of sexual harassment?
  • How do you think workplaces can try to stop harassment?
  • What have you heard about the #MeToo movement? How are people around you talking about it?
  • Do you think that movements such as the #MeToo movement can impact real change? Why or why not?
  • What do you think constitutes the need to have a social/political movement?

Links for more:

By: Kristen Auletto, Research Associate

In the summer of 2016, Pokémon Go became a global phenomenon by bringing the digital world and the “real world” together. This mobile app, which was downloaded over 500 million times, is a location-based augmented reality game. Users across the world walked around their neighborhoods, holding their phone cameras up to various buildings and landmarks. They were looking for digital creatures that would appear on the screen, superimposed over their real life surroundings, that they could “catch” with the swipe of a finger. Pokémon Go faded in popularity, but the game was one of the more prominent mainstream developments in the field of augmented reality and virtual reality. The popularity of this game signified that virtual and augmented reality were about to be the next significant trend in technology.

Many people are still trying to understand what virtual reality is, and how it is different from augmented reality. According to the Virtual Reality Society, virtual reality is “a three-dimensional, computer generated environment which can be explored and interacted with by a person.” People can become immersed in the virtual world and become a part of it. Virtual reality stimulates the mind to create the illusion of reality. A person dons a headset or goggles and is transported into a new world. On the other hand, augmented reality is a blending of virtual objects in the real world. Augmented reality superimposes images onto the real world rather than creating a whole new digital world. Augmented reality often takes advantage of smart device cameras to add digital objects or effects to an image of the real world. While both of these technologies are of interest to businesses, augmented reality is much more accessible and widespread than virtual reality at this time.

Both VR and AR technology are gaining heavy investment from tech companies such as Microsoft, Facebook, Google, HTC, Lenovo, and Samsung. The industry is currently worth approximately $19 billion and is predicted to grow between 34-40% by 2023. Virtual and augmented reality are slowly becoming accessible to the mainstream public, but the technology is still too expensive for widespread use. While costs are decreasing quickly, currently affordable technology provides a lower quality experience than do costlier options.

To combat this problem, companies are developing a wide range of VR and AR options. Lower cost options use smartphones, while thousand-dollar high-performance systems are generally not for personal use. Prices have been dropping in recent months as companies struggle to compete for market share, which indicates that these devices are likely to increase in popularity.

Virtual and augmented reality have endless potential to impact the business world. Some industries, such as medicine, aerospace/defense, engineering/manufacturing, entertainment, gaming, and tourism, are well-suited for VR and AR. However, all types of businesses can benefit from this technology. It can touch almost every aspect of business, from product development to customer service to HR to sales. Organizations such as Ford, UCLA, Airbus, Snapchat, Sotheby’s, Carnival Cruises, The North Face, Marriot, and The Line are already using virtual reality in many ways.

The retail and ecommerce space has great potential to reach customers in an impactful way using virtual and augmented reality. Retailers can give shoppers the option to “try before they buy” in a completely new way. Many home furnishing companies such as Ikea and Wayfair have augmented reality apps that allow people to virtually place furniture or decorations in their homes before making a purchase, for example. Clothing, accessory, and makeup retailers are creating ways to virtually sample their products, which presents a new way to promote products and interface with customers. AliBaba and eBay have both experimented with virtual department stores, in which customers can see displays and make purchases with a nod of the head. Retailers are also using VR/AR to bring customers into traditional brick-and-mortar stores. The North Face, for example, recently used a VR headset in-store to allow customers to experience a winter landscape as they shopped for cold-weather gear.

Virtual reality has vast potential in marketing. Marketers can test displays or ads before actually creating them. Product prototypes can be developed virtually rather than using costly physical materials. It is reported that Ford saved $8 million dollars by testing new car parts virtually. Advertisements can be immersive, three-dimensional experiences that truly make products come alive to customers. VR/AR helps to build the emotional connection that marketers seek. Products and promotions can be made interactive as a way to make them stand out among the competition. 19 Crimes Wine, for example, has exploded in popularity thanks to an augmented reality app that allows each bottle’s label to come to life. Snapchat has experienced success with sponsored “lenses” that brands such as Taco Bell and Universal Pictures have used to create an augmented reality experience. These types of marketing efforts have much higher engagement and return on investment than other digital campaigns.

In human resource management, the recruiting and training process could benefit greatly from VR/AR. Potential candidates can have the chance to complete job simulations and experience the work environment without the same level of risk. The hiring process is expensive, and virtual reality can help prevent job turnover by giving candidates a realistic understanding of what jobs will be like. Virtual training can prepare new employees for their jobs in a more realistic way.

Business communications could change as well. Employees and clients across the world can use technology to host virtual meetings, conferences, and work spaces, eliminating the need for expensive travel and creating a better experience than a traditional video call.

While reality technologies bring the potential for positive change to businesses, they also have several issues that could be problematic. The cost of virtual reality devices and software is simply too high for more businesses to invest heavily in it. On the plus side, investors are seeing the potential of this technology and are willing to contribute funds to make the technology more accessible. Companies that want to implement VR/AR need to prove the value, and there isn’t enough information available to do so. As businesses start to experience success with the technology, they will need to track metrics to show success.

Another potential downside is that virtual reality has the potential to eliminate jobs, or at the very least, to change the nature of many occupations. If virtual shopping takes off, for example, the brick-and-mortar retail industry could suffer even more than it already has. Interior designers might be made obsolete. The tourism industry could suffer a decline if people believe they can get a similar experience from wearing headsets while sitting on their couches. Engineers/product designers who are in the habit of using certain software programs and/or physical materials will need to learn new technological skills to design products using VR and AR. However, many analysts are confident in the potential for virtual reality and augmented reality to create jobs rather than to take them away. It is difficult to predict the types of jobs that will become available in the future, but those who have a good grasp on these technologies are likely to succeed.

Overall, the impact of virtual/augmented reality is still widely unpredictable, but the possibilities are promising. Businesses that are able to successfully be “early adopters” of this technology will likely set the precedent for the future. Product design and development, marketing and customer experience, HR functions, and ecommerce are the most likely to experience changes as this technology becomes more and more accessible.

Classroom Implications

Students should understand what exactly virtual reality and augmented reality are. They should test out an example, such as Pokémon Go or the IKEA place app, which are both able to be used for free on a smart device. Even Snapchat and Instagram include augmented reality features (Lenses) that students probably use on a daily basis without even realizing it. After experimenting with these tools, students should brainstorm ways that this technology can be used in different business functions. They might provide examples of augmented reality marketing campaigns that they have seen or witnessed already.

Students should also spend some time reviewing past technological revolutions and how they impacted different industries and business activities. Doing so can help them consider how great of an impact VR/AR can have on retail, marketing, HR, etc. They should understand the value of embracing new technologies rather than being resistant to them. Finally, students should understand how knowledge of VR/AR could help them become more employable in the future.

Links for further learning:

Example technology — Microsoft HoloLens:

The future of virtual reality in business:

How reality technology is used in business:

Examples of augmented reality campaigns:

If you were an educator in attendance at MBA Research’s Conclave 2017 in Vancouver, Washington, you may remember one of our business speakers, Rick Turoczy. Rick is the Cofounder of PIE (Portland Incubator Experiment). Rick also helped cofound Oregon Story Board, a company committed to mentoring, teaching and advocating for VR in education. Oregon Story Board is a great resource for use in learning more about innovation in VR education.

President Trump is widely known for his stance on deregulation. He has delivered on his promises to relieve businesses of rules that many feel restricted growth and interrupted productivity. Last month, he held a press conference to announce that he has negated or deferred more than 1,500 planned regulatory actions since he took office. February’s Action Brief looks at the effects of deregulation on business.

While the connection between regulations and the growth of business are heavily debated, what’s clear is the buoyancy with which businesses are moving forward in anticipation of continued deregulation. This confidence is being credited with increasing investments, a rallying stock market, more hiring, and a surge of spending, especially in the manufacturing sector that has resulted in new plants, equipment, and factory upgrades. In addition, energy companies have benefitted heavily from President Trumps reversal of environmental protections. Comcast announced that it would invest more than $50 billion in infrastructure leading up to 2022 based partly on the repeal of net neutrality rules.

As businesses are hiring more workers, they are increasing investments in technology to help make workers more efficient and to address worker shortages. Wendy’s is adding self-service kiosks at 1000 restaurants. While the move is expected to shift employment to other areas, it is also expected to increase efficiencies and help give younger customers an ordering experience with which they are comfortable.

 President Trump has relaxed rules related to job training and apprenticeship programs. Several studies show that regulatory costs are either no longer the top concern of executives or are rapidly losing ground to the bigger concern of labor shortages.

Not all executives and business owners are happy. Many small businesses, while generally favoring fewer rules, are concerned about “regulatory whiplash” based on rapid deregulation that can be costly and hard to keep up with. Many changes require research, legal intervention, and human resource efforts which not all small businesses have at their disposal.

While oil and gas executives generally welcome Trump’s deregulation efforts, there is caution among some in the industry that loosened regulations could result in a major disaster (such as BP’s oil spill in the Gulf in 2010) which could tarnish the industry’s reputation and ultimately result in even tighter regulations than what are currently in place.

The National Association of Home Builders and the National Association of Realtors were concerned with President Trumps reversal of a cut in annual insurance premiums on many new FHA mortgages. According to the National Association of Realtors, the move by President Trump will increase home buying costs for approximately 850,000 home buyers and nearly 40,000 potential home buyers will not be able to afford homes at all due to the increase.

Executives across the U.S. are keeping close tabs on further deregulatory action. Some executives are also considering potential consumer backlash to changes. Watching and listening to what is happening at the national political level is crucial for executives determining how changes will affect their business. Tracking legislation can be helpful but time consuming. State and national trade associations often track legislation and are a great source for seeing what may be ahead.

Classroom Implications

Helping students understand issues around regulation/deregulation is important This article will help them understand some of the basics and explore some examples of deregulation.

Give students real-world examples of regulatory requirements that may be relevant in their own lives. This article gives an in-depth example of how government and private business regulations affect one family’s apple growing business.

Have students think about how rules apply in their own lives. Have them identify an example of a rule in their family, school, or work that they would like to have removed. Ask them to identify pros and cons of removing the rule. Conversely, ask them to think of a rule or regulation they feel should be added, and have them list the potential effects.

Issues around government regulations can be divisive and polarizing. Often, it seems that people debating these issues are looking at them through the lens of their political party without thinking beyond those lines. It’s not unusual to see issues around government regulation being debated heavily and even argued about on national television. One of our readers, Rusty Poeppelmeier, a Bond Manager at Liberty Mutual Surety, has the following advice for students working to develop opinions about the regulatory environment (or other issues being hotly debated right now)

  • Listen first, judge later.
  • Take time to get to know information about the issues—don’t make decisions based on perceptions or “party” lines. Do your own research if needed.
  • Ask the other side to share their viewpoint—and then listen carefully and ask questions.
  • If you realize your stance is wrong, move to the other side and be a part of the solution.
  • Always search for compromise.
  • When standing alone on an island with the right position, stand awhile longer and explain your views.
  • And remember---winning isn’t everything.


What’s keeping employers up at night? Employee retention.  A more transient society plays into this but so does a struggle by employers to offer the pay and benefits necessary to keep employees with them long term. One study indicates that 69 percent of employees say searching for new jobs is a regular part of their routine. This month's Action Brief explores the changing landscape of employee loyalty and what businesses can do to decrease turnover of valued workers.

The unemployment rate, currently at just over 4 percent, is partially driving what is known right now as an “employees market.” The natural rate of unemployment is between 4.5 and 5 percent. Rates below that threshold make it increasingly difficult for businesses to retain enough workers to maintain ideal operational capacity. In addition, there is a mismatch between the skill sets employers need and those possessed by the unemployed population

Further complicating things for employers is the tendency of millennials and members of Generation Z to change jobs more frequently than their baby boomer counterparts. In 2016, a U.S. Bureau of Labor Statistics study showed that 18-35 year-olds in the workforce had an average tenure of 1.6 years on the job. The “gig” economy and the of lure entrepreneurial adventures are detracting even further from workforce stability. In addition, some urban areas experiencing high-business growth are also facing housing shortages and/or unaffordable housing prices for middle and lower class workers, making it difficult for potential employees to help fill jobs in those locales.

Even if businesses aren’t feeling the pinch in the recruiting and hiring stages, it's still important for them to evaluate their employee loyalty levels and retention plans. Why? Turnover can be expensive—some studies put the cost at 6-9 months of the employee’s salary—other studies estimate a higher cost. Turnover can also lower productivity levels, reduce employee morale, and jeopardize trade secrets.

Why aren’t workers more loyal? Studies show that workers who are changing jobs are doing so for a number of reasons including:

  • Lack of career advancement pathways
  • Underutilization of skill sets
  • Need for greater flexibility and better work-life balance
  • Unsatisfactory pay and benefits packages
  • Lack of engagement in the company and work efforts (A recent Gallup poll shows that 87% of employees are disengaged at work.)

Besides competitive compensation and traditional benefits, what will help employees want to stay? Businesses are working to find the right answer to this question. They are finding that employees want more generous benefits, such as:

  • Mentoring, training, professional development, and coaching
  • Student loan repayment assistance (PwC offers each of its employees $1,200 for this purpose.)
  • More lifestyle perks including childcare benefits, access to mental health services, and expanded leave options

Some employers are getting creative with benefits to help promote work/life balance. Salesforce provides employees with six days of paid volunteer time per year and $1,000 a year to donate to a charity of their choosing. Airbnb provides employees with an annual stipend of $2,000 to travel and stay in any Airbnb location worldwide. Netflix provides new parents with one paid year off and the option to return to work part-time. While these benefits would be challenging for some companies to provide, they can still appeal to potential and current employees with wellness programs, free snacks, flexible work hours, and relaxed working environments.

Employers are also discovering that workplace culture and employee engagement play a huge role in retention. Studies show that engaged employees are more productive, more customer-focused and can help companies be more profitable. How can employers promote engagement? Some of the top drivers in this area are:

  • Demonstrating ethical leadership skills and commitment to the success of the organization 
  • Being transparent to promote trusting relationships and rapport with employees
  • Making sure employees feel valued and that they understand they are the most important resources in the organization
  • Encouraging employees to problem solve and innovate
  • Offering employees professional growth and career development opportunities
  • Aligning organizational goals across all employees and rewarding them with profit sharing or gain sharing

Human resources professionals also recommend looking at the entire employment lifecycle when strategizing about how to retain top talent:

  • During the recruitment and selection stages, ensure that employee and employer are well matched. This lays the groundwork for a long relationship. This is an important time to make sure that employee and employer expectations and ideas about the job and company and candidate values are well understood.
  • The onboarding process helps set some of the early expectations for how employees will be treated and valued throughout their tenure. Having a strong training and orientation program, sends a message to new employees that they are important to the success of the organization.
  • Millennials and employees in general are asking for, and receiving, more regular feedback in the form of formal performance evaluations. Among other thingsthis feedback can allow both the employer and employee a chance to evaluate prospects for advancement. They use this opportunity to seek feedback from employees about the organization as well. It’s better to get this input during the employee lifecycle rather than during the exit stage.
  • Challenging and motivating employees throughout the employment lifecycle are key to making sure they stay engaged.
  • Employee recognition is a key component for ensuring an organizational climate that is positive, productive, and innovative.
  • When the exit stage is reached, employers need to take full advantage of what employees have to say about their work experiences in the organization and what types of things would have improved the experience.

Classroom Implications

Students can start to understand the concept of loyalty and engagement based on jobs, volunteer work, school clubs, or sports teams. Ask them to think about the factors that influence their participation (or lack of participation) in their current daily worlds. Have them think about whether engagement is an employer responsibility only, or if the employee plays a role as well.

Encourage students to identify their values as well as factors about work that are important to them and to share what benefits, besides pay, are important to them. Discuss ways that these issues and values can be talked about during the interview with employers.

Have students research companies to find out how they are addressing loyalty and retention issues.

Have students read this article about the natural rate of unemployment and discuss how unemployment rates can affect employee loyalty.       


One of our Action Brief Advisors, Rusty Poeppelmeier, a Bond Manager with Liberty Mutual Surety in Cincinnati, Ohio responded to our January Action Brief with the following comments:

Each generation has differences that create challenges and opportunities. People leave jobs for a lot of reasons and students should learn more about those trends. The interesting part is that most studies vary in what are considered the top three reasons that employees leave jobs. This is partly because they change over time and each generation is different. But the reasons generally revolve around topics related to empowerment, engagement, and recognition. Students should read and understand the different answers and understand they can and will change over time.

Students should spend time learning the history of employee rights and what drove the need for change. The landmark acts such as the social security act of 1935, Fair labor standards act of 1938, Civil rights act of 1964, OSHA act of 1970, the ADA of 1991 and others are good to study for context. What events led to the formation of unions would be another. Students might be surprised to learn that there were times in recent history when employee safety was not the highest priority. What might seem trivial or automatically expected by one generation was not to another. Employees fought to get those benefits and some retired never seeing them. Students should study how each generation was shaped and why it led to these differences. All too often I hear people talk about how this group or that group had it easier or harder. The reality is each group grew up in different times with a different set of variables. The newer generations will deal with issues the previous generations never faced. Some have never seen a world war while others saw two. One generation never had a computer while another rarely used a piece of paper or signed by “blue” pen. Others were somewhere in the middle.

Students should learn about the history and differences so they can broaden their perspective and understanding. This is important because some day they will be the leaders and will have to address retention issues with the generations that follow. Students who have a broader mindset and openness to change will be more successful in retaining and empowering employees. They will look for ways to engage, empower, and recognize employees, which will lead to better retention over time. It will give them a competitive edge in acquiring and attracting talent in the labor force. 

The world of work continues to evolve rapidly, making the need for innovation a top priority. Every business wants to remain relevant in the face of Increasing competition, globalization, changing consumer expectations, and evolving technologies which are all drivers of innovation. Many companies are innovating on some level while others are struggling to innovate at all. This month's Action Brief explores innovation and how businesses are managing it within their current structures or changing to make their working environments more conducive to innovation at all levels.

Workplace Implications

Why aren’t all companies innovating? Some companies are risk averse, while others feel they have a corner on the market and don’t need to change. Still others see change coming and don’t do anything about it. Blockbuster openly admits they knew they needed to innovate and didn’t. And, then along came Netflix.

Determining what constitutes an innovation is a first step in beginning to foster a successful program. Some companies start by looking in the rearview mirror to identify ideas that produced margin and revenue gains in the past. They then use those learnings as a framework for developing a working definition. For something to be counted as innovative at Whirlpool, for example, the product or service must be unique, create a competitive advantage, potentially yield further innovations, and provide greater value for the customer than anything else on the market. What an innovation is varies by company.

Different forms of innovation can add to the challenges around definition. These are generally agreed upon as:

  • Product—think Fitbit, kindle, iPhone—or improvements to current products
  • Process—think supply chain or business operations improvements
  • Business model innovation—perhaps the most challenging, risky and disruptive--alas AirBnB and Uber

How do companies make innovation a priority? Initiatives need to start from the top down and should involve everyone in the company including customers and partners. The company culture should reflect an agenda that includes innovation as a priority. Many companies that are serious about innovation are using a phase-gate (or stage-gate) project management technique to manage new initiatives. The method is metric based with standardized scores applied at “gates” between each phase to determine if the project is ready to move to the next level. Other ways companies are fostering innovation include:

  • Developing and prioritizing structured innovation programs
  • Listening to stakeholders inside and out of the organization
  • Staying open to new ideas
  • Sponsoring innovation “boot camps” for employees
  • Collaborating—with employees, partners, and outside groups
  • Creating collaboration spaces for brainstorming and growing new ideas
  • Giving employees permission to innovate—and permission to fail
  • Flattening management structures to decrease long approval processes and empower employees to thrive in a more independent environment

For some employees, the innovative culture is a mindset shift and adjustment can take time. Leaders can encourage employees to embrace new ways of thinking by communicating regularly about innovation programs, sharing examples, and helping employees become familiar with the ideation process.

Adobe’s Kickbox program—an open-sourced innovation model—is designed so that any Adobe employee can participate, not just those who exhibit innovative traits in their everyday work. In this way, employees begin to learn how to innovate if they are not already naturally “wired” for it.

Some employees with an innovative mindset may find themselves working for companies that are not encouraging of or fostering innovation. Employees can pitch new ideas as a way of helping companies begin to think innovatively. Some suggested tips for employees who want to promote new ideas or concepts are to:

  • Ensure that their ideas are in line with their companies’ vision and objectives
  • Be flexible and open to feedback which can sometimes feel harsh or misguided but is a necessary and helpful component of innovation
  • Use imagery to help open the eyes of skeptics
  • Make sure their enthusiasm is backed up by facts and be ready to discuss risk mitigation related to the new idea

How can companies find the right employees to help grow a culture of innovation? Ask prospective employees the following questions to help determine whether or not they would be a match for your company:

  • How do they deal with change?
  • How have they helped innovate or improve processes in previous positions? Have them describe their creative processes and barriers they’ve encountered, explaining how their contributions may or may not have helped change the company bottom line.
  • How do they cope with failure? Have them to share an example from a professional standpoint.

Change, in general, is often driven by dissatisfaction or even conflict around ideas, products, and processes. Innovators can sometimes be labeled as not “playing well” with others. But keep in mind that it’s this very trait, a penchant for pushing the envelope, that sometimes drives the innovation and change needed to make or keep an organization successful.

To learn more about innovative processes within companies, we recommend “The Innovator’s Method” by Nathan Furr and Jeff Dyer. Read a preview here.

Classroom Implications

At MBA Research’s 2017 Conclave in Vancouver, Washington, several business speakers asserted that innovation can and should be taught in schools. While some students are natural innovators, those who are not can learn to think and act innovatively. Here are some ideas to get the ideas flowing with students:

  • Vera Sell, an innovator and Software Solutions Manager for Tektronix in Beaverton Oregon, spoke to one of our groups at Conclave and led us in an ideation exercise. She asked the attendees to come up with as many uses for a pair of socks as they could within five-minutes. We broke up into small groups, and each group wrote its ideas on sticky notes. In the end, all the ideas were shared aloud with prizes for the group who had the most ideas and to the group with the most unique idea. Sounds crazy—but the groups quickly worked together to generate creative ideas—and had a lot of fun at the same time.
  • Ms. Sell also introduced us to the Snake Oil game which has players doing sales pitches on oddly matched items—and requires them to think quickly about how the items could be useful in everyday life.
  • Ask students whether they feel they are suited to be innovators and what attributes this entails.
  • Talk with students about the differences between entrepreneurship and intrapreneurship. Ask which description better matches their interests and why.
  • Have students choose an organization to research how that organization is or isn’t innovating.

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