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Some might think that 2030 seems too distant in the future to be taken too seriously. While the future is always difficult to predict, a series of trends and workplace developments have emerged that very clearly indicate what the workplace and organizational culture will look like and, more importantly, ‘feel’ like in seven years’ time. And it’s something that all CEOs and senior leaders should take very seriously.
For the best part of a century, most organizations have been managed in a very similar manner – at least culturally. But this model has recently been shaken by a few monumental societal developments, one being the shifting of control and power away from leadership and management and toward employees.
This has been accelerated by the COVID-19 pandemic and is now gaining significant momentum. Courtesy of ‘work from home’ orders, employees have become accustomed to a different work–life balance. They now face the reality that office-based work style practices are a hangover from a pre-tech era and interfere substantially in balancing family and personal wellbeing.
Now, while other mental health issues relating to isolation have also arisen through this period, the vast majority of employees have no interest in returning to an office-bound five-days-a-week routine.
In the short-term, many large organizations will be caught in a clash of operational ideologies as they resist current and future realities and ‘wait’ for the old ways of working to return when they never will. The hardest hit will be the traditional organizations governed by a traditional board and led by Alpha types – or worse, people aspiring to be Alpha.
The worrying trend of second-in-command leaders who have mistakenly attached their personal identity with being ‘the boss’ will, at some point in the next few years, be corrected as employees make it clear that respect is earned through engagement and authenticity, not through an appointed title. While this sounds logical and reasonable, this new reality is not overly common today (especially in more traditional, publicly listed companies).
Following the substantial number of companies that followed government ‘work from home’ orders during the pandemic, the future will see a wholesale and sustained shift in organizational culture towards more flexible and decentralized work arrangements.
Employees will have more control in 2030 in terms of their work arrangements and decision-making processes. Self management and self-managed teams will be the norm, not the exception as they are today.
As the economy and technology continue to evolve, the nature of work will also change. This sentiment is based on insights from the world’s leading universities – Oxford University’s Saïd Business School, the University of Cambridge and the University of Washington have all reported in studies that self-managed teams had higher levels of employee engagement and job satisfaction compared to traditionally managed teams.
Organizations that resist and cling to outdated models will perform poorly across a range of measures, not the least being gross profit.
Technology will play a significant role in shaping organizational culture in the next decade. With more advanced technology, remote work will become more common and seamless, enabling employees to work from anywhere at any time. This will change the way teams collaborate and communicate, and will lead to a more decentralized and flexible culture.
AI will become more integrated into the workplace, automating repetitive tasks and allowing employees to focus on more complex and creative work. This will change the skill sets required of employees and may lead to a more data-driven and analytical culture.
Virtual and augmented reality technologies will become more prevalent in the workplace, allowing for more immersive and interactive training and collaboration. This will change the way employees learn and work together, and will lead to a more interactive and immersive culture.
AI, including chatbots like ChatGPT, will impact workplace culture in several ways, many of which are positive. Some, however, will require new sets of social and ethical governance and policy. As technology becomes more integrated into the workplace, cybersecurity will also become a major concern. Companies will need to invest in new technologies and protocols to protect their sensitive information, which may lead to a more security conscious culture.
Technology will also play an important role in engaging employees, allowing for more effective communication, feedback and recognition. This will change the way employees interact with their managers and colleagues, and will lead to a more engaged and connected culture. This, however, will rely heavily on an embedded sense of trust and a culture of belonging.
In the next six years, the reputation of a company’s culture will become increasingly important as more and more employees and consumers prioritize working for, and doing business with, companies that have positive and inclusive cultures.
Employee reviews and search results will carry substantially more weight than today as reputation shifts into ‘real time’ reputation, rather than an aggregate perception based on historical storytelling and brand performance.
The better-performing organizations will be more transparent about their culture, policies and practices, and will actively engage with employees and stakeholders to build trust and understanding. They will practice inclusion and diversity, placing a greater emphasis on creating inclusive and diverse cultures in which all employees feel valued, respected and supported.
Reputation gains and any future ‘war on talent’ will be heavily influenced by the degree to which organizations invest in empowering employees. The highest-performing companies will prioritize employee mental health and wellbeing, offering support and resources to promote positive mental health and prevent burnout. They will also be more adaptable in order to respond to changing market conditions and business environments, to continue to innovate and to stay competitive.
Confirmation bias, or the tendency to seek out and interpret information in a way that confirms existing beliefs, is a well-documented phenomenon that has negative consequences in many areas, including company culture. The tendency for confirmation bias will increase over the next 10 years due to a range of compounding elements.
First, with the rise of social media and online platforms, it will become very difficult for leaders to remain independent and not surround themselves with information and perspectives that align with their existing beliefs, which reinforces confirmation bias. Second, should organizations work against the movement toward diversity they will be more susceptible to confirmation bias, as employees will be less exposed to different perspectives and ideas.
Finally, organizations that fail to establish and nurture high levels of psychological safety will be more likely to have a culture characterized by confirmation bias, as employees will feel discouraged from speaking up and challenging the status quo.
A study by the University of Illinois found that confirmation bias can lead to poor decision-making in the workplace, as individuals focus on information that confirms their existing beliefs and ignore information that contradicts them. Furthermore, a study by the University of Amsterdam found that confirmation bias leads to a lack of creativity and innovation in the workplace, as individuals may be less likely to consider and act on new ideas that challenge their existing beliefs.
The most successful leaders of the future will be emotionally intelligent, adaptable, culturally aware, visionary and tech-savvy. These capabilities will allow them to effectively navigate the rapidly changing business environment and build a culture that can drive growth and success.
Importantly, cultural intelligence, much like technology acumen, is not a fixed trait. It is developed and improved over time through education, training and experience.
When it comes to the specific elements of cultural intelligence, there are four aspects that will separate the top leaders from their peers. First, a cognitive aspect referring to the knowledge and understanding of different cultural customs, values and practices. Second, a physical aspect enabling leaders to adapt body language, verbal and nonverbal communication to different cultural contexts.
The third aspect of cultural intelligence, the emotional aspect, will arguably have the greatest influence on cultural leadership. The ability to self-regulate emotions, as well as understand the emotions of others, will clearly demonstrate cultural tone, approachability and transparency, and set the expectations and style of interpersonal connectivity within the company.
As an output of emotional control, the ability for leaders to adapt their behavior to different cultural contexts – including their communication style, decision-making and problem-solving – is the fourth critical aspect of culture intelligence and will be a 24/7 leadership requirement in 2030 as the world becomes more diverse, creative and operationally flexible.
Leaders of the past are evaluated and judged based on the standards and values of the present. As a result, certain leaders of the past will be held in contempt by future society for actions or beliefs that are no longer considered acceptable. For example, leaders who promoted discriminatory, overly conservative or autocratic cultural practices will be viewed negatively in 2030, while leaders who championed diversity and environmental sustainability will be celebrated.
Even today, a study from the University of Sussex found that investors are increasingly taking ESG factors into account when making investment decisions. Companies that do not prioritize ESG issues will see a decline in stock price and have difficulty attracting investment and talent.
Likewise, employees are increasingly looking for leaders and companies that prioritize environmental sustainability and any perceived lack of support for sustainability will negatively impact employee sentiment towards leaders.
A 2021 study conducted by Deloitte found that 80 percent of employees believe that companies have a responsibility to address environmental issues, and that a company’s commitment to sustainability is a key factor in their decision to work for or remain working for a company.
Qualifications that will be considered important in 2030 will be vastly different from those that are currently valued. Some of the key changes expected include an emphasis on soft skills , such as authentic leadership, increased empathy and listening skills. As a result, traditional university qualifications will be more evenly balanced with interpersonal life skills.
Less predictably, as automation and AI continue to impact the job market, creativity, strategy, problem-solving and a detailed understanding of the impact of technology on customer and culture will become increasingly important. This presents a seismic shift for the majority of today’s leaders and the traditional leadership profile.
Today, in 2023, it is increasingly recognized that a positive and effective organizational culture can have a significant impact on business success. As a result, more leaders are becoming aware of the importance of culture and taking steps to improve it.
Companies with strong cultures have higher employee engagement, better customer satisfaction and better financial performance. Leaders are becoming more aware of the role that they play in shaping culture, recognizing that culture isn’t something that just happens but rather that it’s deliberately created and nurtured by leaders and employees.
As a result, the use of new generation culture technology is making it easier for leaders to measure culture and track progress over time, allowing them to identify areas where culture needs to be improved and make data-driven decisions about how to address those issues.
A study conducted by the Society for Human Resource Management in 2020 found that nearly 90 percent of HR professionals surveyed said that their company’s culture was important to the overall success of the organization. Despite these insights, today almost half of high-performing talent leave organizations within two years of their commencement.
This represents a very clear disconnect between the assumptions leaders make about culture and the reality for employees. In 2030, culture will be better understood, analyzed and recognized as the primary driver of organizational performance. CEOs will be held even more responsible for the state of culture, and organizational performance will be viewed as a direct output of the state of culture.
AI will impact workplace culture in several ways, many of them positively, and in other ways that will require new sets of social and ethical governance. Leaders will need to embrace the exploration and rapid development of AI, especially organizations with a reliance on service culture. Chatbots will mature beyond the tipping point of customer service substitution and become the preferred customer experience interactive solution – more so than humans in call centers.
The main areas of value will come from availability of data and accuracy of information, as chatbots and avatar bots will recall account information, validate customers in seconds and have the capability to answer questions and perform complex requests much faster than people.
As stated earlier, this degree of organic or unintentional culture change will require unprecedented attention toward talent identification, training, aspects of leadership and governance and always-on culture management.
Despite a compelling and tragic suite of evidence pointing to a rise in mental health issues and increased work-related suicide globally over the past decade, very few organizations take employee wellbeing into account when it comes to the fundamental objectives and responsibilities of an organization.
In Australia alone, suicide rates increased from 2001 to 2018, particularly among men aged 45–54 years, according to the Australian Institute of Health and Welfare. The Australian Bureau of Statistics reported that the age-standardized suicide rate for males increased from 16.2 deaths per 100,000 population in 2011 to 18.2 in 2021. Female rates also increased from 5.1 deaths per 100,000 population in 2011 to 6.1 in 2021.
Suicide rates aside, employee mental health needs exploded through the pandemic years of 2020–2022. Between March 2020 and September 2022, over 33.8 million government-subsidized mental health-related services were processed nationally in Australia. In the four weeks leading up to 4 September 2022, around 1.1 million government-subsidized mental health-related services were processed nationally. This was down eight percent from 2021 and two percent from 2020, but up 11 percent from the same period in 2019.
These figures tell an important story of crisis through change, and when combined with local suicide rates across the same period, there is support for the concept that an irreversible shift has now been made toward a new work–life balance. Employees have now adjusted to new work styles, modified home environments and home–life practices, which are now ingrained in both a physical and psychological sense.
CEOs and senior leaders have six years of new challenges and unprecedented changes heading their way in the form of culture and work-style transformation. The better performing leaders will be confident, contemplative, tech-savvy individuals who have a firm and comprehensive understanding of the shifting needs of employees and what a healthy, high-performing culture looks like.
Some will cling to the past and what they know, along with their sense of authority and, as a result, will be ill-equipped to deliver in the new, more flexible, technology enabled future. The most well-regarded, successful leaders in 2030 will possess high levels of cultural intelligence.
They will share a sincere interest in supporting employees to live their best life in a considerate and respectful workplace community, characterized by diversity, authenticity and genuine regard for the environment and the role organizations play in supporting individuals, communities and the planet.
Karl Treacher is the CEO of The Culture Institute of Australia and founder of Australia’s workplace culture conference CultureCon™. Karl is an Associate Professor at Griffith Business School and specializes in culture insights and organizational transformation.