To defend against disruption, build a thriving workforce

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Nonstop disruption. We have all lived through it the past several years: a global pandemic, geopolitical and economic instability, and the rise of new technologies such as generative AI (gen AI). This increasing pace of change, coupled with the anxiety of prolonged uncertainty, has created a situation in which companies can’t afford to keep doing business as usual. Indeed, workers have sent a clear message that they are disengaged to varying degrees and often burned out. They continue to question where, how, and why they work.

Automation and analytics broadly—and gen AI specifically—may be extremely helpful tools for addressing productivity challenges, not to mention the energy transition and climate change. However, if it’s not managed properly, the very adoption of gen AI as a new way of working could burn people out even more, accelerating the downward spiral.

Recent McKinsey research reveals that both technical and nontechnical heavy users of gen AI are increasingly likely to leave their jobs because of burnout. Those who aren’t burned out, however, told us they have remained in their jobs because they have real flexibility that suits their personal needs and work preferences, they do meaningful work that gives them energy, and they have support at work for their health and well-being (including mental and emotional health). Organizations would be wise to take note of these worker preferences since the need for gen AI talent is expected to grow rapidly.

But leaders should also consider the big picture. If gen AI can now take care of rote tasks and even complement some complex knowledge work, the nature of work is poised to change for millions of people, not just tech workers. Employees across industries and roles can be freed up or redeployed to focus on work that involves judgment, innovation, creativity, and collaboration—work that is more human.

Because this higher-level cognitive work is harder to plan for and manage, it requires much more than the absence of burnout.1 It demands a culture of thriving, in which the promise of innovation and technology, used correctly, inspires people to be more creative in their problem-solving. That can then benefit overall performance.

To build a thriving workplace, leaders must reimagine work, the workplace, and the worker. That means shifting away from viewing employees as cogs who hit their deliverables then turn back into real human beings after the day is done. Employees are now more like elite artists or athletes who are inspired to produce at the highest levels but need adequate time to recharge and recover. The outcome is exceptional; the path to getting there is unique.

In this article, we delve into what a thriving culture is (and what it isn’t) and offer five actions organizations can take to maximize healthy work environments, team effectiveness, and employee well-being so that more workers can reach their peak performance.

Diving into thriving: The skills that are most important now

A recent McKinsey survey of a global sample of workers found that only about 4 percent in a typical organization reported high levels of sustainable engagement and productivity that in turn brought disproportionate value to a company.2 We call these individuals “thriving stars” (Exhibit 1).

Thriving stars are typically a small segment of employees, but they have an outsize influence on organizations.

Thriving is more than being happy at work or the opposite of being burned out. Rather, one of the cornerstones of thriving is the idea of positive functioning: a holistic way of being, in which people find a purposeful equilibrium between their physical, mental, social, and spiritual health. Thriving is a state that applies across talent categories, from educators and healthcare specialists to data engineers and retail associates.

As gen AI becomes more prevalent in more jobs, the impact from thriving employees has the potential to grow. These are workers who can demonstrate higher-level cognitive and social–emotional skills to be at their collaborative, creative best each day. In fact, the recent McKinsey survey of gen AI talent shows that heavy users and creators feel they need to build these cognitive and social–emotional skills more than technological skills to do their jobs.

McKinsey research has found that thriving stars achieve high levels of sustained performance because of multiple factors: they are adaptable and resilient, they have found meaning and purpose at work, they achieve work–life balance and flexibility, and they experience psychological safety and trust from leaders, allowing them to create the same for their own teams.

The analysis also revealed that these employees flourish in an environment where autonomy and flexibility are valued by the organization. This indicates that many traditional practices and policies that companies use today may not create a thriving workforce at scale. These traditional practices include measuring productivity by inputs, outputs, and activities rather than by supporting outcomes and results; mandating in-person time; and focusing interventions on corrective action instead of on accelerating performance.

If two computer programmers, for example, are working to develop a creative new-user feature, how helpful is it to measure lines of code written, keystrokes logged, or hours worked? Does it matter if the code was written in the office or at home? If one coder writes 10,000 lines of code and another writes 1,000, which new-user feature is better? The answer has to do with the outcome, not the activity. If users prefer the 1,000-line code because it is simpler and more elegant, that is the better work product—even if it was written in one-tenth of the time.

The assembly-line approach has largely inspired modern-day management and current work policies (the 40-hour workweek is a prime example). Under this model, the organization monitors the programmers’ keystrokes or lines of written code to quantify activities, not necessarily outcomes or impact. Because the work is standardized, the biggest red flag for these workers would be not working enough hours or not producing enough code.

The organization that follows this assembly-line model would want the programmers to do the coding themselves, with no help from AI. It may even want the programmers to complete the coding in their cubicles, not at home. On a workforce level, employees in this model need to be engaged enough, to put in the hours without getting burned out, and to make enough high-quality code each hour to recover from setbacks and power through. This way, they can achieve efficiency and productivity.

If the organization instead takes an artist or athlete approach, it understands not only that people need to be at their very best to be effective but also that the path is different for everyone. As long as there is accountability for timelines and quality of work, the outcome is what matters. If a programmer used AI to do some of the coding and fine-tuned the rest but the result is a more user-friendly product, that would be celebrated. Under this approach, employees are pushed to be innovative, creative, and collaborative; the organization supports their use of the resources available to generate the best output (Exhibit 2).

Companies can move away from traditional ways of managing employees toward a more flexible model.

We believe that the work for humans is departing further from the assembly-line model and getting closer to the artist or athlete framework. In this way of thinking, companies should not be afraid of letting people experiment with chatbot services or other gen AI tools, if those tools help workers perform their jobs better. They should realize that gen AI has the power to enhance human creativity (while also acknowledging the need for intellectual property protections) but not to replace it.

Take the movie Barbie as an example. If Hollywood had asked a chatbot to create a film based on the iconic doll, there’s very little chance it would have come up with the movie about feminist empowerment directed by Greta Gerwig. Leaders should create an environment that allows more employees to thrive like Gerwig.

The work environment gets a makeover

While the scarcity of high performers is an age-old organizational problem, today it takes on new urgency. As more work requires higher cognitive and social–emotional skills, it also requires people who are up to the challenge. To find and retain these employees, organizations should view them as both leaders and full human beings, leaning into the artist or athlete analogy as a guide to the multiple factors that bring about stellar performance.

In this workplace, people at every level are capable of being potential thought leaders who have influence through the right training, support, and guidance. They don’t have to be just “doers” who simply implement what others tell them to. All employees can learn to lead themselves, others, and the business (even if they themselves are not managers). Soon, as many begin to manage AI, they may need to judge which work to delegate to AI, how to assign it, what criteria to use, and how to supervise it. And they may, at times, need to intervene to correct it.

This sort of thriving organization also welcomes employees who bring their full selves to work, knowing that demonstrating authenticity, vulnerability, and other emotions has real benefits and that enhancing psychological safety at work can lead to better decision making and performance. In Right Kind of Wrong: The Science of Failing Well (Atria/One Signal Publishers, September 2023), professor Amy Edmondson of Harvard Business School writes about how organizations can embrace human fallibility while learning from (and even preventing) failure.

While this work environment sounds great in theory, how does it become reality? To build a thriving culture, companies can rethink policies, practices, and rituals through five actions.

Rewrite the rules on workforce flexibility

Many organizations have made strides when it comes to offering workforce flexibility since the pandemic forced new rules upon much of the business world. Even so, leaders can look for more ways to infuse thoughtful flexibility into the workweek beyond work-from-home and hybrid options.

At the company level, one of the most cutting-edge changes regarding flexibility has involved piloting a four-day workweek. While that is a step in the right direction, it’s not enough. If we think about elite artists and athletes, they don’t have the confines of a four- or five-day week (some even work up to seven days a week). But they do rely on designated times to recover and recharge. Whereas some companies have identified core hours when all employees are expected to be online, we believe there is an opportunity to implement core days—that is, designating a certain number of days or specific days during the week when employees are expected to be online, with flexibility on “off days” to finalize work.

At a function or team level, rather than mandating in-office days, the expectation can be based on the degree of coordination and interdependence of work, or “teaminess.” Some groups may have a greater degree of teaminess, while other teams and functions may have more defined swim lanes and clearer handoffs.

When the function involves more teaminess, the expectation should be more in-person or overlapping core hours. However, just because it’s Tuesday and an employee’s team is in the office doesn’t mean the employee has to be there—especially if there are team video calls throughout the day. Leaders can strive for a more thoughtful collaboration model (more on that below).

On an individual level, employees should be encouraged to optimize for their particular rhythms outside of core team hours. We all know morning and night people,3 as well as colleagues who do their best work alone and those who become their most creative selves in a team setting. Some may complete their duties over three long days, while others may stretch the work out in smaller increments over seven days, setting aside time on quiet weekends to get some focused work in.

It’s hard for many leaders and managers to let go of the assembly-line approach to working hours in the office. After all, this has been the norm for nearly a century, since the 40-hour workweek was first adopted by the Ford Motor Company in 1926. But those who embrace a fluid-flexibility model will be responding to what employees across industries and jobs say they need to feel engaged and to thrive.

Rethink the collaboration model

As routine tasks are increasingly automated, the remaining work becomes more complex, dynamic, and creative and therefore requires higher levels of innovation and collaboration. In turn, effective team dynamics become even more essential within and across teams. The best collaborative models augment thriving by creating a team environment that offers clarity in three areas: the problem the team is trying to solve, how the team knows when it’s successful, and how to work together to get there.

What problem are we trying to solve? Teams must understand the strategic context, problem statement, what’s in and out of scope, and the from–to aspiration at the start of each project. As the work becomes more complex and requires more innovative solutions, solving for each of those elements becomes increasingly less straightforward.

How will we know when we’re successful? As teams scope out the work, they should clearly define what the ultimate impact is from the project, as well as the leading indicators they can track along the way. In today’s environment, we’re more likely to see that the ultimate impact tends to be holistic in nature, affecting teams, customers, stakeholders, and society. The impact for a social media influencer, for example, may be whether a video goes viral, rather than the time frame needed to create that video. If an expected outcome isn’t materializing, the team should rapidly diagnose the problem and shift to different measures of progress.

How do we create sustainable team practices? It’s hard to thrive at work if one’s working preferences aren’t taken into consideration. Teams, especially cross-functional ones, need to feel their own sense of agency as they work together. They must jointly identify and synthesize work preferences to make the most of their time together. Do people, for instance, want to communicate through calls, emails, texts, or a communication app? Should cameras be on or off during online meetings? Are travel and locating close together crucial to achieving team goals? What type of work energizes or drains each team member? A rapid cadence of pulse checks on deliverables is crucial. Feedback is important, too, and not just during a postmortem, when the team discusses what worked well and what could have been done better. People should be empowered to continually offer their constructive feedback about what could be done differently.

Emphasize performance coaching

Just as agreed-upon norms and practices allow teams to thrive, so do clear expectations for individual employees. Those include guidance on how the outcome of their work is measured. A strong performance management system sets accountability metrics that are consistent and equitable.

Employees should have stretch goals they can work toward with clear, quantifiable, objective, and holistic metrics that show whether they are meeting those expectations. If 80 to 90 percent of the workforce is meeting performance expectations, these goals are probably too easy.

Athletes and artists can’t reach their performance goals without continuous feedback and training. A coach wouldn’t wait for the World Cup to manage performance, and a painter’s agent wouldn’t wait until just before a gallery opening to provide feedback on a new body of work. In the same vein, employees shouldn’t have to wait until the end of the year to know how they’re doing. Specific, continuous feedback helps people who are not meeting the bar to meet it, those who are meeting it to exceed it, and those who exceed it as thriving stars to also accelerate their ability to be future leaders.

Even the highest performers should continue to learn and grow through feedback and coaching. Athletes are instructive here as well. They may have a personal coach, a personal trainer, a nutritionist, and others to help them perform at their best. Often, the best athletes in the most important positions get the most coaching.

By contrast, in a corporate setting, an executive coach may be seen as a corrective. Leaders often spend more time coaching the lowest performers than they do the top performers, for example. What if organizations put more energy and resources into coaching and feedback for the highest performers in the most critical roles? Feedback is extremely valuable across all groups, from the C-suite to the edges of any organization.

Create opportunities to practice and train, not just to perform

At many workplaces, leaders don’t specify whether employees are in practice mode or performance mode. Think of a professional athlete practicing for a big game; the activities and drills are different from those on game day. In the same vein, employees can be in practice mode during certain meetings with their teams, and they can be in performance mode during, say, a board call or a steering committee meeting.

In practice mode, people can expand their comfort zones to be bolder, take more calculated risks, and be more innovative—all of which are critical to learning and professional development. When leaders offer an environment where employees feel safe to speak up, to disagree openly without repercussions, and to show up authentically, their teams are more likely to be productive, creative, and innovative.

Leaders can augment these positive effects by clarifying which opportunities are practice and which are performance so that employees can experiment (for instance, by trying a new analysis).

Outside of day-to-day opportunities to practice, training and capability building should be reimagined. Often, the focus is on creating an enjoyable and engaging experience that is highly recommended to others. However, if we look at artists and athletes, the best training is often grueling and demanding. It is predominantly focused on perfecting technical skill sets and building the right mindsets to achieve explicit goals, not a 98 percent recommendation rate.

Kick the meeting habit and build in time for recovery

To build thriving teams that can tackle problems effectively, it’s important to create the space for employees to think critically, get the work done, and have time to recover. Unfortunately, at many organizations, meeting requirements have become a roadblock to creativity and real productivity. How many meetings are employees in each week that they don’t need to be in? Can information instead be passed along through quick interactions or an email?

Being in back-to-back meetings day after day can be draining—physically and emotionally. Some companies have implemented “no meeting” days on a monthly or quarterly basis. Many employees also add to their calendars microbreaks or time to block things out and focus. They use that time to go for a walk or even take a quick nap—whatever they need to disconnect, recharge, and recover. Building in these moments, small as they may seem, can reap big rewards. Recent McKinsey research on thriving indicates that globally, aligning employment with modifiable factors of health can not only lead to years of higher-quality life but also create trillions of dollars in economic value.4Working nine to thrive,” McKinsey Health Institute, March 13, 2024.

In this postindustrial digital era, organizations must shift from rewarding traditional forms of productivity—time spent, output recorded—to recognizing impact and outcomes. Until recently, the steps required were slow and evolutionary for most companies. But now, with the pandemic and the advent of gen AI, this evolution can turn into a revolution that spurs employees and organizations alike to grow and thrive.

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