W ork means something different now than it did three years ago. Labor trends that preceded the coronavirus pandemic—and accelerated throughout it—are reshaping organizations and business practices. John Rodi, the leader of the KPMG Board Leadership Center, has seen dramatic shifts in executive boards’ priorities and needs, and he believes those new imperatives will remain necessary as we navigate an uncertain future. The key to success? Trusting, empowering, and focusing on employees.
What brought you to KPMG and to board governance?
I’ve been with KPMG for almost 30 years, including about 18 years as a partner with the firm. Several years ago, I was asked by the firm to serve as the lead partner of our Board Leadership Center. KPMG has been an outspoken proponent of board governance for over 20 years. I was honored to take that role on.
This team I lead provides insights on the most challenging issues that boards are facing today, whether it be ESG, strategy, risk, or talent. We do that by delivering programming in the governance space and also by publishing timely thought leadership.
In the past few years, workplaces and work culture have changed so much. What has changed for the KPMG board leadership community?
One change is the intense focus on the well-being of employees and the need for companies to prove their support for their people, as opposed to just putting words on a page. People can see through that nowadays. There is also a focus on diversity, equity, and inclusion, with a view toward holding leaders accountable if the employee base does not resemble the country’s demographics or show progress.
Finally, there’s the rise of employee empowerment. What’s the employee experience? What’s the impact of a company’s decision on the employee? That lens has changed significantly. I think employee empowerment is only going to grow more important over time.
What, specifically, can a board do to genuinely empower its employees?
A board should be putting employees at the center of every decision. While boards certainly should still ask about the financial implications of decisions, they should also ask about the people implications. For example, if a company is going to do a head-count reduction, with the economy where it is, what’s the impact on the morale of its people? What’s its PR and comm strategy? The board should also tailor its oversight of talent strategy to the future needs of the business.
Based on a recent survey that we did of the board director community, more than 80 percent of boards said that employee expectations are a regular part of their discussions. It’s also important for them to empower their senior management teams to take that cross-functional approach to how they reimagine work.
Have all these major shifts been beneficial?
An obvious benefit is flexible work arrangements. It’s not just about working remotely—people now have some control over how and when and where they’re going to do their best work. No two people are the same. Work-life balance means different things to a lot of people. What’s important is not to treat flexibility as just an HR policy, but as something that is ingrained in the business. People have definitely proven that they can be trusted to get their work done. Work is what gets done, not where it gets done.
There is some risk in terms of keeping the culture and fabric of an organization together. Many organizations are apprentice-based models, and people tend to learn better in teams. Starting out, I used to work in audit rooms all hours of the night with the manager and partner, and I was able to be a fly on the wall just listening to how people dealt with issues. I learned the people side of it. That’s one of the things that’s missing [from remote work]. The key is going to be learning how to engage with each other in meaningful ways and to be intentional when we do gather so companies don’t lose their identity by being too dispersed and too flexible. That’s where there’s going to be some give and take.
What will boards need to understand about workers’ needs in the next few years, with the economy facing an uncertain future?
Boards have to think about business results and costs and strategy, but I would argue that this shift in the employee-employer dynamic is here to stay. It would be shortsighted to say, “We need to batten down the hatches. We’re going to take away flexibility because we’re going to reduce our head count. We need everybody else to double up on work, and we’re going to take away your flexibility.” Even if we go into a recession, and even as companies deal with downturns, I think shifting the people strategy away from some of the benefits that we talked about would be a mistake.
Boards also need to provide that appropriate challenge to ensure that senior management not only delivers strong financial results but also generates future leaders that can deal with the challenges that are coming, handle the changes in employee-employer relations, and listen to employees’ needs.
What else do you think boards should know?
Fast-forwarding to just a few years from now, it’ll be interesting to see how this changes, how companies will work. Everybody talks about growth, which of course is important. But, if you can, get the employee dynamic right and become that company that people long to work for. Focus on people first, and the growth will come.