Julio Portalatin, President and CEO of Mercer, a global consulting firm that delivers advice and technology-driven solutions to help organizations meet the health, wealth and career needs of their changing workforces, believes that executives need to navigate and lead change within their organizations. And he’s no stranger to that challenge, leading more than 23,000 employees who support clients in over 130 countries.
Before joining Mercer in 2012, Portalatin spent 20 years at AIG and he is a leading contributor to the dialogue on the future of work, human capital, global economic trends, healthcare, financial wellness, pension systems, and diversity.
Chief Executive caught up with Portalatin to discuss his leadership advice for fellow CEOs, what chief executives need to focus on as they build the workplaces of the future and the important role corporate culture plays at Mercer. Below are excerpts from the conversation:
His advice for CEOs looking to become more effective leaders
I think it’s vitally important for CEOs and the leadership around them to help their organizations navigate change. In order to do that effectively, good business leaders need to relentlessly drive a vision and a purpose for the company, day in and day out.
In an environment where fast-paced change is the norm, being grounded in vision and purpose ensures that everyone understands exactly what’s meaningful and what counts. Leaders should encourage every member of their firm to look through that lens, and to seek smarter ways to move things forward. Change means that what you’ve done in the past is unlikely to be successful in the future so, you have to be in a constant mode of asking, “Where’s the smarter way? Where’s the better way?”
One approach I see effective leaders using is surrounding themselves with people who are greater than they are. You need to be brave to always want to do that but it enables you to execute your purpose and vision with fast-paced change, always looking for the smarter, better way.
Key areas that CEOs should focus on as they build the workplace of the future
With rapid developments in AI, technology and automation, the future has never been so unpredictable. We’re learning that the skills that we have today may not all be relevant tomorrow. So, part of a CEO’s role is to constantly think about what capabilities are necessary looking ahead.
For example, the World Economic Forum, which I have the honor of attending on behalf of Mercer, predicts that over one-third of skills considered important in today’s workforce will become largely irrelevant in the future. It’s something Mercer watches closely and studies. In our 2018 Global Talent Trends Report, we found that more than half of executives predict at least one in five roles in their organization will cease to exist in the next five years! So, as the future of work evolves, leaders need to think about all the implications and be very transparent about, and prepared for, the skills necessary. By mapping the talents of the current workforce with the projected needs of the future workplace, gaps can be identified and addressed through change management, employee engagement programs and lifetime learning.
Gone, too, I think, are the days where we had a very systematic and structured way of approaching education. Generally, people in the U.S. would go to elementary school, junior high, and high school, and then college or vocational school, at which point they would pause and say: “Okay. Now my career will take me in a certain direction.” What matters today, in my opinion, is constantly improving your skills; the learning never stops.
On top of this you overlay the intersection of AI and aging societies. In 30 years, the UN projects that more than a third of the entire world’s population will be above the age of 50. As workplace automation and aging come together, one could even say collide, CEOs need to build workplaces that in one way or another emphasize the importance of technology-related and cross-functional skills and incorporate the needs of older worker as well. Today, for the first time in history, we have the challenge of up to five different generations in the workforce.
People speak a lot about millennials, but they don’t often speak about the contributions all workers can have directly in this world of digitization and automation. How do we bring everyone along for the journey? All generations will be needed as we think about the skills that companies will require to grow in the future. There are a lot of different ways to look at this, which makes it complex, but it also makes it very forward-looking and exciting for those who embrace it and try to understand what’s going to be necessary to be successful.
The importance of company culture at Mercer
Culture beats strategy all day long. I don’t care if you have the best strategy in the world, if you don’t get culture right you’re going to have a difficult time executing.
Effective company culture is built around a clear sense of purpose and, of course, company values. I think you really need that bedrock in today’s world for employees to feel like they belong and want to be taken along on the organization’s journey. I’ll give you an example, again from our 2018 Global Talent Trends report. We found that 75 percent of employees who see themselves thriving feel fulfilled personally and professionally. They report working for companies with strong senses of purpose. So, engagement and purpose are very closely aligned. In fact, thriving employees are really engaged colleagues and generally do greater work, have higher productivity, feel more satisfied in the job they do, have lower absenteeism, and, ultimately, grow the bottom line.
At Mercer, we strive to make a positive difference by helping companies advance the health, wealth, and careers of their most important asset, which is their people. That’s our purpose. This goal is ingrained into our company culture and it directs our strategic imperatives, our mission and our values.
We actually have an acronym that dictates our values: PRIIDE. The “P” is the passion our employees have to win for our clients, for each other, and for the communities we serve. Respect is the “R.” Respect for diversity, for inclusion, for each other, and for the way we do business. The “I” has a double meaning. It reflects Innovation and how we must constantly look for the smarter way and also Integrity in everything we do. The “D” is how we dedicate ourselves to our clients and continue to show value for them. And the “E” is for empowered decision-making, closer to the client so that each employee feels like an individual owner of the company. That empowerment is incredibly important in today’s fast-paced changing world where you have to stay ahead.
I also believe in making diversity an imperative in your company. When I say diversity, I mean it very broadly. Diversity in thought, background, contribution, team structure, and so on. When you have diverse thinking applied to business challenges it good for everyone: clients and colleagues. At Mercer, we work hard to ensure our employees know they can bring their whole selves to work every single day and we will celebrate and appreciate that in our organization, and apply it for competitive advantage.
We also demonstrate our values through community service. We have strong advocacy for corporate social responsibility. Every year our employees log record number of hours engaging with their communities. Our Mercer Cares initiative, as an example, is our global program that supports and encourages our colleagues to really drive voluntarism in their communities where they live and work. We’re proud to support that and help the world in meaningful ways.
These are some ways we try to engage our people and our organization and hopefully, as we continue to do that, more and even brighter days will be ahead of us.