As organisations periodically develop their business strategy and begin the more difficult task of implementation, the first aspect of strategy execution that impinges directly on employees is restructuring the organisation. Designing the structure of an organisation typically requires the following considerations:
1 Types of structure;
• functional vs business unit;
• centralised vs decentralised;
• matrix vs linear vs. networked;
2 Spans of control;
3 Number of layers; and
4 Nature of reporting relationships
(straight vs dotted line).
However, it is the failure to recognise the influence of structure on the organisation’s environment that leads to poor choices in organisation design. The cumulative impact of these poor design decisions across many global organisations contributed to the economic crisis. In designing the organisation structure best suited for long-term sustainable success, leaders need firstly to strike the appropriate balance between alignment and creative tension. Once the right balance is selected, decisions in regard to organisation design become easier.
Alignment requires all elements of an institution to point in the same direction and drive towards the same outcomes. The structure must be aligned with the strategy. Whenever an institution undergoes a strategic review, executive teams spend considerable effort to ensure that their organisation structure is redesigned to align with the new strategy. For example, if the main source of competitive advantage is cost leadership derived from operational efficiency, then a centralised, functional structure may be the best choice because this type of structure reduces duplication and leverages scale.
Alignment between the structure and the desired culture is also important. If a CEO wishes to drive a greater sense of accountability, a business unit structure may be the preferred choice. If a culture of innovation and swifter decision-making is to be fostered, then an organisation with fewer layers tends to work best. The structure also needs to be aligned with systems and processes. In an organisation reliant on straight-through processing, for instance, the use of a matrix structure to reduce the incidents of functional or business unit silos is vital.
The failure to balance alignment with strategic and cultural intent against the need to ensure creative tension within the institution is one of the errors that has contributed to the crisis. Most important organisational decisions are trade-offs between competing needs. These trade-offs need to be made by balancing short and long-term value creation and preservation criteria. This can be achieved by structuring the organisation to establish and maintain creative tension.
Creative tension is critical in many industry sectors and business contexts. The failure to ensure reporting lines were kept separated and independent between credit and operational risk and sales and trading functions within financial services institutions, contributed to the current crisis. In the pharmaceutical sector, it is important to ensure that the research and development function is adequately funded relative to the sales and marketing functions so that a pipeline of new products exists to replace older products whose patents expire, exposing them to competition from generics. Within the manufacturing and mining industries, it is critical that production and operations functions receive appropriate levels of investment compared to sales and marketing functions so that they can establish continuous improvement programmes that achieve a competitive cost base and maintain margins over the long term.
In business unit-style organisation structures, it is vital that decision rights and approval authorities are clear and appropriately allocated between head-office and the business units. This will ensure decisions at the individual business unit level are consistent with overall business strategy and do not maximise business unit results at the expense of optimising overall group performance.
Once the balance is struck between alignment and creative tension, the institution will be able to achieve more effective trade-offs between the short and long-term time horizons and between value creation and preservation initiatives. Leaders are then better able to choose the most effective organisation design for their circumstances. Nevertheless, there are some useful rules of thumb that should guide these choices. It is generally accepted that spans of control below four and above 10 create under- and over-leverage or duplication and insufficient control, respectively. Similarly, too much hierarchy or too much de-layering can both prevent effective risk management.
The rapid pace of change has caused institutions to review their business strategies more frequently and as a result restructure their organisations regularly. In doing so, executives need to ensure that sufficient time is taken to embed these changes. It is important to ensure that these changes are documented and communicated via updated organisation charts and job descriptions. These tasks are often neglected which in turn cause confusion among employees who lack clarity about how the organisation is structured and in particular how their roles operate within and in relation to other roles within the new structure. Discussions with bankers in the aftermath of the economic turmoil revealed that this confusion was a contributing factor to the crisis.
As egos and pay packets expanded exponentially during the economic boom that preceded this downturn, many institutions fell into the trap of designing their organisation structure around individuals rather than ensuring the appropriate balance between alignment and creative tension. One lesson we have hopefully learnt from this crisis is to resist this temptation in the future.
by Dharma Chandran is a Human Capital partner and Performance and Reward leader with Ernst & Young Far East Area
Sunday, December 19, 2010
HR strategies for the upturn on talent
There is a need to pay attention to retaining top talent through segmentation, using innovative technology to engage employees and optimising HR delivery
With an upturn in sight, the war for talent may have changed somewhat but it’s certainly not over and companies need to be prepared to handle human resource issues.
“While some people are currently in that mindset that the talent war is over, that’s not really the case when we talked to chief executives. The war for talent in some cases may change a bit but it’s going to come back stronger,” said Rick Smith, Accenture partner and Asia Pacific organisation effectiveness practice lead.
Smith cited an August 2008 Accenture study (When Good Management Shows: Creating Value in an Uncertain Economy), which looked at how 850 US companies performed after the 1990-91 recession, caused by the oil price shock. The study showed a wide gap in terms of return on investment capital between companies that outperformed and those that underperformed their peers.
“What we found is there’s a clear separation between those that were able to take advantage during that last crisis and those who were not able. We expect that the same trend is going to apply to this economic recession,” he said.
According to Accenture, HR practitioners need to pay attention to retaining their top talent through segmentation, using innovative technology to engage employees and optimising HR delivery.
Looking at the three areas, Smith said the days of HR handling talent with a broad brush are over. It’s about HR being more targeted on a fine-tuning basis, he said in a briefing in August.
HR should differentiate talent by “segmentising” them based on the company’s mission-critical positions, said Low Choy Huat, director of talent and organisation performance practice for Accenture in Malaysia.
“If you focus on the most critical or the most important workforce and try to maximise that workforce through certain interventions, you probably get much more performance out of them,” he said.
According to an Accenture paper titled “Preparing for the upturn” released in September, companies need to evaluate their workforce based on the talent they need versus those that they have. This would help the company prepare for when the economy recovers.
The paper cited Australian telecommunications company Telstra as an example. Telstra introduced a learning programme called “Communications technician of the future” which contributed to a 50% increase in productivity amongst its communications technicians.
However, with a finite budget to disperse rewards and training incentives to top performers, HR’s power to engage employees is limited. Low said that this is where HR departments should use technology to come up with innovative and cost-effective ways to engage people.
“I think that Malaysian companies should find ways to leverage on communications as well as social networks to engage their employees, particularly the Gen-Y,” said Low.
The consulting firm itself leverages on Facebook and personal blogs through its company portal to engage not just current employees but potential and former employees as well. On how successful its Facebook campaign has been, Low was unable to provide statistics. However, Smith said Accenture had been receiving good anecdotal responses from prospective employees.
Technology also plays a role in supporting employees in work as well as work/life balance. The Accenture paper found that employees who reported that they had the skills, information, experts, technology and tools to do their jobs well were nine times more likely to be highly engaged than those lacking such resources.
According to Low, another trend observed in high performers during uncertain times is that they try to understand the implication of HR’s operational cost and look for ways to reduce the cost.
Accenture found that HR administrative costs could be reduced by 20% to 25% through self-service while e-learning could save training operational costs of between 15% and 25%.
“I think in getting the basics right, HR should always be focused on standardising HR processes and systems. For companies which have got multiple subsidiaries, the processes are usually not very consistent so there are a lot of opportunities to do that in uncertain times because HR is pressured to reduce cost,” he said.
Having a highly efficient HR organisation and well-embedded processes is important due to cost efficiency during a downturn but it also optimises an organisation ready to take on the upturn.
Accenture’s paper revealed how it helped South Korean telecommunications and energy conglomerate SK Group in its global expansion plan by improving its HR system in terms of its talent base, HR capabilities, and leadership support for globalisation.
Armed with the results, SK is aggressively enlarging the quantity and quality of its global talent, and building HR capabilities to support expansion of its global operations and revenue growth outside South Korea.
“The key thing in successful talent management is the ability to think about how to create a workforce that will perform when the company turns around. I think in the Malaysian context, we have not been too far ahead,” said Low
With an upturn in sight, the war for talent may have changed somewhat but it’s certainly not over and companies need to be prepared to handle human resource issues.
“While some people are currently in that mindset that the talent war is over, that’s not really the case when we talked to chief executives. The war for talent in some cases may change a bit but it’s going to come back stronger,” said Rick Smith, Accenture partner and Asia Pacific organisation effectiveness practice lead.
Smith cited an August 2008 Accenture study (When Good Management Shows: Creating Value in an Uncertain Economy), which looked at how 850 US companies performed after the 1990-91 recession, caused by the oil price shock. The study showed a wide gap in terms of return on investment capital between companies that outperformed and those that underperformed their peers.
“What we found is there’s a clear separation between those that were able to take advantage during that last crisis and those who were not able. We expect that the same trend is going to apply to this economic recession,” he said.
According to Accenture, HR practitioners need to pay attention to retaining their top talent through segmentation, using innovative technology to engage employees and optimising HR delivery.
Looking at the three areas, Smith said the days of HR handling talent with a broad brush are over. It’s about HR being more targeted on a fine-tuning basis, he said in a briefing in August.
HR should differentiate talent by “segmentising” them based on the company’s mission-critical positions, said Low Choy Huat, director of talent and organisation performance practice for Accenture in Malaysia.
“If you focus on the most critical or the most important workforce and try to maximise that workforce through certain interventions, you probably get much more performance out of them,” he said.
According to an Accenture paper titled “Preparing for the upturn” released in September, companies need to evaluate their workforce based on the talent they need versus those that they have. This would help the company prepare for when the economy recovers.
The paper cited Australian telecommunications company Telstra as an example. Telstra introduced a learning programme called “Communications technician of the future” which contributed to a 50% increase in productivity amongst its communications technicians.
However, with a finite budget to disperse rewards and training incentives to top performers, HR’s power to engage employees is limited. Low said that this is where HR departments should use technology to come up with innovative and cost-effective ways to engage people.
“I think that Malaysian companies should find ways to leverage on communications as well as social networks to engage their employees, particularly the Gen-Y,” said Low.
The consulting firm itself leverages on Facebook and personal blogs through its company portal to engage not just current employees but potential and former employees as well. On how successful its Facebook campaign has been, Low was unable to provide statistics. However, Smith said Accenture had been receiving good anecdotal responses from prospective employees.
Technology also plays a role in supporting employees in work as well as work/life balance. The Accenture paper found that employees who reported that they had the skills, information, experts, technology and tools to do their jobs well were nine times more likely to be highly engaged than those lacking such resources.
According to Low, another trend observed in high performers during uncertain times is that they try to understand the implication of HR’s operational cost and look for ways to reduce the cost.
Accenture found that HR administrative costs could be reduced by 20% to 25% through self-service while e-learning could save training operational costs of between 15% and 25%.
“I think in getting the basics right, HR should always be focused on standardising HR processes and systems. For companies which have got multiple subsidiaries, the processes are usually not very consistent so there are a lot of opportunities to do that in uncertain times because HR is pressured to reduce cost,” he said.
Having a highly efficient HR organisation and well-embedded processes is important due to cost efficiency during a downturn but it also optimises an organisation ready to take on the upturn.
Accenture’s paper revealed how it helped South Korean telecommunications and energy conglomerate SK Group in its global expansion plan by improving its HR system in terms of its talent base, HR capabilities, and leadership support for globalisation.
Armed with the results, SK is aggressively enlarging the quantity and quality of its global talent, and building HR capabilities to support expansion of its global operations and revenue growth outside South Korea.
“The key thing in successful talent management is the ability to think about how to create a workforce that will perform when the company turns around. I think in the Malaysian context, we have not been too far ahead,” said Low
It’s time to move beyond retention strategies
COMPANIES in Asia can no longer solely focus on talent retention strategies but need to be proactive in recruiting and engaging their workforce, as economic recovery continues to tighten the squeeze for talent.
Speaking at a recent business luncheon talk, Talent2 Intenational Ltd managing director Andrew Banks said there wasn’t a one-size-fits-all HR strategy for talent retention.
“In the next few years, the fiercest competition in Asian counties will be from within the region. Global companies will have to be more sophisticated in finding out the best place for their investments and which labour force they should take advantage of, ” he added.
The talk was organised by the Malaysia Australia Business Council and Talent2 International Ltd, an Australian-listed human resource outsourcing firm with more than 1,100 staff across 17 countries. Its clients include multinationals and public sector organisations.
Banks noted certain changes in employment in recent months due to the economic downturn.
“Over the last 12 months, we have seen higher demand of local jobs such as teachers, doctors, nurses, farmers, versus global jobs with multi-national companies as the workforce is being pulled into different local sectors, thanks to government stimulus packages,” he said.
Hence companies would need to take local political and governmental policies into consideration during workforce mapping to figure out how to best work within the regulatory framework, he added.
A strategic HR approach would include workforce planning, supply mapping, talent pools, technology and using HR data to better understand the changing workforce. “Retention strategies deny the reality that workforces will churn,” he said.
According to Banks, HR departments were “not curious enough” about their employees and were not maximising the HR data they have to their advantage. “Data such as staff exit turnover rates, how many offers were made but not accepted, candidate sourcing and the time it takes to fill the job could help in understanding your workforce better.”
Besides just looking at why people were leaving, companies could also learn from employees who stayed on, which was what Talent2 International did to reduce its call centre client’s attrition rate from 40% to 15%.
“Eighty-five percent of them were women who lived within five miles of the call centre and liked to work three and a half days a week. And that’s all we looked for when we changed the recruitment strategy. Earlier the call centre ran ads for all sorts of people and tried squeezing them into a box, instead of the other way around,” he said.
Banks shared his observation on the Malaysian workforce. “The Malaysian workforce is not homogeneous so you have to find out what drives them, why they stay on with the company… and use that data to segment and target future talent into individual roles,” he said.
Speaking at a recent business luncheon talk, Talent2 Intenational Ltd managing director Andrew Banks said there wasn’t a one-size-fits-all HR strategy for talent retention.
“In the next few years, the fiercest competition in Asian counties will be from within the region. Global companies will have to be more sophisticated in finding out the best place for their investments and which labour force they should take advantage of, ” he added.
The talk was organised by the Malaysia Australia Business Council and Talent2 International Ltd, an Australian-listed human resource outsourcing firm with more than 1,100 staff across 17 countries. Its clients include multinationals and public sector organisations.
Banks noted certain changes in employment in recent months due to the economic downturn.
“Over the last 12 months, we have seen higher demand of local jobs such as teachers, doctors, nurses, farmers, versus global jobs with multi-national companies as the workforce is being pulled into different local sectors, thanks to government stimulus packages,” he said.
Hence companies would need to take local political and governmental policies into consideration during workforce mapping to figure out how to best work within the regulatory framework, he added.
A strategic HR approach would include workforce planning, supply mapping, talent pools, technology and using HR data to better understand the changing workforce. “Retention strategies deny the reality that workforces will churn,” he said.
According to Banks, HR departments were “not curious enough” about their employees and were not maximising the HR data they have to their advantage. “Data such as staff exit turnover rates, how many offers were made but not accepted, candidate sourcing and the time it takes to fill the job could help in understanding your workforce better.”
Besides just looking at why people were leaving, companies could also learn from employees who stayed on, which was what Talent2 International did to reduce its call centre client’s attrition rate from 40% to 15%.
“Eighty-five percent of them were women who lived within five miles of the call centre and liked to work three and a half days a week. And that’s all we looked for when we changed the recruitment strategy. Earlier the call centre ran ads for all sorts of people and tried squeezing them into a box, instead of the other way around,” he said.
Banks shared his observation on the Malaysian workforce. “The Malaysian workforce is not homogeneous so you have to find out what drives them, why they stay on with the company… and use that data to segment and target future talent into individual roles,” he said.
Asian firms focus on improving internal ops in downturn, says study
EXECUTIVES in Asia have been focusing on streamlining internal operations and driving efficiencies during the economic downturn. Faced with an unpredictable economic landscape, executives surveyed in a study by the Economist Intelligence Unit (EIU) said they have put investing in new markets and hiring new staff on hold.
The report, titled From hindsight to foresight: Improving business transparency in the wake of the financial crisis, summarised a survey of 258 executives that was conducted from June to July this year. Markets surveyed were Australia, New Zealand, India, Japan, China, Hong Kong and Singapore with 15% from the rest of Asia. Most of those surveyed were C-Suite executives or higher and 52% worked with companies with global annual revenues exceeding US$500 million (RM1.73 billion) from across the industries.
According to the report, 47% of Asian executives surveyed said their organisations have chosen to focus on internal issues such as increasing the frequency of internal reporting and placing more emphasis on analysis and transparency. Half of the survey respondents said their priorities were on streamlining existing operations and systems.
With these issues dominating the Asian companies’ agendas, innovation and product development were placed on the back burner. Less than a quarter are taking advantage of the downturn to hire new staff and only 31% are likely to take advantage of depressed prices to make an acquisition over the next year.
According to the report, most of the region’s companies failed to anticipate how badly the downturn would affect them with 70% saying the recession had brought home how vulnerable their firms were to market risk.
The crisis has also exposed 40% of the companies to the risk of relying on internal reporting that lacked accuracy, timeliness and completeness.
Nevertheless most of the survey’s respondents were optimistic that the changes their organisations were making would result in big gains on the upturn.
More than half (70%) predict a rise in revenues, 63% expect improvements in operational efficiency and 59% believe they will increase their market share
The report, titled From hindsight to foresight: Improving business transparency in the wake of the financial crisis, summarised a survey of 258 executives that was conducted from June to July this year. Markets surveyed were Australia, New Zealand, India, Japan, China, Hong Kong and Singapore with 15% from the rest of Asia. Most of those surveyed were C-Suite executives or higher and 52% worked with companies with global annual revenues exceeding US$500 million (RM1.73 billion) from across the industries.
According to the report, 47% of Asian executives surveyed said their organisations have chosen to focus on internal issues such as increasing the frequency of internal reporting and placing more emphasis on analysis and transparency. Half of the survey respondents said their priorities were on streamlining existing operations and systems.
With these issues dominating the Asian companies’ agendas, innovation and product development were placed on the back burner. Less than a quarter are taking advantage of the downturn to hire new staff and only 31% are likely to take advantage of depressed prices to make an acquisition over the next year.
According to the report, most of the region’s companies failed to anticipate how badly the downturn would affect them with 70% saying the recession had brought home how vulnerable their firms were to market risk.
The crisis has also exposed 40% of the companies to the risk of relying on internal reporting that lacked accuracy, timeliness and completeness.
Nevertheless most of the survey’s respondents were optimistic that the changes their organisations were making would result in big gains on the upturn.
More than half (70%) predict a rise in revenues, 63% expect improvements in operational efficiency and 59% believe they will increase their market share
Healthier workplaces make good business sense
IN conjunction with World Heart Day yesterday, the World Economic Forum (WEF), World Heart Federation and World Health Organisation (WHO) have called on businesses and governments to make workplaces healthier — a move that not only reduces likelihood of global health threats but also brings positive impact to economic performance.
“The World Economic Forum has identified chronic diseases as a major global threat for human lives and for economic growth and development over the coming 10 years,” said WEF executive chairman Professor Klaus Schwab.
Workplace wellness programmes, practised by the world’s leading companies, “made good business sense as productivity losses due to chronic diseases were estimated to be four times greater than the cost of their prevention or treatment”, he said in a Sept 23 press release.
Other substantial benefits for employers include increased productivity, up to 20% fewer sick days, lower medical costs, improved morale and corporate image, and enhanced staff retention.
Governments and leaders should invest the same amount of efforts and dollars towards improving workforce health as they do with the health of global financial systems, said World Heart Federation president Professor Pekka Puska, who officially launched World Heart Day in Abuja, Nigeria.
In view of the fact that most people spend more than half their waking hours at work, this year’s World Heart Day, themed “Work with Heart”, encourages healthy workplace habits that can reduce heart disease and stroke.
Healthier workplaces may not be necessarily costly as small changes such as bans on smoking, making more fruit and vegetables available at canteens and encouraging workers to have daily physical activity are relatively cheap, said the WEF in the statement
These efforts also help prevent other chronic diseases such as diabetes, cancer and chronic respiratory diseases, which altogether contribute to 60% of all deaths worldwide. Heart disease and stroke are the world’s leading killers, causing over 17.2 million deaths annually.
WHO department of chronic diseases and health promotion director Dr Fiona Adshead dismissed heart disease and stroke as “rich country” problems, as commonly misconceived, because over 80% of deaths from cardiovascular disease occurred in low- and middle-income countries. “We need a worldwide effort if we are to have a significant impact,” she said.
Written by Kathleen Tan
“The World Economic Forum has identified chronic diseases as a major global threat for human lives and for economic growth and development over the coming 10 years,” said WEF executive chairman Professor Klaus Schwab.
Workplace wellness programmes, practised by the world’s leading companies, “made good business sense as productivity losses due to chronic diseases were estimated to be four times greater than the cost of their prevention or treatment”, he said in a Sept 23 press release.
Other substantial benefits for employers include increased productivity, up to 20% fewer sick days, lower medical costs, improved morale and corporate image, and enhanced staff retention.
Governments and leaders should invest the same amount of efforts and dollars towards improving workforce health as they do with the health of global financial systems, said World Heart Federation president Professor Pekka Puska, who officially launched World Heart Day in Abuja, Nigeria.
In view of the fact that most people spend more than half their waking hours at work, this year’s World Heart Day, themed “Work with Heart”, encourages healthy workplace habits that can reduce heart disease and stroke.
Healthier workplaces may not be necessarily costly as small changes such as bans on smoking, making more fruit and vegetables available at canteens and encouraging workers to have daily physical activity are relatively cheap, said the WEF in the statement
These efforts also help prevent other chronic diseases such as diabetes, cancer and chronic respiratory diseases, which altogether contribute to 60% of all deaths worldwide. Heart disease and stroke are the world’s leading killers, causing over 17.2 million deaths annually.
WHO department of chronic diseases and health promotion director Dr Fiona Adshead dismissed heart disease and stroke as “rich country” problems, as commonly misconceived, because over 80% of deaths from cardiovascular disease occurred in low- and middle-income countries. “We need a worldwide effort if we are to have a significant impact,” she said.
Written by Kathleen Tan
Separation policies affect staff morale, firm’s brand
HOW a company treats its outgoing employees directly affects the morale of remaining employees, says a study by global career management firm DBM and the Human Capital Institute, a global professional association.
The study, titled Global Trends in Separation Practices, involved over 1,200 business leaders from 45 countries. Published in late August, 91% of participants were human resource professionals representing a wide cross-section of industries.
According to the report, almost all organisations faced decreased levels of morale (71%) and reduced loyalty (62%) after trimming their workforce.
However, most organisations (81%) believe providing higher levels of separation benefits positively impacts the morale and productivity of the remaining workforce, said the report.
“When remaining employees see their former colleagues treated with dignity, it has a positive effect on their morale,” said DBM Malaysia Sdn Bhd managing director Mastura Diana Jaffar during a phone interview on Sept 18.
When determining severance policies, companies place consideration to departing employees (84%) and protecting the morale and commitment of remaining employees (82%) over financial considerations such as budget (67%) and return on investment (40%).
Almost all (85%) of the organisations surveyed provide severance to at least some of their employees but less than half (45%) provide severance to all their employees. The amount paid is usually determined by years of service (85%) and level within the organisation (50%).
Three-quarters of organisations with 100 or more employees provide outplacement services to selected employees, said the report. An employee’s position in the company (63%) followed by years of service (39%) are factors in determining whether he or she will receive outplacement services. Circumstances such as mergers and acquisitions and facility closings help determine levels of outplacement support for 58% of the companies surveyed.
Organisations now recognise that support for departing employees is a requirement rather than an option, said DBM chairman and CEO Robert Gasparini in a statement on Aug 27. “Separation policies help safeguard the company brand and reinforce relationships with employees, consumers and stockholders,” he said.
At least 90% of human resource professionals agree that the most valued features of outplacement programmes include support, coaching and guidance from consultants, said the report. Ideally outplacement services should also include self-marketing materials, skill building and coaching, job leads and access to online resources.
It is important for organisations to manage employee separation well as “departing employees become customers, referral sources, competitors and perhaps even future employees returning,” said Gasparini. “By managing employee separation well, companies can fortify loyalty and mitigate retention risk among the remaining workforce.”
Written by Emily Tan
The study, titled Global Trends in Separation Practices, involved over 1,200 business leaders from 45 countries. Published in late August, 91% of participants were human resource professionals representing a wide cross-section of industries.
According to the report, almost all organisations faced decreased levels of morale (71%) and reduced loyalty (62%) after trimming their workforce.
However, most organisations (81%) believe providing higher levels of separation benefits positively impacts the morale and productivity of the remaining workforce, said the report.
“When remaining employees see their former colleagues treated with dignity, it has a positive effect on their morale,” said DBM Malaysia Sdn Bhd managing director Mastura Diana Jaffar during a phone interview on Sept 18.
When determining severance policies, companies place consideration to departing employees (84%) and protecting the morale and commitment of remaining employees (82%) over financial considerations such as budget (67%) and return on investment (40%).
Almost all (85%) of the organisations surveyed provide severance to at least some of their employees but less than half (45%) provide severance to all their employees. The amount paid is usually determined by years of service (85%) and level within the organisation (50%).
Three-quarters of organisations with 100 or more employees provide outplacement services to selected employees, said the report. An employee’s position in the company (63%) followed by years of service (39%) are factors in determining whether he or she will receive outplacement services. Circumstances such as mergers and acquisitions and facility closings help determine levels of outplacement support for 58% of the companies surveyed.
Organisations now recognise that support for departing employees is a requirement rather than an option, said DBM chairman and CEO Robert Gasparini in a statement on Aug 27. “Separation policies help safeguard the company brand and reinforce relationships with employees, consumers and stockholders,” he said.
At least 90% of human resource professionals agree that the most valued features of outplacement programmes include support, coaching and guidance from consultants, said the report. Ideally outplacement services should also include self-marketing materials, skill building and coaching, job leads and access to online resources.
It is important for organisations to manage employee separation well as “departing employees become customers, referral sources, competitors and perhaps even future employees returning,” said Gasparini. “By managing employee separation well, companies can fortify loyalty and mitigate retention risk among the remaining workforce.”
Written by Emily Tan
Sunday, December 12, 2010
Talent management in crisis
It was spring of 2003 and I was strolling along Australia’s famous Bondi Beach when a slogan emblazoned on the back of a T-shirt caught my eye: “You pay monkeys, you get peanuts.” The words were familiar yet slightly different, and took a while to sink in.
I had been reflecting on my experiences over the past seven years spent consulting in the wake of the Asian financial crisis. As a human resource consultant specialising in compensation, I had heard the original saying “You pay peanuts, you get monkeys”, on numerous occasions. This statement is used by boards, management and consultants to justify increases in compensation for key executives and employees. However, it over-simplifies the complex issue of talent management. The underlying assumption is that we work for pay alone, which is not true.
Six years later, I am back in Asia doing consultancy after spending five years in a variety of HR roles at one of Australia’s top four banks. We are once again deep in economic crisis. The global financial crisis had its roots in poor consumer lending practices in the US whereas the Asian financial crisis was caused by ill-advised lending to Asian conglomerates in particular. There is also another difference: the huge compensation paid to executives and bankers had allegedly contributed to the latest crisis, whereas the previous one was partly caused by the failure to appreciate the risks inherent in related-party business dealings. It has led me to think about that slogan on the T-shirt again and about how some HR practices have contributed to these economic crises.
The cause of the global financial crisis can be traced by focusing on structural economic factors. Interest rates were held too low for too long in the US, making funding too easily available to lenders. They in turn made finance available, through poor credit underwriting standards, to consumers unable to service this debt. Home prices reached unrealistic levels while securitisation enabled lenders to free their balance sheets to lend again and diversify the risk globally. Some organisations hedged these risks through complex derivatives, which were poorly understood. When the original borrowers defaulted on the loan repayments, a contagion swept through the global financial system and plunged us into recession.
Another way of examining the global financial crisis is by applying a behavioural lens. From this perspective, the global financial crisis was caused by excessive risk-taking, a short-term orientation to profitability, inadequate corporate governance and insufficient regulatory supervision. The implications for HR from these seemingly aberrant attitudes and behaviours were that the compensation for bankers was too highly leveraged towards variable pay and that the payout for executives over-emphasised short-term incentives over long-term ones.
To draw so few HR implications from this crisis and focus them all on compensation is to over-simplify the complex issue of talent management. If it is true that regulators did not adequately supervise these markets, why is this so? Is it possible that regulators relied on financial institutions to regulate themselves because self-regulation is in their shareholders’ long-term interest? If so, why did self-regulation fail? It is interesting to note that investigators of unauthorised and fraudulent trading activities by individual “rogue traders” around the world have often cited “organisational culture” as one reason why many of these incidents occurred and went undetected for a long time.
An organisation’s culture — the collective values, beliefs, attitudes and behaviours of its employees — is heavily influenced by its talent management policies and practices. Healthy organisational cultures will generate a system of checks and balances which can curb excessive risk-taking and ensure that critical business decisions are based on sustainable business models.
If, for instance, the organisation recruits employees from very narrow or familiar sources, it is possible that people in this organisation will not question or challenge practices that are not in the long-term best interests of shareholders. Similarly, if rigorous selection methodologies are forsaken, then employees in critical roles may not have the right skills to perform well. In the case of credit-risk managers, this could have disastrous consequences.
Likewise, the failure to plan for leadership succession can lead to regular churn among senior executive ranks and result in constant changes to business strategy and loss of institutional memory because new leaders will tend to bring in their own teams. If there is insufficient investment in training, employees will not be able to perform their roles. Many employees view classroom training as the only legitimate form of learning. This undervalues the expertise one can gain from on-the-job coaching. Employees also often view the only form of acceptable career progression is climbing up the corporate hierarchy. This ignores the effectiveness of lateral moves as a means of developing well-rounded leaders.
In my current role, I can hardly deny the importance of rigorous and objective performance management systems and processes. Nor would I discount the impact leveraged compensation structures and an inappropriate balance between short and long-term incentives in executive pay mixes have on behaviour.
However, to say that these have been the only HR influences that contributed to past economic crises is to paint an incomplete picture.
The role that a diverse workforce plays in creating a healthy organisational culture, which appropriately balances the need to drive short-term profits with the imperative to build a sustainable business, should not be underestimated.
To limit the HR lessons learnt from economic crises to compensation-related issues raises the risk that we will repeat the mistakes of the past and suffer similar consequences in the future.
by Dharma Chandran is a partner with Ernst & Young and Far East area leader of the Performance & Rewards Practice.
I had been reflecting on my experiences over the past seven years spent consulting in the wake of the Asian financial crisis. As a human resource consultant specialising in compensation, I had heard the original saying “You pay peanuts, you get monkeys”, on numerous occasions. This statement is used by boards, management and consultants to justify increases in compensation for key executives and employees. However, it over-simplifies the complex issue of talent management. The underlying assumption is that we work for pay alone, which is not true.
Six years later, I am back in Asia doing consultancy after spending five years in a variety of HR roles at one of Australia’s top four banks. We are once again deep in economic crisis. The global financial crisis had its roots in poor consumer lending practices in the US whereas the Asian financial crisis was caused by ill-advised lending to Asian conglomerates in particular. There is also another difference: the huge compensation paid to executives and bankers had allegedly contributed to the latest crisis, whereas the previous one was partly caused by the failure to appreciate the risks inherent in related-party business dealings. It has led me to think about that slogan on the T-shirt again and about how some HR practices have contributed to these economic crises.
The cause of the global financial crisis can be traced by focusing on structural economic factors. Interest rates were held too low for too long in the US, making funding too easily available to lenders. They in turn made finance available, through poor credit underwriting standards, to consumers unable to service this debt. Home prices reached unrealistic levels while securitisation enabled lenders to free their balance sheets to lend again and diversify the risk globally. Some organisations hedged these risks through complex derivatives, which were poorly understood. When the original borrowers defaulted on the loan repayments, a contagion swept through the global financial system and plunged us into recession.
Another way of examining the global financial crisis is by applying a behavioural lens. From this perspective, the global financial crisis was caused by excessive risk-taking, a short-term orientation to profitability, inadequate corporate governance and insufficient regulatory supervision. The implications for HR from these seemingly aberrant attitudes and behaviours were that the compensation for bankers was too highly leveraged towards variable pay and that the payout for executives over-emphasised short-term incentives over long-term ones.
To draw so few HR implications from this crisis and focus them all on compensation is to over-simplify the complex issue of talent management. If it is true that regulators did not adequately supervise these markets, why is this so? Is it possible that regulators relied on financial institutions to regulate themselves because self-regulation is in their shareholders’ long-term interest? If so, why did self-regulation fail? It is interesting to note that investigators of unauthorised and fraudulent trading activities by individual “rogue traders” around the world have often cited “organisational culture” as one reason why many of these incidents occurred and went undetected for a long time.
An organisation’s culture — the collective values, beliefs, attitudes and behaviours of its employees — is heavily influenced by its talent management policies and practices. Healthy organisational cultures will generate a system of checks and balances which can curb excessive risk-taking and ensure that critical business decisions are based on sustainable business models.
If, for instance, the organisation recruits employees from very narrow or familiar sources, it is possible that people in this organisation will not question or challenge practices that are not in the long-term best interests of shareholders. Similarly, if rigorous selection methodologies are forsaken, then employees in critical roles may not have the right skills to perform well. In the case of credit-risk managers, this could have disastrous consequences.
Likewise, the failure to plan for leadership succession can lead to regular churn among senior executive ranks and result in constant changes to business strategy and loss of institutional memory because new leaders will tend to bring in their own teams. If there is insufficient investment in training, employees will not be able to perform their roles. Many employees view classroom training as the only legitimate form of learning. This undervalues the expertise one can gain from on-the-job coaching. Employees also often view the only form of acceptable career progression is climbing up the corporate hierarchy. This ignores the effectiveness of lateral moves as a means of developing well-rounded leaders.
In my current role, I can hardly deny the importance of rigorous and objective performance management systems and processes. Nor would I discount the impact leveraged compensation structures and an inappropriate balance between short and long-term incentives in executive pay mixes have on behaviour.
However, to say that these have been the only HR influences that contributed to past economic crises is to paint an incomplete picture.
The role that a diverse workforce plays in creating a healthy organisational culture, which appropriately balances the need to drive short-term profits with the imperative to build a sustainable business, should not be underestimated.
To limit the HR lessons learnt from economic crises to compensation-related issues raises the risk that we will repeat the mistakes of the past and suffer similar consequences in the future.
by Dharma Chandran is a partner with Ernst & Young and Far East area leader of the Performance & Rewards Practice.
In times of crisis, refocus on core competencies
Times of crisis, whether economic or within the company itself, is when companies should refocus on their core competencies.
“It should be seen as a time of opportunity. A chance to change the business model into something centred on core competencies that are competitive, flexible and relevant to the times,” said Frank Kern, senior vice-president of IBM Global Business Services, in an interview at IBM Towers in Petaling Jaya last month.
Kern said IBM did just that when it divested itself of its PC division, which was acquired by Lenovo in 2004. Despite the name International Business Machines, IBM’s core competency had never been about manufacturing computer hardware. “It’s about solutions,” he said.
When IBM started in 1896 as the Tabulating Machine Company, it was manufacturing meat slicers and electronic punch-card machines.
“Today our solutions are found in the intellect of consultants and data management. The way we provide solutions may have changed, but the core hasn’t,” said Kern.
It was the decision to refocus on providing solutions that led IBM, under CEO Sam Palmisano, to move to a “higher-value position” in financing, software and services as opposed to a more “commodity-driven industry” like PC manufacturing, said Kern. The move has been successful. Even in a downturn, IBM’s net income in 2Q2009 was US$3.1 billion (RM10.9 billion), up 12% from US$2.8 billion in 2Q2008, said Kern.
Once you’ve decided on your core competence, divest yourself of less successful enterprises and acquire companies that will push you further in the direction you want to go, said Kern. In IBM’s case, it acquired PricewaterhouseCoopers’ consulting arm in 2002 for US$3.5 billion and sold off its PC division, which hadn’t been profitable in over three years, to Lenovo for US$1.25 billion.
“Acquiring PwC allowed us to gain the necessary expertise to be a leader in consulting and analytics,” said Kern.
In the last three years, IBM has invested more than US$10 billion in the emerging market of business analytics, added 4,000 new consultants who specialise in that field, and invested over US$6 billion in R&D. It recently announced its intention to aquire SPSS, a predictive analytics software provider, for US$1.25 billion.
Better data gathering and analytical systems can help companies better weather a crisis, said Kern. “Too many companies are making decisions based on incomplete data. Most CEOs understand the value of data but have no way to access it in a format they can use. But once they are adequately informed, the ability to make better decisions is incredible,” he said
Finally, with any changes made, you need a change management programme, said Kern. “Anything you do in the company that changes things must be managed in terms of company culture and processes.”
“It should be seen as a time of opportunity. A chance to change the business model into something centred on core competencies that are competitive, flexible and relevant to the times,” said Frank Kern, senior vice-president of IBM Global Business Services, in an interview at IBM Towers in Petaling Jaya last month.
Kern said IBM did just that when it divested itself of its PC division, which was acquired by Lenovo in 2004. Despite the name International Business Machines, IBM’s core competency had never been about manufacturing computer hardware. “It’s about solutions,” he said.
When IBM started in 1896 as the Tabulating Machine Company, it was manufacturing meat slicers and electronic punch-card machines.
“Today our solutions are found in the intellect of consultants and data management. The way we provide solutions may have changed, but the core hasn’t,” said Kern.
It was the decision to refocus on providing solutions that led IBM, under CEO Sam Palmisano, to move to a “higher-value position” in financing, software and services as opposed to a more “commodity-driven industry” like PC manufacturing, said Kern. The move has been successful. Even in a downturn, IBM’s net income in 2Q2009 was US$3.1 billion (RM10.9 billion), up 12% from US$2.8 billion in 2Q2008, said Kern.
Once you’ve decided on your core competence, divest yourself of less successful enterprises and acquire companies that will push you further in the direction you want to go, said Kern. In IBM’s case, it acquired PricewaterhouseCoopers’ consulting arm in 2002 for US$3.5 billion and sold off its PC division, which hadn’t been profitable in over three years, to Lenovo for US$1.25 billion.
“Acquiring PwC allowed us to gain the necessary expertise to be a leader in consulting and analytics,” said Kern.
In the last three years, IBM has invested more than US$10 billion in the emerging market of business analytics, added 4,000 new consultants who specialise in that field, and invested over US$6 billion in R&D. It recently announced its intention to aquire SPSS, a predictive analytics software provider, for US$1.25 billion.
Better data gathering and analytical systems can help companies better weather a crisis, said Kern. “Too many companies are making decisions based on incomplete data. Most CEOs understand the value of data but have no way to access it in a format they can use. But once they are adequately informed, the ability to make better decisions is incredible,” he said
Finally, with any changes made, you need a change management programme, said Kern. “Anything you do in the company that changes things must be managed in terms of company culture and processes.”
Getting ready for a ‘resumé tsunami’
With a recovery on the horizon, employers had better look to securing their top talent or they may find themselves buried under an avalanche of resignations when the good times return. A recent report on a global study by Forbes Insights for Deloitte found that after previous recessions, many companies experienced a “resumé tsunami” as employees seized the opportunity to move on.
Published in July, the report titled “Managing talent in a turbulent economy: Clearing the hurdles to recovery” is based on a survey of 319 senior business leaders of large companies across industries from the Americas to Asia-Pacific, Europe, the Middle East and Africa.
The study found that nearly two-thirds of business leaders were concerned about losing high-potential and critical talent in the year after the recession ends. Cost-cutting measures taken by companies have increased the chance of voluntary turnover with survey respondents citing lack of compensation increases (44%), lack of adequate bonuses (28%) and excessive workload (30%) as hurdles to retaining employees.
A series of quick online polls by The Korn/Ferry Institute on the firm’s online executive centre, ekornferry.com, between May and June have identified lack of trust in corporate leadership as a potential problem. The polls aim to provide brief snapshots into the executive mindset. The potential pool of respondents numbered 1,600 from 70 countries, but the numbers that chose to respond to each question differed.
When asked if they trusted their boss, one-third of 125 respondents to the poll said they didn’t. Asked if they trusted their CEO, 33% of 86 respondents also said no. Furthermore, only 30% of 117 respondents believed their company’s current CEO to be the best person for the job.
This is a significant problem as corporate leaders are the most critical link to employee engagement, says Indranil Roy, Korn/Ferry managing director of Leadership and Talent Consulting (L&TC), Asia-Pacific, in an email interview dated Aug 19. “Trust in leaders has been the primary casualty of the global crisis,” says Roy.
This corresponds with the Towers Perrin Global Workforce Study which found that the single factor that impacts employee engagement the most is the organisation and its senior leaders. The 2008 year-long study by Towers Perrin-ISR involved 664,000 employees in 50 global companies.
Unfortunately, there is no short cut to regaining employee trust and thus retaining them when the economy recovers, says Roy. “Trust must be rebuilt one person at a time and must start from the top,” he adds.
Towers Perrin managing director Julie Gebaur advised leaders during a workshop in Kuala Lumpur in June on “Closing the engagement gap” to take the effort to understand employees and what drives them to perform. Additionally, to foster employee engagement, leaders must foster learning and career paths for staff and involve them by keeping them informed in the decision-making process and accepting feedback. Most importantly, says Gebaur, leaders need to care. “If the senior leaders don’t care, it will take everyday heroics from immediate management to engage the people in their team,” says Gebaur
Written by Emily Tan
Published in July, the report titled “Managing talent in a turbulent economy: Clearing the hurdles to recovery” is based on a survey of 319 senior business leaders of large companies across industries from the Americas to Asia-Pacific, Europe, the Middle East and Africa.
The study found that nearly two-thirds of business leaders were concerned about losing high-potential and critical talent in the year after the recession ends. Cost-cutting measures taken by companies have increased the chance of voluntary turnover with survey respondents citing lack of compensation increases (44%), lack of adequate bonuses (28%) and excessive workload (30%) as hurdles to retaining employees.
A series of quick online polls by The Korn/Ferry Institute on the firm’s online executive centre, ekornferry.com, between May and June have identified lack of trust in corporate leadership as a potential problem. The polls aim to provide brief snapshots into the executive mindset. The potential pool of respondents numbered 1,600 from 70 countries, but the numbers that chose to respond to each question differed.
When asked if they trusted their boss, one-third of 125 respondents to the poll said they didn’t. Asked if they trusted their CEO, 33% of 86 respondents also said no. Furthermore, only 30% of 117 respondents believed their company’s current CEO to be the best person for the job.
This is a significant problem as corporate leaders are the most critical link to employee engagement, says Indranil Roy, Korn/Ferry managing director of Leadership and Talent Consulting (L&TC), Asia-Pacific, in an email interview dated Aug 19. “Trust in leaders has been the primary casualty of the global crisis,” says Roy.
This corresponds with the Towers Perrin Global Workforce Study which found that the single factor that impacts employee engagement the most is the organisation and its senior leaders. The 2008 year-long study by Towers Perrin-ISR involved 664,000 employees in 50 global companies.
Unfortunately, there is no short cut to regaining employee trust and thus retaining them when the economy recovers, says Roy. “Trust must be rebuilt one person at a time and must start from the top,” he adds.
Towers Perrin managing director Julie Gebaur advised leaders during a workshop in Kuala Lumpur in June on “Closing the engagement gap” to take the effort to understand employees and what drives them to perform. Additionally, to foster employee engagement, leaders must foster learning and career paths for staff and involve them by keeping them informed in the decision-making process and accepting feedback. Most importantly, says Gebaur, leaders need to care. “If the senior leaders don’t care, it will take everyday heroics from immediate management to engage the people in their team,” says Gebaur
Written by Emily Tan
Develop your career effectively
Many people have a one-dimensional idea of career development. To them, it simply means promotion - ever onward and upward. If this is your idea of career development, you are going to miss some important opportunities.
So step back a bit before you attempt to step forward. There is more than one angle to career development and you need to be clear about what they are and what they offer.
Project work: If you haven’t done any before, this is a way of developing your career.
Job expansion: Another form of career development is to add things on to your existing responsibilities.
Sideways movement: This involves stepping into another field of interest, perhaps one that is related to your present one. For example, you switch from drug discovery to clinical trials.
Downward movement: This might seem like a negative move. But think again. If a career is coming to a close - and they all do - this can be a very useful and appealing option.
Outward movement: For very experienced people, this might be the only way to get the personal and career growth they seek.
What you need to do
Whichever way you decide to go in developing your career, you need a clear goal above all else. Then you need to do a careful analysis of the skills you need to achieve that goal. You also need good timing.
One of our contacts in Singapore wanted to move into clinical research from drug discovery after a few years in the pharmaceutical industry. She did it by age 30. If she left it much later, there was a risk that she would become typecast or over-priced and unable to make the move.
You also need good sources of advice and information. You do that by networking well, so that you always have someone to confer with when the need arises - and, just as important, when it doesn’t.
Networking is a two-way street. People with an extensive network get to hear of opportunities that might otherwise stay hidden. So include recruitment consultants in your network.
The earlier you start planning for a successful career, the more likely it is that you will achieve your aim. You won’t get to the top unless you first identify what it takes to get there and get yourself into the sort of positions that allow you to start building the necessary skills.
Whether you plan to be a top specialist or a top strategist, you are likely to need similar qualities. These include:
*Leadership skills and a practised ability to get the best out of different people;
*Communication skills, in particular the ability to associate with people from other disciplines and cultures and, above all, the ability to listen and to assimilate data;
*Sound knowledge of business and commercial drivers that provide the motivation and energy to meet your organisation’s goals;
*Finance skills, at the very least, an ability to read and understand a balance sheet, a profit and loss account and an operating statement; and
*Determination, allied with sound judgment - it’s just as important to know when to drop something as it is to know when to plough on with it.
And if you are a technology specialist pursuing a career alongside different specialists, it will pay to start with higher qualifications. A PhD will give you a better chance of developing a career path that eventually converges with that of your competitors.
Achieve your aspirations
Some people are content with where they are and do not want another promotion.
What they are interested in is personal development rather than career development. In their view, ambition should not be compulsory.
For such people, the opportunity to learn something new, perhaps in the form of support for some form of advanced learning, has greater value.
But if you are one of the truly ambitious ones, you can still achieve your career aspirations.
All you need is clear focus, a clear career goal, the qualities needed to support your ambition, an effective personal network and determination. What are you waiting for?
* Article by Laura Thomas, managing director of RSA Singapore
So step back a bit before you attempt to step forward. There is more than one angle to career development and you need to be clear about what they are and what they offer.
Project work: If you haven’t done any before, this is a way of developing your career.
Job expansion: Another form of career development is to add things on to your existing responsibilities.
Sideways movement: This involves stepping into another field of interest, perhaps one that is related to your present one. For example, you switch from drug discovery to clinical trials.
Downward movement: This might seem like a negative move. But think again. If a career is coming to a close - and they all do - this can be a very useful and appealing option.
Outward movement: For very experienced people, this might be the only way to get the personal and career growth they seek.
What you need to do
Whichever way you decide to go in developing your career, you need a clear goal above all else. Then you need to do a careful analysis of the skills you need to achieve that goal. You also need good timing.
One of our contacts in Singapore wanted to move into clinical research from drug discovery after a few years in the pharmaceutical industry. She did it by age 30. If she left it much later, there was a risk that she would become typecast or over-priced and unable to make the move.
You also need good sources of advice and information. You do that by networking well, so that you always have someone to confer with when the need arises - and, just as important, when it doesn’t.
Networking is a two-way street. People with an extensive network get to hear of opportunities that might otherwise stay hidden. So include recruitment consultants in your network.
The earlier you start planning for a successful career, the more likely it is that you will achieve your aim. You won’t get to the top unless you first identify what it takes to get there and get yourself into the sort of positions that allow you to start building the necessary skills.
Whether you plan to be a top specialist or a top strategist, you are likely to need similar qualities. These include:
*Leadership skills and a practised ability to get the best out of different people;
*Communication skills, in particular the ability to associate with people from other disciplines and cultures and, above all, the ability to listen and to assimilate data;
*Sound knowledge of business and commercial drivers that provide the motivation and energy to meet your organisation’s goals;
*Finance skills, at the very least, an ability to read and understand a balance sheet, a profit and loss account and an operating statement; and
*Determination, allied with sound judgment - it’s just as important to know when to drop something as it is to know when to plough on with it.
And if you are a technology specialist pursuing a career alongside different specialists, it will pay to start with higher qualifications. A PhD will give you a better chance of developing a career path that eventually converges with that of your competitors.
Achieve your aspirations
Some people are content with where they are and do not want another promotion.
What they are interested in is personal development rather than career development. In their view, ambition should not be compulsory.
For such people, the opportunity to learn something new, perhaps in the form of support for some form of advanced learning, has greater value.
But if you are one of the truly ambitious ones, you can still achieve your career aspirations.
All you need is clear focus, a clear career goal, the qualities needed to support your ambition, an effective personal network and determination. What are you waiting for?
* Article by Laura Thomas, managing director of RSA Singapore
Up Close and Personal with Tadashi Yanai, CEO of UNIQLO
IT was a warm Wednesday morning as this writer was escorted up the elevator to meet Tokyo-based Fast Retailing Co's chairman and chief executive officer Tadashi Yanai, at his hotel suite in Kuala Lumpur. Tadashi, who heads Japan's largest clothes retailer, is also the country's richest man with a net worth of US$9.2bil, according to Forbes.
An intimidating bodyguard stood at the entrance to Tadashi's suite. Inside, the man himself was surrounded by an ensemble comprising public liaisons, media correspondents and more bodyguards.
Tadashi greeted me with the traditional Japanese bow and the entire interview was aided by a translator.
The self-made billionaire was quick to admit that it was through hard work and perseverance that he is where he is today. But Tadashi admitted that there was one point in his youth when he actually considered not working for a living!
When I was around 17 or 18 years old, I told myself that I didn't want to work my entire life. I was not interested in business at all, said the soft spoken gentleman.
Tadashi was in Malaysia last month to officiate the opening of the first Uniqlo store here. Uniqlo is one of the fashion brands under Fast Retailing.
The globe-trotter
Tadashi was born in 1949, the same year his father founded Men's Shop Ogori Shoji in Ube City, Yamaguchi Prefecture, selling men's clothes.
As a young man between the late 1960s and early 1970s, Tadashi had the opportunity to travel the world, gaining valuable insights from observing the way international brands operated.
Though he wasn't interested in the retail clothing business (at least not then), Tadashi was born into it and couldn't help but be fascinated by the industry and how different it was in the various parts of the world
For me, travelling the world and seeing how the various businesses operated was indeed a precious experience, Tadashi said, adding that among the more famous stores that he visited were American clothing and accessories retailer, Gap and prominent British retailer, Marks & Spencer.
I studied how the business worked and how it succeeded. The idea was to bring these experiences back to Japan and make it a success here, and then replicate it in other parts of the world.
Building an empire
With that, gone was the never wanting to work for a living attitude as it was only natural to take over his father's business.
Tadashi took over the helm of his father's business in 1984 and opened the first Uniqlo store that year in Hiroshima City titled Unique Clothing Warehouse, specialising in casual clothing.
The chain grew rapidly and in 1991, Tadashi changed the name of the company from Ogori Shoji to Fast Retailing. By 1994, there were more than 100 retail stores in Japan.
The turning point came in 1998 when Uniqlo pushed fleece wear for 1,900 yen, selling two million units. The fleece boom continued and in 1999, Uniqlo sold over eight million outfits.
By 2002, the first overseas Uniqlo outlet was opened in China along with four outlets in London.
The brand's popularity continued and it opened its first stores in the United States, Hong Kong and South Korea by 2005.
To date, there are more than 700 Japan-based Uniqlo stores and a fast growing collection of overseas offerings.
The Look West policy
According to various reports, Tadashi has set an ambitious target to open 1,000 stores in China by 2020. The reports have quoted him as saying that China has transformed itself from a developing country to the world's largest growth centre.
But apparently, that's only just half the total target, according to Tadashi.
I want to open 1,000 stores within the Asean region in the next 10 years. So, by 2020, we would have a total of 2,000 stores both in Asean and China.
Asean has great growth potential, even more than China. Comparatively, it's one whole region versus one country, meaning that the (Asean) population is significantly larger (than that of China's) and will offer better (growth) opportunities.
Tadashi said the growth potential for Asean had only just begun ... could be as big as China some day.
Tadashi is highly optimistic of Malaysia's outlook. He has visited Malaysia numerous times between 1960s and early 1970s.
I actually visited Malaysia some 40 years ago. I went to Singapore and then travelled here by bus, Tadashi recalled.
Back then, there was jungle everywhere. But today, there are many skyscrapers everywhere! The country is so well developed. It's exciting to see how much the country has grown.
Tadashi said he had seen similar positive growth in other Asean countries, hence his policy to look to this part of the region for business opportunities.
He summed up the company's strategy moving forward by paraphrasing an old business philosophy of Malaysia's former prime minister, Tun Dr Mahathir Mohamad.
Many years ago, Dr Mahathir propagated the Look East Policy, encouraging Malaysia to learn from more advanced economies such as Japan for inspiration.
However, Japan's economy has not been doing too well recently while Asean markets have been booming. That's why I say that for Fast Retailing, we now have to adopt a Look West Policy,' because economies in that part of the region, on our west, are doing better than us, Tadashi enthused.
But the ultimate goal for Fast Retailing, said Tadashi, was to have a store everywhere in the world.
The dream is to be able to provide truly great clothing around the globe. To do that, we need to be in every part of the world.
Never about the money
Tadashi humbly said he never imagined that he would one day join the ranks of the wealthiest. But making money was never the biggest part of the plan, he admitted.
I never pursued wealth. It just came naturally. To me, it has always been about the business, managing it, growing it and benefiting society.
I believe that if you pursue wealth, you will always be chasing it, said Tadashi, who takes his inspiration from the founders of well-known Japanese conglomerates such as Panasonic and Honda.
Tadashi added that a person pursuing success should not be afraid of taking risks and making mistakes.
If you want to succeed, you have to experience failures. To me, the worst people in the world are those that neither succeed nor fail. These people don't do anything and accomplish nothing.
The second worst types are those that continuously fail. They never learn from their mistakes and never succeed, he said.
Tadashi added that in a rapidly-changing global environment, failure was one of the costs of success.
The world is constantly changing. To succeed in this environment, you need to make mistakes, fail, learn from them and move on.
In light of the changing global marketplace, taking risks was vital, said Tadashi.
I have always been a risk-taker. But I only take them (risks) as long as the company doesn't go bankrupt. You need to constantly evaluate the situation. If you don't take risks, you will never profit.
Tadashi said trust and credibility are important traits in growing a successful business.
Also, for him it's basically his way or the highway at the office.
I consider myself a strict boss at the office. I think it is necessary if you need to do what's right. A lot of managers out there say a lot of things but they never do it.
If I say something, whether at the office or in public, it will be executed and I will do it. That's what sets me apart from others.
Work and play
According to Tadashi, from Mondays to Fridays it's strictly business, while the weekends are reserved for his second biggest passion golf. And his favourite pastime? Work, he said.
I know that to a lot of people, work is work and play is play. But to me, my work is my playground. I find it fun and enjoying. To be able to do something where you can contribute to society is an enjoyment, said Tadashi.
Still, when time does afford him the luxury to relax, Tadashi likes to read a good book and listens to jazz music.
I like reading books on business management by people that actually run their own businesses, he said.
An intimidating bodyguard stood at the entrance to Tadashi's suite. Inside, the man himself was surrounded by an ensemble comprising public liaisons, media correspondents and more bodyguards.
Tadashi greeted me with the traditional Japanese bow and the entire interview was aided by a translator.
The self-made billionaire was quick to admit that it was through hard work and perseverance that he is where he is today. But Tadashi admitted that there was one point in his youth when he actually considered not working for a living!
When I was around 17 or 18 years old, I told myself that I didn't want to work my entire life. I was not interested in business at all, said the soft spoken gentleman.
Tadashi was in Malaysia last month to officiate the opening of the first Uniqlo store here. Uniqlo is one of the fashion brands under Fast Retailing.
The globe-trotter
Tadashi was born in 1949, the same year his father founded Men's Shop Ogori Shoji in Ube City, Yamaguchi Prefecture, selling men's clothes.
As a young man between the late 1960s and early 1970s, Tadashi had the opportunity to travel the world, gaining valuable insights from observing the way international brands operated.
Though he wasn't interested in the retail clothing business (at least not then), Tadashi was born into it and couldn't help but be fascinated by the industry and how different it was in the various parts of the world
For me, travelling the world and seeing how the various businesses operated was indeed a precious experience, Tadashi said, adding that among the more famous stores that he visited were American clothing and accessories retailer, Gap and prominent British retailer, Marks & Spencer.
I studied how the business worked and how it succeeded. The idea was to bring these experiences back to Japan and make it a success here, and then replicate it in other parts of the world.
Building an empire
With that, gone was the never wanting to work for a living attitude as it was only natural to take over his father's business.
Tadashi took over the helm of his father's business in 1984 and opened the first Uniqlo store that year in Hiroshima City titled Unique Clothing Warehouse, specialising in casual clothing.
The chain grew rapidly and in 1991, Tadashi changed the name of the company from Ogori Shoji to Fast Retailing. By 1994, there were more than 100 retail stores in Japan.
The turning point came in 1998 when Uniqlo pushed fleece wear for 1,900 yen, selling two million units. The fleece boom continued and in 1999, Uniqlo sold over eight million outfits.
By 2002, the first overseas Uniqlo outlet was opened in China along with four outlets in London.
The brand's popularity continued and it opened its first stores in the United States, Hong Kong and South Korea by 2005.
To date, there are more than 700 Japan-based Uniqlo stores and a fast growing collection of overseas offerings.
The Look West policy
According to various reports, Tadashi has set an ambitious target to open 1,000 stores in China by 2020. The reports have quoted him as saying that China has transformed itself from a developing country to the world's largest growth centre.
But apparently, that's only just half the total target, according to Tadashi.
I want to open 1,000 stores within the Asean region in the next 10 years. So, by 2020, we would have a total of 2,000 stores both in Asean and China.
Asean has great growth potential, even more than China. Comparatively, it's one whole region versus one country, meaning that the (Asean) population is significantly larger (than that of China's) and will offer better (growth) opportunities.
Tadashi said the growth potential for Asean had only just begun ... could be as big as China some day.
Tadashi is highly optimistic of Malaysia's outlook. He has visited Malaysia numerous times between 1960s and early 1970s.
I actually visited Malaysia some 40 years ago. I went to Singapore and then travelled here by bus, Tadashi recalled.
Back then, there was jungle everywhere. But today, there are many skyscrapers everywhere! The country is so well developed. It's exciting to see how much the country has grown.
Tadashi said he had seen similar positive growth in other Asean countries, hence his policy to look to this part of the region for business opportunities.
He summed up the company's strategy moving forward by paraphrasing an old business philosophy of Malaysia's former prime minister, Tun Dr Mahathir Mohamad.
Many years ago, Dr Mahathir propagated the Look East Policy, encouraging Malaysia to learn from more advanced economies such as Japan for inspiration.
However, Japan's economy has not been doing too well recently while Asean markets have been booming. That's why I say that for Fast Retailing, we now have to adopt a Look West Policy,' because economies in that part of the region, on our west, are doing better than us, Tadashi enthused.
But the ultimate goal for Fast Retailing, said Tadashi, was to have a store everywhere in the world.
The dream is to be able to provide truly great clothing around the globe. To do that, we need to be in every part of the world.
Never about the money
Tadashi humbly said he never imagined that he would one day join the ranks of the wealthiest. But making money was never the biggest part of the plan, he admitted.
I never pursued wealth. It just came naturally. To me, it has always been about the business, managing it, growing it and benefiting society.
I believe that if you pursue wealth, you will always be chasing it, said Tadashi, who takes his inspiration from the founders of well-known Japanese conglomerates such as Panasonic and Honda.
Tadashi added that a person pursuing success should not be afraid of taking risks and making mistakes.
If you want to succeed, you have to experience failures. To me, the worst people in the world are those that neither succeed nor fail. These people don't do anything and accomplish nothing.
The second worst types are those that continuously fail. They never learn from their mistakes and never succeed, he said.
Tadashi added that in a rapidly-changing global environment, failure was one of the costs of success.
The world is constantly changing. To succeed in this environment, you need to make mistakes, fail, learn from them and move on.
In light of the changing global marketplace, taking risks was vital, said Tadashi.
I have always been a risk-taker. But I only take them (risks) as long as the company doesn't go bankrupt. You need to constantly evaluate the situation. If you don't take risks, you will never profit.
Tadashi said trust and credibility are important traits in growing a successful business.
Also, for him it's basically his way or the highway at the office.
I consider myself a strict boss at the office. I think it is necessary if you need to do what's right. A lot of managers out there say a lot of things but they never do it.
If I say something, whether at the office or in public, it will be executed and I will do it. That's what sets me apart from others.
Work and play
According to Tadashi, from Mondays to Fridays it's strictly business, while the weekends are reserved for his second biggest passion golf. And his favourite pastime? Work, he said.
I know that to a lot of people, work is work and play is play. But to me, my work is my playground. I find it fun and enjoying. To be able to do something where you can contribute to society is an enjoyment, said Tadashi.
Still, when time does afford him the luxury to relax, Tadashi likes to read a good book and listens to jazz music.
I like reading books on business management by people that actually run their own businesses, he said.
Saturday, December 04, 2010
Changing the way we change
The paradox is that the more things change, the more they remain the same. This has led to many civilisations, nations and organisations becoming trapped in a difficult position. They cannot respond to the need for transformational change in turbulent times, causing them to deteriorate and fall from grace. Many struggle when it comes to dealing with the pressure to change. For nations and organisations to be successful, it is important that they change the way they effect change.
In the past, companies embraced predictability as they grew and managed their businesses. Shareholders wanted little more than security, earnings growth and profits. The management teams of organisations were able to deliver results through little modification to their businesses and operations because many markets were either closed or underdeveloped then. Today, with open markets, labour mobility and instantaneous and ubiquitous communications, this comfortable scenario has been blown to smithereens. Change is taking place rapidly in the global and local environment, which presents inept managers with an unfamiliar situation. So, how do we change the way we change to survive and grow?
What is change?
The three stages of change popularised by psychologist Kurt Lewin, which are still the basis of many change management approaches today, illustrate how change can take place.
• Unfreeze. People have the tendency to seek a situation where they feel relatively safe and have a sense of control. In establishing themselves, they attach their identity to their environment. This creates a stasis where any alternative, even those that offer significant benefits, will cause discomfort. They seldom talk about the future and significant effort may be required to “unfreeze” them and get them moving.
• Freeze. A key part of Lewin’s model is the notion that change is a journey rather than a simple step. This journey may not be that simple and one may need to go through several stages of misunderstanding before they get to the other side. A classic trap is for leaders to spend months on their own journey and then expect everyone else to cross the change chasm in a single bound. Freeze thus requires time. Often, the hardest part of freezing for an individual is to get started.
• Refreeze. At the end of the journey, the final goal is to refreeze, putting down roots again and establishing a new place of stability. In practice, refreeze may be a slow process as transitions seldom come to a clean stop but move in fits and starts, with a long tail of bits and pieces. In modern organisations, this stage is often tentative as the next change may well be around the corner. Many organisations have found that as employees await the next change, they tend to fall into a state of shock where they work at a low level of efficiency and effectiveness.
This continuous “unfreeze, freeze and refreeze” cycle of incremental and radical changes will be a constant feature from now on. Management leaders will need to have the foresight to know when and how they must change and the competence and agility to quickly initiate and implement the necessary changes to survive and be resilient and relevant in these fast-moving times.
Below are some management insights that you could consider before implementing change in your organisation.
Change must come from within
Management leaders must understand that change is inevitable and must come from within. It is important to hear the voices of customers and those who serve these customers. Today, customers and employees are more demanding and know what changes they want and need. Changes must take into account the voices of customers and management leaders need to heed their demands. Change is a continuing process, not an “event”, and so far there is no innovation or paradigm shift that has been successfully implemented overnight.
Know the next cycle of change
Management leaders often make the mistake of assuming that once the process of change begins, employees will realise it is going to happen and embrace it. As change causes fear, it takes some time for employees to understand what it implies and commit to it. It is important to understand that people tend to go through stages in their attempt to cope with change. Knowing the next cycle of change allows the preparation of the change mindset.
Quick fix or change paradigm may not be appropriate.
When changing mindsets, management leaders must understand that quick fixes may not be appropriate. Here is a case for your consideration: There is a leak in the ceiling of one of the offices and instead of fixing it, someone puts a pail under it to collect the water. He uses the simplest method to address the problem, not fix the cause of the leak. This illustrates the need to have a maintenance mindset and culture to fix a root problem in the organisation.
Changing the ‘changer and changee’ mindset
It is important to understand that purposeful change initiatives and achievements need not come from those in top management. Today, employees in the front line and on the shop floor may be the ones who know best and are the real change evangelists. Look at Japan and South Korea. The employees on the shop floor are the drivers of the Kaizen and quality culture; they are the “changees”. They made significant improvements to quality and productivity when empowered and given the opportunity to make changes. Management, as the organisational “changer”, must not presume to have the recipe for change improvement and take all the credit.
Beware of the burnt toast syndrome
Once upon a time, a father put a slice of bread into an electric toaster and when it popped out, it was burnt. The father then scraped off the burnt part of the bread, spread jam over it and handed it to his child. The child grows up and burns his toast as well. He scrapes off the soot, spreads jam on the toast and eats it. The question: Is the toaster supposed to burn the bread? This is a classic tale of the blind spot and resistance to change. Do you have many of these people or unnecessary processes or rituals in your organisation that hamper the efficiency and effectiveness of your operations? We need to have foresight, be constantly vigilant and learn how to change the way we change if we are to survive and be resilient and progressive in this rapidly changing world.
Dr Wilson Tay, MMIM, MIM-CPT, is CEO of the Malaysian Institute of Management
In the past, companies embraced predictability as they grew and managed their businesses. Shareholders wanted little more than security, earnings growth and profits. The management teams of organisations were able to deliver results through little modification to their businesses and operations because many markets were either closed or underdeveloped then. Today, with open markets, labour mobility and instantaneous and ubiquitous communications, this comfortable scenario has been blown to smithereens. Change is taking place rapidly in the global and local environment, which presents inept managers with an unfamiliar situation. So, how do we change the way we change to survive and grow?
What is change?
The three stages of change popularised by psychologist Kurt Lewin, which are still the basis of many change management approaches today, illustrate how change can take place.
• Unfreeze. People have the tendency to seek a situation where they feel relatively safe and have a sense of control. In establishing themselves, they attach their identity to their environment. This creates a stasis where any alternative, even those that offer significant benefits, will cause discomfort. They seldom talk about the future and significant effort may be required to “unfreeze” them and get them moving.
• Freeze. A key part of Lewin’s model is the notion that change is a journey rather than a simple step. This journey may not be that simple and one may need to go through several stages of misunderstanding before they get to the other side. A classic trap is for leaders to spend months on their own journey and then expect everyone else to cross the change chasm in a single bound. Freeze thus requires time. Often, the hardest part of freezing for an individual is to get started.
• Refreeze. At the end of the journey, the final goal is to refreeze, putting down roots again and establishing a new place of stability. In practice, refreeze may be a slow process as transitions seldom come to a clean stop but move in fits and starts, with a long tail of bits and pieces. In modern organisations, this stage is often tentative as the next change may well be around the corner. Many organisations have found that as employees await the next change, they tend to fall into a state of shock where they work at a low level of efficiency and effectiveness.
This continuous “unfreeze, freeze and refreeze” cycle of incremental and radical changes will be a constant feature from now on. Management leaders will need to have the foresight to know when and how they must change and the competence and agility to quickly initiate and implement the necessary changes to survive and be resilient and relevant in these fast-moving times.
Below are some management insights that you could consider before implementing change in your organisation.
Change must come from within
Management leaders must understand that change is inevitable and must come from within. It is important to hear the voices of customers and those who serve these customers. Today, customers and employees are more demanding and know what changes they want and need. Changes must take into account the voices of customers and management leaders need to heed their demands. Change is a continuing process, not an “event”, and so far there is no innovation or paradigm shift that has been successfully implemented overnight.
Know the next cycle of change
Management leaders often make the mistake of assuming that once the process of change begins, employees will realise it is going to happen and embrace it. As change causes fear, it takes some time for employees to understand what it implies and commit to it. It is important to understand that people tend to go through stages in their attempt to cope with change. Knowing the next cycle of change allows the preparation of the change mindset.
Quick fix or change paradigm may not be appropriate.
When changing mindsets, management leaders must understand that quick fixes may not be appropriate. Here is a case for your consideration: There is a leak in the ceiling of one of the offices and instead of fixing it, someone puts a pail under it to collect the water. He uses the simplest method to address the problem, not fix the cause of the leak. This illustrates the need to have a maintenance mindset and culture to fix a root problem in the organisation.
Changing the ‘changer and changee’ mindset
It is important to understand that purposeful change initiatives and achievements need not come from those in top management. Today, employees in the front line and on the shop floor may be the ones who know best and are the real change evangelists. Look at Japan and South Korea. The employees on the shop floor are the drivers of the Kaizen and quality culture; they are the “changees”. They made significant improvements to quality and productivity when empowered and given the opportunity to make changes. Management, as the organisational “changer”, must not presume to have the recipe for change improvement and take all the credit.
Beware of the burnt toast syndrome
Once upon a time, a father put a slice of bread into an electric toaster and when it popped out, it was burnt. The father then scraped off the burnt part of the bread, spread jam over it and handed it to his child. The child grows up and burns his toast as well. He scrapes off the soot, spreads jam on the toast and eats it. The question: Is the toaster supposed to burn the bread? This is a classic tale of the blind spot and resistance to change. Do you have many of these people or unnecessary processes or rituals in your organisation that hamper the efficiency and effectiveness of your operations? We need to have foresight, be constantly vigilant and learn how to change the way we change if we are to survive and be resilient and progressive in this rapidly changing world.
Dr Wilson Tay, MMIM, MIM-CPT, is CEO of the Malaysian Institute of Management
KPIs: A blunt instrument is better than none
KPIs are financial and non-financial measures or metrics used to help an organisation, and in this case, a country, define and evaluate how successful it is, especially in terms of making progress towards its most important goals. One view of KPIs is that they can be a useful tool for measuring and managing performance, but for this to work, the performance environment must be completely controlled and static on three levels: values, structure, and system.
We agree that there are certain conditions required for KPIs to be effective instruments to drive change and results. We would even add that KPIs are a blunt instrument to engender high performance. That said, a blunt instrument is better than none at all
KPIs fail largely because of the inability to make this simple statement materialise. There are three major points of failure:
1 - Failure to identify the key indicators. By their very definition, KPIs focus on key indicators, not all indicators. Many critics of KPIs have pointed to their non-comprehensive set of measures as a failure. In the US, there is much talk of how Wall Street’s focus on short-term financial performance, rather than a longer-term sustainable goal catering to a broader set of stakeholders, is a primary cause of the financial crisis we suffer today. Therefore, the starting point for defining a KPI is to understand what is really key, and ask, “What is really important to the different stakeholders?”
KPIs need to be defined in a way that ensures the KPIs of one agency do not conflict with another. Apart from ensuring that agendas do not conflict, what needs to get done will need to cascade throughout the administration. Key activities need to be aligned towards the same outcomes (that is, the KPIs).
2 - Tracking and reporting on process and activity rather than results. For KPIs, you need to know what metrics to measure and to measure with objectivity.
Once you are measuring the right “outcome, not process” metric, it is important that KPIs are quantifiable, and verifiable. Many KPI systems also fail because the metrics, however apt, are not independently measurable, and are left to the owner to arbitrarily (and with personal vested interest) to define one’s own results, hence success.
3 - Lack of reward. Ultimately, the effectiveness of any KPI system depends on ensuring timely and sizable rewards. Getting results will require very hard work from the KPI owner, both in terms of formulating a plan as well as executing to plan to realise results. It stands to reason that success when achieved needs to be recognised and rewarded, and equally important, failure needs to be acknowledged and accountability assigned.
Selected paragrapghs taken from article written by Vincent Chin, BCG partner and managing director and head of BCG’s Malaysia office
We agree that there are certain conditions required for KPIs to be effective instruments to drive change and results. We would even add that KPIs are a blunt instrument to engender high performance. That said, a blunt instrument is better than none at all
KPIs fail largely because of the inability to make this simple statement materialise. There are three major points of failure:
1 - Failure to identify the key indicators. By their very definition, KPIs focus on key indicators, not all indicators. Many critics of KPIs have pointed to their non-comprehensive set of measures as a failure. In the US, there is much talk of how Wall Street’s focus on short-term financial performance, rather than a longer-term sustainable goal catering to a broader set of stakeholders, is a primary cause of the financial crisis we suffer today. Therefore, the starting point for defining a KPI is to understand what is really key, and ask, “What is really important to the different stakeholders?”
KPIs need to be defined in a way that ensures the KPIs of one agency do not conflict with another. Apart from ensuring that agendas do not conflict, what needs to get done will need to cascade throughout the administration. Key activities need to be aligned towards the same outcomes (that is, the KPIs).
2 - Tracking and reporting on process and activity rather than results. For KPIs, you need to know what metrics to measure and to measure with objectivity.
Once you are measuring the right “outcome, not process” metric, it is important that KPIs are quantifiable, and verifiable. Many KPI systems also fail because the metrics, however apt, are not independently measurable, and are left to the owner to arbitrarily (and with personal vested interest) to define one’s own results, hence success.
3 - Lack of reward. Ultimately, the effectiveness of any KPI system depends on ensuring timely and sizable rewards. Getting results will require very hard work from the KPI owner, both in terms of formulating a plan as well as executing to plan to realise results. It stands to reason that success when achieved needs to be recognised and rewarded, and equally important, failure needs to be acknowledged and accountability assigned.
Selected paragrapghs taken from article written by Vincent Chin, BCG partner and managing director and head of BCG’s Malaysia office
Breaking down barriers
Achieve the Four Fs of organisational success by overcoming communication blocks
To be a successful executive, you must know how to knock down walls.
I do not mean the walls of brick and steel that hold up buildings; I mean the bureaucratic barriers that hold up communication.
In many companies, communication flows through narrow channels, usually from the top down - they are called chimneys of power. People walled off from these chimneys are left to work in an information vacuum.
Today’s successful corporations have demolished the walls that prevent the lateral flow of communication. With the walls gone, information permeates the organisation.
Such organisations find it easier to achieve the Four Fs that management expert Rosabeth Moss Kanter tells us are essential to business success. A successful company, she says, must be focused, flexible, fast and friendly.
You cannot focus the efforts of your entire work force if your organisation is criss-crossed with walls that impede the flow of information.
You cannot be flexible if you have a rigid corporate structure in which every division and department is a closed information loop.
You cannot be fast if information has to seep slowly through layer after layer of management.
And you cannot be friendly if your people do not talk to other people inside and outside your organisation. If you look around, you may see plenty of boundaries in your own company that need to be removed.
One of them may be the door to your office that remains closed to input from your employees. Another might be a rigid boundary between hourly and salaried employees that keeps people in one category from talking freely with people in another.
Or it could be a boundary that shuts out ideas that do not originate in your own organisation.
Other boundaries might be the lines that run between divisions of a corporation. If one division develops a new method or a new technology, does it keep it to itself or does it share it with other divisions?
Among the toughest boundaries to dismantle are the ones individual managers erect around the borders of their turf.
In the old days, corporations became overpopulated with people who were promoted to their “levels of incompetence”. Armed with the word “manager” in their titles, they staked out their own little turfs and guarded them jealously.
In a corporation without boundaries, advancement means moving into positions in which knowledge can be put to productive use by coaches, advisers or knowledge workers, and where expertise is interchanged throughout the organisation.
In such corporations, advancement for individuals results in the advancement for the entire company
To be a successful executive, you must know how to knock down walls.
I do not mean the walls of brick and steel that hold up buildings; I mean the bureaucratic barriers that hold up communication.
In many companies, communication flows through narrow channels, usually from the top down - they are called chimneys of power. People walled off from these chimneys are left to work in an information vacuum.
Today’s successful corporations have demolished the walls that prevent the lateral flow of communication. With the walls gone, information permeates the organisation.
Such organisations find it easier to achieve the Four Fs that management expert Rosabeth Moss Kanter tells us are essential to business success. A successful company, she says, must be focused, flexible, fast and friendly.
You cannot focus the efforts of your entire work force if your organisation is criss-crossed with walls that impede the flow of information.
You cannot be flexible if you have a rigid corporate structure in which every division and department is a closed information loop.
You cannot be fast if information has to seep slowly through layer after layer of management.
And you cannot be friendly if your people do not talk to other people inside and outside your organisation. If you look around, you may see plenty of boundaries in your own company that need to be removed.
One of them may be the door to your office that remains closed to input from your employees. Another might be a rigid boundary between hourly and salaried employees that keeps people in one category from talking freely with people in another.
Or it could be a boundary that shuts out ideas that do not originate in your own organisation.
Other boundaries might be the lines that run between divisions of a corporation. If one division develops a new method or a new technology, does it keep it to itself or does it share it with other divisions?
Among the toughest boundaries to dismantle are the ones individual managers erect around the borders of their turf.
In the old days, corporations became overpopulated with people who were promoted to their “levels of incompetence”. Armed with the word “manager” in their titles, they staked out their own little turfs and guarded them jealously.
In a corporation without boundaries, advancement means moving into positions in which knowledge can be put to productive use by coaches, advisers or knowledge workers, and where expertise is interchanged throughout the organisation.
In such corporations, advancement for individuals results in the advancement for the entire company
Preparing for Your Interview - Why Looks Really Do Matter
Congratulations, you landed the interview! Now - you need to make a great impression.
Are you digging through your closet? Asking everyone you know what you should wear? What kind of tie do you put on? What should you do with your hair? If you’re getting differing opinions, here are some simple guidelines to help - plus two things not everyone considers but employers do notice:
1. Dress for the job you want, not the job you currently have. If the industry is more formal, dress accordingly. If the position is a step up from your current one, dress better than you normally would. Spend some money on a new suit that would fit your new role. And no matter what - do your homework. Find out what the culture is like so you can dress appropriately.
2. Don't try to make a major statement with your clothes. You want your personality and qualifications to stand out-not the funky clothes you're wearing, unless it's a creative environment where that's more acceptable.
3. It’s ok to express your individuality in some way. If you want to show your personality with your clothing, wear a scarf, tie or something else small that expresses it. You don’t want the person interviewing you to be distracted by a large hat or huge bulky belt buckle.
4. If you aren’t sure what the culture is like for your particular industry, err on the side of being more professional and formal than casual. Not all workplaces are as casual as you might expect these days.
5. You want to wear higher quality clothes. It makes an impression and we all know that first impressions are important. If you don’t have a decent suit, go out and buy one; it’ll be worth it. Wearing higher quality clothes shows that you are willing to invest in your career and your future. You are dressing for success!
6. Always go to your interview clean cut. This means hair cut, shaven, tattoos and piercings covered up tastefully. The bottom line is you want to look like you made an effort and are committed to success. The last thing you want your interviewer thinking is that you just rolled out of bed. Spend time getting ready and making sure you look clean cut.
7. Keep makeup and hairstyles simple and classic. As with your clothing you don’t want your hair or how you did you makeup to be distracting to the interviewer. Opt for a subtle natural look.
8. Take a hard look at yourself in the mirror after you have chosen what you are going to wear. What's the impression they're going to get? Step outside of yourself and think about what you would think when you looked at yourself for the first time. Is this the impression you want to make?
9. Two things not everyone pays attention to but can make a big impression: your teeth and your nails. If your teeth are not as white as they could be, or your nails not trimmed and neat – do something about it. This can give a bad impression. You want to look completely professional and put together so pay attention to every detail.
10. And last but not least, wear something that makes you feel confident, like the person who can have that job. When you feel confident you will express that confidence to others.
by Hallie Crawford is a certified career coach
Are you digging through your closet? Asking everyone you know what you should wear? What kind of tie do you put on? What should you do with your hair? If you’re getting differing opinions, here are some simple guidelines to help - plus two things not everyone considers but employers do notice:
1. Dress for the job you want, not the job you currently have. If the industry is more formal, dress accordingly. If the position is a step up from your current one, dress better than you normally would. Spend some money on a new suit that would fit your new role. And no matter what - do your homework. Find out what the culture is like so you can dress appropriately.
2. Don't try to make a major statement with your clothes. You want your personality and qualifications to stand out-not the funky clothes you're wearing, unless it's a creative environment where that's more acceptable.
3. It’s ok to express your individuality in some way. If you want to show your personality with your clothing, wear a scarf, tie or something else small that expresses it. You don’t want the person interviewing you to be distracted by a large hat or huge bulky belt buckle.
4. If you aren’t sure what the culture is like for your particular industry, err on the side of being more professional and formal than casual. Not all workplaces are as casual as you might expect these days.
5. You want to wear higher quality clothes. It makes an impression and we all know that first impressions are important. If you don’t have a decent suit, go out and buy one; it’ll be worth it. Wearing higher quality clothes shows that you are willing to invest in your career and your future. You are dressing for success!
6. Always go to your interview clean cut. This means hair cut, shaven, tattoos and piercings covered up tastefully. The bottom line is you want to look like you made an effort and are committed to success. The last thing you want your interviewer thinking is that you just rolled out of bed. Spend time getting ready and making sure you look clean cut.
7. Keep makeup and hairstyles simple and classic. As with your clothing you don’t want your hair or how you did you makeup to be distracting to the interviewer. Opt for a subtle natural look.
8. Take a hard look at yourself in the mirror after you have chosen what you are going to wear. What's the impression they're going to get? Step outside of yourself and think about what you would think when you looked at yourself for the first time. Is this the impression you want to make?
9. Two things not everyone pays attention to but can make a big impression: your teeth and your nails. If your teeth are not as white as they could be, or your nails not trimmed and neat – do something about it. This can give a bad impression. You want to look completely professional and put together so pay attention to every detail.
10. And last but not least, wear something that makes you feel confident, like the person who can have that job. When you feel confident you will express that confidence to others.
by Hallie Crawford is a certified career coach
How To Get Promoted : 9 Obvious And Often Not Practiced Tips
It would be safe to say that you would have probably entertained the question of how to get promoted even before you graduated or left school. In my chats with juniors from my industry, I am often asked this question which I gladly answer. However, I sense they simply want short cuts to the next level.
These experiences pushed me to pen these 9 obvious but often not practiced tips on how to get promoted. Start internalizing these tips and make them part of your career plan. Before you know it, you would have moved up to the next level.
One main reason for people to ignore these obvious practices on how to get promoted is because they seem very long term. But they are not at all. All you need to do is to consistently DO them. I have broken them down to 3 main sections: Plan, Attitude and Action.
PLAN
1. Where Are You and Why Are You There? How to get promoted?
First you will need to have a reference point. Ask yourself, where are you now? And why are you there? Is there any key strength that has brought you where you are now that you can continue to leverage for the next promotion?
Are there any weaknesses that you really need to correct before the next promotion is possible? These questions, while simple are strategic. It allows you to check your strengths and weaknesses. It forces you to access what has worked and what will work to get you promoted.
2. Where Do You Want To Be and How Do You Get There?
You obviously need to have an objective and a plan. Just saying that you want to get promoted is not enough. You need to be clear on your next position. Is it a promotion to a different department or a different branch? Write this down.
Now that you have written this down, how do you plan to get that promotion? Develop a plan for to achieve that objective. If you are lucky, you can even work this out with your immediate boss. Most bosses do not promise that promotion at such discussions but at the very least you get an idea of what are the expectations.
ATTITUDE
3. Put Pride, Passion and Belief In Everything You Do
People who get promoted are those that have a sense of pride in their work. And they take pride in their work. They are driven by genuine enthusiasm and desire to do their best no matter how small the job.
They believe in themselves and they believe in the bigger goals of their unit or department and company. How to get promoted? Ask yourself; do you conduct yourself with pride, passion and belief?
4. Back it Up with Skills/Knowledge, Direction and Action
Having pride, passion and belief is only part of how to get promoted. It must be backed up skills and knowledge. That means having the necessary skills and knowledge to do a superb job. Having a direction is important to guide that energy generated by your passion. Otherwise, effort is wasted. Without action which is the actual completion of the task, all else is academic. You will be judged by what you do.
5. See Challenges As Opportunities
Another obvious tip on how to get promoted is to see challenges as opportunities. Very often I see young executives being thrown challenging assignments, which they choose to see as an additional chore.
If you want to be promoted, look at challenges as opportunities to shine. Do not complain about hard work, how hard you worked or if your assignment is tougher than your colleagues’. Trust me, no one wants to know how hard you work. In everyone’s mind, their own work is the hardest.
ACTION
6. What Is Your Part?
Know your part and play your part. What is your role? Are you an implementer? Or are you a leader? Know exactly what you need to do in order for your unit to achieve its goals. Knowing your part means being a team player. No one can succeed without help from others. We all need the support of colleagues. When the team succeeds, you succeed too.
7. Do Your Best NOWI consider this as one of the most important tip on how to get promoted. Do your best NOW. Today. This week’s tasks and projects. Do not bask in the glory of your previous work. That is gone. In all likelihood, no one else cares about it especially your bosses.
Do not think too much about future projects that are not implemented yet. That is in the future. It is not here yet. Focus on DOING your best NOW. It determines how you are being judged. When you reflect too much on the past and think too much about the future, you forget to focus on the NOW.
8. Do More Than NecessaryIf you want to know how to get promoted, do more than the necessary. That means volunteering for work and taking the initiative to make a job better. It also means not sitting around waiting for work to come to you.
Bosses like people who can help them solve problems. Even if the problem is not yours, but if you feel you can be of help and have the expertise to solve it, then volunteer to help. You become the team’s competitive advantage when you do that. And bosses like people who give their unit an advantage over the others. Helping your team stay ahead is then helping you stay ahead too.
9. Do Work from The Next Level Up
If you continue doing work for your current position then you truly deserve your current position. People who know how to get promoted know that if you want the position next level up, you start doing some of those work from that level now. If you are a senior executive now, do some work that is only expected of an assistant manager (assuming that is the next level up). This allows you to demonstrate that you are capable of that position already.
Obviously, there are zillions of tips out there on how to get promoted. These are some of those that I deem to be obvious and not practiced enough by career success seeking newbies. Putting these into practice would greatly increase your chances of a promotion.
by Long Yun Siang
These experiences pushed me to pen these 9 obvious but often not practiced tips on how to get promoted. Start internalizing these tips and make them part of your career plan. Before you know it, you would have moved up to the next level.
One main reason for people to ignore these obvious practices on how to get promoted is because they seem very long term. But they are not at all. All you need to do is to consistently DO them. I have broken them down to 3 main sections: Plan, Attitude and Action.
PLAN
1. Where Are You and Why Are You There? How to get promoted?
First you will need to have a reference point. Ask yourself, where are you now? And why are you there? Is there any key strength that has brought you where you are now that you can continue to leverage for the next promotion?
Are there any weaknesses that you really need to correct before the next promotion is possible? These questions, while simple are strategic. It allows you to check your strengths and weaknesses. It forces you to access what has worked and what will work to get you promoted.
2. Where Do You Want To Be and How Do You Get There?
You obviously need to have an objective and a plan. Just saying that you want to get promoted is not enough. You need to be clear on your next position. Is it a promotion to a different department or a different branch? Write this down.
Now that you have written this down, how do you plan to get that promotion? Develop a plan for to achieve that objective. If you are lucky, you can even work this out with your immediate boss. Most bosses do not promise that promotion at such discussions but at the very least you get an idea of what are the expectations.
ATTITUDE
3. Put Pride, Passion and Belief In Everything You Do
People who get promoted are those that have a sense of pride in their work. And they take pride in their work. They are driven by genuine enthusiasm and desire to do their best no matter how small the job.
They believe in themselves and they believe in the bigger goals of their unit or department and company. How to get promoted? Ask yourself; do you conduct yourself with pride, passion and belief?
4. Back it Up with Skills/Knowledge, Direction and Action
Having pride, passion and belief is only part of how to get promoted. It must be backed up skills and knowledge. That means having the necessary skills and knowledge to do a superb job. Having a direction is important to guide that energy generated by your passion. Otherwise, effort is wasted. Without action which is the actual completion of the task, all else is academic. You will be judged by what you do.
5. See Challenges As Opportunities
Another obvious tip on how to get promoted is to see challenges as opportunities. Very often I see young executives being thrown challenging assignments, which they choose to see as an additional chore.
If you want to be promoted, look at challenges as opportunities to shine. Do not complain about hard work, how hard you worked or if your assignment is tougher than your colleagues’. Trust me, no one wants to know how hard you work. In everyone’s mind, their own work is the hardest.
ACTION
6. What Is Your Part?
Know your part and play your part. What is your role? Are you an implementer? Or are you a leader? Know exactly what you need to do in order for your unit to achieve its goals. Knowing your part means being a team player. No one can succeed without help from others. We all need the support of colleagues. When the team succeeds, you succeed too.
7. Do Your Best NOWI consider this as one of the most important tip on how to get promoted. Do your best NOW. Today. This week’s tasks and projects. Do not bask in the glory of your previous work. That is gone. In all likelihood, no one else cares about it especially your bosses.
Do not think too much about future projects that are not implemented yet. That is in the future. It is not here yet. Focus on DOING your best NOW. It determines how you are being judged. When you reflect too much on the past and think too much about the future, you forget to focus on the NOW.
8. Do More Than NecessaryIf you want to know how to get promoted, do more than the necessary. That means volunteering for work and taking the initiative to make a job better. It also means not sitting around waiting for work to come to you.
Bosses like people who can help them solve problems. Even if the problem is not yours, but if you feel you can be of help and have the expertise to solve it, then volunteer to help. You become the team’s competitive advantage when you do that. And bosses like people who give their unit an advantage over the others. Helping your team stay ahead is then helping you stay ahead too.
9. Do Work from The Next Level Up
If you continue doing work for your current position then you truly deserve your current position. People who know how to get promoted know that if you want the position next level up, you start doing some of those work from that level now. If you are a senior executive now, do some work that is only expected of an assistant manager (assuming that is the next level up). This allows you to demonstrate that you are capable of that position already.
Obviously, there are zillions of tips out there on how to get promoted. These are some of those that I deem to be obvious and not practiced enough by career success seeking newbies. Putting these into practice would greatly increase your chances of a promotion.
by Long Yun Siang
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