Looking To Increase Employee Performance? Motivation Is Critical.
By: Dick Grote
Dick Grote is one of America's most well-known speakers, authors, and consultants on employee performance reviews. He is the Chairman and CEO of Grote Consulting and the developer of the Grote Approach online employee performance review system.
What's an organization to do when all of its honest and genuine efforts to motivate Sally and Sam to come to work on time, work safely, deliver efficient services, and act as if they were happy to be a part of the team, fail? There is no shortage of pop-psych books and motivational speakers who'll tell you a thousand-and-one ways to light a fire in Sam's belly. But what do you do when the fire goes out and none of those thousand-and-one ways seem to work any more? What do we really know about motivation?
Does anything work?
Given the constant barrage of pep talks and posters, slogans and free advice on the topic of motivation, there should certainly be at least a couple of core principles that predictably work every time. Aren't there? Or are we stuck with the notion that everybody's an individual, and what's a turn-on for Sally is likely to be a turn-off for Sam?
Rather than speculate, let's gather some data. Think back through all the jobs you've ever had, and bring to mind the job you had that produced the greatest amount of motivation in you. It doesn't matter what the job was — it might be the job you have right now; it might be a part-time job you had in high school. Doesn't matter.
It also doesn't matter what the word, "motivation," means to you. However you choose to define the term is fine. Simply bring to mind the job that you had when you had the greatest degree of job satisfaction, excitement, enthusiasm, turned-on-ness.
Now that you've got the job clearly in mind, quickly jot down the factors that caused you to feel so motivated, so satisfied, and so turned on. If you're like most people, the factors you listed are highly predictable — and so are the ones that didn't make your list.
On your list appear such items as recognition, opportunities for achievement, freedom and autonomy, challenge, the chance to learn and grow, and the work itself. What was missing? You probably didn't write down such important items as job security, benefits, working conditions, and the organization's policies and procedures.
It turns out that the missing link in understanding motivation is understanding that there are two very different factors at work. On one hand there are the things that motivate us, that turn us on, that cause us to feel satisfied with the job. On the other are those things that dissatisfy us, that turn us off, that demotivate us. There are two separate variables at work, and you have to attack both of them. Psychologist Fred Herzberg stated it best, "Job satisfaction and job dissatisfaction are not flip sides of the same coin. They are entirely different coins, and the wise manager uses both those coins to buy better performance."
What is motivation?
A good working definition of motivation is this: motivation represents a measurable increase in both job satisfaction and productivity. The motivated worker does his job better and likes it more than those folks who are not so motivated. What generates real motivation is the first set of factors mentioned: opportunities for achievement and accomplishment, recognition, learning and growth, having some say in how the job is done, and worthwhile work. Those are the items that generate strong feelings of loyalty, satisfaction, enthusiasm, and all those other important attributes we want to see in those whose paychecks we sign.
But you can't get away with working exclusively on the satisfiers scale. You have to make sure that you clean up the job to reduce or eliminate those things that cause people to be unhappy and quit.
Wait a minute, some of you are saying — where does money fit into this scheme? Pay is the ringer in the equation; the one factor that shows up as both a source of satisfaction and a source of dissatisfaction. People are dissatisfied with their pay when they feel it isn't commensurate with their efforts, or is distributed inequitably, or doesn't reflect the responsibilities of the job, or is out of touch with market realities. If you don't pay competitive wages, people will be unhappy and they will quit. But no matter how much you raise salaries, you won't generate motivation and job satisfaction, because job satisfaction is a function of the content of the job.
Look at it this way: Hire me to wash dirty dishes and pay me chickenfeed and I'll be unhappy and demotivated. But raise my wages to a princely sum and guess what — I'll still hate washing dirty dishes. But I won't complain any more about my crummy compensation; I probably won't quit; and I may even improve my attendance record (if you pay me my munificent wages on an hourly basis). What you have bought with the generous pay increase you provided me was not real job satisfaction. All you have bought is the absence of dissatisfaction. They are not the same thing. If you really want me to be a happy camper, you'd better change the nature of my work.
And changing the nature of the work is the true key to motivation. The message is clear: do everything you can to get rid of the things that generate employee unhappiness, recognizing that no matter how big an investment you make you'll get precious little in return. All your money will buy is the absence of dissatisfaction. Listen up — you have no choice! You must pay people competitive wages, you must provide a healthy, safe and attractive work environment, you must give at least as good insurance policies and vacations and retirements plans as people could get working for the bagel joint down the street. If you don't, people will quit and you won't be able to hire replacements. But all you'll get for the fortune you spend in this effort is a bunch of people who have to search hard for something to complain about.
If you want genuine motivation, though, you've got to look at the job itself. Does the work provide me with the chance to really accomplish something? Does my job allow me to do something that makes an actual difference? Do I have a lot of say in how I do my job or am I totally constricted by standard operating procedures? Can I learn and grow and develop on this job, or will I be tightening the same nut on the same bolt for the next thirty years? Do I get any recognition when I do something particularly well?
Providing recognition of good performance is the best place to start. Recognizing good performance any time it's encountered — with just a "Thanks" or a literal pat on the back — can be enough to get the motivational engine working. Sally and Sam will need more than just an attaboy, but acknowledging excellent work every time it appears is a wonderful place to start the engine of motivation running.
Tuesday, December 7, 2010
keeping emplyees happy
Keeping Employees Happy By Mike Lee
Dealing with employees can be one of the toughest challenges for a shop owner. By learning some basic strategies of employee management, an owner can reduce his or her stress level, minimize personnel problems and better ensure the success of the shop.
Let's start by going over some basic concepts. Employees are people you employ (hire) to work with you and assist you in achieving your business goals. An owner needs to have well-defined goals and must be able to communicate them to employees to get their support. Good employees want to know what you are trying to accomplish, how they fit into the picture and how they can benefit by helping you succeed.
To find and hire good people, you need to know what good people are looking for - what motivates them to get up in the morning and go to work. Of course, people want money; they want to get compensated well for the work they do. But it's not the only thing they want. Good people are also looking for a group to be part of, and they want to know that their work is contributing to something of importance. Many people also want stability; a well-organized, high-morale working environment and growth potential. Some look for an employer who can communicate clearly and who stays relatively calm even during times of high stress.
Take the time to sit down with each member, or potential member, of your crew and find out what each one wants in life. Ask about their goals and ambitions. Make sure they each understand what you expect from them, the level of production you demand, what one's compensation will be if he or she achieves this level, and how this will help them get the things they want out of life.
Your employee pay plan should reward high levels of production. It can even be tailored for each individual. One technician might work extra hard for a cash bonus while another might prefer paid vacation days for a reward. Just make sure you don't pay high wages or bonuses without also demanding high production. Many pay systems are based on hours on the job. These systems pay people who don't produce much the same wages as those who produce a lot. In companies with these systems, employees learn that if they just show up and look like they are working, they'll get paid. It is up to the owner to demand high production and to reward it. Don't reward the underachiever.
Make sure you have a system for tracking and monitoring production, and graph and post these statistics weekly. Your best employees will feel acknowledged and, hopefully, the worst will feel the need to improve. Each employee should be responsible for at least one statistic that measures the main thing he is producing on his job. For example, each technician's billable hours should be calculated weekly and depicted on a sheet of graph paper. Post these graphs so each employee knows where he stands. Employees need to know that their employment and pay is based on their level of production and its value to the company, and not on who they know or their personality or other arbitrary factors. An employer who does not enforce this kind of accountability from his employees is likely to make personnel decisions based on guesswork rather than facts.
An interesting question to ask any employee is, "Where does your paycheck come from?" Many will respond, "My boss." Some are closer to the mark when they say, "the customer." But the truth of the matter is that an employee's pay comes from his own hard work - his ability to produce quality products and services the business can then sell to customers for income and support.
The executive of a business must be able to organize the activities of the business and train employees so they will be able to produce valuable products. Most people want to achieve results they can be proud of and, to a great extent, it is up to the owner to make sure they can be proud of their products. It is an owner's responsibility to make sure each person who comes on board is given a clearly delineated job and is adequately trained so he understands how to do this job. He also needs to be shown what his job means to the rest of the crew and he needs to know about the overall product the company produces. Unless every employee is aware of how his job relates to the final product of the company, you will never really have an efficient team working together to achieve your goals.
Mandatory weekly meetings with your crew will strengthen the concept of a team - that you are not just a bunch of individuals running around frantically trying to get something done - and will give you a chance, as a team, to review how the shop did during the previous week. It is vital to stay positive in these meetings, to accentuate and focus on the production and improvements that were made in the previous week and to set targets for the upcoming week. Stay upbeat and don't let the meeting drag on. If a particular employee did something above and beyond the norm, acknowledge him or her in front of the group. If there are any corrections or improvements you want to see, go over those, too. However, never single someone out for correction in front of the group. If you're unhappy with someone, always address this with him privately.
Help each of your employees to see the priorities of the business correctly: first, to make sure the customer wins because without customers there is no purpose for the shop; and second, to make sure the shop is winning (viable) because without the shop, there is no purpose (or paycheck) for the employees. Finally, the employees have to win because if they can't win, they won't stay. Review these priorities at your team meetings and make sure everyone understands them.
Managing employees is a primary responsibility of an owner. Your success at it will be a reflection of your attitude toward the business. You set the tempo and the pace for your crew. If your standards are high, and you demonstrate your commitment to meeting these standards, they will follow. If you show genuine care for your people, they will respond.
Dealing with employees can be one of the toughest challenges for a shop owner. By learning some basic strategies of employee management, an owner can reduce his or her stress level, minimize personnel problems and better ensure the success of the shop.
Let's start by going over some basic concepts. Employees are people you employ (hire) to work with you and assist you in achieving your business goals. An owner needs to have well-defined goals and must be able to communicate them to employees to get their support. Good employees want to know what you are trying to accomplish, how they fit into the picture and how they can benefit by helping you succeed.
To find and hire good people, you need to know what good people are looking for - what motivates them to get up in the morning and go to work. Of course, people want money; they want to get compensated well for the work they do. But it's not the only thing they want. Good people are also looking for a group to be part of, and they want to know that their work is contributing to something of importance. Many people also want stability; a well-organized, high-morale working environment and growth potential. Some look for an employer who can communicate clearly and who stays relatively calm even during times of high stress.
Take the time to sit down with each member, or potential member, of your crew and find out what each one wants in life. Ask about their goals and ambitions. Make sure they each understand what you expect from them, the level of production you demand, what one's compensation will be if he or she achieves this level, and how this will help them get the things they want out of life.
Your employee pay plan should reward high levels of production. It can even be tailored for each individual. One technician might work extra hard for a cash bonus while another might prefer paid vacation days for a reward. Just make sure you don't pay high wages or bonuses without also demanding high production. Many pay systems are based on hours on the job. These systems pay people who don't produce much the same wages as those who produce a lot. In companies with these systems, employees learn that if they just show up and look like they are working, they'll get paid. It is up to the owner to demand high production and to reward it. Don't reward the underachiever.
Make sure you have a system for tracking and monitoring production, and graph and post these statistics weekly. Your best employees will feel acknowledged and, hopefully, the worst will feel the need to improve. Each employee should be responsible for at least one statistic that measures the main thing he is producing on his job. For example, each technician's billable hours should be calculated weekly and depicted on a sheet of graph paper. Post these graphs so each employee knows where he stands. Employees need to know that their employment and pay is based on their level of production and its value to the company, and not on who they know or their personality or other arbitrary factors. An employer who does not enforce this kind of accountability from his employees is likely to make personnel decisions based on guesswork rather than facts.
An interesting question to ask any employee is, "Where does your paycheck come from?" Many will respond, "My boss." Some are closer to the mark when they say, "the customer." But the truth of the matter is that an employee's pay comes from his own hard work - his ability to produce quality products and services the business can then sell to customers for income and support.
The executive of a business must be able to organize the activities of the business and train employees so they will be able to produce valuable products. Most people want to achieve results they can be proud of and, to a great extent, it is up to the owner to make sure they can be proud of their products. It is an owner's responsibility to make sure each person who comes on board is given a clearly delineated job and is adequately trained so he understands how to do this job. He also needs to be shown what his job means to the rest of the crew and he needs to know about the overall product the company produces. Unless every employee is aware of how his job relates to the final product of the company, you will never really have an efficient team working together to achieve your goals.
Mandatory weekly meetings with your crew will strengthen the concept of a team - that you are not just a bunch of individuals running around frantically trying to get something done - and will give you a chance, as a team, to review how the shop did during the previous week. It is vital to stay positive in these meetings, to accentuate and focus on the production and improvements that were made in the previous week and to set targets for the upcoming week. Stay upbeat and don't let the meeting drag on. If a particular employee did something above and beyond the norm, acknowledge him or her in front of the group. If there are any corrections or improvements you want to see, go over those, too. However, never single someone out for correction in front of the group. If you're unhappy with someone, always address this with him privately.
Help each of your employees to see the priorities of the business correctly: first, to make sure the customer wins because without customers there is no purpose for the shop; and second, to make sure the shop is winning (viable) because without the shop, there is no purpose (or paycheck) for the employees. Finally, the employees have to win because if they can't win, they won't stay. Review these priorities at your team meetings and make sure everyone understands them.
Managing employees is a primary responsibility of an owner. Your success at it will be a reflection of your attitude toward the business. You set the tempo and the pace for your crew. If your standards are high, and you demonstrate your commitment to meeting these standards, they will follow. If you show genuine care for your people, they will respond.
10 Tips to Fast-Track Your Promotion
Getting a promotion involves more than just hard work.
Yes, you need to work hard, be dedicated and competent in your job to
get that big fat promotion. But in these competitive times, a lot more
goes into getting a good appraisal. So, we put together 10 tips that
can help improve your chances of a promotion.
1. Set a goal and a path to get there
First, figure out what’s the next role or job you want. Then, do what
it takes to get there, over and above your current job duties.
For instance, if you are a marketing executive and the next level is
to become a brand manager, there might be certain types of projects or
training that can enhance your skills and make you better suited for
your next job.
“The more initiative the employee takes based on his aspiration, the
faster he will learn,” says Sumit Mitra, executive vice-president of
human resources at Godrej Industries Ltd. Managers will eventually see
that you understand the new role and consider you for it.
2. Don’t wait to be spoon-fed
In this dynamic world, organizations and jobs are evolving all the
time and jobs are not simply a certain set of duties. Be on the
lookout for what’s changing around you and step up to take on extra
tasks when possible. It shows your drive, and perhaps helps the boss
out a little bit. Don’t wait for your manager to come and tell you
what else you should be doing. The promotion won’t come to you, you
need to reach out to get it.
“I would always be impressed by a person who takes a proactive
approach in taking on additional responsibilities,” says Nirmit
Parekh, managing director and chief executive officer of international
executive research firm 3P Consultants Pvt. Ltd. in Mumbai.
3. Be flexible and let it be known
Are you open to moving on to a new job function or to a different
location for work? If yes, let your superiors know. Sometimes managers
may perceive, for instance, that you might not want to move to another
location because your children are in school or your husband can’t
move, and thus pass you up for a promotion. Make sure you don’t get
tagged with this label.
Some companies, like Godrej, have systems by which you can let your
company know of your openness to moving. But if your company doesn’t,
“you should informally inform the human resources team; they will have
more visibility” of jobs across the company, says Mr. Mitra.
4. Mid-way feedback
The surest way to know if you are on the right track to where you want
to go is to ask. While most companies have a formal performance
appraisal process once a year, experts suggest that it might make
sense to check in with your boss informally, mid-way through the year.
This lets your boss know: “I’m here to learn, I’m here to contribute,
please let me know where I’m falling short,” says Mr. Parekh. “It also
makes the person who you’re asking (feel) respected.”
5. Turn challenges into opportunities
It sounds like self-help babble. But sometimes a promotion or
opportunity may really come your way in the form of a challenge, such
as a project in a remote part of the country.
If you sign up for it and do a good job, it shows management your
ability to handle pressure and your grit. “Going through these
challenges not only gives you a sense of newfound confidence, but also
gives you recognition that you are just not a peace-time general but a
successful war-time general,” says P. Dwarakanath, director of group
human capital at Max India Ltd., a financial and healthcare services
firm.
6. Be a problem-solver, not a complainer
If you’re working on a project and there is a roadblock, don’t go
running to your boss listing all the problems. “If you are expecting
your manager to find a solution then I think you are expecting a lot,”
says Rajalakshmi S., director of human resources at Pegasystems
Worldwide (India) Pvt. Ltd, a business process management firm in
Hyderabad.
Instead, be positive and try to figure out ways to solve the problem.
This can be a signal to your higher-ups that you have the ability to
handle more than just your current job, and might be ready for a
leadership role.
7. Find a mentor
If possible, find someone in your organization to help guide you on
what you need to do to move up and to improve your visibility in the
organization. This is especially helpful in very large companies where
younger employees may find it tough to know about various
opportunities.
Finding the right mentor might not be easy. Mr. Mitra of Godrej
advises looking for someone whose guidance and judgment you respect
and with whom you share some emotional connection.
8. Are your goals aligned with the company’s?
As organizations evolve rapidly, they are looking for leaders who
understand the company’s vision and whose goals are aligned with those
of the company. When possible, find ways to make it clear to your
superiors that, at the very least, you are interested in a long-term
career at the company that will involve advancement from your current
position.
9. Getting the boss equation right
Depending on the structure of your organization, your immediate
supervisor may have a little or a lot to do with your promotion. So,
keep him or her happy.
That doesn’t necessarily mean inviting the boss over to dinner at your
place every other week. Rather, you need to build trust and bonding at
a professional level. Following many of the tips above will help. Be a
team player and be the person who can be counted on when something
unexpected happens or there’s a crisis. Ultimately, you want “your
manager (to have) the confidence that you are reliable,” says Mr.
Dwarkanath.
If your boss is holding you back, make sure that you’re visible to
your boss’s boss, who likely will have a greater say in your
advancement. Don’t be thwarted just because you think your immediate
supervisor feels threatened by your promotion prospects.
10. Be patient.
It’s like job-hunting in a way. It requires a degree of karma. If you
are overlooked for a promotion, don’t sweat too much. Complaining and
whining could reduce your chance of being considered for the next one.
Obviously, if you keep being overlooked you need to figure out why
from your superiors.
But don’t read too much into the first or second time you get passed
over. The key is to keep your managers in the loop about your
accomplishments. “If there are gaps in communication, then even the
worthy many times do not get promoted,” says Ms. Rajalakshmi.
By Shefali Anand and Prerna Sodhi
from India Career Journal
Yes, you need to work hard, be dedicated and competent in your job to
get that big fat promotion. But in these competitive times, a lot more
goes into getting a good appraisal. So, we put together 10 tips that
can help improve your chances of a promotion.
1. Set a goal and a path to get there
First, figure out what’s the next role or job you want. Then, do what
it takes to get there, over and above your current job duties.
For instance, if you are a marketing executive and the next level is
to become a brand manager, there might be certain types of projects or
training that can enhance your skills and make you better suited for
your next job.
“The more initiative the employee takes based on his aspiration, the
faster he will learn,” says Sumit Mitra, executive vice-president of
human resources at Godrej Industries Ltd. Managers will eventually see
that you understand the new role and consider you for it.
2. Don’t wait to be spoon-fed
In this dynamic world, organizations and jobs are evolving all the
time and jobs are not simply a certain set of duties. Be on the
lookout for what’s changing around you and step up to take on extra
tasks when possible. It shows your drive, and perhaps helps the boss
out a little bit. Don’t wait for your manager to come and tell you
what else you should be doing. The promotion won’t come to you, you
need to reach out to get it.
“I would always be impressed by a person who takes a proactive
approach in taking on additional responsibilities,” says Nirmit
Parekh, managing director and chief executive officer of international
executive research firm 3P Consultants Pvt. Ltd. in Mumbai.
3. Be flexible and let it be known
Are you open to moving on to a new job function or to a different
location for work? If yes, let your superiors know. Sometimes managers
may perceive, for instance, that you might not want to move to another
location because your children are in school or your husband can’t
move, and thus pass you up for a promotion. Make sure you don’t get
tagged with this label.
Some companies, like Godrej, have systems by which you can let your
company know of your openness to moving. But if your company doesn’t,
“you should informally inform the human resources team; they will have
more visibility” of jobs across the company, says Mr. Mitra.
4. Mid-way feedback
The surest way to know if you are on the right track to where you want
to go is to ask. While most companies have a formal performance
appraisal process once a year, experts suggest that it might make
sense to check in with your boss informally, mid-way through the year.
This lets your boss know: “I’m here to learn, I’m here to contribute,
please let me know where I’m falling short,” says Mr. Parekh. “It also
makes the person who you’re asking (feel) respected.”
5. Turn challenges into opportunities
It sounds like self-help babble. But sometimes a promotion or
opportunity may really come your way in the form of a challenge, such
as a project in a remote part of the country.
If you sign up for it and do a good job, it shows management your
ability to handle pressure and your grit. “Going through these
challenges not only gives you a sense of newfound confidence, but also
gives you recognition that you are just not a peace-time general but a
successful war-time general,” says P. Dwarakanath, director of group
human capital at Max India Ltd., a financial and healthcare services
firm.
6. Be a problem-solver, not a complainer
If you’re working on a project and there is a roadblock, don’t go
running to your boss listing all the problems. “If you are expecting
your manager to find a solution then I think you are expecting a lot,”
says Rajalakshmi S., director of human resources at Pegasystems
Worldwide (India) Pvt. Ltd, a business process management firm in
Hyderabad.
Instead, be positive and try to figure out ways to solve the problem.
This can be a signal to your higher-ups that you have the ability to
handle more than just your current job, and might be ready for a
leadership role.
7. Find a mentor
If possible, find someone in your organization to help guide you on
what you need to do to move up and to improve your visibility in the
organization. This is especially helpful in very large companies where
younger employees may find it tough to know about various
opportunities.
Finding the right mentor might not be easy. Mr. Mitra of Godrej
advises looking for someone whose guidance and judgment you respect
and with whom you share some emotional connection.
8. Are your goals aligned with the company’s?
As organizations evolve rapidly, they are looking for leaders who
understand the company’s vision and whose goals are aligned with those
of the company. When possible, find ways to make it clear to your
superiors that, at the very least, you are interested in a long-term
career at the company that will involve advancement from your current
position.
9. Getting the boss equation right
Depending on the structure of your organization, your immediate
supervisor may have a little or a lot to do with your promotion. So,
keep him or her happy.
That doesn’t necessarily mean inviting the boss over to dinner at your
place every other week. Rather, you need to build trust and bonding at
a professional level. Following many of the tips above will help. Be a
team player and be the person who can be counted on when something
unexpected happens or there’s a crisis. Ultimately, you want “your
manager (to have) the confidence that you are reliable,” says Mr.
Dwarkanath.
If your boss is holding you back, make sure that you’re visible to
your boss’s boss, who likely will have a greater say in your
advancement. Don’t be thwarted just because you think your immediate
supervisor feels threatened by your promotion prospects.
10. Be patient.
It’s like job-hunting in a way. It requires a degree of karma. If you
are overlooked for a promotion, don’t sweat too much. Complaining and
whining could reduce your chance of being considered for the next one.
Obviously, if you keep being overlooked you need to figure out why
from your superiors.
But don’t read too much into the first or second time you get passed
over. The key is to keep your managers in the loop about your
accomplishments. “If there are gaps in communication, then even the
worthy many times do not get promoted,” says Ms. Rajalakshmi.
By Shefali Anand and Prerna Sodhi
from India Career Journal
Do Multinationals Really Understand Globalization?
Do Multinationals Really Understand Globalization?
The ability of global companies to leverage global opportunities is surprisingly shallow
By Navi Radjou and Prasad Kaipa
IBM (IBM) recently released two important reports on the rapidly changing global business environment: the 2010 CEO Study, which is based on interviews conducted with more than 1,500 chief executive officers worldwide; and the Global Student Study 2010, which is based on a survey of more than 3,600 graduate and undergraduate students worldwide.
Taken together, the studies compare side by side the value system, mindset, and management style of current-generation CEOs with those of the Millennials (aka Generation Y) who are poised to become future leaders. As we studied them carefully, we found a big discrepancy between the Millennials' view of globalization and its impact on organizations and that of present CEOs.
Most CEOs surveyed by IBM expect their business environment to get increasingly complex in coming years, driven by tectonic shifts in the macroeconomic environment: 76 percent of CEOs foresee a swift shift of economic power from the West to developing markets. We can't agree more: The Organization for Economic Cooperation & Development (OECD) forecasts that the global share of gross domestic product (GDP) for developed economies will drop from 60 percent in 2000 to 43 percent in 2030. As a result, businesses will soon be operating in what we call a polycentric world—where Western centers of economic and geopolitical power will be interconnected with new centers of growth and influence in Asia, Africa, and South America.
The Task at Hand
A polycentric world is inherently complex due to its extreme diversity. Consider this: The already 250 million-strong Chinese middle class is expected to double in size in the coming decade and one global worker in four will be an Indian by 2020. The result? A massive increase in the diversity of the customer base and workforce of multinationals on a scale they have never experienced before. To effectively serve such a highly heterogeneous customer base and manage a highly multicultural employee base, CEOs of many multinationals will need to fundamentally redesign their monocultural (read: Western) and ethnocentric organizations. They will need to learn to juggle multiple business models, organizational practices, management structures, and even leadership styles in order to harness the growing diversity in the unpredictable global business environment.
Unfortunately, CEOs seem to underestimate the task at hand. Only 23 percent of CEOs surveyed believe that globalization will have a big impact on their organization in the next five years. Worse: While many Western CEOs claim that 50 percent to 60 percent of their future growth will come from emerging economies like India and China, another study shows that only 2 percent of their senior leadership currently hails from those fast-growing regions. This means that 98 out of 100 senior execs in Fortune 500 firms are defending obsolete business models in the old monocentric world (read: the U.S.), whereas only two of them are trying to restructure their organization for growth and success in the new polycentric world!
On the other hand, 55 percent of the Millennials that IBM surveyed expect globalization to massively change organizations in the future—and seem eager to contribute to those changes. After all, Millennials already live in a polycentric world and are fully aware of its extreme diversity—with their friends on Facebook and online gaming sites spanning multiple continents. As such, these culturally malleable Millennials welcome and celebrate the growing diversity in the globally interconnected business environment and are confident they can navigate through its complexity by leveraging their social networking skills and by focusing on continual learning.
Polycentric Organizations
The onus is on existing CEOs to redesign their organizations to leverage global diversity and the creative potential of Millennials (who will soon swell their employee base) in order to find innovative solutions for dealing with complexity in the postrecession global economy. To effectively compete and win in the emerging polycentric world, we believe, monolithic and ethnocentric multinationals must evolve into what we call polycentric organizations that reflect internally the growing external diversity and are able to learn and adapt continuously. Polycentric organizations not only tame but even capitalize on global complexity because of three noteworthy attributes:
1. They operate as a network. Polycentric organizations eschew hierarchical structures and silos —the death knell for developing empathy and harnessing diversity. Rather, they operate in a networked configuration, integrating creative talent and ideas from employees, suppliers, and customers across regions to meet the global demand for innovative products and services.
2. They are highly adaptive. Flexibility is key to learning dynamically and succeeding in extreme diversity. Polycentric organizations aren't wedded to a single European or U.S.-centric business model or organizational practice, but employ a diverse portfolio of strategies and approaches that allow them to quickly learn and adapt to new opportunities and threats in different regional markets.
3. They boast a global mindset. Polycentric organizations don't believe in a single "corporate culture," and allow multiple perspectives and value systems to co-exist within the same enterprise. They are also open to external ideas and actively collaborate with a rich network of partners. This diversity in thinking and action is reflected in the heterogeneity of their leadership team and how they make and execute their decisions.
Our research shows that a few visionary multinationals—some Western, some Eastern—have begun to embody and manifest the three key attributes of polycentric organizations.
For instance, both General Electric (GE) and Cisco Systems (CSCO) are de-Westernizing their firms and creating networked organizations by giving leaders in emerging markets global R&D remit and global profit-and-loss (P&L) responsibilities. John Chambers, Cisco's CEO, dispatched his top lieutenant, Wim Elfrink, to Bangalore to launch and run Cisco's Globalization Center East, which now works closely with the U.S.-based research and development teams to co-create affordable and sustainable solutions for both emerging and developed markets. Likewise, GE's CEO Jeffrey Immelt has made John Flannery, till recently the president and CEO for GE Capital in Asia, the head of GE's India operations, reporting directly to GE Vice-Chairman John Krenicki. For the first time in its history, GE now has a senior vice-president heading India, which from now on will be treated as one single, integrated business with its own P&L on par with any other global business unit of GE.
Globalization Strategies
Best Buy (BBY) has made adaptability the cornerstone of its globalization strategy. For example, Best Buy's astounding growth in China is due to the fact that it designed its local stores to be less transactional (as in the U.S.) and more experiential, giving Chinese customers plenty of space to browse and try out products before actually buying them.
Not to be undone by their Western rivals, next-gen multinationals from emerging markets like Tata Motors (TTM) and Lenovo (LNVGY) are diligently cultivating a global mindset by increasing the diversity of their leadership teams. For instance, Lenovo's chief marketing officer, chief operating officer, and many senior vice-presidents are all non-Chinese. Similarly, Ravi Kant, vice-chairman of Tata Motors, told us that the leadership team of recently acquired Jaguar Land Rover continues to make decisions and operate pretty much as before, and together with other Tata Motors units they are learning to operate with a global mindset. Finally, Suzlon Energy (SUEL:IN), India's wind energy pioneer, is tapping into globally distributed creativity thanks to its global innovation network with R&D hubs in Denmark, Germany, and the Netherlands.
The monocentric global economic order is rapidly being eclipsed by a polycentric world. Rather than keeping their enterprise locked into 20th century organizational structures and processes, CEOs of multinationals must leverage the Millennials to accelerate their firms' evolution into polycentric organizations that harness the diversity and capitalize on the complexity of the 21st century.
Navi Radjou is executive director of the Center for India & Global Business at Judge Business School at the University of Cambridge. Dr. Prasad Kaipa is a CEO coach and adviser; he has worked with more than 100 top executives and 30 Fortune 500 companies in the areas of leadership development and innovation.
Feeding the mind
Feeding the Mind
Lewis Carrol
Breakfast, dinner, tea; in extreme cases, breakfast, luncheon, dinner, tea, supper, a glass of something hot at bedtime. What care we take about feeding the lucky body! Which of us does as much for his mind? And what causes the difference? Is the body so much the more important of the two?
By no means; but life depends on the body being fed, where as we can continue to exist as animals (scarcely as men) though the mind be utterly starved and neglected. There fore, nature provides that in case of serious neglect of body, such terrible consequences of discomfort and pain shall ensue, as will soon bring us back to a sense of our duty; and some of the functions necessary to life she does for us altogether leaving us no chance in the matter. It would fare but ill with many of us if we were to superintend our own digestions and circulation. “Bless me!” one would cry, “I forgot to wind up my heart this morning! To think that it has been standing still for the last three hours!” “I can’t walk with you this afternoon,” a friend would say, “as I have no less than eleven dinner to digest. I had to let them stand over from last week, being so busy, and my doctor says he will not answer for the consequences if I wait any longer!”
Well, it is, I say, for us that consequences of neglecting the body can be clearly seen and felt; and it might be well for some if the mind were equally visible and tangible – if we could take it, say, to the doctor, and have its pulse felt. “Why, what have you been doing with this mind lately? How have you fed it? It looks pale, and the pulse is very slow.” “Well, doctor, it has not had much regular food lately. I gave it a lot of sugar plums yesterday.” “Sugar plums! What kind?”
“Well, they were a parcel of conundrums, Sir.”
“Ah, I thought so. Now just mind this: if you go on playing tricks like that, you will spoil its teeth and get laid up with mental indigestion. You must have nothing but the plainest reading for the next few days. Take care now! No novels on any account!”
Considering the amount of painful experience many of us have had in feeding and dosing the body, it would, I think, be quite worth our while to try and translate some of the rules into corresponding ones for the mind.
First we should set ourselves to provide for our mind its proper kind of food. We very soon learn what will, and what will not, agree with the body, and find little difficulty in refusing a piece of the tempting pudding or pie which is associated in our memory with that terrible attack of indigestion and whose very name irresistibly recalls rhubarb and magnesia.Top Five Regrets of the Dying
Top Five Regrets of the Dying
By Bronnie WareFor many years I worked in palliative care. My patients were those who had gone home to die. Some incredibly special times were shared. I was with them for the last three to twelve weeks of their lives.
People grow a lot when they are faced with their own mortality. I learned never to underestimate someone’s capacity for growth. Some changes were phenomenal. Each experienced a variety of emotions, as expected, denial, fear, anger, remorse, more denial and eventually acceptance. Every single patient found their peace before they departed though, every one of them.
When questioned about any regrets they had or anything they would do differently, common themes surfaced again and again. Here are the most common five:
1. I wish I’d had the courage to live a life true to myself, not the life others expected of me
This was the most common regret of all. When people realize that their life is almost over and look back clearly on it, it is easy to see how many dreams have gone unfulfilled. Most people have had not honored even a half of their dreams and had to die knowing that it was due to choices they had made, or not made.It is very important to try and honor at least some of your dreams along the way. From the moment that you lose your health, it is too late. Health brings a freedom very few realize, until they no longer have it.
2. I wish I didn’t work so hard
This came from every male patient that I nursed. They missed their children’s youth and their partner’s companionship. Women also spoke of this regret. But as most were from an older generation, many of the female patients had not been breadwinners. All of the men I nursed deeply regretted spending so much of their lives on the treadmill of a work existence.By simplifying your lifestyle and making conscious choices along the way, it is possible to not need the income that you think you do. And by creating more space in your life, you become happier and more open to new opportunities, ones more suited to your new lifestyle.
3. I wish I’d had the courage to express my feelings
Many people suppressed their feelings in order to keep peace with others. As a result, they settled for a mediocre existence and never became who they were truly capable of becoming. Many developed illnesses relating to the bitterness and resentment they carried as a result.We cannot control the reactions of others. However, although people may initially react when you change the way you are by speaking honestly, in the end it raises the relationship to a whole new and healthier level. Either that or it releases the unhealthy relationship from your life. Either way, you win.
4. I wish I had stayed in touch with my friends
Often they would not truly realize the full benefits of old friends until their dying weeks and it was not always possible to track them down. Many had become so caught up in their own lives that they had let golden friendships slip by over the years. There were many deep regrets about not giving friendships the time and effort that they deserved. Everyone misses their friends when they are dying.It is common for anyone in a busy lifestyle to let friendships slip. But when you are faced with your approaching death, the physical details of life fall away. People do want to get their financial affairs in order if possible. But it is not money or status that holds the true importance for them. They want to get things in order more for the benefit of those they love. Usually though, they are too ill and weary to ever manage this task. It is all comes down to love and relationships in the end. That is all that remains in the final weeks, love and relationships.
5. I wish that I had let myself be happier
This is a surprisingly common one. Many did not realize until the end that happiness is a choice. They had stayed stuck in old patterns and habits. The so-called ‘comfort’ of familiarity overflowed into their emotions, as well as their physical lives. Fear of change had them pretending to others, and to their selves, that they were content. When deep within, they longed to laugh properly and have silliness in their life again.When you are on your deathbed, what others think of you is a long way from your mind. How wonderful to be able to let go and smile again, long before you are dying.
Life is a choice. It is YOUR life. Choose consciously, choose wisely, choose honestly. Choose happiness.
Monday, December 6, 2010
Caste as social capital
Caste as social capital
http://www.dnaindia.com/opinion/column_caste-as-social-capital_1387350
May 24, 2010, By R Vaidyanathan | Place: Mumbai
Caste is back. It is likely to be part of the 2011 census. It was part of the decennial censuses between 1881 and 1931.
Of the 1929 castes aggregated in the 1881 census, 1126 [58%] had population of less than 1000; 275 less than ten. A large number of them were single member castes. The British had created a social "hierarchy" on the basis of caste in that Census.
The alienated metropolitan rootless wonders (AMROWs) and other assorted experts are upset since they have concluded that caste is bad. They want to be counted in the censusas "Indian".
Every Indian is expected to feel guilty, whenever caste is mentioned and talked about. In international fora, caste is used as a stick to beat anything connected to Indian religions, customs, and culture. In other words, caste for Indians has been turned into what "holocaust" is for Germans and Austrians.
We have an uncanny ability for self-flagellation. But more tragic is our enthusiasm to convert all our strengths into weaknesses since some white men and missionaries started denigrating Indians on the issue of caste.
We fail to recognise that it is a valuable social capital, which provides cushion for individuals and families in dealing with society at large, and more particularly the State. The Anglo-Saxon model of atomised individuals in a contract-based system and forcing him to have a direct link with the State has had disastrous effects in the west where families have been destroyed and communities have been forgotten.
Every person is standing alone, stark naked with only rights as his imaginary clothes to deal directly with the State.
The State also does not have the benefit of concentric circles of cushions to deal with individuals. Caste has been made a curse by our intellectuals based on the half-baked knowledge and acceptance of the Euro-centric individual-based model, which is based on rights and contracts rather than relationships and duty.
At a basic level, caste promotes heterogeneity. Heterogeneous and distributive systems are more stable and long-lasting than homogeneous and centralised systems. Caste is a major bulwark against homogenisation tendencies of systems like Marxism, Maoism or Savarkarism or the Semitic faiths. We should realise that "our strength is our diversity" and acceptance of the "other". It is much more than "multicultural tolerance".
It is also assumed that caste is a rigid hierarchical system which is oppressive. But as observed by the renowned sociologist Dipankar Gupta that "In fact, it is more realistic to say that there are probably as many hierarchies as there are castes in India. To believe that there is a single caste order to which every caste, from Brahman to untouchable, acquiesce ideologically, is a gross misreading of facts on the ground" The truth is that no caste, howsoever lowly placed it may be, accepts the reason for its degradation"(Dipankar Gupta in Interrogating Caste; pp1; Penguin Books 2000)
History does not support the thesis of caste discrimination. If it were as oppressive as it is portrayed then there should have been massive and regular caste wars in the last thousand years. There have not been any. If it has survived thousands of years then there is some inherent strength in it. The renowned Gandhian, Dharampal has demonstrated that data for Madras, Punjab and Bengal Presidency for 1800 to 1830 shows that the majority enrolled in the schools were from OBC and SC categories.
Caste has played an important role in the consolidation of business and entrepreneurship particularly in the last fifty or so years. The World Bank suggests that the remarkable growth of Tirupur is due to the coordinated efforts of Gounders, many of whom not even matriculates. "(World Development report, 2002 pp175; The World Bank). In a financial sense caste provides the edge in being a risk taker since failure is recognised and condoned and sometimes even encouraged by the group.
We have the exhaustive Economic Census of 2005, conducted by the Central Statistical Organization (CSO) which covers 41.83 million enterprises engaged in different economic activities.The survey finds that more than 50 per cent of the enterprises are owned by SC/ST/OBC categories.
As MN Srinivas, doyen of sociologists, pointed out that "An important feature of social mobility in modern India is the manner in which the successful members of the backward castes work consistently for improving the economic and social condition of their caste-fellows. This is due to the sense of identification with one's own caste, and also a realisation that caste mobility is essential for individual or familial mobility"(Collected Essays; pp196-197, OUP2005).
Caste should be counted in 2011 census for all religions since every religion has caste even though we pretend it does not exist. It is required for policy planners and experts to work on a road map to calibrate changes based upon the census. We may have to enumerate a new caste called "Indian" consisting of the AMROWS mentioned above.
http://www.dnaindia.com/
May 24, 2010, By R Vaidyanathan | Place: Mumbai
Caste is back. It is likely to be part of the 2011 census. It was part of the decennial censuses between 1881 and 1931.
Of the 1929 castes aggregated in the 1881 census, 1126 [58%] had population of less than 1000; 275 less than ten. A large number of them were single member castes. The British had created a social "hierarchy" on the basis of caste in that Census.
The alienated metropolitan rootless wonders (AMROWs) and other assorted experts are upset since they have concluded that caste is bad. They want to be counted in the censusas "Indian".
Every Indian is expected to feel guilty, whenever caste is mentioned and talked about. In international fora, caste is used as a stick to beat anything connected to Indian religions, customs, and culture. In other words, caste for Indians has been turned into what "holocaust" is for Germans and Austrians.
We have an uncanny ability for self-flagellation. But more tragic is our enthusiasm to convert all our strengths into weaknesses since some white men and missionaries started denigrating Indians on the issue of caste.
We fail to recognise that it is a valuable social capital, which provides cushion for individuals and families in dealing with society at large, and more particularly the State. The Anglo-Saxon model of atomised individuals in a contract-based system and forcing him to have a direct link with the State has had disastrous effects in the west where families have been destroyed and communities have been forgotten.
Every person is standing alone, stark naked with only rights as his imaginary clothes to deal directly with the State.
The State also does not have the benefit of concentric circles of cushions to deal with individuals. Caste has been made a curse by our intellectuals based on the half-baked knowledge and acceptance of the Euro-centric individual-based model, which is based on rights and contracts rather than relationships and duty.
At a basic level, caste promotes heterogeneity. Heterogeneous and distributive systems are more stable and long-lasting than homogeneous and centralised systems. Caste is a major bulwark against homogenisation tendencies of systems like Marxism, Maoism or Savarkarism or the Semitic faiths. We should realise that "our strength is our diversity" and acceptance of the "other". It is much more than "multicultural tolerance".
It is also assumed that caste is a rigid hierarchical system which is oppressive. But as observed by the renowned sociologist Dipankar Gupta that "In fact, it is more realistic to say that there are probably as many hierarchies as there are castes in India. To believe that there is a single caste order to which every caste, from Brahman to untouchable, acquiesce ideologically, is a gross misreading of facts on the ground" The truth is that no caste, howsoever lowly placed it may be, accepts the reason for its degradation"(Dipankar Gupta in Interrogating Caste; pp1; Penguin Books 2000)
History does not support the thesis of caste discrimination. If it were as oppressive as it is portrayed then there should have been massive and regular caste wars in the last thousand years. There have not been any. If it has survived thousands of years then there is some inherent strength in it. The renowned Gandhian, Dharampal has demonstrated that data for Madras, Punjab and Bengal Presidency for 1800 to 1830 shows that the majority enrolled in the schools were from OBC and SC categories.
Caste has played an important role in the consolidation of business and entrepreneurship particularly in the last fifty or so years. The World Bank suggests that the remarkable growth of Tirupur is due to the coordinated efforts of Gounders, many of whom not even matriculates. "(World Development report, 2002 pp175; The World Bank). In a financial sense caste provides the edge in being a risk taker since failure is recognised and condoned and sometimes even encouraged by the group.
We have the exhaustive Economic Census of 2005, conducted by the Central Statistical Organization (CSO) which covers 41.83 million enterprises engaged in different economic activities.The survey finds that more than 50 per cent of the enterprises are owned by SC/ST/OBC categories.
As MN Srinivas, doyen of sociologists, pointed out that "An important feature of social mobility in modern India is the manner in which the successful members of the backward castes work consistently for improving the economic and social condition of their caste-fellows. This is due to the sense of identification with one's own caste, and also a realisation that caste mobility is essential for individual or familial mobility"(Collected Essays; pp196-197, OUP2005).
Caste should be counted in 2011 census for all religions since every religion has caste even though we pretend it does not exist. It is required for policy planners and experts to work on a road map to calibrate changes based upon the census. We may have to enumerate a new caste called "Indian" consisting of the AMROWS mentioned above.
Happiness-Khushwant Singh's prescription
Happiness-Khushwant Singh's prescription
One on the most convincing pieces on happiness
Khushwant Singh at his best. The rationale applied to each preference is
absolutely top class.
EIGHT CLUES TO HAPPINESS
By- KHUSHWANT SINGH
Having lived a reasonably contented life, I was musing over what a person should
strive for to achieve happiness. I drew up a list of a few essentials which I
put forward for the readers' appraisal.
1. First and foremost is GOOD HEALTH. If you do not enjoy good health you can
never be happy. Any ailment, however trivial, will deduct from your happiness.
2. Second, A HEALTHY BANK BALANCE. It need not run into crores but should be
enough to provide for creature comforts and something to spare for recreation,
like eating out, going to the pictures, travelling or going on holidays on the
hills or by the sea. Shortage of money can be only demoralizing. Living on
credit or borrowing is demeaning and lowers one in one's own eyes.
3. Third, A HOME OF YOUR OWN. Rented premises can never give you the snug
feeling of a nest which is yours for keeps that a home provides: if it has a
garden space, all the better. Plant your own trees and flowers, see them grow
and blossom, cultivate a sense of kinship with them.
4. Fourth, AN UNDERSTANDING COMPANION, be it your spouse or a friend. If there
are too many misunderstandings, they will rob you of your peace of mind. It is
better to be divorced than to bicker all the time.
5. Fifth, ENVY towards those who have done better than you in life; risen
higher, made more money, or earned more fame. Envy can be very corroding; avoid
comparing yourself with others.
6. Sixth, DO NOT ALLOW OTHER PEOPLE to descend on you for gup-shup. By the time
you get rid of them, you will feel exhausted and poisoned by their
gossip-mongering.
7. Seventh, CULTIVATE SOME HOBBIES which can bring you a sense of fulfilment,
such as gardening, reading, writing, painting, playing or listening to music.
Going to clubs or parties to get free drinks or to meet celebrities is criminal
waste of time.
8. Eighth, every morning and evening, devote 15 minutes toINTROSPECTION. In the
morning, 10 minutes should be spent on stilling the mind and then five in
listing things you have to do that day. In the evening, five minutes to still
the mind again, and ten to go over what you had undertaken to do.
RICHNESS is not Earning More, Spending More Or Saving More, but ...
"RICHNESS IS WHEN YOU NEED NO MORE"
Khushwant Singh at his best. The rationale applied to each preference is
absolutely top class.
EIGHT CLUES TO HAPPINESS
By- KHUSHWANT SINGH
Having lived a reasonably contented life, I was musing over what a person should
strive for to achieve happiness. I drew up a list of a few essentials which I
put forward for the readers' appraisal.
1. First and foremost is GOOD HEALTH. If you do not enjoy good health you can
never be happy. Any ailment, however trivial, will deduct from your happiness.
2. Second, A HEALTHY BANK BALANCE. It need not run into crores but should be
enough to provide for creature comforts and something to spare for recreation,
like eating out, going to the pictures, travelling or going on holidays on the
hills or by the sea. Shortage of money can be only demoralizing. Living on
credit or borrowing is demeaning and lowers one in one's own eyes.
3. Third, A HOME OF YOUR OWN. Rented premises can never give you the snug
feeling of a nest which is yours for keeps that a home provides: if it has a
garden space, all the better. Plant your own trees and flowers, see them grow
and blossom, cultivate a sense of kinship with them.
4. Fourth, AN UNDERSTANDING COMPANION, be it your spouse or a friend. If there
are too many misunderstandings, they will rob you of your peace of mind. It is
better to be divorced than to bicker all the time.
5. Fifth, ENVY towards those who have done better than you in life; risen
higher, made more money, or earned more fame. Envy can be very corroding; avoid
comparing yourself with others.
6. Sixth, DO NOT ALLOW OTHER PEOPLE to descend on you for gup-shup. By the time
you get rid of them, you will feel exhausted and poisoned by their
gossip-mongering.
7. Seventh, CULTIVATE SOME HOBBIES which can bring you a sense of fulfilment,
such as gardening, reading, writing, painting, playing or listening to music.
Going to clubs or parties to get free drinks or to meet celebrities is criminal
waste of time.
8. Eighth, every morning and evening, devote 15 minutes toINTROSPECTION. In the
morning, 10 minutes should be spent on stilling the mind and then five in
listing things you have to do that day. In the evening, five minutes to still
the mind again, and ten to go over what you had undertaken to do.
RICHNESS is not Earning More, Spending More Or Saving More, but ...
"RICHNESS IS WHEN YOU NEED NO MORE"
Competency Mapping
Competency Mapping
Shashank Ahluwalia
------------------------------
"This is to certify that this article "Competency Mapping" is written by Shashank Ahluwalia and is her original work. This article has not been published elsewhere and has not been given to any other publisher for publication. I also agree to have this declaration published with the article if it needs to be".
------------------------------
Access to competencies, rather than access to cash, is the most critical driver growth.
Competency is a result of ability and willingness. It is a cluster of knowledge, skill, abilities, underlying personal characteristics that drive resultant behavior leading to success or superior performance on the job. Competency is a set of observable behavioral statements. It could be related to organization mission, vision, strategy, internal and external customer satisfaction and expectation, departmental focus areas. Thus it is the ability and positive attitude or also can be defined as combination of 2 components – Knowledge and Skill.
In today's world it is becoming increasingly very important to build on the competitive activities of the business, particularly regarding what competencies a business needs to have in order to compete in a specific environment. Top management is identifying corporate core competencies and working to establish them throughout the organization. HR development builds competency based models that drive business results. Competency modeling addresses the development of people from process design through succession. But most of the organizations of all sizes are still struggling with defining, designing and implementing competency model projects.
The process is completely customizable. The decisions of competency design are driven by number of organizational factors, including management philosophy, customer requirements, business needs and in place processes. These factors vary from one organization to another, requiring a customized approach to competencies in the workplace. Customization is essential to the overall success of competency efforts, since every organization must integrate competency concepts into its own job design, recruitment, hiring orientation, development and succession planning processes. Competency Mapping is a process of identifying key competencies for a company or institution and the jobs and functions within it. Competency Mapping is important and is essential exercise. Every well managed firm should be well defined roles and list of competencies required to perform each role effectively. Such list should be used for recruitment, performance management, promotions, placements and training needs identification.
The competency framework serves as the bedrock for all HR applications. As a result of competency mapping, all the HR processes like talent induction, management development, appraisals and training yield much better results. The competency mapping process does not fit the ONE-SIZE-FITS-ALL formula. It has to be specific to the user organization. It is important to focus on one or two key areas of implementation rather than the whole HRD agenda in one scoop. So if recruitment and selection or performance management is the key strategic need of the business and where the pain is being felt, start there. It is advisable to begin with a "Horizontal Slice" of management or the senior most team as the benefits will percolate down to the whole organization. It's about identifying preferred behaviors and personal skills which distinguish excellent and outstanding performance from the average. The use of competencies can include assessment during recruitment, assessment during further development, as a profile during assessment to guide future development needs, succession planning and promotion, organization development analysis.
Competency Mapping is a process through which one assesses and determines one's strengths as an individual worker in some cases, as a part of the organization. It generally examines 2 areas emotional intelligence and emotional quotient and strengths of an individual in areas like team structure, leadership and decision making. Large organizations frequently employ some form of competency mapping to understand how to most effectively employ the competencies of strengths of workers. They may also use competency mapping to analyze the combination of strengths in different workers to produce the most effective teams and higher quality work.
How is Competency mapped for an individual?
Competency Mapping is essential and vital as they provide clear picture of what is expected from the employees to achieve excellent performance. Improving employee competency is important because organization in this competitive era need to have a competitive edge. This is must for employee's optimum performance. An individual has to be profiled in terms of levels of knowledge application and attitudes on the measurement of scale of each competencies that we identify. This process and profiling becomes inconvenient if we divide our area of working or the job family into 3 constituents – Vital, Essential and Desirable and then an expected calibration is done on the measurement of scale of each competency. In such cases there can be ranging ramplifications or the so called gaps between the position profile and the person profile which in turn gives birth to what is called as training needs.
Competency Mapping can also be done for contract or free lance workers, or for those seeking employment to emphasize the specific skills which would make them valuable to a potential employer. These kinds of skills can be determined when one is ready to do work. Competency Mapping also requires some thought time, analysis and some people simply may not want to do work involved to sufficiently map competencies.
The value of competency mapping and identifying emotional strengths is that many employers now purposefully screen employees to hire people with specific competencies. They may need to hire someone who can be an effective time leader or who has demonstrated great active listening skills. A problem with competency mapping especially when conducting by an organization is that there may be no room for an individual to work in a field that would best make use of his or her competencies. If the company does not respond to competency mapping by reorganizing its employees, then it can be of little short term benefit and may actually result in greater unhappiness on the part of individual employees. A person identified as needing to learn new things in order to remain happy might find himself or herself in a position where no new training is ever required. If the employer cannot provide a position for an employer that fits him or her better, competency mapping may be of little use.
However competency mapping can ultimately serve the individual who decides to seek employment in an environment where he or she perhaps can learn new things and be more intellectually challenged. Being able to list competencies on resumes and address this area with potential employers may help secure more satisfying work. This may not resolve issues for the company that initially employed competency mapping without making suggested changes. It may find competency mapping has produced dissatisfied workers or led to a high work turnover rate.
Over the past 10 years, human resource and organization development professionals have generated a lot of interest in the notion of competencies as a key element and measure of human performance. Competencies are becoming a frequently used and written about vehicle for organization applications like assessing the current performance and future development needs of persons holding job and roles, mapping succession possibilities for employees within the organization, assigning compensation grades and levels to particular jobs and roles.
A competency map is a list of an individual's competencies that represent the factors most critical to success in the given jobs, department, organizations or industries that are a part of individuals current career plan. Competency mapping is a process an individual uses to identify and describe competencies that are most critical to success in a work situation or work role. The main need for identifying and mapping competencies is for individuals who may be pursuing full time employment within the organization. However the need for mapping of competencies also extends to independent contractors seeking project work with those organizations that broker their services.
For example:-
· Determining what competencies is the employer looking for?
ü Use the job description: - The companies that employ behavioral interviewing have predetermined the skill sets they require for a particular position.
ü If you don't have job description – research the company
ü Look at other similar job postings
· Assessing the Leadership Competency Profiles for executives:-
The leadership competency profile for executives contains 6 competencies. These are broadly defined as multiple concepts are found within their definitions. For instance in case of competency "Coaching and Team Development", the definition integrates 2 important elements. The first element focuses on acting as a coach; the second element which is congruent with the first one has to do with being a change agent and championing change.
The approach is somewhat different than other interview techniques as the interviews must truly understand the situation that the candidate faced, what the candidate did, said or felt and why they did so and the consequence of action. Because of this requirement interviews will often take the form of a conversation where the candidate does 80% of talking.
Being ignorant is not so much a shame as being unwilling to learn to do things the right way.
--Benjamin Franklin
--Socrates
"In a nutshell, educated persons are those who can choose wisely and courageously under any circumstances. If they have the ability to choose between wisdom and foolishness, between good and bad, between virtuousness and vulgarities, regardless of the academic degrees they have, then they are educated."
Shashank Ahluwalia has done her Bachelor's in Computer Applications from Punjab University, Chandigarh and is currently pursuing her Master's in Business Administration from Amity University. Very determined and passionate, aspires to make an excellent career in HR ahead. She is presently undergoing learning and strategy sessions and can be reached at shashank.ahluwalia86@gmail.com
Copied for mail forwarded in HR Groups
Saturday, October 30, 2010
The Next Revolution in Interactions
The Next Revolution in Interactions
by Bradford Johnson, James Manyika, Lareina Yee
The McKinsey Quarterly (2005 Number 4)
Like vinyl records and Volkswagen Beetles, sustainable competitive advantages are back in style—or will be as companies turn their attention to making their most talented, highly paid workers more productive. For the past 30 years, companies have boosted their labor productivity by reengineering, automating, or outsourcing production and clerical jobs. But any advantage in costs or distinctiveness that companies gained in this way was usually short lived, for their rivals adopted similar technologies and process improvements and thus quickly matched the leaders.
But advantages that companies gain by raising the productivity of their most valuable workers may well be more enduring, for their rivals will find these improvements much harder to copy. This kind of work is undertaken by, for example, managers, salespeople, and customer service reps, whose tasks are anything but routine. Such employees interact with other employees, customers, and suppliers and make complex decisions based on knowledge, judgment, experience, and instinct.
New McKinsey research reveals that these high-value decision makers are growing in number and importance throughout many companies. As businesses come to have more problem solvers and fewer doers in their ranks, the way they organize for business changes. So does the economics of labor: workers who undertake complex, interactive jobs typically command higher salaries, and their actions have a disproportionate impact on the ability of companies to woo customers, to compete, and to earn profits. Thus, the potential gains to be realized by making these employees more effective at what they do and by helping them to do it more cost effectively are huge—as is the downside of ignoring this trend.
But to improve these employees' labor performance, executives must put aside much of what they know about reengineering—and about managing technology, organizations, and talent to boost productivity. Technology can replace a checkout clerk at a supermarket but not a marketing manager. Machines can log deposits and dispense cash, but they can't choose an advertising campaign. Process cookbooks can show how to operate a modern warehouse but not what happens when managers band together to solve a crisis.
Machines can help managers make more decisions more effectively and quickly. The use of technology to complement and enhance what talented decision makers do rather than to replace them calls for a very different kind of thinking about the organizational structures that best facilitate their work, the mix of skills companies need, hiring and developing talent, and the way technology supports high-value labor. Technology and organizational strategies are inextricably conjoined in this new world of performance improvement.
Raising the labor performance of professionals won't be easy, and it is uncertain whether any of the innovations and experiments that some pioneering companies are now undertaking will prove to be winning formulas. As in the early days of the Internet revolution, the direction is clear but the path isn't. That's the bad news—or, rather, the challenge (and opportunity) for innovators.
The good news concerns competitive advantage. As companies figure out how to raise the performance of their most valuable employees in a range of business activities, they will build distinctive capabilities based on a mix of talent and technology. Reducing these capabilities to a checklist of procedures and IT systems (which rivals would be able to copy) isn't going to be easy. Best practice thus won't become everyday practice quite as quickly as it has in recent years. Building sustainable advantages will again be possible—and, of course, worthwhile.
The interactions revolution
Today's most valuable workers undertake business activities that economists call "interactions": in the broadest sense, the searching, coordinating, and monitoring required to exchange goods or services. Recent studies—including landmark research McKinsey conducted in 1997—show that specialization, globalization, and technology are making interactions far more pervasive in developed economies. As Adam Smith predicted, specialization tends to atomize work and to increase the need to interact. Outsourcing, like the boom in global operations and marketing, has dramatically increased the need to interact with vendors and partners. And communications technologies such as e-mail and instant messaging have made interaction easier and far less expensive.
The growth of interactions represents a broad shift in the nature of economic activity. At the turn of the last century, most nonagricultural labor in business involved extracting raw materials or converting them into finished goods. We call these activities transformational because they involve more than just jobs in production. By the turn of the 21st century, however, only 15 percent of US employees undertook transformational work such as mining coal, running heavy machinery, or operating production lines—in part because in a globalizing economy many such jobs are shifting from developed to developing nations. The rest of the workforce now consists of people who largely or wholly spend their time interacting.
Within the realm of interactions, another shift is in full swing as well, and it has dramatic implications for the way companies organize and compete. Eight years after McKinsey's 1997 study, the firm's new research on job trends in a number of sectors finds that companies are hiring more workers for complex than for less complex interactions. Recording a shipment of parts to a warehouse, for example, is a routine interaction; managing a supply chain is a complex one.
Complex interactions typically require people to deal with ambiguity—there are no rule books to follow—and to exercise high levels of judgment. These men and women (such as managers, salespeople, nurses, lawyers, judges, and mediators) must often draw on deep experience, which economists call "tacit knowledge." For the sake of clarity, we will therefore refer to the more complex interactions as tacit and to the more routine ones as transactional. Transactional interactions include not just clerical and accounting work, which companies have long been automating or eliminating, but also most of what IT specialists, auditors, biochemists, and many others do.
Most jobs mix both kinds of activities—when managers fill out their expense reports, that's a transaction; leading workshops on corporate strategy with their direct reports is tacit work. But what counts in a job are its predominant and necessary activities, which determine its value added and compensation.
During the past six years, the number of US jobs that include tacit interactions as an essential component has been growing two and a half times faster than the number of transactional jobs and three times faster than employment in the entire national economy. To put it another way, 70 percent of all US jobs created since 1998—4.5 million, or roughly the combined US workforce of the 56 largest public companies by market capitalization—require judgment and experience. These jobs now make up 41 percent of the labor market in the United States. Indeed, most developed nations are experiencing this trend.
The balance is tipping toward complexity, in part because companies have been eliminating the least complex jobs by streamlining processes, outsourcing, and automating routine tasks. From 1998 to 2004, for example, insurance carriers, fund-management companies, and securities firms cut the number of transactional jobs on their books by 10 percent, 6.5 percent, and 2.7 percent a year, respectively. Likewise, a more automated check-in process at airports makes for smaller airline check-in staffs, automated replenishment systems reduce the need for supply chain bookkeepers, and outsourcing helps companies shed IT help desk workers. Manufacturers too have eliminated transactional jobs.
Meanwhile, the number of jobs involving more complex interactions among skilled and educated workers who make decisions is growing at a phenomenal rate. Salaries reflect the value that companies place on these jobs, which pay 55 and 75 percent more, respectively, than those of employees who undertake routine transactions and transformations.
Demand for tacit workers varies among sectors, of course. The jobs of most employees in air transportation, retailing, utilities, and recreation are transactional. Tacit jobs dominate fields such as health care and many financial-services and software segments. But all sectors employ tacit workers, and demand for them is growing; most companies, for example, have an acute need for savvy frontline managers.
A new path to better performance
The demand for tacit employees and the high cost of employing them are a clear call to arms. Companies need to make this part of the workforce more productive, just as they have already raised the productivity of transactional and manufacturing labor. Unproductive tacit employees will be an increasingly costly disadvantage.
The point isn't how many tacit interactions occur in a company—what's important is that they ought to add value. This shift toward tacit interactions upends everything we know about organizations. Since the days of Alfred Sloan, corporations have resembled pyramids, with a limited number of tacit employees (managers) on top coordinating a broad span of workers engaged in production and transactional labor. Hierarchical structures and strict performance metrics that tabulate inputs and outputs therefore lie at the heart of most organizations today.
But the rise of the tacit workforce and the decline of the transformational and transactional ones demand new thinking about the organizational structures that could help companies make the best use of this shifting blend of talent. There is no road map to show them how to do so. Over time, innovations and experiments to raise the productivity of tacit employees (for instance, by helping them collaborate more effectively inside and outside their companies) and innovations involving loosely coupled teams will suggest new organizational structures.
The two critical changes that executives must take into account as they explore how to make tacit employees more productive are already clear, however. First, the way companies deploy technology to improve the performance of the tacit workforce is very different from the way they have used it to streamline transactions or improve manufacturing. Machines can't recognize uncodified patterns, solve novel problems, or sense emotional responses and react appropriately; that is, they can't substitute for tacit labor as they did for transactional labor. Instead machines will have to make tacit employees better at their jobs by complementing and extending their tacit capabilities and activities.
Second, a look back at what it took to raise labor productivity over the past ten years shows that the overall performance of sectors improves when the companies in them adopt one another's managerial best practices, usually involving technology. In retailing, for instance, Wal-Mart Stores was a pioneer in automating a number of formerly manual transactional activities, such as tracking goods, trading information with suppliers, and forecasting demand. During the 1990s, most other general-merchandise retailers adopted Wal-Mart's innovations, boosting labor productivity throughout the sector.
But in the world of tacit work, it's less likely that companies will succeed in adopting best practices quite so readily. Capabilities founded on talented people who make smarter decisions about how to deploy tangible and intangible assets can't be coded in software and process diagrams and then disseminated throughout a sector.
Tacit technology
Companies have three ways of using technology to enhance and extend the work of tacit labor. First, and most obviously, they can use it to eliminate low-value-added transactional activities that keep employees from undertaking higher-value work. Pharmacies, for example, are using robots to fill prescriptions in an effort to maximize the amount of time pharmacists can interact with their customers. Meanwhile, The Home Depot is trying out automated self-checkout counters in some stores. The retailer isn't just automating and eliminating transactional tasks; its chairman and CEO, Robert Nardelli, believes that automated counters can reduce by as much as 40 percent the time customers spend waiting at cash registers. Just as important, the new counters mean that people who used to operate the old manual ones can be deployed in store aisles as sales staff—a much higher-value use of time.
Furthermore, technology can allocate activities more efficiently between tacit and transactional workers. At some companies, for example, technology support—traditionally, tacit work undertaken by staff experts on PCs and networks—has been split into tacit and transactional roles. Transactional workers armed with scripts and some automated tools handle the IT problems of business users; only when no easy solution can be found is a tacit employee brought in.
Second, technology makes it possible to boost the quality, speed, and scalability of the decisions employees make. IT, for instance, can give them easier access to filtered and structured information, thereby helping to prevent such time wasters as volumes of unproductive e-mail. Useful databases could, say, provide details about the performance of offshore suppliers or expanded lists of experts in a given field. Technology tools can also help employees to identify key trends, such as the buying behavior of a customer segment, quickly and accurately.
Kaiser Permanente is one of the organizations now pioneering the use of such technologies to improve the quality of complex interactions. The health care provider has developed not only unified digital records on its patients but also innovative decision-support tools, such as programs that track the schedules of caregivers for patients with diabetes and heart disease. Although it is hard to determine quantitatively whether physicians are making better judgments about medical care, data suggest that Kaiser has cut its patients' mortality rate for heart disease to levels well below the US national average.
Finally, new and emerging technologies will let companies extend the breadth and impact of tacit interactions. Loosely coupled systems are more likely than hard-coded systems and connections to be adapted successfully to the highly dynamic work of tacit employees. This point will be particularly critical, since tacit interactions will occur as much within companies as across them. Broadband connectivity and novel applications (including collaborative software, multiple-source videoconferencing, and IP telephony) can facilitate, speed up, and progressively cut the cost of such interactions as collaboration among communities of interest and build consensus across great distances. Companies might then involve greater numbers of workers in these activities, reach rural consumers and suppliers more effectively, and connect with networks of people and specialized talent around the world.
Competitive advantage redux
Technology itself can't improve patient care or customer service or make better strategic decisions. It does help talented workers to achieve these ends, but so, for example, do organizational models that motivate tacit employees and help them spot and act on ideas. These kinds of models usually involve environments that encourage tacit employees to explore new ideas, to operate in a less hierarchical (that is, more team-oriented and unstructured) way, and to organize themselves for work. Most of today's organizational models, by contrast, aim to maximize the performance of transactional or transformational workers. Tacit models are new territory.
As a result, it won't be easy for companies to identify and develop distinctive new capabilities that make the best use of tacit interactions—new ways to speed innovations to market, to make sales channels more effective, or to divine customer needs, for instance. But at least such capabilities will also be difficult for competitors to duplicate. Best practices will be hard to transplant from one company to another if they are based on talented people supported by unique organizational and leadership models and armed with a panoply of complementary technologies. If it becomes harder for performance innovations to spread through a sector and thereby to boost the performance of all players, it will once again be possible to build operating-cost advantages and distinctive capabilities sustainable for more than a brief moment.
During the past few years, advantages related to costs and distinctiveness have rarely lasted for long: they eroded quickly when companies built them from innovations in the handling of what are essentially transactional interactions. E*Trade Financial, for instance, gained tactical advantages by optimizing transactional activities to create more efficient and less expensive ways of making trades but then watched its unique position evaporate when other discount brokers and financial advisers embraced the new technology and cut their trading fees. Cheap trades were no longer a sufficient point of differentiation.
By contrast, advantages built on tacit interactions might stand. A company could, for example, focus on improving the tacit interactions among its marketing and product-development staff, customers, and suppliers to better discern what customers want and then to provide them with more effective value-added products and services. That approach would create a formidable competitive capability—and it is difficult to see how any rival could easily implement the same mix of tacit interactions within its organization and throughout its value chain.
Looking forward
As companies explore how to expand the potential of their most valuable employees, they face more than a few challenges. For one thing, they will have to understand what profile of interactions—transactional and tacit—is critical to their business success and to allocate investments for improving the performance of each. Some companies will have to redeploy talent from transactional to tacit activities, as Home Depot did. Others, following the example of companies such as Toyota Motor and Cisco Systems, may find it necessary to redeploy their available tacit capacity to transformational and transactional activities, thus bringing a new level of problem solving to many kinds of transformational jobs. At the same time, it will be necessary to guard against becoming overly reliant on a few star tacit employees and to manage critical tacit or transactional activities undertaken by partners or vendors.
On the human-resources side, companies will need a better understanding of how they can hire, develop, and manage for tacit skills rather than transactional ones—something that will increasingly determine their ability to grow. Certain organizations must therefore learn to develop their tacit skills internally, perhaps through apprenticeship programs, or to provide the right set of opportunities so that their employees can become more seasoned and knowledgeable. What's more, performance is more complex to measure and reward when tacit employees collaborate to achieve results. How, after all, do you measure the interactions of managers?
Companies will also have to think differently about the way they prioritize their investments in technology. On the whole, such investments are now intended largely to boost the performance of transformational activities—manufacturing, construction, and so on—or of transactional ones. Companies invest far less to support tacit tasks.
So they must shift more of their IT dollars to tacit tools, even while they still try to get whatever additional (though declining) improvements can be had, in particular, from streamlining transactions. The performance spread between the most and least productive manufacturing companies is relatively narrow. The spread widens in transaction-based sectors—meaning that investments to improve performance in this area still make sense. But the variability of company-level performance is more than 50 percent greater in tacit-based sectors than in manufacturing-based ones. Tacit activities are now a green pasture for improvement.
The Morning Meeting Ritual
The Morning Meeting Ritual
by Marty Linsky
Is your organization plagued by inefficient communications, finger pointing, and lack of accountability? Get all key decision makers to the table—same time, every day. Welcome to Marty Linsky's The Morning Meeting. From Harvard Management Communication Letter.
A global petrochemical company struggling to create a coherent strategy after a merger with a very different kind of firm. A small advertising and design house trying to manage itself during a time of rapid growth. A public agency facing a series of budget cuts that threaten core services and deeply held values. An established bank losing market share to new boutique players coming into its market and cherry-picking high-margin products. As diverse as the challenges facing these organizations seemed, when my colleagues and I looked closely, we recognized that they shared two closely linked underlying causes: chronic communication problems within the executive team and a lack of shared accountability.
When communication is stifled and turf protection the order of the day, an organization's senior leadership team is less than the sum of its parts and cannot grapple with strategic and operational challenges most effectively. Expertise and energy go untapped: less than frank communication sometimes means that team members do not know the full extent of one another's issue; and a lack of shared accountability leads some to think, "Hey, that's his problem and he's got to fix it."
In contrast, two qualities characterize high-functioning leadership teams: (1) hard conversations happen—difficult issues move quickly from people's heads to the conference table; (2) accountability is shared—individuals on the top team feel a responsibility to the organization as a whole, not just for their piece of the action.
To take senior teams to a new level of leadership, we have put together a model of top team communication that we call The Morning Meeting (TMM). It's a deceptively simple name for an intricately ritualized event that has delivered significant payoffs to the organizations that have put it into practice: Backbiting and turf protection are dramatically reduced. Tough problems are addressed while they are still manageable. Issues cannot be covered over, and people can no longer hide. Ownership increases.
What TMM looks like
The genesis for the TMM model was an organization we worked with where the top team met every morning, every day, at the same time. Because this meeting was where the big decisions got made, admittance was a highly valued privilege. Executives who were on the road called in, unless time-zone differences made such virtual attendance impossible.
Here's how TMM in its purest form works: Every day, at the same time, the top team—numbering between six and fifteen people, both staff and line—assembles around a conference table, either in person or virtually. Also at the table are one or two others who either are responsible for an important current initiative or are valued for their area of expertise. There's no preset agenda. While the CEO sits at the head of the table, if there is such a spot, he does not run the meeting, and everyone sits in the same place each day.
Around the conference table on folding chairs, in a sort of gallery, are a handful of deputies and executive assistants to the principals at the table. Sometimes the CEO will have an issue or two to begin the meeting. More often, the CEO defers to the person seated to his left, the No. 2 person—the chief of staff, deputy CEO, or COO—who starts things off and runs the meeting. When No. 2's issues are fully discussed, the person seated to the left raises any issues of concern, and so on, clockwise around the table, full circle to the CEO. Once everyone at the table has had an opportunity to speak, everyone in the gallery leaves and the top team gets a chance to go around the table again. In this second phase of the meeting, executives discuss highly sensitive issues, such as legal and personnel matters, that demand a higher level of confidentiality. Depending on the size of the group and the complexity and number of issues, the entire meeting can take as little as 15 minutes or as long as two hours.
The ground rules:
- Anyone can put anything on the table for discussion; it doesn't have to be related to one's own area of responsibility. All are expected to be willing to comment on every issue raised, even those that lie beyond their technical expertise or area of responsibility.
- These are decision meetings, but issues do not just get raised and resolved. Implementation plans are broadly outlined and agreed upon, and internal and external communication strategies often are considered. Sometimes, with particularly sensitive issues, the exact language that everyone around the table is going to use is hammered out.
- Once an issue is fully vetted, the CEO determines the decision rule that will govern it. He decides whether he'll be the one to make the final call, whether a particular individual or subgroup will make it, or whether it will be made by group consensus.
- Changing one's mind, even in the middle of the conversation, is OK, even respected. Not having an opinion is not.
- There are no arguments about fact questions. Participants are to get the facts and raise the subject at the next meeting. Keep in mind, however, that fact questions are sometimes masks for deeper value-laden issues. An argument about the cost of opening a remote office might mask strategic concerns about whether expansion is a good idea.
Making it work in your organization
When we try to introduce some variant of TMM into an organization, there is often resistance: "We can't do that here." "We're too busy." "How can so many senior people keep their schedules so flexible every day?"
Our experience, however, is that the resistance is often a mask for anxiety about leaving a familiar if dysfunctional mode of operating. (Being "too busy" is a way of feeling valuable.) Members of the top team have grown comfortable with the autonomy they have, with their one-on-one relationship with the CEO and with other team members, and with not having the responsibility of worrying about the organization as a whole. Having those conversations around the coffee machine sometimes feels safer than having them in a formal meeting.
That said, the TMM model is a flexible one. Not all executive teams will need to institute it daily to see benefits; one firm we worked with has had considerable success with a weekly meeting. During a crisis or during organization-wide change initiatives, we advise holding the meeting daily. When things are running smoothly, meeting less frequently can deliver positive results.
Of course, complexity and challenge do not exist solely within the upper reaches of an organization. Division and unit heads can adapt the model to foster better decision making and execution within their teams.
On the surface, TMM is about communication, but imbedded within it are norms and values that are critical for organizations that must deal with difficult issues and adapt nimbly to new situations: an openness to considering multiple perspectives, a willingness to share responsibility for finding creative solutions, and the discipline to move consistently from strategy to execution.
[Excerpted from "The Morning Meeting: Best-Practice Communication for Executive Teams," Harvard Management Communication Letter, Vol. 3, No. 2, Spring 2006.]
The Office of Strategy Management
The Office of Strategy Management
by Martha Lagace, Senior Editor, HBS Working Knowledge
Many organizations suffer a disconnect between strategy formulation and its execution. The answer? HBS professor Robert S. Kaplan and colleague Andrew Pateman argue for the creation of a new corporate office.
"Why is there such a persistent gap between ambition and performance?" ask Robert Kaplan and David P. Norton in " The Office of Strategy Management" in the October 2005 Harvard Business Review. "The gap arises, we believe, from a disconnect in most companies between strategy formulation and strategy execution. . . . [But] it doesn't have to be like this."
Successful companies, they write, are establishing a new corporate-level unit called the office of strategy management. This unit is distinctly different from the strategic planning unit and plays a unique coordinating role to help bring strategy to fruition.
For this e-mail Q&A, Kaplan, the Baker Foundation Professor at Harvard Business School, teamed up with colleague Andrew Pateman, Principal of the Balanced Scorecard Collaborative.
Martha Lagace: You and David Norton have highlighted some troubling statistics about how strategy formulation is so often disconnected from strategy execution. What is an office of strategy management, and when and why is it needed? What are its typical activities? How it is distinct from a strategic planning unit?
Andrew Pateman and Robert Kaplan: The statistics surrounding the success that organizations have in executing strategy is low. Our article, "The Office of Strategy Management," using data from a Bain Consulting study, notes that seven out of eight companies in a global sample of 1,854 large corporations failed to achieve profitable growth, though more than 90 percent had detailed strategic plans with much higher targets. Our own work with clients supports the existence of a persistent gap between the strategic goals organizations set for themselves and the results they achieve.
Over the past fifteen years, we have studied the root causes of this disconnect between strategy and performance. We have learned that most organizations do not have a strategy execution process. Many have strategic plans, but no coherent approach to manage the execution of those plans. Consequently, many key management processes remain disconnected from strategy. We have also learned that:
(a) Many organizations don't have a consistent way to even describe their strategy, other than in a large strategic planning binder. We believe strongly that organizations need to find a consistent, coherent way to translate their strategy into operational terms.
(b) Sixty percent of typical organizations do not link their strategic priorities to their budget, virtually ensuring that key strategic initiatives do not get funded and resources may not be supplied to deliver on the strategic plan.
(c) Two-thirds of HR and IT organizations develop strategic plans that are not linked to the organization's strategy. This is extraordinary.
(d) Seventy percent of middle managers and more than 90 percent of front-line employees have compensation that is not linked to the strategy.
(e) Most devastating, 95 percent of employees in most organizations do not understand their [organization's] strategy.
In short, there is often a chronic disconnect in organizations between strategy formulation and strategy execution.
An office of strategy management, or OSM, is intended to close that gap. It is typically a new unit at the corporate level of an organization, overseeing all strategy-related activities—from formulation to execution. It is not intended to perform all of this work, but to facilitate the process so that strategy execution gets accomplished in an integrated fashion across the organization. Typically, a strategic planning unit has little or no influence over the process of executing the strategy it helped to create. In our view, one unit should facilitate both strategy formulation and execution process, making an enhanced strategic planning unit a natural home for the OSM.
Since our focus reflects the preeminence of the Balanced Scorecard as the vehicle through which strategy is described and executed, an OSM is typically an outgrowth of a good scorecard program. Such a program tends to raise common questions: How do we use these scorecards to align the organization? How can we ensure that our people understand our strategy? How do we use the scorecard to improve how we conduct our management meetings?
An OSM typically emerges when the Balanced Scorecard team incrementally and organically assumes more and more responsibilities on its own initiative—responsibilities that were formerly not performed by any person or unit in the organization. So, early on the BSC team fills a gap in the management of the organization. While many of our examples are from Balanced Scorecard users, the same principles of strategy execution apply to non-scorecard users.
Based on our research and client work, we created a model to describe the roles and responsibilities of an OSM, as described in the recent Harvard Business Review article. Some of these roles are owned by an OSM outright, such as scorecard management and cascading. There are other roles where it plays a coordinating function, essential to ensuring that strategy informs critical processes like budgeting, operational planning, and performance management.
Q: Your article discusses Chrysler Group and the U.S. Army as designing successful programs that extended their Balanced Scorecard work. Is a Balanced Scorecard initiative necessary as a first step before creating an OSM? If not, how might a company set up an OSM without it?
A: A Balanced Scorecard is an important, though not a necessary, first step in creating an OSM. First, the principles we describe about the need for an OSM are universal—organizations need to improve how they link strategy formulation and execution, whether they use the Balanced Scorecard or not. Organizations failing to make this link are destined to be among the failures we mentioned above.
We feel that Balanced Scorecard users have a distinct advantage. These organizations have found ways to describe and communicate their strategies using powerful and tested approaches. They have recognized the need to make strategy execution a recognized competency of the organization, distinct from simply having a good approach to formulating strategy.
We recognize that there are different approaches being used to manage strategy. An OSM could easily be established in a non-scorecard organization using the identical approach as scorecard users. The same set of questions apply: What is our strategy? How is it being measured? Are we allocating resources to support our strategy? Do our people understand it? Are we having outstanding sessions to discuss and monitor our strategy? How do we pull all of this together into a coherent process?
Q: You write that an OSM can serve in effect as the CEO's chief of staff. In a typical organization, how many staff would be in an OSM, what are their career backgrounds and/or training that make them best for this function, and what are their roles vis-à-vis other important units such as finance, HR, marketing, and so on?
A: A typical OSM in a large and complex company seems to require about six to eight full-time people. Typically, these people are not new hires and consist of the scorecard team and elements of the strategic planning group or finance. The OSM is most definitely not new bureaucracy or overhead for an organization. We have seen many OSMs that are smaller, consisting of between three and five people.
OSM staffing requires a mix of talent. The OSM can become an area where future leaders gain a strategic perspective on the organization. Clearly, people able to understand and think in strategic terms are critical. They need good interpersonal skills since they must interact effectively and authoritatively with senior business units and functional heads. Project management experience is desirable to oversee scorecard projects and initiative management. Operational experience is also vital, since the essence of good strategy execution is about "getting things done" and people who understand the relationship between strategy and operational reality will make enormous contributions to the OSM.
An OSM naturally interacts with other business units and functions. In this regard, it has two roles. First, it provides support to operating units to ensure they have the tools required to support the corporate strategy. Second, it ensures that strategy informs the work of the key functional units like HR and finance, to name two key players. For example, in a typical organization the budgeting process is partitioned from the strategy development process. The result is that key strategic investments often get lost in the pressures of daily operational management, or worse, the budget becomes the de facto strategy of the organization. A good OSM will collaborate with the CFO to "integrate" strategy into operational planning and budgeting. We have yet to see a CFO resist the effort to make the planning process more strategic and useful for the organization.
Q: You write that OSMs are "facilitating organizations, not dictating ones." While they would seem to create the risk of more top-down management, the opposite effect happens. Could you give some examples of positive effects in companies you've seen? What activities should OSMs not be involved in?
A: We believe that strategy must be managed explicitly, like any other major process in an organization. In most organizations, this process either does not exist or is incomplete. Shareholder value is left on the table. The purpose of an OSM is to unlock unrealized value by making strategy execution a distinct and recognized competency in an organization. It can only do this by enabling others—operating units and functions—to do their jobs in a way that supports the organization's strategy. We don't believe that this will always make everybody happy, since an OSM is helping to establish a new management discipline, which may or may not be welcomed by all.
The positive effects are being most keenly felt in the organizations we cite in our article—the Army, Chrysler Group, and Canadian Blood Services since they are the earliest adopters. As the concept of the OSM matures and as we hear more and more stories, we will be able to add to this list of stories that confirm an OSM's role as a facilitating organization.
As for activities not to be involved in, the OSM should not be seen as dictating strategy either at the corporate or business unit levels. It should not attempt to take over functions already being done by other functional units, such as finance, IT, and HR. Its role is to facilitate, coach, and coordinate.
[Robert S. Kaplan is Baker Foundation Professor at the Harvard Business School.]
Subscribe to:
Posts (Atom)