Tag Archives: Employment

Bring Your Own Device (BYOD) – Productivity Gain or Problem in the Making?

English: A woman cuddling a pile of digital de...

Which Devices To Take To Work? (Photo credit: Wikipedia)

The incredible growth in sales of tablets and smartphones during the past few years is changing the landscape for business, leading to increased demands for knowledgeable business consultants that understand the dynamics of this rapid change and the opportunities and risks it presents. The Bring Your Own Device (BYOD) concept has also become popular over the past few years.

The latest statistics really emphasise the speed of this change:

  • Nearly 1 Billion smartphones will be shipped this year, overtaking basic mobile phones for the first time, according to IDC.
  • Tablets, such as the iPad, have already overtaken laptops – just 3 years after being introduced – with shipments of around 230 Million expected this year, pushing them 20% ahead of laptops. In fact, tablets are expected to pass sales of all PC form factors in 2015, reaching sales of around 330 Million.

Recognising the desire of employees to take advantage of the latest technology to make them more productive, companies are embracing the Bring Your Own Device (BYOD) concept , with an iPass survey carried out in December & January showing that 81% of companies accommodate personal devices in the office, and 54% of them having formalised policies for this.

This is where the need for consultants becomes apparent – nearly half of the world’s companies don’t have formal policies that address this urgent issue, and the problem becomes more apparent when we realise that the top 2 sources of frustration in IT departments relate to onboarding and supporting personal devices (thus approving the BYOD practise) in the office. This even eclipses security concerns, although these, of course, become even more of an issue with such devices.

In fact, over half (55%) of companies surveyed reported some form of security issue in the past year, mainly in connection with lost or stolen phones. When you consider that in 2011, over 70 million smartphones were stolen (we don’t yet have the data for 2012), and only 7% of these were recovered, the size of the problem really becomes apparent. Even with laptops, companies can expect to lose one in ten during their lifetime (3-4 years).

When we then consider that, according to IDC, 70% of enterprise data now resides on mobile devices and yet three out of four companies lack comprehensive policies for managing and securing their mobile devices, while nearly 60% of lost smartphones were unprotected, the enormous scale of the costs to business become clear.

So, given this, why are companies embracing the Bring Your Own Device (BYOD) concept?

Simply put, because allowing staff to choose and use their own devices increases employee satisfaction, improves productivity and reduces cost to the company. Over half of mobile workers report working more than 50 hours per week, and nearly one in five reports putting in over 60 hours each week.  The gains here are tangible, as are the cost reductions through companies not needing to invest so heavily in such devices themselves.

Companies need to take full advantage of the benefits of Bring Your Own Device (BYOD), while minimising the risks through putting comprehensive policies, systems and procedures in place that will minimise the risks and costs inherent in the loss of such mobile devices. Doing so will improve their performance, competitiveness and bottom line. Failure to do so risks them being left behind.

Note: I first posted this on the Business Connexion blog on 12 Jun.

The Changing Way we Work & Live – part 3

English: Miniature turbine 3D print from Rapid...

English: Miniature turbine 3D print from Rapid 2006 in Chicago, Illinois. (Photo credit: Wikipedia)

The first in this series of posts looked at how technology advances are enabling location independence for people at work, and the second looked at some of the socio-economic impacts of this move. In fact, the changes are potentially even more widespread further into the future, as a recent MindBullets post discussed.

Essentially, what this post suggests is that in the next decade or so, a combination of 3D printing – that technology is already available, albeit in a somewhat rudimentary form still – and cheap robotics will render manufacturing as we know it obsolete.

What’s more, this combination of technologies will make the production lines of old irrelevant as we move to true user choice in every product. We all remember the early days of the mass produced car, when Henry Ford suggested that customers could have the Model T in any colour they liked, so long as it was black. Contrast that with today where the buyer has, literally thousands of combinations of colour, internal and external finish, engine and accessories available to make a vehicle unique, or at least highly individualized. In the future, there will be no limit to the choices available as each product will be built/printed to your exact specification.

The impacts of this are, of course, dramatic – imagine the impact on China if its low-cost manufacturing prowess is no longer needed as it is faster and cheaper to make items at/near the customer. What will the effect be on the economies of countries like China, Mexico and others where a largely unskilled labour force has provided economic growth through mass manufacturing? And what will the consequent ripple effects around the world be as a result?

What, too, will be the impact on the logistics and transportation industries if there is no longer the need for transporting all the freshly-made products around the world? Shipping, air, road and rail transport, and warehousing will all undergo massive changes and many companies that are household names will have to adapt radically or disappear.

The Amazon of the future, for example, instead of having huge warehouses filled with a multiplicity of product and a logistics operation predicting demand and ensuring, so far as is possible, just-in-time delivery from its vast range of suppliers, will have a series of printing/manufacturing modules and will create products to order in a matter of minutes – and the only transport needed is to the consumer. As prices of 3D printers continue to fall, imagine a world where these are in every home, negating even this ‘last mile’ transportation.

There will, of course, still be the need for some level of transportation – the raw materials for the 3D printers and robotic manufacturing operations, but this will be much less onerous than the transportation of today.

There is, of course, still one area that 3D printing and robotic manufacturing has not solved – organic material. This means that food – fruit, vegetables, meat, eggs, fish and so on – will still, for the foreseeable future at least, need to be transported from the farms to consumers in some way. Here, too, we’re seeing huge change today as increasing numbers of consumers buy this online, bypassing the need for physical supermarkets and shops, and we’ll look at the effects of all this online shopping in the next part of this series.

There’s no question that the current advances in 3D printing and robotics will dramatically change the way products are made and delivered and the effects of this on companies and countries will be massive. Technology is really causing the pace of change to accelerate more and more quickly – the future just gets more and more interesting.

Note: I first posted this on the Business Connexion blog on 8 April.

The Changing Way We Work & Live – part 2

Urban Decay

Urban Decay (Photo credit: pmorgan)

The previous post showed how technology is enabling location independence for the workforce for the first time since the Industrial Revolution created the need for urbanisation.

Smart devices, such as smartphones and powerful tablets, are providing people with the ability to be fully productive at customer sites, from home or wherever else the demands of the role take them, with sales of these devices outstripping those of PCs for the first time in 2011.

Estimates vary widely, but it seems that at least 10% of the workforce today works from home rather than in an office, and estimates are that this could reach as much as 60% in a decade. What’s more, contrary to what many employers feared, it seems that working from home increases productivity noticeably – some 10-15%, in fact – due to people working longer with fewer breaks and having less interruption.

But this location independence has far wider implications, too:

  • Equipment purchases – concomitant with location independence, people want to have their own choice of devices: the Bring Your Own Device (BYOD) phenomenon.  Initially concerned about the security implications of people using their own devices, companies have realised that the cost savings more than compensate for the additional security/monitoring required, and the employee is happier, too. Of course, this has ripple effects on the supply chain as companies no longer need to buy large volumes of end-user equipment due to the users purchasing their own, normally from the retail channel. This is exacerbated by a move into the cloud and companies consequently no longer needing as many servers and storage systems as they simply use these “as a service” from the cloud providers – again impacting the supply chain for such equipment.
  • Pervasive communications – of course, for location independence to work, people need access to fast communications links wherever they are. This is continuing to drive the roll-out of faster, cheaper mobile and fixed-line communications throughout the country. This trend will continue – more bandwidth, cheaper, driving the need for even more as applications increasingly take advantage of whatever is available. Inexpensive, or even free, video conferencing is quite normal now – replacing meetings in offices – and the use of vide for demonstrations, sales tools and so on fuels an ongoing demand for even more.
  • Housing prices – one issue that’s seldom mentioned when talking about location independence is the impact on house prices. As people need to cluster less around major metropolitan areas to work, so this must impact prices in areas that were in very high demand for the reason of convenient access to work. Could this be the catalyst that finally bursts the London property bubble? Could it also cause prices to increase in more remote, cheaper areas as people opt for quieter spots? And then what about the impact on transport – less commuting means fewer passengers on the trains and tube. Not only might this mean people actually getting seats when commuting, but it may force the operating companies to reduce prices to try and attract people to use the services.  The socio-economic impact of this location independence could be huge.
  • Holidays / Leave – another interesting result of the increasing move to people working from home is the effect on holidays and leave. Not only is it increasingly difficult to monitor when people are “at work” or not, the lines are also blurring between work and leisure time. All of this creates headaches for companies when it comes to such things as people taking time off. A number of companies, particularly in the USA, are now moving away from formal leave allowances and the administration that goes with this, opting instead for employees being able to determine their own leave requirements, provided they get their work done. Not only does this further improve motivation and morale but improves company balance sheets as they no longer have to provide for paying out against untaken leave – and for large companies, these amount can be substantial.

Just as the Industrial Revolution led to urbanisation in the 18th and 19th centuries, could technology and location independence lead to the reduction of these large conurbations in the 21st century?

One thing’s certain – work will never be the same again.

Note: I first posted this on the Business Connexion blog on 4 Mar.

Our Changing Lifestyle

London

Many of you will have come across the various forms of the “Did You Know?” or “Shift Happens” slide shows over the past decade or so – there are several versions on YouTube, of course.

Regardless of how accurate you believe the figures presented to be, the facts of the matter are that the nature of work is changing more fundamentally than many people yet believe – and is doing so more quickly than any major change that has gone before.

Urbanisation really came into its own with the Industrial Revolution: although towns/cities had existed almost from the dawn of civilisation, it took the centralising of manufacture to drive the majority of the workforce into conveniently situated accommodation near to their work.

Now, though, two major factors are driving the next big change in the way we live:

  • The increase of service industries – in the US and the UK, this already accounts for around 77% of GDP, v 22% for “traditional industry,” and even in China service industries are fast approaching parity with “traditional industry” in GDP terms (44% v 46%).  Such “knowledge” work is far less location-dependant than manufacturing lines and their like.
  •  The increase in digital communication technologies and speeds which free us up from location dependence even more, as we can talk, meet (over video links), email, and so on from virtually anywhere, any time.

These factors are, of course, spawning ever-more smaller businesses focused on different niche market areas. Big business in many service areas is inefficient as management overheads lead to cost issues when compared with smaller businesses, which are also generally more nimble and able to adapt more rapidly to changing market conditions.

While the higher cost of property in cities was offset by the lower commuting costs which kept the populations of the cities growing, as people need to commute less to central locations so the need to live in a city diminishes and people become freer to choose where to live. Couple this with the issues over living conditions in crowded cities (the recent riots in UK cities underscore some of this) and a somewhat more rural residential lifestyle becomes attractive – less expensive, less crowded, quieter and less potentially dangerous.

The impact this could have on cities is enormous – property prices would drop as supply of properties exceeds demand and infrastructure investment would move elsewhere, following the people. Conversely, large-scale migration to more rural areas will create its own set of problems – residents objecting to large-scale growth (although the shop-owners won’t mind the influx of customers too much), crowded roads and creaking infrastructure which will have to be upgraded to handle the increased loads, and so on. District councils will start to compete with each other to offer the best combination of space (there’s no point moving from one crowded area to another), infrastructure, affordability and general lifestyle.

As location independence grows, the same, of course, should then start to happen at a country level. Some countries – Malaysia, for example – are busy today trying to attract retirees on the basis of lifestyle and costs, and so boost their economies through a relatively high-spending population. Can we expect to see a scenario in the next 10 years where countries compete to attract people on the basis of infrastructure, cost of living and general lifestyle, regardless of where the companies themselves are located?

What would this do for country citizenship, for taxation bases, social security networks and the like? Have you thought about where you would, or wouldn’t, like to live if you were able to be truly location-independent? How does your current country measure up?

Capitalism – What the Future Holds

Wall Street

Image by Mirka23 via Flickr

The world is in a state of flux.

With the economic downturn lingering far longer than most people expected, governments are under growing pressure to kick-start economies. However, a growing number of countries with looming debt crises and a consequent unwillingness or inability of governments to spend more money hampers this.  And, as the northern hemisphere weather warms up, we can expect to see growing numbers of demonstrations by people wanting jobs or, at least, a reduction in job cuts.

All of which leads to the question – is the capitalist system doomed?

I don’t believe for a moment that this is the case – history shows that capitalism is the most effective way for countries and people to grow their wealth – but I do think we’re going to see some far-reaching changes.

Back in September 2009, I suggested in my post, “The Perils of Quarteritis” that the short-term thinking so prevalent in recent years had contributed significantly to the crash, and that businesses would move to a longer-term, more strategic model.

The March 2011 edition of Harvard Business Review has a wonderful paper, “Capitalism for the Long Term,” by Dominic Barton, Global Managing Director of McKinsey & Company where documents his findings from 18 months of research and hundreds of meetings with business and government leaders. In this paper, Barton makes 3 points to support his conclusion that capitalism must survive, but that it needs to change, too:

  1. A return to longer-term thinking by companies, investors and politicians alike – he refers to this as “The Tyranny of Short-Termism” (my version was Quarteritis).
  2. That there is no difference between serving the interests of shareholders and of stakeholders – in spite of a more recent belief that serving stakeholders made shareholders poorer, managing for long-term value growth benefits not only stakeholders and society but shareholders, too.
  3. Company executives and boards need to act more like owners, not temporary care-takers – as by doing so they will naturally look to the long-term and so benefit the company, its shareholders, its stakeholders and society as a whole.

Basically, it all comes down to taking a longer-term view of business (as well as the economy, in the case of government) and a consequent change in leadership style, too – see my post of November 2009, “Leadership for the New Business World.”

This longer-term thinking and more inclusive leadership approach will ultimately be to the benefit of all – investors, executives, employees and society as a whole.

What do you think?

Update (31Mar11): Read the Leadership Interview with James Quigley of Deloittes, just out at N2growth.com – leadership is about trust and looking to long-term sustainability.

BAA Humbug – The short- and long-term effects of greed and ineptitude

BAA staff work feverishly to clear the snow at Heathrow

Image via yfrog: BAA staff work feverishly to clear the snow at Heathrow

I’m going to try not to make this too much of a rant, but I’m both extremely disappointed and annoyed – not for me personally (thankfully I wasn’t directly affected), but for the thousands of people who’ve had their holiday plans, reunions and Christmas spoilt through a combination of woeful ineptitude and greed.

And, I think, there’s a real danger of this ineptitude and greed having long-term effects that are several orders of magnitude more serious for the country as a whole.

I’m talking here, for those of you who’ve not yet guessed, about BAA and Heathrow.

How can a company entrusted with managing the world’s busiest international airport be so unprepared for winter? It’s certainly not through lack of money – BAA is on track for an operating income of nearly £1 billion this year, and yet their total expenditure on preparing for snow and winter conditions this year was just £500 000…  (an amount the board has just allowed to be increased to £10 million – still only 1% of their operating profit!). In my view this is a typical case of short-term profit focus, at the expense of long-term sustainability (see my post: The Perils of Quarteritis).

It’s not as if they didn’t have warning. The first cold snap hit at the end of November and there were already warnings that heavy snow and icy conditions could be expected for the rest of the year. Granted, by then it was probably too late to have been able to source much new equipment in time (although they should have learned a lesson from January & February), but they put no contingency plans in place at all.

What about a deal with farmers nearby to use their tractors and grading equipment in an emergency? What about stockpiling grit, salt, glycol, etc.? Then they compounded things by turning down offers of help to clear the runways and taxiways from the military.

And, on top of this, they apparently gave out poor information to airlines such as BA which could have operated more flights than they did, and so reduce the backlog somewhat.

So, this corporate greed and ineptitude directly ruined the holidays for thousands of people, apart from costing hard-pressed airlines a good deal of money (can they sue BAA?)…

But the long-term effects could be even more serious. With some 30 million people a year visiting Britain, annual tourism expenditure of some £90 billion and almost 8% of jobs supported by tourism, this is a vital sector of the economy. However, the unreliability of British airports – especially one as important as Heathrow – is bound to make travellers think twice about using Britain as a stopover point, or even as a destination.

And airports in the Middle East such as Dubai and Qatar are eager to take these passengers. For example, Dubai is already the 4th busiest international airport in the world, with huge expansion already underway, and one of the youngest fleets in the world (and a flexible one, as Emirates was apparently able to put on 3 extra flights a day to clear their backlog once Heathrow reopened).

The impact of a diversion of disgruntled passengers from Heathrow to Dubai, for example, would have an enormous impact on Britain and on the struggling BA.

BAA needs to wake up, stop being so greedy and to accept proper responsibility for its role in running strategically important airports – or it needs to be replaced by a company that will do so, and quickly.

What do you think – should the company, its leadership, or both be replaced?

Whither the Welfare State?

Sea wall and railway
Image via Wikipedia

Or should that be “wither” as it’s clearly time to change the model dramatically – a model which was developed after the last war, in a very different world?

As Dr Adrian Rogers quite famously put it, “You cannot legislate the poor into freedom by legislating the industrious out of it. You don’t multiply wealth by dividing it. Government cannot give anything to anybody that it doesn’t first take from somebody else. Whenever somebody receives something without working for it, somebody else has to work for it without receiving. The worst thing that can happen to a nation is for half of the people to get the idea they don’t have to work because somebody else will work for them, and the other half to get the idea that it does no good to work because they don’t get to enjoy the fruits of their labour.”

Having only moved to England a few weeks ago, I find it’s interesting to listen to what people here are saying about the “welfare state” issues, particularly at the moment when it’s clear that the new government has no chance but to make some dramatic changes to the way things have been done in the past 13 years of Labour Party rule.

But it seems that it’s not just the country that Labour has brought to the edge of bankruptcy: former Deputy Prime Minister under Tony Blair, John Prescott, has told us that the Labour Party itself is in danger of bankruptcy, with debts of some £20M ($30M) through a combination of over-spending and poor accounting: ironically making the announcement on the day that Tony Blair’s new investment bank was being registered… At least the party was consistent with its approach to finance, even if the former Prime Minister seems to have profited most handsomely from his time in office.

However, I digress. The basic issue, as Dr Rogers so succinctly put it, is that Governments can’t just create money magically, but can only redistribute money from one part of society to another, and the more that people want to take, the more that others are forced to give.

Few people doubt that societies should help those within them that are unable to fend for themselves – this compassion, after all, is what is supposed to make us human – but the question today is how much help should be given and to whom. I find it astonishing, for example, that there are families in England who have not worked at all for three generations, and simply live off benefits. Others, who receive free housing, believe it should be their right to pass these houses onto other family members. Girls find that being a single parent is a profitable enterprise, and start to have babies at a very young age, then turn to the state for housing and benefits, and are able to live comfortably without working. The list of abuses to the system is endless…

Clearly this is wrong. We should protect those unable to work for reasons of frailty, but those who are healthy should have a defined maximum period – say 6 months – on “free” benefits and then should start “earning their keep.” If they can’t find a paying job within that period, the welfare authorities should have them working for the society that is housing and feeding them – there is so much that needs to be done, from infrastructure development and maintenance to helping the elderly and the sick (hospital porters, for example), and would provide benefits in return for such work. This would not only help motivate them to find more steady (and, perhaps, comfortable) work, but reduce the costs of running local authorities as much of the work could be done by those on benefits.

What do you think – should benefits be given without restriction, or should recipients who are able to do so be obliged to “earn” their benefits, and help the society that is providing them in return?

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Is Offshoring threatened by a return to Onshoring?

CHICAGO - JUNE 16:  A demonstrator protests ag...
Image by Getty Images via Daylife

One of the potential side-effects of the global economic slowdown that could have far-reaching financial and political consequences is the question of whether offshore jobs should be brought back onshore.

After all, since the Offshoring model really started to take off in the 90s, a number of economies have become dependent on the revenues generated by their ability to provide such facilities for the historically more costly Western countries. For example, India’s business and technology services companies are estimated to have had revenues of some $58 Billion in 2008, up from just $4 Billion ten years earlier, with that sector’s export earnings (largely Offshoring) reaching an estimated $46 Billion in 2008 – offsetting some three quarters of the country’s oil imports.

The rationale for Offshoring was simple:

  • Consumers were ever-more price conscious, and companies were equally ever more cost conscious.
  • Developing economies had much lower labour rates and so could provide manufacturing and many services at significant lower cost, to the benefit of the consumer and the company.

The effects on local labour were not a serious consideration as it was widely believed that they would find alternate employment – perhaps even at a higher skills level which would earn them more money.

Of course, Offshoring was not without its challenges – issues over the quality/consistency of goods and services supplied, of cultural/language differences (especially in the services sector), of corporate governance (data and information leaks, etc.) and of differing expectations of both parties raised their heads. But these could be overcome while economies remained strong and consumers kept buying.

However, the persistence of the economic slowdown, coupled with the likelihood that unemployment in the Western democracies will remain high for the foreseeable future and the growing public debt are forcing a re-evaluation of the Offshoring model:

  • What impact will weaker Western currencies have on the production cost?
  • Will a move to new models of outsourcing – using a managed-services model with guarantees of performance/quality, as opposed to the classic “staff augmentation” model – enable total delivered cost to be lower Onshore?
  • For manufacturing, to what extent will lower transport costs of finished goods offset the higher manufacture cost of Onshore products?
  • What is the premium that can be attached to national pride (e.g. goods/services from that Onshore country)?

And then there are political considerations for the Onshore country: politicians that are seen to encourage job growth are more likely to be re-elected. What’s more, perhaps this could be done in a way that benefits that country’s fiscus, while being seen to be friendly to business and to the workforce as a whole. To what extent would tax breaks for companies bringing jobs back Onshore be offset by the additional income taxes it would gain from the newly employed, the decrease in unemployment benefits and the additional sales tax/VAT it would gain from the spending of these people?

Although a return to Onshoring may not be suitable for everything – large scale manufacturing of small, relatively low-cost items, for example – it seems to me that the benefits to a country, and to that country’s employers, of adopting a greater Onshoring model could be significant. And, if this trend took hold, the impact on Emerging markets that had come to rely on providing Offshoring could be even more significant. What do you think?

Update:
Great blog article by Derek Singleton: “5 Strategies for Growing as a Domestic Manufacturer

Are Layoffs Bad For Business?

View of Wall Street, Manhattan.
Image via Wikipedia

“Downsizing is killing workers, the economy – and even the bottom line.”

This direct quote from an article in Newsweek of 15th February entitled “Layoff the Layoffs” rather forcefully makes the point that contrary to conventional business wisdom, the constant cycle of cutting headcount as a primary means of cutting costs is tantamount to long-term economic suicide – not to mention the effects on the health of people.

According to the article, research clearly shows a link between layoffs and lower stock prices, with the negative impact on the stock prices worsening with the size and permanence of these layoffs – in spite of the widely-held view that layoffs will boost stock prices through showing effective cost management.

Another debunked issue is that of productivity – in fact productivity per employee does not rise, no doubt due to morale issues – while a study of companies in the S&P 500 showed clearly that companies that downsize remain less profitable than those that don’t.

Adding to the profitability falls, of course, are the costs of laying off staff – both direct (severance pay, etc.) and indirect (morale, rehiring costs when things pick up, and so on). These are always woefully underestimated, as is the extent to which companies embarking on wholesale layoff programs have to rehire – at inflated cost – key staff who elected to “take the package.”

In fact, McKinsey studies over the years have shown that company executives believe that less than 40% of corporate transformations in their businesses are “mostly” or “completely” successful.
Conversely, companies that choose to find ways to weather the periodic storms are the first to recover, and do so far more strongly that those that have made significant across-the-board cuts.

Of course, there will always be times when cutting staff is unavoidable in a business – it may even be the thing that will save it from total collapse. But when this time does come, all the experts agree that it should be done in a transparent, open manner, with cuts being made in defined areas, rather than simply across the board – the all-too-frequent approach of an uninvolved management team. Getting everybody from the CEO down personally involved will get the best results, as happened with the well documented case of Malaysia Airlines a few years ago.

Hopefully this message of transparency, involvement and engagement will start to get through to company leaders as well as to the stock market and investment analysts that so many company leaders are guided by. As I mentioned in my blog post, “Leadership for the New Business World,” a new set of skills are necessary for the successful business of the future – skills that will rebuild the faith of communities in their leaders. In fact, it’s interesting to see how many of the top-rated companies in Fortune’s “Top 100 Companies to Work For” list this year have weathered the storm without across the board layoffs, with many showing positive growth in staff and even in their businesses, too.

Certainly, companies that retain their staff, and take the opportunity to hire key new ones, retain all the critical “institutional intelligence” and are best positioned for the economic upswing, as I mentioned in my blog post, “Will your business survive the upswing?

There’s no doubt – Layoffs are bad for your business, especially when handled without due care, attention and precision. Conversely, a covenant with your staff to be open, fair and honest with them at all times will go a long way to securing the long-term, profitable future of your business.

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Leadership for the New Business World

The worst economic recession for generations has caused a re-evaluation of business practices in many areas, and a call for greater corporate governance and oversight. Now that we’re officially reaching the end of the recession with many countries in Asia and the whole of the Eurozone, amongst others, officially out of it, it’s also time to look closely at leadership practices in business.

One thing’s certain – many changes need to be made, and recent surveys showing a significant majority of employees are planning to change jobs as soon as hiring picks up make this an urgent necessity if companies are to avoid the upheaval and cost increases associated with high staff turnover.

There are many reasons for this level of unhappiness, among them:

  • Severe stress at work – as companies cut costs and staff, those that remained found their workloads growing, often to a point of near-unsustainability;
  • Severe stress at home – really an extension of the added stress at work, compounded by longer working hours, and often less pay;
  • Lack of appreciation – many, if not most, companies overlooked the stress factors and showed no appreciation for the additional efforts of their staff, a situation worsened by cost-cutting which impacted the staff “welfare” programmes already in place;
  • Do as I say, not as I do – as the recession bit ever deeper, many executives seemed oblivious, continuing with executive perks, parties and benefits even as they were making deep cuts in employment and other areas (look at the scandals surrounding many of the bailed-out businesses for example);
  • Lack of direction – as companies cut, often in several waves, many seemed to have lost their direction. Although, as I pointed out in an earlier article, 93% of companies had updated their strategies and priorities to address the slowdown, the fact is that much of this work was done well into the recession and they were floundering for a good time (only half have a strategy in place for the upturn!).

As a result of these and other issues many have lost faith in their business leadership and this is the reason for the potential dramatic increase in staff turnover.

A recent survey by McKinsey, “Leadership through the crisis and after” points to the way forward. What’s interesting is that the top criteria for leadership during the crisis are the same as those for after it, with only minor changes to relative importance. In essence, leaders are expected to be:

  • Inspiring, creating a vision for all to see and aim for, and doing so convincingly and clearly;
  • Unambiguous, defining expectations and rewarding people appropriately for this;
  • Challenging, through encouraging people to challenge assumptions and take risks;
  • Participative, involving others in the decision-making process;
  • Above Reproach, acting as a role model, mentoring and teaching;

These are very much in line with what’s being said elsewhere and with what executives perceive as the most important criteria for organisations going forward: Leadership, Innovation, Clear Direction and an External (Customer, Supplier, etc.,) Orientation being seen as the top success factors.

It may not be too late. Employment typically lags an upturn by several months, so leaders still have a little time to restore the faith of their workforce. However, they cannot afford to delay any longer to address these issues of concern and need to clearly demonstrate that they understand the way forward for success. Failure to do so will almost certainly cost companies dearly.

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Postscript: Was pointed to an excellent presentation by Dr Tommy Weir on CEO Shift demonstrating how leaders will need to shift their thinking in 5 key areas related to talent. Well worth watching! See it at http://tommyweir.com/Video.aspx

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