Thursday 25 October 2012

To Compete Globally, Create Passionate People! Thursday 22 November, 2007 by Charles B Kovess An investment in people will reduce costs, increase loyalty, increase performance, and ensure long-term, global, sustainable competitive advantage. Too often we see organisations loudly proclaim that 'their people are their greatest resource', and then, a short time later, announce massive downsizing strategies, to 'get their cost structures into world competitive practice'! Companies have been downsizing in the past few years to such an extent that intermediaries have reaped huge rewards because larger companies do not have the manpower to deal with smaller, yet very profitable, transactions. My contention is that such organisations are paying a massive price in terms of their asset base, in maintaining their true sustainable competitive advantage. Today, very few organisations have unique services or products. A few decades ago, when an innovation advantage was gained, the innovator kept it for a few years. Now, innovation lasts only a few weeks. An organisation's true uniqueness, its true advantage, is its people, their: Energy Passion Creativity Innovation Knowledge Wisdom, and The quality of their relationships - both within the organisation, and externally In business today, particularly globally, relationships are critical. How do organisations build relationships if they do not have sufficient numbers of people? In terms of cost-cutting, particularly in terms of employees, how can beneficial relationships be maintained? Loss of security for employees is the price that is paid in a downsizing environment, and an inability to tap into the invisible, and often hard-to-measure contributions, that people can make. If fear dominates a person's thinking, their ability to contribute back to their employer is significantly diminished. Yet, to compete globally, we need such contributions. So, what should a business do? How will it ensure its future in a globalised, cost-cutting economy? Investment in people is the answer The world is changing, so companies must change. People are the companies, and yet there is great resistance to change by most people. So, how does an organisation keep its knowledge capital and compete globally? In my view, there are six key concepts that must be kept in balance, in an almost exquisite tension. These concepts are the ones that are difficult to imitate; thus, by mastering them, the organisation maintains its competitive advantage, which then increases its ability to expand into the global economy: Great teamwork People must know how to work together. However, people are different, and yet we must access these differences to be competitive. Unfortunately, the principles of great teamwork are not well understood in the corporate world. An inspirational purpose A company does not exist to make profit: it exists to serve people. To the extent that if it serves people well, then profits flow. As Arie de Geus writes in The Living Company, profits for companies are like oxygen to people: both are essential to existence, but neither of them is the purpose. Many companies have purpose statements that do not engage their people's spirit, where there is no true commitment to an inspirational purpose. Openness of communication Telling the truth in the corporate world is a risky business. And yet, if we don't, the real issues and problems will not be addressed. Creating an environment where the truth can be told happens very rarely. CEOs require great courage to hear the truth. It requires practice, and a recognition that mistakes will be made, and upsets will occur. Commitment to development of its people Developing people skills is like training for a marathon: it's an ongoing process. Yet, the Karpin Report many years ago identified a major failing in the corporate world. Most leaders and managers expect their people to change overnight, after they attend a training program. Wisdom about people is required, and this enables a commitment to people to be long-term, rather than short-term, ‘quick fixes'. High financial rewards based on performance The key issues here, are how do you measure performance and who is performing? That's where the need for open communication and teamwork manifests itself. If people relate openly to each other, then sharing views on performance and commitment is more likely to happen. Alignment of individual purpose to the corporate purpose When individual purpose is fulfilled through the achievement of corporate purpose, magic happens! It was the key to Wal-Mart's success, said Sam Walton, in Jeffrey Pfeffer's work The Human Equation. If you look after the employees, and give them what they need, then employees look after the customers, and that's the key to success. It is through accessing employee passion and inspiration that keeps customers coming back to your organisation. I acknowledge the challenge faced by investing in people, but all it needs is for leaders to passionately believe this to be true, because they will be willing to fight the non-believers, who are only interested in next quarter's profit results. It is time we reassessed the importance of people!


Thursday 22 November, 2007
An investment in people will reduce costs, increase loyalty, increase performance, and ensure long-term, global, sustainable competitive advantage.
Too often we see organisations loudly proclaim that 'their people are their greatest resource', and then, a short time later, announce massive downsizing strategies, to 'get their cost structures into world competitive practice'!
Companies have been downsizing in the past few years to such an extent that intermediaries have reaped huge rewards because larger companies do not have the manpower to deal with smaller, yet very profitable, transactions.
My contention is that such organisations are paying a massive price in terms of their asset base, in maintaining their true sustainable competitive advantage. Today, very few organisations have unique services or products. A few decades ago, when an innovation advantage was gained, the innovator kept it for a few years. Now, innovation lasts only a few weeks.
An organisation's true uniqueness, its true advantage, is its people, their:
  • Energy
  • Passion
  • Creativity
  • Innovation
  • Knowledge
  • Wisdom, and
  • The quality of their relationships - both within the organisation, and externally
In business today, particularly globally, relationships are critical. How do organisations build relationships if they do not have sufficient numbers of people? In terms of cost-cutting, particularly in terms of employees, how can beneficial relationships be maintained?
Loss of security for employees is the price that is paid in a downsizing environment, and an inability to tap into the invisible, and often hard-to-measure contributions, that people can make. If fear dominates a person's thinking, their ability to contribute back to their employer is significantly diminished. Yet, to compete globally, we need such contributions.
So, what should a business do? How will it ensure its future in a globalised, cost-cutting economy?

Investment in people is the answer

The world is changing, so companies must change. People are the companies, and yet there is great resistance to change by most people. So, how does an organisation keep its knowledge capital and compete globally?
In my view, there are six key concepts that must be kept in balance, in an almost exquisite tension. These concepts are the ones that are difficult to imitate; thus, by mastering them, the organisation maintains its competitive advantage, which then increases its ability to expand into the global economy:
  1. Great teamwork

    People must know how to work together. However, people are different, and yet we must access these differences to be competitive. Unfortunately, the principles of great teamwork are not well understood in the corporate world.
  2. An inspirational purpose

    A company does not exist to make profit: it exists to serve people. To the extent that if it serves people well, then profits flow. As Arie de Geus writes in The Living Company, profits for companies are like oxygen to people: both are essential to existence, but neither of them is the purpose.

    Many companies have purpose statements that do not engage their people's spirit, where there is no true commitment to an inspirational purpose.
  3. Openness of communication

    Telling the truth in the corporate world is a risky business. And yet, if we don't, the real issues and problems will not be addressed. Creating an environment where the truth can be told happens very rarely. CEOs require great courage to hear the truth. It requires practice, and a recognition that mistakes will be made, and upsets will occur.
  4. Commitment to development of its people

    Developing people skills is like training for a marathon: it's an ongoing process. Yet, the Karpin Report many years ago identified a major failing in the corporate world. Most leaders and managers expect their people to change overnight, after they attend a training program. Wisdom about people is required, and this enables a commitment to people to be long-term, rather than short-term, ‘quick fixes'.
  5. High financial rewards based on performance

    The key issues here, are how do you measure performance and who is performing? That's where the need for open communication and teamwork manifests itself. If people relate openly to each other, then sharing views on performance and commitment is more likely to happen.
  6. Alignment of individual purpose to the corporate purpose

    When individual purpose is fulfilled through the achievement of corporate purpose, magic happens! It was the key to Wal-Mart's success, said Sam Walton, in Jeffrey Pfeffer's work The Human Equation. If you look after the employees, and give them what they need, then employees look after the customers, and that's the key to success. It is through accessing employee passion and inspiration that keeps customers coming back to your organisation.
I acknowledge the challenge faced by investing in people, but all it needs is for leaders to passionately believe this to be true, because they will be willing to fight the non-believers, who are only interested in next quarter's profit results.
It is time we reassessed the importance of people!

Source:ceoonline.com

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