Archive for category Globalization

How successful companies speak and think has not really changed

It is easy to spot them, the companies that have started their decent. If you hear words like:

- We are still recovering from the recession; we cannot invest
- We only want to do the basics; we cannot afford to do more
- Our management team is cutting all costs; everything non-essential has to go

On the other hand, with companies on the rise you hear words like:

- We want to substantially increase productivity, we are ready to make the investment, what does it take?
- The basics are not enough. We want to do more. We want the most advanced tools so we can compete more effectively
- We want to leverage our existing investments but our management team is looking to invest in game changers
- What are some best practices you recommend?

Companies that take risks, make investments in good or bad times and stick with them all the way, and empower their employees to think about, find and implement game changers win. Those who start “restructuring”, “right-sizing”, “focusing on essentials only” “leave projects unfinished” don’t do very well.

Hundreds of prospects and customers later. The pattern is undeniable.

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Why Generational Profiling Is Bad Management

Here is an interesting perspective on the Generation X, Y and Z at work talk we have all heard lately. Some excerpts:

Would you characterize your employees by gender, age, race, religion, or in any other way when it comes to managing them and enabling them to be successful at their jobs? Of course not. And I’m not talking about verbally or publicly. I’m talking about when you sit down to do their review, determine their raise, have a one-on-one, or interview them, would you take any of that stuff into account? Again, of course not.

You know why? Because there are at least a dozen more important and relevant factors, like job performance, experience, knowledge, team work, etc. The only profiling I’m aware of in the real business world has to do with multinational companies managing workforces in other countries where employment law, compensation, and culture are different. To me, that makes sense.

But profiling groups by generation is ridiculous, no matter what the management researchers and gurus say. Not to mention that it’s dehumanizing.

I somewhat agree with Steve Tobak’s observations in that some of this generation talk is overblown and its importance exaggerated. However, from our own experience at Tenrox younger generations have very different expectations. When it comes to recognition, rewards, raises and bonuses, of course you look at job performance, experience, knowledge and other such factors to determine what is appropriate. But everyone does not feel appreciated or get motivated the same way. For some, an equivalent valued gift, a few extra days off, a paid vacation works better than a cash bonus or a raise. We try to take such things into account when communicating with or rewarding our team members; and yes, the employee’s generation plays an important role in how we approach such discussions.

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The Recession Generation

In this Newsweek article http://www.newsweek.com/id/229959 the author explores the impact of the recent financial crisis, the new age of uncertainty, and severe economic downturn on employment and spending patterns.

Some key takeaways:

  • It’s no accident that the psychology of entire generations is shaped by the milieu in which they grew up; economic research tells us that our lifelong behaviors are determined in large part by the seismic events—good or bad—of our youth
  • Even one really tough year experienced in early adulthood is enough to fundamentally change people’s core values and behaviors
  • Recession babies not only invest more conservatively, they tend to make less money, choose safer jobs, and believe in wealth redistribution and more government intervention
  • This division between capital and labor and the permanently high unemployment that it seems to encourage not only depresses wages, it depresses people; a large body of research shows they tend to withdraw from their communities and societies after being laid off (their spooked neighbors, encouraged to work ever harder, do too)
  • Parental unemployment has huge negative consequences for children, making them more likely to fall behind in school, repeat grades, and exhibit anxiety disorders
  • The worry today, say Reich, Soros, and political scientists such as Harvard’s Robert Putnam, is that fearful, vulnerable people will become more easy prey for ugly class politics, being drawn, as Reich puts it, to “populist demagogues on either side of the political spectrum.”
  • Americans generally have a high tolerance for inequality. Yet that tolerance may wane as we enter a new age in which young graduates can’t expect to do better than their parents—and one in which Wall Street is perceived as being able to continue business as usual while Main Street struggles. “Americans are OK with inequality,” says Reich, who believes we are at a tipping point, “as long as they feel the system isn’t rigged.”

All this said, there are some glimmers of hope in the New Normal.

  • Post-crisis, consumers are putting a greater value on time spent with family and friends than on money (a good thing when there’s little of the latter around)
  • There’s also a glimmer of possibility that hard times might make us nicer to each other … simply thinking about money made subjects less sensitive to pain, and less likely to help each other or want to connect with strangers

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Localism – There’s No Place Like Home

A great article by Newsweek magazine (http://www.newsweek.com/id/217029/page/1) on the trend towards staying local. Here are some of the key takeaways:

Perhaps nothing will be as surprising about 21st-century America as its settledness.

Yet in reality Americans actually are becoming less nomadic. As recently as the 1970s as many as one in five people moved annually; by 2006, long before the current recession took hold, that number was 14 percent, the lowest rate since the census starting following movement in 1940. Since then tougher times have accelerated these trends, in large part because opportunities to sell houses and find new employment have dried up.

Our less mobile nature is already reshaping the corporate world. The kind of corporate nomadism described in Peter Kilborn’s recent book, Next Stop, Reloville: Life Inside America’s Rootless Professional Class, in which families relocate every couple of years so the breadwinner can reach the next rung on the managerial ladder, will become less common in years ahead. A smaller cadre of corporate executives may still move from place to place, but surveys reveal many executives are now unwilling to move even for a good promotion. Why? Family and technology are two key factors working against nomadism, in the workplace and elsewhere.

Nothing allows for geographic choice more than the ability to work at home. By 2015, suggests demographer Wendell Cox, there will be more people working electronically at home full time than taking mass transit, making it the largest potential source of energy savings on transportation.

Some studies indicate that more than one quarter of the U.S. workforce could eventually participate in this new work pattern. Even IBM, whose initials were once jokingly said to stand for “I’ve Been Moved,” has changed its approach. Roughly 40 percent of the company’s workers now labor at home or remotely from a client’s location.

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The Next Game-Changers

Nice article by Morningstar on how technology and market forces are making fundamental changes in the competitive landscape. Companies whose previous market dominance and position were virtually unassailable have now become also-ran businesses experiencing a rapid decline in revenue and, specially, profits.

There is also a good non-techie explanation of Cloud Computing. Here is an excerpt:

Consider “cloud computing” (which is sometimes called “software as a service”). Basically, instead of having all your software and files installed on your computer, in a cloud computing world, you would just fire up a Web browser and use services provided remotely from central locations. In the current way of doing things, I buy Microsoft Word, install it on my machine, use it, and store my files on my local hard drive. But on the bleeding edge of technology, I could just fire up a Web browser, visit the Web site of a word processing service (such as the current Google Docs), and save my documents on the service’s central computers. It’s cheaper, and the documents are automatically backed up and available from anywhere.

Allow me a short analogy using electricity. Think of how the world would look if each of us had our personal electricity generator in our backyards. Although silly and inefficient, this is essentially what we have with computers today. Eventually, it looks as though the computing world will move to the electricity model, where power is generated efficiently at a handful of central locations and then distributed via a robust transmission system.

Another emerging example of this trend comes from console gaming. A new firm named OnLive will soon be offering a service that–according to early reviews–will offer games comparable to what is available today from Microsoft’s Xbox or Sony’s PlayStation. But with OnLive, there is no big box under the television or physical games required, just a controller and a simple device that connects to the Internet.

Cloud computing is perhaps the most revolutionary trend in this article, as opposed to the other trends that are more evolutionary. Simply put, software is no longer married to hardware. Or, just think of it as the trend toward having the majority of computing power no longer distributed on millions of desktop boxes, but rather provided by central servers in thousands of locations and distributed via the Internet.

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The Unbundling of the Corporation

Here is an interesting article from the New York Times on the impact the credit crisis is having on corporate models.

Part of the article discusses the transformation of corporate structures:

  • Let’s try a different lens. How have past crises shaped management thinking and strategy? Innovation in management, after all, is adaptive. Management is not a science, like physics, with immutable laws and testable theories. Instead, management, at its best, is an intelligent response to outside forces, often disruptive ones.
  • Times of severe economic duress, management experts say, can serve to sharply accelerate trends already under way.
  • The technologies made it possible to monitor and coordinate business operations as never before. And the Depression made it imperative for managers to achieve efficient economies of scale to tap national markets, ensuring corporate survival amid a downward spiral in total demand.
  • A modern version of that kind of technology-aided shift in management practice and corporate organization could be in the offing, says John Hagel III, the co-director of the Deloitte Center for Edge Innovation, a research arm of the consulting firm.
  • The sharp downturn, according to Mr. Hagel, will force companies to go beyond simple cost-cutting to take a hard look at the economics of their businesses. Most companies, he says, are actually bundles of three different businesses: infrastructure management, product and service development and commercialization, and customer relations.
  • The current crisis, Mr. Hagel says, opens the door to “an unbundling of the corporation” to achieve greater efficiency and profitability. The trend, he notes, is already exemplified by specialist companies that focus on particular infrastructure fields. In logistics, Mr. Hagel says, many companies farm out those chores to Federal Express and UPS; in call centers, he points to Convergys; and in contract manufacturing, to Flextronics.
  • .. look like an Internet-era rerun of the corporate transformation of the 1930s and ’40s. “We’re facing the potential to have that play out again — this time with digital infrastructures that allow companies to organize and manage their activities in new ways”

The un-boxing of the organization is a trend I alluded to in my Ten Predictions for Project Management Trends in 2009 (see #8 the rise of the project workforce).

The article also mentions how large companies are creating smaller almost independent organizations within the larger entity and smaller teams within their product and service development divisions (for example) because they have learned that innovation and progress is far more likely to occur with such small teams. A trend I also see over and over in every project I have been involved with in my entire career.

The second part of the article discusses how the economic crisis is redefining the role corporations have to play now that government has been forced to get so intimately involved in their oversight and bailout:

TODAY, the pendulum is swinging back to a model in which corporations will be regarded more as social organizations, whose obligations extend well beyond Wall Street, according to Rakesh Khurana, a professor at Harvard Business School.

It is truly remarkable how important transparency, accountability, and social responsibility have become. I would even venture to say that these metrics are becoming as important as profits and growth in assessing a company’s value and whether it is deemed to be a dependable partner or a worthwhile investment.

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Want a Fix to the H-1B Mess? Look to Canada

In a previous post, I argued that the advertised drought in the American high-tech talent pool isn’t nearly as bad as what Microsoft and others claim it to be. I also said American companies ought to look first to small-town America before filing the paperwork to import foreign talent on worker visas.

Here’s another solution: Instead of debating an arbitrary number such as how many H-1B visa immigrants should be allowed into the country – who really knows whether the 65,000-person cap is too high or low? – instead of artificial caps of any kind, reward those companies that perform their research and development here in the United States.

Congress can introduce legislation that would give tax credits and other incentives to companies that choose to do the right thing by employing Americans to perform high-tech tasks that have recently gone to foreigners in India, China, Eastern Europe and elsewhere.

Canada has its collective head screwed on tightly concerning this issue. More on that shortly.

Governments should not be in the business of telling private companies who they should and should not be hiring. But they should be in the business of encouraging – even rewarding – responsible behavior. With an R&D tax credit program, it would be in a company’s best interest to look first at small, hard-hit towns in America. With such a system, free-market principles would be at work. If credits were compelling enough, those companies that choose to go overseas for talent would likely be the ones that really need it, as opposed to those just looking for cheap labor. And let’s face it, a big benefit of the H-1B visa system as well as off-shoring is cheap labor.

For years, Congress has debated the merits of liberalizing the worker visa system. Much of the debate has been centered around the H-1B program, which allows foreigners to temporarily work in the United States to fulfill mostly specialized, high-tech positions. The system is currently capped at 65,000 new visas per year, with an additional 20,000 for foreigners who have earned advanced degrees in the United States. Efforts to raise this cap have gone back and forth for years, with no clear outcome in sight.

In April, the Bush Administration extended the amount of time foreign nationals can work here on student visas from one year to 29 months. The move was in response to the increasing demand for foreign talent. Many students, some argued, didn’t get their chance to work here under H-1B status because of that demand.Now, that decision is being challenged by a number of groups including the American Engineering Association, the Immigration Reform Law Institute and The Programmers Guild. They argue that the administration overstepped its boundaries.

I think these arguments could be lessened substantially – even settled – if there is a real program aimed at both helping American workers and keeping American corporations competitive in the global marketplace.

Canada could be a fine example. The federal government of Canada and many of its provinces make remarkable efforts to keep R&D in the country. One such initiative is called the Scientific Research and Experimental Development program and it offers substantial federal and provincial tax credits for wages, materials, machinery, equipment and contracts. Here’s how it works:

A privately held Canadian-controlled corporation that performs qualified R&D in the country can earn a 35 percent tax credit up to the first $2 million of qualified expenditures and 20 percent for any excess amount. There are similar programs in certain provinces such as Quebec that provide additional tax credits. Qualified work includes experimental development, research and support work in areas such as bio-tech, pharmaceuticals, engineering, operations and computer software. This is a refundable tax credit, which means that even if your business makes no profit, you will get the appropriate refund back in cash.

To take advantage of these programs, hundreds, if not thousands, of multi-national corporations including Wyeth, Compuware, IBM have setup large R&D centers in Canada employing hundreds of thousands of Canadians. The huge positive economic impact of these programs on the prosperity of Canadians is quite visible everywhere you go. These are high paying local jobs for highly qualified resources that stay put and contribute to their own communities.

I don’t see any downside to having such a system, even a stronger one. Let’s eliminate the silly cap program. Let the free market reign.

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H-1B Visas: Look to Small Town America Before Bangalore

Responding to record demand for foreign workers and the beating of the “I can’t find enough American talent” drum by Bill Gates and other prominent business leaders, Republicans in the U.S. House of Representatives are urging Congress to raise the H-1B visa cap.

H-1B visas allow foreigners to work in the United States for up to six years to fulfill specialty positions – usually tech-related – that require at least a bachelor’s degree. To keep the loss of American jobs to a minimum, the government imposes a yearly limit of 65,000 visas with an additional 20,000 allocated to foreigners with advanced degrees from U.S. universities.

Earlier in April, the government received 163,000 requests. That means filers have a 50 percent chance of getting an H-1B worker for next year, especially since the system is designed to be random. Literally, American companies have to win the lottery to get foreign talent.

With so much demand, America must really have a critical technology talent crunch, right? My answer is “No.”

Yes, India and other developing countries are outpacing us in the engineering department. And yes, some skill sets are hard to find here. But I believe there is far more talent in the United States than advertised. One needs only to look at the dot-com crash of the early 2000s. As American high-tech workers lost their jobs in droves, H-1B applications still poured in.

And this continues as the country is facing a weakening economy.

Proponents, however, say a weakening economy is when you need more – not fewer – foreign workers because American companies need to be extra competitive to survive. Large tech firms and groups such as the American Electronics Association are pushing for increased caps and new rules, saying American competitiveness is hurt because the country does not have enough high-tech workers. Said Gates to a recent House panel: “The current base cap of 65,000 H-1B visas is arbitrarily set and bears no relation to the U.S. economy’s demand for skilled professionals.”

As a result of the growing support, this could be the year when more liberalized H-1B laws are passed. There currently are several bills floating around, including the “SKIL Act,” which would raise the number of visas to 115,000 and increase the cap by 20 percent each year afterward.

That would be a mistake. Yes, we are living in a flat world and many companies have to bring in foreign talent. But another big reason why these companies want more H-1Bs is simply to import cheap labor. Rules on H-1B wages are hardly ever enforced. And employees from India and China are happy to work for wages below American standards.

In my recent travels across small-town America, I have seen first hand the high number of skilled workers – American workers – who want to be employed in technology fields. I see many of them who want to be designers, programmers and developers. There are states such as the hard-hit Michigan and Wisconsin that have plenty of young college graduates who would be great candidates for Microsoft, Google and other high-tech firms such as Tenrox.

Why do we want more workers from Bangalore? We should be looking to Detroit, Madison and Milwaukee first.

You want more students to take high-tech courses in school? How about offering fewer jobs to foreigners? Let’s send a message to young Americans that high-tech careers are safe – as safe as any job can be in a flat world – as long as they train to compete in that flat world.

What Microsoft and others should be doing is setting up more development centers in hard-hit markets – whether they’re hit by lost manufacturing jobs or the real estate crisis. Not only would those companies get a workforce willing to work, but they’d get employees cheaper than in places such as Redmond or Mountain View. Government can help by providing research and development tax incentives for companies that invest in small town America; just look at Canada’s successful R&D tax credit program as an example of a model that can be adopted for America’s hard hit states.

Global IT giant Wipro is taking a page of that strategy. The company – one of the world’s largest offshorers – is currently building software development facilities throughout the United States that will employ hundreds of recent college graduates. Wipro CEO Azim Premji, realizing that it’s good business to be developing in the places one is selling, trains the employees in intensive programs and puts them right to work. We’re not talking six-figure salaries here. But these are 20-somethings who are getting valuable educations.

So, what’s the best part of these two strategies? Premji would not be reversing a 20-year offshoring model if he didn’t believe it wasn’t good for shareholders. Ultimately, though, more American IT workers will be entering the market. That means companies can rely less on going through government bureaucracy to find the world’s top talent and rely more on fostering technology talent right here in the United States.

I’d like to hear your thoughts. Do you think the United States really does have a critically-short amount of high-tech workers? Or do you think the claim is overblown? What do you think should happen with the current H-1B system in today’s flat world?

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The Presidential Candidates on Globalization and Technology

On InformationWeek’s Outsourcing Weblog, there are two interesting posts that have sparked some lively debate on where the presidential candidates stand on globalization and how the United States manages the outsourcing of technology jobs.

The posts include links to the candidates’ web sites, and the comments on these posts are quite lively and run the gamut from enthusiastic support of candidates to vehement opposition.

I won’t be using this blog to support a US presidential candidate. However the presidential candidates are responding to the demands of the flat world on several fronts:

  • How do we balance the "talent crisis" that we keep hearing about with the desire Americans have to protect their own jobs from outsiders and from other countries? 
  • Most candidates support increasing the cap on H1B visas, which would allow more international workers to enter the US. Is this pro-globalization, or pro-corporate interests to the detriment of the technology worker?
  • How much can Americans’ concerns over outsourcing be addressed by better education? Will increased math and science education, public school reform, and other measures make the US more globally competitive? And can these measures make a difference soon enough?

There are many comments, blogs, and videos on the web covering these issues. Several good links are in these InformationWeek blog posts and the comments, representing much of the political spectrum. I hope these questions continue to get the attention they deserve as the US presidential race narrows, and the candidates bring their platforms into sharper focus.

As for my personal opinion, I am in the "fair" not "free" trade camp. If there is a level playing field, then North American workers are every bit as competitive, productive and capable–if not more so–than any other workforce on the planet. If trade agreements and globalization are progressively based on common labor standards, mutually open markets and fair competition, then Americans will thrive.

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Faster is the New Fast: The Demand Grows for Project Workforce Management

Our friend, futurist Jim Carroll, has published a new book: Ready, Set, Done: How to Innovate When Faster is the New Fast. This book is chock-full of insights and observations, and skillfully organized into four sections: Velocity, Agility, Innovation, and Activity.

The section on Agility is particularly of interest to me, because it discusses skills: both the skills companies need to deploy to make work happen, and the skills people need to cultivate so that they can get their job done effectively.

A fascinating fact that Jim shared in his talk at our User Conference: 65% of today’s pre-school children will work in jobs and careers that do not yet exist. That means that the types of work we do in the next 20 years (which isn’t that long!) will change dramatically, and rapidly. Consider, already that for myself and my colleagues (all software guys) in my age bracket (early forties), the word "software" was unknown to us, up to early days of high school.

For individuals, they have to be open both to amazing specialization (I recommend the book’s chapter about "Manure Management" for an example), and constant change.

For companies, the pressure to be agile will be felt in the greater competition and faster times to market for each new innovation. And, the skills needed to develop more sophisticated products and services, and deliver them faster, will become more specialized. As we have discussed here before, companies have to be ready to outsource, attract the right skills, and practice project workforce management: the management of skilled project teams.

In the not-so-distant future that Jim Carroll describes, project workforce management is imperative. He writes:

In an era such as this, firms are faced with a future that requires a new form of human capital agility: the ability to deploy the right skills at the right time for the right purpose, regardless of where the skill might be required, or where the skill is sourced. At the same time, organizations are faced with an increasingly global talent base, a reality that demands new forms of collaboration, insightful project management, and deep insight into the effective utilization of those skills. The way to the future is clear: it’s no longer about managing time: it’s about successful skills deployment.

This book will inspire you to transform your company–and yourself–to be ready for the ever-accelerating rate of change in the flat world.

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