The Innovation Sandbox

C K Prahalad talks about the Innovation Sandbox in the latest edition of S&B. Prahlad presents an interesting study on the low-cost, people, process centric, bottom of the pyramid approach towards innovating public health care system and showcases the emerging low cost effective health care services in India.

They (organizations) must radically rethink the entire business model — technology choices, distribution, pricing, scale, workflow, and organization. Fine-tuning the existing business models will not work. That is why the bottom-of-the-pyramid customer base is the best friend that a company focused on breakthrough innovations ever had. This unfamiliar market with very low discretionary income provides sufficient distance from the current top-of-the-pyramid customer base to force institutions to change their practices.

Resource Constraints and bottlenecks do not necessarily have a negative impact on innovative practices. More than the constraints he feels:

The zone of comfort drives away the zone of opportunity. If managers believe that 80 percent of humanity is “too poor to pay for our products and services and is not part of our target market,” then a new offering at one-fiftieth the price of the current offering, made without sacrificing quality and at the same time ensuring the company’s profitability, looks at first glance like an impossible task. So those managers assume that the idea will be impossible; instead, they make minor changes to existing products and business models, start endeavors that often fail, and conclude from those failures that success was indeed impossible.

End of Job Interview ?? Nahhh...

So do you also think that Job interviews are not likely to survive for long? Well Seth definitely feels so .He thinks that traditional one on one interview techniques does not serves the objective of hiring the best talent .

At least half the interview finds the interviewer giving an unplanned and not very good overview of what the applicant should expect from this job. Unlike most of the marketing communications the organization does, this spiel is unvetted, unnatural and unmeasured.

The other half is dedicated to figuring out whether the applicant is good at job interviews or not.

So he suggests that every applicant gets a guided tour of the organization story.

Maybe from a website or lens or DVD. Maybe from one person in your organization who is really good at this? It might mean a plant tour or watching an interview with the CEO. It might involve spending an hour sitting in one of your stores or following one of your doctors around on her rounds. But it’s a measurable event, something you can evaluate after the process is over. If you’re hiring more than a few people a week, clearly it’s worth having a full-time person to do this task and do it well.

Seth ideas are great as always but lacks the touch of reality. I mean this can work well if the organization has to hire senior level professionals who need to understand the organization from a Leader perspective. Ideally senior management positions require more hands on approach towards problem solving and strategic decision making ability.

However this will not work in case of regular entry or middle management level opening since the logistics required and the time available to fill the position may not be available. Also the execution of this recruitment process depends on the no of people one is looking to recruit. In case where organizations need to fill thousands of openings in few weeks I don’t think it will be a scalable model.

Strategic Role of HR :The Debate Continues

Sometimes I wonder what the HR guys are up to. There are big talks these days about the strategic role HR has to play. But do the HR guys really know enough of operational and business issues to play a real strategic role? That what my dear friend Mayank has to say about his HR...

His post reminded me of a post on Fast company blogpost "why we hate HR" which said

After close to 20 years of hopeful rhetoric about becoming "strategic partners" with a "seat at the table" where the business decisions that matter are made, most human-resources professionals aren't nearly there. They have no seat, and the table is locked inside a conference room to which they have no key. HR people are, for most practical purposes, neither strategic nor leaders.

The issues highlight above are just another example of Organization where HR folks decide the HR policy of the organization sitting in Corporate Offices.

This problem here is not with the HR but with the Vision and thought process of the Organization which believes that HR can add strategic value from Corporate Office,whcich essentially means staying away from from people who actually work in line.

The best way to integrate any function with the strategic objective of the organization is ensure a direct linkage between the business objective and the Policy framework .Be it HR ,Finance, Sales or Marketing ,as long as the we don’t have people aligned to face the business realities of the organization the disconnect will continue to remain.

Here’s my suggestion if you want to have a better or let’s says more strategic contribution from your HR Guy…

1) Let your HR be involved in actual Business making and Project execution. Once your HR joins the Business team they will have a realistic and objective overview of the ground realities. The best part is that policies can be tailor made for a particular business situation depending on the unique nature of the business.

2) HR’s roles in the organization should not only be confined to designing and suggesting policy framework, let HR take the ownership of executing and delivering the end result with line managers.

3) All HR policies/strategies action must involve senior line Management in deciding the policies. Don’t forget the ultimate aim of HR is to enable each manager to take ownership of HR functions for his team.

4) HR is enabler function, it aims at facilitating business objective and its contribution can not only measured in terms of tangibles but also the intangibles.

More on the role of HR .

The HR Paradigm.

Talent Management Strategy

The Cost of HR

Ever changing role of HR

Talent Management in China

Chinese companies now seem to be facing the bitter realties of attracting and retaining talent. According to research by Mercer HR Consulting "Companies in China are struggling to retain their professional and support staff, and face either having to pay higher salaries or excessive recruitment costs.

The survey of more than 100 organisations in China, many of which are multinationals, shows that 54% have experienced an increase in turnover for professional staff since last year, while 42% have reported higher turnover for support staff.

It also found that the average tenure for 25 to 35-year-olds – the age group targeted most by multinational companies – fell from an average of three to five years in 2004, to just one to two years in 2005.

The research also found:

83% of organisations offer healthcare and related insurance to staff,
41% provide health and fitness plans 24% offer flexible working.
44% of organisations believe their employees are dissatisfied with the benefits on offer
The average cost of replacing staff at any level is around 25% to 50% of annual salary.

Here what Recruiting in China has to say about retaining top talent?

Whether they work in Beijing, Shanghai or Guangzhou, executives at multinationals who stay behind closed doors and rarely offer performance feedback or advice are bound to fail. That's because the local hires they need to run their offices and plants will be seeking out bosses who will help them advance their careers.

Another example which shows why standard one shot Performance Management strategy never works in all organizations. Individual’s ability and his perception about Career growth and work content also depend on the cultural background and values.

B-Schools to train our Babu's

ET reports

“Premier management institutes IIM-A, IIM-B and TERI School of Advanced Studies have joined hands with Harvard’s Kennedy School of Government, Maxwell University and Duke University, respectively to conduct short term courses for senior officials of the central government. The officials will be trained in the latest global rules of public management.

The reputed management institutes, short - listed through global bidding, shall design and conduct the short-term courses in management for senior bureaucrats, who will be undergoing the compulsory mid-career course linked with their career advancement.

I wonder if the courses will help our Babu’s perform better. For them more than aptitude it’s the attitude which makes all the difference. Some of the best minds are part of the same system which is branded as inefficient and corrupt. More than courses the govt. should also work on coming up with a matrix for managing performance and developing a measurable reward and promotion system. The bane of system is not talent they have but the way talent is managed.

HR's Future and Intangibles

The Market share and revenues of the firm are not the only factors which drive a firm valuation.

How do you define Intangibles? Does it really matters in a firm’s valuation?

David Creelman and Dave Ulrich answer this in a white paper on “The New ROI of HR”.

They believe the architecture of intangibles has four steps:

1. First is the fundamental issue of keeping promises and managing expectations.

2. Second is a clear strategy—a story about our future that shows how the organization will create value through growth.

3. Third is having the core technical competencies needed to deliver that strategy. These technical competencies might be marketing’s ability to manage its distribution channels or manufacturing’s ability to maintain Six Sigma quality—the specific technical competencies required depend on the strategy.

4. The fourth and final step is capabilities—those things that make a company stand out in the minds of customers. It might be a shared mind-set, such as Nordstrom's companywide commitment to service. It might be speed, such as Apple’s speed to market with the iPod line.

Intangibles like employee and market perception of firm’s goodwill, human capital, value system, and vision guides the intangible values of a firm. Organization can adopt a clear cut strategy to enhance the intangibles of the organization. They need to adopt practical steps which go on to enhance the intangibles .HR is believed to be play a pivot role in enhancing the intangibles of the firm “research data that shows HR makes not just a difference, but a big difference, is conclusive.

“What is really exciting is that investors are beginning to take an interest in organizational and human capital. If investors are interested, you can bet the board will care, and so too will the CEO. This puts HR in the spotlight in a way it never has been before. It won't be easy, but it is a powerful mechanism to ensure that truly strategic, intangible-building HR practices will spread. There has never been a more exciting time to be an HR professional.

XLRI, NHRD and CII Partner for HR accreditation

So finally the talent shortage and lack of skilled HR professionals is having some impact on Industry.

ET reports that “In a move to professionalise and give accreditation to human resource (HR) professionals, the National Human Resource Development network (NHRD) has signed a memorandum of understanding (MoU) with the CII and the XLRI, Jamshedpur, for an accreditation process. This will be launched in a month’s time, P Dwarkanath, director, Glaxo SmithKline (GSK) and president, NHRD, said.

I had posted earlier about the HR talent shortage which exits in the country today.

Today, HR managers are in great demand, with an estimated 5,00,000 required across industries . But there exists a shortage to the tune of 40%,” Father NCasimir Raj, SJ, director of XLRI,. “This apart, the attrition rate is high as people are not sure what areas they can excel in. The training has been designed to check these trends,” he added.

XLRI has been taking the lead in partnering with Industry and even State Govt. to train and set standards in developing competencies for HR roles.

Diversity and Organisational Culture

With the growing pace of globalization and companies operating out of multiple locations spread over globe, diversity of workforce has emerged as a big challenge.

In a recent article disentangling what researchers have learned over the past 50 years, Margaret A. Neale finds that diversity across dimensions, such as functional expertise, education, or personality, can increase performance by enhancing creativity or group problem-solving. In contrast, more visible diversity, such as race, gender, or age, can have negative effects on a group—at least initially.

However, says Neale, fault lines that emerge as a result of such demographic factors can be parlayed to a group’s advantage too.

“In fact, the worst kind of group for an organization that wants to be innovative and creative is one in which everyone is alike and gets along too well,” she says. And the key to making nearly any kind of diversity work is managing it well.

I think teams with members with diverse background have a definite advantage when it comes to being innovative, adaptive and responsive to business challenges. Diverse cultural background means members will look at issues and challenges from different perspective; they will be more proactive in sharing and brain storming issues and will solve problems.

Social Innovation and Business Today

Social Innovation has made one of the biggest impact since it’s dramatic comeback in 1970s through the works of French scholars Pierre Rosanvallon, Jacques Fournier, and Jacques Attali.

Social Innovation is comprised of new strategies, concepts, or ideas that transform policy and practices especially as they relate to the development or extension of civil society.

Social innovation concerns improved quality of life, and may relate to social welfare, working conditions, employment, or community development. It can take place within government, within companies, or within the nonprofit (also known as the third sector) sector.

John Thackara gives these 10 laws for Social Innovation.

Power Law 1: Don’t think “new product” - think social value.
Power Law 2: Think social value before “tech”.
Power Law 3: Enable human agency. Design people into situations, not out of them.
Power Law 4: Use, not own. Possession is old paradigm.
Power Law 5: Think P2P, not point-to-mass.
Power Law 6: Don’t think faster, think closer.
Power Law 7: Don’t start from zero. Re-mix what’s already out there.
Power Law 8: Connect the big and the small.
Power Law 9: Think whole systems (and new business models, too).
Power Law 10: Think open systems, not closed ones.

Rules of Business have not remained untouched and social Innovation seems to be the new mantra for all future business. One of the best example of Social Innovation happens to be the open source movement, Google, your tube, myspace and other social tools which is increasing shaping Business models and society in large. Wealth distributional and equality seems to be the new philosophy where acquiring is passé and sharing is cool…

The Big Question ????

Should HR as a function continue to have Non-Traditional HR person to lead the guide the HR role in organizations?

Traditionally we have seen lot of folks from diverse background doing quite well as HR leads and often giving the HR role in the organization a new direction.

As Philip say “I think one of the biggest drawbacks for HR functions is the fact that they are often filled with people who have no concept of how business operates. They might contain people who have received their MBAs...but when's the last time an organization has allowed an MBA-only person take the helm? MBAs must be accompanied with experience, and this is precisely where traditional HR heads are found lacking. They've rarely had to lead other operations within the organization...and as a result, don't truly understand the P&L responsibilities, hierarchies, turf wars, etc. that might be going on within an organization.

Often it has been said that HR has not been able to pay a strategic role in business as it continues to stay away from the business objective. My point is if HR is able to focus on what its core function / business of operating in an organization exits why does it needs to drag itself to prove that it understands business per say just to act as a strategic partner.

If HR business in the organization is to attract, train, develop, and retain people as well creating a great employer brand, I don’t see any reason why it needs to prove it anything more than that to justify its impact of organizations business. The question here is “Are we (HR) able to prove the impact which it has on the business /profitability and strategy of the organization.

Non traditional HR leaders will also be accepted as traditional HR leaders if only they are able to establish the linkage and continue to give a vision and direction to the HR function as part of the organizational vision and people’s philosophy. To expect that since someone has performed exceptionally well as a business head will continue to do so in HR Head is slightly unfair and unreasonable as the games of the rules are not the same.

However HR professionals should continue to partner actively in business decisions like mergers- acquisition and make an impact on the bottom-line. Business understanding can act as one of the enablers and initiating competencies for HR functions and it could be a necessary but not a sufficient condition/competency for being a successful HR professional.