Jon M. Huntsman on Ethical Leadership

Jon M. Huntsman, founder and chairman of Huntsman Corporation, a $13 billion chemicals company, spoke with Knowledge@Wharton about the challenges of leading in an ethical manner.

Carly Fiorina om Personal Ethics

Carleton S. (Carly) Fiorina who was president and chief executive officer of Hewlett-Packard Company from 1999 to 2005 talks about personal ethics and values in this short video. She served as chairman of the board from 2000 to 2005.Prior to joining HP, Fiorina spent nearly 20 years at AT&T and Lucent Technologies, where she held a number of senior leadership positions and directed Lucent's initial public offering and subsequent spin-off from AT&T.

Change Management and HR

SHRM’s 2007 Change Management Survey Report suggests that more than four out of five HR professionals report that their organizations planned or implemented major organizational changes in the 24 months preceding SHRM’s online survey, which was conducted in November 2006.

The top three major organizational changes that employers were planning or implementing, according to the survey, were:

• New or revised performance management and review processes.

• Major changes to their facilities.

• Changes to the organization’s culture.

However, employee resistance and a communications breakdown are the two primary obstacles employers face when major organizational changes enter the picture. Employees’ understanding of organizational changes improved when HR was involved in the change management processes before it was introduced to all employees, according to nearly three-fourths (73 percent) of 403 HR professionals surveyed.

“The finding that HR departments were most likely to be involved with the planning for major changes indicates that more often than not HR is viewed as a strategic partner for the change process,” the survey report says. Getting employees ready for major organizational changes requires that change management leaders promote understanding of those changes in a well-planned and well-timed manner, Benedict writes.

Perhaps the most important role which HR plays in driving the change initiatives is that to create the element of trust and awareness about the initiative and its impact on people. Some great change management initiatives never fail to have the desired impact as the stakeholders are either unsure about the desired result or do not share common interest and vision in bringing about the change. Change initiative is one of the vital strategic moves which allow the HR function to play leadership role in driving new initiatives.

Some may argue that HR by its very nature is not pro-change and that it believes in maintaining the status quo as it helps in ensuring compliance which brings consistency. However this argument fails miserably as the nature of business is has undergone a dynamic shift and today it’s not about business as usual by how you make the right moves to make the transition to “business unusual” and stay ahead.The same applies to people’s practice in organization. No organization can afford to have de link people strategy from organizational strategy.

I think this is where HR function needs to drive the business decision making in organizations as it’s not just about gearing up for the challenges which lie in the market for getting new business and staying ahead of competition but the real challenge of hiring, training, rewarding and retaining the best talent. Perhaps some of the industries face unique challenge as the business drivers are not the margin of profit or the volume of business but the quality of talent it has to execute its strategy.

Managerial Decision making

Critical managerial decision making is the key to superior performance at work.One has to refer to critical Data, past records and performance metrics and analysis before making decisions .Mc Kinsey study tries to assess the various factors which influence decision making at work. Executives often end up referring to wrong sources, which lacks scientific rigor and credentials in its finding, for arriving critical decisions. Just because one strategy works for a particular organization may not prove to be equally effective for other enterprises.

Unfortunately, many of the studies are deeply flawed and based on questionable data that can lead to erroneous conclusions. Worse, they give rise to the especially grievous notion that business success follows predictably from implementing a few key steps. In promoting this idea, authors obscure a more basic truth—namely, that in the business world success is the result of decisions made under conditions of uncertainty and shaped in part by factors outside our control. In the real world, given the flux of competitive dynamics, even seemingly good choices do not always lead to favorable outcomes.

The halo effect is especially damaging because it often compromises the quality of data used in research. Indeed, many studies of business performance—as well as some articles that have appeared in journals such as Harvard Business Review and The McKinsey Quarterly and in academic business journals—rely on data contaminated by the halo effect. These studies praise themselves for the vast amount of data they have accrued but overlook the fact that if the data aren’t valid, it really doesn’t matter how much was gathered or how sophisticated the analysis appears to be.

This reliance on questionable data, in turn, gives rise to a number of further errors in logic. Two delusions—of absolute performance and of lasting success—have particularly serious repercussions for business strategists.

It’s actually a real problem which many strategist face and typically too much of analysis may lead to complicated or erroneous conclusions if the context of the reference is not verified. Sometimes a single factor can be picked up as a major perceived thereat and instead of finding a meaningful and objective solution based on organizations own reality decisions may be unduly influenced by halo impressions.

Culture as business Strategy

As organizations spread across globe and set operations in different parts of the world, organizational culture is acquiring a whole new meaning. Growing decentralization and growth in no of various units and function means each unit is given the scope to define its scope of operation within the broad organizational framework.Structural changes have been made to allow flexibility of approach and decision making has been decentralized to enable organization scale the challenge of growth and diverse business requirement. All this means organization culture becomes the critical enabler in facilitating a cohesive and well knit unit. Bain & Company’s recently released the Results of Bain & Company’s Management Tools & Trends 2007 study also suggests that Culture continues to be the most important strategy for business success.

The top 5 management trends as described in the report are:

91% agreedCulture is as important as strategy for business success

87% agreed that Information technology can create significant competitive advantages
79 % felt innovation is more important than cost reduction for long-term success.
73 % agreed that consolidating and sharing back office operations improves both cost and quality

66 % agreed that environmentally-friendly products and practices are an important part of our mission

The other two aspects are equally interesting as IT tools and innovative practices are also considered as crucial factors which have considerable impact on the way business will shape in the days to come.

It also suggests that the ten most used management tools included:

§ Strategic Planning
§ Customer Relationship Mgmt.
§ Customer Segmentation
§ Benchmarking

Hewitt Study predicts highest salary hikes in India

Employees working in India are due for a great 2007 ahead as the latest salary increase survey by global HR consulting firm Hewitt Associates has forecasted an average wage hike of 14.5 per cent for India in 2007. This double digit salary growth has continued in India for the fourth consecutive time. Hewitt surveyed 600 companies across 21 industries in five different employee groups, and said it expected salaries in the financial sector to grow the fastest this year.

Some highlights of the study are :

Globalization and increased competition for the talent pool is responsible for forcing companies to increase incentives and compensation to attract high quality professionals and retain them. Salaries in India are continuing to rise and were likely to reach the same levels as in the more developed economies in Asia in the future.

Indian organisations were leading the multinational companies in paying higher salary hikes and that in 2006, domestic companies saw an overall salary increase of 14.9 per cent compared to the 14.3 per cent hike given by foreign-owned organizations.

The highest average increase in 2006 in Indian companies, across levels, has been recorded at the professional, supervisory and technical level, for the seventh year in a row, at 16 per cent - with a 15. 8 per cent average increase predicted in 2007. The top five industries in terms of salary increases in 2007 are expected to be banking and finance, insurance, telecom, hospitality, restaurants and engineering.

The Insurance industry leads the hikes at 17 per cent with a similar increase predicted in 2007 at 16. 1 per cent, beating banking and financial services which had an average increase of 17 per cent in 2006 but is expected to record the highest increase at 16. 5 per cent in 2007. The engineering sector is likely to record a salary increase of 15. 3 per cent in 2007.

Employee Engagement -The critical Ingredients

Is Employee engagement all about inspiring people and managing emotions at work?

More than organizational policies, compensation and recreational activities at work, its leadership at various levels in the organization which engages employees. HR may always strive to come up with great policies, themes for engagement and fancy branding activities. But if there’s one aspect inspire people for superior performance at work is the quality of leadership and mentoring ability of leaders at multiple levels which organization culture facilitates . Some of the great places to work are those which have strong middle management leadership talent and they have always energized and inspired individuals in teams to go for extra mile.

I have seldom come across a disengaged employee in teams which have good leaders. By leaders I do not necessarily means the ones who make so called “strategic moves” at corporate level. For an employee leadership is experienced and exhibited at team level. It need not necessarily be a manager but also peers, and colleagues from different teams.

So does it means leadership development should be a priority for HR function?

This is another debatable issue, can leadership be developed? Yes and No-Well you’ll expect this from an HR guy. I say yes as leadership development can be facilitated by HR interventions but to assume that it can we can develop great leaders in isolation can be a mirage. Leadership development and organizational culture are inter-dependent ; similarly leadership development practices and great organizations have a binding co-relation. Great organisations have a history of developing leaders at all levels.

Employee Engagement is a collaborative effort which requires participation and commitment to the organizations people’s philosophy. Often during my interaction with employees from various organizations and different industries I try and figure out what is it that motivates them keeps them excited about the job they do, some of which are mundane and repetitive at times. More often that not, it’s the immediate leader who is the key to success of an engaged teams and motivated employees. HR as a function can’t actually engage employees in isolation unless the leadership continues to take employee engagement as internal performance metrics for evaluating and rewarding performance.

Dauten on De-Hiring

Here’s an excellent video by Dauten on how managers can make the process of firing employees more human and mutually agreeable for each other. He talks about the de-hiring on how managers can make life easier by adopting a more well thought out and pro active approach in helping employees realize the realities and also help them improve performance to meet expectations.

The Alpha Employees

These individuals form part of a wider trend in executive heroics – long work hours and an exaggerated executive focus on achievement. It is a trend from which business has benefited with productivity and innovation on the rise. It would be wrong to assume that these individuals are slaves to the corporate world, stressed, burnt out, missing their neglected lives, families, sleep. They see themselves as “winners,” “achievers” bent on building businesses, empires and economies even.

Sounds familiar? Do you feel you have such members in your team as well.Hay group studies identifies them the Alpha leaders who are often bold, self confident, occupying leadership positions.

For them achievement or “results” is a prime motivation, but so is being in charge – these people will willingly shoulder levels of responsibility, that are daunting to most. It is for these reasons that they are often called “alpha leaders.”

These alpha leaders are not necessarily to be found at top leadership positions. Many of these alpha types are young, single and independent employees in the age group of 21-28 .Most of them come from small cities ,with their families back home and little social life in these urban jungles, they find solace and find their identity in the work they do.

Some of them are not able to relate to the new culture and lifestyles of different culture. These alpha types’ employees are growing at a much faster pace than you could ever imagine. They spend more and more time at workplace and even weekends in office. They are constantly worried about targets, assignment deadlines and often end up talking about work and colleagues at social gathering. They have little social life and very little to talk about expect work.

So are these neo alpha types good for organizations workforce. Not really,infact it may be a matter of concern for most organisations.Here’s what research studies says:

A persistent focus on tasks and goals can damage performance. Overachievers can be overly prescriptive in their behavior, coercing people rather than coaching them and collaborating. This has the effect of stifling initiative and motivation. Notorious alpha leader behavior includes taking short cuts and forgetting to communicate crucial information as well as asking questions and then answering them. These managers often either ignore, or are oblivious to the needs of those they work with.

Organizations, knowingly or otherwise, can be complicit in creating a culture which fosters alpha behavior. They sometimes reward what the Harvard Business Review calls “the achievement-at all-costs-mentality.” Understandably, they will recruit high achievers and, as long as they deliver good numbers, cast a blind eye. The best executives take a balanced approach, managing their achievement drive while leading through influence, collaboration and coaching.

Headhunting and Talent War

ET reports on the phenomenon growth which headhunting services have seen over the last few years.

Outsourced hiring, or hiring through third party recruiters, will be an over $1 billion industry this year. And it’s growing extremely rapidly. Such hiring is only a decade old in India. It grew slowly initially, but in 2005-06, the business saw exponential growth, posting a turnover of Rs 3,922.32 crore, against Rs 630.98 crore in the year before. The industry this year is seen to be growing at about 40%. So by the fiscal-end, it would go well past $1 billion, according to a study by the Executive Recruiters’ Association (ERA).

Although there is no clear breakup of which sector would contribute to what extent, it is estimated that IT will claim the largest chunk at 30%, followed by telecom/infrastructure, retail /realty and manufacturing/utilities spaces each at 15%, ITES at 10% and others at 15%.

Clearly the boom in services and growth of industry has resulted in huge requirement at middle and senior level positions. The entry level positions are being filled by campus recruitment initiative. Headhunting services are largely being used to fill niche and middle level positions.Another report suggets that the skilled Indian professionals are finding an alternative in continental Europe. The non-English speaking countries of Europe such as Germany, the Netherlands and France are increasingly wooing Indians into their workforce.

In fact, many of these countries are trying to showcase their multicultural business environment to attract global skilled workers. “Holland, for instance, is very comfortable for an international skilled workforce since English is a business language,” says Dirk Bakker, president of the India Netherlands Business Association.

So the indicators are clear that the war for talent is truly global in nature.