Nov 14, 2007

PwC research on Managing Tomorrow's People



A friend of mine sent me a pretty interesting research by PricewaterhouseCoopers (PwC). They along with the James Martin Institute for Science and Civilisation at the Said Business School in Oxford to think about the factors that currently affect business and those which we believe will grow in importance in the future.

So I sent off a mail to the people behind the report and got a response from Sandy Pepper, Partner with PwC in the UK saying I could blog about this report.

The report uses the "scenario planning methodology". The scenario planning exercise revealed that individualism, collectivism, corporate integration and business fragmentation would be the most significant factors affecting global business until 2020. They aligned these along two axes, around which they developed the scenarios further.

So they came up with three "worlds" which were labeled "Blue" (for big company capitalism - where the globalisers take centre stage, consumer preference dominates, a corporate career separates the haves from the have nots), "Green" (Companies develop a powerful social conscience and green sense of responsibility. Consumers demand ethics and environmental credentials as a top priority. Society and business see their agenda align) and "Orange" (Global businesses fragment, localism prevails, technology empowers a low impact, high-tech business model. Networks prosper while large companies fall)

The Future for HR in these worlds according to the report:-

In the Blue World where corporate is king, the people and performance model below is the closest to what many leading companies are aspiring to today – linking HR interventions to improvements in business performance and using more sophisticated human capital metrics to evaluate corporate activity. Under this scenario the management of people and performance becomes a hard business discipline, at least equal in standing to finance in the corporate hierarchy.

In the Green World where companies care, corporate responsibility (CR) is good. The CR agenda is fused with people management. As society becomes a convert to the sustainable living movement, the people management function is forced to embrace sustainability as part of its people engagement and talent management agendas.
Under this scenario successful companies must engage with society across a broader footprint. Communities, customers and contractors all become equal stakeholders along with employees and shareholders.

In the Orange world, economies are comprised primarily of a vibrant middle market, full of small companies, contractors and portfolio workers. People management is about ensuring these small companies have the people resources they need to function competitively. This allows an important role to be carved out for HR, one where the people supply chain is a critical component of the business and is strategically led by the HR function. But the flip side is that this could also see in-house HR becoming a sourcing or procurement function, with the high-end people development aspects of HR being managed externally by guilds.
So what realities will actually come to pass?

In some cases we can see the signs already. The Blue and Orange world exist side by side today, specially in places like Silicon Valley. Orange world firms and people are the creative juice for larger organizational behemoths to buy out and leverage and scale up. Of course, UK consultant and philosopher has talked about it in his book "The Elephant and the Flea". Handy has also touched upon portfolio careers that is mentioned as a reality in the Orange world in the PwC report.

In Europe Green firms are well on the way to becoming a reality I guess. In the West Gen Y is concerned about CSR and how green organizations are. In some years it will matter across the world !

What do you think ? You can download the report here.