Developing Leadership

I've been thinking about the best way to developing leadership in organizations, and although there are various models of leadership development in place (like The Leadership Pipeline) I haven't really come across a good 'approach' to leadership development.

It's an oft repeated dictum that people learn by doing more than they learn by other means- but do they really?

I have come across people who constantly stumble when doing a certain kind of role/job. Their learning is limited to knowing that this is one thing they cannot do well :-)

However, what really helps people learn from doing, is the ability to reflect and introspect.

Therefore, I am coming around to the conclusion that one of the best ways to design a leadership development initiative, is to assess people on their ability to self-reflect, and to reflect with their peers. Then give them lots of different experiences in real-life scenarios. To build business in a new market. To lead an innovation and research team. To take charge of an under-performing team and try to turn it around. To take financial control and look at different ways to get returns for the organization.

As the participants do these real life work - not projects - they will need to learn from each other and interact with the current leaders.

According to Alexa..

These are the top 25 HR/Recruiting blogs...says Jason Davis, who has now gone off and started RecruitingBlogs.com

Good to see that I just about made it to the top 10 :-)

As I commented if these were linked to Technorati rankings, as well as Feed stats, that will give a good perspective on how much a blog is read and linked to also.

Good to see some of my favourite bloggers also on the list like cheezhead, Recruiting.com, jobster blog, Jim Stroud 2.0, HRMDirect Blog, HRMDirect Blog, Michael Specht, The Recruiting Animal, WirelessJobs.com and director of recruiting

Diamond Consultants' India plans

Looks like Diamond (erstwhile DiamondCluster) is planning for a big way to enter India.

Take a look at their careers page, it lists locations as North America, UK and India.

Seems their focus on India is two-fold, firstly the domestic consulting business, and the other with an analytics center to offer services to US clients from India.

There's a huge talent war going on for analytics professionals. So if you are great with numbers, do a statistics course and get an advanced degree.

Indian Prime Minister on Excessive Pay

When PM Dr. Manmohan Singh read out the "excessive pay" speech India Inc. at the CII forum, people were not really ready for it.

Singh told a CII conference that promoters and top executives should be restrained in pay. But what should be the extent of restraint by say a Sunil Bharti Mittal, the newly installed president of CII, whose remuneration doubled to Rs 12.6 crore in the previous year, taking him to the 5th position according to Business India magazine. Or India's top billionaire Mukesh Ambani who was the top paid executive in 2005-06.

According to a Forbes survey, with 36 billionaires, India has edged Japan to the second place, with 14 new Indians joining the list last year, a consequence of generous stock holdings and rising valuations in the technology, realty, commodity, energy and media sectors.

Top managers said they are paid for maximising shareholder value, but efforts at linking pay to incremental value created might end up increasing the risk premium, for failing to attract the right candidate.

However rising Indian pay has to be seen in the context of global competition for talent and an ability by rising Indian organizations to compete with the best in the world. When Indian companies can forge global acquisitions, they surely can afford to pay to acquire the best talent.

Surely Dr. Singh, as an economist, understands the basic law of demand and supply. There is ample proof that India lacks leaders who can take organizations global, and where there is a shortage, prices will rise.

If organizations can pay high and remain competitive, maybe Dr. Singh's government can concentrate on areas that will help India produce more and more leaders. Like revamping and changing the nature of basic, secondary and higher education. Like providing for better healthcare so that future leaders do not suffer due to malnutrition, and focusing on keeping them educated. And also focusing on growing urban centres so that expensive cities don't keep getting more and more expensive as everyone tries to get there, which lead to people demanding higher and higher salaries to move there.

However, if organizations pay high and are not able to remain competitive then maybe Dr. Singh should not be too disturbed. That will weed organizations that don't perform.

Get a pdf of your Linkedin Profile

I tried out this feature today and wondered why I didn't try it before :-)

One can export any visible profile as a pdf document on Linkedin. Perfect when one has invested some amount of time and effort in building your LI profile.

For example if you visit my profile (and are a LI member) then you can see this. However, I can always export it into a PDF and send it to people who may not be LI members.

Cool.

Check out my LI profile as a PDF document here.

Not getting a project

Today a client got back to me after some time, that I would not get a coaching project they had approached me (along with other consultants) to submit a proposal for.

It was a great opportunity as the project was of a global nature and the people to be coached are globally located and very senior executives.

I thought I'd just share my disappointment on this blog...as I am not feeling particularly insightful to say anything else.

Ah well... Looks like I have to wait till I really go global :-)

Well, failure is a huge mirror. It brings one face to face with one's own inadequacies and for a chap like me is not a very easy pill to swallow. Whenever I have faced failure in the past, I've taken it quite personally, as a statement on my personal capabilities, even if at the cognitive level I know that there are other factors apart from just me, that are affecting the results, like great and ,possibly better, competitors, lack of subject matter, previous experience in a related field etc.

I guess I'll take a couple of days to bounce back.

Making it complex

Madhukar blogs about how a concept can be said in so much jargon that it seeks to prove its "toughness" :-)

In MOC (my creativity course), I try to communicate to the students that our thinking and actions are influenced/constrained by how we perceive a situation (and so, if we change our way of perceiving a situation, new solutions would emerge)

The disadvantage of such a simplistic approach is that it is not sufficiently complex, lacks academic rigor, and since students learn it easily, there is no way one can make a tough quiz on this point, which they can't solve.

Today, luckily, I stumbled upon something called "Theory of Situated Cognition", which defines the above mentioned common sense in the following mysterious, complex and academically respectable format:

"A theory of situated cognition suggests that activity and perception are importantly and epistemologically prior - at a nonconceptual level - to conceptualization and that it is on them that more attention needs to be focused. An epistemology that begins with activity and perception, which are first and foremost embedded in the world, may simply bypass the classical problem of reference - of mediating conceptual representations."

By the way, I attended the MOC course which Madhukar taught and the 30 students who opted for it (it was an elective), loved it. It formed the basis of a lot of my beliefs on innovation and creativity.

Confrontation in organizations

My first reading of Intel was by way of a critical book called Inside Intel. There I discovered the aspect of Intel's culture instituted by Andy Grove called "Constructive Confrontation".

It left me fascinated. Because apparently here was a large organization that was living one of the central precepts of organizational development. That is, people would not hesitate to challenge others in meetings. No more group think. In fact, I had the opportunity to facilitate a group of Intel managers' team meeting on one occasion and I found them passionate, and not at all quiet.

However, I also know that Intel has struggled to grow a similar culture in their India development centers. That's because, confrontation, specially of authority figures is anathema to most Indians.

According to this post at Prof. Sutton's blog Intel's core values of constructive confrontation maybe have been changing.

A former Intel insider, Logan Shrine, wrote me this morning about his book about the demise of the Intel culture (written with Bob Coleman) called “Losing Faith”. As an ex-Intel employee who had worked there under Andy Grove and also under the two subsequent CEO's (Barrett and Otellini), I can tell you unequivocally that constructive confrontation was a license for assholes to be assholes and express themselves (one most likely thinks of engineering stereotypes). It wasn't there to police them, but to give people carte blanche to express those behaviors. There is and has never been (during my tenure) any consequences for managers who are assholes at the company.
In fact, I'd like to attest that what made Intel's culture operationally perform was when everyone was treated equally under constructive confrontation and people exercised their right to constructively confront other people when they witnessed a clear violation of Intel values. Although I would not condone Intel's form of this behavior at any other company, it worked at Intel when the culture was egalitarian in its enforcement of the practice. What changed in the culture (I talk about this in my book, "Losing Faith: How the Grove Survivors Led the Decline of Intel's Corporate Culture") is when the managerial ranks put themselves "above" the values and practices of the culture - in effect, considered themselves "entitled."

As I have mentioned earlier, unspoken norms give off more truth about organizations than "professed values". Sticking to such values through behavior is the key.

Things don’t just hop here in India, they leap

..or so says Lin Chase, Director, Accenture Technology Labs India in this blog post at the Accenture site. Here are some quotes:

A year ago, I landed in Bangalore, India – not just for a visit, but to live. I had eight suitcases with me, mostly full of what turned out to be the wrong clothes and shoes, and the name and phone number of a woman who supposedly had an apartment I could live in for a while. A few weeks earlier my boss had asked me if I would be willing to move to India to be Director of a new R&D Lab – Accenture’s fourth. I jumped at the opportunity. Accenture Technology Labs, our technology research and development organization, has been turning technology innovation into business results for 20 years. Plus, things were seeming a little sleepy in California and I’d heard how things were hopping in Bangalore.

Fast forward one year, and I can attest that things don’t just hop here in India, they leap. Bangalore is an inspirational place to work and makes me feel alive 24/7.

This week I’m back in the U.S., visiting a client in New Jersey to arrange a pioneering installation of one of the new inventions of our India team. Prior to building the India Lab, it would have seemed odd to present a Bangalore invention to a U.S. client. But now, I’m convinced that India is the wave of the future – with the talent, the brains, the creativity and the dedicated will to make the future happen.

It’s by far the most exciting and rewarding job I’ve ever had. Our team is developing an R&D spirit together and building a world-class research facility in India. Now we can really start to 'play cricket,' as they say here.

However, Accenture and IBM are the rare IT consulting firms that have really leveraged the India advantage. Their other MNC contemporaries like CapGemini, EDS and the like are still figuring out how to really combat Indian IT firms.

A recent Forrester Group study says that captive outsourcing units are likely to be economically unviable in the long run.

Instead of saving money, the cost of operating captive center costs is typically higher than using third-party providers. The cost per person, per month of a captive center is $4,944, compared to $4,231 for a "third-party supplier." And over three years, the costs of a 150-person captive center are $29,453,799, compared to $21,723,299 for using a third-party supplier.

And while companies say they want to save money, protect intellectual property or more tightly control processes, in reality....

...the majority of the reasons firms cite for building their own facility versus outsourcing to a third party are flawed. Our research shows that in the majority of cases, it is driven by personal reasons such as an expatriate employee's urge to go back to India for family reasons.

According to the report, many American and European companies that have set up captive centers have closed them down, brought in partners or sold their centers to local companies - and many more will do so in the next three years.

6 Books to read

Well the Army Institute of Management, Kolkata had organized a Blog contest which this blog won and now the winning prize has arrived... or I should say, have arrived. Six of the books that I yearned to read arrived in the post and they are:

1. The Halo Effect: and the Eight Other Business Delusions That Deceive Managers by Phil Rosenzweig
2. Made to Stick: Why Some Ideas Survive and Others Die by Chip Heath
3. Resonant Leadership: Renewing Yourself and Connecting with Others Through Mindfulness, Hope, and Compassion by Richard E. Boyatzis and Annie McKee
4. Hard Facts, Dangerous Half-Truths And Total Nonsense: Profiting From Evidence-Based Management by Jeffrey Pfeffer and Robert I. Sutton
5. The Long Tail: Why the Future of Business Is Selling Less of More by Chris Anderson
6. Every Business is a Growth Business: How Your Company Can Prosper Year After Year by Ram Charan and Noel Tichy

So look out for a series of book reviews in the near future as I go through these books. But currently I am busy reading Rushdie's "Shalimar the Clown". So these books would have to wait :-)

Hewitt Associates and ET's list of top employers in India

According to the 2007 list, as Veena mentions, 6 of the top 10 employers are Indian firms like AV Birla Group, Satyam, Godrej, TCS and Kotak Mahindra Bank.

What was surprising to see is that a company like Infosys which has consistently featured in the list has dropped out of the top 10. Also surprising is the resurgence of old economy companies on the list.

Looks like the focus of being a great employer has moved from being in the right industry to having the right processes for employee engagement and development.

Learning through Feedback

Yesterday, an ex-colleague gave me some blunt feedback. It made me defensive in the beginning, and for a second or two I was tempted to rationalize and give reasons why I might have behaved in a particular way or why people might have received some impressions about me due to certain behavior.

I stopped myself, because genuine feedback, even if it makes one uncomfortable - actually, specially if it makes one uncomfortable - is to be treasured. It is data about the impact of our behavior and can be better than most advice given to use.

That's because feedback leaves the choice of behavior change up to the individual. It forces you to think and ask, "if I am being perceived this way by some or most people, what are the consequences of altering this behavior and what are the consequences of not altering this behavior."

Value of feedback is actually after you process it. If you use it. And don't look to justify the reasons.

Allocating Resources for Strategy

It's my pleasure to welcome Ranjan Varma as a guest blogger on this blog. Ranjan is one of those people who makes finance simple to understand for people like me. In this post, Ranjan reviews a book on Optimising Corporate Portfolio.

As Indian companies continue to emerge and gain prominence on the world stage, those companies who outperform will be those who make better resource allocation decisions. Companies that do this consistently over time will lead their industries. It is time for corporates to strategise their Portfolio Management for competetive advantage and outperformance.

I like the word "strategy". Sounds good, no! Whenever I'm doing nothing at office and want to feel smart, I start "strategising on my options to leverage the resources at hand". Roughly translated it means, "I'm taking a nap".

Jokes apart, this is what I read in dailies:

• The total value of M&A involving Indian companies was about $37 billion (Rs 160000 crore) in two months of 2007 as against $20 billion (Rs 86000 crore) in the whole of 2006. Is there some grand strategy there?
  
• LIC, the Insurance behemoth, is in the process of carving two separate entities for its "Credit Card venture" and "pension business". Why is LIC diversifying into credit cards?
  
• Jet and Sahara have finally decided to merge after 10 month of battle. Is there value in the deal?
  
• Tata outbids CSN in the Corus deal? Did they pay too much?

I often wonder at the strategy behind the decisions.

"Optimizing Corporate Portfolio Management", authored by Anand Sanwal, is a useful book whose main premise is that where an organization allocates its resources is what truly drives it strategy and financial returns. So while company leaders issue strategy in presentations or in speeches, this is really not what creates strategy - it is where money gets spent that determines this.

Anand explains, "Let's take a very simple example of a company which has $100 to invest and whose leadership says that their main strategy is to focus on customer loyalty. However, when you look at where they invest their money, you see that $75 is spent on customer acquisition and $25 is spent on initiatives focused on customer loyalty. So even though the stated strategy is customer loyalty, the true strategy is one of acquiring new customers if you look at the resource allocation."

The book offers a practical methodology to bring this powerful discipline to your organization. The book is targeted at any organization struggling to figure out how to better allocate resources - this is every company and any sub-organization within a company, e.g., Information Technology (IT), marketing, R&D, sales, operations, product groups, etc who manage discretionary resources.

The book can be used to help general managers decide which product they should invest in or which country/region deserves more investment versus another. It advocates treating all investments as part of a portfolio whose risk and reward must be balanced - similar to the way a person tries to manage their money as a portfolio of investments.

The book also features case studies of successful companies deploying this discipline including AmEx, Cisco, HP, TransUnion and the State of Oregon. The case studies demonstrate that the CPM discipline can be used across organization of all types, across industries and also across for profit and not for profit (government) organizations.

I enjoyed reading the book and learnt a lot from it despite the agonising title (for a novice like me) !

PCRecruiter provides recruiting software to employers.

The Best Blogs in India

Uber-blogger Amit Agarwal has compiled a list of the most widely read Indian blogs, including bloggers of Indian-origin not currently in India. Hmm, Om Malik and Anil Dash are missing.

The great thing about it is that it seeks to segment the Indian blogosphere along subjects that they cover.

That seems a great way to help readers discover new blogs that they might be interested in.

Focused Search Firm

Was pleasantly surprised to see a US search firm that focusses only on HR talent called HR Search Firm. The only equivalent I know in India is my good friend Hari. However, he's got a one-person firm, whereas this US firm seems a little bigger than that :-)

Being niche, specially in a highly personalised business, like executive search, is a good option especially if you are not one of the top 10 biggest firms.

In India, for example, there are firms that focus on searches in the rapidly booming social and developmental sector too.

On happiness and job

After the last post, I remembered something and left it as a comment on Guy's post (refering to Penelope's myth number one)

Am reposting it here for you all:

There was some research that stated that people 'happy' with their jobs are those who take ownership in it.

There was this anecdote that Dr. Udai Pareek (on e of India's foremost consultants shared) about a similar research he was doing for a hospital. He found that the gatekeeper's ownership scores were much higher and correlated with high pride he took in his job. These were higher than even the doctors' and nurses' scores. On being asked why he took so much pride in his work, he said "If I don't regulate the visitors' times, the patients won't get well".

So maybe it's not just money or relationship that guarantee happiness..but maybe something more intrinsic to oneself and not in the role/job

Tom Peters vs. Penelope Trunk

Tom Peters blogs today:

Richard Branson does things that matter to him ... for the sheer hell of it. Personally, I think that's a very legitimate career and business philosophy. Frankly, the reason that I take on new stuff, and keep accumulating frequent flyer miles, has long been the unadulterated joy I get from doing what I do, and the sheer pleasure from marching in the opposite direction from the crowd. The same was true, if I may admit it, to me as a builder/junior officer, age 23, in Vietnam in 1966+.

While Penelope Trunk (quoted by Guy Kawasaki) says:

The correlation between your happiness and your job is overrated. The most important factors, by far, are your optimism levels and your personal relationships. If you are a pessimist, a great job can’t overcome that. (Think of the jerks at the top.) And if you have great friends and family, you can probably be happy even if you hate your job (imagine a garbage collector who’s in love).

The bottomline?

My guess is if you love what you do, chances are you belong to a minority compared with the rest of the workforce and will probably end up at Tom Peter-esque levels of success.

Other people will do well to follow Penelope's advice :-)

Alan Greenspan turns to consulting

Well according to this report:

Former Federal Reserve chairman Alan Greenspan, whose economic outlook continues to rattle world markets, has inked a consulting deal with Pacific Investment Management Co., the bond management giant.Mr. Greenspan will meet with executives at the Newport Beach, Calif.-based company once each quarter to discuss trends and Federal Reserve policy, according to published reports.

Mr. Greenspan will speak with Pimco executives as often as twice a week via conference call and e-mail.

He will also discuss Federal Reserve interest-rate policy with the firm, with the proviso that those conversations are kept private, according to a Wall Street Journal report.

There are two approaches to being a consultant. One is to get into it when you are young just out of a B School. The other is to build intense expertise over your subject all your life, make a huge dent in the universe and then watch others ask you for expertise. Rudolph Guiliani is also another example.

Wharton seconds me, sort of

A couple of days after I posted this, I see this article from Wharton (subscription required):

Many workers today hold positions at multiple companies during their careers, and may feel no particular loyalty to remain at any organization for any great length of time. By the same token, many companies feel no special loyalty to their workers.

Despite this sea change in corporate culture -- and in some instances because of it -- mentoring is just as important as it ever has been for younger workers looking to learn the ropes from more experienced employees, according to experts at Wharton and other business schools. Indeed, mentoring may also be more important than ever for organizations themselves, since linking up a mature mentor with a promising protégé is an excellent way to keep valued up-and-comers from jumping ship and taking jobs elsewhere.

Increasingly, management experts view mentoring not just as a one-on-one relationship but as a component of social networking, where protégés, also known as mentees, gain valuable knowledge by interacting with many experienced people. Mentees, for example, often look to more experienced co-workers for career guidance and professional advice and use them as sounding boards for ideas and problem-solving. Mentors also help employees learn about, and become acclimated to, an organization's culture and politics.

Yet these days, frequent job changes by younger workers could actually dissuade senior managers from volunteering to be mentors, since they may not wish to spend valuable time with someone who might leave the company before long. Therefore, young workers who want guidance should be more aggressive in seeking to build relationships with mentors than they were in the past, according to these experts.

Yes, the value that mentoring adds is most to the mentee :-) So what's stopping you from getting a great mentor. Are you looking hard enough?

K Pandiarajan on future of jobs

AK Menon quotes the Ma Foi head honcho on the inflection of job creation. A couple of interesting points he makes is:

Corporates have to invest in ‘creating’ talent to bridge the gap between the competency profile of candidates and the employer needs, by focusing on finishing schools.

With increasingly diverse structure of employment (outsourcing, remote teams, telecommuting, parttime,flexitime,interim management et al), commitment to a profession is gaining ascendancy in the employee’s psyche compared to loyalty to an organization.

As if on cue I saw a post by an entrepreneur, Abhishek Rungta, who runs a IT firm in Calcutta (or Kolkata, if you will!) where he says:

There is a lot to rant about the negatives, which we all do. I never liked the way education is imparted in our country and always wanted to grab the first opportunity to change the same.
Initially, Indus Net Academy will start with career oriented professionally taught courses on:- Web Design, Web Development & Internet Marketing. The course will be taught by experts who are practising these subjects at Indus Net Technologies and serving clients from all over the world. Teaching methodology will be a mix of classroom based core concept delivery, self paced study, research and discussion on important ideas, lab sessions and practical tips from practitioners of "how things are done in real life".

We are further backing up the courses taught in Indus Net Academy with guaranteed jobs by joining hands with companies who need the "industry-ready talent".

This is good news. Only with such initiatives will we be able to avoid the alarming future as predicted by TeamLease's India Labour Report, which Dr. Madhukar Shukla blogs about:

Coming Unemployment Explosion

India's working population in 2020 will be equal to India's total population when reforms started in 1991

Projecting current variables forward means 211 million unemployed in 2020; an unemployment rate of 30%

Unemployment will largely be a youth problem; nine out of ten unemployed are likely to be in the 15-29 age bracket

Inefficient Labour Markets

Unorganized employment grew by 31% versus Organized employment of 4% in the nineties

Labour laws may not be affecting overall growth but are influencing where jobs are created and amplifying the substitution of labour with capital.

HR attrition and retention

Sanjay thinks that HR people's high attrition in some industries is symptomatic of their lack of belief in their own talent retention practices.

So my simple thought is follow the old wisdom of 'charity begins at home'. All you guys in HR first think of programs to retain yourselves before you embark on making successful retention plans for the others, your own conviction will make the programs much more successful than anything else.

There are a number of reasons why the HR attrition is high.

One, traditionally, there have been very few HR focussed post graduate education in India. With the result that HR leadership talent is very limited compared to the number of openings. That is why certain industries like IT services, outsourcing and insurance have HR leaders who might be considered very young. It is also the reason why non-HR leaders are moving to HR.

This is coupled with the growth of people intensive businesses in India which should ideally have a higher HR professional to employee ratio than a capital intensive business.

The fact remains that it is not HR people who control the budget and whom the retention programs target. That focus remains to be the line employees, and HR remains a facilitator. However, once that starts to pinch the business, I am sure retention programs focussed at support services like HR will come to be rolled out.

Where I disagree with the Brazen Careerist

Guy Kawasaki interviews my blogger friend, Penelope Trunk, the Brazen Careerist, on his blog, and while I am a big fan of Penelope, here is some India specific thoughts I have.

Is it more important to be competent or likable?

The ideal answer is that you should be both. However, if you lack certain un-trainable competencies, like empathy for customers or employees, then it's unlikely that you'll be very likable. So I'd choose to be a likable, but not where that would interfere with my ability to take hard decisions about people, if need be.

When should I ask for a promotion?

In India where 8-14% salary increases are the norm and new industries are being created every year, asking for promotion is a good idea. However, do it when you think you are ready to deliver in the new role. There are certain organizations that will give you a responsibility before you are ready for it, and you'll have to settle for a salary that consummate with that.

If you don't ask for a promotion in certain high growth industries, then people might think you are not confident of your abilities and you'll probably never get the promotion.

Is being a generalist or a specialist the path to the executive suite?

I agree with Penelope on this question, though if you really want to be a CEO, you need to become a generalist again, with a different perspective. Even functional head roles need you to step out of a specialist role into a generalist role. You should be a T-shaped manager. Depth in one or two areas and breadth in many areas. Read my post on whether you should be a generalist or specialist in HR.

Will getting an MBA or any other type of advanced degree be a good use of time and money since I can’t find a job?

In India, yes. An MBA is simply the way recruiters use a filtering process because they can't visit all the colleges. However, if you graduate from the biggest brand name colleges in the metros, then an MBA is becoming more and more redundant.

By the way, Penelope has promised me a galley copy of her book. So when I get it you can look forward to my take on it too :-)

Nandini beats Jeremy

In the blogger network founder face-off !

Jeremy Wright is the founder of b5media, a very successful network that includes some flagship blogs like Problogger.net and Copyblogger. Nandini Maheshwari, on the other hand, is the mind behind the Instablogs community, a blog network that is growing very fast.

Compensation Consultants under the scanner

In the US members of Congress are looking into the potential conflicts among executive compensation consulting firms that do other lucrative work for the companies whose pay they help devise.

From the NY Times:

The companies — Hewitt Associates; Mercer Consulting, which is a unit of Marsh & McLennan; Towers Perrin and Watson Wyatt Worldwide — confirmed yesterday that they had received a letter dated May 8 from Henry A. Waxman, the California Democrat who is chairman of the oversight committee.

As executive compensation has grown in size and complexity in recent years, pay consultants have become increasingly influential at corporations. And as critics decried rising levels of executive pay, compensation committees of boards justified the outlays as a result of work done by outside consultants.

But the consultants charged with advising on pay were often employed by large companies providing other services — like actuarial work on company pensions and the outsourcing of employee benefit programs — to those same corporations. Contracts for these services often generated significantly more revenue than those involving advice on executive pay.

In 2006, for example, Hewitt generated almost $2 billion in its outsourcing unit while the consulting segment, which includes executive-pay advice, generated about $850 million.

In his letter, Mr. Waxman noted that little is known about compensation consultants’ other business relationships with a company “because the Securities and Exchange Commission does not require companies to disclose whether executive compensation consultants perform other services for management.”

The potential for conflicts among pay consultants is reminiscent of those in the late 1990s among accounting firms that performed lucrative consulting services related to information technology and tax issues for the same companies whose financial results they were charged with certifying. After the S.E.C. required companies to disclose what they were paying in consulting as well as audit fees, the industry moved to separate the two businesses.

But in overhauling its disclosure rules on executive pay last year, the S.E.C. did not require companies to disclose details that would signal potential conflicts among consultants, like the type of other work done by these consultants or the revenues earned under those arrangements. The commission did require public companies to identify the consulting firm or firms hired to help devise executive pay standards, however.

Because companies do not need to disclose these details, investors are in the dark about potential conflicts among consultants that wear two hats at major companies.

Hmm, interesting!

Unspoken Norms

Steve asks do you know your company's unspoken/unwritten rules/norms?

It's a fascinating post and talks about how the penalties of breaking such norms can be severe. As he says:

If you upset your VP, the rest of the department conducts leadership programs in Europe and the Caribbean. You conduct supervisory training in North Dakota. In winter.

Organizational norms are unsaid, unspoken ways of doing things. In other words, they are culture and climate, all those big words we OD guys speak about, in action.

Changing and challenging it should be done with the support of someone senior, preferably the CEO. Because, often, the culture is in the image of the personality of the founder, or the person who shaped it most. Like McKinsey's culture is the personality of Marvin Bower, and Intel's is Andy Grove and Apple's is Steve Jobs.

In fact, there is a fascinating start-up firm I am talking to (if all goes well, might become a client) for assessing their culture. Just assessing. We're not talking about change yet. It's amazing to see how locations and age of the offices can impact the culture within different parts of the organization.

These norms are what influence the so called "profile fit" during interviews. It's about seeing whether the person will gel with the others and the overall culture of the office he/she is being considered for.

These norms also influence a lot of promotion and career decisions that get taken about individuals. It also influences why certain talented people can't make and impact and certain others do.

So what's the unspoken norms in your office?

HRO doubles

A TPI report states:

The number of companies that have outsourced a human resources (HR) function doubled from 2004 to 2006, TPI's research shows. This growth, coupled with the fact that the majority of these companies also have multiple HRO processes in place, shows the need for better tools to help maintain quality, consistency, and efficiency for the industry.

Working with HRO providers, TPI created a framework for a common taxonomy for HRO services, as well as standard pricing units and a robust set of service levels across all HR processes. As the HRO market continues to mature, TPI expects to see more standardization for service offerings, pricing norms and service levels.

“In the early years of HRO, there were different ways of describing, pricing and measuring services,” said Debora Card, project director of Human Resources Advisory Services at TPI. “As the market continues to mature, we wanted to combine input from the major service provider experts in HRO with TPI’s depth of expertise in the market to rationalize some of these basic constructs across the industry.”

Of course, there will be a lot of HR services that will not be very easy to categorise, like outsourcing training (Which can range from outsourcing delivery of training, to outsourcing design and delivery too, or even outsourcing training needs analysis) and recruitment (from contingent recruiting to higher-end retained search). And what about skills like Organization Development (OD) that are typically outsourced because it's not a regularly used in organization. I guess this report did not focus on these kinds of outsourcing, but merely the systems side of outsourcing like HRIS, Payroll and the like.

US CEOs tapping overseas talent

According to a Deloitte survey reported in Consulting Times' May edition:

High-quality employees are the biggest contributors to company growth for 67% of the CEOs surveyed, consistent with 66% last year. Finding, hiring and retaining qualified employees is the biggest operational challenge for 48% of the CEOs, up from 41% last year. To attract employees, 69% are relying on equity compensation and stock options, down from 71% last year. Just over 50% offer flexible hours, up slightly from 49% last year. Training programs and educational opportunities are offered by 38% of the companies, up from 35% last year, and 31% provide a career path, up from 28% last year.

"When it comes to talent, supply and demand are out of balance, making employees more like consumers," explained Jeff Alderton, a principal at Deloitte Consulting. "And like consumers, if employees with those indemand skills sets are not receiving the satisfaction they seek from their workplace, they will find it elsewhere – with the competition. This will put an even greater strain on employers for available talent."

CEOs say their companies are turning to overseas talent, with 45% of those surveyed saying that they are currently offshoring, and 55% saying they plan to offshore in the next five years.

Well, if employees are more like customers why can't HR deploy all those cool marketing tools that marketers use for customer profiling, segmentation and retention, as a good friend of mine suggested.

Indeed, why not?

Get a career mentor

One of the secrets of success I have come across a lot when I interact with successful people is that they have rarely learned everything themselves.

A lot of them have great mentors who shorten the learning cycle and become useful sounding boards when they are faced with any kind of questions or dilemmas.

When I use the term career mentor I also mean a career coach, and while there are differences in these words, the person I am basically asking you to get for yourself is a senior person, who will be your friend, philosopher and guide.

But why would he/she be a mentor for you?

It starts with the chemistry. People get drawn to people who are like them or whom they role model. While organizations can choose mentors/coaches without focusing on chemistry, if you want one who would guide you in your work life, then chemistry and personal relationship becomes very important.

Usually your chosen mentor would be in a similar industry and function like you want to pursue. Helping them keep up with news and new developments will also help them realise that a mentoring relationship is likely to help them too. It's not only the mentors who help in mentees learning. In a lot of ways, reverse mentoring is quite common. If you two can strike a complimentary balance, it's great.

Listen to the mentor, to learn. However, more than that, observe to learn. Often, the biggest learnings are not what the mentor does but how he/she does. Often, they are unaware of these. Observing them will help you get that insight. This is called tacit knowledge.

So who is your mentor?

Business blogging taking off

One of the most effective business blogs I have seen from an Indian firm is the Magicbricks.com blog (by a real estate dotcom).

Of course, my vote would go to Tata Interactive Systems' blog for the views and conversations it builds.

In the meantime Naukri has refurbished its recruiter blogs UI and now offers a featured blogs section that seems to highlight the blogs that employers are taking effort to build rather than have just dry job descriptions. Check my first post here.

What are the examples you have of Indian firms using blogging well?

Recruiting through Second Life

Do you want to apply for a job at Microsoft, but you're not in the US?

Have no fear, 'cause Second Life is here.

Microsoft's international recruiter-and-blogger (and good friend) Priya says it here

We're participating in a worldwide virtual career fair in Second Life from May 15th through 17th. Second Life is a very cool, wildly popular virtual world, and we'll be meeting and interviewing candidates during the job fair on "TMP Island", so named because of the career fair hosts, TMP Worldwide.

In fact, recruiting through Second Life is becoming all the rage, as this Fortune article shows. It's not just tech recruiting even consulting firms like PA Consulting of the UK used SL for recruiting consultants.

And it's not just recruiting. IBM now is using Second Life to conduct employee orientation and mentoring!

Intrigued? Read more about Second Life here.

Dave Ulrich on Leadership

Organisations are focusing too narrowly on the personal attributes of leaders rather than paying attention to the critical connection between leadership abilities and business results, according to Dave Ulrich.

“Leadership as a process is more crucial than the leaders themselves.”

He urged delegates to build systems that sustain the next generation of leaders. “If you want leaders in your organisation to be innovators, you must have innovative HR people implementing innovative HR systems, otherwise you’re going to be in trouble,” he warned.

Well looking at the HR people and HR systems existing today, it's no wonder that the innovative leaders are usually the entrepreneurs.

Udai Pareek's Blog

Anagat Pareek (Dr. Udai Pareek's son) left a comment on my previous post letting me know that Dr. Pareek has started blogging !

Go check out OB and HR, where he has a very thoughtful and insightful post on Transformational HRM.

As he writes:

The transformational functions of HR will include the following: HR people must pursue these.

Talent management: Searching, nurturing, mentoring

Finding, developing and keeping talent are among the top concerns for human resource (HR) executives for 2007, according to the ORC Worldwide HR Priorities Survey, which annually polls a group of global HR executives from a cross-section of industries.
Every six out of 10 respondents (61.7 percent) said the most pressing strategic HR issues companies will face in 2007 fall into the realm of "talent management”
Among the most important issues ranked were leadership development and succession planning, HR technology, workforce planning, executive compensation and diversity, respectively.

Climate of trust, equity and involvement
Change management, including mergers and acquisitions
Leadership
Ethics and social responsibility
Reward system

The following preparations are necessary for HR to play strategic role and to become a competitive advantage.

Thorough knowledge of the business and its various aspects
Thorough knowledge of, and expertise in, applied behavioural science
Consulting and research competencies

The various institutes of management preparing young HR professionals must make sure that the students get thoroughly oriented to play their role in this respects

I hope so too ! Welcome to the blogosphere Dr. Pareek !

Interested in sponsoring the Hyd XLRI Alumni Meet?

Ok, this is a break from regular programming.

Apart from the many things I involve myself in, I am also the de facto co-ordinator for the XLRI alumni activities in Hyderabad.

As usual, we are having our annual meet in the last week of May, and if your organization is looking at getting visibility in front of some CXO level and other major decision makers of corporates in Hyderabad - you can choose to sponsor the alumni meet.

There are a lot of sponsoring options, and if you can drop me a mail, we can talk about them over email. (Read about previous years alumni meets here and here)

Now, back to regular programming.

Crazy salaries across Asia

Very interesting article from FT.com (Hat tip: Shariq) on the talent gap in Asia's financial and IT services industry.

A combination of strong economic growth, corporate ambition and a limited pool of managers and specialists has plunged Asian companies into a battle for top talent, from casinos in Macau gearing up for business to boom towns in resource-rich western Australia desperate to attract mining engineers.

Salaries for top performers are being bid up to unheard of levels. Even Indian software engineers in Silicon Valley are returning home attracted by high ex-pat salary packages and senior positions, as are Chinese and Japanese-born bankers working in London and New York.

Which companies win this war for talent will go a long way to deciding which will succeed in the Asia Pacific region.

The consensus is that recruiting and retaining skilled workers in Asia is harder and more expensive than ever. Headhunters warn that the inability to fill key positions with qualified people, mostly at senior level, is denting the regional expansion plans of many companies.

The struggle to hire qualified staff is most acute in financial services, a sector whose fortunes are closely correlated with the level of growth. Demand for consumer banking in India and China is soaring and investment banks are adding personnel to service the region's emerging acquisitive corporations.

In addition,private equity firms and hedge funds have mushroomed over the past year, pinching scores of the region's top investment bankers along the way, while the region's newly-minted millionaires are demanding world-class wealth management services.

The boom in financial services is also having knock-on effects in connected support industries such as accounting, law and public relations.

A key problem for recruitment is the lack of fungibility of personnel across the different markets of the region, with its varied cultural, political and linguistic traditions. Headhunter Kevin Gibson, managing director of Robert Walters Japan, says: "You can relocate a Mexican to Argentina or an American to the UK. But you can't move a senior manager from China to Japan unless they speak the language and enjoy the culture."

One senior Hong Kong-based executive for a global investment bank describes the situation as "crazy". He said: "Banks are short of good staff all over the world but Asia is the hottest place by far. I have 28-year-olds coming into my office telling me that they are resigning because they have been offered a $1m job." The executive blamed the wage inflation on a combination of factors, including new entrants who pay huge premiums to attract staff, the growth and expansion of hedge funds and private equity firms and the expansion plans of existing players. "It all means that there are too many potential employers chasing too few people," he says.

As well as drawing from the well of investment banks, PE firms expanding in Asia have started to adopt US and European practice by luring senior industry executives. In recent weeks Carlyle Group of the US has poached the regional heads of Coca-Cola and Delphi to oversee the firm's future investments across the consumer and industrial sectors respectively.

The frenzy is thought to have prompted the Singapore government to broker an informal non-poaching agreement that effectively protects two local banks, DBS and OCBC, from aggressive foreign rivals.

In China, analysts describe the talent shortage as "acute". Steve Mullinjer, head of Heidrick & Struggles China practice, says: "There is a paradox of shortage among the plenty." He believes that China requires 75,000 quality people to fill senior vacancies at multinationals and expanding domestic companies but can only supply around 5,000 candidates with suitable experience.

Wage inflation is running so hot that a locally-born general manager for a multinational can earn 20 per cent more than a counterpart in the US "with only 75 per cent of the skills set", he says. "The reality is that executives in China are getting over-titled and overpaid. Underperformers who leave often resurface in jobs earning double the salary."

The talent shortage is also keenly felt in India, especially in the financial services and information technology sectors.

Business is growing so fast that the industry's lobby group has estimated that the Indian IT sector faces a shortfall of 500,000 professionals by 2010 that threatens the country's dominance of global offshore IT services.

Blue chip IT companies are plundering the entire talent pool across industries, stealing civil engineers and graduates from other disciplines and turning them into software engineers. This has left acute shortages in industries such as construction.

Azim Premji, founder chairman of India's Wipro, one of the world's leading IT companies, says: "The multinationals are going berserk and are unnecessarily paying premiums to fill the positions."

The effect on pay rates has been predictable. According to Hewitt Associates, the consultancy, average salary increases in India are running at more than 14 per cent a year, compared with around 8 per cent in China and slightly less in South Korea and the Philippines.

Dinesh Mirchandani, managing director of the India practice of Boyden, a global search firm, said that the annual salary for the typical chief executive of a mid-cap multinational in India, with just $100m sales, has doubled in the past five years to $250,000. He says: "At senior levels, the pay gap between those based in India and those elsewhere has narrowed dramatically. I even have an Indian national chief operating officer in a multinational here who is earning more than his Dubai-based boss." Mr Mirchandani cites BP, Citibank and PepsiCo as multinationals that have prospered because they recruited and retained staff successfully by introducing favourable human resource policies.

The recruitment market in Japan has tended to march to its own beat. However, the country's economic recovery has created bottlenecks in sectors such as financial services, retail and pharmaceutical, while sectors such as precision engineering have been boosted by insatiable demand from China for their products. The talent war even has its plus points. One US investment banking executive working in Asia says that the situation has made it easier to get rid of under-performing staff.

Seems like Asia is the place to be ! No wonder that lots of US and UK managers now see an Asia stint as a 'must do' on their resumes.

The purpose of business

David Maister asks who do we run the firm for? Any ideas?

I'd like to think that the purpose of business is to meet the needs of customers. And to make a profit by doing so.

And not just needs. It should also be able to do new things. Things for whom there was no apparent need. Who is the shareholder, or how much the business transforms is actually not that important.

In fact, if a business is seen as a living being, then not too many businesses survive for long.

So for society, the focus of businesses have to be the production of goods and services that make life and communities better. For businesses themselves however, the focus has to be continous learning and innovation. I blogged earlier on Arie de Geus's thoughts about it too. (another post)

That is how a riverside paper mill in southwestern Finland can grow to become a global telecom leader. Or how a conglomerate traces its roots back to a medicine and book shop four centuries ago.

On Udai Pareek

Don Taylor left a comment on my post earlier saying he wanted to know about Prof. Udai Pareek.

Well, what all can we say about Prof. Pareek. I came to know about him first because he wrote the textbooks that some of us studied. Along with his friend and colleague Rolf Lynton, he wrote the two books on Training for Organizational Transformation. For me Udai will always be an author first and foremost.

He was also one of India's first process facilitators, and along with TV Rao and others in the early 1970s was the founding member of ISABS. You can read his story in his own words here.

On a different level Prof. Pareek is the author and designer of some of the most useful psychometric instruments that I have come across. His book on questionnaires and psychometric instruments is a must have for any trainer-facilitator. In fact, currently I use his questionnaire on Enlarger-Enfolder in a training program on Personal Effectiveness.

He's one of the biggest giants of the OD movement in India, and even now contributes to the understanding of the discipline. He's also interacted with the other giants of the field like Erik Erikson, Doug McGregor and Warren Bennis.

Too bad there's no wikipedia page of Udai's or other Indian OD stalwarts like Pulin Garg, Dharni Sinha.

Reasons Not to change a career

Penelope Trunk tells you not to change a career when:

You hate your boss
You want more prestige.
You want to meet new people
You want more meaning in life
You want more happiness

So when should you change your career? There's only one reason in my book (my yet unwritten book ;-) to change careers, when you have skills that you will utilise more and will earn you more in another career than your present career.

For example, I did my graduation in hotel management after school, thinking it would be great for someone like me who was people-oriented. This was self-diagnosis and in the early 1990s there was no real way for someone to get career counselling. At least, not in the small towns like Lucknow where I grew up. The other reason, of course, was that I was academically not bright enough to get into a good engineering or medical college.

So I did my bachelor's in Hotel Management from a place called WGSHA in the campus town of Manipal. After three years of studying hotel operations along with general management subjects- like Organizational Behaviour, Economics, Marketing - I graduated in 1994 and went for my first hotel job to a place called Aurangabad at a princely salary of Rs. 3000 per month. And you know what? I didn't like it.

So after 14 months I wandered into sales. I discovered I was great at opening sales but was lousy in closing it. So when I worked in Pharma Sales (in Agra of all places!) my sales figures spiked in the beginning and then died down.

That led me to realise that HR is probably what I should be doing. I observed the HR manager of my firm then (Eli Lilly) Mr. Sandeep Dayal, and I guess I role-modelled my career on him. Next thing you know, I quit my job, sat at home for 6 months and prepared for XAT.

I was finally a MBA in HR in 1999.

What if I had not found my calling in HR? A lot of people wander into careers because of external factors (family pressures, comparison with neighbours etc.) Some people don't realise that they belong somewhere else.

There are careers being made and unmade as we speak. If you focus on what you do well - then you will discover the right career for you.

HR News - the SAPPHIRE Newscast

News from the HR World
Compiled by the Students Association for Promotion of Personnel management, Human resource and Industrial Relations (SAPPHIRE)

XLRI, Jamshedpur

Talent crunch makes RPO hot

With the country set to face a talent crunch of half million people in the next few years, Recruitment Process Outsourcing (RPO) is posing a lot of opportunities. With emerging sectors like retailing and IT, the need for focused players in recruiting as RPO service providers will increase, according to human capital management company Kenexa Technologies.

It is estimated that within the Indian market, the total annual spend on recruitment is Rs 700-800 crore. This can theoretically be considered the potential size of the RPO business, a subset of human resource outsourcing (HRO), that can be generated from locally-based companies.
“Hiring pressure is forcing companies outsource the entire recruitment cycle from needs assessment to sourcing, screening, and interviewing candidates, and hiring.”

To find out more click on the title

Mid-life crisis hits booming job market

Getting that sinking, 40-something feeling? You’re not the only one. Even as the turbo-charged Indian economy is sucking in lakhs of workers, the latest available unemployment data shows that only one age group is being left out of the job bull run — the faltering 40s.
The phenomenon is not limited to emerging on-the-job issues such as promotions, handling new projects or increments where younger employees are getting a preference. It is actually reflected in the numbers of those registered as unemployed.

According to the India database of the International Labour Organisation (ILO), based on the information compiled by employment exchanges, 9.3 lakhs jobseekers were absorbed into the workforce in 2004. This brought down the total number of registered unemployed to 4.04 crore. The sting comes in the age-group classification tale: a major part of the drop in the number of unemployed was in younger age groups and even the older ones, but the number of unemployed in-betweens — the 40-to-50 range — increased by about 80,000 in one year.

To find out more click on the title

Docs with MBA degree are hot property

As corporate hospitals go on a massive expansion drive, experienced doctors with management degrees are now hot property. According to head hunters, doctors with management degrees can earn a hefty premium with the differential being as high as 20-40% compared to a doctor without any management skills.

Artemis Health Institute COO Somnath Chakravorty says, “With the entry of corporates in the healthcare sector, the investments in hospitals are very high. Hospitals need to be run efficiently both operationally and financially. Since the core of the business is medicine, professionals who fulfill both requirements are a golden combination”. In a bid to make up for the talent crunch hospitals are looking for several options. Says Vipul Prakash, partner and MD of Elixir, “The talent pool of doctors with MBAs is small and hospitals are sponsoring doctors to get an MBA degree.”

To find out more click on the title

Work Force Management

Work-life balance to be the greatest challenge for HR

Raghuram Reddum, director, HR, Motorola India, talks about the cell phone major’s journey in India and HR challenges that the country faces today.

Work-life balance would be the greatest challenge. It will not be limited to the traditional definition of ‘work’ as we know, but it will be a challenge to get a balance for working professionals, school kids, college-goers as well as house wives who spend a major portion of their waking hours working for the family. Stress levels will be higher.

To find out more click on the title

International

Promotion of staff well-being can deliver return on investment

Organisations need to be more proactive when thinking about wellbeing if they are to demonstrate a return on investment (ROI).Stephen Bevan, director of research at the Work Foundation think-tank, said that while long-term illness did have an impact on work, the workplace was not the cause of most chronic health problems.

He stressed that a cultural shift was needed to put the responsibility for personal health back with the employee. "Individuals need to be empowered to take more responsibility for their lifestyles," Bevan said. "Organisational culture has to change to promote better well-being rather than continuing to adopt a reactive approach to sickness."

However, while the public sector had higher sickness absence rates than the private sector, Bevan said that was a reflection of there being more female workers with caring and childcare responsibilities. "There are more women, but there is also better sickness absence reporting," he said.

To find out more click on the title

Recruitment

HR firms eager to recruit aged workers!

A recent survey by human resource consultancy firm Manpower Inc shows that a skill shortage is now forcing organisations to recruit older workforce, reports CNBC-TV18.

A talent crunch is causing employers to consider recruiting people over 50 years of age, reveals a survey by Manpower India. It surveyed over 4,700 employers, across seven industry sectors, of which, 14% have specific recruitment strategies for older people. Only 16% of the firms that were interviewed have retention strategies in place, which explains the talent crunch problem.

Out of the seven sectors surveyed, topping the list is public administration and education sector at 20%, with the transportation and utilities sector at a close 17%. Experts feel that employers need to take a second look at their older workforce, as their knowledge and experience can lead to greater profits.

To find out more click on the title

Attrition

Attrition rates high among HR professionals

Human resource (HR) professionals in companies, who are expected to play a crucial role in healthy management practices that will help lower attrition rates, are themselves witnessing one of the highest attrition rates of nearly 70-80%, according to industry experts.

The primary reason for this is the severe dearth of HR professionals. The number of HR professionals graduating from various institutions every year is just about 1 to 2% compared with other professionals like chartered accountants, management graduates and engineers. This has led to new businesses poaching heavily from established companies that possess experienced HR teams.

To find out more click on the title

Study: M&As Can Lead to Talent Loss

Mergers and acquisitions can have a negative impact on employee opinions about their company, according to new research by the Kenexa Research Institute.

In a report based on the analysis of data taken from a representative sample of 10,000 U.S. workers, research shows that M&As undermine an employee's feeling about the company and can prompt many to seek new jobs. Not surprisingly, deals that resulted in layoffs had an overwhelmingly negative affect on employee confidence.