Global mega trends

Economics, Society and Business

In a world undergoing change where there are few certainties, it is useful to anticipate and plan for trends. These trends will affect us as individuals and the types of organisations we work with.

As a regular facilitator of strategy planning workshops I am always interested in the analysis of future trends. Today I share with you the views of Professor Joe Nellis of the Cranfield management school.

The trends themselves are unsurprising but the accelerated pace of change is what impresses – and frightens. Our question is what are the implications of these trends?

Professor Nellis divides the trends into three areas; Economics, Society & Environment and Business.

Economics – 3 trends

The massive realignment of economic activity from the West to the East is unprecedented. Today China accounts for less then 10% of world GDP, by 2050 it will be probably be the world’s biggest economy and have a GDP share of 25%. India is also pressing strongly behind China, and of course the US will remain a dominant force.

This economic growth in emerging economies will generate a demand for improvements in living standards. Citizens from emerging market countries look for improved public services; more schools, hospitals, infrastructure and better policing. This demand will result in an anticipated huge growth of the public sector in these countries.

Finally, the third economic trend is the unprecedented rise in the number of consumers in emerging and developing economies. Consumers with similar spending power to that traditionally associated with the West. It is predicted that there will be 1 billion of these consumers with needs to satisfy. Nellis says “such a demand to satisfy has never happened before in such a short time scale”.

Society & the environment – 4 trends

For the first time in the history of the world, people all over the world will be able to communicate with each other. Increasingly people in developing economies are gaining access to technology. In this connected world there will be a massive growth in interactivity. More companies will interact with other companies, and interact with individual consumers. This deepening globalism will, says Nellis “have profound implications for the world of business and society”.

Taking the number of university graduates as a measure of the future talent pool; the developed world produces about 16 million graduates per year. The rest of the world is graduating 33 million students annually. There will be an “exponential growth in the talent pool coming from countries of the emerging markets and the developing world.”

The shortage of natural resources is a trend that is widely accepted. The search for natural resources is intensifying. China is securing natural resources all over Africa to feed its economic growth, in Cornwall tungsten mines are about to open and closer to home there are plans for oil exploration offshore from Dalkey in Dublin.

The last societal trend he mentions is the increase in the lack of trust in big business (and in politicians). Corporate governance is increasingly important for larger companies, and how it can be used “to their advantage and to the benefit of society”. Pay and remuneration must be tied in to performance, and directors must be accountable to shareholders and realise the consequence of their poor decision making. (What measures have been made to recover the 1990s bonuses from Irish bankers? And why are failed Irish politicians being paid large pensions before they reach the pension age of 67?) 

Building trust is about actions, delivering promises and not the empty words from corporate PR and “public affairs” executives.

Business – 2 mega trends

There are “massive issues” to be faced in industry and in business.

The first is the availability of information through search engines on the internet and sites like Wikipedia. How will managers deal with information overload? Can products and services be mass customised for individuals and not only for market segments? The use of information is a huge opportunity for businesses, and “dealing with the overload a significant challenge”.

A combination of all of the above, of the increasingly connected and trading global village is that industry structures will change. New global networks will emerge as well as bigger companies (many of them state owned in emerging markets). Nellis anticipates “different business models and developments concerning the way in which companies interact with each other”.

Big Change is here

How can managers “manage” in this world of increasing complexity? Nellis suggests there is no choice, “if you don’t like complexity, don’t go into management!” The right talent must be recruited to run companies in a much more complex environment.

Gone are the 50 year economic cycles identified by the Russian economist Kondratiev. There has been a major seismic shift, the cycle of economic change is now much shorter, 10 to 15 years. Challengingly, a manager’s career will endure several seismic shifts. Previously managers would have lived through for example one or two economic cycles of ‘growth to recession’. Organisational change will need to be delivered quicker, and better.

Short term focus will no longer suffice, “a successful manager must stay focused on the horizon”. The pace of change is accelerating as has never happened before. “Address these long-term drivers of change now”, Nellis asserts, “or you may be heading for extinction”.

The question facing leaders is how can an organisation take advantage of these global movements?

Joe Nellis, Professor of International Management Economics, Cranfield School of Management, www.som.cranfield.ac.uk/som/

Billy Linehan of Celtar has much experience in strategic planning with clients, facilitating workshops in planning for change. Based from Dublin, Billy has a long term interest in future thinking and is available to work with you in anticipating future trends and how they will affect your business or organisation. Contact Billy at billy.linehan@celtar.ie to benefit from the input of an external adviser into your strategic thinking and business planning.  

How to Get Started, Implement and Deliver Results
in a very difficult environment.

I see that change management consultants Eddie Molloy, Ian Kierans and the Advanced Organisation team are holding a new training programme for senior managers in the coming months.

 Eddie has received national attention on TV, RTE radio and the Irish Times for sharing his articulate perspectives on the need for transformation in the public sector. He and his expert team have also worked extensively in the private and NGO sectors.

Having a attended a similar programme four years ago, I can testify to its value in terms of understanding the dynamics of change – and it’s effectiveness in ensuring the delivery of results.

To quote Eddie on today’s environment

“In the 30 years I have been assisting companies with managing change, I have never seen so many organisations across all sectors facing such difficult situations. To survive most of them need to change – radically and quickly.

Change rhetoric is commonplace today. However to make change a reality remains a complex job that requires a mix of capabilities from ‘hard’ ones (e.g. rigorous programme management, restructuring, process reengineering) to ‘soft’ (culture change and stakeholder engagement).

If your organisation is faced with managing significant change and you are serious about getting real results then this programme would be invaluable to you and senior colleagues.”

For full details including modules, possible dates, prices and method of booking email ed@advancedorganisation.com

Also see

www.advancedorganisation.com

Useful information from Celtar, advisers for business

Contact 086 608 6991

Research shows many sales behaviours are ineffective

It’s been said that if you want to recruit good sales people “hire optimists”. Working with many sales managers over the years, we have debated what makes a “good” sales rep many times.

Here’s a look on the right behaviours for sales people – and the wrong behaviours!

I refer to an interesting piece of research on improving sales people’s performance, most recently a commentary from HBR adding to earlier research from Cranfield – links below to the research report and HBR site.

Cranfield worked with data, provided by sales consultancy Silent Edge, analysing the performance of 800 sales professionals observed in live sales interactions.  The report identifies eight sets of behaviours in sales meetings.  By understanding these behaviours, managers could effect changes in their current sales force and recruit better team members in the future.

The bad news is that only three of the eight behavioural types, a mere 37% of the sales force, were effective.  However the good news is that behavioural tendencies can be managed over time encouraging sales people to adopt behaviours of the most effective types.

Lynette Ryals, Professor of Strategic Sales and Account Management at Cranfield School of Management, co-authored the article with Dr Iain Davies, a lecturer at the University of Bath. 

“The most exciting part of our results is how the behaviours of these sales people are linked to their success” says Professor Ryals. “This is an important report for companies wanting to improve their sales performance.”

“The results of the research are ground-breaking,” claims Silent Edge’s CEO Russell Ward.  “For the first time organisations are able to identify what types of behaviours they have in their sales forces giving managers invaluable knowledge to develop their teams.  This is where Silent Edge is leading the market and we’re helping our clients achieve incredible performance improvements using our innovative evaluation and development tools.” 

The eight behavioural types are

The best

Experts

Closers

Consultants

The rest

Storytellers

Focusers

Narrators

Aggressors

Socialisers

To identify the behaviours of your sales team read the article in the Harvard Business Review here: http://bit.ly/d8We4F or read the full research report here: http://bit.ly/h0GMTz

 Sources

Cranfield University School of Management

Silent Edge, UK based sales training consultancy www.silentedge.co.uk

 Free mentoring, seminars and information

This is a day I am actively supporting and it might interest you or some one you know?

No need to mention what times we’re in, but one positive event happening before Xmas is Your Business Day, a day of free advice and information from the Dublin City Enterprise Board on the 9th of December .

There you will be able to

• consult with experienced mentors from the DCEB panel
• listen to and question clients of DCEB who are leading by example in their small businesses
• listen to and question a range of speakers who will offer ideas and tips on how to compete and grow your business at home and abroad
• network with other business owners

For: owner managers of small businesses, business start-ups, DCEB  clients and anybody else interested in starting a business in Dublin city

Place: the Science Gallery www.ScienceGallery.ie

Location: corner of Pearse Street and Westland Row

Date: Thursday the 9th of December

Time: 9.00am to 4pm

To book your free place go to: www.dceb.ie

Sponsored by the Science Gallery and Ulster Bank

Billy Linehan, Celtar management consultants

Comments on performance management

A characteristic of motivated companies is how they use remuneration and reward strategies to align the goals of people with those of the company.
At Celtar we observe that in many organisations staff are rewarded for average performance. High performers are not encouraged to maintain their performance as there is little recognition of – or reward for – an above average contribution to company objectives.

Often staff, including managers, expect to be rewarded with salary increases for being “in the job”, and individuals appear to work under the maxim

Generally staff and managers would prefer a fair system. The following reward policy makes sense to many;

• A bonus rewards extra value to the company in a current role
• A salary increase rewards extra responsibilities which could be in the current role OR extra responsibilities arising from a promotion. (The increase may be rescinded if responsibilities are inadequately met)

Q. How can reward and benefits policies attract, retain and motivate the best possible workforce to achieve your business objectives?

Ask yourself the following:

1. How competitive is your company compared to similar businesses? Do you match the salaries of your competitors?
2. What benefits do your employees really value? The value of benefits varies for each individual.
3. How can you design a reward and benefit policy that motivates each employee to contribute to your overall success?
4. How much will new reward policies cost your company? What can you afford?
5. Do you need different reward policies or salaries in order to attract and retain employees for different positions?
6. Do your employees understand your rewards policy? Are they clear that there is a relationship between rewards and individual and company performance? How effectively are you communicating the benefits?
7. Could you save money by outsourcing certain payroll administration?
8. How do you collect and analyse employee data (eg. time worked, pay rates, overtime rates, special benefits, holiday time, sickness and other leaves etc.) for reward and benefits purposes? Could special human resource management software improve cost-effectiveness?

The simpler, the better. Performance pay systems, to be effective, require people to understand how their performance is assessed and how their individual performance affects company performance, for example the relationship between IPIs (individual performance indicators) and departmental KPIs (key performance indicators).

Perhaps reward effort as well as performance? Performing well on a difficult task may be rewarded more than an outstanding performance on a less difficult task. It is important to convey this when setting targets, otherwise people may be tempted to try to set easier targets that they know can be exceeded rather than strive for truly superior performance (and contribution).

Performance pay works best when it provides an unambiguously positive incentive to achieve results. The most successful companies provide a competitive base remuneration with additional performance “carrots”.

In summary, it is important to remember that:

• Money talks. Many companies have moved to performance-based remuneration, where a significant component of a manager’s annual pay is linked to achieving targets agreed at the beginning of the work year. This differs from the old merit pay systems that involved incentives that were too small and performance targets that were too ill-defined to really influence behaviour.
• Keep it simple. If people don’t understand how their performance is assessed, or how their individual performance affects on company performance, a performance pay system won’t work. For performance pay to be effective, it must be accompanied by clear communication and constant feedback on progress.
• Get the balance between risk and reward right. Experience suggests that performance pay is most effective when it is genuinely “at risk”, and not just another entitlement (as it appears to be in the Public Sector).

And as a tester an example of reward policy

“You are eligible to participate in the ABC Co. bonus scheme.  This scheme is designed to reward excellent performance in a number of important areas over the course of each financial year.  The areas of performance for which bonus applies are Business Development and/or Project Delivery, Staff Development, Personal Development together with the business unit achieving its targets.  The financial year runs from January through to December with potential of up to 15% of annual salary paid as bonus.  Further details on Individual Performance Indicators will be agreed at your monthly review with your line manager”.

 Celtar advises on how to improve the performance of your staff & how to align their activities with company objectives

Celtar management consultants are a group of expert advisers based in Dublin, Ireland