A copy of my presentation yesterday at the 2013 Activist Investor Conference in New York City.
What shareholders should know about ceo succession plans, and why. from Charlesmore Partners International
Organizational Strategy
January 23, 2013
January 18, 2013
December 06, 2012
Education to Employment: Designing a System That Works
- Globally, seventy-five million youth are unemployed and young people are three times more likely than their parents to be out of work.
- Half of youth are not sure that their postsecondary education has improved their chances of finding a job
- Only 43 percent of employers can find enough skilled entry-level workers and estimates suggest that by 2020 there will be a global shortfall of 85 million high- and middle-skilled workers
Around the world, governments and businesses face a conundrum: high levels of youth unemployment and a shortage of job seekers with critical skills. How can a country successfully move its young people from education to employment? What are the challenges? Which interventions work? How can these be scaled up? These are the crucial questions.
A new report from McKinsey attempts to answer them. To do so, it developed two unique fact bases. The first is an analysis of more than 100 education-to-employment initiatives from 25 countries, selected on the basis of their innovation and effectiveness. The second is a survey of youth, education providers, and employers in nine countries that are diverse in geography and socioeconomic context: Brazil, Germany, India, Mexico, Morocco, Saudi Arabia, Turkey, the United Kingdom, and the United States.
The report’s findings include the following six highlights:
- Employers, education providers, and youth live in parallel universes – or to put it another way, they have fundamentally different understandings of the same situation.
- The education-to-employment journey is fraught with obstacles - not least of which are cost, work relevancy and job access.
- The education-to-employment system fails for most employers and young people – positive outcomes are the exception rather than the rule.
- Innovative and effective programs around the world have important elements in common – most particularly when education providers and employers step into each others’ worlds.
- Creating a successful education-to-employment system requires new incentives and structures – distributed information, collaborative endeavor and systems integration.
- Education-to-employment solutions need to scale up – leveraging interactive technologies and employer-valuable curricula.
McKinsey started this research recognizing the twin crises of a shortage of jobs and a shortage of skills. In the course of it, though, it realized the need to take into account another key shortage: the lack of hard data. This deficiency makes it difficult to even begin to understand which skills are required for employment, what practices are the most promising in training youth to become productive citizens and employees, and how to identify the programs that do this best.
The authors conclude, “The journey from education to employment is a complicated one, and it is natural that there will be different routes. But too many young people are getting lost along the way”.
Source: McKinsey Center for Government
December 04, 2012
November 21, 2012
November 05, 2012
The State of Human Capital
A new report by The Conference Board and McKinsey & Company concludes that human capital professionals are struggling to meet the needs of an-ever changing global business landscape. Specifically, as global markets and technology evolve, “people processes are failing to keep pace”. The authors go on to report that “while tremendous strides have been made over the past decade in areas like workplace diversity and flexibility, the human capital function has largely lagged behind in effecting organizational success. As a consequence, human capital leaders must work harder — and smarter — to cement their place as a key business partner on decisions central to the present and future success of their organizations”.
The State of Human Capital 2012 report examines four specific opportunities that HC executives must seize if they are to effectively manage the global talent pool in an unpredictable business environment. These include:
- Look ahead: anticipate and plan for the human capital of tomorrow– From the increased presence of the highly connected millennial generation to the proliferation of the virtual office, tomorrow’s workplace will look very different from today’s.
- Secure a steady, reliable pipeline for today’s skilled workers, and tomorrow’s leaders – The war for talent continues, spurred by relatively high growth in emerging markets and the mismatch between worker skills and jobs in most regions of the world.
- Develop strategies to reenergize your employees about what they do, and about what the organization stands for – An engaged workforce can drive financial performance. Studies have shown that employees who are truly engaged are more likely to stay and contribute to the organization.
- Ensure that the HR/HC function becomes more agile than the organization as a whole – Organizational agility is an essential response to the volatility of today’s business environment. An MIT study shows that agile organizations grow revenue 37 percent faster and generate 30 percent higher profits than non-agile organizations.
With many human capital departments today paralyzed in the face of seemingly monumental challenges — such as accelerating leadership development, acquiring talent, and retaining key players in a world of constant change across borders, cultures and challenges — the report offers a way forward. Based on a survey of hundreds of practitioners as well as focus groups with senior leaders in human capital around the world, the report offers an overview of the current state of the human capital function, key strategies and approaches executives can implement immediately to reach the summit.
Source: The Conference Board, McKinsey & Company
China’s 12th Five-Year Plan – Implications for Human Capital
China’s 12th Five Year Plan (FYP) emphasizes the “human factor” in economic development more than any previous FYP. As such, the plan is important from a human capital strategy and planning perspective. A special briefing paper from the Conference Board’s China Center distills out the plan’s implications for human capital practitioners and executives concerned about human capital issues in China.
Some of the many key takeaways outlined in the report are:
- Planning should assume an increasingly tight labor market as powerful demographic forces take hold.
- Job creation targets remain paramount (even despite a tightening labor market), suggesting intensifying competition for labor and talent – in part due to the service sector becoming a key focus for development and expansion.
- Plans for education reform may gradually improve graduate workforce readiness – many leading MNCs are pro-active in contributing to the readiness process.
- Planning should assume that wages and welfare entitlements for rank and file employees will increase substantially and continually, via regulatory mechanisms, throughout the 12th FYP period. (It is assumed that increases at the managerial and senior ranks will be left to market forces, and will likely be less pronounced given China’s comparatively high remuneration levels at MNCs.)
The report also summarizes and enumerates the key data points, targets, and projections in the FYP related to human capital, providing a concise and easy-to-use reference resource
Source: The Conference Board
October 26, 2012
Strengthening the Global Leadership Pipeline
By 2030 more than one-half of the world’s GDP will be generated in what are currently classified as “emerging markets.”
In a new study of its membership base, CEB (previously the Corporate Executive Board) examined the leadership challenge of this intensifying reconfiguration of the global business marketplace. It found that 60% of its member companies plan on significantly increasing their global footprint during the next three years but that a lack of globally capable leaders was likely to become a significant impediment to growth and sustaining success.
In the study CEB analyzed the business performance of more than 12,000 senior global leaders at 90 companies and discovered a striking difference between businesses with what it termed “Great Global Leaders”—those who can successfully operate across multiple and diverse geographies—and those without. It reports that Great Global Leaders are almost three times more likely than their peers to be guiding a business that is achieving its performance objectives three years in a row. “Unfortunately, Great Global Leaders are rare, as fewer than one in five senior leaders in the organizations surveyed qualify as Great Global Leaders. Without an adequate pipeline of effective global leaders, most organizations will struggle to be successful—and many will ultimately fail,” the study concludes.
We are told that “understandably” organizations are rethinking, retooling, and (in some cases) reinventing their leadership development programs to create more and better leaders. Yet the review of organizations’ strategies for strengthening their global leader pipeline shows that most approaches are “deeply flawed”. CEB report that some organizations “mistakenly” assume global leadership is the same as other forms of leadership and produce leaders who lack the special skills required for cross-market management. “Others make the opposite mistake”—assuming global leadership is an entirely unique set of skills and capabilities— “producing leaders with profiles inconsistent with the organization’s overall leadership needs.” The survey found that the best companies build Great Global Leaders by striking a balance between these two extremes—identifying, improving, and building leaders’ important core skills and capabilities while also enabling them to be more effective in complex global environments.
Key findings include:
- Many great leaders do not want global roles. CEB finds that only 35% of successful global leaders aspired to be in global roles. Global leadership roles may be unattractive to many leaders for two reasons. First, the link between most global assignments and the long-term career opportunities for leaders is frequently unclear. Second, the relocation, travel, and personal disruption costs of taking on global roles are often significant deterrents, especially for rising leaders.
- Executives should challenge the long-held assumption that to be successful, leaders need to live in the markets they manage. A review of leader performance shows that relocation is not always necessary for success.
- With global leaders likely having responsibility for individuals and teams over which they lack direct authority, the leader’s success or failure often hinges on his or her ability to work through others. A leader’s capacity to influence—being a compelling force or producing effects on the actions, behavior, and opinions of others— increases the probability that someone is a Great Global Leader by 27%.
- Being a successful global leader does not require increasing time spent working; rather, it requires working in a different way. Great Global Leaders spend more time networking with two important groups—clients and peers.
Source: CEB
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