Month: February 2010

The Value Creation Shift

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Everyone knows I love sharing information. I learned about a great website called Elance.com for freelancers and entrepreneurs. The website allows individuals and organizations to bid out work for the best price. Initially, I was amazed at the different people bidding from across the country.

Conventional wisdom would say that a guy bidding for work in India at $5 per hour versus a guy in New York at $60 per hour would be a no brainer. However, I have purchased services from Elance.com where the price was not the prime consideration.  I looked at the individual’s experience and identified what it was worth for me to get it done.  In a nutshell, I was aiming for the most value. Likewise, organizations that want to compete must understand value creation in relationship to globalization.

Business cannot hide from the impacts of globalization.  According to Dr. James Canton’s The Extreme Future: The Top Trends that will Shape the World in the Next 20 Years, there will be a global war for Smart Talent. In fact, it will be the key driver for competitive advantage. As the world will witness, the most educated, skilled, and experienced employees will be in high demand. 

 Global competition and the shortage of workers have made diversity a center-point for most organizations. Globalization has forced many organizations to rethink their approaches. Friedman (2008) noted the progression of globalization. Globalization 1.0 was driven by the dynamic force of global integration; it was about countries globalizing.

Globalization 2.0 (roughly 1800 to 2000) was driven by global integration but with an emphasis on multinational companies; it was about companies globalizing.  In Globalization 3.0, the force is driven by the power of individuals to collaborate and compete globally.  In fact, Globalization 1 and 2 were primarily driven by European and American individuals and businesses. Globalization 3.0 will be driven by more diverse constituents. Therefore, understanding how to create value across the global will be vital for sustaining business success.

Twenty-first century organizations can no longer implement value creation in a vacuum. Value creation can be defined as an organization’s ability to convey worth of its product or service to customers. Therefore, it goes to value, which focuses on the relationship between the customer’s expectations of a product/service quality to the actual amount paid for it. 

Many organizations fail in these global markets due to a lack of understanding their customers as well as their own organizations.  Dr. Lynda Falkenstein, niche market expert, explains, “Understanding your customer’s perceptions of the world is an absolute must for one major reason; that is, no one buys something just because you want to sell it.”

C.K. Prahalad and Vemkatram Ramaswamy, authors of The Future of Competition, further argue that there is an arrogant management structure in place that cares little for the opinion of others.  However, organizations that deal with postmodern workers must foster a different corporate culture. In fact, Prahalad and Ramaswamy reason that 21st century organizations must change their value creation system. They noted the new system as an individual-centered co-creation of value between consumers and organizations. Few executives take the time to explain their values.

Sustaining effective organizations will require a focus on value creation if they hope to be successful in the global market. However, this appears to be a critical weakness in modern organizations. Many organizations exist with value misalignment. Values are the core beliefs of an individual. Different people have different values. Henry Mencken, author of Prejudices, explained, “The difference between a moral man and a man of honor is that the latter regrets a discreditable act, even when it has worked and he has not been caught.”

Global leadership expert Timothy Stagich maintains that the basic values for a high collaborative organization include mutual respect, appreciation of diverse contributions, reciprocal benefit, and a shared understanding of the underlining corporate values. Many leaders forget about the importance of values in an organization. Few institutions take responsibility for value alignment. That reality will hurt them as they fight to survive in Globalization 3.0 and later.

How do organizations adapt to the global market and create value at the same time?

Global Leadership Values for This Era

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In the 1999 blockbuster movie hit The Matrix, a world beyond anyone’s imagination emerges. A computer hacker Thomas Anderson (Keanu Reeves) aka Neo escapes his daily grind in hopes of adventure. However, what Neo discovers is something that transforms his life.

He discovers that his whole world has been created by a cyber-intelligence. Neo refuses to accept it. His mentor Morpheus (Lawrence Fishborne) asks Neo a pointed question: “What is real?”  Likewise, millions of Americans hope that the economic turmoil isn’t real and the threats of global competition are bad dreams. 

American children sing “We are the world,” but the world does not listen. Children in Iran burn American flags. Children in Iraq throw stones at American soldiers. Children in China write hateful essays about the “evil” American ways. American politicians attempt to spin how third world countries embrace Western ways while a terrorist alert is heightened to acknowledge another international threat.

Global trends are impacting the political, social, economic, and technological outlooks of most counties. Sweeping changes make global competencies more critical. Management strategists view these cultural shifts like waves in an ocean. Some of these emerging trends include (a) shift in consciousness, (b) disenchantment with Scientism, (c) inner sources of authority and power, (d) respiritualization of society (e) decline of materialism (f) political and economic democratization, and (g) beyond nationality. These trends will forever change international relationships if they continue.

Additionally, the ever-changing demographics of the world are reshaping a new global perspective. According to one estimate, by 2025, the world population will be at 7.9 billion people. Between 1993 and 2025, around 95% of global population growth will come from developing countries. Clearly, today’s executives now understand that globalization is more than a big word for doing domestic work internationally. Global miscues can be fatal.

Currently, the miscommunication in understanding the Mideast culture has created major headaches for the Western world. Some assume that the Arab people only respond to military force. Therefore, diplomatic efforts get lost in the military battles. Cross-cultural mishaps can occur in the absence of communications. For example, many view the handling of the Israel-Palestinian conflict as an example of the lack of knowledge of culture. Former Secretary of State Colin Powell explained that extremist groups like Hamas must play a vital role in the solution to this crisis.  Others disagree. Therefore, globalization forces organizational strategists to rethink their approach.

In order to compete in the future, special competencies are needed for global competition. In fact, there is something intriguing about global leadership. Global experts Stewart Black, Allen Morrison, and Hal Gregersen argue that every global leader has a set of global characteristics regardless of his or her country or industry. The four key areas include inquisitiveness, perspective, character, and savvy. Business savvy becomes the word of the day because one must be able to think globally and adjust activities on the local level as well as satisfying customers at all levels. For the most part, understanding cultures is viewed as a primary responsibility of government organizations associated with national defense or diplomatic functions.  In fact, understanding trends requires a unique skill mix.

Finally, effective organizations that are positioning themselves strategically realize that globalization is not a dream, but a link to their distant future. Yet, dealing with cross cultural issues is not a simple task. Employees and managers need to develop these global competencies. Doing work globally requires two dimensions of complexity: business and cultural complexity.

 What can be done to incorporate global leadership values in today’s organizations?

 © 2010 by Daryl D. Green

The Era of the Creator

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I sat in the office waiting for a debriefing on my job interview. I didn’t get a management position from this organization. The senior executive spoke to me cordially about me doing a good job. I pressed him for more specifics so that I could improve myself on the next job interview. He candidly mentioned that my outside interest (writing, talkshow appearances, TV interviews) was a distraction to this position. It was apparent that this older gentleman wasn’t ‘feeling my creativity.’ In fact, I felt he didn’t like it. I politely thanked him. I knew I was a marked men his mind due to showcasing my creativity. During this period and in this organization, creativity was not deemed a valuable asset to the organization. 

 

Over the past eight months, 1.8 million people without jobs left the labor market. In fact, their pessimism was so great that they gave up looking for employment. Hidden beneath these numbers are the underemployed. Tennessee Congressman John Duncan Jr. notes, “Underemployment is probably even higher, with far too many having to work at low-paying jobs for which they are over-qualified.”

 With the unemployment rate continuing to rise, individuals are perplexed as to what is the best decision to make for their careers. If more jobs are needed, it will take organizations that possess the ability of innovation. Given this premise, this discussion examines how managers can infuse their organizations with creativity, thereby surviving and defeating disruptive change.  Organizations must develop their workforce to be a collection of innovators and creators. Gary Hamel, author of Leading the Revolution, notes “Industrial revolutionaries will exploit any protective urge, any hesitancy on the part of the oligarchy…In the nonlinear world, only nonlinear ideas will create new wealth.” 

Unfortunately, many of today’s managers are not equip to think in nonlinear ways. Their extensive experiences become a liability during disruptive change. As American businesses battle their global competitors with the scientific management strategy, market shares continue to take a downward spiral. Everyday disruptive change breaks down traditional organization strategies. What worked yesterday will not work in this harsh environment. Therefore, organizations move cautiously into the future. Therefore, the nation stares at impending danger.

However, creativity may be one of the biggest weapons to fend off competitors. Creativity is the process of developing new, uncommon, or unique ideas. It involves a mental process involving the generation of new ideas or concepts, or new associations between existing ideas or concepts. Organizations do not understand how to infuse creativity.

Creative genius Michael Michalko argues that innovation does not happen by chance: “It [creativity] is not a result of some easily learned magic trick or secret, but a consequence of your intention to be creative and your determination to learn and use creative-thinking strategies.”

Companies need to determine how they will use innovation as a competitive advantage. In fact, creative people need to work in environments that stimulate, grow, and enhance their abilities. In taking this step, they need to create a culture that supports these gifted individuals by rewarding them and giving them opportunities to growth. When organizations get serious about maximizing their creativity, they will be laying the groundwork for a sustainable future.

The future is ripe for creators. Sadly, globalization has become a menacing threat to some businesses. Therefore, the major challenge for contemporary institutions is to produce workers who are intelligent, creative, and internationally savvy to handle the challenges of the 21st century. Trend expert Henrik Vejlgaard insists that creative people often set new trends. These create people include poets, authors, actors, architects, singers, and other gifted individuals. High performance organizations across the globe will seek these creative groups out if they want to sustain market advantages and sustain profitability.  

American humorist Erma Bombeck said, “When I stand before God at the end of my life, I would not have a single bit of talent left, and could say, ‘I used everything you gave me.”  Truly, creative individuals want to fully use their talents and feel appreciate. In contemporary organizations, innovation and creativity often falter as a major priority. Management strategist Stanley Gryskiewicz argues that turbulence associated with change can be a positive force for innovation. In fact, finding innovative ways to jumpstart tomorrow’s engineers is a great concern for businesses that want to remain relevant in the 21st century.

How do contemporary organizations take steps to infuse creativity in their organizations? What can creative employees submerged in bureaucracies do to sustain their creative juices?

© 2010 by Daryl D. Green 

 

The Future of Diverse Organizations in America

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In the movie Slumdog Millionaire, the life of 18-year old Jamal Malik is revealed. He is an orphan from the slums of Mumbia. Jamal has the opportunity to play India’s version of ‘Who Wants to Be a Millionaire’; he stands one question away from winning 20 million rupees.

The movie was dramatic and powerful. It demonstrated the impacts of globalization on diverse cultures in the world.  Although Slumdog Millionaire won eight Academy Awards in 2009, it was a movie mostly invisible to the average American citizen.

As American businesses expand globally, organizational leaders need to evaluate what diversity will mean in the near future. Many organizations are struggling to understand the meaning of a culturally diverse organization.  Some organizations are further along in implementing diversity strategies than others. Unfortunately, most managers miss what diversity is all about.

Strategic foresight provides a lens for understanding how to dissect this diverse future. Strategic foresight allows an organization to analyze what has happened or may happen in the environment. Nick Marsh, Mike Mcallum, and Dominique Purcell, authors of Strategic Leadership: The Power of Standing in the Future, explain that the strategic process used in the past is not adequate for today’s disruptive change. They argue that the traditional strategy was designed for the 20th Century Industrial Age.

However, the Knowledge Age requires a flexible and dynamic strategy. Today, organizations are not confined to fixed boundaries or sectors. They have unlimited resources due to the fact that the key resource is not tangible but intangibles (ideas, knowledge, etc.).  In fact, futurist Richard Thieme maintains that the future is being constrained by technologies. In this New World Order, all organizations like all organisms can be defined as structures of information and energy.

A diversity strategy isn’t easy to master. Historically, diversity has been mandated though federal laws via equal employment opportunity and affirmative action. It was a forced change that resulted in negative resistance by both managers and employees. In spite of the government’s many operational flaws, it has attempted to broaden the makeup of workforce for several years.

Clearly, this is a shortsighted approach to organizational strategy when dealing with a multi-cultural marketplace. As recent studies demonstrate, employees want a more meaningful workplace. Diversity is only adding fuel to a fire that is already smoking. Today’s employees don’t want to be a component in a big machine. Employees want to be valued.

In some cases, technology may impede an objective perspective of different cultures. For example, social media is an increasing communication medium where individuals connect with each other. However, many times individuals’ personal social networks are not diverse along ethnic, gender, racial, or religious lines. Anne Tsui, and Barbara Gutek, demographic gurus, argue individuals within a social group may have a different experience than others from the majority culture in a similar experience.

Disruptive change can have a profound impact on society. For example, the Industrial Age marked the rise of factories, the increase of urban life, and the growth of unskilled labor for industrial work. Between 1840 and 1920, there was a massive influx of immigrants seeking work. This reality transformed American society. That is why organizations need to understand strategic foresight.

In 1987, the Hudson Institute published Workforce 2000, which outlined the impending demographic changes for the American workforce. A recent Department of Labor report, Futurework: Trends and Challenges for the Work in the 21st Century, outlined the following future trends:

  • By 2050, minority groups will make-up half of the population
  • Immigrants will account for almost two-thirds of the population
  • One-quarter of the population will be of Hispanic origin
  • Almost one in ten Americans will be of Asian or Pacific Islander decent

In summary, demographic changes will reshape the future of organizational culture. The old paradigm of “just fit in or get out” will soon become archaic. Let’s hope that America can adequately prepare for these shifts before it is too late.

Using a strategic foresight perspective for analyzing the year 2050, what may the future hold for American institutions?  What will be the impacts on major sectors such as business, government, education, and other prominent organizations?  What will globalization mean in the future?

 © 2010 by Daryl D. Green