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Globalisation

My Day Back To University - Global Virtual Working

My Day Back To University - Global Virtual Working

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I recently gave a lecture for my old boss in Bern on global virtual working.  It was so invigorating  to be surrounded by young minds.  At the same time it was obscure because it doesn't feel that long since I did my first degree…I tell myself that I am still young! I took a very fresh and up to date approach looking at 2 current and relevant examples of virtual working, one that had failed  - 'yahoo' and a second that had been successful -'SABRE'.  We did root cause analysis, and built solutions to deal with the actual root causes.  This post is  to share their thinking.

Yahoo

Yahoo's Marrisa Mayer famously asked the employees to come 'back to work,' which by implication said by being at home they were not working.  The initial signs seem good, but as yet we do not know what the long term picture is:

  • Yahoo took over Google with 196.6Mn unique visitors July 2013 (1 month only).
  • 14% hires Boomerangs
  • 16 new products albeit a acquisition spree
  • Share price has gone up from under $15 to $35

SABRE (Travel Technology company includes Travelocity) on the other hand have reported that the implementation of cross functional virtual working has brought better productivity.  There are no public financial figures available because they are privately held.

  • Customer satisfaction in increased from 68% – 85% between 1997 to 2000
  • US marketshare increased 43% - 50% between 1997 to 2000

These two examples show that getting a virtual working environment to work is not simple, and indeed cultural.  The key differentiator between the two companies has been the programs in place to support people from recruitment, training through to tools and leadership.

Outcomes from the Session

When we looked at the root causes it led to these questions:

  • How to manage people you don't see?
  • How to be innovative?
  • How to have a sense of team, and belonging?
  • How to have quality exchanges that enable us to make decisions?
  • How to have and build trust?
  • How to still have the Informal, non verbal and Interactive communication?
  • How to not feel isolated and detached?
  • How to form high quality relationships?
  • How to avoid miscommunication and cross cultural misunderstanding?

Some of the answers that were formed:

  • Have leaders that role model
  • Have leaders that build trust, great communication and engagement
  • Recruit and develop the required leadership capability
  • Recruit and select for the capability and fit to work virtually
  • Train employees with tools and techniques on effective virtual working
  • Communicate the capability to work virtually as a benefit
  • Have a virtual coffee or tea as part of the culture to allow for informal conversations to build relationships, and learn about things outside of a formal agenda.
  • Provide tools for virtual working like you would an effective meeting: Objective, Charter, Plan, Confirmation of what is discussed.
  • Have communication principles. Email headers to indicate tone (e.g. agreeable, not agreeable) and not just the normal Action Required, FYI
  • Have a nominated facilitator for larger meetings
  • Send content prior to a meeting with the rule that it is reviewed in order to focus on decisions
  • Periodic team events
  • Hybrid approach - have face to face meetings depending on ambiguity and the type of change

Key Learnings

1.  My first graduate job was based from home, it's a skill that I am glad is being developed at university.

  • The students will commence on joint teams one half based in Bern and the other in Prague.

2.  The requirement for people to be able to to work from home is on the rise.

  • 37% organisations experienced an increase in requests to work from home. Source SHRM 2013

3. There are cultural patterns with Northern Europe leading the way in home working

  • US 2.9 Million work virtually. Source: Telework Research Network 2011.
  • On average 13% EU working virtually. Leading the way are : Netherlands, Finland, Denmark, Sweden Germany 1.5 Million people work virtually. Source: Empirica and UK 1.3 Million work virtually full time. 3.7 Million Part Time. Source: BBC 2011.
  • Asia limited virtual working 6% source: Deloitte 2011

4. The situation and context defines a hybrid of of virtual and face to face (nothing ground breaking but true).

5. A company can all too easily tackle a symptom, rather than the root cause.  Yahoo went for bringing everyone back to work.  It will be interesting in the long-term what that means for their agility and pace to deal with leaner, and virtual competitors.  The students asked the real questions and came up with solutions.

6. Success in virtual working is not easy and requires a strategy, plan and well executed support.  SABRE made this investment with a positive impact on their customer and market share.  I have note seen many companies really tackle this issue.

7. The technology has outpaced initial barriers to virtual working.  The students have been using Adobe Connect, Face Time and Skype. They talked about being able to get people to engage in their expectations for the semester, what they can contribute and aligning goals using tools in Adobe Connect.

Globalisation – The East Re-financing the West Some Thoughts for OD

Globalisation – The East Re-financing the West Some Thoughts for OD

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Back when I was consulting it was all about the BRIC economies.   We outsourced like hell to get economies of scale.  Business Process Outsourcing continues to attempt to make things seemingly cheaper.  There has been mixed success with some of these business models.  Where the models flopped the key flaw was the integration of people into the process, and misunderstanding of culture.  To realise the ROI many companies have to tackle this issue. Companies like Nespresso have bucked the trend with manufacturing in Switzerland.  Switzerland is not a cheap place to base manufacturing, but the quality, consistency and productivity has been factored into the business case. Those tiny little capsules of premium coffee lock the customer in, and they are happy to pay £4.80 a pack.  In 2010 they sold 6.5bn capsules according to Bloomberg.  The luxury at home coffee market is estimated to be worth £8bn, and Nespresso is still in double-digit growth but now competition is fierce.

Before we speculate on some implications for OD professional, it is important to note the new trend.  Those countries that the West naively outsourced to do the manufacturing of the whole product (eeek) or components, and non-strategic fulfilment of the processes, are quickly becoming serious technological contenders.  For example, take Tata Steel and Mittal Steel who bought Corus and Arcelor two of the EU’s biggest steel companies.  Our political leaders like David Cameron are going cap in hand to the Chinese for help.  The west is losing dominance of its own markets.  At the same time China and India have the two biggest markets of their own.  China sold a million cars per month in January and February 2010!  There is yet again a seismic shift.

This is a game changer, for those companies and countries that want to continue to be global players.

It is Europe who is dependent on the IMF for funds, as apposed to emerging economies.  It is China who has been the major investor in Africa £7billion in 2006, which is not yet tapped for its natural resources!   Sub –Saharan Africa is growing with a GDP of 5% or more between 1995 and 2005.  The recession cut growth, but the world bank expects it to return to 4.5% in 2010.  The projected GDP for Africa 2020 is 2.6 trillion and 18.6 trillion in 2050!  If China is the backer here then much like Britain built its empire, these are the foundations for the future wealth.

GDP Africa

The political forces are aware of this change.  For example, the US congress blocked the $18.5 billion purchase of Unocal by the 70% state-owned China National Offshore Oil Corporation.  China has liquidity.  Its cash reserves are the equivalent of 40% GDP an estimated £3.3 trillion! Watch this space!

So what does this mean for OD professionals?

  • We need local leaders, and local talent for the game changers in BRIC but with the new countries, Russia and Africa.  Goldman Sachs and economist Jim O’Neil defined the next 11 (N11) emerging countries and CIVETS outlined by Robert Ward: Columbia, Indonesia, Vietnam, Egypt, Turkey and South Africa.  To overcome the cultural issues, understand and innovate in that market.
  • Global leaders may need a different skillset, flexibility and awareness.  Check out a post on learning Chinese.
  • Do not just think about efficiencies of outsourcing to the East, we now need to think in reverse, and in-between.  We need people that can understand and leverage the benefits of Re-financing.  What can Corus gain from Tata and visa versa to be a more effective global player?  Are their parts of the process that are now better suited in the West?

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