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The Future Employee

The Future Employee

The future is now. Well, in some cases, the future is past. The sci-fi movie Blade Runner, made in 1982 and 2017, set the future in 2019. It got some things right (or at least headed that way in terms of flying cars and “android” helpers) and some things wrong (like the internet and social media). But it seems there will always be employees.

Thus far, employees are created from a particular education system. Formal education trains humans to understand existing technologies and systems and prepares them to join the system. After 20 years of schooling, the student is expected to pick a career. Everyone is born unique. Unfortunately, education standardizes them. Today, each person is not measured by her/his worth, but by pitching them against others studying the same standards.

So, what is the current education crop looking like? We are talking about Generation Z, the post-Millennials, born near 2000s (Bloomberg says aged between 7 to 22 in 2019), born post-internet. 2020’s tiesagers (passed teenage into tiesage). Gen z’s education brings in new approaches to education in terms of entrepreneurship, digital technology and personal branding at an early age. They are digitally literate (as opposed to educated). Preference for education in humanities are decreasing and STEM (science, technology, engineering and mathematics) are increasing. Gen Z are currently physically armed with internet, social media voice, science and technology in their hands; and psychologically faced with social media stress, climate change, family relations; and still schooling and high cost of living. These are the current future employees (pardon the oxymoron).

But the current crop of gen x and millennials are also part of the workforce. They bring with them experience, perspective, history and probably wisdom. They are also in transition towards higher digital literacy.

In the past, things were fairly simple following a fairly well-defined process: study hard and get a job, stay with the organization for the entire career, work way up the corporate ladder and building a nice retirement package. Hindsight is 20-20 vision and all that. But this is becoming an exception.

The corporate objective is moving away from mere profitability and returns to shareholders. Future employees look for corporate responsibility as much as learning.

So, what is the future looking like to these employees? These leads to few questions:

 

Will AI and automation take over future careers? Will my co-worker or supervisor or supervisee be a robot?

The only constant is change. It has happened in the past when we moved from rewarding loyalty with retirement packages and wrist watches, to annual bonuses, to hire and fire policies. Thinking AI and automation will take over future careers is like asking if discovering fire will result in extinction. AI and Automation are tools to help us. Hence, the future employee will or need to move high up in value-chain – both individually and operationally. There will be a rapid rethinking on moving away from our comfort zones to catch up and keep up.

We are already reporting and responding to robots. Be it to chatbots or IVRs or designing our CVs to respond positively to AI screening. The idea is acceptance to the change. The future employee and employer will already be adaptable to such changes.

 

Is lifelong learning a wise investment?

What if I train my employee and the employee leaves to work with a competitor? The answer is what if you don’t train and the employee stays in the organization? Training employees is like playing mah-jong or poker. So long as there are only 4 players, the same amount will remain in the kitty and there will be no challenges and profitability. One must not look at one playing table, but the whole room full of playing tables. When organizations return trained employees to the workforce, the country gains with higher skilled employees.

 

The HR future

What is required of a future employee?

The future employees must be “twingineers” – with the ability to work in both the physical and digital space. They must learn to be an Explorer – Multi-functioner – Innovator – Team player. The future employee must engage in lifelong learning to stay relevant both within an organization and in the global business environment. They will learn greater adaptability to take on new jobs and new roles and older ones become redundant due to industry 4.0. The future employees must learn that constant digital transformation in an organization is a given. They will learn application of relevant technology as there are and will be many options that technology will provide. There will be no more low skill, routine jobs.

 

What is required of a future employer?

Employers must be twingineers as well. correspondingly must provide for quick lateral shifts to the future employee so as to provide a working environment best suited to their uniqueness. Jobs must provide for customization and flexibility. Organizations must provide for ability to work across gen x to gen z, incorporate a consistent and adaptable digital culture, bring in agile corporate standards and bureaucracy. Corporate constitutions can no longer be written in stone. Learning is no longer on-the-job, but what the employer invests in the employee in terms of lifelong learning. Organizations must make employees future ambassadors of their organization. They can prove that they are returning better employees and therefore better human beings to the world. Investment in digital transformation should not be near-term business operations; it is a long-term strategy. Digital transformation should not be to protect legacy ways of doing business, but true transformation of the business itself. Employers can attract new talent for near-term but must train existing employees for long-term. Such lifelong training must be uniform to facilitate uniform integration of various skills and outputs.

For partnerships, speaker and general business enquiries with 2iB Partners:

Contact Person Dylan Tan
Designation COO
Email Dylan@2ibpartners.com

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Is having a Corporate Social Responsibility (CSR) program just a cost to your company?

Is having a Corporate Social Responsibility (CSR) program just a cost to your company?

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Developing great companies that give back is more about devising a clear Corporate Social Responsibility (“CSR”) program aligned with the company’s goals and values rather than forcefully integrating CSR with their business strategies and goals. Instead of passing it off as a short term marketing gimmick, CSR should be seen as a long term investment strategy.

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Is having a Corporate Social Responsibility (CSR) program just a cost to your company?

Is having a Corporate Social Responsibility (CSR) program just a cost to your company?

Developing great companies that give back is more about devising a clear Corporate Social Responsibility (“CSR”) program aligned with the company’s goals and values rather than forcefully integrating CSR with their business strategies and goals. Instead of passing it off as a short term marketing gimmick, CSR should be seen as a long term investment strategy.

 

Some benefits that a good CSR imparts to a business:

  1. Improving name recognition
  2. Boosting brand reputation among consumers
  3. Increasing sales and positive consumer sentiment
  4. Assisting in efforts to recruit and retain talented employees
  5. Improving the quality of life in communities where you do business

 

Some companies with example of good CSR model:

 

Coca-Cola’s 5×20 program

Companies are no longer looking at CSR as a marketing move, but rather as a long-term investment. For example, the Coca-Cola Company’s 5×20 program aims to bring five million women in the developing world into its business as local bottlers and distributors of Coca-Cola products by 2020.

This investment to empower young women entrepreneurs will obviously generate more revenue for Coca-Cola because they will have more bottlers and can sell more product. But at the same time, this type of investment will undoubtedly lead to better-educated people and eventually, more prosperous communities in areas that need help.

VISA

The corporate social responsibility model implemented by Visa provides financial opportunities for people in developing areas of the world. By partnering with local governments and nonprofit organizations, people who previously did not have access to the benefits of banking and financial services now do.The Gates Foundation found that this type of service helps low income and poor people manage their finances in trying times, build assets, and increase connectivity worldwide.

 

CSR as a cost-saving measure

Other companies look at CSR as a way to save money. Energy efficiency is a good example. Wal-Mart has three goals of its social responsibility policy: to be fully supplied by renewable energy, to create zero waste, and to sell products that sustain people and the environment. These are lofty goals, but if achieved, they will ultimately save the company a great deal of money.

From savings to developing loyalty with consumers, the benefits of becoming a socially responsible far outweigh the costs. Companies can no longer to afford to ignore their social responsibilities.

 

Statistics

Statistics on Employee Engagement

Purchasing Behaviour

  • 55% of global consumers willing to pay extra for products and services from companies committed to positive social and environmental impact up 10% from 2011 – Nielsen 2014 Doing Well by Doing Good  
  • 42% of North American consumers willing to pay extra for products and services from companies committed to positive social and environmental impact up 7% from 2011 – Nielsen 2014 Doing Well by Doing Good  
  • 1/3 rd of consumers (33%) are now choosing to buy from brands they believe are doing social or environmental good. – unilever international study 2016
  • A study in 2014 by public relations and marketing firm Cone Communications and Echo Research revealed 90 percent of shoppers worldwide are likely to switch to brands that support a good cause, given similar price and quality.

Sustainability Influences

  • Among the 66% of global respondents willing to pay more, over 50% of them are influenced by key sustainability factors, such as a product being made from fresh, natural and/or organic ingredients (69%), a company being environmentally friendly (58%), and company being known for its commitment to social value (56%). Sales, and coupons didn’t even make the top five. For this group, personal values are more important than personal benefits, such as cost or convenience. – Nielsen
  • More than one in five (21%) said they would actively choose brands if they made their sustainability credentials clearer on their packaging and in their marketing.  Representing an estimated €966 billion opportunity exists for brands that make their sustainability credentials clear. – unilever international study 2016

Trends

  • Trend for purpose-led purchasing is greater among consumers in emerging economies than in developed markets. 78% in the US and 53% of shoppers in the UK say they feel better when they buy products that are sustainably produced, that number rises to 88% in India and 85% in both Brazil and Turkey. – unilever international study 2016

Attitudes on Social Responsibility

Millennials and Work

 

Developing a CSR program is not necessarily just a cost, it can help propel your business forward, create a more civic conscious brand image while at the same time, giving back to society. A good CSR scheme should produce win-win outcomes.

 

3 Key Notes Before Entering a New Market [Video & Transcript]

3 Key Notes Before Entering a New Market [Video & Transcript]

The above is a video taken during one of 2iB Partners master class where our advisor Mr. Richard Eu answers a question on “3 Key Notes Before Entering a New Market” by a business owner, Mr. Peh Zheng Yang.

 [Begin Transcript]

Mr. Peh: You mentioned something like for more traditional businesses, like my retail business with a product and when you’re looking to expand regionally, you talked about either buying or organic growth. So, well you mentioned that there are very key differences to look out for. So, I’d like to know, what are 3 important things to look out for – perhaps like processes to look out for or potholes we need to avoid.

 

Mr. Richard Eu (2iB Partners):

The People Problem

 

Actually, the main thing is the people problem. You get the right person, anything can work. In most cases it is very hard to find the right person, that’s one.

 

Aligning existing operations

 

And the other thing is that, if you start out in a new country, you have got to give a lot of effort, backing and support from your existing operations. So are your existing operations prepared to do this and spend time doing stuff, not beneficial for them, you know and to help out this new territory. So I come, you know, in my case, we have situations where the people from one country wouldn’t support the other one because they are looking at their own bottom line. So you have got find a way of aligning everybody else in the organization to ensure the success of that operation. So it is some compensation scheme you have to think of, right?

 

Navigating regulatory issues

 

And then the third one I would say is probably, in our case particularly – regulatory, getting over regulatory issues. But generally speaking, every time I go to a new territory, requirements will be different and you’re going to need somebody who can navigate the stuff locally. I won’t say paying bribes, but you’ve got to know who are the right people to deal with. Especially in the emerging countries, it’s a lot more difficult to do that.

 

[End Transcript]

 

Investing in the right instruments – Human Capital

Investing in the right instruments – Human Capital

Human Capital

Human capital may be defined as a measure of the economic value of an employee (from a contractor to the CEO). Measured by his skills, contribution, value and cost to his company. But if it is only measured by economic value, then the potential of that employee at different stages of his life or career is destroyed.

Before we proceed, let us make a simple differentiation between human resource and human capital. Human resources deal with the present. Managing what is there and applying it in the right silos. It is tactical. Human capital deals with all three tenses. It is strategic and should take into consideration issues beyond logic as well.

Data and statistics as we know only measures what was and projects on what it will be based on what was. So, if the employee makes a mid-career change that is far more profitable (even in terms of economic value), it cannot and will not be taken into consideration. One of the main reasons that I am no longer interested in chess is that while it used to be a game of strategy, today it is merely arithmetic and only measures your memory. Just like IQ tests only measure your ability to take an IQ test and not really your intelligence. I apply this analogy to measuring an employee merely by his current skill sets. Try getting a computer to put a value to a signature of Van Gogh at his time or a painter who just might be the next Pablo. Ergo, data will always be insufficient.

Some Observations Questions Hypothesis & Analysis

 

Digital Displacement

Investments should be made in people first, ideas next and issues last. I have been subject to a few interviews in my life by recruiters for jobs. But they were enough to make a lasting impact. My first observation was that interviewees to them are merely a database. The focus is always on the employers. Perhaps it is merely the law of supply and demand. After all, it is the employers that pay the recruiters. It is human tendency to think within the box, act on instructions and use forms and precedents to arrive at a hiring conclusion. In the fast approaching age of digital transformation, such boxers like the recruiters are ironically going to be displaced by technology first. This can be extended to similar professions like property agents, financial advisors, etc.

 

The Senior Professionals, Managers, Executives, Technicians (PMET) Conundrum

Another problem with human capital is the PMET Conundrum. Do we lay off PMETs or upskill and utilize them? Singapore has made valiant efforts to remain relevant by upgrading the silver workforce with SkillsFuture. While I fully endorse the effort, I am not sure about its intended outcome. Sometimes I see it as teaching an old dog new tricks. It is difficult. However, with due credit to Singapore, they at least offer you the opportunity and availability. Such efforts to upgrade one’s self must come from within the individual. Indeed, learning only stops when you are dead. So, can such persons and individuals be recapitalized or should they be invested in?

I believe redefinition and reallocation of their roles and change in perception is necessary. After all, persons like recruiters and PMETs also have the added advantage of being data points for future applications. If you haven’t discovered the worth in your employee, then the fault is yours solely.

Human capitalization and re-capitalization can be aggregated and deployed. The experiment comes later.

Concluding Points

Human capital, in my definition, is the analysis and application of resources from schooling to silver learning and investment therein. So, while this may not be achievable by and within a company or organization, it must come from various combined sources.

Every employee is equal to the mass of their experience and knowledge; and their contribution to company and society. The employee’s relative skill, worth, experience and knowledge changes over time and this need to be capitalized. The human capital is invested to provide profits or just more capital.

Persons such as recruiters, financial advisers, compliance experts, etc., should transform themselves into corporate psychologists to realign and relocate human capital. With all their recruiting experience and interviews, they should be in the best position to understand and differentiate the strengths and weakness, truth and cover ups, wheat and chaff of candidates.

PMETs should be recognized for their gold mine of practical skills, information and experience. They are a crucible of knowledge. A plethora of mentors. Their relative contributions over time should be thoroughly exploited. Fitting an engineer into the finance sector brought tremendous change in the way stock markets functioned. This is way I desire human capital seeing tapped and recapitalized.

Displaced, retrenched or redundant employees need not form part of a “Cost-Savings + Efficiency” exercise. Human capital should be redeployed into different sectors and the categories above serve that purpose efficiently.

Application of all of the above by a collection of companies – in the context of Singapore and other first world countries, export (on a reimport basis) and international interaction of this human capital to other countries, developed, developing and under-developed – will make a change to world economy as we know it.

So, invest in your people – your human capital and your great minds. Ideas will follow. The capitalized employee will fetch ideas which are after all an aggregation of data, thoughts – logical and illogical (takes 100 bullshit ideas to fertilize one good one) and a eureka moment. A good and smart investment, in terms of money or effort, in human capital will provide exponential returns to a group of companies. At least valuation of human capital is better realized than tech valuations. It is long term and not an exit strategy like some recently listed tech companies. Unless, I should wait for an application where I could upload all the collective experiences and knowledge of human capital onto a cloud platform and run algorithms.

 

Yang Yen Thaw- Managing Director, 2iB Partners

For partnerships, speaker and general business enquiries with 2iB Partners:

Contact Person Dylan Tan
Designation COO
Email Dylan@2ibpartners.com

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Is having a Corporate Social Responsibility (CSR) program just a cost to your company?

Is having a Corporate Social Responsibility (CSR) program just a cost to your company?

Apr 3, 2019 | , ,

Developing great companies that give back is more about devising a clear Corporate Social Responsibility (“CSR”) program aligned with the company’s goals and values rather than forcefully integrating CSR with their business strategies and goals. Instead of passing it off as a short term marketing gimmick, CSR should be seen as a long term investment strategy.

read more

When Mergers & Acquisitions don’t work

When Mergers & Acquisitions don’t work

Mergers and Acquisitions (M&A) aim for financial stability of a business and wealth maximization of shareholders. It provides a potentially bigger and diversified market share. In these days, it is the most commonly use methods for the growth of companies. M&A are a dominant means of globalization and is key to scaling up and internationalization.

The potential problems of M&As are aplenty. Ego issues, inflated books, race against time, misrepresentations, etc. As long as the business looks profitable, the merged / acquisition parties are happy but when profits go south, then the finger pointing begins.

M&As should be familial not financial. If M&As are driven purely by finance, it is going to be a disaster for the business. Finance in business rarely takes a long-term view. It is the maximization of profits in the shortest time. Finance people laugh all the way to the bank. Maybe it is solely driven by time value of money. But great businesses are the greatest collateral damage if such a view is adopted.

M&A Reasons

Collaborations and synergies, often touted as reasons for M&As, are highly advantageous to M&A parties. This brings in, among other things, cost savings + efficiencies (CSE), value, returns and profitability. CSE brings in sharing of resources, centralization of corporate functions and systems, elimination of duplicate overheads, optimization of over-capability, shared networks, business op­timization, managing financial risk, elimination of double incidence of taxation, shared technology and human resource reallocation. These can bring about high profitability by itself.

M&A Headaches

i-contact

Though the term “merger” implies a creation of a single entity from two or more equals this does not work in practice. There is no i-contact – both in terms of seeing eye to eye and discarding egos; both of speaking on the same eye level and equal egos. In most merger discussions, getting the two to see eye to eye itself is a daunting task. There will always be a bigger equal in terms of higher revenues or profits, or in terms of potential growth or their war-chest. And when the captains of the business come to an understanding, the professionals will come in with their own set of needs and wants to potentially scuttle the deal. This is worse in an acquisition. There will always be a difference of opinion in every aspect of valuation depending upon the buy or the sell side. Warren Buffet’s “price is what you pay, value is what you get” would probably be the anti-thesis of such business deals.

Non-prima inter pares

The big problem and headaches for M&A reasons are many a times the perception of primus inter pares. There is always the issue of one being bigger than the other. Whether it be in terms of revenues or profits or growth or talent or arrogance of cash. Substantial amount of time is spent in sorting out the babel from benefits. Hence when 2 or more parties get into a room, it is very difficult for them to have a balanced discussion or negotiation and this leads to high protraction of deal completion.

Human Capital

Human capital (HC) deals with all three tenses – past, present and future. It is strategic and takes into consideration issues beyond logic as well. HC is probably the first collateral damage in an M&A. While M&As are supposed to bring in CSE of scale, paradoxically, most of the valuable existing experience in a company is lost in redundancies, lay-offs, retrenchment, human resource conflicts. This capital which has high return on investment, must be captured and reallocated in an M&A.

Professionals assisting in M&As are also part of HC. If the professionals’ vision is not aligned with M&A parties, the M&A is headed towards dangerous times. Such professionals, even with good intentions, will take the M&A one step forward, but 3 steps back.

On a different note, an interesting development in HC companies getting into an M&A would be the development of big data and analytics and its application on the experience of individuals. With most interested individuals expressing / uploading their thoughts in some form of the other on the web, one day sufficient processing speed and bandwidth can give us the benefit of this experience.

Time

Time is money, time is the enemy. But it is a long-term investment. In the haste to close a deal, most M&As gloss over critical issues. Time is also the culprit in closing deals over weekends resulting in missing out potential added costs, disputes, rushing go-to-market, pushing to agreements without careful consideration and relationship building (cf. guanxi below). Time is not speed and speed is not time. What is important, is speed based on calculated timing. An M&A built on relationships takes time, but it calculates the long-term benefits of working well together resulting in a high average speed.

Legal

The importance is always understated and misunderstood, especially in international M&As.

Merged & Acquired – Solution

  • M&As are delicate subjects. In these cases, I say that the shortest distance between two points is never a straight line. Diplomatic skills, EQ, empathy, motivational theory applications, change management and cultural integrations are pre-requisites for a successful M&A. This actually saves time in the long run and are the multiple points that in fact bring the main 2 points together.
  • Capture and reallocation of HC in merged or acquired companies. This capital which has high return on investment in an M&A.
  • Guanxi – Like most Chinese expressions, guanxi is complex. Simply put, it means “relationships” (but without hierarchy). Build understanding and acceptance before M&A. It forms what I call Human Due Diligence.
  •  Find professionals that give you the paradoxical and elusive “Collaborative M&A with Organic Growth” that consider contribution by all parties to an M&A to help each other increase output, increase customer base, improve and develop new products and successfully deploy HC.

 

Yang Yen Thaw Managing Director – 2iB Partners

 

For partnerships, speaker and general business enquiries with 2iB Partners:

Contact Person Dylan Tan
Designation COO
Email Dylan@2ibpartners.com

YOU MAY LIKE

Is having a Corporate Social Responsibility (CSR) program just a cost to your company?

Is having a Corporate Social Responsibility (CSR) program just a cost to your company?

Apr 3, 2019 | , ,

Developing great companies that give back is more about devising a clear Corporate Social Responsibility (“CSR”) program aligned with the company’s goals and values rather than forcefully integrating CSR with their business strategies and goals. Instead of passing it off as a short term marketing gimmick, CSR should be seen as a long term investment strategy.

read more

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