Living among wolves


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Why the pace of change demands a new approach to labor

With four key pressure points impacting business globally, HR outsourcing is emerging as a core strategy for success. Living Among Wolves combines all four of Rolf Kleiner's white papers exploring the four forces driving the uptake of HR outsourcing. For more information download your copies today:

- In Fast Company
- Strategy is Nothing Without Speed
- Survivability is Adaptability
- The Need to Find a New Workforce

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Living among wolves

  4. 4. 4 | LIVING AMONG WOLVES: IN FAST COMPANYIF WE TAKE A LOOK AROUND, IT’S NOT JUST FINANCIALMARKETS THAT ARE IN TURMOIL. Social and political environments acrossthe globe are also in flux. Entrenched governments are falling, new networks and communitiesfor social change are forming. We’ve entered a time of heightened volatility, increasedinstability and significant change—change that is accelerating with each passing day.As individuals, and as organizations, we are • It took Apple’s iTunes store nearly three • Half of what a university student learnscommunicating and collaborating about this years to sell its first billion songs (2003- in their first year of education is obsoletechange at an astonishing rate: 2006). Just two years later (June 2008) it by the time they graduate had sold 5 billion. And less than two years• 3000 books are published every day on later again (February 2010) it had doubled • Ten thousand baby boomers exit the the earth to 10 billion workforce every day around the world• There are over 1 billion Google searches The labor market, as a consequence, is also in • When children born this week enter the conducted and more than 8 billion text a phase of accelerating change: workforce 20-plus years from now, there messages sent, every day will likely be a very inexpensive computing • The top 10 jobs a decade from now don’t device that is more powerful than the• Over 35 hours of video are uploaded even exist yet human brain to YouTube each minute à Å
  5. 5. 5 | LIVING AMONG WOLVES: IN FAST COMPANYIF WE REALLY WANT TO UNDERSTAND HOWTHIS RAPID-FIRE CHANGE IS THREATENING THESUSTAINABILITY of even well-established, global corporations,we need only look to industries that have been subject to swiftly changingconsumer behavior and the consequences they’ve experienced.Think about Blockbuster. In 1985, the first Netflix (now a major ‘on demand’ provider) brand to being swallowed up by a once muchBlockbuster store opened in Dallas, Texas. back in 2000 for just USD 50 million turned smaller rival.The expansion of the chain was rapid and out to be a fatal error. As Blockbuster’ssuccessful and a culture of home movie total worth dwindled to around $24 million, Both the music and film industries have beenviewing grew up and sustained this expansion Netflix added subscribers to its service at an turned on their heads in under a decade—afor just shy of two decades. Then something astonishing rate, and continues to do so. very short time in the world of strategichappened. planning and execution for large global In the first quarter of 2011 Netflix added organizations. It is tempting to look back onAs the world of ‘on demand’ took hold and around 3.3 million domestic subscribers to its the Blockbuster example and think the shiftBlockbuster’s traditional revenue stream web-streaming movie and TV products, nearly and the opportunity was obvious, yet thesebegan to drop, they faced the ultimate test: double that of the previous year. Meanwhile, a dramatic falls are not new.change and change quickly. fire sale of Blockbuster has seen it purchased by one of Netflix’s major competitors, DishUnfortunately, Blockbuster didn’t make it in Network. It took a little over two decades fortime. Their rejection of an offer to purchase Blockbuster to go from powerful, successful à Å
  6. 6. 6 | LIVING AMONG WOLVES: IN FAST COMPANYWHAT IS NEW IS THE INCREDIBLE SPEED WITHWHICH THESE CHANGES in the competitive landscape aretaking place, and how quickly traditional rivals are trading places.General Motors (GM) took 30 years to to earth – but who missed the switch from competitive landscape where dominancemove from a market-leading position into analogue to digital. They are now riding the doesn’t last, even if you think you have abankruptcy. In 2007, Toyota surpassed GM Android wave, but each of the players in the ‘killer’ the largest corporation in the world, yet mobile device segment understands thatholding that position for 30 years, as GM once change is always knocking at their door. Even Microsoft did not welcome the news ofdid, is increasingly unlikely. BlackBerry, once supremely dominant among Apple surpassing it in terms of market corporate users, has been forced to change capitalization in 2010, nor did Dell when theIn the tech space, the examples of dominant with the popularity and swift adoption of the same occurred to them in 2006. Sony is onlymarket positions changing quickly are even iPhone and Android. too aware that the dominance it once enjoyedmore stark. through its compact disc technology is now Business is accustomed to, and thrives on, harder to match. Tech giants everywhere areThink Motorola, who dominated the wireless competition. But this is not just competition racing to unveil their own tablet computer toradio market – including having the message we’re talking about. This is worldwide, frenetic rival the iPad. And on it goes, change at anfrom the first men on the moon beamed back change, which is fuelling in increasingly fierce ever-increasing pace. Ã Å
  7. 7. 7 | LIVING AMONG WOLVES: IN FAST COMPANYAS WE GAZE IN AWE OF THE SPEED, AGILITY ANDINNOVATION OF THE APPLES AND GOOGLESOF TODAY, we must remember that big falls come from greatheights. It’s clear that market leaders are acutely aware of the speed ofchange in the world they live in, and that they are helping to drive it, butno one is immune to these dramatic shifts in behavior and sentiment.Each of the examples above illustrate the Standing still is not an option. And manypoint that the pace of change within the global organizations have learned the hardbusiness community is increasing substantially, way that to operate differently, they need toand this is redefining the way we must think think differently.about business leadership. This is why innovative outsourcing solutionsIf change is happening faster, even large are becoming necessary to businessglobal organizations that traditionally struggle sustainability over the long term. A workforcewith agility must find ways to: that is unencumbered by established processes, practices, beliefs, and infrastructure• do more with less; is going to challenge the norms of any business, but it’s also going to offer new ways• innovate faster; to react to rapid market change.• think beyond their current paradigm; and• adapt continuously. Ã Å
  9. 9. 9 | LIVING AMONG WOLVES: STRATEGY IS NOTHING WITHOUT SPEEDREMEMBER WHEN STRATEGIC PLANS WERE WRITTEN INFIVE- TO 10-YEAR TIME SPANS? Remember when they were closely heldsecrets at the top of corporations, not widely shared internally, and certainly not externally?For all of us, in virtually every industry, those For many large, global organizations, thedays are gone. Commoditized markets have dream of being fast, lean and agile seemssignificantly shortened the business cycle. perpetually out of reach. We know thisNow, every business must: because almost 70% of strategic initiatives are never successfully executed, and a 20101. do more with less Harvard Business Review survey showed that just 37% of readers felt their companies2. innovate more, and more quickly were “very good” or “excellent” at3. be agile and adaptable strategy execution.4. avoid holding on to old paradigms or As the pace of change in the world around us dated thinking increases, and the business cycle contracts, the reality is that strategy is nothing without speed of execution, and most of us are failing that critical test. Ã Å
  10. 10. 10 | LIVING AMONG WOLVES: STRATEGY IS NOTHING WITHOUT SPEEDIDENTIFYING THE BARRIERS. Two key issueshave occupied the minds of CEOs for some time now.1. how do we access the skills and 1. Only select people in the organization talent necessary to drive execution feel that strategy is ‘their job’ – a gap of strategy; and between strategy and execution is created2. how do we effectively collaborate 2. Too few people are engaged in the both internally and externally? strategy from the outsetBoth of these issues— accessing the right 3. The time to write and approve strategiestalent and facilitating effective collaboration— takes too long and erodes execution timehave meant that the accepted practice ofwriting a strategy, getting it approved by the 4. Disengagement from strategy at theCEO and then going about communicating lower levels of an organization leads toand executing it has fundamental flaws. This poor decision-makingtop-down approach means that: Ã Å
  11. 11. 11 | LIVING AMONG WOLVES: STRATEGY IS NOTHING WITHOUT SPEEDMAKING STRATEGY EVERYBODY’S JOB. Cisco isthe best possible model of how a large global business can operate as a‘distributed idea engine’, where leadership emerges organically, unfetteredby central command, and strategy is acted out on a continuous basis.Cisco actively engages large networks business decisions, or to share ideas, and as a large numbers of staff vote on the validity andof staff in boards and councils that have result decisions are made much, much faster. popularity of particular component designs.real decision-making power and financial Not only has this reduced its product offeringresponsibility, as well as their own (sometimes LEGO too has a broad base of decision makers and therefore increased its profitability, it hasunorthodox) tools for collaborating and to execute their strategy—and they learnt to restored the core values of the brand of qualitysharing information. By mobilizing this army of do so the hard way. After unleashing designers and flexibility.some 500-plus employees to play a significant to diversify their product offering to anrole in core decision-making, Cisco is seeing unsustainable 12,000+ items (from 7000 just a Decision-making, including big picturebusiness plans drawn up and executed in few years prior), production costs went through strategic decisions, can no longer be confineda fraction of the time it used to take. This the roof. After the mistake began to take a to the boardroom.radical and less stringent approach to process serious toll on profitability in the mid-2000s,means they no longer rely solely on the senior LEGO realized its error. They have since movedexecutive team and CEO to make major to a broad decision-making model, where à Å
  12. 12. 12 | LIVING AMONG WOLVES: STRATEGY IS NOTHING WITHOUT SPEEDBRIDGING THE GAP BETWEEN STRATEGY ANDEXECUTION. No matter how brilliant a strategy may be, if staff do nothave the tools and resources to execute, it will fail.Obvious though that may seem, resourcing is change programs, new technology and remaining competitive, especially when time-consistently ranked as a key issue for staff in innovation are all important internal focuses, sensitive patents are the key to long-termimplementing change. accessing a talent pool that can already profitability. Linking with smaller, more agile deliver what you need is a shortcut many and singular-focused R&D firms to assist withWithout the right people, engaged at the organizations now need, because they simply drug development decreases the time toright time, strategic pace can end up being don’t have the lead-time they used to. market for new treatments considerably.little more than empty activity. Everyone feelsbusy, and perhaps even burdened or burnt The noisy, swiftly changing business Today, there is a clear relationship betweenout, but actual progress is not achieved. This environment we are all operating within speed of execution and being open to theis why HR outsourcing has become a key creates the need for business partnerships external market; of moving from ‘push’ingredient for timely strategic execution. that create instant value. orientation to ‘pull’ orientation, or attracting and then engaging like-minded talent inInternal change and responsiveness to market Think of big pharma – shortening the time organizations.trends is a continual challenge. And while to market for a new drug is essential to à Å
  13. 13. 13 | LIVING AMONG WOLVES: STRATEGY IS NOTHING WITHOUT SPEEDIT IS NOT JUST ABOUT PRODUCTIVITY.Engaging external resources to tap into existing expertiseand innovation is not just about operating leaner.Productivity has been a driver of outsourcing what of your current practices, processes and immense. And as that challenge is overcome,for some time, but it’s not the only one. Being ways of working? another will be hot on its heels. That is whyable to inject new thinking, to help shift old managing talent successfully is a balancing actparadigms and ways of working —and do so This is not to devalue experience and between retaining the right people, ideas andquickly— is also an advantage HR outsourcing history, particularly when it’s possible that processes, and accessing new ones as andcan provide. up to 90% of company knowledge is inside when they’re needed. employees’ heads. It’s true that existingHalf of what college graduates today are talent helps maintain established processes To be among the 30% of business thatstudying will be obsolete by the time they and objectives, but the biggest challenges don’t waste their investment in strategygraduate. The top 10 jobs a decade from and opportunities ahead are ones we don’t development, and which go on to executenow don’t even exist yet. What this means for even understand yet, let alone have the their ideas, getting that balance right in anbusiness is that if current college students are skills or talent pools to overcome. When increasingly competitive landscape could wellnot learning what you will need them to know they do arise, the challenge of retraining, be the key to business 3 or 5 years time (i.e when you hire them), redirecting and retooling existing staff will be à Å
  15. 15. 15 | LIVING AMONG WOLVES: SURVIVABILITY IS ADAPTABILITYBACTERIA ARE MASTERS AT ADAPTABILITY. The mostsuccessful bacteria have a memory that allows them to respond to a threat andexecute a response almost instantly. Then, after the threat is gone, they wipe theirresponse memory clean in order to remain fully adaptable to the environmentsthey are in, without being hung up on how they responded to the last threat.They’re not burdened by the past. For them, survivability is adaptability.What if, a business operating in its chosen Yet, companies like have already Zappos, founded and run on the principlesmarketplace could apply these same used a strong focus on adaptability to create of constant adaptation, was purchased byprinciples? Imagine if it were unencumbered a successful alternative business model. One Amazon for well in excess of $1bn in 2009by established processes, practices, beliefs, of their core values —‘embrace and drive —just a decade after its launch. Clearly, theyand infrastructure—how much faster could it change’—reflects the link that they have made were, and are, doing something right.react to market change? between evolution in nature and in business:When we think about how much we rely on “We are ever evolving. If we want to continueexisting knowledge, past experience and to stay ahead of our competition, we musthistory to guide us in our decision-making, continually change and keep them guessing...the concept of applying this kind of ‘wait As long as embracing constant change is aand see’ approach can —at first— seem part of our culture, they will not be able tocounterintuitive. evolve as fast as we can.” – à Å
  16. 16. 16 | LIVING AMONG WOLVES: SURVIVABILITY IS ADAPTABILITYEMBRACING THE NEED TO CONSISTENTLY EVOLVEIS A MORE ROBUST STRATEGIC PRINCIPLE FOR THEWORLD WE LIVE IN TODAY than the traditional focuses of scale,productivity and efficiency. But achieving this requires a dynamic, bottom-upstrategy execution model and this is not an easy shift for many companies.First, it requires giving up the comforting This doesn’t mean that we throw out every • The way we think —our collectiveidea that with enough research and enough element of planning and strategic intent, but decision-making and accepted wisdomdata, professional strategists can predict it does mean that we begin to see the flawsthe future and plan for it. The issue here is that this approach has inherently, and look • The process and practices we’ve createdthat this approach relies on the threats and to build our adaptive capabilities to combat around usopportunities that strategists see when they them. • The infrastructure we rely on to doare writing the plan remaining relatively static Once we begin to accept that we don’t know our workuntil it is implemented. Given that we areall now operating in an era of heightened what’s ahead, and that any prediction is just The established processes, practices, beliefs,volatility, instability and accelerating change, an educated guess, we can begin to shape a and infrastructure that we rely upon to makethis is increasingly unlikely. business to be more agile and adapt when the our business decisions are the very things that next challenge or opportunity does become can stop us from adapting quickly to change.The reality is, any strategy is always —by its clear. To do this, we need to look closely at Bacteria don’t have this—they forget whatnature —a strategy for now. We have data, the three main barriers that might prevent us happened yesterday and focus all their energywe have trends, but these will only lead us to from embracing change: on adapting to what’s happening today.predictions, and every prediction is flawed. Ã Å
  17. 17. 17 | LIVING AMONG WOLVES: SURVIVABILITY IS ADAPTABILITYIT’S EASY TO SEE HOW THE NEW BREED OFTECH COMPANIES MIGHT BE ABLE TO APPLYTHIS KIND OF RADICAL APPROACH, yet even in amature technology-driven marketplace, such as a call centre, the biologicalprinciples of adaptability and of just-in-time thinking can be applied.We know that managing capacity with Companies such as KellyConnect have taken force—one that wants and needs this kind of It’s clear, even without a crystal ball to relyrespect to labor in a call center is critical a more innovative approach to this problem. flexibility to be able to participate in work. upon, that HR practice needs to evolve tobecause the labor is the most expensive Using Cloud Computing and remote capture these new opportunities and to helpcomponent. One of its biggest challenges managing and mentoring, KellyConnect can This ‘workforce virtualization’ is wholly business adapt more quickly to market to deal with the fluctuating nature of the fluctuate the labor pool in accordance to enabled by technological change and it To find the right people at the right time, towork, especially around peak calling times. If real-time call activity. By creating a distributed means that there is an increasing array of foster flexible and adaptive thinking, and topeak calling times are at 11 a.m. and 2 p.m. workforce, including at-home workers, they jobs, and elements of jobs, that can be tasked embed a culture that thrives on change, thehow is staff productivity maintained in the have been able to create the kind of flexibility to individuals in any part of the globe. Of way we think about our workforce will have tointervening three hours? that works for their clients and employees. course, this assists companies to access talent adapt as well. wherever it is, which will become increasinglyOutsourcing whole departments to a This sort of technology-led optimization critical as global demographic shifts see talentlocation where labor is cheaper is one way is applicable not just in call centers, but pools drying up in most developed overcome this. However, the waste is still anywhere distributed workers need to be Workforce virtualization is one way to be morethere, it just costs less as result of the labor coordinated or directed centrally. And it adaptable, but there are others.arbitrage. also allows business to tap into a new labor à Å
  19. 19. 19 | LIVING AMONG WOLVES: THE NEED TO FIND A ‘NEW’ WORKFORCETHE TRADITIONALLY STRONG CORRELATIONbetween labor, work and location is beginning to break down.With obvious exceptions, such as frontline We may know that new technologies haveworkers in mining, construction or made workforce virtualization possible, andmanufacturing, there is a whole slew of work even relatively simple, but here are twothat can now be ‘virtualized’, or moved to reasons why it is also becoming necessary:where the talent is. In a growing knowledgeeconomy, there are fewer limits on the • psychographic changes acrossbreadth and scale to which you can globalize generations means the next workforce hassome functions. different expectations of work, and • demographic shifts mean that talent pools are not where they used to be. Ã Å
  20. 20. 20 | LIVING AMONG WOLVES: THE NEED TO FIND A ‘NEW’ WORKFORCEFLEXIBILITY IS NEEDED TO MEET TALENT SHORTAGES.Finding and holding on to the right people is a growing challenge for mostorganizations. The trend towards more flexible working arrangementsis, at least in part, both a driver and a solution for this challenge.Close to half (44%) of the active workforce in Compared to traditional employees free agents: Adding them to a permanent payroll isthe United States now consider themselves costly, particularly as their skills may only be‘free agents’, compared to 26% in 2008.  • Are better educated, with more than a needed for specific projects or timeframesThis means they are not employed by one third of free agents possessing a Master’sorganization on a permanent basis, degree or higher • Workers across all generations are seekingbut instead engage in freelance, consulting, greater flexibility. Retention strategies now • possess a technical or professional skill set need to include telecommuting and flexitemporary or contract work, or have theirown business. work arrangements to hold on to talented Being able to access this pool of highly individuals qualified and experienced talent is becomingThe growth in free agents is partly due to paramount when we consider that: • Productivity gains and the injection ofthe economic climate and the need to driveefficiency and productivity. But even without new ideas are what many organizations • Maintaining competitive advantage isthis, the data shows that there is a significant recognize they need more of becoming more difficult. Sourcing just-increase in the percentage of workers across in-time talent provides a cost-effective Accessing a new pool of talented workersall generations who are now classifying employment model is now easier than it ever has been thanksthemselves as free agents. to common technologies that are built to • The most talented and experienced facilitate this virtual working style. workers can also be the most expensive. Ã Å
  21. 21. 21 | LIVING AMONG WOLVES: THE NEED TO FIND A ‘NEW’ WORKFORCECLOUD COMPUTING REVOLUTION IS ALREADY HERE.The evidence that cloud computing and virtualization has grown rapidly iseverywhere we look —data shows that job advertisements for cloud computing/virtualization professionals increased by 344% in between 2009 and 2010.Every large, global tech company seems Today, IBM employees’ badges allow themto have cloud computing and virtualization access to numerous locations so they are notsolutions as part of their product suite. anchored to a specific facility. The facilities inThe fact that they themselves use these to each location are there to help them conductmobilize their own workforce should be a business on a nomadic basis. As a result, IBM’sgood indication that their benefits are real. workforce is already in a virtual mode.IBM is an example of a workforce thathas virtualized over the past decade as ithas made the transition from manufacturingto services. Ã Å
  22. 22. 22 | LIVING AMONG WOLVES: THE NEED TO FIND A ‘NEW’ WORKFORCEDEMOGRAPHIC SHIFTS MEAN TALENT ISN’TWHERE IT USED TO BE. Employees’ desires for more flexibilityat work, as well as the economic benefits of that approach are now clear.Yet, there is another, perhaps ultimately more powerful imperative tolook seriously at work virtualization as a key to business sustainability.When we examine the global trends emerging Skip forward to today and the trend ofin workforce demographics, the news is not reducing workforces has spread out widelygood. The changes are rapid and the impact across Europe. Central and Eastern Europeis not clearly understood. What is understood remain the only real sectors of positiveis that these demographic changes will workforce growth in the region.provide significant challenges with respectto accessing talent and executing in the Looking at the projections for 2020, themarketplace. situation is indeed dire right across Europe. Turkey remains the only significant region withIn 2000, GeoLabour data showed that a positively expanding workforce.across Europe, more people were enteringthe workforce than are leaving it. Individual And it is this unstoppable workforce evolutioncountries such as Italy and Germany bucked that is the driver for HR outsourcing.the trend and were already at below No longer just a cost-reduction tool, HRreplacement rate, but on the whole, Europe outsourcing has emerged as a core strategyhad a sustainable workforce. for major companies operating in this new workforce reality. Ã Å
  23. 23. 23 | LIVING AMONG WOLVES: THE NEED TO FIND A ‘NEW’ WORKFORCEUNDERSTANDING HOW AND WHYGENERATIONS ARE DIFFERENT. Twenty-plus yearsago, when you asked someone what they did for a living, they toldyou where they worked. Today, they tell you what they do.The next generation of employee is wired, Generation Xers talk about work-life balance. Employee-employer loyalty is waning, and continuous connection and conversation intoconnected, plugged in and empowered, Millenials see work and life as one thing—the it can be tempting for Baby Boomers and an opportunity. Younger generations seeand this psychographic change across a line is blurred and if company culture does even Gen Xers to see younger employees as technology use as something that definesgeneration has significant implications for not enable this meeting of two worlds, the demanding and fickle. who they are, not just as products they use.recruitment. For younger generations –Gen X Gen Y/Millenial employee will leave and go To harness the power of these always-multi-and much more so for Gen Y or Millenials: to the next opportunity—quickly. When we For older generations of managers who’ve tasking employees, who see work and life as consider that Millenials will make up around lived repeatedly through restructures, one interconnected way of being, company• the attachment of skills to employers is 40% of new hires by 2015, something has to outsourcing and downsizing, it can feel as culture must adapt. weakening give if the right talent to run an organization though less experienced Gen Y’s/Millenials is to be secured. ‘expect’ rather than ‘earn’ the freedom,• gaining knowledge and broad autonomy and influence they demand. experience is more important than salary You want what? When discussing the and security impact of these psychographic changes But the burning debate here must not be across the generations, it is easy to focus on about whether access to Facebook at work• company culture must support bottom- will damage productivity, it must center the negatives. up decision-making power around turning the Millenials’ mindset of à Å
  24. 24. 24 | LIVING AMONG WOLVES: THE NEED TO FIND A ‘NEW’ WORKFORCEA NEW APPROACH TO DECISION-MAKING.Perhaps one of the greatest opportunities that the new generationalpsyche brings to the workplace, is that of distributed decision-making.Even the largest of global businesses are The Pepsico’s of the world know that whentoday exploring heavily with models to today’s college graduates assess you as aoperate as a ‘distributed idea engine’, where potential employer, they want to see howleadership emerges organically, unfettered by they will fit into your company’s culture.central command. Demonstrating flexibility, collaboration and distributed decision-making will make orPepsico is fully engaged in its digital and break the ability to attract and retain thissocial recruiting strategies. A short visit to new workforce.their site shows that theyare intent on connecting and engaging withtheir current and future workforce on theMillenials’ terms – open, two-way dialogue. Ã Å
  25. 25. “IF YOU LIVE AMONGWOLVES, YOU NEED TOHOWL LIKE A WOLF”RUSSIAN PROVERBABOUT THE AUTHORROLF E. KLEINER is the Senior Vice-President and General Manager of KellyOutsourcing & Consulting Group. In this role he is responsible for the strategicand structural development of the global business practice of KellyOCG.ABOUT KELLYKelly Services, Inc. (NASDAQ:  KELYA, KELYB) is a leader in providing workforce solutions.Kelly® offers a comprehensive array of outsourcing and consulting services as well as world-classstaffing on a temporary, temporary-to-hire and direct-hire basis.  Serving clients around the globe,Kelly provides employment to more than 530,000 employees annually.  Revenue in 2010 was$5 billion.  Visit and connect with us on Facebook®, LinkedIn®, and Twitter®. Ã EXIT