Next Moves in a Global Economy: Podcasts from the 2007 Wharton Economic Summit - Knowledge@Wharton

Next Moves in a Global Economy: Podcasts from the 2007 Wharton Economic Summit - Knowledge@Wharton

Today, driving back home I was listening to one of the podcast available in this page from the Wharton Economic Summit. It was an interview with Shellye L. Archambeau, CEO of MetricStream and she was talking about the balance of life and work. I found her comments very valid and practical; here are some of the ideas:
- When it comes to life-work balance, there are integrators and there are segmentors. Integrators use technology to do things that were not possible before and by doing so, they integrate work in daily life. Segmentors, draw a hard line between life and work.
- Plan for help and put it in the budget. If you want to work hard, have a family and enjoy your life, you'll need some help. If needed, pay for that help and enjoy a smaller house.
- Be open and explicit regarding your commitments with family and work so they both know where is the line.

I personally adhere to the side of integrators. I believe in the augmenting power of technology. I do believe and practice the habit of morphing your working habits and adapting them to your family habits.

As I was listening to this podcast, I was thinking to myself that this is yet another example of attention economy in practice. The way you use your time and how you reach a combination of work and life that fits you, is essentially a choice of where are you extracting the maximum return to your attention. In some moment of the day you prioritize the quality time and attention devoted to your family. In some others the work gets the attention.

Bottomline: Decide what is the value that can be obtained from your attention and use technology to enable it!

Entrepreneurs inside your company

Is it possible to have entrepreneurs inside large corporations? That's an interesting question.
I think the answer is YES.

Then, the next question is, are they going to last?. Mmm, that's a different story and how to make it happen is a very interesting managerial challenge.

In a recent conversation with someone who knows the technology industry very well, he mentioned: "this company is much more entrepreneurial than that other one.." Can an entrepreneurial culture retain entrepreneurs inside?

The fact of the matter is that entrepreneurs, at least my understanding of entrepreneurs, are motivated by two things: following their guts to transform reality and make money with it. Many companies with the so called "entrepreneurial spirit" can provide the freedom to do the first. But very few companies will also provide the second element.

One could argue that if you want to make money, you should go out and run the risk. True. However, I think there's a balance to be achieved here. It's in the interest of the company to identify and invest in new areas and to do that, they will be better off leveraging the entrepreneurial skills of employees. However, these will only be interested in pursuing the opportunity, if the associated compensation reflects the risks in their careers.

There is opportunity for creating the mechanisms that can recognize contribution to business growth through new endeavours inside large organizations. This recognition should come in the form of higher monetary premium. Of course, the risk-reward equation cannot be the same as if the opportunity was pursued outside the company. The same opportunity outside the umbrella of a large organization, should provide higher upside, simply because it also encompasses a higher downside.

The question then is: how many companies have the internal mechanisms that discriminate compensation according to achievements? Are successful entrepreneurs inside large companies capturing a bigger premium than their more static peers?

As Jack Welch has tirelessly explained, top performers should be making x2 or x3 what your average performers are doing. For enterprise entrepreneurs, that should be x10.

What should my children study?

Some months ago, a good friend of mine who's got a son aged 17, threw this question to me in the context of a discussion about the future. If I could give him any advice, what should I suggest him to study?

Now, that's a difficult one. For parents in their 50's, the traditional educational models worked out pretty well. The world was somehow predictable, you could find an area that you liked or felt passionate about, and you could read those reports that said "demand for lawyers in the next 5 years will grow by 10%..."

The problem today is quite a different one. First, every academic discipline evolves so fast, that when students graduate after 4-5 years, a significant portion of what they have learned is obsolete. Is this giving them the preparation they need?

Second, with the current trends in globalization, the fact that you become a doctor in, say France, does not guarantee that you will be taking a job as a doctor in France. It may very well happen that off shoring trends, take out to India a portion of the jobs for doctors in France.

So, in other words, the situation has changed now. We must move from a view of predictable, static jobs that require well defined skills to be performed, to a much more fluid environment, in which the skills needed evolve very fast and where globalization increases competition for everyone. If we cannot predict where a market is going to be in 5 years, how could we possibly predict which skills are going to be needed?

OK, so what do you tell your friend? I confess that I did not know what to reply, but I tried:

- Make sure you find an education institution that gives him mastery in some discipline, but more importantly, where he learns how to learn. As a corolary of this, you probably want to suggest that he studies the less volatile disciplines such as math or philosophy.
- Make sure he understands his education as a continuous flow and he takes ownership of it. i.e., forget your traditional model of thinking that your title would give you a job. That will not work. In this context, developing his intellectual curiosity will be important.
- Make sure he is conscious of the global dynamics. Understanding who else can do your job at a lower cost is important.

I hope this was valid for him. And I also hope it will be valid for my kids (and yours)

Your investment to improve tacit interactions

http://www.mckinseyquarterly.com/article_page.aspx?ar=1767&L2=18&L3=30

If 70% of your workers interactions are what McKinsey calls Tacit, did you ask yourself what percentage of your IT investment goes to support those interactions?

Reengineering and automating processes has taken companies to achieve great productivity improvements. But if we are to live in an era where interactions are more tacit than, transformational or transactional, what is going to be the contribution of IT to improve productivity in this environement?

There are two key areas in IT that companies look at in order to support the new nature of their work:
- Make information accesible. Despite the organizational structure, try to avoid silos in information. Allow the information flow in all directions and break down barriers, hierarchies to become porous.
- Make people accesible. Adopt mechanisms to increase the means you can access people, inside or outside the boundaries of the organization in real time. Provide as many channels as possible in order to maximize the bandwidth of communciation.

As you can read in one of the McKinsey articles mentioned in previous posts, "Tacit interactions reduce the importance of structure and elevate the importance of people and collaboration"

In further posts I explore the details on how to do this and how SOA and Web 2.0 converge.

The new workplace

In this post I try to summarize some of the most important research published lately on the new dynamics of work and the emergence of a new workplace.

An old topic that was fancy in the late 90's is comign to the spotlight again. Judging by the number and quality of articles and research being published, for example by McKinsey Quarterly Journal and recently The Economist, one would argue that the workplace discussion is hot again.

The reasons are quite strong and they tell us that the debate is a very profound one with big implications for modern organizations.

The new interactions described by McKinsey essentially prove that we've entered a different type of economy. The article distinguishes between three types of interactions:
- Transformational- extracting raw materials or converting them into finished goods
- Transactional- Interactions that unfold in a generally rule-based manner and thus can be scripted or automated
- Tacit- More complex interactions requiring a higher level of judgement, involving ambiguity and drawing on tacit, or experiential, knowledge.
The facts are that 70% of jobs created in the US since 1998 are tacit jobs. And these jobs today count for 41% of labor market in the US.

One of the most important implications of this nature of jobs being created today is the difference in the productivity achieved by firms where the majority of the interactions are tacit. Another McKinsey research shows that "...the variability of company-level performance is more than 50 percent greater in tacit-based sectors than in manufacturing-based ones. Tacit activities are now a green pasture for improvement."

The latest contribution has come from The Economist. In it's recently published survey "The battle for brainpower" analyses in detail the new battles to build the "Empires of the Mind"

SW2006_Industry_Report.pdf (application/pdf Objeto)

SW2006_Industry_Report.pdf (application/pdf Objeto)

In this frequently quoted report by McKinsey and Sandhill about the status of the Software industry in 2006, one very interesting observation (as he have discussed previously) says "many innovations, collectively termed web 2.0, will fully reach the enteprise- as in previous cycles, innovation developed for individual users will translate into substantial enterprise opportunities". True.

Web 2.0 for the enterprise will bring a combination of tools like blogs, wikis, search, tagging to the corporate user that can reduce the friction experienced today around the person to person multipoint collaboration activities.

After going through automation of business processes in all transactional interactions, the big opportunity in front of corporate productivity improvements come from an optimization of social/tacit interactions.

The McKinsey Quarterly: An executive take on the top business trends : A McKinsey Global Survey

The McKinsey Quarterly: An executive take on the top business trends : A McKinsey Global Survey
Here it is again. Consistent with the IBM results posted in a previous entrance, this sample of 3470 CEO and other C-level executives conducted by McKinsey Worldwide through similar conclusions: "Innovation (products, services and business models)" and "greater ease of obtaining information and developing knowledge" are the two biggest factors that contribute to the accelerating pace of change in global business environments. This last one is as well the one trend that is perceived as having the biggest impact in profitability of companies.
As mentioned before in this blog, one of the biggest challenges for organizations today consists in combining the fact of global presence and speed of change with the ability to cooperate and communicate among teams inside and outside the main orgnization boundaries.
What the web has developed as Web 2.0 technologies with a great emphasis on social capabilities driven by technology standards, still needs to hit the corporate world.
A very good perspective of how these technologies can impact the corporate world and about the strategic thinking behind it cna befound in this excellent blog entry by John Hagel: SOA versus Web 2.0

Corporate search needs to heed workers, Google exec says | CNET News.com

Corporate search needs to heed workers, Google exec says | CNET News.com
The most important statement in this article is when Dave Girouard says "consumers and employees are the same people". I entirely agree and that is the reason why I see the standards for corporate technology being set today by end user internet tools. Why exactly can't I get the Google experience inside my company? is a question that most end users do. The same goes for email, calendars, groupwork tools, instant messaging...Be bullish on corporate software as it will need to catch up quickly with the end-user experience employees get in the Internet.