UPFRONT Regretting People Neglect

Australasian chief executives have, to their regret, discovered that the hunkering-down mentality of recent years has taken heavy toll of their organisations. According to IBM’s recently released 2004 Global CEO study, local CEOs believe new kind of leadership is now required if business is going to capture new growth opportunities.
Management’s recent unwillingness to adequately invest in human capital has created corporate road-block, just when the renewed mood for growth requires all hands on deck, says Kevin McCaffrey, partner with IBM Consulting. In other words, the once admired frugal practice of running tight training budgets has come back to bite business “hard”.
The net effect of this short-term cost-cutting is too few qualified leadership candidates. Management is left asking itself; how do we grow the talent needed to tap into this new climate for growth?
While most of the CEOs surveyed believe the cost-cutting agenda has run its course, continued cost-containment, effective asset utilisation and risk management feature strongly in their balanced growth agenda. Local CEOs seeking strategic growth identified two main options for their businesses. Three out of every five CEOs consulted see new and differentiated products and services as the way forward, while 40 percent of them believe expansion into new markets is key potential source of growth. They also seem focused on service excellence as growth engine.
Most of the 456 CEOs who responded to the IBM study globally, recognise that only an investment in people-skills will deliver revenue growth. On regional level, about 55 percent of Australian and Kiwi CEOs see people-skills as the second most important issue on the agenda over the next three years.
The study also highlights concern among local CEOs that without acquiring the right people they won’t have the skills to respond quickly enough to capture growth opportunities, says McCaffrey. But, more than 85 percent of the CEOs believe they need to embed greater responsiveness and agility into their technology and systems.
There are, says McCaffrey, no clearer signals that growth is back on the corporate agenda than greater recruitment activity, and more consistent investment in reorganising the business. CEOs also realise that workforces need re-educating in newly implemented systems and processes. “It’s all part of the global migration from product to customer focus,” he says.
But need for just-in-time (JIT) learning – what staff need to know on-the-job today – means yesterday’s linear learning path won’t cut it any more. The pressure on companies to tap into new growth opportunities means learning and working need to be more intertwined, says McCaffrey.
How companies deliver training is critical to how much people actually learn, he adds. And given the army of X-generation adolescents about to flood the workforce over the next five years, employers must realise that how they learn is very different to former generations.
For instance, while less than 50 percent of new recruits bothered to read hard copy manual for company information, 85 percent were prepared to access the same data online.
Hard copy material may never be completely replaced, but it needs to be blended with other learning mechanisms, says McCaffrey. Having identified the need for blended learning, especially within service organisations, IBM plans to take up the mantle through scalable end-to-end online in-house training solution for both big and small Kiwi companies.
Learning isn’t core business for any organisation so there are times when using third-party providers to manage in-house learning makes sense. IBM’s end-to-end learning solution was developed for the US Army and is dubbed e-Army U. Service personnel use it to continue their education (via web portal of 26 universities) no matter where they are geographically.
IBM has been roadshowing its new “Basic Blue” learning concept and while it is still looking for its first true (blended learning) local sale, clients from the banking, utility, state and tourism sectors are assessing the options, according to Melbourne-based Amy Poynten, principal of IBM’s Learning Services. The market, she says, is attracted by the ability to move from static learning model to learning-on-demand. With IBM proposing to wear the fixed costs associated with training, clients can move to variable cost learning model.
But, says Poynten, before organisations develop road-map for ongoing learning they must diagnose what training they’re already doing. That means identifying the costs and assessing the measurable outcomes of what they are doing.