Leading the Way is a column written by PricewaterhouseCoopers professional staff. It appears in the Business section of the Bangkok Post twice each month. The column provides specialised advice to corporate decision-makers in Thailand on global and local business trends.
This article appeared in the January 22, 2008 issue of the Bangkok Post.
By Kulvech Janvatanavit
At the beginning of 2007, a team from PricewaterhouseCoopers gathered to explore the future of people management. Our thinking was sparked by the rising profile of people issues on the business agenda, the talent crisis, an ageing workforce, and the increase in global worker mobility. We wanted to explore how these issues might evolve, and how organisations need to adapt to stay successful.
In this article, we outline three of the possible organisational models we will see in 2020, and what type of employee management each requires.
The Blue World: Corporate is King
In this model, big company capitalism reigns supreme. The sheer size of corporations in the Blue World means that a significant number now operate with annual turnovers that far exceed the GDP of many individual countries.
In 2020, many of these corporations provide the equivalent of welfare states for their employees. People management encompasses many aspects of employees' lives, including housing, health and children's education. Staff retention rates are high as people policies seek to lock in talent. However, top talent is still hard to attract and retain, as many senior executives use personal agents to seek out the best deals.
Mass consolidation has had an impact on cultural issues. Leadership teams now use rigorous recruitment processes to ensure new employees fit the corporate ideal. Existing staff are subject to compulsory corporate culture learning and development programmes.
Huge people costs drive the need for robust metrics and analysis. Employee engagement, performance and productivity are all measured systematically. Leadership can tap people data on a daily basis, and these provide an early warning signal of non-corporate behaviour or below-standard performance.
In the Blue World, technology pervades every realm of business and leisure activity. The line between inside work and outside is often blurred by technology with employers providing the platform. The Blue World is one in which the globalisers take centre stage, and a corporate career separates the haves from the have nots.
The Green World: Companies Care
In this model, consumers and employees are the ones who force change. Companies develop a powerful social conscience and green sense of responsibility, while consumers demand ethics and environmental credentials as a top priority.
Companies have strong control over their supplier networks to ensure that corporate ethical values are upheld across the supply chain. This leads many organisations to take greater ownership of key components of the supply chain through vertical integration. Rigid contractual obligations cover every eventuality.
The audit process and quarterly company reports are characterised by a focus on measuring greenness, detailing carbon emissions ratings, and carbon exchange activity, as well as the more traditional valuations. The importance shareholders and investors place on these issues is reflected in the share price.
In this Green World, new graduates look for employers with strong environmental and social credentials; in response HR departments play a key role in developing the corporate social responsibility programme.
Employees are expected to uphold corporate values and targets around the green agenda. The need to travel to meet clients and colleagues is replaced with technological solutions that reduce the need for face-time.
Finally, most companies in the Green World provide staff with corporate transport options between work and home to minimise the need for vehicle use. This leads many companies to relocate some operations to where people are based, and out of big cities.
In the Green World, society and business see their agendas align.
The Orange World: Small is Beautiful
In this organisational model, big is bad for business, for people and for the environment. Global businesses fragment, localism prevails, and technology empowers a low-impact, high-tech business model.
The dream of a single global village has been replaced by a global network of linked, but separate, and much smaller, communities. The exponential rise in the efficiency of online systems for buying, selling and trading services and skills has debunked the old orthodoxy that economies arise from scale.
Supply chains are built from complex, organic associations of specialists, varying greatly from region to region and market to market. The solution is now not to outsource, but to fragment.
The millennial generation, comfortable with technology, is driving the usage of technology as the interaction with services, government and work, with an emphasis on choice and anti-monopoly thinking encouraging innovations.
In the Orange World, organisations recognise that their employees and the relationships they have across their networks are the foundation of company success. Companies seek to promote and sustain people networks.
Guilds become more important, and take on many of the responsibilities previously assumed by employers including sourcing talent, medical insurance and pensions, development and training. Employees are usually aligned to guilds and can gain opportunities through professional portals provided by guild networks.
Finally, employment contracts are flexible to accommodate staff churn and rapid turnaround. Individuals develop portfolio careers, working on a short-term, contractual basis.
In the Orange World, networks prosper while large companies fall.
Meeting the business challenges of tomorrow
What will the world look like in 2020 - Blue, Green, Orange or something else entirely? It is highly plausible that all three will feature in tomorrow's world.
We already see some multinationals heading in the direction of the Blue model, and, as the CSR and sustainability agendas grow, many are taking on characteristics of the Green World. The Orange World represents the most radical departure. Will big business find itself outflanked by a vibrant, innovative and entrepreneurial middle market? Only time will tell.
The world of work is going to become even more complex. Our message is: take a long hard look at your organisational models and current people management strategies; how are you addressing reward, international mobility, employee engagement, development and learning? Think about how these might change in the future and whether the strategy you now have in place is ''future-proof'', sustainable, and relevant for the plausible worlds of tomorrow.
