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Blog: Global Work Watch May 2008 Archive
 

May 30th, 2008

Overheated China Chatter From McKinsey?

Consulting firm McKinsey & Co. has reputation for thoughtful analysis, but its latest bulletin on China veers toward the sensational.

I received an e-mail this week from The McKinsey Quarterly  with an article titled “Competition From China: Two McKinsey Surveys.” It had this somewhat alarming lead sentence: “Executives around the world expect competition from Chinese companies to increase, mainly because of their low production costs, yet surprisingly few are acting to meet the threat, a McKinsey survey shows.”

In particular, McKinsey notes that less than 30 percent of executives surveyed say they work for a company that has changed its approach to sourcing a great deal during the last three years in response to competition from China. And less than 20 percent of the execs said their firms made substantial changes to marketing, organizational structure and global strategies in response to China.

The lack of dramatic steps vis-a-vis China is not surprising, though, for reasons McKinsey itself uncovers. For one, competition from China in many cases remains weak. According to McKinsey’s survey of global executives, 41 percent of the respondents view Chinese companies as weaker competitors than companies from other countries. Just 8 percent of the execs said superior products or services were a competitive advantage for companies based in China. Only 7 percent said “attractive brands” gave China-based firms a competitive edge. Product quality and brand awareness are crucial factors for sustainable success in business today.

Yes, the surveyed execs expect China to make progress in those areas in the next three years—24 percent said superior products or services will become a competitive advantage, and 22 said the same for attractive brands.

But another part of the McKinsey report highlights how difficult it will be for China to move up the value chain, as they say. McKinsey surveyed executives at companies based in China and found that those leaders see a dearth of management skill as the biggest obstacle to the global growth of their companies. Forty-four percent cited a lack of managerial talent as a barrier to globalization, well ahead of insufficient capital, which ranked second.

“This jibes with the view of executives from other countries, only 1 percent of whom cite stronger managerial talent in Chinese companies as giving them a competitive edge,” McKinsey stated.

Companies in developed countries, too, are concerned about management skills. But China is an acute case. We noted China’s managerial talent problem in a special report last year, pointing out how a shortage of leaders often puts junior officials on a too-fast track.

Companies in China are working to solve the issue. But partly because China’s Cultural Revolution hurt the education of many citizens, there is no quick fix.

So on the whole, a measured response to China by companies makes sense, even if McKinsey is shouting otherwise.


May 22nd, 2008

Can Employee Uniforms Make Profits Look Better?

Do clothes make the employee? And how much sartorial solidarity is called for in the workplace today?

These are among the questions raised by a press release put out today by UniFirst, “a provider of uniform and work apparel programs to companies throughout North America.”

The headline of the release at first struck me as comical—“Uniforms Help Companies Gain Market Share During Economic Downturns; Improve Bottom Lines.” But this seemingly absurd claim has some intriguing support behind it:

• Companies that increase advertising during a recession can improve market share—and uniforms effectively make workers into walking billboards.

• Research by reputable organizations has found positive results from uniforms both in terms of customer and worker attitudes. UniFirst cites a study by the University of Nevada-Las Vegas of 200 hospitality employees finding that uniforms heightened wearer self-confidence and contributed to positive work attitudes.

UniFirst also argues that uniforms can help with employee retention once the economy picks up.

“When economies improve, conditions become more conducive for employees to seek out new jobs,” Robert Isaacson, director of marketing for UniFirst, said in a statement. “The ‘team-like’ atmosphere uniform programs create has been shown to be a positive influence in retaining good employees and improving overall turnover rates.”

I have a hard time buying this claim, though, and I wonder how much good really is possible from a one-style-fits-all approach. Yes, I can see how uniforms like the brown outfits worn by UPS drivers are tightly tied to the shipper’s overall brand, how uniforms could create a sense of pride for some workers, and how they can engender a helpful team spirit—something U.S. companies often undervalue.

But there are uncomfortable downsides to uniforms and rigid dress codes. The way they can feel stifling and silly is captured in the film Office Space, where Jennifer Aniston’s character chafes against having to decorate her waitress uniform with “flair”—buttons intended to pump up her workplace persona .

It’s also not clear how far the benefits of uniforms extend. About the only time white-collar workers wear uniforms is at industry trade shows, when button-down shirts with corporate logos abound on exposition floors. But I’ve always gotten a sense that people feel a little ridiculous in their company-wear. My editor, Carroll Lachnit, recounts hating having to wear a Workforce shirt at trade shows, because it got in the way of reporting.

“When I was walking around the show floor, trying to introduce myself or interview someone, people didn’t see me as a journalist (despite the press badge), but as some overly aggressive vendor,” she says.

That’s gets at the way uniforms are a tough fit for “information workers”—the discretion and autonomy invested in them is undermined by a company outfit that connotes a certain cog-in-the-wheel-ness.

Undoubtedly, a snob factor also goes along with office workers’ disdain for uniforms. They are seen as trappings of the working class. In the case of uniforms by UniFirst, there is another potentially unsettling aspect. The company not only provides work clothing but “facility services cleanliness products, such as restroom items and floor mats.” Even if I were wearing a well-made, comfortable UniFirst shirt, the fact that the vendor also made the office floor mat would lower my self-esteem a couple of notches.

Of course, “business formal” and “business casual,” and all the variations possible within them, still add up to a kind of uniform or costume. Working-class folks sum this up by sneering at “the suits.”

Hospital settings and pro sports are the only settings that immediately come to my mind where the uniform-class issue is turned on its head: Both highly paid doctors and sports players wear distinctive uniforms.

Have any “knowledge worker” companies experimented with uniforms on a regular basis? What do you think—could uniforms come into fashion beyond their traditional industries such as retail, health care and hospitality?


May 14th, 2008

Managers Buffeted by Economic Turbulence Too

Global Work Watch has written a fair amount about worker insecurity in the today’s international economy. But the issue of employment stability extends into the executive ranks as well.

A couple of recent reports suggest that a tumultuous market—rife with mergers, layoffs and job hopping—may be a bummer both for senior managers and the companies they serve.

In its Employee Engagement Report 2008, consulting firm BlessingWhite found that engagement levels were highest for people holding job titles of vice president or above. Still, only 47 percent of those executives were engaged, leaving more than half with “less-than-ideal emotional connection and alignment.”

A story on the report by Human Resource Executive magazine quoted Hewitt Associates consultant Ray Baumruk to explain the situation. Baumruk cited shrinking job tenure among executives as one of the factors that harms engagement. “Executives are human and not immune to the stress of the growing pace of change and job security concerns,” he said.

Disengaged managers are a problem for businesses not only because of their immediate impact on firms but also because leadership looms as a key challenge in the coming years. Management skills are the top priority for organizations as they think about their future talent needs, according to a new study from the Economist Intelligence Unit. The report, which surveyed nearly 600 executives in developed countries, found that the ability to deal with and manage change was the most cited skill seen as critical to success over the next three years. The next most-cited skills were strategic thinking ability and communication and interpersonal skills.

Job hopping and getting laid off might help some people learn how to deal with change, nut it’s also likely that short stints will get in the way of soaking in leadership lessons. The sort of “soft” management skills in demand seem to me to come best from sticking with a post for a while and wrestling with tough situations over time.

Without giving leaders time to develop and teams time to jell, even the best talent can be wasted. Consider this comment from University of Michigan business professor Dave Ulrich in the Economist Intelligence Unit study: “Talent without teamwork is not sufficient. If you have talent that cannot work together, you have an all-star team, but they’re not going to win: you keep buying free agents, but they don’t play well together.”

(Business software firm SAP sponsored a roundtable discussion of the Economist Intelligence Unit report at its recent user conference. I took part in the forum, and it can be found here: http://wwwmedia.sap.com/replay/global/sapphire/orlando08/080505_11am_SAPHIRE_Roundtable_200k.asf).

So let’s see: Management ability is crucial, but managers are feeling alienated from their firms, partly because of the turbulent economy and its job insecurity.

Doesn’t that argue for creating a calmer business climate and more stable employment—even for those in the C-suites?


May 1st, 2008

Safety Harness a Better Metaphor Than Safety Net?

As the stream of grim economic and job market news continues, let me throw out an idea I’ve been mulling for a while.

Maybe we need a new metaphor for the way we help workers struggling without a job. Instead of calling it a “safety net,” perhaps we should call it a “safety harness.” By harness, I’m thinking specifically of the gear used by rock and mountain climbers—the belt and straps attached to a safety rope that keep you from falling too far in case you lose your footing.

I think the economic safety harness is a better metaphor because it highlights the responsibility of the individual to get to where they’re going financially. Yes, they may fall—because of their own misstep or economic winds beyond their control—and need the steady hand of society to keep them from tumbling to disaster. But the individual will have to return to the mountain face to continue their ascent.

The economic safety net connotes a kind of passivity. It highlights social cushioning and assistance rather than individual initiative. Indeed, the circus imagery conjured up by a safety net suggests the economy amounts to a tightrope or trapeze act fraught with immense risk.

It’s true that economic risk is increasing for workers around the globe. But the safety net metaphor may exaggerate the peril and the role of luck while downplaying people’s power to control their economic destiny. As a result, I suspect, the phrase itself figures into the reluctance of conservatives especially to provide more generous unemployment benefits.

In my view, an economic safety harness would include expanded unemployment benefits as well as sound training programs, health insurance and decent retirement benefits—a combination which would give people the confidence and tools to take risks and keep climbing toward prosperity.

As it stands, leading economists consider our safety system for displaced workers to be skimpy. Fortifying it is an urgent task. Not only is the job market deteriorating for workers, but increases in unemployment benefits appear to be particularly effective at jump-starting the economy.

The U.S. economic stimulus package—centered on tax rebates—did not extend jobless benefits. There’s been talk about taking that step in a second stimulus plan. But the Bush administration has signaled its opposition to an additional package.

In other words, the administration isn’t eager to improve the “safety net” that catches workers. Would things be different if the president were asked to strengthen the “safety harness” that helps workers stick to their economic journey?



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