IBM Chairman and CEO Sam Palmisano recently wrote in Foreign Affairs: “The globally integrated enterprise will require fundamentally different approaches to production, distribution and workforce deployment … actively managing different operations, expertise and capabilities … allowing it to connect more intimately with partners, suppliers and customers.”
The globally integrated enterprise is an organization focused on connecting and using various sources of production and value creation, regardless of where they are. It involves the close interaction among myriad internal and external stakeholders, including employees, customers, partners, government agencies and other third parties with a stake in the outcome of a particular product or service. Increasingly, this integration is the ante to doing business in today’s interconnected world.
At the center of the globally integrated enterprise is the workforce itself. Although global information systems and closely linked supply chains of physical goods are key components, it is ultimately individuals who are responsible for coming up with and delivering the products and services for the organization.
Thus, to successfully operate in a globally integrated world, an enterprise must build a set of core competencies aimed at optimizing the workforce. Many companies have started to focus their attention on one or two of these areas, but few have looked at these as an integrated set of organizational and workforce imperatives.
All too often, these efforts are driven by a particular department or function rather than involving a unified set of corporate stakeholders. Responsibility for developing these capabilities lies in the HR and learning organizations, but it also must include line-operating units and supporting functions such as IT, legal and corporate communications.
Building and sustaining a workforce for the globally integrated enterprise requires seven core competencies.
Understanding the Workforce’s Demographics and Capabilities
The globally integrated enterprise must have the competency to make fact-based decisions regarding the workforce, analyzing human capital data, developing basic insights about corporate demographics, skills and capabilities and employee performance. But fragmented HR systems, a lack of analytic tools and limited resources often stand in the way.
This lack of visibility affects not only HR but the learning function, as well. How can learning leaders design effective learning strategies if they don’t have a full understanding of their workforce? All too often, it is virtually impossible for senior executives to make workforce decisions in the same way a chief financial officer would make strategic choices based on the company’s financial position.
Predicting Future Labor Supply and Demand
Although many organizations struggle to understand the state of their workforces, even more find it difficult to make educated decisions about their future workforce needs. How does the organization’s business strategy translate into a set of human capital requirements? From a learning perspective, how does strategy inform the identification of relevant skills and capabilities, which, in turn, translate into successful learning programs?
Today’s global business leaders must consider issues on both the supply and demand side of the labor equation. For example, on the demand side, many organizations struggle to take their business strategy and transform it into a series of human capital requirements. On the labor-supply side, companies must understand the availability of labor across markets and constantly monitor their associated costs.
The disconnection between the organization’s business direction and the associated workforce requirements can be significant. The demand issues leaders must consider include:
- Capacity: Will the organization have enough employees to support the execution of a particular strategy?
- Capability: Does the organization have the right knowledge, skills and competencies to execute the strategy?
- Culture: Do the organizational norms and values support the strategy’s development and implementation?
Globalization, changing workforce demographics and fluctuating business cycles loom as challenges on the labor-supply side. Companies must understand labor supply, not only as it pertains to the full-time workforce but also in regard to third parties such as outsourcing partners and placement agencies.
Using Social Networks to Increase the Visibility and Application of Knowledge Across the Organization
Mapping the informal networks within an organization is essential to understand where people find knowledge and get their work done. Studies consistently show the importance of social network relationships to obtain information, solve problems and learn how to get work done.
Tools such as social network analysis can help bring these informal networks to life, as well as allow organizations to better understand and influence the development of these important knowledge conduits. The more recent emergence of blogs, wikis and tagging helps increase the visibility of knowledge within and across organizations.
By making it easier for individuals to display their areas of expertise and receive feedback on their ideas, these tools help foster the development of connections, relationships and common context that are critical to the flow of knowledge across traditional boundaries.
Enabling Individuals to Perform Work, Regardless of Location
Working in a virtual environment requires access and bandwidth, of course. But as these become ubiquitous commodities, the enterprise also will need to enable employees to manage their own personal transactions, as well as information about themselves, their work units and the organization.
Employee and managerial self-service tools not only reduce the time and cost of many routine activities — they also allow individuals to get the information they need, regardless of their time zone or location. When tailored to a person’s particular business unit or role within the organization, these tools can reduce organizational clutter and time wasted trying to find valuable information.
Equally as important, organizations need to find ways to evaluate remote workers by their contribution, not simply by their presence. They need to find ways to ensure remote workers stay connected to their networks and are recognized for their accomplishments in terms of rewards and promotions.
Facilitating Collaboration Across Traditional Organizational Boundaries
Encouraging nontraditional collaboration is a key competency for global enterprises. One example is informal groups that meet regularly on topics of common interest to share knowledge and expertise. Such communities help maintain the flow of knowledge across the organization and help preserve organizational memory.
Nontraditional communities at work can decrease new employees’ learning curve, improve response to customer needs and inquiries, reduce reinvention of the wheel and spawn ideas for products and services.
Driving the Rapid Development of Skills and Capabilities to Meet Changing Business Conditions
Employee education itself is a core competency of the global enterprise. The Conference Board has studied workforce education, and it found a correlation between increases in employee skills and economic output. Research also shows that workforce education delivers better employee morale, improved capacity to deal with workplace change and use new technology, better team performance, reduced time per task, lower error rates and waste, better health and safety and improved retention of employees and customers.
How can companies maximize this competency? By delivering the necessary learning to employees when they need it and in a format they can easily digest and apply to their work environment. Delivering content through technology is simply one piece of the picture — even the best learning systems account for about 30 percent of the total learning individuals do in the workplace.
The remaining 70 percent occurs on the job and must be supported by performance support tools as well as through mentoring, informal communities of practice and other opportunities for individuals to discuss problems and learn from others who have faced similar circumstances.
Evaluating Employee Performance and Providing Appropriate Feedback
In an IBM study of more than 300 organizations, companies that had higher numbers of individuals receiving formal performance reviews also demonstrated higher profitability. Although this might seem intuitive, consider the challenges when an organization must develop a consistent, worldwide framework to set goals and evaluate progress at regularly defined intervals. These goals and expectations obviously will differ by job role, but the process should be equivalent and transparent for all.
In addition to performance feedback, individuals also should have the opportunity to evaluate their skills and capabilities, as well as discuss opportunities for career development and advancement. This provides individuals a path toward personal development, and it allows the organization to make better decisions about the current and future state of its workforce.
The Key Competencies in Action
An oil services company faced the challenge of a lack of communication among petroleum engineers working in different geographies. In the field, these employees felt uncomfortable making decisions independently. As a result, they overloaded limited headquarters support resources.
The company decided to invest in a knowledge-sharing community of engineers. It set up face-to-face and virtual events to increase peer awareness of knowledge and capability and to foster trust among the group members. A community portal and content management software provided access to members’ biographies, drilling documentation, frequently asked questions and other content.
The community served as a vehicle to build connections and pass along experience and best practices. Within a year, the organization had eased the burden on support resources, and decision making had significantly improved in the field. Better decisions and improved quality translated into savings substantial enough to recoup the company’s investment with the first year.
By developing these seven competencies, organizations will be better equipped to react more rapidly and more effectively to changes in the global environment. These capabilities need to be considered not as separate ventures, however, but as part of an integrated effort to increase workforce effectiveness.