Fear: Does your organization have the Courage to invest in tough times?
You can’t pick up a newspaper these days without reading about more business downturns, layoffs, and lowered expectations for retail sales, automobiles, consumer products, housing, and financial services. Lots of business leaders are making tough decisions right now, and I also know a lot of our HR and L&D readers are worried about their jobs.
In fact, for baby boomers like me, the concept of retirement in the next 10-15 years is now becoming a fleeting thought: many people now realize that they may have to put off retirement for another time. (The stock market has lost an entire decade of positive performance, so we all have to wonder what that says about US business competitiveness.)
So there is a lot of fear out there – and business leaders in almost every industry are being forced to make difficult decisions: cutting costs, reducing headcount, getting out of certain businesses, and restructuring. In our just-released Fall 2008 TalentWatch®, we found that almost 1/3 of our respondents have a new CEO or top management team and 26% are going through some type of major restructuring. These changes bring stress into every person in the organization.
How do organizations deal with these transformations? The key, of course, is to build a workforce that can rapidly adapt. In this kind of environment people have to take on new roles, take charge of turning around their operations, and focus relentlessly on execution. In many cases these changes identify dramatic gaps in capabilities and skills which may have been glossed over during good times.
An example: Global Pharmaceutical Company
Let me give you an example. We are working with a large pharmaceutical company which is going through a business transformation. This company is a global leader and traditionally built its business through a series of autonomous geographic business units, supported by a global research, global manufacturing, and global corporate functions. Such a business structure worked well in a market with fast growth, high margins, and highly differentiated products.
The world has changed however. Today pharmaceutical companies must deal with the loss of patent protection on many products, the need to sell to low cost healthcare providers, a neutral to negative regulatory environment, and the need to continuously invest in R&D as new genetic-based pharmaceutical breakthroughs become possible.
So this highly successful, well regarded company, which is over 100 years old, needs to change. They are changing in two big ways: first, they are reorganizing the company into global business units which focus on different market segments; second they are revamping their manufacturing capacity to more rapidly deliver generic versions of their patent drugs. These two changes result in new job roles, new leadership positions, and a new sense of purpose among tens of thousands of loyal employees. The company is now focused on operating as an integrated company, with the ability to reduce costs, increase adaptability, and deal with these market changes.
Such Changes Demand Investment:
This particular company realizes that in many ways they are not prepared for this transformation. So they are investing in a series of new leadership development programs, a new global leadership model, and a new program to rebuild the “nobility of first line management” through a new focus on managerial talent development.
They also realize that many people who’s careers were built in one business function (e.g. sales or marketing) have to broaden their understanding of the business, so they have built a business simulation which teaches leaders about how the entire company and the pharmaceutical industry work.
These programs show a commitment to building skills and capabilities during the downturn, with a clear understanding that now is the time to empower and enable managers and leaders to make the changes needed.
Does Your Company have this Courage?
It takes courage and leadership to invest in talent now. One of the easiest things to cut during tough times are HR and L&D budgets. While you may have to tighten the screws on your learning and HR operations, you will find that a continued focus on talent development today is more important than ever. Our 2008 High Impact Learning Organization® research clearly found that organizations with a continuous, systemic focus on organizational learning greatly out-perform their peers. Your role as an HR or L&D leader is to help build confidence in your leadership that they should continue to invest and hold you accountable to deliver the programs and strategies that help your organization transform itself during today’s economic slowdown.