Q & A Talkshow – Asean Single Market – Human Captial
( Talk show with Agus and John Vijayarangam )
1) When organizations in Indonesia want to expand their business to other countries in ASEAN, what will be the Human Capital Role or actions that would be required by companies ?
It is quite obvious that with the prospects of a Single Asean Market coming up in 2015 . The frame work for business will change with globalization , naturally the dynamics for managing HR will change and a paradigm shift will be called for in the management of Human Capital . The three directly affected parties would be :
a) The organizations going through change – to cope with the enormous market opportunities
b) The HR Professional – who will be faced a variety of new issues problems and priorities
c) The Asean Executives – who would need to then start thinking of either cashing in on opportunities in a Global environment or survival in a competitive global environment.
We would need to draft out a new roadmap setting out revised Human Capital Role and policies in line with the planned creation of single ASEAN market .
It is not just the organizations / HR Professionals / or the executives who have to play a role but the Government of Indonesia will have to get involved in looking at the maco aspects of HRD and making dramatic changes in a) education b) Legal systems c) immigrations and cross –border movements d) socio economic policies and culture change programs for public sector executives .
Actually you if ask me , as far as the Human Capital functional role is concerned , I think you will need Salt AND Pepper in the Human Capital role .
Answer : Five Part frame work :
a) Strategic Planning for International HR
b) Alignment of Organisation : Companies sometimes assume they can operate abroad the same way they operate in their home towns . in tune with Asean Market / International customer service / high expectations for quality standards / and the associated training needs etc.
c) Leadership : cross cultural leadership
d) Talent Management : Recruitment of global manager / Training & Development for International standards / Compensations & Benefits Planning – with knowledge of international standards /
e) Performance Culture
2) In facing the Asean single market in 2015 – how can executives / managers prepare for meeting the challenges? What competencies would you recommend we start building ?
Well you can have one big market for Asean but if there is little or no planning for the Human Resources it would be one big calamity for those countries who have not done the human resource planning for the huge opportunities ahead. One is hard-pressed to think of a more important resource than human capital.
In fact, it would not be too much of an exaggeration to say that the global business center of gravity has shifted to the Asian region. It is a historic opportunity and countries that wake up to take up the challenge , will reap rich dividends.
So what competencies can we build ?
In our work with a wide range of international companies operating across many different markets and industries, it has become clear that the most successful business leaders consistently demonstrate a specific set of competencies. These competencies set this group apart from other managers. Successful global managers, particularly those leading the internationalisation of domestic companies, demonstrate these same competencies but in a very distinctive way. In our view these competencies fall into four distinct areas. These are:
a) Business leadership
Business leadership in a global company has very specific challenges. In new markets, particularly new international markets, there is an overriding imperative to form strategic alliances and partnerships. Whether due to the need to gain distribution in a foreign environment, to gain lower cost production through scale, or to navigate the regulatory environment of foreign countries; the ability to build alliances and business partnerships is a key to successful business leadership in new markets.
b) Functional leadership / Technical experts – global standards
Functional leadership is typically defined in terms of the specific functional skills an individual brings to a business situation. In the context of a globalising company specific functional skills are often critical and relate to the challenges facing the business, such as in the areas of marketing, manufacturing or logistics.
c) Managing Change / flexibility / adaptation skills
Global markets are typically characterised by rapid change and a high degree of uncertainty. Ability to lead teams in a changing environment / managing this change and Keeping the team focused and motivated is critical .
d) Globally competitive Personality / Resumes : i) Communications – english / foreign language ii) International qualifications iii) Cross culture experts iv) International mid set : reading / personality / dress / personal leadership styles
To be successful working in another culture he or she must demonstrate a deep respect for, and sensitivity to, cultural differences. This does not mean however that successful managers ‘go native’. To the contrary, if the individual is to be truly respected by the local team, he or she must also remain grounded in his or her own culture and national identity. Finding this balance is a defining characteristic of the most successful global managers
3) There is a lot of talk about Human Capital and its importance in the future could you briefly explain what exactly is human capital and how is this different from traditional Personnel management .
There are, two key principles that are central to the human capital idea:
First, people are assets whose value can be enhanced through investment.. As with any investment, the goal is to maximize value while managing risk. As the value of people increases, so does the performance capacity of the organization, and therefore its value to clients and other stakeholders.
Second, an organization’s human capital policies must be aligned to support the organization’s “shared vision”—that is, the mission, vision for the future, core values, goals and objectives, and strategies by which the organization has defined its direction and its expectations for itself and its people. All human capital policies and practices should be designed, implemented, and assessed by the standard of how well they help the organization pursue its shared vision.
In most traditional companies employees traditionally have been viewed through the budgetary lens, and therefore they have often been seen as costs to be cut rather than as assets to be valued.
4) How can organizations start preparing their talents to compete in an International environment .
Organisation can start the following :
a) Change Management :The sooner companies prepare people for change, the more successful they will be. So companies are working towards organisation structures that are flexible and malleable. There is awareness that change management is one area that needs to be looked at, but no one knows how to go about it. People are still looking for the right way. Change has to be managed in such a way that it feels comfortable.
People hate change, and that is a global phenomenon. Nobody likes to see the status quo shaken. But changes have become part of life, and the frequency and magnitude of changes has also become higher than what it was 30 years ago. Some of it is of the companies’ own doing and is predictable, while others are due to global trends and are unavoidable.
Despite nearly two decades of corporate globalization efforts, many organizations still struggle to find managers who are comfortable and effective in the increasingly global economy. Most suffer both from a lack of cultural awareness when dealing with employees and partners overseas and from a lack of experience managing increasingly complex processes over long distances.
Though a few insightful corporate giants such as General Electric, Cisco Systems, and Intel have made strides in developing successful global managers, many human resources leaders and senior executives continue to be frustrated with the available skills and resources.
5) But even so, there are steps companies and managers can take to better prepare for the challenges of managing globally. Our focus here is threefold: (1) to develop a clearer understanding of the challenges of managing people across borders; (2) to instill in new global managers an awareness of and an appreciation for the vast differences among the cultures in which they do business; and (3) to give global managers the tools and support they need to succeed.
What does it take to be a great global manager?
Research suggests a number of characteristics, the most important being the ability to understand, empathize, and work with multiple cultures. A multinational company investing around the world will face clients and customers from cultures totally different from that of the home country. For example, business in Latin America is based very much on relationships of personal trust: One gets to know a Mexican or Argentinian boss before one presents him with a formal contract. In France, one deals directly with the powerful patron at the top. In Germany, on the other hand, written rules and procedures are all-important: A foreign manager seeking to speak to a German CEO will immediately be directed to the appropriate department head. In contrast to Germany’s strict written rules, the Japanese operate on strict unwritten rules, known as kata. Job security is considered in America to produce a mediocre employee, but in Japan, the lack of job security will do the same. The French admire intellectual prowess, the Americans short-term success; Australians are often wary of both.