Susan Keehley asked:




Be Informed, Build Upon Your Talents, Help Others

 

by Susan Keehley

It’s difficult to pick up any newspaper, magazine, or publication that doesn’t have an article on business or social networking. With rising unemployment and historically high layoffs, networking becomes so important to building relationships through reciprocity. How do we help each other succeed? More studies show that we need to learn better networking skills to result in career security, meeting business goals, and developing professional competencies. Check out the latest points:

 Be Informed

Relating to corporations, companies which recognize the need to manage internal networking, have created a new position, CNO, Chief Networking Officer. This person captures and weaves all the potential win-win opportunities for everyone involved. CNO actions and synergies could have an effect on many layers of the company.

In a recent MIT study (1/09), employees with the most cohesive face-to-face networks were 30% more productive. An article in the Academy of Management Journal states, “successful managers spend 70% more time networking than their less successful counterparts.”

CPP Inc, announced a worldwide study which found most companies were unprepared for upcoming leadership gaps. Josh Bersin, president of Bersin & Associates, states, “Leadership development, executive coaching and career development should be among the priority investment areas for most companies today.” The Wall Street Journal reported (2/09) that despite cutbacks, firms are investing in developing leaders. According to the book, “Make Your Contacts Count” employees need development in strategic networking practices to excel at creating, cultivating, and capitalizing on the cross functional relationships that get things done and affect the bottom line. Also noted in the book, before employees retire or move on to other jobs, advanced networking skills help them pass on their valuable organizational and technical knowledge to new, younger staff members. So is YOUR company on the surf board ready to ride the economic wave by including networking skills training in your leadership development program?

On an individual level, “Make Your Contacts Count” states that based on their research, “2/3 of job finders say they found their job through networking.” It takes about six contacts to show your character and competence and for people to trust and recommend you.

According to Upward Mobility and Pepperdine’s Graziadio School of Business Management relating to professional networking and its impact on career advancement, those making more than $200k state the single most critical factor in determining the value of your network is the breadth of connections with people who are willing to recommend you for the jobs.



Build Upon Your Talents



In conclusion, good networking skills can be learned by anyone at any stage in their career. Networking is the hottest avenue for staying ahead of economic tsunamis for businesses and individuals, however do companies recognize networking as a money making activity? Some other reflective questions include- Is networking training offered, or included in employee performance plans? Are people rewarded for networking successes? Are employees encouraged to belong to professional associations and for bringing back information and contacts?

Do individuals perceive their networking skills to be stronger than they actually are? Do people believe that if they are sociable and have friends that they don’t need to improve or learn more about networking? There could be a false impression of the value of their network. It’s time to do an assessment on the net worth of your network. Do you know at least 100 people well enough to call and say, “hi, this is _____” and they know who you are and what your skills and talents are? Have you taught your contacts what you do (not your title or company)? Can they easily explain to others what you are good at? Do you look for ways that your resources and information can help others fulfill their personal and professional goals?



Help Others



With 60% of the respondents from the Stanford University’s Shyness Clinic survey saying that they are shy, the increase in online social networking, and studies supporting that even top executives haven’t mastered specific networking skills, it’s apparent that improved networking skills are needed now. There’s an art to networking. Now is the time to invest in your employees; now is the time to invest in yourself and learn how to improve networking skills. Most importantly, learn how to help your neighbor who is struggling with similar challenges.  While helping others they learn to know your character and competence which can result in developing a good relationship, trust and referrals.



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Matthew Hancock asked:


“Green Building” is a broad term used to describe the design and construction of sustainable and environmentally conscious buildings.

The driving force behind this is to lower our negative impact on the environment and, at the same time, make the buildings we live and work in safer and healthier for us.

According to the United States Green Building Council (USGBC) statistics,`buildings are responsible for all of the following:

39% of US carbon dioxide (CO2) emissions

70% of US electricity consumption

15 trillion gallons of water consumption



Even though there is still some controversy over the effect of greenhouse gases on the environment, the last two statistics are very important for those of us living in urban areas experiencing continuous growth, especially the American Southwest. With our population expansion, aging water and electrical infrastructure, and shrinking landfills, designing and constructing green and sustainable buildings makes practical sense from a utilitarian perspective.

In fact, USGBC data shows that green buildings use 36% less energy, require fewer raw materials, and divert less waste to our landfills. Furthermore, the “increased” cost of green building is only one or two percent more expensive than a conventional building. This minute difference exemplifies the tangible and long-term benefits of sustainable design, primarily due to the fact that green buildings conserve water and electricity. Thus, while they are more expensive to build, green structures will save money by conserving more energy over time.

Another push towards the green build movement is by local governments. More and more municipalities

are adopting the USGBC LEED® (Leadership in Energy and Environmental Design) guidelines for new

and renovated buildings. In 2006, at the USGBC Greenbuild expo, the Mayor of Denver challenged other major cities to see who can have the most LEED® certified green buildings. They are accomplishing this by offering tax breaks to private corporations and mandating sustainable construction for city-financed projects.

This has led to a dramatic increase in the number of sustainable projects built by LEED® Certified general contractors. However, this growth has not come without challenges. Currently, the following issues are restricting the number of green projects being built:

Increased demand for green products has lead to long lead times

New and unspecified materials are labeled “green” products which are not necessarily certified

Building officials are struggling with a steep learning curve on how to evaluate these new products and sustainable building techniques



Despite these difficulties, the USGBC, sustainability advocates, and green building construction management firms are meeting to overcome these challenges.

The LEED® process is constantly under review and continues to adopt the latest codes and products. This includes Standard 189, a new minimum standard for green building. The USGBC is currently developing LEED® 3.0 and working with national code writers to include new products and techniques.

The American Institute of Architects (AIA) has even rolled out a new initiative called “Sustainability 2030,” which at its roots, is looking to design all buildings by the year 2030 as carbon neutral. The USGBC has even initiated the Green Advantage Builders Certification for contractors to certify their knowledge in green building

techniques.

So what does green building mean at the end of the day? It’s simple yet profound: Do the right thing for you, the environment, and the next generation. While most companies are concerned with their bottom line, they ought to embrace the idea that energy and water conservation, green building, and the use of “green materials” in construction stands to increase their savings over time while positioning them as a leader in environmental stewardship.

According to the USGBC, we spend 90% of our time indoors. Due to this fact, scientists have identified an increase in allergies, asthma, absenteeism from school, and even work. There have been numerous studies done on post occupancy productivity levels, which have increased within “green” built facilities. Not only does

green adaptation result in less sick days taken, but also shows an increase in productivity, job

satisfaction, and in the case of schools, better grades.

So, as we positively affect the environment around us with sustainable green construction, we eventually create better health for ourselves.



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Kennette Reed asked:


People make up your business. Without them, there would be no products, communication, management, or customers. Those who work within the company (internal customers) need to have a clear understanding of their roles, and how their actions affect operations and external customers. Without this clear understanding, they will view their actions as isolated incidents, which have little or no affect on the big picture.

Finding what it takes to effectively communicate the importance of company roles is paramount to an organization’s success with its staff and its external customers. However, the mode of communication that works for one staff member, may not work for others. Discovering how to recognize individual learning styles, and uncovering personal motivations, requires time. Is your company taking the time to both communicate and listen to internal customers? They are the strength of your company.

Getting To Know You

As a kid, my class had to learn “the friendship song”, Getting To Know You. It begins with the words, “Getting to know you, getting to know all about you. Getting to like you, getting to hope you like me.” The singer expresses how their life is better, as a result of a new friendship. Building cooperative and friendly relationships with fellow staff should be encouraged in all companies.

Too often, day-to-day work inhibits relationship building. Even though staff may spend hours together at the office, in meetings, on sales calls, or doing other company business, they often know little about each other’s lives, hopes, and dreams. Organizations cannot expect to train and motivate people toward consistent, quality service, if they never take the time to personalize the relationship. Find out what drives individuals to learn, strive for excellence, or reach higher levels of success.

It’s About the Learning

It all comes down to learning. Managers must learn about company expectations, products, and staff. Then, information about expectations and products must be shared with staff. Most importantly, the information communicated needs to be comprehended by everyone. The one person, who doesn’t understand, may be the person who provides incorrect information to your best customer. Learning effective communications styles requires understanding differences in learning, and motivation stimuli.

Learning what motivates people to learn and excel is the basis for developing training methods, goal setting, and motivating staff to succeed. Experiential learning (a learning and training method) is one training/learning method used in the workplace. It is based on the idea that comes from the work, and the people with whom the work is performed. Through workplace projects, teams, and goal setting, a staff development strategy can be established with a process known as Action Learning. It uses critical questions to test the knowledge gained from the experiences of the learner and trainer.

What Motivates?

The success of any organization (and the individuals who work for it) is also about motivation. Those who help others to learn and grow must take the time to discover what motivates individuals to excel. No amount of training will get an unmotivated staff member to learn. With a clear understanding of individual learning styles and aspirations, managers will be able to design communications, organizational improvements, training, work teams, and goal setting that produce motivating and successful outcomes. When staff are motivated to achieve and excel, everyone benefits.



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May Smith asked:


Change happens fast and is constant in the world of business. New opportunities arise on a daily basis and keeping the employees up-to-date is needed if the company intends to be on top of the game. E-learning companies come in with a helping hand to facilitate better learning for a more competitive work force. Companies take advantage of e-learning for many reasons like saving financial resources and delivering up-to-the minute information for a geographically-dispersed group.

The hunt for the best e-learning solution for a company begins by having the human resource and training department acquire knowledge on the most fitting e-learning system for their company. This is critical because choosing an unfit e-learning system can affect the quality of training negatively which can eventually lead to financial losses. Another trap that a company can get into is finding the right e-learning system but failing to execute it well.  But in the ideal circumstances, getting the best e-learning system for a company and managing it well, can be a pivotal tool to the success of the business. Thus, a company should keep in mind what they need to achieve their goals and have unwavering commitment in implementing an e-learning system.

The e-learning industry has expanded quickly as the internet and information sourcing became readily available at a few clicks on the computer. There are many e-learning companies which offer a broad range of cost-effective e-learning content, technology and services. Only by critical research and background checks, we can acquire the services of the best e-learning company. After determining the kind of training a company needs, knowing what kind of technology one’s infrastructure can support is next. E-learning systems are complex and could be a mine field for a company to build their own. It may  not be successful unless the company has a strong IT group and instructional designers who can sustain the maintenance, management of content and make necessary upgrades when the need arises. Sadly, this is rarely the case. Choosing the right e-learning designers for a company and building a healthy working relationship with them is vital for the system to work for you. E-learning with the use of internet as its distribution mechanism is very flexible, measurable and definitely cost-effective.

Yes, acquiring the right e-learning system can save training expenses and give an easy training solution to a company, but effective e-learning is not dependent on a set of technologies. Rather, it is anchored on the harmonious combination of physical and social technologies, activities, presentations and the availability of consultants. This holistic approach which combines technology and human interaction creates a more meaningful e-learning experience.



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Vignettes For Training asked:


Discover how using Knowledge Maps in e-learning programs help online learners

learn better and faster. Demos and examples of models will show you how complex

information can be turned into simplified overviews. http://www.vignettestraining.com/preview-main-workshop.htm

Pasadena, CA September 2007 – Vignettes for Training (VFT), an e-Learning consulting and development firm presents some demos and examples of Knowledge Maps to illustrate how they help online learners learn faster and better.

Many e-Learners usually complain: “I am lost in so much content.” e-Learning programs are just too long and too hard for learners to rapidly grasp or instantly get a gist of the ideas. This is where “Interactive Knowledge Maps” work best. Knowledge Maps help online learners obtain a bird’s-eye view – a view of the forest and not the trees. “These models help e-learning developers visualize how to design and approach mapping of complex information into simplified overviews, according to Ray Jimenez, PhD, Chief Learning Architect for Vignettes for Training, Inc.

These are the models:

o Process Flow

o Organizational Relationships

o Content Overviews

To preview the models visit this link and click “Knowledge Maps.”

http://www.vignettestraining.com/preview-main-workshop.htm

e-Learning Developers will benefit from the models in:

o Rapid e-Learning content production

o Web-based training design

o Instructional design for e-Learning

Using Knowledge Maps in e-Learning design and development is one of the many

topics that Ray Jimenez, PhD will cover in his workshops on “3-Minute & Rapid e-Learning” to be held in Chicago, IL and Pasadena/Los Angeles,CA on December 3 and 7, 2007. To learn more, visit:

http://www.vignettestraining.com/preview-main-workshop.htm

About Vignettes for Training, Inc. (VFT)

Vignettes for Training, Inc. is an e-Learning content development and

learning platform development company. VFT is a pioneer in designing

engaging,highly interactive and Rapid e-Minute e-Learning snippets and

using LMSs to deliver faster and better e-learning. VFT’s clients include

Countrywide Home Loans, Aramark, US Air Force, Dollar Tree Stores, Goodwill

Industries, California Institute of Technology, and many others.

For more information contact:

Maricel Sesdoyro

Director for Client Services

1191 Huntington Drive, 188

Duarte, CA 91010, USA

Phone: 626 930 0160

Email: support@vignettestraining.com



Website content

Awilda Borres asked:


Introduction

In the fall of 2008, three managers from Romania and US convened a roundtable on Romanian and Anglo-American management practices.  Over the course of several weeks, the roundtables covered four organizational themes:  Coordination, Courage, Collaboration, and Creating Change.  This article is a summary of their dialogue regarding organizational practices, based both on their experience and empirical research.

Although all three came from different backgrounds, they shared a common experience and expectation:  all experienced economic shifts in their countries and belief that the modern organization as it exists today, should radically change.  A brief background on participants of the roundtable:

Matt Aiello started and manages a small waste management company in the US.   Prior to starting his own company, he worked in multiple industries, which provided him a broad view of different management styles and industries.   

Awilda Borres is currently Director of Organizational Development with Merck & Company, a global pharmaceutical firm, and has over 15 years of experiencing in designing and leading large-scale change in large corporations.

Madalina Bucur is currently an assistant manager and regional selling manager with Bucur Grup Automobile, a mid-sized automobile distributor and service organization in Romania. Madalina is also a subject matter expert in Informatics and Computer Science.

Context

What changes have you seen in the way managers lead their organizations in the last 10 years? How much does the general economic and social environment (culture) influence organizations and management styles?

Awilda:  I have worked in numerous countries but not extensively in Romania-so so my statements are based mostly on my research and conversations with colleagues in Romania and Eastern Europe:  it is my opinion that national culture has more influence on corporate culture than previously believed, even in 2008.  We also now have empirical findings supporting the impact of this factor[1].  Romania was a socialist country and highly regimented, i.e., command and control, as exhibited by its planned economy.  It was not until the ‘revolution’ in 1989 that Romania abandoned the command economy model.  It is almost 2009, so practices such as competitive and open markets are still relatively new, at least from my experience.  Though much reform and progress has been made, there are still fundamentals such as productivity which consumes management time and effort.  It seems time would be best spent on understanding how to shift culture, though more difficult, the return on investment would benefit any firm.

Madalina: I would agree the change was not realized at once.  It was only after 40 years of Communism, Romania joined the capitalist market economy.  It has been a complex process, which needed time and a shift in the Romanian people’s behavior.  Understanding the backdrop in which Romanian companies operate is critical for any manager:

The transition toward the market economy started in 1990 and during the period 1990-1995, many small and middle size enterprises (SMEs) were created due to the existence of unexploited market niches and the enterprising Romanian spirit. A second phase of revitalization commenced after 2000, due in part to Romania’s entry to into the European Union and the investment of multinationals in Romania.

During the Communist period, Romania experienced a highly centralized system of management, which made initiative, critical thinking and innovation dangerous. Nevertheless, these are the very qualities which are required in management in a democratic market economy.

 Matt:  From a small business perspective, large corporations and franchises are ‘taking out’ small businesses in all industries in the US.  Small business managers in the last ten years have been fighting to survive more than ever–they have to look for ways to innovate and cut cost.    It is getting more and more difficult for small businesses to compete across the board; large corporations have the resources and capability of delivering cheaper products and services.  So  small businesses must create a niche, or a specialty to grow if they are to survive.  I believe that the current economic situation and consumer culture in America does impact small firms and how they are managed.   The US consumer is turning from small business and to large conglomerates.  Why?  A better product at a cheaper price.  Also these large corporations have monstrous advertising budgets at their disposal which influence or instructs consumers where and how to find their services.  But it would be unfair to lay all of this at the feet of the American corporation or consumer—small business have made mistakes by inefficient or poor management practices, which result in bad service or poor products.  We have entered a new age in America—before there was an equal playing field in the US–now corporations are slowly taking over markets traditionally served regionally or locally by small firms.

2.      What are the key challenges facing management in your respective organizations?

Matt:  As you know I work in the waste management industry. Currently, there are three large corporations that have close to 85 percent of the entire market share in the waste industry.  Due to size, they have been able to purchase most of the smaller companies throughout the US.  Though they can offer cheaper services and better rates to commercial and residential customers, some smaller companies have been able to compete (mostly in the states of New Jersey, New York and Connecticut).

But since the economic crisis, the managing costs across the waste management industry have increased and we have been forced into a price war by larger competitors.  So in my opinion, the key challenges for small business managers in industries like mine and other managers in small organizations:

1)     how to manage more efficiently, cut costs, and

2)     how to differentiate our services in a unique manner so that customers remain loyal and paying customers during an economic downturn.

Madalina:  First, the Romanian market is often characterized as an “unstable and an atypical” market, which means in most cases one cannot really predict what is going to happen, or to make plans based on the market.   Yet there are success stories, such as Carrefour and Renault.  Both firms (retail and auto manufacturer) primarily entered the market based on market studies–a huge risk.  Yet now Carrefour Orhidea, located in Bucharest, is the second largest revenue stream for the entire company. Likewise, it was Renault’s intent to produce only the Logan model in Romania, but now Renault operates a techno centre with multiple products lines in Bucharest.

2) The second challenge is the rapid change of economic legislation, which makes it difficult to develop and implement financial and strategic planning. 

3) The third challenge is the educational system which does not stimulate creativity or correlate theory with practice.  As a result the majority of university graduates are not well prepared for the challenges in the real market or workplace.

The facts mentioned above affect all the companies–in fact, the small and medium size firms (as the one I work for) are mostly affected by the lack of well trained employees and specialists.   But this does not only affect employees, let me share some facts about   ’the typical Romanian manager’:

In the 1990s, college graduates were reticent to work for an international company, preferring to work for a state company.  Although 26% of Romanian managers have some form of formal education, they were not actually prepared to think and act commercially.  In the last years there have been made major investments which have resulted in the growth of corporations and transfer of managerial know-how.

Based on a survey[2] realized of 850 companies in 21 counties (judete), this is a portrait of the typical Romanian manager: adult male (75.5%), highly educated (48% technical, and 26% economical high education), and diligent (more than 50% work at least a 60 hours week). Though most managers were trained in Western countries or are expatriates, they rarely set strategies or establish objectives in their organizations–they adhere and follow policies, strategies set from headquarters, typically a multinational. In contrast, the typical company in Romania has one or more business partners, many with family members involved in the business and ¾ of all managers are married.

4) Finally, the last  challenge is connected to the last challenge regarding size of companies– access to loans for investments and funds for innovation is difficult, given that more than 60% of a small and medium size firm turnover is due to the amount of taxes paid to the Romanian State.  As a footnote, this week (first week of Dec 2008)   the Romanian government passed a plan to stimulate investment on behalf of companies.  In 2009, taxes will be reduced and funds must be reinvested into innovation practices and plans.  At the same time, national banks increased interest rates to 23-25%, making it difficult for businesses to secure loans.

Coordination

3.  How does management communicate to their employees? To each other? What tools are available to employees?

 Matt:  From a small business perspective, this is straight-forward due to the smaller staffs in these organizations—simple and direct.  Even if the staff is larger, it is nowhere near the size of a corporation such as Merck with over 40,000 employees!  However that is not to say management in small organizations do not have their challenges, for example, there may be more politics among employees.  There is a higher likelihood of developing personal relationships which is positive but also potentially a risk because they may know more about each other than about the performance of the small firm or the industry.

Small organizations often do not have large intranets and extranets at their fingertips, so communication about the business and industry can be limited compared to how large corporations communicate daily instantly globally to their employees.

 Madalina:  If we view Romania using Hofstede’s cultural dimensions, one could say that the culture in Romanian organizations have a low uncertainty avoidance ranking, which means a ready acceptance of change and greater tolerance for risk-taking.  The research indicates a short-term orientation, and a higher power distance, which can indicate the absence of a balance of power within society.  This means, individualism is more prevalent than collectivism, which is helpful to understand how managers and employees approach their work in this culture.

From my experience I would agree with the research.  For example, generally Romanian firms have a greater number of hierarchical levels than their international counterparts. As mentioned in a previous roundtable, autocratic management style and culture is typical, and participative management is seldom to be seen or actualized.

Managers as well as the employees prefer face-to-face communication. E-mails, memos and briefings or the company intranet are less used. Both managers and employees are less formal about delegation and conducting meetings. In the multinational companies it is different: processes are more formalized and communication is done by electronic means.

Important to note is that communication at the same level is slight or minimum, dependent if information is required to fulfill her/his own tasks. Everybody is focused on accomplishing their objectives and tasks, and less interested in how decisions, outputs affects a peer’s tasks or the company’s performance.  Hofstede’s framework seems to validate the individualistic tendency of employees:  it can be both positive and a negative in multinational companies, I think.

Courage

4.      Is speaking up or risk-taking acceptable or common? Is it rewarded?

 Madalina:  Managers do not usually involve the employees in the strategic and tactical planning of processes of the company. Although there is a big gap between them, speaking up is acceptable as long as debate on the topic is encouraged. Romanian firms are only now placing importance on strategic planning, as stated earlier.  On a day-to-day basis, employees take risks, but in most cases they are not aware of their consequences later in the process or to company performance.  If the result is satisfactory, then it is considered as part of successfully completing one’s job, and possibly a bonus or salary increase is given.

5.      What kind of influence (power) does middle management have?

Matt:  Given our assumption: a small business is a company with less than 100 employees, I need to state that middle management is not needed in this size organization.  However, it is my experience that entrepreneurial individuals are attracted to small organizations because they may have more’ power’, authority, or direct reports (as opposed to a corporation).

 Madalina: Middle management influence in initiating and influencing strategic decisions is quite low– it is more about informing top management about what how goals are met/not met. (There are qualitative studies to substantiate this).  Middle management exert their influence on lower levels with the objective of coordinating and controlling objectives and outputs.

 6.      What kind of influence do more “senior” employees have? Women?

Matt:  In this arena, I think small companies definitely have the edge and competitive with larger corporations for the following reasons:

1)      Senior employees at small businesses are usually employed longer than they are at large companies, sometimes until they retire. The corporate world is more fast-paced, and driven by results.  I believe small businesses care more about employees, and less quick to lay-off talented employees.

2)      Employees in small companies is a huge capital cost, so management does not want to lose talented performers as it more expensive in the long-run.  This is why I believe there are more women in senior management and as owners of small to mid-sized companies in the US. Regardless of your gender, if you are talented and a proven performer, the playing field is equal—which is different in large organizations in the US.

 Madalina: Now that is a definitely a surprise!  I would have expected more progress in the US.  In Romania, more and more women are in leadership positions, and recently there has been the recognition of the top 300 businesswomen in the country.  Nevertheless men are predominant in leadership positions.  A survey done in Romania[3] shows that the main criteria for promotion are: results (79.50%), potential (16.15%), age and experience only 4.35%. The criteria  used for determining salary level does not take into account the person’s gender. Education, the person’s position and the results are of primary importance. Senior people in a company usually receive a bonus, but that does not mean they possess greater power or influence than junior managers.

Collaboration

7.       Are teams common in organizations? (quality circles, cross-functional or self-directed teams)

Madalina: In the last few years Romanian companies have become more and more aware that in order to solve some problems or to innovate it is necessary to create teams. Inside of a company, industry, company size, it is possible to find quality circles, cross-functional or self-directed teams. Although Romania is seen as more as an individualistic than collective society, the employees, especially new hires, have adapted rapidly to newer forms of organizations and practices.

We are seeing more cross-functional teams comprised of different departments to solve a common problem. In my company, teams have been established to launch new products and to achieve corporate-wide investment objectives.

Matt:   I believe there are fewer teams in small business because teams require so much time and resources.  Management is always concerned that all employees and processes operate effectively, but management has to be efficient as well.   Also, it is a risk to create teams just for the sake of creating teams—it can backfire in small organizations as teams may focus more on how they are working together than on the work itself.

 Creating Change

8.      There is internal and external pressure to change corporations and reinvent management (see Hamel). Do you think this is possible in your company?

9.      How quickly does change tend to happen in your industry?  Is change introduced and managed top-down (defined by the industry or upper management) or bottom-up (employees)?

 Matt:  As a whole, I believe there are always external pressures to reinvent management.  In order to succeed in the waste management industry in the US,  first one must reinvent business operations—every cost you can cut has to be cut–this includes equipment,  advertising cost  billing, and yes, employees as well.

As a manager and entrepreneur, I need to think innovatively about how to operate efficiently as well as new sources of profits. Operationally, I think about e-bills for billing and advertising online to customers.  As an innovator, I think about how to eliminate the manual labor involved in waste management such as residential incinerators or automated waste collection. These innovations would change the whole landscape of the waste management industry yet impacts how I think about my business today.

 Madalina:  As we discussed in an earlier session, employee attachment to a ‘corporation’ is low, and mainly dependent on how much his/her own interests are satisfied.  In this there is a strong similarity with the individualistic culture in the US.  However, the use of external compensation as motivator and reward for performance differs from US reward systems in that position and years of service (seniority) is a consideration (though not the only factor).

Regarding change and innovation, in 2007 a study conducted by the National Council of Small and Medium Sized Private Enterprises in Romania (CNIPMMR) revealed that innovative efforts within SMEs were especially focused on new products (34.87%), new technologies (26.99%), new managerial and marketing approaches (15.92%), renewing the informational system (13.77%) and human resources training (13.46%).  According to this study, there were no companies with no innovative approaches at all in 2007 (21.18%) !

I do need to state that the study did cite over 25% of management respondents intention to overhaul or restructure their management structures and systems—indicating the growing need to innovate management practices.  The respondents included management from small to large corporations in Romania.

Matt:   These roundtables have been interesting in how more alike we are than not—in my industry change also happens from the top-down.  It is unavoidable in a small organization.  In fact, building a positive company culture and sustaining a healthy, growing small firm depends on your ability to manage change effectively.  As a small business owner, you owe it to yourself and to your employees to be the best change leader one can be, and understanding key industry drivers is the first step.

Awilda:  Typically western corporations still adopt a classical change approach to deal with change. By a classical change methodology, I mean:                                                   

 1) top-down, defined and led by current management                                         

2) project or process management approach, such as Sigma,                                                  

 3) focus on restructuring.  It is the same in the US as in Romania: years of institutional, bureaucratic thinking is difficult to change in a few months—thus managers spend years reorganizing and redesigning processes.[4]  The paradox underlines the issues with the pharmaceutical industry and corporate management today: C level executives consider human capital as the competitive differentiator, especially in the research and development of new drugs and vaccines.  Yet we have just started experimenting with bottom-up change:  engaging employees to shape strategy and as leaders of change.                                                                                             

Closing Comments

 Madalina: If Romanian companies want to be more competitive, there must be more focus on innovation. In his book “The Future of Management” Gary Hamel asserts that if a company wants to cope with globalization and accelerate change, the company must become a “serial innovator”, and the only innovation that offers a durable competitive advantage, is management innovation. To achieve this goal a company has to commit itself to a bold goal, to deconstruct the management orthodoxies, to embrace new principles and learn from positive deviants within their organizations.

As I pointed out in earlier roundtables, Romanian management are not captive to hierarchical management orthodoxies–this does not mean that these principles are unknown but most Romanian managers lead instinctually.  This may actually prove to be an advantage to new principles and practices.

In my opinion, unlike the American management, the Romanians should see management innovation in the opposite way—that is to formalize the existing practices while not adopting large corporate cumbersome practices—always look for positive deviation from today’s practices. This is the real opportunity for Romanian companies in today’s global competitive marketplace.

Matt:  Given today’s competitive pressure, customer demands, regulatory requirements, supply upsets, and technology breakthroughs –change is no longer the exception—it is now ‘The Rule.’  Unfortunately, in the US, 80% of change initiatives fail to meet expectations[5], regardless of the transformation:  IT innovation, re-engineering, lean manufacturing, merger, or acquisition.  So the reality for small or large organizations is that the global landscape and playing field has changed forever.  From what I see in the US, there are few senior business leaders and executives able to absorb this fact–which means there will only be a few who will make it in the new economy—statistically this means 20% or less will survive in the long-run. 

Awilda:   Matt’s statement reminds of a Romanian saying: ‘Brains take a long time to thaw out after a hard winter’–management are still thawing to the possibilities of new ways of managing.[6]  Companies are seeking ways to adapt to disruptive technologies and economies.  It is a fact that large companies are still instrumental in introducing new practices, technology, ideas, especially in emerging markets–however Madalina is on point to caution that managers should not adopt processes without critically assessing their value.  The same institutions driving changes are feeling tremors in their own executive suites.        It is not only Hamel who questions if managers today can envision and be the architects of tomorrow.  Personally we can no longer afford be spectators on the sidelines, criticizing management—we need to get on the field and shape game plans and even the game itself.

Appendix

Strategic Planning Activities and SMEs

Of the 54.84% of small and medium enterprises (SMEs) which develop annual strategic plans, 13.58% are involved in strategic planning activities, and 34.10% are not preoccupied with any planning activity at all.  In order to understand the degree to which management is involved in strategic planning, one must also take into consideration the firm’s experience on the market [7] (and in most cases this means management also).

 

Table 1

% Involved in

 Strategic Planning

SME Length of Time

Under 5 years

5-10 years

10-15 years

above 15 years

Involved in annual strategic planning process

56.07%

54.36%

52.56%

57.43%

Involved in 3-5 year strategic plan

13.18%

11.50%

15.06%

16.83%

No involvement in strategic planning

33.59%

34.96%

34.11%

34.00%

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[1] Peretz, H. and Fried, Y., National Values and Performance Appraisal Practices, and Organizational Performance: A Study Across 21 Countries, p.3. Our expectation is based on the model of culture fit, or MCF (Aycan, 2005), which  was proposed by Kanungo and his associates (Kanungo and Jaeger, 1990).  The  MCF suggests that national culture affects employees are exposed to an HR activity that does not fit the national culture they will tend to respond negatively (Aycan 2005). 

[2] O.Nicolescu,A.I.Maniu,C.Nicolescu,F.Anghel: White Chart of Romanian SMSs in 2007, Olimp, Bucharest, 2007

[3] D.Popescu, I. Verboncu, I.Chivu: THE EUROPEAN DIMENSION of the HUMAN RESOURCES MANAGEMENT – A NEW PERSPECTIVE FOR ROMANIA, ASE, Bucharest

[4]  Van Frausum, Y.G., Gehmann, Ul, and Gross, J.  ”Market Economy and Economic Reform in Romania:  Macroeconomic and Microeconomic Perspectives”, Europe/Asia, Studies, Vol.46, No.5, 1994, 735-736.

[5] Smith, M. E., “Success rates for different types of organizational change”, Performance  Improvement, 41 (1), 2, 2002. Initiative Failure Rates: Culture Change (81%), Business Expansion (80%), Software (74%), Re-engineering   (70%), M&A  (67%),  TQM-Driven Change (63%),  Restructuring  (54%).

[6] Dalton, K., Kennedy, L. “Management culture in Romania: Patterns of change and resistance,” Journal of East European Management Studies, 2007.

[7] O.Nicolescu,A.I.Maniu,C.Nicolescu,F.Anghel: White Chart of Romanian SMSs in 2007, Olimp, Bucharest, 2007



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