Zapaterismo

China in Africa

Africa has been on my mind a bit lately, in part due to a wonderful (though likely quite controversial) article from last month's Fast Company, which I finally got around to reading.  The article touches on China's land grab on the African continent, telling a story that many will be fascinated to hear.

Certainly, part of the reason that China has been able to so aggressively go about acquiring raw materials from African countries is because of the relative lack of local industry in so many African countries.  I'll be posting some more thoughts on this soon, as Hernando de Soto's book, The Mystery of Capital, sparked some thinking, but also wanted to share the following TED talk that makes a similar point, though it comes from a different direction.

Addendum:

I should also note that, according to the Fast Company article, part of the reason for China's aggressive move into Africa has to do with an entirely different talent management challenge than is being faced in most of the rest of the World.  In China, the challenge isn't only producing enough skilled workers and managerial talent, it's also finding jobs for the millions of unskilled and unemployed that China is working to integrate into the country's middle class. 

A mighty wind

Since gas prices across the US reached an average of $4/gallon this last week, I thought it timely to share this wonderful Fast Company article.

If there is one fabulous thing about skyrocketing fuel prices, it's their ability to make even people like this guy believers in alternative energy.

Risk and uncertainty in HR

One of the great mythical beliefs held by most economists is that people make decisions based on objective criteria and reason (called rational choice or rational action theory).  Just about all traditional economic theory rests on this assumption, yet we know from experience in life in general and, in particular, life in modern organizations, that this is hardly the case. Life is just too complex to be so objective.

Douglass North, a Nobel Prize winning economist at Washington University whose work I've been reading lately, goes so far as to suggest that true objectivity in decision-making is impossible, since at any point in time we simply don't know what we don't know. Even yesterday's tried and true solutions are in no way guaranteed to solve tomorrow's problems, since the human environment we live in is constantly evolving.

This ubiquitous uncertainty, in his view, is what really drives human behavior.  We try to mitigate uncertainty by creating explanations and theories based on socialized beliefs, accumulated knowledge, and personal experience. The resultant web of "rational" myths, in turn, drive our decisions and dictate how we craft the "institutions" that impede or facilitate economic exchange and growth.

So, he says, much of the explanation for economic disparity between countries lies in the fact that some were simply lucky enough to get it "right" more often.

It's an interesting proposition.  And if you think about corporate strategy, it's starts to come to life a bit more.  Why would any rational CEO place the future of his/her company in the hands of a best guess around what will spell success (i.e. a "strategy")? 

The explanation lies in the fact that uncertainty can't be circumscribed. So we've created this concept of "strategy" to take over where certainty ends. (Another reason we shouldn't be surprised that financial performance has more to do with execution than strategy.)

If you believe any of this, you'll also note that it flies in the face of the idea of evidence-based decision making. If access to data and analytics can't guarantee you'll make the right decisions, then why go to all of the trouble?

Well, because while you may never be able to predict the future perfectly (e.g., will this person really make a good regional sales manager?), you do want to position yourself to get it right more often, and that's where data is so helpful.

There may be no set of organizational decisions that rely so heavily on rational myths as those that concern talent, and perhaps also no set of organizational decisions that so heavily lack access to reliable data. The relationship, I think, is no coincidence, and the impact can be seen in the fact that so many of us have somehow come to accept success rates of, say, 50% when hiring and promoting employees.

That sucks.

As Douglass North suggests, we'll never be able to get it right 100% of the time, because the world is just too complex, our world views are too full of bias, and we simply don't know what we don't know.  But that doesn't mean we should give up on trying to be more predictive, by doing things like:

1. Creating a ready supply of valid and current talent data within our companies

2. Empowering line managers to use talent data to make better decisions, through education and by delivering useful talent management analytics back to the business

It's a huge task, but take a leap of faith and start pushing to make your organization more data-centric in its decision-making.

Innovating at the Bottom of the Pyramid

I want to extend a hat tip to Jon Ingham for picking up on this fabulous article from C.K. Prahalad.

Prahalad is a Professor of Corporate Strategy at the Ross School of Business at the Univ of Michigan.  He, along with Gary Hamel, is responsible for the concept of Core Competence, and independently he has authored a number of articles and a book revolving around how to serve the poorest of the world's poor while still making a handsome profit. 

It's inspiring work - who wouldn't want to make lots of money and change the world for the better in the process?! - and it's great business sense considering the sheer numbers and aggregate spending power of that vastly underserved demographic.

Please take a read.   Article

Faith Based Analytics

I commented in an earlier post on the way in which talent management platforms in general are empowering companies to perform analytics on unreliable data, by hiding it behind dashboards and flashy matrices.  Here is Tom Davenport's take on same idea, as it pertains to the current financial crisis.

http://discussionleader.hbsp.com/davenport/2008/02/faithbased_analytics.html

If you don't already subscribe to one of the many HBSP Discussion Leader blogs or their Conversation Starters feed, I highly encourage it.  Great doses of business insight every single day.

Talent Management or Talent Optimization?

A nice post from Josh Bersin here on the impact of a recession on HR.

This passage, in particular, stood out for me...

"Driving business alignment in learning and HR will become even more important.  When the business is slowing, line managers have less patience than ever for 'generic HR programs.' "

He's spot on, and his comments remind me of an earlier post, where I argued that the talent management trend really comes down to social and economic forces asking us to do a better job of making the best possible use of scarce resources.  You can read that here.

19.20.21

While I ripped on BusinessWeek's innovation article a couple of weeks back, I do have to give them credit for introducing me to the 19.20.21 project.

I have little doubt that the world of the future will be one in which the vast majority of the world's population lives in major urban centers. 

The sociologist in me finds it fascinating to think about both the opportunities and challenges such a reality will present.  I'm looking forward to seeing, hearing, and reading the findings of this not so humble endeavor.

Too bad it's not an open-source project - I would love to be a part of it.

Chris Anderson's Take on the Technology Life Cycle

I am (finally) reading Chris Anderson's The Long Tail.  This is one of probably 5 books that I am reading or have read lately and have thus far failed to write about.

In the meantime, I also came across this TED Talk, where he shares his own view of the Technology Life Cycle. Not nearly as nuanced as either Clayton Christensen's or Geoffrey Moore's point of view, but his examples are quite interesting.  Definitely worth a look.

 

Debunking myths on China

Interesting commentary on China's future outlook.

A couple worth noting here:

• In China’s provinces, the statistics are notoriously unreliable, as local officials inflate them to avoid being punished for poor management of the economy. For its part, the central statistical office calculates GDP through counting increases in value-added production even though much of its statistical information comes from state-owned enterprises that provide poor data. Walker routinely deducts 2 percent from official Chinese growth statistics. This summer, in a little noticed announcement, the Asian Development Bank lopped 40 percent off previous Chinese income per head statistics. That is some revision.
• The statistics we do have show up some near-insuperable problems. One is that 40 percent of Chinese bank loans are considered “bad”, a gigantic misallocation of capital.
• As early as 2015 China’s working age population will begin to fall. By 2040, just a decade before China hopes to be a middle-income country, it will have 100 million citizens over 80. That is more than the current worldwide total.
• McKinsey, the management consultancy, reports that only 10 percent of China’s graduating engineers are good enough to work for foreign companies.