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Human Resources Articles ( 07 Jul 2009 )
February 10 2009 - A survey by Booz & Company of 828 senior managers from 65 countries explored corporate responses to the global economic crisis and the impact on social responsibility agendas. Respondents came from a variety of major industries. Over one-third (37 per cent) were CEOs or reported directly to CEOs; an additional 24 per cent were two layers below CEO. Managers from Western Europe predominated (38 per cent) followed by North America (30 per cent) and emerging markets (28 per cent).

Article One: Reacting to the Global Crisis – Reference: HRM Guide:
Reacting to the Global Crisis
Reacting to the Global Crisis
February 10 2009 - A survey by Booz & Company of 828 senior managers from 65 countries explored corporate responses to the global economic crisis and the impact on social responsibility agendas. Respondents came from a variety of major industries. Over one-third (37 per cent) were CEOs or reported directly to CEOs; an additional 24 per cent were two layers below CEO. Managers from Western Europe predominated (38 per cent) followed by North America (30 per cent) and emerging markets (28 per cent).
Respondents were asked to assess their company's financial strength (ability to function without immediate external financial support) and competitive strength (relationship to competition in respect of costs, product/brand positioning, technology/capabilities, leadership/management, and ability to influence or collaborate with regulatory authorities). Companies were categorized as strong (both financially and competitively), stable (strong financially but weak competitively), struggling (weak financially but strong competitively) or failing (weak in both areas).
The survey found that irrespective of their designation, companies were finding it difficult to identify effective responses to the current economic downturn ( 40 per cent questioned whether their leadership had a credible plan in place). Many respondents (46 per cent) doubted their leader's ability to implement a crisis strategy even if apparently credible. One-third of CEO and CXO-level respondents were not confident about their own plans.
The survey also found that 65 per cent of struggling companies had responded insufficiently to ensure their own survival (such as increased attention to asset disposal or pursuit of external funding). One-quarter of companies that considered themselves financially secure were not taking advantage of opportunities to improve their position. More than half (54 per cent) of respondents expected their organizations to emerge from the crisis stronger but the survey did not support this optimism, finding discrepancies between many companies' financial and competitive position and their strategic response.
Bill Jackson, Booz & Company senior partner explained:
"Companies have focused on the near term, some at the expense of the long-term opportunities. The strong need to go long. They need to create a view of new industry structure. Many strong and stable companies are playing things too short-term oriented for the moment. The really struggling and failing companies have reacted dramatically and some have already moved into bankruptcy."
The survey found that, in many cases, companies were not following the most appropriate course. It concluded:
·         While struggling and failing companies would be expected to accelerate efforts to improve working capital positions, slash overheads, drive process improvements and renegotiate deals with suppliers, surprisingly many are not. Between a quarter and a third of respondents say their companies are pursuing such strategies no more aggressively than they were before the crisis.
·         Stable and strong companies are more focused on cutting costs across the board and conserving cash than on opportunities to strengthen their competitive positions.
·         While stable companies would be expected to capitalize on the crisis by buying companies with compelling products or brands but weak finances, or pursuing other growth initiatives, 21 per cent are pulling back on mergers and acquisitions, as are the same percentage of strong companies. One in five stable companies is also investing less in new products or slowing moves into emerging markets.
Bill Jackson added:
"A real issue is with the 'tweeners'-companies holding on by their finger nails. They have reacted to the near term cash issues; they are working on renegotiating their bank covenants, but one wrong move and they are done. Their boards are worried, since this crisis is new and different to most executives' experiences."
Additional survey findings include:
·         40 per cent of respondents expected "green" and other corporate social responsibility initiatives to be significantly delayed as a result of the recession. This was especially pronounced in transportation (51 per cent) and energy (47 per cent).
·         Despite the depth of the challenges faced, 54 per cent of respondents overall believed that the crisis would ultimately have a positive impact on their companies' competitive position (59 per cent of managers in emerging markets compared with 53 per cent in North America and 52 per cent in Western Europe). 75 per cent of managers expressed a positive view of their companies' current financial strength; only 13 per cent said they worked for financially weak companies.
·         Among managers below CEO and CXO levels, 51 per cent thought senior leadership lacked the capabilities to carry out crisis plans. Researchers suggest this is apparently at odds with the optimism expressed in other responses.
·         Forty-three per cent of respondents from the financial sector believed that stakeholders from business, government and unions were collaborating effectively to stabilize their industry. Less positive responses came from those in healthcare and pharmaceuticals (56 per cent critical); telecommunications and media (42 per cent); and transportation and commercial services (41 per cent).
The survey identifies three steps to restructuring in the current economic crisis:
·         Get an accurate read on the environment and the company's position in it. An accurate self-diagnosis is critical to end the cycle of inappropriate strategic actions.
·         Design a good plan that does enough, but not too much, when time is short and resources may be diminished in a crisis. Identify a limited set of straightforward initiatives that have the potential to make a difference quickly.
·         Communicate and execute, which is vital to regaining the confidence of all stakeholders, from skeptical managers to risk-averse shareholders.
Bill Jackson concluded:
"Many top executives are still reacting and are not ahead of the curve yet. They are still operating with their cumbersome processes and lines of communications. This is slowing them down. They are do not getting the right homework fast enough, nor are they able to enact decisions quick enough or to the extent they expect. This crisis calls for a new, more direct leadership approach."

Article Two: Hire Happy Employees – Reference: HR Directory:
Hire Happy Employees
Hiring happy, optimistic job applicants can increase your company’s productivity and lower turnover. Plus, optimistic, confident employees are vastly more delightful to have on-board.
Methods to help companies have optimistic, positive employees include pre-employment tests, job interviews of applicants, managing being role-models, and reinforcing smiles.
What are happy, optimistic employees? In a book I co-authored – “Spontaneous Optimism®” -- we explained optimistic people focus on solutions and not on problems, have a “can-do” mindset, and do what is needed to achieve goals despite all odds.
In contrast, the opposite of optimism is pessimism. Pessimists focus on problems and not on solutions. Pessimistic people love to do three actions: Complain, blame, and whine...
The quickest, easiest and cheapest way to have happy employees is to hire human beings who are optimistic and upbeat. The most objective and customizable method to assess job applicants is pre-employment testing. When a company tells me it wants to hire better employees, we start by customizing pre-employment tests. How? We conduct a “benchmarking study” by testing current employees in each job. From this, we discover test scores of the company’s high-achieving “superstars” – that is, employees who are both highly productive and low turnover.
Valuable finding: Almost invariably, high-achievers score above-average or high on two scales of the pre-employment test:
1. Optimism test scale
2. Reactions to Pressure test scale
In contrast, underachievers in the same jobs in the same companies usually score (a) low on Optimism (i.e., they score pessimistic) and (b) low on Reaction to Pressure (i.e., they score like whiners).
For example, one company recently did a “benchmarking study” for hiring employees into seven jobs. On the pre-employment test, “superstar” employees in all seven jobs scored high on both (1) Optimism scale and (2) Reactions to Pressure scale. Note: Although these seven jobs covered a wide range of skill-levels and abilities, pre-employment test scores showed high-achievers in all jobs exuded an optimistic, ‘can-do’ personality.
A second method to assess a job applicant is job interviews. Unfortunately, interviews prove quite subjective, and managers generally do lousy at predicting job success based on interviews.
Question: What should managers do to assess a job applicant’s optimism?
Answer: Ask open-ended questions about confronting problems. Then, notice if the applicant (a) focuses on solutions – like an optimist or (b) wallows about problems – like a pessimist.
For example, the interviewer could ask, “Tell me about the two worst situations you got into in your last job.” Then, the interviewer needs to observe if the job applicant answers like an optimist or a pessimist.
Ralph Waldo Emerson wisely observed, “What you do speaks so loudly that I cannot hear what you say.” This quote illustrates why leaders, executives and managers must be employees’ role models for optimistic and upbeat behavior.
Every leader can be a fabulous role model simply by focusing non-stop on 1. Goals – measurable goals with deadlines that help the company grow and prosper 2. Solutions – every time a problem arises, instantly focus on implementing solutions
Also, the leader or manager must not allow employees to act pessimistic by whining, moaning, and complaining. When an employee complains or whines, the optimistic leader simply needs to say, “I can tell that bothers you. Now, please tell me your possible solution to overcome the problem.” Insist the employee conjure up solutions, and not wallow in moaning about problems.
Eye-opening research revealed the more an employee smiles, the happier the customer. Harvard Business Review (5/07, page 24, reported Patricia Barger of Bowling Green State U. and Alicia Grandey of Penn State U. studied employees and customers in a coffee shop. They found the more an employee smiled, the more the employee’s customers felt happy with their coffee shop experience.
Leaders and managers can apply the same actions in any company. The leader needs to smile, reinforce smiling by employees, and hire employees who readily smile. This gels to create a positive, happy corporate culture.
Managers and leaders are smart to create an optimistic, upbeat workplace. My pre-employment testing research reveals high-achieving “superstar” employees overwhelmingly are optimistic and poised under pressure. To create a workforce of happy, positive employees, leaders and managers can do the following:
1. Hire optimistic, upbeat job applicants – predicted by pre-employment tests and interviews 2. Be a role model – always displaying optimists’ actions 3. Reinforce employees’ optimistic actions – e.g., focusing on solutions and smiling
By leaders using these three keys, the result is a company composed of optimistic, ‘can-do’ employees who are A. Highly productive B. Low turnover C. A pleasure to work with D. Highly profitable
© Copyright 2007 Michael Mercer, Ph.D.
Michael Mercer, Ph.D., is nationally known as an expert on
pre-employment testing and how to hire the best. His five books include “Hire the Best – & Avoid the Rest™” and also “Spontaneous Optimism®.” The “Abilities & Behavior Forecaster™ Tests” created by Dr. Mercer are widely used to help companies hire the best. You can obtain his free 14-page special report “Hire Productive, Profitable & Honest Employees” plus get a free subscription to “Dr. Mercer’s Management Newsletter” at http://www.Pre–