SMART PEOPLE LEADING SMARTER PEOPLE

       We live in the midst of the worse financial crisis in more than 50 years, and take heart in the decline of oil prices as a sign of the easing of yet another crisis - the "energy crisis". Yet, at a time when new ideas are the only hope for our economic salvation, the real "energy" crisis is to be found in the inability of tired old institutions to produce the innovation and creativity that we so desperately need.
       In fact, today's real energy crisis is represented by our inability to rise to the occasion with new insights and approaches. Despite the enormous pool of talented people that have characterised almost two decades of globalisation, most of these individuals and their ideas continue to be ensnared in organisational cages left over from periods of capital- and labour-intensiveness, designed for command and control, rather than liberation and excellence. The result: great people achieving mediocre results. What an extraordinary waste!
       While the word "talent" is bandied about as if it were an undifferentiated resource, I believe, instead, that all talent issues begin with the individual. We must, therefore, consider the organisational consequences of restoring a degree of individuality to the talent issue. In my recent research on virtuoso teams, we reaffirmed the old adage that real success - and a better world - is more easily achieved by surrounding yourself with people smarter than you and, then, letting them show it. This means accepting a challenging team environment and adopting new leadership practices better suited to an impresario than to a manager. While such a suggestion may seem fanciful, the seriousness of our present situation suggests that such flights of fancy might well be a small price to pay for helping talent contribute to a better world.
       I begin with the belief that real professional talent is precious and should be devoted to living up to its promise, in the pursuit of higher-order societal goals. Leader-aspirants should strive to fulfil this objective, and our work in the virtuoso-team project examined how this could be done.
       Smart people leading smarter people
       Our research focused on a number of great teams that were defined by big, ambitious, personally-risky goals and a relentless search for the absolute best talent, two things that gave them a head-start on "greatness". They then applied leadership approaches that allowed their assembled talent to shine as brightly as the leader had anticipated. Among the leadership practices we observed were:
       Leader as a talent scout
       All of the teams we studied featured a leader who devoted substantial time and energy to identifying potential talent. J Robert Oppenheimer scoured US campuses for the right scientific skills to bring together the Manhattan Project, which led to the atomic bomb and pioneered "big science". Miles Davis was always on the lookout for the next "big sound; the next new idea".
       We were amazed by the amount of time team leaders personally devoted to getting the best people obtainable, position by position. In every case, being a "talent scout" was always a central piece of the leadership role.
       Listening rather than telling
       If you assemble all-stars in every position, and pay the premium for doing so, then listening should be a leader's most important activity. We saw this in all our teams. Davis, who revolutionised jazz with different all-star bands in the 1940s, 1950s and 1960s, was characterised as a world-class listener, despite his reputation for opinionated assertiveness. Only by listening can a team leader understand and appreciate the potential contributions of talented individuals.
       Focus on collaboration and an exchange of ideas, rather than idea-hoarding
       Ideas have value only if they're shared. All of our teams succeeded because they shared rather than protected ideas. This does not mean that there was no competition within the teams; far from it. Thomas Edison, who, as the "Wizard of Menlo Park", was credited with inventing incandescent light, recording sound and adding sound to motion pictures, in reality did it with a team - The Muckers - and built his "invention factory", so that ideas between developers and machinists could move rapidly in both directions.
       In nearly all of our teams, small, cramped quarters promoted intensity, immediacy and full-bandwidth team conversations, ensuring keen awareness among all team members.
       "Fail faster to succeed sooner"
       When facing big risks, taking small ones frequently allows a team to move faster and with a lesser chance of catastrophic failure. The use of "prototypes" is a different way of learning, and all of our teams used experimentation and failure to achieve rapid learning.
       For example, take Leonard Bernstein and his all-star team who created a Broadway revolution with the "West Side Story" project. Dances were deliberately fashioned out of continuously changing modules in order to respond faster to audience reactions.
       Challenge ideas, not the person
       Virtuoso teams thrive on direct and impolite challenges to ideas, without diminishing the individuals. While each all-star team member's potential is accepted as a given, every idea or action is fair game for improvement to the team's benefit. Such tolerance for challenge profoundly changes team dynamics and makes the leadership role much more involving, but the results are worth it. Comic genius Sid Caesar and his virtuoso writing team, which included Woody Allen and Mel Brooks, were challenged to create a new show every week. They wanted every show to be memorable, and their slogan became: Polite teams yield polite results!
       Let individuals soar
       Perhaps in our efforts to be inclusive, we've allowed the "we's" to so dominate the "I's" that we've wound up "just average". If you go to the trouble and expense of finding and recruiting great people, let them be great. Don't bend them to fit the team. General Leslie Groves, who helped the Manhattan Project succeed, adopted the leadership attitude of always asking: "What can I do to make it easier for you to do your job?" Our idea is to put talented individuals in positions where they can be as good as their promise, and then help them to succeed, for all of our benefits.
       We believe that one of the best ways of employing leadership for a better world lies within the ability of talented people to fulfil their ambitions in the pursuit of team, organisational or societal goals. This is not easy to do, and seems to defy currently fashionable, and overwhelmingly negative attitudes towards ambition, elitism and "stardom". Quite the contrary, we are in favour of all of these: being ambitious, allowing justifiable elites to emerge on the basis of superior performance and letting people become stars. We believe that organisations that win in the talent wars do it one individual at a time, and by enabling talented people to fulfil their potential, we increase the likelihood that we all will win.
       William Fischer is a professor of technology management at leading business school IMD International in Lausanne, Switzerland. He addresses this topic in 'Driving Strategic Innovation', a programme he co-directs with Prof Charlie Fine of the Massachusetts Institute of Technology.

China's factories scramble to hire migrant workers

       Chinese factories are racing to hire migrant workers laid off during the global crisis as they struggle to meet the world's Christmas orders for Barbie dolls, iPods and designer jeans, say analysts and observers.
       The surge in demand has caused a labour shortage in some parts of the country as factories ramp up production,but does not necessarily mean that the export sector is on the mend, they said.
       "The shortage is primarily due to a short-term misalignment of demand and supply due to a sudden upswing in demand probably fuelled by the arrival of Christmas orders," said economist Ren Xianfang of IHS Global Insight in Beijing.
       "The high labour intensity of most of the export-oriented manufacturing industries means that either the reduction or increase of new orders will cause quite big swings in labour demand, which explains the sudden job losses and just as sudden resurgence of demand."
       Nearly 20 million migrant workers lost their jobs early this year as factories closed or slashed production in response to plummeting orders from key markets in Europe and the United States.
       While the government says 96% of those people have found new jobs in the cities, the still-weak export sector suggests many of them have gone into construction or stayed home where economic conditions are improving thanks to massive government spending.
       "The country's interior provinces have benefited from fiscal stimulus projects and stronger local economies," said Ben Simpfendorfer, a Hong Kong-based economist at Royal Bank of Scotland.
       "The logic for travelling thousands of kilometres to a neighbouring province is thus less compelling."
       In southern Guangdong province, the country's manufacturing hub, factories face a "serious" labour shortage as Christmas orders pour in, said Xu Jiang, a manager at the Hui'an Human Resources Service Centre in Dongguan city.
       "Demand for workers is rising but many migrant workers did not come back from home (after being laid off),"Xu said."Some simply will not come back here after finding a job at home."
       Many migrant workers were choosing to stay home to take advantage of improved conditions created by the government's four-trillion-yuan ($585 billion) stimulus package, Xu said.
       The shortage has forced factories in Wenzhou, in eastern Zhejiang province,to offer free meals, air-conditioned dormitories and extra holidays to entice migrant staff, state media reported.
       Wang Ouxiang, deputy secretary of the Employment Service Centre in Wenzhou, said there were 150,000 job vacancies in the city."Factories in the city are thirsty for labourers."
       Pressure on factory owners was more intense this year. Foreign retailers had delayed placing Christmas orders until September due to the uncertain economic outlook and were demanding shorter delivery times to keep inventory levels low, said Mr Simpfendorfer.
       "Orders have been bunched into a single month - they usually start coming in as early as July," he said."The labour shortages are not necessarily a sign of a fast-recovering export sector, and while export orders have strengthened, they may yet relapse."

IT'S CHEAPER TO KEEP A GOOD EMPLOYEE

       David Bell, MD of Ra-Kahng Associates, says companies should be more selective when making job cuts By Nina Suebsukcharoen
       Being a high performer is not always a sure ticket to career success because when the going gets tough, as it has been lately,the best people are often shown the door along with others who don't meet their high standards, says David Bell, managing director of Ra-Kahng Associates, the Thailand licensee for the Crestcom International management training company.
       This interesting point surfaced in a survey of local companies undertaken by a large finance firm, which could not be identified for business confidentiality reasons. Most of the participating companies said that when redundancies were undertaken they cut right across the board without taking individual performance into consideration.
       Mr Bell questions this approach, saying it would be better to keep the high performers and motivate them.
       "It is difficult to do that, and there are legal restrictions of course, but I would have thought there should be more effort to identify the high performers," he said, adding that in most most companies a small number of people account for a disproportionate amount of productivity.
       He drew attention to Pareto's Principle the 80-20 rule - a formula developed by the Italian economist Vilfredo Pareto which states that in most companies 80% of the work is done by 20% of the people. The split could vary a little, say 70-30 or 60-40, but it is the high performers who make a huge difference in overall profitability. A large number of companies are hamstrung by having numerous workers who just come in to do the job they are paid for without trying to shine or improve in any way.
       Mr Bell says it is important to find and develop talented employees, because this is the way to get out of the recession and build up business again.
       The tendency to make across-the-board job cuts is common in other countries as well, but Mr Bell has noticed that in some countries there is more effort to retain high achievers. However, it seems the legal structure in Thailand and many other places tends to promote equal, across-the-board redundancies.
       Pointing out that companies have to pay a set amount of money in severance pay depending on the number of years those laid off have put in, regardless of their performance, Mr Bell said he would rather pay more and keep the good people to ensure a better future for the company.
       He said employers had to watch out for cases of "why did you fire me and not them?"and being able to defend their decisions, but making the effort to be more selective is still important.
       Another key point that emerged in the survey is that companies should come out of this recession leaner and more effective than before and would not want to go back to a situation where they had to carry unproductive staff. This means that even when they start rehiring they probably won't employ as many people as before.
       However, Mr Bell said he has heard that a lot of employees do not want to be rehired,with this applying particularly to factory workers who have gone back upcountry after getting their redundancy payment and are happy there.
       This does affect local industries because some of them are seeing production increase faster than was earlier anticipated.
       "Apparently that is happening quite a lot - you lay them off, pay them off and they don't want to come back again and you are stuck with having less people than before."
       Recruiting people could also be problematic at the upper end of the market because some of those who were laid off feel they were treated poorly and do not want to return.
       "I think they also recognise that they are more valuable," said Mr Bell.
       He added that keeping high-potential employees does not hinge just on financial incentives such as salary, time off, gifts and bonuses, because these only have a shortterm effect.
       "For example, give me a salary increase and I'll say that's great. Ask about my salary increase next week and I'll say it's what I'm worth. That is what they pay me, that is my value.
       "It doesn't give me an incentive any more.Short term, for the first week or two, it does,but now I am settled down and that's it."
       He said it is in fact long-term motivators that will make workers want to do a better job, and among these are recognition, particularly public recognition, a sense of belonging and a feeling of being "in on things",making a difference, doing an important job,being respected and being involved in problem solving."People are different and they have different levels of performance. You know, a machine is a machine. It uses a certain amount of power, needs to be serviced once a month or whatever, raw materials are pumped into it and of course it pumps out the stuff it produces at a certain rate. It can't go any faster than that - that is what the limit of the machine is.
       "But a person doesn't have such limits, so you can motivate them by making them feel that they are doing a great job. Sure they have to be paid properly, but making them feel that they are part of the organisation and that they are doing something that is worthwhile is going to make them much more motivated."
       Mr Bell said the biggest hidden cost of a company is in fact staff turnover, because this expense does not appear in the bottom line. This point emerged in a system worked out by the Saratoga Institute which was adopted by the Society for Human Resource Management.
       Mr Bell and one of his associates put a lot of work into this issue, and determined that the average cost of replacing somebody works out to be about 30-40% of their annual salary.
       This takes into account the time and money spent on advertising and hiring a replacement,and even after the new employee comes in it could take three to six months before the employee becomes productive because it would take that long to learn the job and get to know the company and its people.
       "Of course, you could say that you saved money because you weren't paying anybody a salary during the period before hiring, but is this really a saving or a cost? I think it's a cost.
       "If that job is a worthwhile job it has to have value to it on top of the salary, otherwise you wouldn't hire someone to do it."
       Mr Bell also mentioned the outcome of a study done recently in seven European countries which found that more than 70%of executives who quit their companies did so to get away from their bosses.

AMMAR CALLS FOR CHANGES IN SOCIAL SECURITY BENEFITS

       Economist Ammar Siamwalla yesterday called for a cancellation of unemployment insurance paid to those who quit their jobs.
       At the 24th Asean Social Security Association Board Meeting (ASSA) yesterday, Ammar, from the Thailand Development Research Institute, also said that economy-stimulating measures - such as the Bt2,000 allowance to low-income workers or the elder persons' Bt500 per head per month allowance - should be temporary.
       Thailand's unemployment figures remained unclear, he said. The people changing from the universal health scheme (Gold Card) to the Social Security Office's membership package on grounds that they had jobs were declining, he said. Whilst the number of those shifting back to the Gold Card scheme after losing their jobs unchanged because they were still entitled to SSO benefits for six months. Meanwhile, although many companies didn't downsize their workforces, many workers no longer worked overtime and thus earned less than before, he said.
       Thailand now had insurance systems for all cases. But what must be reconsidered, Ammar said, was unemployment insurance, which pays money to all jobless persons including those laid-off and those who quit jobs on their own. Those who quit should not get this money, he said, because they did that voluntarily, they were small in number, and the money should be spent in other assistance to reduce the SSO fund's burden.
       Declining to say if the cancellation proposed should be done, SSO secretary-general Pan Wannapinij said it could not be done right away because the SSO must observe the law requiring it to pay the jobless at 30 or 50 per cent of their salary. The change would have to be scrutinised by the SSO Board first and employee representatives might oppose it.
       Last year, the SSO paid out Bt2.4 billion in unemployment insurance, while Bt3.9 billion was paid in such unemployment insurance in the past eight months, prompting an estimation that this year's figure could be Bt5 billion, he said.
       Pan also talked about improving SSO benefits for "off-system" workers - those whose employers are not registered companies but who willingly applied for SSO membership according to the SSO Act's article 40. A proposed improvement should be submitted to the Council of State in two weeks, he said. After that it will be sent for Cabinet approval before being published in the Royal Gazette. He said the proposed draft also allowed the off-system workers, who are required to pay Bt3,360 distribution to the SSO fund per year, to pay at Bt280 a month.