Last month we talked about the flatness of the world as presented by Thomas L. Friedman and closed on what it will take for US to continue to lead the world - the quality and inventiveness of our employees.  This led me to believe that elaborating on the importance of people to profits might be an appropriate topic as we enter a new year.

Several publications directed at the Human Resources professional have tried to identify and codify the "hot issues" for the next few years.  One such publication, HR Manager, identified a discussion that David Ulrich, a leading management guru, had with the Conference Board on this subject.  Here are the eight issues he identified as critical to corporate health and survival.

One - Building your leadership pipeline is a must.  Like GE, 3M, P&G, or Emerson where will your next team of managers come from.  Remember, the baby-boomers are getting ready to retire and will need to be replaced with equally, if not more, skilled and competent leaders.

Two - Leadership must be dispersed.  As the pace of business quickens and operations become more dispersed leadership will be forced to change from a function to an individual role.  What will you have to do to train everyone to be a leader?

Three - Employment branding will get you the talent you seek.  As outstanding employees become scarcer, it will no longer be enough to be "the employer-of-choice."  The future will demand that we "brand" ourselves so that those type employees seek us out as their employer-of-choice.  Ulrich cites the example of 3M who has branded itself as an innovator and thereby attracts innovative and creative people from the talent pool.  What should your brand be?

Four - You must capture a bigger portion of the employee´s mindshare.  A couple of months ago we talked about companies with engaged employees and the fact that over 80% of those companies significantly exceeded all three of the major stock market indices.  Unfortunately, other research indicates that most employees operate at about 60% efficiency or engagement.

Five - Organizational capacity must exceed the rate of change.  Simply stated you must insure that the intellectual capital of your employees stays ahead of the ever-changing knowledge economy.  The question remains, "is this your responsibility or your employees personal responsibility?"  If you assume this responsibility what are you plans to deliver results?

Six - Get ready for a heterogeneous workforce.  Friedman talked about the fact that while it is now possible for the technically educated individual to find meaningful and rewarding work in their home country of India, China, or wherever there is a large number of these individuals who have already immigrated here.  As the baby-boomers retire these immigrant minorities will become a significantly more visible part of the workforce.  What will you need to do to accommodate them so that you can continue to maximize their contribution?

Seven - Line managers must communicate more effectively.  As we ask employees to become more engaged and decisive as noted above, we must provide them with the information to do both.  Failure to include employees in the information flow will lead to either poor performance, or turnover spawned out of frustration, or both.

Eight - Measurement leads to credibility.  No longer will it be sufficient to measure things like how long it takes to fill an open requisition.  In the coming months and years the question will shift from "how many people were hired" to "what is the quality of the people hired" and "how well do the new employees help the organization innovate, change, and deliver results?"

I may have told some of you this story, but I still find it interesting and hope you will too.  When I joined the Hay Group I was assigned a research project as part of my "education and training."  Along the way, I stumbled across what I considered to be a trend.  I determined that you could identify a progression in the background or skill sets of CEOs.  The first were those like Henry Ford who were good at making a product, the manufacturers or the engineers.  Close on Henry´s heels were the financial types who had the skills and ability to squeeze some additional profit out of each nickel.  As these skills become commonplace, the next group of CEOs came from the marketing ranks because they could create demand.

From this, I made the quantum leap of logic and asked the question "Will your next CEO have a human resource background?"  I based this question on the business equation "Capital Equipment Labor = Profits" and the fact that labor was the only element that had not yet been maximized.  Well, at that time there were only two people willing to listen to my argument - Slim and None and Slim was well on his way out of town.  Interesting that today a lot more people are celebrating the importance of people to profits.

So, what are your plans to be ready for, or to begin preparing for this new environment?  Have you:

• Conducted a SWOT (Strength, Weakness, Opportunity, Threat) Analysis of your operations and the business sector in general?
  
  
• Analyzed your employee´s strengths relative to the new business plan or the anticipated new environment?  Have you developed a depth chart for each operating unit or department?
  
  
• Developed a succession plan?  Emerson, under Charles Knight, was renowned for their "Red, Yellow, and Green" coding of all management talent so they would know who was available and who needed additional seasoning when more responsible positions became available.  Have you determined who, like Kermit, should be colored green?
  
  
• Determined training needs and resources?  Do you have a tuition reimbursement plan?  Will you contract with a College District or some other resource for in-house training?  Have you identified what skill sets need to be developed?

I don´t propose to hold this out as anywhere near a complete list of actions necessary to prepare for the new flat world, but I hope it gives you cause for thought about the steps that you should take at this time to begin to prepare.  Let´s get those employees ready and engaged so we can continue to lead the world into the future. 

Copyright 2005 J.E. Mittler & Company.  All rights reserved.