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Archive for October 2009

Was it better before ?

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Charlie Chaplin in "Modern Times"Often, we are hearing  people saying it was better before, when they were youngs. Sometime, when we have a look to the world, we could think in such way, when we are looking to the financial crisis, the environmental issues, and many other things.

Was it really better before? Should we go back to the past?

Until the beginning of the 20th century in the Western countries, and still today in some countries over the world, the children were obliged to work, when they were only 12 years old. Some of them never went to school and had no chance to have a long life. The work they had to do was very hard. They were not workers but rather slaves working in very bad conditions. For instance, the hard work in the coal mines cost a lot of people their life. The safety conditions and policies did not exist in this time.

Since that time, a lot of things happened. The technological developments contribute to reduce the hardness of some work. The people works in better conditions. But the technological developments have not only positive, but also negative consequences. For instance, the automotive industry increased her production capacities with less people. Does it mean that finally, the automation and the technologies should be rejected? Do not forget that these last 20 years, the information and communication technologies have expanded on an exponential way, creating new activities and new jobs.

It is obvious that the world is changing a bit more everyday. The difficult time we are facing with the economical crisis, the environmental challenges and the humanitarian questions, represents good opportunities to innovate, to change some models in our economy, in our environment, to move to a better world.  Change is the motor of innovation. With all the progress done everyday in medicine, technologies, it should be possible to live in a world where everybody could live in dignity. All the acquired experiences acquired and the drawn conclusions about the past, the history, should be used to redefine new societal projects. It is just a question to become an actor and not stay as a spectator, to understand that our economy should be in the service of people and not the people in the service of the economy. Financial profit make only cense to ensure the continuity of projects contributing to the development of a sustainable world. Money should be considered as a tool and not as a goal.

How will we move these next years ? Shall we say in few years that it was better before? Wait and see, to see if the people  are able to learn.

Written by Eric Saint-Guillain

October 30, 2009 at 22:55

Posted in Uncategorized

What to you think about change ?

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Peter Drucker said:  

“The systematic innovation requires the will to consider change as an opportunity.”

What do you think about this ?  Is the present economical crisis an opportuity of change ?

http://en.wikipedia.org/wiki/Peter_Drucker

Written by Eric Saint-Guillain

October 29, 2009 at 22:32

Posted in Business

Shared services centers, the best solution?

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Shared Service Center

Shared Service Center

Many international companies are using shared service centers for a range of services. Most of the time, these shared service centers are located in regions where the salaries are lower than in other countries. I experienced few times this way of process in the financial and accounting area. Is this an advantage for companies to operate in such way ?

 As every system, shared services centers present advantages and disadvantages. In a multinational company, common processes are set up and used by every location. It means that there is a standardization of the processes, and if you are able to perform tasks or activities for a location, you could do it for every location. This seems to be an advantage. Nevertheless, there are also specific requirements for every location, for legal purposes. I experienced recently such case, in which some intercompany transactions needed to be supported by an invoice. These documents went never raised, which could cause some issue on a legal point of view.

By noticing such problem, my questioning was the following: are these process set up correctly by involving all the people playing a role in these process? Are the requirements for each location correctly analyzed? Are the people performing these processes well trained? By asking these two questions, I want to talk about the following. In order to perform correctly some tasks, you need to know and understand the purpose and the implications of the tasks you are performing. In order to have things under control, a good training needs to be provided to the operators. This is the difference between to delegate a task and a process. A process is a range of tasks, and by delegating a process, the people acquire more control on this process, understand better the purposes of the process, and it brings more added value in terms of competences and knowledge, and indirectly more value for the company.

If I am talking about knowledge and competences, it is because sometimes, I have the feeling that people working in shared service center, in India or other locations with lower salaries, are a little bit the slaves of the companies, performing basic tasks for a competitive price. I have the feeling they are considered as enough stupid to do such job. If it is the case, it is for me a mistake. I noticed an important people turnover in such organization, because people want to move to other function, to more interesting jobs. As you know, when people move to another function, there is always a loss of knowledge after the handover. This loss of knowledge has a negative impact on the service quality, and the time spent to solve some problems issued by such situation represents a cost for the company. Once again, we are coming back to the disadvantage of short term views.

Does it mean that shared service centers does not represent added value except for financial advantages? I will not be so categorical, but there is some requirements needed. First, we have to integrate the dimension of personal development. We are not the only one in the western countries who wants to progress in our professional career. The evidence is that in countries like India, or in South America, there are also very talented IT engineers, financial people… It means that the training aspects are very important in order to provide high quality services, and to contribute to the professional development of the employees and the interest of their job. The implemented technologies are also important in order to improve such operating structure. In certain cases, I noticed that the shared service center structure brought about more work for the beneficiary location, in term of transmission of documents and information. And last but not least, an efficient organization is necessary to ensure a smooth running of a shared service center….and for the all company too!

 

(Picture: http://blogs.mcgill.ca/fyi/files/2009/01/hrsu.jpg)

Written by Eric Saint-Guillain

October 19, 2009 at 21:40

Posted in Business

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The job your are dreaming, why not ?

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Peter Drucker (1909-2005)

Peter Drucker (1909-2005)

Many times, the question of the job motivation is asked, and the criteria’s of motivation analyzed. Often, the question is if the salary represents the main factor of motivation. Is the salary the most important factor of motivation ?

The main important thing to be motivated is to do what you want to do. A first exercise is to know what you like to do, what are your strong points and your weaknesses. If you do not like the figures, you will certainly not become a good accountant, and you will not convince the other people, as you are not convinced yourself. Peter Drucker, named “the pope” of the management, said “It is better to work on your strong points, to go from competence to excellence, instead of to work on your weaknesses to go from the incompetence to the mediocrity.”

I remembered when I was in the secondary school, some teachers and sometime family members were saying that you should do these studies because there are jobs and economical opportunities. If we can understand such advice from your family who is concerned about your future, is it the best advice we can give to somebody ?

In a fast moving environment, I can not give such advice to a teenager, because the job he will do in ten years, is maybe not yet existing. Let us take the example of the information technologies which knew these last twenty years an exponential development. It was difficult to learn twenty years ago what you can do with IT today.

Of course, you will probably ask if everybody can have the chance to do the job he want to do, and should it be a job giving the economical autonomy? Difficult to answer of course, but you can to put the chance on your side. First of all, no matter the studies the teenager will do, the acquired knowledge will be tools to find good opportunities. Curiosity and interest can also create interesting opportunities. I remember a friend who made a Phd in musicology, and could teach in US universities. His other passion was the software development he learned by himself. After few years of career in software development, he finally realized a dream: he started to develop software to learn music. The other positive points, which is not the most important but quite important, is that he could live of his passion.

To do the job of your dreams is one of the best things you have to attempt. You have to feel it as a passion, as something you are convinced by. If you do not try such challenge, you will do a job you do not like to do, and feel it as a real burden, as a constraint. Walt Disney said: “If you can dream it, you can do it !”

Written by Eric Saint-Guillain

October 11, 2009 at 21:38

Long term objectives and short term concerns

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General Motors assembly line

General Motors assembly line

These times, we are hearing that the economical recession is finished and everybody seems to be happy to see the business restarting….as usual ! I have no habit to be pessimistic. It is a fact that in such time, it is better to have a positive mind in order to start new challenges and to influence positively the market. But for all the people who lost their jobs and who have difficulties to pay their bills at month end, to feed their children, to pay medical costs, the recession is not finished at all.

One of the major activity sectors which was hit by the economical crisis is the automotive industry. With the GM bankruptcy, we saw the American government trying to find solutions in order to save the company and in order to limit the social disaster of such bankruptcy. Other governments in Europe, like Germany and Belgium, are ready too to bring some financial helps to Opel. Nevertheless, is it a good idea to invest so much money in a industry where there is an overproduction of 35% ? If there is overproduction, it means in this case that there is too much player in this industry segment. Should not be interesting to invest in industrial segments which present good potential for the future, like renewable energies?

The problem is that governments have to face to a dilemma. They have to struggle with budget deficit. In order to limit the social expenses, and to find a short term solution, they are intervening financially in order to sustain some industries, like automotive industry. But by investing in some industries having structural problems, they are reducing their capacity to invest and to sustain long term projects developments.

How did we come to such situation?

We can observe that when some government find important source of revenue, they do not think for how much time this source will make earning money. Let us take an example related to the automotive sector. For instance, in Belgium, around 50% of cars are company cars. Company cars are given to employees as a less taxable benefit than an equivalent gross salary complement. These leased cars are important sources of revenues for the government, and the gas used by these cars too. Nevertheless, they have three major problems related to this. First, it is a fact it will be more and more difficult to extract petroleum, as a result of which, the price will increase progressively. It will represent a cost increase for companies, and will affect they results. The companies will have to replace such benefit by another. But if the number of company cars is decreasing, how the government will compensate the revenues decrease? The second problem is the one of mobility as in many cities and countries. The traffic jams are constantly increasing, and it represents also a cost for companies. Do not forget the third problem of  the environment. We are consuming more petroleum than the earth produces, and there is a negative impact with CO2 rejections.

It seems that governments have short term views, and as far as they find some important source of revenues, they have the feeling that it will be forever. Now, it becomes more complicated to finance long term project developments, when you have even not enough money to close your annual budget.

This remembers us that when the problem appears, sometimes, it is already too late. We have not only to consider things as definitively acquired, and not only to think about tomorrow, but also the day after tomorrow.

(Picture source: www.e24.fr)

Written by Eric Saint-Guillain

October 4, 2009 at 15:37

Posted in Economy

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