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Posts Tagged ‘Economy

Lack of talents or lack of motivation.

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The "Motivation machine"

Professional organizations are publicising figures about employment on a regular basis. Even these last times, things seem to be going better because the economy is recovering from the financial crisis, there is always a same finding. This finding is the difficulties that companies have to find and recruit some specific profiles. The lack of talents is a brake for the local economical development, and the problem will probably be more important in the coming years with the baby-boomers who will be retired. What are the reasons of such situation?

A first reason could be a weakness in the performances of the education system. An inefficient education system induces a lack of qualified people. Let us remind that a strong education is the basics of an harmonious personal development for people. Before to be workers, we are first human being and we are going at school to be first educated people, to be ourselves. By benefiting from a strong basic education, we increase the possibility to move to a larger range of studies at high school or university, and to have access to a larger range of jobs.

But is the education level the only reason of lack of talents? And what about remunerations? In this particular difficult time, it is often told to people that the salaries level has to be maintained. I know people around me applying for new job, who were asked to work with a salary decrease around 30%. As freelance consultant, I received some assignment proposal for a rate lower of 36%, and one of them was for a large company in the banking sector where the bonuses allowed to the top management did not know such decrease. By mentioning this, should not we allowed to think that the problem of missing profiles is not due to a lack of talent but to a lack of motivation from talented people. Some studies show that salary level is not the most important thing people are looking for, but they hope to have a decent salary for the job they are doing and for the related constraints they have to assume. Some people want one job or another, and are choosing the one that is well paid, what is understandable. But if there is no salary difference between that job and the one they really would enjoy to do, why would they continue to do it? Sometimes ago, I read some testimonials in such way about people launching their own activity, and telling that they will not probably earn more money but they will have the advantage to be their own boss.

The lack of motivation and lack of talent induce negative consequences on the economy. When some profiles are missing, companies are relocating activities in other countries. The fact that salaries are always dumped, induces a negative impact on the local economy. When people have a lower purchase power and that they are pushed and encouraged to consume, they begin to contract credits they cannot reimburse. We have seen the consequences with the financial crisis of 2008. But apparently, some people have a short mind.

The talent development is an ongoing process, producing short, mid and long-term effect. The talent development is a process having to be improved and worked on both sides. Ourselves, we have to develop our talents in order to evolve, to increase our potential and our knowledge, to get more opportunities. But we have to know that we will have possibilities to use our talent and that our talents and efforts will be correctly rewarded. That is the reason why companies, managers have to promote talents and to define clear goals and challenges, as opportunities where people can express their talent and be part of a nice project. It will make the difference between to have people who are doing their job because they have to, and they have to earn money and the one’s who have the feeling to contribute to a common project. In the second case, there will be clearly added-value for people and for the company.

Written by Eric Saint-Guillain

April 25, 2011 at 15:28

The perception of changes, an open window to new opportunities

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The Center for sustainable energy and technologies in Ningbo - China

Yesterday, I was listening on the radio that the last car was produced in the Opel assembly plant of Antwerpen in Belgium. This is the consequence of the General Motors bankruptcy and the related restructuring process. The Flemish Regional government tried to make lobbying to find another partner to buy the business in order to save a local production, but also to save jobs. On another way, I was reading an article published in the Spanish newspaper El Pais and translated in the Courrier International, that the Silicon Valley, symbol of new technologies and entrepreneurship, was moving his activity in the green technologies. I was wondering why it seems that some countries seem to be always in advance in term of innovation. There are probably many factors to explain such differences.

It is obvious that we are living in a fast moving environment. These fast changes imply to have a long-term view. Changes are sometimes slow but ongoing processes, but we only perceive then at a certain moment. If for instance, you plant a tree in your garden, and you are looking to it everyday, you will not perceive that the tree is growing a bit every day. It is after few weeks or months that you will suddenly notice the tree grew significantly. What is interesting to know is if it is the change which is not always easily perceptible, or is it our mind which don’t want to change of vision easily. Are our mind progressive or conservative? It depends of each of us and we need probably more or less time to integrate new ideas, new paradigms. Does this break of perception, linked to a culture difference, explain that some countries are more innovative than other? This is an interesting question underlining different important aspects, in which governments could have a key role to play.

As said, a sustainable economical development needs a long-term view. Some well performing industries will not be anymore in few years, because the economical environment is changing. It is important to predict what will be the long-term changes, based on what we can observe today, in order to develop appropriate policies to ensure these developments. Let us take the example of Belgium. This country was known during many years as a country where car manufacturers were investing. The car manufacturing industry was bringing a lot of jobs, and these factories were appreciated for the productivity and qualification of people. It was of course a good source of revenues for the State, and as far as everything is fine, we do not look further to what could be happen. But since many years, like in most of western countries, the employment in such factories was decreasing, and companies began to invest in countries where the manpower was cheaper than in western countries. The trend seemed to be obvious. These industries were not expanding their activities in our countries. Our economy is changing and needs transformation. Some elements are necessary to implement such transformation. But are our governments supporting enough the economy renewal implementation? Let us take another example, when by the past, the Belgian Government allowed huge intervention to save the metalwork industry, but like the automotive industry, the size of the production plants and the jobs did not stop to decrease. Was it a good initiative to sustain a declining industry sector in our country? It was probably a good initiative on a short-term basis in order to save jobs, but not on a long-term basis. It would probably be better to allocate budgets to develop new fields of economy and to give incentives for research and development programs.

Since few years now, a lot of local initiatives are taken in order to sustain the development of new economical projects. The question is to know if the efforts and incentive done by the governments to stimulate the innovation and the creation of new economical development fields are sufficient, and if such measures are not coming too late? Is this the result of a too conservative view of our world? Ilya Prigogine, Nobel price in chemical sciences, was used to say that we have to build the present time, based on the experience of the past and by anticipation of the future. If we have a look to the past, we can note that everything has changed, and that there is no reason why this process should stop. This is a reason why we have to be aware about each change, each trend we can see. We have to consider these changes as an open window to new opportunities and challenges. It is a question of mind, of vision about our world, to be able to change of paradigm and to think out of the box. It is obvious that by mentioning this, we underline the importance of education and the qualification level of people. Knowledge and capabilities are the raw material of innovation and development. A strong and sustainable economy can only be build with a performing education system, and by encouraging people to acquire a culture based on adaptability, and considering changes as a opened window to new opportunities and challenges.

 

 

Written by Eric Saint-Guillain

December 16, 2010 at 22:04

Corporate Social Responsibility, a philosophy or a marketing tool?

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Corporate Social Responsibility, for a better world.

Today, we can see a lot of companies investing time and funds in Corporate Social Responsibility. I was recently asking the question on a forum if such programs are the concretisation of a philosophical culture or by the motivation of a positive marketing image. This question suggests a cynical intention of companies to do a positive action for business purposes. If sometimes such question is asked by some of us, it is probably because the Corporate Social Responsibility initiatives goals are a bit in the opposite of the company goal, it means to make profit. And the other question is to know if the final goal to implement Corporate Social Responsibility programs is to contribute to a positive social action or if it is to develop a positive marketing image. It is always easy to criticize such initiatives by saying that it was not done for a good reason, in this case for social purpose. But such initiatives make cense when the strategy and the philosophy of the company is in accordance with such actions. In other words, could we believe to the valuable reasons of a CSR program of a company when this company is firing people in order to maximize profit?

Do not forget that companies needs to make profit in order to ensure the development and the sustainability of their activities. Do not forget that there cannot be efficient social policy without strong economy. Both are linked, but companies would have to integrate all the dimensions, social, economical, development, people management, motivation…in their corporate values. In a lot of case, it implies a change of paradigm. Is the economy there to serve people or people have to serve the economy? As I already asked in other articles, is a economy sustainable when companies are cutting jobs to make more profit and when you reduce the purchasing power of people? In such context, does the CSR appear as a cynical way to gain respectability? Such a paradox does not appear as positive. But we have maybe to see here the possibility to develop another business model, where all the components have to be taken into account, in order to show a more coherent image. There is already existing companies and business based on the Social economy model. These companies are integrating different values, and sometimes more constraints to develop a sustainable business. But this kind of environment initiates most of the time more creativity, and particularly when the people are motivated and subscribe to the company project. I remember an article about an IT small company based on a cooperative model, where each employee could acquire shares of the company and have a vote to the board of directors. This model shows interesting advantages. The CEO of this company was mentioning in the article that with such company model, he could be fired by the employees, and that he was taking more time to make proposals and taking decisions. But on the other side, the employees are more involved in the project and have more responsibilities on their shoulders. It is not forbidden to think about the possible changes that CSR could produce on the way to do business.

Does it mean that every company cannot implement Corporate Social Responsibility in order to avoid critics? Certainly not! Such initiatives have to be encouraged and have not to be criticized. But I think that a CSR program starts within the company, by taking care about a range of value, like people management, employee wellness and personal development, environment concerns. Such program can contribute to reduce costs and to increase the employee commitment. These programs could be nice challenges if the ones who initiate them, want to do it with efficiency and reach a valuable goal. It offers a positive contribution for those who needs some help in particular difficult time, and contributes to give a positive feeling of usefulness for those who contribute to the realisation of such programs. For programs where people are dedicating time as volunteer, it is a good experience to face challenges, to be confronted to some difficult situations. This kind of experience is invaluable and brings a positive contribution in terms of education. Probably that a lot of us, we lost one day our job and we had to face difficult time. We had probably chance to have people around us giving supports and encouragement. We don’t have to forget this. It is important from time to time to give assistance to people, but also to help them to take a new start. As said previously, there is no social without economy, and no economy without social. Before to be consumers, we are first human being.

 

 

Written by Eric Saint-Guillain

December 6, 2010 at 21:22

The financial crisis is over and good practices back! Really?

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The fall of Lehman Brothers on 15th of september 2008

Most of you probably know through the media the solvability problems some countries are facing, like Greece. And some speculators are finding an opportunity to make money by creating additional problems in an already difficult environment. And Greece is not the only country facing to budget deficit. Let us remember that with the financial crisis and the uncontrolled risks taken by some banks, a lot of countries over the world have to make actions by funds injections, in order to save then and to save the money of their customers. The consequence is that the private debts of the banks became public debts, it means a charge for each citizen.

This subject was discussed by the finance ministers of the G7, but until now, it is the status quo! And it seems that the game of speculation and risky investments started again. The problem is that in such games, like in most of games, they are winners and losers. But what is unacceptable is that the losers are not part of the game, I mean the people who will have to support the increase of the national debt and who will suffer of the consequences of budget deficits. For who is the crime profitable?

I can notice that today, in such context, there is a confusion between the speculators and the entrepreneurs. The financial and economical world is considered in a negative way. In this difficult time, it is not a good thing, as we absolutely need the creation of companies and activities in order to compensate the jobs losses. In order to maintain a social environment, we need to have a strong economy where everybody can play a role and live with dignity. But to have a strong economy, we need entrepreneurs with innovative projects and activities, and the essential tools, financing sources, to develop such projects and activities.

By meeting recently some entrepreneurs, there were mentioning to me the financing problems they were facing. They were wondering how to find financing sources and partners without dealing with sharks? The traditional banks are not enthusiastic to finance such projects, because they have not enough return on investment on it. But how could we explain and understand that they are investing in more lucrative investments but much more risky too? The explanation could be the following:  if things go wrong again for the banks, they count to the government to make new capital injections. But with the debts the governments contracted to save banks, will their still have the capacities to perform another capital injection? And what could be the economical, social and political consequences of such new intervention?

Is the human being able to learn from his mistakes? Yes, he is, but on another way, he thinks that things are linear, that he can always have control on things, and that there will be always a solution to solve a problem without too much consequence, that he can always escape to critical situations and not be concerned by then. That is what was probably thinking a certain..Bernard Madoff !

Picture source: http://www.etftrends.com

Written by Eric Saint-Guillain

February 10, 2010 at 22:22

Posted in Economy

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Small could still be beautiful

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Silicon Valley, land of innovation

In my previous posting, I was talking about the social economy as an alternative. Of course, to face such complex problem, there is not only one solution, but different ways of alternatives. If I am coming back to this subject, it is because when some indicators are showing that the recession seems to be over, other consequences of the economical crisis are still there, to prompt us to stay moderately optimistic ….or pessimistic. That is what we could see in the news these last days.

Few days ago, there were around seven hundred people losing their job in the Brussels region. A major media distributor felt in bankruptcy and around four hundred people will lose their job. Another pharmaceutical group announced a new restructuring process, by cutting one hundred and seventy jobs. A press group, facing to a decrease of advertising revenues announced also a job cutting of seventy six employees. These tree companies were obliged to axe jobs for different reasons. There are circumstances where we have no choice to cut jobs in order to ensure the company continuity.

Regarding this problematic, I would like to talk about the axed jobs as consequences of merging and acquisitions processes. We can hear very often companies explaining that they acquired other companies or merged with other companies because there are synergies and complementarities between activities. In my mind it should mean that the combination of different activities should provide new opportunities and generate more revenues. It makes sense for small companies who have similar or complementary activities but which can not reach a critical size in their market. But for bigger companies, like international groups, it appears that most of the time, the purpose of such operation is often a financial goal. Most of the time, after such operations, it follows a restructuring wave and a lot of jobs are axed. As already mentioned in other postings, how can this economy survive, when the principle seems to be “do more with less people”? If people are losing their purchasing power, how can we sustain a growing economy? Are merges and acquisitions always necessary to ensure a business? Some years ago, a Belgian fashion designer, Olivier Strelli decided to expand his activities in Japan. After some problems of unfair concurrency and piracy, he decided to stop his activities in this country. Finally, such decisions did not have a negative impact on his business.

It is not forbidden to believe that our economy needs to move to a SME economy, where there is more flexibility in terms of organization, in term of creativity and innovation. I was reading recently in a book written by Philippe Buschini (*) about Personal Branding, a sentence of Nathan Rosenberg saying that “The innovation appears often outside of the existing organizations, partly because the winning organizations are staying in the status quo and are resisting to the ideas which could affect then”. A lot of new high valued activities were created by start up companies, with high potential of development. Let us think for example to the IT industry.

But the interesting point is that in the actual environment, where things becomes more and more complex, these small companies needs to get high value advices and services but on a temporary or part time basis. This could be a real opportunity for other companies and people, to create not only commercial and technical relations, but real business partnerships. This kind of services are already existing, with the field of interim management or project consulting, but we could also consider that people could become partners in several companies, and participate of the development processes for each of then. People would work as freelance, which is still seen as more risky than an employee position, but the advantage could be to gain more experiences by working on different projects and in this way, to ensure their employability.

By thinking about this, it seems that the story is a process of constant renewal. Some small companies grew, became giants and then disappeared. It could be that finally, small could be still beautiful.

(*) Philippe Buschini website: http://www.buschini.com/

Picture from http://www.flickr.com/photos/explorer/112761636

Written by Eric Saint-Guillain

November 19, 2009 at 19:45

Social economy, the sustainable way ?

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AGRICULTURE-ENVIRONNEMENT-ALIMENTATION-MAG

In Gironde, consumers are financing the installations of a "bio" market gardner for a local direct sale.

Today, the social economy seems to gain interests. The main principle of this concept is to create an economical model showing more solidarity. When I read these words, I am wondering if we are not busy to re-invent what should be the ideal model?

If you think about the economy, it has to be to the service of the people, and not the opposite. By mentionning this, it implies that the economy has a social dimension…or should have it.  But today, the concerns are more to maximize the profit of the companies in order to create value for the shareholders. But for how many time? In these particular difficult times, people lost their jobs. Sometimes, it was the only solution in order to maintain the continuity of economical activity. But we can see also in many countries, increasing difference between higher and lower salaries. When some people could not spend the money they are earning during all their live, other people try to survive.

Do not forget that some people have high responsibilities and need to be paid for. But until which salary level does it still make cense? When I remember by the past, some salaries and bonuses earned by some directors of companies which did not show exceptional performances or falling in bankruptcy, I see that more as an incompetence premium. Everybody would be ready to miss a target of to fail a project and receive a salary or bonus which allows you to have a comfortable live. Where is the risk?

By reducing the lower salaries, how can we ensure an economical growing, if people can not pay for goods or services? By contracting debts? That is what  happened these last years, and created the financial crisis.

We can not create a social environment in an economical desert, but we can not also develop a sustainable economy without a sustainable social model.

Today, it seems we are trying to find new technical solutions in order to re-start the economy, while it is much more a mentality change which needs to happen. Let us take the example of the automotive industry. Today, in order to save this industry and to boost the car sales, many countries are giving allowance to people buying a “green” car. When we know that the automotive industry is in overcapacity since few years and that this industry is producing more with less people than before, this kind of measure will only produce short term effect, but fundamentally will not solve the problem.

In a sustainable economy model, the profit should only ensure the continuity of the company, giving the capability to finance new projects development. The profit is one of the components, the human resource is another. Maintain the number and the quality of the jobs contributes to maintain the know-how of your company. And this know-how is increasing everyday as long as same people are staying in the company. People should not be considered as employee, but as partners of the company. Reduce the people turnover contributes also to reduce recruitment fees and avoid to lose productivity.

To preserve the environment contributes also to a more social environment and develop a sustainable economy. By producing less and recycling more, by developing new activity fields respecting environment, we can develop a social economy giving opportunities to lower qualified people, to contribute to a high valued environmental project. We can already see such programs, gaining successful results.

Personally, I believe that a social economy is possible. It implies innovation and creativity. Creativity does not mean only to invent new things, but also to do things, to think on another way. But such transformation is possible if it is driven by the common good. It is just a question of will and intellectual honesty, to move to a society where people do not exist only by using a credit card.

Written by Eric Saint-Guillain

November 11, 2009 at 23:16

Posted in Economy

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