Agility Update April 2011

Agility Update April features three very different and thought-provoking stories. The first is that technology can be used to move decision-making up or down the corporate hierarchy. A second technology-related story sounds the warning that Internet Bubble 2.0 may be imminent. Our last item swings the focus back to people and asks if India’s employee-centric HR management delivers more sustainable results than the West’s approach to people.

How Information and Communication Technologies Affect Decision Making
Companies can target where decisions should be made on the chain of command by carefully setting up their technology and communication systems. A Business+Strategy article reports that analysis of data from more than a 1000 EU and US firms found that information-based software like databases moves decisions down the corporate hierarchy, whereas communication technologies drive decisions toward the top. This is because access to databases and advanced software allows lower-level employees to act with more autonomy, but the spread of e-mail and mobile phones means supervisors can be consulted with greater ease than ever before. When designing their systems, firms must first answer the question: Are we better served if our employees take responsibility or ask for direction? And once the decision-making level is set, appropriate guidance to individuals of their responsibilities, accountabilities and expectations would be useful. Read more at: http://www.strategy-business.com/article/re00135?gko=f4066

New Internet Bubble?
University lecturer and retired serial entrepreneur Steve Blank has sounded the warning that we are now in the second Internet bubble. He says in his blog: “The signals are loud and clear: seed and late stage valuations are getting frothy and wacky, and hiring talent in Silicon Valley is the toughest it has been since the dot.com bubble.” In a separate development, Bloomberg reports that a poll of global investors reveals that 69% of them think that Facebook is overvalued [at US$50 billion]. Just 10% thought it was "properly valued" (and 4% thought it undervalued), while 17% had "no idea." Over half of the Bloomberg poll respondents even went so far as to agree that the Facebook valuation represents the "beginning of a dangerous new bubble."  Read more at: http://steveblank.com/2011/03/18/new-rules-for-the-new-bubble/  and http://www.fastcompany.com/1721736/is-facebook-a-bubble

People Management: Better in India
Research is suggesting that the continued robust performance of leading Indian companies throughout the global financial crisis (GFC) is due to their superior human resources (HR) practices that avoid much of the short-sightedness embraced by Western capitalism. Peter Cappelli, director of the Centre of Human Resources at the Wharton School at the University of Pennsylvania, says   Indian companies see the competency of their businesses as lying with their employees. In contrast, US firms see it much more as driven by the leaders and by clever business decisions, rather than worker-level execution. India’s employee-centric view extends into practice. Almost 70% of Indian HR executives report they are closely involved in creating strategy with the other top leaders in their companies (vs. 44% in US companies) and 87% claimed to work closely with the top management team on implementing strategies (vs.. 56% in the US). However, the researchers claim the most interesting finding is what Indian business executives do not say. Indian company leaders surveyed never mentioned cost reduction as a priority for HR. As for Australia, evidence suggests we sit in the middle with a leaning towards US practices. Approximately 6 out of 10 respondents to an Australian Human Resources Institute (AHRI) survey conducted in April 2009 to determine the impact of the GFC reported they had downsized or were planning to do so. Read more about Indian HR practices at: http://knowledge.asb.unsw.edu.au/article.cfm?articleId=1343