AUGUST 2010

Change - and the embracing of change – is accelerating. While it took Twitter four years to reach tweet number 10 billion in March this year, it took less than five months to double the figure. This month’s Agility Update is focussing on change. “The Great Rebalancing” from McKinsey explains changes at the macro-level and their flow-through impact on today’s dominant English-speaking business bloc. Other articles selected for August highlight the impact of globalisation on the business professional’s family and community; of technology creep from an individual’s personal life into work; and of changing societal needs and expectations on leadership skills.

The Great Rebalancing
Apple launched its iPad in April this year. Barely a month later, the look-alike iPed was on sale in China (which is on track to pass the United States as home of the world’s largest R&D force) for US$105, or 1/5th of the original price of the iPad. This illustrates what McKinsey & Co calls “The Great Rebalancing” where the coming decade will be the first in 200 years when the centre of economic growth shifts from developed to developing countries.

According to McKinsey, this growth will not only create a wave of new middle-class consumers but also drive profound innovations in product design, market infrastructure, and value chains. Increasingly, global companies will need to focus on innovation to win in low-cost, high-growth countries to ensure their survival. An example of innovative low-cost competition that can turn traditional price and cost structures on their heads include the US$2,200 Nano car made by India’s Tata.

However, McKinsey said a few innovative companies are starting to get it right. GE, for example, has devised an electrocardiograph machine for the Indian market that can be sold profitably for US$1,500, less than a fifth of the price of traditional ECG monitors in Europe and the United States. Based on this experience and others like it, GE is now developing more than 25% of its new health care products in India, with explicit plans to deploy them both in emerging and advanced economies. Read more at: https://www.mckinseyquarterly.com
Read a related article “When companies underestimate low cost rivals at: https://www.mckinseyquarterly.com

New Normal: The Rootless Professional
Despite an American focus, the book Next Stop, Reloville: Life Inside America’s New Rootless Professional Class by Peter T. Kilborn is of relevance to Australia’s professional expats as well. In his book, Kilborn exposes the price both families and communities pay when the breadwinner – most often the father – travels frequently for work, leaving a spouse and children alone to fend for themselves in communities where few connections are actually made. After all, the next move is right around the corner—or the globe.

He uses the term “Relos” – to describe those who move every three or four years for a job. For many, such periodic relocation is a track to the top of the company hierarchy, and the jobs come with high salaries and generous perks. But these moves can also take a high toll on families and the community. Other issues explored include the changed sense of community from the physical to the virtual, and the children of “relos” who, having lived abroad, often don’t identify with a place or even a country. These children call themselves “third culture kids” and many engage with other kids via electronic links –  Facebook, My Space, email, texting – rather than in their physical community. Read more at:
http://knowledge.emory.edu/article.cfm?articleid=1343

Tech disconnect: The Impact of Consumer IT in the workplace
New research by International Data Corp (IDC) has thrown a disconnect between employers and employees into the spotlight. The research found that consumer technology, such as smartphones, netbooks and social networking sites, is being used increasingly in the Australian workplace. In fact, 97% of Australian employees use at least one self-purchased technology device in the course of their work. Yet, many organisations are not aware of what consumer technology is actually being used. The risk of such ignorance is inadequate security measures - both technology and policies - putting their corporate data and their employees' privacy at risk. Some key Australian findings include:

• 80% of employees say they use VoIP, but organisations estimated only 55% of their employees used it.
• 25% of employees say they use a smartphone, but organisations estimated only 13% of employees use one.

• 56% of employees say they are allowed to store personal data on the network, but only 44% of employers say they can.
• 40% of employees say they are allowed to download non-work related video files, but only 24% of employers say they can.

Read more at: http://www.hcamag.com/news/46904/details.aspx Details of the research is available at: http://blog.unisys.com/

Are Powerful Leaders a Liability?
A new London School of Economics study says powerful leaders make worse decisions by dominating their colleagues into silence. While it is important for leaders to exude authority and competence, Dr Connson Locke, from LSE's Department of Management, said: “There is a clear downside to appearing too much of a leader because it inhibits employee voice in participative decision-making. Even when a leader invites his or her team to speak up they may still hesitate because they react to nonverbal expressions of power such as posture, frequent eye-contact and a louder voice – behaviours which leaders are encouraged to use because they contribute to an image of competence and confidence.” Read more at: http://www2.lse.ac.uk/newsAndMedia/news/archives/2010/08/leaders.aspx