Thursday, 18 September 2008

What's driving the business context

Liam Fahey @ CIPD 2008

Bob Morton from Ciba introduced the session and Liam Fahey

Bob Morton from Ciba speciality chemicals opened the session and during his opening he reminded us that while many other speakers at the event had highlighted the current financial situation we should look beyond what is happening in the financial sector and look at the wider picture. His implication being that if you only look at the end of your nose you miss the real issues and more importantly the opportunities.

Liam Fahey (from the leadership forum) 'launched' himself on an unsuspecting audience with the opening line "good afternoon (it was 0935), those of us not in HR are used to an earlier start." - not a ripple from the some what small audience in the large auditorium. Fahey carried on regardless.

Fahey started to set the scene of what is happening in the world and how this impacts on our future strategy development - not just for hr but HR and business. He asked the rhetorical question "what COULD happen in the future that can screw your organisation?..." "what are humanities greatest needs" Indeed big questions for early on a Thursday morning.

Fahey drew our attention to what he calls the 10 needs of humanity (foci of change):

  1. Energy
  2. Water
  3. Environment
  4. Education
  5. Poverty
  6. Food
  7. Disease
  8. Terrorism/ war
  9. Democracy
  10. Population

And asked us how many of us applied this to our organisation when looking at strategy? In conjunction with this he highlighted a range of change domains: Products/ Services, Plans/Strategies, Region/ Global etc.. all of which interact with the global drivers of change. These can create and destroy significant business opportunities. To put these factors into context he pointed out that it did not matter how big or small our organisations were, nor what products or services we offer - regionally or globally, these factors would impact us and our decision making.

We were taken on a whistle stop tour of data and impacts of these ten factors, and shown that it is not difficult to get data on these factors - indeed many of the governmental agencies around the world provide this data for free - all we need to do is use it! This started to make the whole proposition real. No longer were these factors that would impact big and international organisations but each and every one of us.

As an example of using this data Fahey gave a brief case study looking at the mobile phone sector, he showed how the first 1/2 billion users are now changing their phone on average every 12 months, that the second 1/2 billion users have different requirements - and that the further down the user population you go the challenges faces - to the extent that the business model that works for the first 1/2 billion users is completely inappropriate for the second billion users etc... so as organisations we need to adapt to market needs greater than anything we have done before.

Lehey outlined the 10 factors and the potential impacts. He stated that 15% of the worlds population live with an abundance of water - that leave 85% with a water shortage - so their needs will be different, both in terms of services and application of technology and products. In this context he discussed two US based organisations that are pulling their manufacturing out of India and China and relocating them to the US on the basis that the water situation in the two countries will have a significant impact on production capability. So these 10 factors are being used by organisations for strategic decision making.

Food - demand is outpacing supply, and this is an area that needs to be looked at - both use and waste if we are to have a sustainable business model.

Terrorism - this was an interesting one, he asked us on a scale of one to ten of impact on us as a world population and economy where terrorism would be.... then he asked the same of human based viruses...... his answer was that terrorism was -10 and human virus was +100 in terms of impact. he cites SARS which only lasted for a few months and to all intents and purposes only really hit one region - he then asked us to imagine what would happen if a disease really spread and to thing about the impact..... He then asked what sort of effort and priority our governments were putting into protecting us from these factors - he mentioned that the UK only has enough vaccine for 5% of its population for a flu pandemic....

In Disease he looked at the increasing cost and impact of diabetes, both to the health of a population, health care implications and on product R and D. fascinating stuff.

Fahey skirted at a rapid pace on so many areas that I could not do them justice here.


He closed with challenging HR. HR needs to drive these things (the 10 factors) to influence senior management. We (HR) need to be both overt and subversive, we are potentially hold the key for success for our organisations... no one else is doing it...

Where ideology meets human circumstances ideology always loses.... this is as true in business as it is in politics... so values are all very well but just how far will the organisation go to support them? ( what would you do/ not do for £10m ?).

In the Q&A section in response to a question... You must remember the following two rules:

  • Rule #1 you cannot predict the future
  • Rule #2 ... remember rule #1

He said it was not about predicting the future - but running scenarios based on the information he has shared to forcast possible situations, he said that incidents like 9/11, the financial crash have been identified by scenario planning and some organisations are better position BECAUSE they had CONSIDERED the possibility... not because the 'predicted it'

He intimated that people are THE strategic asset and as managers we need to ensure that this asset and resources is utilised effectively - whatever that means in a given context.

Summary thoughts

It was a shame that there was a small audience and a a 'reluctant' applause. For me this was one of the most powerful and enlightening session of the conference. For an HR manager or director to be truly strategic we need to look beyond the policy and procedures and develop contingency and strategy to deal with the possible future scenarios. One colleague Fahey mentioned said that in an exercise looking at 'worst possible situation' - over 90% of them had already occurred - so strategic and scenario planning is of critical performance.

Fahey did not 'sell' his own books in fact they were not mentioned in the presentation - I for one will be buying some of them - a highly recommended speaker - in fact I would say mandatory reading/ listening for all CPP and other HR 'students'. I hope the MP3 of this session will be widely available.

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