People Management in Emerging Markets

The hierarchy and talent myopia

2009-07-12T06:29:00.000-07:00

This week, I’ve hosted some meeting with some bank directors and Wharton students, as part as our college relationship program, presenting some IBBA banking operations. When we’re passing through some business data, it was impossible to notice that the way businesses are managed is only a small representation of the culture that business is in.

Banks in Brazil always focused large, high revenue clients. These clients demanded more sophisticated products, and also brought more revenues to banks. So the attention was almost fully direct to them. Small, “hyper middle” clients were caught sometimes by the stream, and Relationship officers couldn’t give all the attention they want to them (one, because plans of compensation generally focus on revenues, and two, because operations to large clients tend to be more complex and absorb more time).

In the middle of one business explanation like this one I’ve just made, a director asked a Wharton student:

“Do you have a check book?”

The Wharton student looked strangely, “Of course I have”.

“So” said the director, “know that in Brazil you couldn’t elect the president. In fact, none of us in the room could elect the president in a regular election”.

The explanation: in Brazil (and in other emerging markets), a HUGE amount of the population do not have bank accounts - if we look to the middle class, that represent a little bit more than 50% of the population (+- 100MM), only 25% of it (25MM) have bank accounts. Imagine poorer classes! This means that more than 70% of the population doesn't have a bank account, and this often-forgot public represent more society than we do.

And in a Marie-Antoinette-in-a-suite-way, (“If the population is hungry and don’t have bread, why don’t they eat brioches?”) businesses are managed taking as a base only a small amount of the population (in this example, people with bank accounts) as a reality, in a myopia that forbids you to see the potential of 75MM of customers without banking accounts that, with simple action, that could generate huge gains.

And the same goes for HR practices.

Expect to find HR policies with myopia. Practices are put in place generally considering three categories of professionals (that represent less than 20% of the organization, in general): director, managers and talents. “The rest” of the 80% of the employees tend to be forgotten when it comes to career, incentives, training, etc. And more: the leading team tends to place themselves in a pentatonic-lifestyle that only works to increase this myopia (so if you’re part of the leading team, be aware of it).

One may argue that “talents” are responsible for the great delivery of the organization, so that’s where they should focus. The same (error) as the example presented. Watch out! As a manager in emerging markets, don’t sub estimate the potential of the mass of employees that are not directors, nor managers nor talent, but are responsible to get things running.

The game changes in emerging markets! If you were a gambler in this game, where would you place your bet? If you have more examples (or counter-examples), feel free to share!

Best regards,

Alexandre Winandy

Edgar Schein, M&A processes and Integrating cultures

2009-07-04T22:10:00.000-07:00

Emerging markets are getting mature, so M&A process increases in a consolidation process (many of them accelerated by the actual economic crises). Culture is always a main issue of this subject, so this topic may be handy.

Some weeks ago I was in an event and met Edgar Schein (still the thought leader when it comes to Culture - his Organizational Culture and Leadership is still my favorite organizational book). At a certain point of the event, I’ve posed the following question:

- In M&A processes, Cultural management has been one main critical factor for success. Is it really possible to integrate cultures, creating a third culture, or there’s always a prevailing culture that will suffocate the other?
His answer:

- Culture is a set of behaviors that a group of people learn as “right” or “wrong”. So culture is limiting. If the person responsible for the decisions related to one of the cultures (ex.: a CEO), there will be no cultural integration, because every decision this person makes will be limited by the culture of origin. The only way to integrate cultures is to have a balanced group of decision-makers (ex.: an integration committee balanced 50/50 with people of the two merging cultures) with power to decide and execute strategy. Companies often fail doing that because there’s always some “filter” to these decisions (ex.: the CEO, from one of the cultures, has the final word), or put together unbalanced integration teams (if you have a 60/40 team, the culture with more people will tend to prevail). You only change culture changing people who are responsible for the decisions.

So when integrating culture, people should be honest with their goals: the discourse of “getting the best of each culture” will only be possible if you have a decision-making-team with people from both companies (in a balanced ratio). If not, be aware that a “cultural takeover” may take place – a big risk when it comes to the value of this kind of operation.

But should a wining (and strong) culture be really willing to change its formula just because of an M&A process? I have some doubts about this…

(Anyway, Schein proved to me that he’s still “the reference” when it comes to organizational culture)…

Best regards,

Alexandre Winandy

Related topics:
- The Leadership Code in Emerging Markets
- Entering Ethnocentric Cultures

Edgar H. Schein (born 1928), a professor at the MIT Sloan School of Management has had a notable mark on the field of organizational development in many areas, including career development, group process consultation, and organizational culture. He is generally credited with inventing the term corporate culture.

Hierarchy in emerging markets

2009-07-01T03:52:00.001-07:00

Power is probably the biggest wildcard that a leader may find in an emerging market, and one entering this game can either profit from or face troubles when playing it.

In emerging markets, the distance is bigger between social classes – for example, social differences between the concepts of “Poor Middle class and Rich” are clearer than in emerging countries (ranging from differences in habits, social and education, etc). Moreover, those social distances corroborates to societies to achieve a higher “power hunger”.

This means that the climbing to reach “power” is generally higher, slower and more painful to those in developed countries. Nevertheless, when on arrive on the top, will do its best to maintain it.

This distance can be demonstrated in the behavior of the leader, but also in very concrete signs and symbols:
- Dedicated refectory, according to the level - I indeed worked in a company with three different lunchrooms: for directors, for superintendents, for managers – none for the public.
- “Badges” - in other company I’ve worked for, each hierarchical level had an ID Card in different colors, and every employee was obliged to use – so you would know exactly to who you were talking to).
- Different power signs – from specific tables and dedicated seats (ex.: at the head of the table) to rooms sizes related to hierarchical position (a manager who decided to share a table with his team, having a seat in the middle of his employees, to be pressed by his peers to change it seats).

The “power distance” also reflects in leadership behaviors:
- In general, leaders in emerging markets are more distant, autocratic and operational than leaders in developed countries.
- Franc, “straight-to-the-point” feedback or contradictory points of view may be seen as a treat lack of respect.
- People development is seen as a difficult task, so most leaders prefer to recruit “formed” talent in the market, than risking attributing more power to his/her employees in order to develop them,
- Careers tend to be less accelerated, with little (or none) focus in talent retention or succession planning.

When entering in corporate games in emerging markets, one must be aware of the role of power all and its manifestations – for using it to one’s favor, or for not falling in any traps.

This is probably the thickest – and higher barrier – that stands between people relation in emerging and developed countries…

The need of being Flexible

2009-06-22T18:04:00.000-07:00

What is the first thing you can imagine when you receive your paycheck:

a) Paying your bills

b) Investing

c) Running to the supermarket to buy everything you can, because if you don’t do so your money will be worth only a half on the next day?

Answer “C” may seen strange, but happens (or happened) in several emerging countries in a

near past.

Can you imagine what “budget planning” means in a country like this? Where no plan can be follow, because things may change dramatically in a day-to-day basis?

On the one hand, this leads emerging countries to focus on the short-term thinking, but on the other hand, demands creative solutions and demands people to be (really) flexible.

This is also expressed in the working environment, where flexibility is not only expected, but demanded.

- Meetings won’t generally start on time (some minutes may be tolerated, ex.: In Brazil is generally accepted 15min of delay).

- A professional may be seen as too bureaucratic or rigid (even little creative) if tends to follow strictly the rules.

- If a boss just denies one demand of his/her employee because “it does not fit the policy”, he/she may be seen as unwilling to do something (not only follow the guidelines).

- Assertive, straight-to-the-point answers can be also perceived lack of goodwill (“you didn’t even consider an option!”) and even aggressive.

- If someone say to you a “no”, you can probably talk to other people and easily find who can obtain to you an “yes”.

Cultures are generally aspects perceived as true by a certain group, a set of expected behaviors that one may have. This means that there’s opportunities for professionals with a different profile (they can become a “white fly” in the company), but one must be really wise to not be classified in a pejorative way.

In uncertain economic scenarios, flexibility is a core competence. So learning how to direct this energy to achieve higher business results may be a great asset.

But the everlasting question: what is more desirable; a flexible “short-term-thinking-company” or a “not-so-flexible” but with strong planning systems?

Regards

Alexandre Winandy

The Leadership Code in Emerging Markets

2009-06-03T20:27:00.000-07:00

Yesterday I went to a conference presented by Dave Ulrich. The conference was directed to a senior executive audience, eager to know about Ulrich’s leadership theory and experience.

There were nothing really different from the book, but when Ulrich asked one question, there was an example of leadership behavior in emerging markets!

He explained that there are mainly four types of leadership, in which we all have a certain predisposition towards:

- Shape the future (the Strategist): to those who feels more comfortable setting strategies and planning scenarios.

- Make things happen (the Executioner): to those who feels more comfortable executing and putting things into action.

- Engage today’s talent (the People engager): to those who feels more comfortable dealing and motivating the team.

- Build the next generation (the Talent Developer): to those who feels more comfortable developing people and building on talent.

There’s also a nice division in short and long term:

Long term orientation: The Strategist and The Talent Developer.

Short term orientation: The Engager and the Executioner.

So, I was in a conference room with 800 directors and senior executives from emerging markets. Ulrich than demanded, “Think about what kind of leadership behavior you feel more comfortable, which is your predisposition”.

Any guess about the results?

60% chose “The Executioner”, while 30% chose “The Engager”. This means that 90% of this 800 sample of senior executives, examples of professional success, were short-term oriented.

Once the markets shifts quickly in emerging markets, this kind of leadership is more commun. Ask any executive in emerging markets to make a five-year planning process – they may laught at you! Not because they are “limited” (something I once heard from a Swiss executive), but simply because it’s almost impossible!

Economy is unpredictable (ex.: Brazil stock market is 45% up this year!), so fast REACTION and operational excellence (no mistakes allowed!) is strongly demanded.

So, expect to find “short-term” oriented leadership in emerging markets. And if you’re expatriated, even thou long-term competences are necessary, make sure to develop good deal your executioners competences!

Best regards,

Alexandre Winandy

Talent Risk

2009-05-27T20:11:00.000-07:00

Talents in emerging markets suffer from the bullwhip effect – when the market in booming, they are booming amazingly. When things are going down, they are on free fall. The closer is the employee from the whip end, the stronger is the volatility (for good and for bad).

In a period of global crises as we’re nowadays, it’s really easy to retain talent (or better: to find the market flooded with it). The reason is pretty simple: talents are rarely in “hardcore- essential-areas”, but mostly in talent intensive areas– so the business won’t shut its doors if you fire them (incoherent? Let’s see…).

Let’s take a regular department (ex.: HR). You have one employee responsible for payroll and other responsible for long-term development. You have greater probability to hire a talent to do the long-term development of your company (because those competencies are harder to find and to be taught), in payroll talent plays a lesser role (those professionals need a great deal of specialization). But one will impact more on the long run, and the other in the short run (assuring that paychecks are ready to go!). If you had to downsize, who would you fire?

On the other hand, this is the best time to go to the market – one, because people is not hiring, and two, because you may find great, cheap talent in the market.

In emerging markets, market is more volatile, and so are talent cycles. The biggest challenge for one company is to identify those cycles, to:

a) Decide if it’s time to “buy”, “hold” or “sell” its talents.

b) Make sure that is not taking a short-term decision (such as not retaining or even firing a talent because market is going down).

In emerging markets market moves quickly. And whatever one’s decision, it’s better to be a conscious one.

Best regards,

Alexandre Winandy

Entering Ethnocentric Cultures

2009-05-20T17:57:00.000-07:00

I’ve just gotten back from a training program in Intercultural Awareness. Pretty nice content, lots of behavioral activities to show how, must of the time, we can’t listen or face differences (even though you think we do it well).

For example, can you take a guess of the five most “Ethnocentric” countries (countries focused in its own culture and little openness to cultural exchange)?

First (and most ethnocentric) country of all: the United States of America

This may be an easy guess to most people. The US is well know in the world for “imposing” its own habits. Ex.: the terminology “Cultural Shock” was created by an American, to describe the difficult of Vietnamese to adapt to the American culture – even though it was the US who was in Vietnam (so, the “foreigners” where demanding the “hosts” to adapt to them).

But what about the other ethnocentric cultures? Here it goes:

- Brazil

- Russia

- India

- China

Ethnocentrism is the tendency to believe that one's own race or ethnic group is the most important and that some or all aspects of its culture are superior to those of other groups. Since within this ideology, individuals will judge other groups in relation to their own particular ethnic group or culture, especially with concern to language, behavior, customs, and religion. These ethnic distinctions and sub-divisions serve to define each ethnicity unique cultural identity.

That’s it; the so called BRIC is ethnocentric! This means that habitants of these countries do not only think that “my way is the right way”, but also tends to be more resistant to foreign practices!

When entering BRIC countries, watch out to try to really understand its culture. Do not assume that your practice is the best. And listen actively to map Cultural Dimensions and understand the differences. Trying to implement “standard people management practices” may be a mistake!

Best regards,

Alexandre Winandy

Recruitment and selection in emerging markets - specialized workforce

2009-05-10T18:48:00.000-07:00

This post can be view as a "follow on" of the "Recruitment and selection in emerging markets - for non-specialized workforce", with the difference that things get a little more challenging at this level!

Although you may thing good colleges and experience in emerging markets, the cost of specialized workforce is relatively higher! And you must find difficult to retain these employees on the long run.

For recruiting: try to get close to top local business schools and get the list of alumnus or actual post-graduation students. Those professionals tend to have higher career growth, good academic background and "hands-on" experience. Another way is to map professionals association (like project management institute groups). Finally, once in emerging markets there’s great social distinctions, internet is a well-segmented media to reach this kind of professionals (lot’s of resumes database).

Now, here it goes the golden tip - a very useful alternative that one may consider, not used by many companies because it takes a little bit more time to implement: is to develop specialized workforce "in house", building knowledge after training programs. I mean, hiring cheap, non-specialized workforce and training it!

One actual example: A project management (PM)/process improvement department is created with IT employees (in emerging markets, these professionals are not much expensive. They also have good logic skills and a "PM default" mind-set). So, we've defined the structure with IT employees and started in company training with a local top business school (for less then the total compensation for one specialized employee, for a year). Great return on investment, great social demonstration, investing in education. Everybody wins.

One example from other post (Talent Guerrilla): General managers of banking agencies were getting expensive in the market, while entry-level employees had low qualification. What was done? Started hiring from other segments (cheap paycheck!!!) and developed a great “in house” educational program with top levels universities. Result: a great return on investment - general managers brought to this programs were cheaper, and had financial results later on as good as– and most of the times event better than – traditional “career” general managers.

So, summarizing:

- In recruiting, you can rely in universities, professional associations and the internet.

- Strongly consider training and development programs. May seen expensive at first sight, but may prove to be cheaper (and more popular) on the long run.

Best regards!

Alexandre Winandy

Still thinking about the Code...

2009-05-01T05:53:00.000-07:00

I was in a conference one of this days and I've said that I worked for the HR Department of a Corporate and Investment Bank. The presenter said that was because of people like me, professional who "supported this kind of industry", that we were facing this crises. The kind of populist speech common in Emerging Markets - and It worked! The audience almost started a riot, supporting the presenter, throwing rocks at me! (kidding, just figure of speech, but it was close!).

The code for their view of me (and the company that I've worked for) is probably "The Villain".

Nobody really like banks... This feeling grew stronger with the crises. So the "code" gets stronger!

I've thought a lot about the last post (http://peoplemanagementinemergingmarkets.blogspot.com/2009/04/were-repitiles-or-organizational.html). I'm really interested in "breaking the code" for the work relations in Emerging Markets, in investment banking, etc.

The PT Cruiser is a reptilian product…

The PT Cruiser is a car [that] when people see it, they say, “Wow, I want it.” Some people hate it; we don’t care. There is enough people that say, “Wow, I want it,” to make a big success. And then when we tested that, and we say, “How much will you pay for this kind of car?,” people say, “Oh, we’ll pay $15,000 or $35,000.” You know that when you have a product where people say $15,000 or $35,000, the price is irrelevant.
What is it that make[s] the PT Cruiser a reptilian car? First, the car has a strong identity. What people told us is that “We’re tired of these cars that have no identity. I have good quality, good gas mileage, good everything else, but when I see the car from a distance, I have to wait till the car gets close to know what it is, and I have to read the name.” When you go to see your mother, she doesn’t need to read your name to know who you are, you see? We want this reptilian connection. And so this notion of identity, absolutely key, was very reptilian for a car.

If a Car can have personality to the market, so can a Company.This may be the basis for an Organizational Branding, for having more ability to manage an "Employer Brand".

"If I had all the answers, what would be your questions?"

- How do I, as am employer, deal with my employees? (the "King" (I rule), the "Prophet" (follow me and you will be rewarded)?).

- How do the employees deal with the company? (the "Adolescent" (everything is possible), the "Grandfather" ( the Aging Hero)? ).

- How do the employees deal with "work"? (the "I'm only here for the money"? The "Status"? The "Challenge"?).

- How does target professionals sees the organization (what is the archetype? The "Hero"?)

- How does society views the Banking Business (probably as a "Villain" nowadays...).

Are Bankers the new Villains (or have always being)? Is possible to manage your brand as an employer? Should we go beyond internal culture and explore the market?

I'll try to run this project in the organization... Really curious for the results.

We're repitiles (or "The Organizational Branding")

Good culture, bad culture

Culture, Watch out!

We're repitiles (or "The Organizational Branding")

2009-04-29T19:48:00.000-07:00

An adolescent - that's the code for the USA, accordingly to Dr. Rapaille - that's the reason for the "super-size" meals, the need for big cars and infinity consumption. And that's also the reason for being the "land where everything is possible", of the possible dreams - just like a regular adolescent.

I’ve participated today in a conference call with Dr. Rapaille (writer of The Cultural Code). Interesting theory and methodology, he aims to reach the “reptilian” part of our decision – this means, go straight for the guts, something deeper than logic and feelings.

How does this turn to practice?

Jeep code: The code for Jeep in the US is “horse”, because the car is made to go “all terrain”, through wind and water, just like a horse. And the vehicle was designed for that. Windows go down to fell the wind. The wheel is made to have the sensation of directing a horse. Eyes (read “headlights”) are round because horses’ eyes are round. So, the code for Jeep is “horse”.

Coffee code: in the USA, “coffee” means more by its smell than by its taste. Americans make weak coffee, mix with cream, etc, because what matters is the smell. Packages are designed to produce a stronger smell. Why? Because the code for coffee in the US is “home”. So, advertisement may have a soldier arriving at home and making coffee, and the mother says “my son is home”, just by the smell.

And what does this have to do with HR in Emerging Markets?

The same way that “coffee” may be different meanings to different countries, so does the code for “Work”. Frenchmen work 35 hours per week. For them, working is Hell (a.k. Rapaille). This is differently from several emerging countries, where working hard is Heaven ("thanks god I’ve a work!").

When people brought French cheese to the USA they found failure. Because Frenchmen sees cheese as “life”, and want to touch it, squeeze it, smell it. You don’t put cheese in the fridge, because you won’t put a cat in the fridge (they are all alive!). In the US, cheese is “dead”, must be pasteurized, stored in the fridge. So we can’t just transport French cheese sales techniques to the US, we must adapt.

And so with HR practices.

So what’s the relation of Emerging Market Employees to their employees? What may be the code for “work”? What is your employer brand’s code? Can we really import practices to other countries?

Best Regards,

Alexandre Winandy

Recruitment and selection in emerging markets - for non-specialized workforce

2009-04-25T12:49:00.000-07:00

If high level of education or technical knowledge is not a problem for you, you can find tons of cheap, unprepared workers in emerging countries. You have a great surplus of non-specialized workforce (as presented in "Talent Guerilla"). But be aware to use the right tactics to do not end up wasting time and effort:

- You can count on regular advertisement , mainly in newspapers and associations (internet will not be as well available as in developed economies).

- Government often offers professionalization courses, so mapping these agencies is also a nice way to recruit.

- Once you may have tons of candidates to basic positions, group dynamics or group interviews are the best tools.

- Watch out to the level of sophistication of some of yours questions! Public/basic education in emerging countries is different from developed countries (you can often find high school graduates with strong literacy problems.

- Service is not expensive in emerging markets, so the best alternative is to hire an HR Agency for it (they can do all this hard work for a really low fee).

Attention: Legislation is often weak to employees, allowing a great deal of outsourcing/informal work practices (you can check some examples on the “Good culture, bad culture” post). But hiring process can be really bureaucratic, and taxes to employeers are sky-high!

Attention 2: Don’t expect lots of loyalty of base-level employees. An offer from other employee of plus US$50 per month may bail them out of your company. With the growth of social plans (Brazil’s “Bolsa Familia” is getting worldwide know) is also impacting this loyalty, raising turn over rates.

Once turn over rate for base posts can be really high and weak labor legislation may expose companies to several risks, many companies choose to outsource a big share of its workforce. These outsourcing companies are not much specialized, so their fee is often low.

Things get a whole lot different when it comes to specialized workforce, but we may debate this is other post!

(Talent Guerilla is a post well related to this one, check it out at http://peoplemanagementinemergingmarkets.blogspot.com/2009/04/talent-guerrilla.html).

Regards!

Alexandre Winandy

Posts related to Recruitment in Emerging Markets:

“Good Culture, Bad Culture”

“Talent Guerilla”

“Wanna know your audience?”

Good culture, bad culture

2009-04-21T10:19:00.000-07:00

There was a very interesting comment on my last post (pity it was anonymous):
“the views mentioned are to be agreed... the way of approach in emerging countries is definitely different than that of the US , UK etc... the way the US people think is definitely not at par with most people around the world...

BUT in emerging countries Individual, reflexive activities should be encouraged as it takes the professional approach towards work a step ahead...”

Great point of view, led me to think to some practices (or manifestations) that are eligible to being judged.

Example 1

An investment bank has a performance evaluation tool that compares the performance EVERY employee in the organization, compensating more the top ranked, and less the others. This means that the results brought by the Commercial Director are compared to the results brought by the Accountant director, and the amount of their bonuses depends on that.

How they measure accomplishments? All the managers gets together and ranks every employee (from business or support area) based on their accomplishments, and distributes bonuses based on this rank. How is it sustained? By Trust (that management will have institutional thought and do their best)! Completely subjective, but this is the practice on the biggest Latin American investment banking operation. Is that “good” or “bad”, “right” or “wrong”?

Example 2

You make an offer to a job applicant in emerging market for, let’s say, USD10.000,00 an year (this may be a nice paycheck depending on the country). He counter-offer you: for USD15.000,00, he’ll start a company, pay all the taxes, as debit you in your “consultancy expenses”, tax-free for you – even though we works with you steadily. Or will demand to not be registered to keep receiving governmental help.

Informal work represents 75% of the job market in South Africa, 66% in South Asia and almost 50% in Latin America (source: OECD). In Brazil, almost 10% of the GDP is formed by informal work.

In Emerging Markets, employment legislation is usually rigid and bureaucratic, and taxation is often sky-high. Add that to a high level of uncertainty tolerance and we can ask: willing to be an informal employee is “good” or “bad”, “right” or “wrong”?

Why can those examples be true? Because in emerging cultures people valorizes Trust (even though it isn't objectively based) and are more Tolerant to Uncertainty (because life is much uncertain in emerging markets).

So, can we really assume that a cultural expression is "good" or "bad"? Or this is just a judgment influenced by our own values?

More about culture in emerging markets: http://peoplemanagementinemergingmarkets.blogspot.com/2009/04/culture-watch-out.html

About how economy may lead emerging markets to be more tolerant to uncertainty: http://peoplemanagementinemergingmarkets.blogspot.com/2009/03/so-wanna-know-your-audience-follow.html

An example about Informal Job Market in Argentina: http://www.globalpost.com/dispatch/argentina/090331/be-job-seeker-buenos-aires?page=0,1)

Best regards!

Alexandre Winandy

Culture, Watch out!

2009-04-15T18:49:00.000-07:00

I’ve just spent two days in a really custom workshop about International Compensation Trends with principals/global partners of a big consulting firm - one from the USA, other from Paris.

US Principal: Why don’t you use Client Satisfaction as a non-financial metric to measure your relationship managers?

Commercial VP (laughing): That may not work in Latin America as good as it works in the US our in Europe – and gets worse in Brazil. Latin people are very collective, establishes close relation with everyone, becomes friends with clients really easily. The chances of “gaming” the system are huge, because of these relations.

Even being said thousand times, Business Managers and HR Professionals often fail to consider the Cultural differences in their analysis.

The collective, aggregative, “familiar” relations are common not only in Latin America, but in other Emerging Countries as well – analyzing national culture indexes, most emerging countries are less Individualist than the US and Western Europe*.

Therefore, people management practices in emerging countries must consider the following:

1. Employees will stick together really easily. This means that process that may be perceived as unfair for one employee may be amplified to other employees.

Example: a manager may face a quiet riot from the team after treating one member in a “unfair-perceived” way).

2. Employees may protect themselves in a species of “corporativism”.

Example: In 360o evaluation, make agreements to evaluate well each other).

3. Relationships between managers and employees may include some personal attention, with manager-employee relationship with thin boundaries with “friendship” – asking personal questions (as a symbol of interest in the human being), have lunch, extra-office activities (as happy hours, barbecues) together.

Example: managers may protect their employees in evaluation processess.

4. Individual, reflexive activities may not be as welcome as teamwork or integrate activities.

Example: self-study methods won’t work much, once learning in groups is als preferred.

Best Regards!

Alexandre Winandy

*Cultural Index Analysis based on Geert Hofstede Cultural Dimensions (http://www.geert-hofstede.com/). Sample Individualist Indexes (the higher the score, the more individualist the population is): Latin America (average) = 30%, India=40%, Western Europe (average) = 60%, USA=90%.

Diversity matters

2009-04-12T15:47:00.000-07:00

While developed countries were investing in diversity education and legal employment opportunities, emerging markets were trying to survive to their volatile market, and started looking for diversity in delay.

Once diversity education takes time to have its effects in society, emerging countries had to “run after the wasted time” with short-term actions.

How was it concretized? Generally, by affirmative actions*and legal acts.

This means that inclusion depends a great deal on the government, and one can experience several government inclusion programs – and that the traditional debates may assume different form than in Europe and the USA, once there may be more urgent issues related to the countries’ background.

True history: a friend of mine, a Brazilian Senior HR Manager from a Swedish multinational went to coordinate a project in India. Being a female in leadership position in common in Sweden and getting common in Brazil – but when she arrived in the Indian subsidiary, she had problems once certain employees could not communicate directly with her (religion matter). Even worse: some chastes would refuse to communicate to one another, and some employees didn’t recognize her as a leader for being a woman (!).

Moral: be prepared to find REALLY diverse viewpoints and actions.

So, when establishing a People Management plan in an emerging market, be aware both to international diversity indexes (such as female participation in your workforce) and regional indexes. That’s it, the workload is doubled. You need to pay attention to regional dynamics – both demographic (as native population, elders) and social (as former prisoners).

Racial Background may be a primary focus of attention (such as affirmative actions to afro-descendents in Brazil and Native population in other South-American countries). Social background is also a major factor to follow (such as inclusion of people with disabilities, and inclusion process for those who shows financial needs).

Most “insertion quotas” affect access to higher education (such as a percentual of seats in universities in Brazil reserved for afro-descendents), but governmental and societal pressure may bring this awareness also to companies.

Last but not least, be aware of Religion-related impacts (although there’s less legislation related to the theme, but it could have huge impacts in people relation dynamics)!

Summary for Diversity Action in Emerging markets:

First - map legal inclusion actions (such as the Brazilian disability act – instituting % of people with disability that must be part of the payroll).

Second – try to understand the social roots to diversity problems (it may be different from the common sense).

Third - keep track of international “traditional” data, but also pay attention to regional data (demographical and social). In emerging markets, it’s pretty possible that a law is instituted regarding the inclusion of one of those groups, so you better be prepared!

Finally - be brave, and ready to deal with lots of prejudice (another expression of lack of education).

Best Regards!

Alexandre Winandy

*affirmative action: a policy designed to redress past discrimination against women and minority groups through measures to improve their economic and educational opportunities (source: Princeton online dictionary).

HR Risks and Opportunities When Entering Emerging Markets

2009-04-07T18:40:00.000-07:00

I've found this white paper done by The Corporate Executive Board (www.executiveboard.com) and want to share in with you - an outline (no more than an outline!) about people management Risks and Oportunities when entering in emerging markets.

It can be understood as a "generic HR plan" or "questions you should ask yourself" when building a business plan, it's "ok" structured.

There's a lot of questions, few answers - but don't worry: I will move on filling this blog with real life experience and examples of People Management actions in Emerging Markets!

Here it goes the summary and link:

Summary: HR plays a key role in helping an organization to capitalize on opportunities or mitigate significant risks when entering a new market. This checklist developed by the Corporate Leadership Council highlights key areas to consider from a human capital perspective when evaluating and entering an emerging market. The document serves to help HR professionals identify risks and opportunities from an HR perspective to enable them to build effective plans for successful new market entry.

When evaluating whether to enter a new market, the following areas should be considered: government, workforce climate, education, culture, quality of life, pay levels, benefits, and environment. When opening a new site, HR concerns include the following: staffing, recruiting and retaining employees, training and development, cultural compatibility, communications and technology, and policies, procedures, and structure.

http://hosteddocs.toolbox.com/hr-risks-and-opportunities-when-entering-emerging-markets.pdf

Best regards!

Alexandre Winandy

Talent Guerrilla

2009-04-05T19:47:00.001-07:00

“The guerrilla fighter needs full help from the people of the area. This is an indispensable condition” (Che Guevara, Guerrilla Warfare).

I was participating in a round-table event with VPs from different multinational companies, as well as several HR professionals participating. The theme was HR sustainability, and the following dialog took place:

HR Professional: I’ve some problems with the employees in my company. We employ really young prof

essionals, from poor communities. When they start making money, the first thing it happens to most of them is to go into parties, starting using alcohol and drugs. So the managers have often to play a role of not only mentors, but also of parents. Do you think that companies should embrace this action as a social responsible role? If not, what should I do?

HR VP: I believe that the role of the employer is simply… to employ! Let me tell you one thing lady, you’re not in the USA. You don’t have lack of workforce – on the contrary, there’s a line of unemployed trying to get in any company, at any costs. How many employees in this situation you have? 10? 100? 500? So your employees are using drugs, here is what I tell you: fire all of them, use them as an example. There are a lot of other employees, willing to behave in a different way. These are the benefits of working in an emerging market. Workforce is disposable.

Sad… but true!

Minimum salary in Brazil is around USD 180,00, and even so there are lots of people that do not earn that much. As a contrast, Brazilian executives are figuring around the world’s fattest paychecks (a lot motivated by bonuses).

As its common in emerging markets, you have two contrasting realities:

- a surplus of workforce offer to basis or entry level positions.

- a shortage of prepared workforce to specialized positions.

What impact this may have in People Management?

Well, don’t be surprised if you open a base-level post and next morning you wake up with a line of people in front of your office! A friend of mine did open a cashier post in the bank that she worked – next morning, lines of applicants (that showed up in person) we as far as three blocks – far enough to change it plans and do a competence panel (and also offered a quick meal to those in line, who waited for hours for their turn).

On the other hand, try to guess how difficult it is to find a person for a qualified position. You may waste months in the search.

Preparing “cheap workforce” to higher standards is a wildcard that only few industries use. The hint: find “cheap workers”, Invest in training and/or education, and wait for the return on investment.

In real life, how does it work?

For one bank that I’ve worked for, general managers were getting expensive, while entry-level employees had low qualification. What was done? Started hiring from other segments (cheap paycheck!!!) and developed a great “in house” educational program with top levels universities. Result: a great return on investment - general managers brought to this programs were cheaper, and had financial results later on as good as– and most of the times event better than – traditional “career” general managers.

So as an HR professional in an emerging market, seize the opportunity investing in education. This can help “raising the bar” for the countries’ educational standards, gain workforce (and media) support, and improve return on investment.

So, wanna know your audience? Follow economic indexes!

2009-03-31T19:13:00.000-07:00

A great way to understand people behavior and cultures in Emerging Markets is to understand the target-market economic dynamics – that’s why most successful “people management gurus” were CEOs, CFOs or consultants…

…Because it’s not only about people – it’s also about what drive people behavior!

(some may say that are dreams, values, desires. Some may say… MONEY!).

If understanding economic dynamics it’s important to every professional, this king of “scanning” must be amplified when it comes to emerging markets.

Why? Because they are generally unpredictable, uncontrolled, unsafe! Volatility and fragility is huge in these systems, and this shapes workforce desire.

A personal picture: When I was young, inflation in Brazil was busting. In the 80s, it reached 60% of MONTHLY inflation! So, what is a regular-employee first reaction when he got his paycheck? To think about investing in his education? To buy imported goods? To invest in a new-rising stock market?

NO!

It was to run to the supermarket, buy and store as much as he could, and pray to prices do not rise while he was in the cashier line!

(Try to talk about long term benefits and pay in an environment like that)…

A generic picture: in Brazil (and in most emerging markets), you actually have to pay cash to buy a house! That’s it, plain old cash - no mortgages, horrible financing plans – only save as much as you can, go to your bank, withdraw everything, and buy a house!

(Maslow 101: what is the sense of security that a company benefits should give to employees in these markets)?

So, want t understand and manage people, try first understanding the economic history underlying – you can bet that much of the “status quo” (both for what companies offer and for what employees perceive value) can be explained by that.

Be ready to find:

- More flexible professionals, with higher tolerance to the uncertain (more case-to-case analysis).

- More “personal”, close relationship between employer-employee (non-formal contracts).

- More contrast between qualified and unqualified employees (more diversity).

And people management should be ready to be adapted to these characteristics!

(are your tools ready speed-of-light-adaptable, customized to a hugh “intra-cultural” diversity, and react quickly to high-flexibility-and-exceptions-demands? If not, maybe you need to rethink them to Emerging Markets!).

You probably know thousands of blogs and sites with relevant economic information, but try this one, great deal of economic background: http://www.emergingmarkets.org.

More about People Management, Culture, and Other Countries in the next post.

Doubts/Questions/Suggestions: share your point of view by Comments or Mail!

Best Regards,

Alexandre Winandy

Why a People Management in Emerging Markets Blog?

2009-03-31T18:27:00.000-07:00

Hi! My name is Alexandre Winandy, and I’ve being working with Human Resources for several years in Brazil, in the banking sector and also in consultancies – what put me in contact with different business realities.

As being both Brazilian and Belgian, and having lived in the United States, and WORKED with top level (often multi-cultural) professionals, I’ve got in touch with different cultures and HR practices.

But one thing happened over and over…

…first class theories, built by first class professionals for a more-or-less- controlled environment…

…being applied just as if they were universal truths in the caotic Emerging Markets dynamics!

A fault done not only by expatriated professionals, but by emerging markets professionals as well.

So, If you were looking for a forum to present, discuss and inquiry about people management in a dynamic, low-predictable environment, you got the right address!

To customize better for your needs, feel free to comment any topic or send an e-mail to the indicated address. The availability of information in this forum will be as higher as participation is!

Best Regards,

Alexandre Winandy