Academy of Economic Studies Bucharest

Faculty: Business Administration

Master Business Administration
STRATEGIC HUMAN RESOURCE MANAGEMENT
Case study
International Business Machines
Coordinator:
Assist.univ.PhD.Valentina Mihaela GHINEA
Student:
Mircea Andrei Nicolae
2010
Contents
Contents......................................................................................................................................2
Introduction.................................................................................................................................
IBM!s Strate"y............................................................................................................................#
Basic Beliefs and Mana"ement $rinci%le...............................................................................#
Financial &i"hli"hts for the year 200'...................................................................................(
$)*+E*,S fi-e forces.................................................................................................................
+hreat of ne/ entrants.............................................................................................................0
Bar"ainin" %o/er of su%%liers................................................................................................0
Bar"ainin" %o/er of 1uyers....................................................................................................2
+hreat of su1stitute %roducts...................................................................................................2
Intensity of ri-alry amon" com%etitors ..................................................................................2
S3)+ analysis...........................................................................................................................'
IBM!s &uman *esources Strate"y..............................................................................................'
4e-elo%in" an ada%ta1le /or5force 6 A critical ca%a1ility....................................................'
*e-ealin" the leadershi% "a% 6 Future "ro/th at ris5...........................................................10
4ri-in" "ro/th throu"h /or5force analytics........................................................................10
From Multinational to a 7lo1al com%any.................................................................................11
+en ste%s for a 7lo1al &uman *esources strate"y...................................................................11
1. Brea5 all the 8local national8 "lass ceilin"s......................................................................11
2. +race the lifeline...............................................................................................................12
. Build a "lo1al data1ase to 5no/ /ho and /here the talent is..........................................12
#. Construct a mo1ility %yramid...........................................................................................12
(. Identify leadershi% ca%ital.................................................................................................12
.. Assess 1ench stren"th and s5ills "a%................................................................................1
0. *ecruit re"ularly...............................................................................................................1
2. Ad-ertise %osts internally..................................................................................................1
'. Institute succession %lannin"............................................................................................1
10. Challen"e and retain your talent.....................................................................................1
Conclusion................................................................................................................................1#
*EFE*ENCES..........................................................................................................................1#
2
Introduction
International Business Machines Cor%oration 9IBM: is an information technolo"y com%any
that uses their e;%ertise to %ro-ide customer solutions. +he com%any o%erates %rimarily in a
sin"le industry usin" se-eral different se"ments that create -alue 1y offerin" a -ariety of
solutions that include< technolo"ies< systems< %roducts< ser-ices< soft/are< and financin" .
+he com%any,s ma=or o%erations com%romise three hard/are %roduct se"ments. +hese
se"ments are: technolo"y< %ersonal systems< and enter%rise systems. +hey also offer a "lo1al
ser-ices se"ment< a soft/are se"ment< a "lo1al financin" se"ment< and an enter%rise
in-estments se"ment .
IBM offers its %roducts and ser-ices throu"h third>%arty 1usiness %artners li5e distri1utors and
resellers. +hey also offer these ser-ices throu"h its on>line channels .
IBM is historically 5no/n for their %ersonal com%utin" %roducts. +hese include: note1oo5s<
des5to%s< /or5stations< monitors< and $4A,s. IBM offers many other %roducts and ser-ices.
+hey offer u%"rades< accessories< and %arts. +hey also offer %rintin" systems< stora"e systems<
net/or5in" tools< and ser-ers. In addition< they offer soft/are< 1usiness consultin"<
outsourcin"< /e1 hostin"< trainin"< and financin".
In 1'11 the Com%utin">+a1ulatin">*ecordin" Co. 9C>+>*: formed 1y a mer"er of three
com%anies: the +a1ulatin" Machine Co.< the Com%utin" Scale Co.< and the International +ime
*ecordin" Co. +he firms =oined forces to emer"e as one entity incor%orated in the state of
Ne/ ?or5. C>+>* is the %recursor of /hat /ould 1ecome International Business Machines
Cor%oration.
In the 1e"innin" of the com%any,s history< they sold time recordin" e@ui%ment< %unch cards<
mechanical 5ey%unches< -ertical sorters< and ta1ulators.
+he com%any first used the name IBM in 1'10 /hen they entered the Canadian mar5et. At
this time they had o-er <000 em%loyees and had recently o%ened a di-ision in BraAil. In
1'2#< the com%any officially chan"ed their name to International Business Machine
Cor%oration.
In 1'(2< +homas 3atson< Br. 1ecame IBM,s %resident. 3atson< fa-orin" a %ush into the
com%uter mar5et< led the com%any in an immense research %ro"ram desi"ned to sur%ass their
ma=or com%etitor< *emin"ton *and. Because of this research< the IBM 001< the first
%roduction com%uter desi"ned for scientific calculations /as introduced.
)-er the years< IBM has continued to ma5e 1etter< faster com%uters. &o/e-er< they ha-e also
e;%anded their 1usiness 1y addin" outsourcin"< /e1 hostin"< net/or5in"< and other customer
related ser-ices.
IBM has 1een /ell 5no/n throu"h most of its recent history as the /orld,s lar"est com%uter
com%any and systems inte"rator. 3ith almost #00<000 em%loyees /orld/ide< IBM is second
lar"est 91y mar5et ca%italisation: and the second most %rofita1le information technolo"y and
ser-ices em%loyer in the /orld accordin" to the For1es 2000 list /ith sales of "reater than 100
1illion CS dollars. IBM holds more %atents than any other C.S. 1ased technolo"y com%any
and has ei"ht research la1oratories /orld/ide. +he com%any has scientists< en"ineers<
consultants< and sales %rofessionals in o-er 200 countries. IBM em%loyees ha-e earned fi-e
No1el $riAes< four +urin" A/ards< nine National Medals of +echnolo"y< and fi-e National

Medals of Science. As a chi% ma5er< IBM has 1een amon" the 3orld/ide +o% 20
Semiconductor Sales Deaders in %ast years.
IBMs Strategy
+he com%any,s 1usiness model is 1uilt to su%%ort t/o %rinci%al "oals: hel%in" clients succeed
in deli-erin" 1usiness -alue 1y 1ecomin" more inno-ati-e< efficient and com%etiti-e throu"h
the use of 1usiness insi"ht and information technolo"y 9I+: solutionsE and< %ro-idin" lon">
term -alue to shareholders. +he 1usiness model has 1een de-elo%ed o-er time throu"h
strate"ic in-estments in ca%a1ilities and technolo"ies that ha-e the 1est lon">term "ro/th and
%rofita1ility %ros%ects 1ased on the -alue they deli-er to clients. +he com%any,s strate"y is to
focus on the hi"h>"ro/th< hi"h>-alue se"ments of the I+ industry.
Fision statement:
At IBM< /e stri-e to lead in the in-ention< de-elo%ment and manufacture of the industry,s
most ad-anced information technolo"ies< includin" com%uter systems< soft/are< stora"e
systems and microelectronics. 3e translate these ad-anced technolo"ies into -alue for our
customers throu"h our %rofessional solutions< ser-ices and consultin" 1usinesses /orld/ide.
Mission statement:
IBM main acti-ity is to find solutions to its /ide ran"e of clients usin" ad-anced information
technolo"y. Its clients are indi-idual users< s%ecialiAed 1usinesses< and institutions such as
"o-ernment< science< defence< s%atial and educational or"aniAations. +o meet and res%ond to
its customers needs< IBM creates< de-elo%s and manufactures many of the /orld,s most
ad-anced technolo"ies< ran"in" from com%uter systems and soft/are to net/or5in" systems<
stora"e de-ices and microelectronics.
Basic Beliefs and Management Principle
Respect for the Individual
&el% each em%loyee to de-elo% his %otential and ma5e the 1est use of his a1ilities.
$ay and %romote on merit.
Maintain t/o>/ay communications 1et/een mana"er and em%loyee< /ith o%%ortunity
for a fair hearin" and e@uita1le settlement of disa"reements
Service to the Customer
Gno/ our customersHneeds< and hel% them antici%ate future needs.
&el% customers use our %roducts and ser-ices in the 1est %ossi1le /ay.
$ro-ide su%erior e@ui%ment maintenance and su%%ortin" ser-ices.
Excellence Must Be a Way of Life
Dead in ne/ de-elo%ments.
#
Be a/are of ad-ances made 1y others< 1etter them /here /e can< or 1e /illin" to
ado%t them /hene-er they fit our needs.
$roduce @uality %roducts of the most ad-anced desi"n and at the lo/est %ossi1le cost.
Managers Must Lead Effectively
$ro-ide the 5ind of leadershi% that /ill moti-ate em%loyees to do their =o1s in a
su%erior /ay.
Meet fre@uently /ith all their %eo%le.
&a-e the coura"e to @uestion decisions and %oliciesE ha-e the -ision to see the needs
of the com%any as /ell as the di-ision and de%artment.
$lan for the future 1y 5ee%in" an o%en mind to ne/ ideas< /hate-er the source.
Oligations to Stoc!holders
+a5e care of the %ro%erty our stoc5holders ha-e entrusted to us.
$ro-ide an attracti-e return on in-ested ca%ital.
E;%loit o%%ortunities for continuin" %rofita1le "ro/th
"air #eal for the Supplier
Select su%%liers accordin" to the @uality of their %roducts or ser-ices< their "eneral
relia1ility and com%etiti-eness of %rice.
*eco"niAe the le"itimate interests of 1oth su%%lier and IBM /hen ne"otiatin" a
contractEadminister such contracts in "ood faith.
A-oid su%%liers 1ecomin" unduly de%endent on IBM.
Financial Highlights for the year 2009
Sales '..'1 Bil
Income 1.0 Bil
Net $rofit Mar"in 1#.10I
*eturn on E@uity 00.00I
4e1tJE@uity *atio 1.1'
First< the &* function must 1e a1le to deli-er strate"ic insi"hts to 1usiness units<ena1lin"
the or"aniAation to more effecti-ely source<e-aluate and moti-ate em%loyees in an
increasin"ly tur1ulent 1usiness en-ironment. At the same time< &* needs to continue to
%ro-ide administrati-e ser-ices that are relia1le< cost>effecti-e and res%onsi-e to the needs
of 1usiness units around the "lo1e. In today!s 1usiness climate< it is no lon"er sufficient for
the human resources function to e;cel in =ust one of these areasE &* must %erform 1oth roles
effecti-ely to contri1ute to the lon"term success of the or"aniAation.
IBM 1elie-es that an on>demand 1usiness re@uires an 8on>demand /or5force8Kone that is
res%onsi-e to mar5et re@uirementsKada%ti-ely 1rin"s the ri"ht s5ills and e;%ertise to meet
client demand< is resilient to mar5et forces< and %ro-ides stron" leadershi%. Gey elements that
hel% to create an on>demand /or5force include de%loyin" %ro"rams that reco"niAe
accom%lishments< re"ardin" %eo%le de-elo%ment as an in-estment< differentiatin"
%erformance and re/ards< nurturin" leadershi% ca%acity< dri-in" accounta1ility< and 1alancin"
(
its human asset utiliAation. In other /ords< IBM intends to use its &* mana"ement system to
hel% deli-er -alue to its customer< the 1usiness.
IBM,s ne/ 1usiness strate"y relies on considera1ly more cross>IBM colla1oration than e-er
1efore. +his in turn re@uires more and 1etter /or5force mana"ement systems. IBM needs to
1e a1le to assem1le /or5force ca%a1ilities to meet client needs /here-er they may 1e in the
/orld< and they need to 1e a1le to do it @uic5ly. +he challen"e in doin" this is that #' %ercent
of the /or5force has less than fi-e years, e;%erience /ith the firm< and more than one>third of
the /or5force do not /or5 out of a traditional IBM 1uildin"< 1ut are considered mo1ile
/or5ers. As a 5ey element of their e;ecution strate"y< IBM has de-elo%ed /hat it descri1es as
an $daptive Wor!force 9A43F: in its ser-ices 1usiness. In essence< A43F is the
a%%lication of su%%ly chain mana"ement %rinci%les to the /or5force. In IBM,s case< the 5ey
@uestion is 8&o/ do /e o%timally match resources to client demands< across units /ithin
IBM and throu"hout the /orldL8 Includin" contract /or5ers< IBM has more than #0(<000
em%loyees throu"hout the /orld. +he %ro1lem is that historically< the resources ha-e 1een in a
-ariety of su%%ly %ools and difficult to a""re"ate leadin" to su1o%timiAed res%onse to client
needs. +o deal /ith this issue< IBM has included a%%ro;imately .( %ercent of the /or5force
9%rimarily technical< client>facin" em%loyees: in their A43F %ro"ram< /hich is a
multimillion>dollar transformation %ro=ect inte"ratin" strate"yJ%olicy< %rocess< or"aniAation<
and technolo"y to ensure that the resource su%%ly and demand information is a-aila1le
throu"hout the 1usiness to match critical s5ills to client needs< on demand.
P!"#!$S fi%e forces
.
"hreat of ne& entrants
IBM< holds a share in the hard/are sector of 0.1I mar5et share /hich is not e-en a 10I
share. Com%ared to IBM,s com%etitor,s the com%any does not really hold that much of the
mar5et. +hey really need to /atch out for the ne/ entrants their mar5et could 1e lost. 3ith
ser-er,s /e see that IBM is only 2...I /hich is only .I hi"her than their com%etitor &e/lett
$ac5ard< the com%any needs to /atch for the ne/ entrants /ith the ser-er industry due to
(.0I of the mar5et is o/ned 1y other com%etitors if they /ere to all come to"ether /ith a
fe/ start u% com%anies they /ould lose a 1i" chun5 of their mar5et. 9SM$: +he com%any
needs to 1e -ery /ell a/are of the ne/ entrants to the mar5et. If they do not then they could
not only lose their num1er one title in the most %roducti-e of all of the industries to /hich
they com%ete. +hey com%any /as founded u%on res%ect and the a1ility to "ro/ at a ra%id
%ace. &o/e-er< the com%any can not =ust sit 1ac5 and /atch ne/ entrants< the com%any needs
to e;%and their 1asis and 5ee% e;%andin". IBM has a "ood mar5et %osition and 1road %roduct
and re-enue 1ase %ro-ide ratin"s sta1ility< 1ut the u%side is they ha-e a "reat %otential for the
hi"hly com%etiti-e mar5et. 9SM$:
Bargaining po&er of suppliers
IBM "oes any/here it /ants for the su%%lies of its materials. +he com%any does %roduce
0
most of its o/n soft/are from /ithin. +he su%%lies it does need they do try to "et if from their
su1sidiaries to /hich they ha-e %urchased o-er the years. +he com%any does loo5 for the 1est
%roduct for the 1est %rice< as any com%any /ould /ho is tryin" to turn a %rofit. +he
1ar"ainin" %o/er of the su%%liers is rather lo/ 1ecause the com%any is -ery di-ersified in
/here it "ets its ra/ materials. So unless the su%%liers are tryin" to "i-e the lo/est %rice to the
com%any that is the only 1ar"ainin" %o/er they ha-e. Before the %rice /ars e-en 1e"in IBM
has a %rice set for /hat they are loo5in" to s%end for a lar"e @uantity of items. +he com%any
does one thin" to< /hich is really smart< if they can 1uy the %roduct chea%er than they can
%roduce itE they 1uy the %roduct or e-en the /hole com%any.
Bargaining po&er of 'uyers
IBM< in the ser-ice industry< is in a -ery ti"ht raceE so lar"er com%anies are loo5in" for the
1est %rice for the 1est %roduct. IBM /ill lead the other com%anies in ser-ices. IBM has sho/n
that it,s ser-ices has 1een to% in it,s industry. In 2000< the com%any made 2.2# 1illion dollars
in ser-ices and 10.1( 1illion dollars in re-enue from the soft/are to /hich they su%%ly for
their 1uyers. +he com%any stri-es from their ser-ices and soft/are to /hich they im%lement
e-ery year. 3ith such a re%uta1le name as IBM 1ac5in" them< the com%anies /hich see5 the
use of IBM in their com%anies< either 1y the com%any of IBM itself of one of it,s su1sidiaries<
"i-e these com%anies a rather lar"e %o/er of 1ar"ainin". +he only catch /ith this is /hen you
1uy %roduct from IBM you also ha-e to %urchase the maintenance of the e@ui%ment< ser-er<
and net/or5. So /hen the com%any can offer a lo/er %rice for their %roduct< they can ma5e
u% in the a"reement for ser-ice for an e;tended %eriod of time. IBM is the only one to /ho
can ser-ice IBM e@ui%ment. 3ithout the ser-ice a"reement the %roduct is /orthless.
"hreat of su'stitute products
IBM is a first mo-er in the ser-ices industry. +he com%any ho/e-er is lac5in" in the technical
side of it such as the "ame cu1e. +he "o into a mar5et and try to ta5e as much of a share of the
mar5et as they can then e;%and their 1usiness in that %articular area. IBM needs to /orry
a1out ma5in" its %roducts 1etter and faster. +he com%any< ho/e-er< does ha-e on thin" on it,s
side is that they are the only one to /hich can o%erate< fi;< and net/or5 their soft/are. +he
com%any needs to sho/ res%ect and 5ee% the com%any "oin" on a /ell>founded 1elief that
they are the 1est ones industry. +he other com%anies follo/ in IBM,s /a5e. 3ith as many
com%uter ma5er,s and com%anies /hich offer the same ser-ices as IBM %roduct su1stitution
is a stron" threat to a firm /hen customers can face fe/< if any< s/itchin" cost. &o/e-er< on
the same note< IBM,s e@ui%ment can only 1e used on IBM,s system. So the com%any /ho has
IBM,s system already esta1lished in their net/or5 /ould ha-e to %ay for all of the chan"es
o-er to ne/ ser-ice. +he com%any /ould ha-e to incur a "reater cost of s/itchin" o-er to ne/
com%any and 1rin" in ne/ soft/are and hard/are than if it /ere to =ust stay /ith IBM.
Intensity of ri%alry among competitors
IBM is a first mo-er so /here they lac5 at first a ma5e u% in the end could 1enefit or cost
them at the same time. +he com%any can "et into the mar5et and esta1lish a lar"e share 1ut
they may hit a fe/ 1um%s alon" the /ay to /hich a com%any such as Cisco or Microsoft
2
could see /hat the %ro1lem /as and fi; it 1efore< IBM could realiAe it then< IBM may lose
/hat they had already esta1lished. +he intensity of the ri-alry is -ery im%ortant <it forces
e-ery com%etitor as /ell as IBM to esta1lish ne/ clientele and de-elo% 1etter ser-ices and
materials to remain num1er one in there res%ecti-e industry!s.
S(" analysis
Stren"ths:
> Ad-anced 1usiness %erformance
mana"ement.
> 7ood or"aniAation culture.
> Strate"ic outsourcin"< mer"ers and
ac@uisitions.
> Creati-e ser-ices.
> &i"h research and de-elo%ment.
> Stron" 1rand e@uity.
> Doyal customers.
> Mar5et share leadershi%
3ea5nesses:
>)lder and a"in" tehnical %ersonal
>Bad communication.
> Dess %enetration in lar"e consumer 1ase.
> E;odus of talent.
>4i-ersity and /or5force issues.
>Non acce%tance of international a"reements
and standards %ro%osed 1y international
1odies.
>Mer"er and ac@uisition issues.
)%%ortunities:
> Emer"in" mar5ets and e;%ansion a1road.
> Inno-ation.
> Matured internet mar5et.
>)%%ortunities in Cloud Com%utin".
+hreats:
>7lo1al economical climate.
>Ne/ com%etitors in the ser-ice
mar5et94ell<Accenture:.
>E;ternal chan"es9ta;es<%olicies<etc:
IBMs Human !esources Strategy
)e%eloping an adapta'le &or*force + , critical capa'ility
+here can 1e no dou1t that /innin" in com%etiti-e and @uic5ly shiftin" "lo1al mar5ets
re@uires res%onsi-e or"aniAations. &o/e-er< for many com%anies< /or5force ada%ta1ility has
1een elusi-e.
IBM!s findin"s su""est that three 5ey ca%a1ilities influence the /or5force!s a1ility to ada%t to
chan"e. First< or"aniAations must 1e ca%a1le of %redictin" their future s5ill re@uirements.
Second< they need to effecti-ely identify and locate e;%erts. And lastly< they must 1e a1le to
colla1orate across their or"aniAations< connectin" indi-iduals and "rou%s that are se%arated 1y
or"aniAational 1oundaries< time Aones and cultures.
Many or"aniAations are currently de-elo%in" these ca%a1ilities as inde%endent initiati-es<
rather than as %art of a more com%rehensi-e a%%roach to /or5force mana"ement. For
e;am%le< the =o1 of %redictin" future s5ills is often left in the hands of the learnin" and
'
de-elo%ment function< /hile colla1oration %ro=ects mi"ht 1e nestled /ithin a ne/ly founded
Inno-ation team< or e-en the I+ function. ?et< all of these ca%a1ilities re@uire the =oint
attention and effort of multi%le sta5eholders< includin" the line or"aniAation< to truly
contri1ute to 1ottom>line results. 3hile emer"in" technolo"ies such as automatic e;%ertise
locators and 3e1 2.0 social net/or5in" tools are slo/ly 1ein" ado%ted to 1etter identify and
connect e;%erts around the "lo1e< they need to 1e /o-en into the fa1ric of day>to>day /or5.
!e%ealing the leadership gap + Future gro&th at ris*
No com%le; or"aniAation can transform itself /ithout "reat leaders 6 those /ho can deli-er
today!s 1usiness results /hile "uidin" the or"aniAation throu"h on"oin" tur1ulence and
uncertainty. As or"aniAations face ne/ challen"es associated /ith "lo1aliAation and
inno-ation< ne/ leadershi% s5ills are re@uired. IBM 1elie-es successful future leaders /ill
need to /or5 more effecti-ely /ith outside %artnersE ser-e as role models and mentors to
indi-iduals /ho are increasin"ly dis%ersed across countries< re"ions and "eo"ra%hiesE and
%ro-ide "uidance and structure to em%loyees /ho come from a -ariety of
"enerations<e;%erience le-els and cultures.
7i-en the e;%losi-e "ro/th in emer"in" mar5ets< and the retirement of e;%erienced %ersonnel
in more>mature economies<our com%any is %lacin" its futures at ris5 if /e cannot identify<
de-elo% and em%o/er the ne;t "eneration of leaders.
Deadershi% de-elo%ment is a %rocess that needs to reach far do/n into the or"aniAation< ta%
hi"h>%otential indi-iduals early in their careers and %ro-ide them /ith the core s5ills they
need to identify ne/ o%%ortunities<de-elo% inno-ati-e solutions and deli-er results.
$erha%s most im%ortant to the success of de-elo%in" future leaders< ho/e-er< is the
/illin"ness of the entire or"aniAation to ta5e res%onsi1ility for selectin" indi-iduals and
%ro-idin" them /ith the a%%ro%riate "uidance and e;%eriences. 3hile the &uman *esources
function can %lay a ma=or role in de-elo%in" critical and creati-e %ath/ays that allo/
indi-iduals to ad-ance their careers< only the or"aniAation as a /hole can commit the
resources and %ro-ide the su%%orti-e culture needed to ma5e leadershi% de-elo%ment truly
successful.
)ri%ing gro&th through &or*force analytics
IBM!s focus hi"hli"hts t/o strate"ic im%erati-es: im%ro-in" o%erational e;cellence and
increasin" to%>line "ro/th. Each of these strate"ies creates a different set of /or5force
im%lications. +o %rioritiAe these issues and %ro-ide in%ut into the 1roader or"aniAation!s
1usiness direction< /e /ould e;%ect &* and the 1usiness units to en"a"e in an on"oin"
dialo"ue a1out strate"ic /or5force in-estments and transformation %ro"rams.
+he "ood ne/s is that after years of effort< &* sees itself slo/ly mo-in" 1eyond its traditional
transactional role and mi"ratin" to/ard a more strate"ic relationshi% /ith the 1usiness.
Missin" from these strate"ic con-ersations are the analytics needed to de-elo% insi"hts and
formulate 1usiness cases for in-estment. IBM!s research clearly hi"hli"hts a lac5 of systems
inte"ration< an ina1ility to e;tract data and a dearth of clearly defined metrics.
+he ma=or challen"e for IBM is to lin5 the human ca%ital information /ith data from
Sales<Finance and other related de%artments. 3ithout consolidated information<e;ecuti-es
find themsel-es una1le to identify their risin" stars< re/ard solid %erformers for their
contri1utions and retain desired em%loyees.
10
Challen"es surroundin" inte"ration and data @uality are currently ta5in" %recedence o-er the
need to im%ro-e the analytic ca%a1ilities of &* %ersonnel.
Not only do they %ro-ide 5ey metrics that can im%ro-e /or5force %roducti-ity and
%erformance< they also ena1le their &* %ersonnel to translate human ca%ital data into
e;ecuta1le strate"y.
Creatin" an ada%ta1le /or5force re@uires more than a series of &* %ro"rams. It starts /ith
leadershi% 6 ha-in" the ri"ht %eo%le /ho ha-e the s5ills and ca%a1ilities to de-elo% and
communicate a -ision<%ro-ide structure and "uidance and ultimately deli-er 1usiness results.
It re@uires the a1ility to identify e;%erts and foster an en-ironment /here 5no/led"e and
e;%erience tra-el 1eyond traditional or"aniAational 1oundaries. It calls for a talent model that
can hel% com%anies recruit< de-elo% and retain -alued se"ments of the em%loyee %o%ulation.
It de%ends on an underlyin" 1ac51one of data and information a1out the current and %ro=ected
state of /or5force %erformance< and the a1ility to a%%ly that information to de-elo% strate"ic
insi"hts and recommendations.
+he human resources or"aniAation< 1y itself< cannot 1e e;%ected to shoulder this entire effort.
+rue< the &* function needs to ta5e a lead role in %ro-idin" strate"ic "uidance on /or5force
issues and desi"nin" human ca%ital %ro"rams that can enhance /or5force effecti-eness.
&o/e-er< the entire e;ecuti-e suite needs to %lay a role in im%ro-in" /or5force %erformance.
+his may in-ol-e %ro-idin" functional e;%ertise< ta5in" =oint res%onsi1ility for e;ecutin"
human ca%ital %ro"rams or sim%ly settin" a %ositi-e e;am%le for em%loyees /ithin their
or"aniAations. 3ithout this unified commitment< all 1ets are off.
+he adaptale %or!force is a %recursor for future or"aniAational success. +he 5ey to
1uildin" that 5ind of /or5force lies /ith the leadershi% of the or"aniAation< facilitated in lar"e
%art 1y &*. If there /as e-er a time for the &* function to %ro-e its strate"ic -alue and
contri1ute to or"aniAational %erformance and "ro/th< it has arri-ed.
From Multinational to a -lo'al company
"en steps for a -lo'al Human !esources strategy
7ood &.*. mana"ement in a multinational com%any comes do/n to "ettin" the ri"ht %eo%le
in the ri"ht =o1s in the ri"ht %laces at the ri"ht times and at the ri"ht cost. +hese international
mana"ers must then 1e meshed into a cohesi-e net/or5 in /hich they @uic5ly identify and
le-era"e "ood ideas /orld/ide.
./ Brea* all the 0local national0 glass ceilings
+he first< and %erha%s most fundamental< ste% to/ard 1uildin" a "lo1al &.*. %ro"ram is to end
all fa-oritism to/ard mana"ers /ho are nationals of the country in /hich the com%any is
1ased. Com%anies tend to consider nationals of their head@uarters country as %otential
e;%atriates and to re"ard e-eryone else as 8local nationals.8 But in today,s "lo1al mar5ets<
such 8us>-ersus>them8 distinctions can %ut com%anies at a clear disad-anta"e< and there are
stron" reasons to discard them:
Ethnocentric com%anies tend to 1e ;eno%ho1ic >> they %ut the most confidence in
nationals of their head@uarters country.
11
Bi" distinctions can 1e found 1et/een e;%atriate and local national %ay< 1enefits and
1onuses< and these differences send loud si"nals to the 1ri"htest local nationals to
learn as much as they can and mo-e on.
Dess effort is %ut into recruitin" to%>notch youn" %eo%le in o-erseas mar5ets than in
the head@uarters country. +his lea-es fast>"ro/in" de-elo%in" mar5ets /ith shallo/
1ench stren"th.
Insufficient attention and 1ud"et are de-oted to assessin"< trainin" and de-elo%in" the
careers of -alua1le local nationals already on the com%any %ayroll.
2/ "race the lifeline
Based on your com%any,s 1usiness strate"y< identify the acti-ities that are essential to
achie-in" success around the /orld and s%ecify the %ositions that hold res%onsi1ility for
%erformin" them. +hese %ositions re%resent the 8lifeline8 of the com%any. +y%ically< they
account for a1out 10 %ercent of mana"ement.
1/ Build a glo'al data'ase to *no& &ho and &here the talent is
+he main tool of a "lo1al &.*. %olicy has to 1e a "lo1al data1ase sim%ly 1ecause
multinational com%anies no/ ha-e many more strate"ic %osts scattered around the "lo1e and
must monitor the career de-elo%ment of many more mana"ers. Althou"h some multinational
com%anies ha-e 1een com%ilin" /orld/ide &.*. data1ases o-er the %ast decade< these still
tend to concentrate on %osts at the to% of the or"aniAation< ne"lectin" the middle mana"ers in
the country mar5ets and %otential stars comin" throu"h the ran5s.
2/ Construct a mo'ility pyramid
E-aluate the mana"ers in terms of their /illin"ness to mo-e to ne/ locations as /ell as their
a1ility and e;%erience. Most &.*. de%artments loo5 at mo1ility in 1lac5>or>/hite terms:
8mo-a1le8 or 8not mo-a1le.8 But in today,s "lo1al mar5ets this conce%t should 1e -ie/ed as a
"raduated scale and constantly reassessed 1ecause of chan"in" circumstances in mana"ers,
li-es and com%any o%%ortunities. +his /ill encoura"e many more mana"ers to o%t for
o-erseas assi"nments and o%en the thin5in" of line and &.*. mana"ers to different /ays to
use a-aila1le in>house talent.
3/ Identify leadership capital
Build a data1ase of the com%any,s mi; of mana"erial s5ills 1y %ersuadin" %eo%le to descri1e
the information in their c.-.,s< their mana"ement talents and their %otential on standard
%ersonal>%rofile tem%lates. Bum%>start the %rocess 1y ha-in" the senior mana"ers and those in
the lifeline %osts com%lete the forms first. Add others /orld/ide /ith the %otential to mo-e
u%. Include functional s%ecialists /ho sho/ "eneral mana"ement %otential.
*e@uire o-er time that e-ery e;ecuti-e =oin the "lo1al &.*. system. +his ma5es it harder for
uncut diamonds to 1e hidden 1y their local 1osses. *eco"niAin" that %eo%le,s situations and
career %references shift o-er time< hold all mana"ers and technical e;%erts res%onsi1le for
u%datin" their c.-.,s and re-ie/in" their %ersonal %rofiles at least once a year.
12
4/ ,ssess 'ench strength and s*ills gap
As5 each e;ecuti-e to com%are his or her s5ills and characteristics /ith the ideal re@uirements
defined for the e;ecuti-e,s current %ost and %referred ne;t %ost. In-ite each to %ro%ose /ays to
close any %ersonal s5ills "a%s >> for e;am%le< throu"h in>house trainin"< mentorin"< outside
courses or %artici%ation in cross>1order tas5 forces.
Com%are the s5ills detailed in the %ersonal assessments /ith those re@uired 1y the 1usiness
strate"y. +his information should form the 1asis for the mana"ement de-elo%ment and
trainin" %ro"rams and sho/ /hether there is time to %re%are internal candidates for ne/ =o1
descri%tions.
5/ !ecruit regularly
Search for ne/ recruits in e-ery im%ortant local mar5et as re"ularly as in the head@uarters
country. 4e-elo% a re%utation as 8the com%any to =oin8 amon" "raduates of the 1est
uni-ersities.
6/ ,d%ertise posts internally
Create a com%any!s o/n "lo1al la1our mar5et. In a lar"e com%any< it is hard to 5ee% trac5 of
the 1est candidates. For this reason< I.B.M. already ad-ertises many of its %osts on its
/orld/ide Intranet.
*outine internal ad-ertisin" has many ad-anta"es in that it:
Allo/s a com%etiti-e internal =o1 mar5et to function across nationalities< "enders and
other cate"ories.
Sho/s am1itious %eo%le they can ma5e their future in the com%any.
Ma5es it harder for 1osses to hide their leadin" li"hts.
Attracts hi"h>fiyers /ho may 1e ready to =um% shi%.
&el%s to 1rea5 do/n 1usiness>unit and di-isional 1aronies.
*educes in1reedin" 1y transferrin" mana"ers across 1usinesses and di-isions.
7i-es the rest of the com%any first %ic5 of talent made redundant in another %art of the
/orld.
Solidifies com%any culture.
Is consistent /ith "i-in" em%loyees res%onsi1ility to mana"e their o/n careers.
9/ Institute succession planning
E-ery mana"er in a lifeline =o1 should 1e re@uired to nominate u% to three candidates /ho
could ta5e o-er that %ost in the ne;t /ee5< in three months or /ithin a year< and their 1osses
should si"n off on the nominations. +his should "o a lon" /ay to/ard sol-in" succession
@uestions< 1ut it /ill not resol-e them com%letely.
.0/ Challenge and retain your talent
7lo1al net/or5s that transfer 5no/led"e and "ood %ractices run on %eo%le>to>%eo%le contact
and continuity. E;ecuti-e continuity also cuts do/n on turno-er< recruitment and o%%ortunity
1
costs. As international com%etition for talent intensifies< therefore< it 1ecomes increasin"ly
im%ortant for com%anies to retain their "ood mana"ers. Monetary incenti-es are not sufficient:
the %ac5a"e must include challen"e< %ersonal "ro/th and =o1 satisfaction.
&he '()step "lo1al &.*. frame/or5 has the %otential to affect e-ery e;ecuti-e in e-ery
location. +his scale of culture chan"e has to 1e led 1y a com%any,s chief e;ecuti-e< /ith full
commitment from the to% mana"ement team. A tas5 force of &.*. and 1usiness strate"ists /ill
1e needed to facilitate and im%lement the %ro"ram< 1ut its success in the end /ill de%end on
line mana"ers.
Conclusion
IBM is a com%etiti-e com%any /ith a hu"e %ool of ra/ talent /hich e;%loited at it!s full
%otential< usin" a coherent "lo1al &.*. strate"y can maintain the com%any!s technolo"ical
ad-anta"e< increase it!s mar5et share and %otential %rofits.
You must guard constantly against those who lack vision. You must guard against the
reactionary mind. Always cultivate and associate with persons of vision and with persons
who believe that things are going to be better. When you do this you take on the kind of
vision backed by the right kind of inspiration that you need if you are going to grow in this
business or any other business.
&homas *ohn Watson+ Sr,+IBM %resident 91'1#>1'(.:
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///./i5i%edia.com
///.i1m.com
htt%:JJ///.strate"y>1usiness.com
htt%:JJ///.endicottalliance.or"
8Business 3ee5< +o% Brands 200'8
Smith< $aul *ussell 91''':. Strate"ic Mar5etin" Communications: Ne/ 3ays to Build and
Inte"rate Communications
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