How The Crisis Is Redefining Work Culture

58 • THEEDGE MALAYSIA

| MAY 25, 2009

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How the crisis is redefining work culture

O

nce in a long while comes a change so significant and so forceful that it dramatically redefines how societies and individuals view the world, and indeed of themselves. The events surrounding 9/11 redefined American identity and its sense of security. If this current global economic recession is indeed the worst since the 1929 Great Depression, then this huge convulsion must lead to changes in many spheres of life, management not least. All of us are forever changed one way or another by the financial maelstrom. Wealth built up over decades and even generations has been wiped out in a matter of months. Jobs have been lost forever. Retirees have had pensions wiped out and some must now return to work in their advanced years. Entire industries have undergone seismic shifts and even capitalism seems to have been turned on its head with the effective nationalisation of banks in America and Europe. Indeed, many old pillars have crumbled. Management debates in response to this crisis have revolved around the themes of striving for more efficiency, or of redefining business strategy. The most tangible outcomes have manifested in cost-cutting — usually headcount — and sharpened focus on improving cash flow and liquidity. The flood of curriculum vitae (CV) of senior managers and CEOs reaching the desks of my headhunter friends suggests that many corporate leaders are either out of a job, or looking for new openings rather than cheering on their teams about the Six Sigma (a powerful methodology founded by Motorola to improve business processes). The managers who still have jobs know that

such mantras may fall on deaf ears if staff, or even senior managers themselves, wonder constantly about job security. My two former employers — news agency Reuters and investment bank Merrill Lynch — have in recent times merged or were taken over although both had long histories. This is not merely a climate of economic uncertainty; it is one in which all that is certain is that the old order will not last and change is the only constant. And business leaders must review not only strategy but also how employees view their individual job functions, work-life balance and their sense of self purpose in an environment in which job tenures are more uncertain than ever before. I will address three themes here. First, long-term employment will gradually disappear except in public service and a few sectors relatively immune to sudden economic shifts. Employees will no longer expect it and few employers can or would want to hold it out as a carrot. The layoffs of Japanese salaried men by the likes of Toshiba and Panasonic and of veterans at Lehman Brothers in New York and London have been played out in the world media. In this environment, smaller teams, often with distinct sub-cultures, will emerge in the workplace. Each team will have greater accountability and, increasingly, measurable performance indicators of their contribution to the corporation’s performance. Leaders will negotiate for budgets and even a measure of longevity for their work teams; and will utilise a mix of “permanent” employees and contract staff (with the prospect that some of the former may even convert to the latter). A functional manager may be told

| BY LAI KWOK KIN |

my say that he will have a fixed number of staff but with the flexibility that he can engage a few outside vendors, freelancers or contract workers. Then there is the emergence of outsourced CEOs — a growing number of out-of-work or retired but experienced executives who opt to lead teams for a defined number of hours per week or for a predetermined period of time. A good outsourced corporate chieftain may handle three or four corporations or teams at a time, juggling a few sub-cultures with different goals and budgets. Second, the convergence of costcutting pressures — specifically office rents — and that of workplace technological enhancements, such as better connectivity, mobile computing, voice-over-Internet and video-conferencing, means that telecommuting has and will escalate sharply. Work teams will not only comprise a mix of employees and outsourced labour, but also teams that will increasingly oper-

Recovery will be patchy FROM PAGE 55

been instructed to purchase real estate. We have been told that Beijing-based SOEs are in the process of purchasing one million sq m of unsold commercial space in the city. This may help arrest a downward spiral in real estate in the short term, but it does nothing to solve the underlying problem of excess supply. Several real-estate analysts have also warned of increasingly speculative or even fraudulent activities in the property sector.

What is the bottom line for the Chinese economy? With the fiscal and monetary stimulus still building up momentum, the Chinese economy will be given a further strong push in the coming months. With so much money being thrown at the economy, it is inevitable that the Chinese economy will show stronger growth rates in 2H2009. We will not be surprised if China’s GDP growth for the year as a whole is reported as more than 8%. In addition, with such a powerful monetary injection

underway, it is also likely that excess liquidity will boost equity prices for a while more. However, what the above cautionary points tell us is that the recovery will be patchy. We are probably not going to see the sustained recovery in global demand that is needed to produce a substantial and continuing recovery in Chinese exports. Moreover, the short-term measures of easing monetary conditions and forcing SOEs to buy real estate only postpone the necessary adjustments in the realestate sector in China, which could well remain a drag on the economy for some time. Another point to consider is that the Chinese authorities have put in place important initiatives for the longer term such as the massive investment in transport infrastructure to improve connectivity within the economy as well as the groundbreaking commitment to rebuild the healthcare system. These are extremely positive initiatives and will yield economic benefits over the longer

term. However, these benefits may not be felt immediately. All this means that the Chinese economy will remain dependent on continued public-sector pump-priming for some time. For the rest of Asia, it is the recovery in global demand that is essential — most Asian exports to China are components or raw materials which are processed in China’s export industries for final consumption in the developed countries. The pick-up in China’s domestic economy will help boost the prices of some commodities and will have some spillover effect in areas such as semiconductors but, otherwise, the impact on the rest of Asia will be relatively limited. In other words, it is still a recovery in the US, Europe and Japan that Asia as a whole needs in order to return to rapid economic growth. Manu Bhaskaran is a partner and head of economic research at Centennial Group Inc, an economics consultancy

ate more in cyberspace across different time zones. Two friends of mine — one in Singapore and the other in Seattle, US — hired virtual assistants who are physically based in India and the Philippines. Connected via the Internet and at considerably lower costs, these assistants handle a range of chores such as updating websites, telemarketing, transcription, fixing appointments and even sending flowers and birthday cards. And yet, they are an integral part of “the team”. In this world of increasing impermanence and redefinitions of the concepts of work space and corporate culture, how do managers build up teams and morale? This question leads me to the third theme, which, I believe, will gain increasing prominence during this crisis — that of the individual’s sense of self. Each age of uncertainty forces individuals to ponder their own place in the universe, whatever their faiths or positions in society. The beheading of England’s King Charles I in the 1600s, the two world wars, and the Cultural Revolution in China are but a few of such dramatic turning points in modern history. If this crisis is as cataclysmic as the experts tell it, then surely it will lead to great introspection among individuals, and with it a subtle but growing change in the workplace. Apart from shorter tenures, contractual employment and greater flexibility in time and telecommuting, team members — permanent or outsourced — will demand more personal meaning in their jobs. That meaning is often to be found in the intersection between their personal talents and gifts on the one hand, and what they find most enjoyable, on the other. While

modern capitalism is generally efficient in seeking out and rewarding the former, it must now recognise and deal with the latter even if it may at times appear to conflict with an established corporate culture. Great team leaders are those who not only can nurture and retain talents and skills, but are also genuinely interested in or at least give sufficient space and flexibility for personal interests or causes. This new thinking will take human resource management to a new level beyond just allowing mums to work at home. It means embracing the personal identity of the team member and finding ways to blend his or her interests and quirks with that of the team sub-culture or goals. It will be increasingly meaningless to ban the use of social networking sites, such as Facebook, Twitter or Second Life, in the workplace. It will be impossible to regulate them. A team member in a complex software project, who may have an active cyber-identity as a roller-blade enthusiast, recently posted his CV on LinkedIn looking for freelance opportunities. The outstanding manager must harness all three elements —shorter job tenures or contract labour; accelerated telecommuting; and team members’ personal goals and interests — to make the whole bigger than the sum of parts. Lai Kwok Kin held careers in financial journalism and investment banking before founding WeR1 Consultants Pte Ltd, which provides investor relations and corporate strategy consultancy services to CEOs of listed and unlisted corporations

Don’t gamble with savings FROM PAGE 54

up to the members to understand the features, risks and benefits of their investments. The measures implemented by the EPF in the investment scheme include lowering the cost of carrying out investments for its contributors and allowing members to invest only in the local bourse to avoid currency risks and other uncertainties. Some of the pension or provident funds overseas have a list of approved stocks for their contributors to invest in as one of the measures to protect their savings. Perhaps the EPF could do the same. But it will require a bigger pool of analysts to undertake the increased workload in doing research on companies to come up with a list of investment-grade stocks. The EPF could get the fund management companies to provide a list of stocks for its members to choose

from but this could pose a challenge to the fund managers. Another measure could be to penalise the fund management companies if they fail to put in a credible performance over a certain period compared to their peers. This could be in the form of guidelines for these companies so that their returns over, say, three years are not lower than that of their peers. EPF members should not gamble away their hard-earned savings by investing in speculative instruments. They should know that their contributions are deemed to be held in trust and ensure that their savings are there when they retire. If their savings are lost in speculative investments like warrants, it will be their own fault and that of the fund managers. Toh Lye Huat is associate editor at The Edge. Comments: feedback@ bizedge.com