Talent Management in the Corporate Sector

Talent Management in the Corporate Sector A Talent Management INTRODUCTION:- Talent management is the process that emerged in 1990 and continues to be adopted, as more companies came to realize that their employees talent, skills drive their business success. Companies that have put into practice talent management have done so to solve an employee retention problem. The issue with many companies today is that many organizations put tremendous effort into attracting employees to their company, but spend little time into retaining and developing talent. A talent management system must be worked into the business strategy and implemented in daily processes throughout the company as a whole. It cannot be left solely to the human resources department to attract and retain employees, but rather must be practiced at all levels of the organization. The business strategy must include responsibilities for line managers to develop the skills of their immediate subordinates. Divisions within the company should be openly sharing information with other departments in order for employees to gain knowledge of the overall organizational objectives. Talent management refers to the process of developing and integrating new workers, developing and retaining current workers, and attracting highly skilled workers to work for your company. Talent management in this context does not refer to the management of entertainers. The term was coined by David Watkins of Softscape published in an article in 1998. The process of attracting and retaining profitable employees, as it is increasingly more competitive between firms and of strategic importance, has come to be known as the war for talent. IMPORTANCE OF TALENT MANAGEMENT IN US CORPORATE SECTOR US sector always want to grow and improve their system and processes must focus on people practices that allow or foster their growth and improvement. The best practices are known. The key variables (leadership competencies, experience and skill, interest rewards) that motivate people to succeed have been identified and successfully put into practice. Talent Management is no loger a cutting-edge field being solely tapped by pioneers. It is a viable path towards and improving organizational performance. Integrated, strategically aligned human capital asset management systems have provided significant economic benefits to companies that have embraced them as ongoing processes instead of one-time events. Research done on the value of such systems to companies consistently finds benefits in these seven critical economic areas: revenue, customer satisfaction, quality, productivity, cost, cycle time, and market capitalization. This research clearly shows that adopting and investing in best-practice talent management systems results in bottom-line improvement in each of these key areas:- 1) Increase Revenue It was initially thought that companies that make more money were associated with better talent management practices only because they could afford them (.19 correlation), but the 2001 Watson Wyatt Human Capital Index Study showed that talent management practices actually increase financial performance (.41 correlation). According to Watson Wyatts research 15% of profit performance is driven by: Management participation Open management style Taking some risks, but not too many Top managers spending 20% of time with customers Around 20% of top management should be outsiders Management training is deemed important Top managers are effectively incentivized Succession planning is done A good appraisal system is in place Employees get feedback In addition to supporting Becker and Huselids 1998 results, the 2001 Watson Wyatt Human Capital Index study showed precisely which HR practices have an impact on the bottom line. 49 specific HR practices across 6 dimensions played the greatest role in creating shareholder value. The research quantified exactly how much an improvement in each practice could be expected to increase a companys market value. For example, a company that makes a significant improvement (one standard deviation) in all of the practices categorized under Total Rewards and Accountability should see its value improve by 16.5 percent, and a significant improvement in 43 key HR practices is associated with an increase of 47 percent in market value. Results included: 16.5% impact on company market value from total rewards and accountability 9% impact from a collegial, flexible workplace 7.9% impact from recruiting and retention excellence 7.1% impact from the integrity of communications 6.5% impact from the implementation of focused HR service technologies 33.9% loss from non-prudent use of resources Careful inspection of all the data shows that for every available correlation calculated over time, the relationship between past HR practices and future financial performance is stronger than the relationship between past financial outcomes and future HR practices. This is the first study to show that HR practices actually increase financial performance (.41 correlation) instead of inferring that companies that make more money can afford better HR practices (.19 correlation). Given companies of comparable size, those whos CEOs exhibited more emotional intelligence competencies showed better financial results as measured by both profit and growth. The divisions of leaders with a critical mass of strengths in emotional intelligence competencies outperformed revenue targets by a margin of 15-20 percent. 2) Customer Satisfaction Knowing and using the critical competencies associated with success creates results. The 1998 Watson Wyatt study, Competencies and the Competitive Edge, showed that when an organization identifies and communicates the core competencies that it needs to be successful in the present and the future, it has developed a powerful tool to help meet its goals. Competencies define and communicate an organizations strategy and help employees to understand that strategy and achieve its goals. The many roles that competencies can play in an organization include: Articulating what the organization values Providing a common language for employees and managers to describe value creation Establishing a new paradigm for human capital management programs (organizational levers) Focusing on the development of the individual instead of an organizational structure Linking pay, promotions and growth directly to what the organization values to be successful Guiding employees and managers to what is expected and how value is defined even in times of dramatic change and restructuring Competencies serve as a powerful communication vehicle to focus all members of the organization on the skills and activities that will create both value and wealth. Competency-based programs can make a difference to the bottom line. Analysis of the financial data clearly shows that companies with competency- based programs perform better in the marketplace. Such programs help focus the organization and all the individuals in it on what they can do to add value to the organization. Contributions are role-related rather than position-related. Adopting this view of contribution to value will help organizations think differently about their human resource and development programs. Organizations can focus on competencies needed for the future and identify the roles that employees do and must play. Programs that build employee commitment can bring great returns. Data from this and other Watson Wyatt studies clearly demonstrate that both individual and organizational performance increase when employees are committed to their companies. Ensuring that organizational levers that build employee commitment are in place and working will affect the bottom line. This was most notable when the competencies focused on attributes and behaviors that promoted customer satisfaction. Training is important, but it is no substitute for good management. A large majority of the organizations participating in Watson Wyatts study identified training and development as the driver of future corporate success. The high-performing companies identified it slightly more often than the others. Putting people first by adopting high performance management practices translates into improved morale, more innovation, better customer service, higher productivity, greater cost reduction, greater flexibility, and increased skills development. 3) Improve Quality Motor vehicle manufacturing firms in US implementing flexible production processes and associated practices for managing people enjoyed 47 percent better quality and 43 percent better productivity than firms relying on traditional mass-production approaches, according to a worldwide study by Wharton Schools John Paul McDuffie. Overall financial performance improved 3.8% per year for ten years when companies stayed with traditional talent management practices, 6.8% when they realized they needed to re-design their talent management practices, and 10.1% when they launched a completely new talent management system Watson Wyatts 2002 European Human Capital Index study shows that 36 key human capital variables (practices and policies) are associated with an almost 90% increase in value. 4) Increase Productivity Initial research on 740 companies HR practices found that those using high performance work systems (HPWS are defined as integrated talent management practices) had economically and statistically significantly higher levels of company performance. One standard deviation of improvement on their bell curve of integrated talent management systems was associated with changes in market value from $15,000 to $60,000 per employee. Employee productivity was calculated as the logarithm of net sales per employee using gross rate of return on assets (GRATE), which is less sensitive to depreciation and other non-cash transactions, and Tobins q, a future-oriented and risk-adjusted capital-market measure of performance that reflects both current and anticipated profitability and often mirrors the price that the market will pay for intangible assets (goodwill). Further research that included three US surveys and the experience of more than 2,400 companies continued to show significant impact of systems that select, maintain, develop, and reinforce employee performance on both market-based and accounting-based measures of company performance (while statistically controlling for RD investment, industry market changes, capital improvements, sales growth trends, etc.). Moving from the 60th percentile of integrated HPWS to the 80th percentile improved market valuation by $20,000 per employee. This reflects both operational excellence and alignment with the companys strategy. When the elements are present, but not aligned with the company strategy there is a 27% drop off in measured gains. Gallup Management Journal reported the following in 2001: †¢19% of all employees are actively disengaged from their jobs †¢55% of all employees are not engaged in their jobs and †¢26% of all employees are engaged in their jobs at a cost of $292-355 Billion per year to the US economy. Great people management equals great shareholder value: European companies with the best human capital management deliver around twice as much shareholder value as their average competitors. 5) Reduce Cost ASTD and SHRM studies companies that is renowned for their ability to retain top talent (Linbeck, Kennedy Rossi, Zachary, Dow Chemical, Edward Jones, Great Plains, Sears, and Southwest Airlines). One key finding was that all of these companies implemented competency-based position profiles so that employees understood the skills and abilities required to move into leadership positions. They must also avoid wasting their money on bad human capital investments: The 2001 Watson Wyatt Human Capital Index study showed precisely which HR practices have an impact on the bottom line. 49 specific HR practices across 6 dimensions played the greatest role in creating shareholder value. Additionally, one dimension, Prudent Use of Resources identifies six practices that diminish shareholder value (e.g. training that is not connected to the business objectives and not evaluated for ROI). A new book shows how Microsoft, Intel, Nokia, Starbucks, Singapore Airlines and 20 other world-class organizations are luring and holding high-quality employees. One senior executive said, Microsoft has a market capitalization of $450 billion, the largest in the world. If you add up every desk and chair, every computer, every building, every piece of land, everything we own, including the $17 billion or so we have in the bank, it comes to about $30 billion. If you then add in things like goodwill and other financial assets, maybe youll come up with another $70 billion, if you really struggle. But that means that there is $350 billion more that people have given us credit for that is not there. What is it? Well, its the stuff in smart peoples heads. With that knowledge Microsoft has built and maintains a human capital management system very similar to Mundo Strategies system to prevent employees from wanting to leave the company even as the stock took a beating in the past few years. Supervisors who received training in how to listen better and resolve employee problems found that lost-time accidents were cut by 50 percent, formal grievances were reduced from 15 to 3 per year, and productivity goals were exceeded. Retention is one of the more obvious areas that effective talent management practices can affect. What attracts and retains high performers? 79% stay because of opportunities for advancement 69% stay because their job is redesigned 65% stay because they are learning new skills in their current job. Why do high performers resign? 56% leave because they are dissatisfied with company management 56% leave due to inadequate opportunity for promotion 50% leave due to dissatisfaction with pay 6) Reduce Cycle Time There is very little research into the impact of talent management practices on company cycle time. One classic work on cycle time showed that steel mini-mills using a high-commitment approach to management required 34 percent fewer labor hours to make a ton of steel and had a 64 percent better scrap rate than mini-mills using a command and control approach. 7) Increase Return to Shareholders Market Capitalization The five highest return to shareholders from 1972-1992 (Southwest Airlines Co. 21,775%, Wal-Mart Stores, Inc. 19,897%, Tyson Foods, Inc. 18,118%, Circuit City Stores, Inc. 16,410%, and Plenum Publishing 15,689%) differentiated themselves from their competitors and the market only through the way they managed their people during the infancy of talent management. Whereas at the start of the 1990s studying its earnings and fixed assets and adding a token amount for goodwill invariably gauged a companys stock market valuation, by the end of the decade a seismic shift had taken place. When accountants Ernst Young came to look at the issue, they found that the largest slice of most companies market capitalization was held in intangibles primarily, the talent, knowledge and teamwork of its staff. In high-tech companies like Nokia, the percentage was as high as 95 per cent; but even old economy stalwarts like BP, despite its huge investments in oil platforms and exploration equipment, notched up a significant 74 per cent. The upshot was that even companies operating in the same sector with similar earnings could experience widely differing stock valuations. Those ignoring the new emphasis on intangibles invariably found themselves penalized by the markets. Watson Wyatt also reported that a 26% increase in market value in 2000 was driven by common talent management best practices: Use of knowledge and contract workers Recruiting excellence Consistent pan-European HR practices Good union-management relations Lack of hierarchy, clear leadership Teamwork and 360 ° feedback Customer-focused environment Remuneration Sharing information with employees The difference between a non-strategic HR system and one that has removed the barriers to performance are dramatic. Improving the relative sophistication of the HR system by adopting best practices does not provide measurable value (20%-60% adoption of a strategic HR system). Integrating the strategic elements of HR into the broader fabric of the organization provides a significant improvement in shareholder value (60%-80%). When HR systems have adopted best practices and aligned those systems with business priorities and initiatives they return the greatest shareholder value (80%-100%). The five-year survival rates of initial public offering showed that firms whose talent management practices scored in the top one-sixth of IPO firms had a 33 percent higher probability of surviving than those in the lowest one-sixth. Firms in the upper one-sixth in providing financial rewards to all employees, not just managers, had almost twice as much chance of surviving for five years, according to research by Theresa Welbourne of Cornell and Alice Andrews of Vanderbilt. COMPETITIVE ADVANTAGE OF TALENT MANAGEMENT IN US CORPORATE SECTOR Taking a systemic approach to talent management Getting the right people in pivotal roles at the right time should be nothing new to HR professionals, but done effectively, talent management can create longterm organizational success. Here, Lynne Morton and Chris Ashton show how to align talent management strategies to business goals, integrate all related processes and systems and create a talent mindset in organization. TALENT MANAGEMENT (TM) IS more than a new language for old HR work, or just the next hot new thing for HR practitioners and managers to get involved in. For many organizations, it has become a strategic imperative. McKinsey research1 reveals that 75 percent of corporate officers were concerned about talent shortages and Deloitte reports that retaining the best talent is a top priority for 87 percent of surveyed HR directors. This need for talent and, therefore, its expert management is also driven by macro trends including: †¢ New cycles of business growth, often requiring different kinds of talent. †¢ Changing workforce demographics with reducing labor pools and, therefore, a talent squeeze. †¢ More complex economic conditions which require segregated talent and TM. †¢ The emergence of new enterprises which suck talent from larger organizations. †¢ A global focus on leadership which is now permeating many levels of organizations. The strategic importance of talent management:- On the basis of substantive research undertaken for our forthcoming report , they argue that good TM is of strategic importance and can differentiate an organization when it becomes a core competence and when its talent significantly improves strategy execution and operational excellence. For example, imagine your company has the right talent in pivotal roles at the right time. What difference will these people make to revenues, innovation and organization effectiveness compared with having to operate without them? What is the cost of the lost opportunities and the downtime and replacement costs of losing critical talent? What are the consequences of having to make do with the wrong kind of leaders and managers in the top two executive layers or of not having successors groomed and ready to replace them? Yet generally, organizations still struggle with TM. According to research, three-quarters of business leaders have invested dedicated resources in TM but most say they havent yet felt the impact of doing so.3 Why not? Through one of the research, they tried to provide reasons by asking these questions: †¢ Why are they doing TM? Is it for the individual, the organization or both? †¢ What do they mean by talent and talent management? †¢ What are their propositions for attracting and retaining talent? †¢ How do they manage and use the talent in their organization needs? †¢ How are internal roles and resources deployed appropriately to support TM? †¢ How is TM integrated across HR processes and with business planning and strategy execution processes? Talent management at FDC its focus, leadership, acquisition, retention, evaluation and tools has evolved over five years, and continues to be a work in progress. The evolving talent plan aligns with goals, business strategy and their organizational implications. The talent office annually reviews analytics and recalibrates talent to align with growth and other organizational needs. The current growth objective is 15 percent. Ours is a numbers business, which tends to reflect a short-term view, says Annmarie Neal, senior VP, organization development. Yet, we also have to build a leadership bench and talent pools, not around the execution capabilities were known for, but on a customer-solutions focus and strategic foresight. Investments in talent arent short-term they need at least three-year horizons to see returns. The key issue for FDC is to accurately identify high potentials with different capabilities such as strategic thinking, partnership building, results orientation, innovation and talent leadership and then build succession depth. In effect, they are building talent balanced with buying it, guided by the notion of critical positions that is, those positions that positively impact on the strategic goals or their execution. They are now applying their processes for identifying, assessing and growing future leaders to our more junior, untested populations who we expect to be our next VPs. Technology, as Neal explains, has allowed them to do more in depth and breadth with the same headcount. TM initiatives at FDC include: †¢ Talent profiling of individuals. †¢ Conducting calibrations of business performance and key results behaviors. †¢ Assessing and forecasting succession depth. †¢ Implementing organizational assessment summaries to give status reports for leadership talent. †¢ Using just-in-time, action-learning programs and talent-sharing assignments. †¢ Developing talent at risk tools based on potential derailers and defection triggers. †¢ Introducing a talent scorecard with five perspectives, each of which has critical indicators hiring. As we see it, TM is a strategic and holistic approach to both HR and business planning or a new route to organizational effectiveness. This improves the performance and the potential of people the talent who can make a measurable difference to the organization now and in future. And it aspires to yield enhanced performance among all levels in the workforce, thus allowing everyone to reach his/her potential, no matter what that might be. Though this interpretation of talent is inclusive, it strikes a strategic balance between performance and potential. Performance historically, the primary focus of measurement and management concerns both the past and the present, whereas potential represents the future. Our position assumes that potential exists, it can be identified and it can be developed. Here are specific ways that two case organizations inthe report define talent: †¢ Executive management team leaders, directors/VPs and A-player managers in all functions plus Bplayers as potentials. †¢ Future business leaders with more strategic capabilities than just operational excellence skills -plus specialist talent able to execute business integration projects on time and to budget. Clearly, there isnt a single consistent or concise definition. Current or historic cultural attributes may play a part in defining talent, as will more egalitarian business models. Many organizations acknowledge that talent, if aligned with business strategy or the operational parameters of strategy execution will change in definition as strategic priorities change. For example, in start-up businesses, the talent emphasis will be different to the innovative or creative talent needed to bring new products to market. Any definition needs to be fluid as business drivers change, so will the definitions of talent. What TM involves Talent management is the integration of different initiatives, or constructs, into a coherent framework of activity. There are certain crucial components and a useful model for defining TM is to think of it in these key words: †¢ Ethos embedding values and behavior, known as atalent mindset, to support the view that everyone has potential worth developing. †¢ Focus knowing which jobs make a difference and making sure that the right people hold those jobs at the right time. †¢ Positioning starting at the top of the organization and cascading throughout the management levels to make this a management, not HR, initiative. †¢ Structure creating tools, processes and techniques with defined accountability to ensure that the work gets done. †¢ System facilitating a long-term and holistic approach to generate change. Integrating TM through a system Its worth emphasizing that integration is critical. Our research shows that without integrating TM activities, the effort invested will tend to be dissipated with patchy results. Integration is knowing how all the pieces of TM fit together within a TM system. This will not operate in isolation from strategy, business planning and the organizations approach to people management. In this sense, the work of talent management cuts across what has been traditional HR silos. If integrated, it functions in a more facilitative, OD-like nature. It will also reach higher up the organization than other HR initiatives, often attracting the attention of boards and senior teams. Similarly, TM reaches down the organization, to include new recruits along with tenured professionals. Lastly, talent planning must be done in parallel with business planning, creating a rich integration of people and strategy. One way of achieving such system integration and alignment is the CRF Talent Management System (see Figure 1, above right). This systemic view of talent has five elements: Need the business need derived from the business model and competitive issues. Data collection the fundamental data and intelligence critical for good talent decisions. Planning people/talent planning guided by data analysis. Activities the conversion of plans into integrated sets of activities. Results costs, measures and effectiveness criteria to judge the value and impacts of TM Using this system can help TM become a strategic differentiator rather than a standard set of HR processes if the right conditions, context, timescales and offerings exist in the first place. System integration and alignment ensures that TM efforts are rational and fit for purpose. Since the arrival of the current era of talent is widely acknowledged, its not surprising that renewed significance is being placed on the management of that talent. And as talent continues to be viewed as a strategic differentiator, its management will take more of a strategic role. How fascinating it will be to take the pulse of talent management in the business community in another five years. We believe that while the management of talent will most likely become embedded in the fiber of cultures by then, the HR executives who led those initiatives will have achieved much more prominence. OBJECTIVES OF TALENT MANAGEMENT: There are some basic objectives which need to be fulfilled by the US corporate sector while applying Talent Management in the organisation and the objectives are:- 1) TO DETECT TALENT:- It is very important for the US corporate sector to determine or detect their best talent for the organisation and this Talent Management helps the selector to select the best talent among the pool of various alternatives present in the organisation. Because the best talent helps in generating more and more good ideas which help organisation to achieve or innovate something new. As Talent Management helps in detecting best talent of the organisation within the organisation, this helps organisation to achieve their goal more efficiently and effectively which are set by the organisation. 2) TO DEVELOP TALENT:- After detecting the talent in the organisation the US corporate next step for applying Talent Management is to develop the talent. It is not necessary that every person has a some talent in him or her but talent can also be developed through regular practice such as training, educating, providing them with the basic guidelines of the respective talent so that the talent of any person can be used for the effective utilization of the talent for the sake of the organisation which will be helpful for the organisation to came up with a new idea with the help of talent which will provide them with the best competencies among the competitor so that they can stay in long run of the business giving tough competition to their competitors and by developing talent US corporate sector tried to change the scenario of the employees by developing their talent and making them more confident, reliable and motivating factor for themselves and for others too which improves the behaviour and efficiency t o work. There is a huge change when a person come to some hidden talent in him and this makes them to be more responsible to the work and take the work as natural as play 3) TO MAKE TALENTS MORE RELIABLE:- Talent Management helps in making talent more reliable and US corporate sector use the Talent Management as their one of the important tool for making their employees talent more reliable as talent management helps in detecting and developing talent by the different mode they used while developing their talent they make the employees to be more confident in their talent which makes them more reliable which means that they will be confident in using their talent and organisation can rely on their talent while doing or making effective decision. Until and unless employees believe themselves in their talent then the organisation too will not have any faith on the employee and US corporate sector never keep such employees in the organisation as US corporate sector is best known for their talent and technologies and the technology is the result of the talent only. 4) TO PROMOTE TALENTS TO STRATEGIC PROJECTS OR TO HIGHER POSITION:- Talent Management helps in promoting talent to strategic projects or to the higher position because US corporate sector that every talent should be given their own position. If the talent deserves higher position then he should be given the higher position irrespective of any other things which might be taken in account such as education or qualification. They think that if the post deserves that talent then that talent should be given that post. When talent is promoted it acts as a motivating tool for the employees to make them more responsible and work towards the achievement of the goal set by the organisation which also enhance their style and attitude towards their work. Talent Management in the Corporate Sector Talent Management in the Corporate Sector A Talent Management INTRODUCTION:- Talent management is the process that emerged in 1990 and continues to be adopted, as more companies came to realize that their employees talent, skills drive their business success. Companies that have put into practice talent management have done so to solve an employee retention problem. The issue with many companies today is that many organizations put tremendous effort into attracting employees to their company, but spend little time into retaining and developing talent. A talent management system must be worked into the business strategy and implemented in daily processes throughout the company as a whole. It cannot be left solely to the human resources department to attract and retain employees, but rather must be practiced at all levels of the organization. The business strategy must include responsibilities for line managers to develop the skills of their immediate subordinates. Divisions within the company should be openly sharing information with other departments in order for employees to gain knowledge of the overall organizational objectives. Talent management refers to the process of developing and integrating new workers, developing and retaining current workers, and attracting highly skilled workers to work for your company. Talent management in this context does not refer to the management of entertainers. The term was coined by David Watkins of Softscape published in an article in 1998. The process of attracting and retaining profitable employees, as it is increasingly more competitive between firms and of strategic importance, has come to be known as the war for talent. IMPORTANCE OF TALENT MANAGEMENT IN US CORPORATE SECTOR US sector always want to grow and improve their system and processes must focus on people practices that allow or foster their growth and improvement. The best practices are known. The key variables (leadership competencies, experience and skill, interest rewards) that motivate people to succeed have been identified and successfully put into practice. Talent Management is no loger a cutting-edge field being solely tapped by pioneers. It is a viable path towards and improving organizational performance. Integrated, strategically aligned human capital asset management systems have provided significant economic benefits to companies that have embraced them as ongoing processes instead of one-time events. Research done on the value of such systems to companies consistently finds benefits in these seven critical economic areas: revenue, customer satisfaction, quality, productivity, cost, cycle time, and market capitalization. This research clearly shows that adopting and investing in best-practice talent management systems results in bottom-line improvement in each of these key areas:- 1) Increase Revenue It was initially thought that companies that make more money were associated with better talent management practices only because they could afford them (.19 correlation), but the 2001 Watson Wyatt Human Capital Index Study showed that talent management practices actually increase financial performance (.41 correlation). According to Watson Wyatts research 15% of profit performance is driven by: Management participation Open management style Taking some risks, but not too many Top managers spending 20% of time with customers Around 20% of top management should be outsiders Management training is deemed important Top managers are effectively incentivized Succession planning is done A good appraisal system is in place Employees get feedback In addition to supporting Becker and Huselids 1998 results, the 2001 Watson Wyatt Human Capital Index study showed precisely which HR practices have an impact on the bottom line. 49 specific HR practices across 6 dimensions played the greatest role in creating shareholder value. The research quantified exactly how much an improvement in each practice could be expected to increase a companys market value. For example, a company that makes a significant improvement (one standard deviation) in all of the practices categorized under Total Rewards and Accountability should see its value improve by 16.5 percent, and a significant improvement in 43 key HR practices is associated with an increase of 47 percent in market value. Results included: 16.5% impact on company market value from total rewards and accountability 9% impact from a collegial, flexible workplace 7.9% impact from recruiting and retention excellence 7.1% impact from the integrity of communications 6.5% impact from the implementation of focused HR service technologies 33.9% loss from non-prudent use of resources Careful inspection of all the data shows that for every available correlation calculated over time, the relationship between past HR practices and future financial performance is stronger than the relationship between past financial outcomes and future HR practices. This is the first study to show that HR practices actually increase financial performance (.41 correlation) instead of inferring that companies that make more money can afford better HR practices (.19 correlation). Given companies of comparable size, those whos CEOs exhibited more emotional intelligence competencies showed better financial results as measured by both profit and growth. The divisions of leaders with a critical mass of strengths in emotional intelligence competencies outperformed revenue targets by a margin of 15-20 percent. 2) Customer Satisfaction Knowing and using the critical competencies associated with success creates results. The 1998 Watson Wyatt study, Competencies and the Competitive Edge, showed that when an organization identifies and communicates the core competencies that it needs to be successful in the present and the future, it has developed a powerful tool to help meet its goals. Competencies define and communicate an organizations strategy and help employees to understand that strategy and achieve its goals. The many roles that competencies can play in an organization include: Articulating what the organization values Providing a common language for employees and managers to describe value creation Establishing a new paradigm for human capital management programs (organizational levers) Focusing on the development of the individual instead of an organizational structure Linking pay, promotions and growth directly to what the organization values to be successful Guiding employees and managers to what is expected and how value is defined even in times of dramatic change and restructuring Competencies serve as a powerful communication vehicle to focus all members of the organization on the skills and activities that will create both value and wealth. Competency-based programs can make a difference to the bottom line. Analysis of the financial data clearly shows that companies with competency- based programs perform better in the marketplace. Such programs help focus the organization and all the individuals in it on what they can do to add value to the organization. Contributions are role-related rather than position-related. Adopting this view of contribution to value will help organizations think differently about their human resource and development programs. Organizations can focus on competencies needed for the future and identify the roles that employees do and must play. Programs that build employee commitment can bring great returns. Data from this and other Watson Wyatt studies clearly demonstrate that both individual and organizational performance increase when employees are committed to their companies. Ensuring that organizational levers that build employee commitment are in place and working will affect the bottom line. This was most notable when the competencies focused on attributes and behaviors that promoted customer satisfaction. Training is important, but it is no substitute for good management. A large majority of the organizations participating in Watson Wyatts study identified training and development as the driver of future corporate success. The high-performing companies identified it slightly more often than the others. Putting people first by adopting high performance management practices translates into improved morale, more innovation, better customer service, higher productivity, greater cost reduction, greater flexibility, and increased skills development. 3) Improve Quality Motor vehicle manufacturing firms in US implementing flexible production processes and associated practices for managing people enjoyed 47 percent better quality and 43 percent better productivity than firms relying on traditional mass-production approaches, according to a worldwide study by Wharton Schools John Paul McDuffie. Overall financial performance improved 3.8% per year for ten years when companies stayed with traditional talent management practices, 6.8% when they realized they needed to re-design their talent management practices, and 10.1% when they launched a completely new talent management system Watson Wyatts 2002 European Human Capital Index study shows that 36 key human capital variables (practices and policies) are associated with an almost 90% increase in value. 4) Increase Productivity Initial research on 740 companies HR practices found that those using high performance work systems (HPWS are defined as integrated talent management practices) had economically and statistically significantly higher levels of company performance. One standard deviation of improvement on their bell curve of integrated talent management systems was associated with changes in market value from $15,000 to $60,000 per employee. Employee productivity was calculated as the logarithm of net sales per employee using gross rate of return on assets (GRATE), which is less sensitive to depreciation and other non-cash transactions, and Tobins q, a future-oriented and risk-adjusted capital-market measure of performance that reflects both current and anticipated profitability and often mirrors the price that the market will pay for intangible assets (goodwill). Further research that included three US surveys and the experience of more than 2,400 companies continued to show significant impact of systems that select, maintain, develop, and reinforce employee performance on both market-based and accounting-based measures of company performance (while statistically controlling for RD investment, industry market changes, capital improvements, sales growth trends, etc.). Moving from the 60th percentile of integrated HPWS to the 80th percentile improved market valuation by $20,000 per employee. This reflects both operational excellence and alignment with the companys strategy. When the elements are present, but not aligned with the company strategy there is a 27% drop off in measured gains. Gallup Management Journal reported the following in 2001: †¢19% of all employees are actively disengaged from their jobs †¢55% of all employees are not engaged in their jobs and †¢26% of all employees are engaged in their jobs at a cost of $292-355 Billion per year to the US economy. Great people management equals great shareholder value: European companies with the best human capital management deliver around twice as much shareholder value as their average competitors. 5) Reduce Cost ASTD and SHRM studies companies that is renowned for their ability to retain top talent (Linbeck, Kennedy Rossi, Zachary, Dow Chemical, Edward Jones, Great Plains, Sears, and Southwest Airlines). One key finding was that all of these companies implemented competency-based position profiles so that employees understood the skills and abilities required to move into leadership positions. They must also avoid wasting their money on bad human capital investments: The 2001 Watson Wyatt Human Capital Index study showed precisely which HR practices have an impact on the bottom line. 49 specific HR practices across 6 dimensions played the greatest role in creating shareholder value. Additionally, one dimension, Prudent Use of Resources identifies six practices that diminish shareholder value (e.g. training that is not connected to the business objectives and not evaluated for ROI). A new book shows how Microsoft, Intel, Nokia, Starbucks, Singapore Airlines and 20 other world-class organizations are luring and holding high-quality employees. One senior executive said, Microsoft has a market capitalization of $450 billion, the largest in the world. If you add up every desk and chair, every computer, every building, every piece of land, everything we own, including the $17 billion or so we have in the bank, it comes to about $30 billion. If you then add in things like goodwill and other financial assets, maybe youll come up with another $70 billion, if you really struggle. But that means that there is $350 billion more that people have given us credit for that is not there. What is it? Well, its the stuff in smart peoples heads. With that knowledge Microsoft has built and maintains a human capital management system very similar to Mundo Strategies system to prevent employees from wanting to leave the company even as the stock took a beating in the past few years. Supervisors who received training in how to listen better and resolve employee problems found that lost-time accidents were cut by 50 percent, formal grievances were reduced from 15 to 3 per year, and productivity goals were exceeded. Retention is one of the more obvious areas that effective talent management practices can affect. What attracts and retains high performers? 79% stay because of opportunities for advancement 69% stay because their job is redesigned 65% stay because they are learning new skills in their current job. Why do high performers resign? 56% leave because they are dissatisfied with company management 56% leave due to inadequate opportunity for promotion 50% leave due to dissatisfaction with pay 6) Reduce Cycle Time There is very little research into the impact of talent management practices on company cycle time. One classic work on cycle time showed that steel mini-mills using a high-commitment approach to management required 34 percent fewer labor hours to make a ton of steel and had a 64 percent better scrap rate than mini-mills using a command and control approach. 7) Increase Return to Shareholders Market Capitalization The five highest return to shareholders from 1972-1992 (Southwest Airlines Co. 21,775%, Wal-Mart Stores, Inc. 19,897%, Tyson Foods, Inc. 18,118%, Circuit City Stores, Inc. 16,410%, and Plenum Publishing 15,689%) differentiated themselves from their competitors and the market only through the way they managed their people during the infancy of talent management. Whereas at the start of the 1990s studying its earnings and fixed assets and adding a token amount for goodwill invariably gauged a companys stock market valuation, by the end of the decade a seismic shift had taken place. When accountants Ernst Young came to look at the issue, they found that the largest slice of most companies market capitalization was held in intangibles primarily, the talent, knowledge and teamwork of its staff. In high-tech companies like Nokia, the percentage was as high as 95 per cent; but even old economy stalwarts like BP, despite its huge investments in oil platforms and exploration equipment, notched up a significant 74 per cent. The upshot was that even companies operating in the same sector with similar earnings could experience widely differing stock valuations. Those ignoring the new emphasis on intangibles invariably found themselves penalized by the markets. Watson Wyatt also reported that a 26% increase in market value in 2000 was driven by common talent management best practices: Use of knowledge and contract workers Recruiting excellence Consistent pan-European HR practices Good union-management relations Lack of hierarchy, clear leadership Teamwork and 360 ° feedback Customer-focused environment Remuneration Sharing information with employees The difference between a non-strategic HR system and one that has removed the barriers to performance are dramatic. Improving the relative sophistication of the HR system by adopting best practices does not provide measurable value (20%-60% adoption of a strategic HR system). Integrating the strategic elements of HR into the broader fabric of the organization provides a significant improvement in shareholder value (60%-80%). When HR systems have adopted best practices and aligned those systems with business priorities and initiatives they return the greatest shareholder value (80%-100%). The five-year survival rates of initial public offering showed that firms whose talent management practices scored in the top one-sixth of IPO firms had a 33 percent higher probability of surviving than those in the lowest one-sixth. Firms in the upper one-sixth in providing financial rewards to all employees, not just managers, had almost twice as much chance of surviving for five years, according to research by Theresa Welbourne of Cornell and Alice Andrews of Vanderbilt. COMPETITIVE ADVANTAGE OF TALENT MANAGEMENT IN US CORPORATE SECTOR Taking a systemic approach to talent management Getting the right people in pivotal roles at the right time should be nothing new to HR professionals, but done effectively, talent management can create longterm organizational success. Here, Lynne Morton and Chris Ashton show how to align talent management strategies to business goals, integrate all related processes and systems and create a talent mindset in organization. TALENT MANAGEMENT (TM) IS more than a new language for old HR work, or just the next hot new thing for HR practitioners and managers to get involved in. For many organizations, it has become a strategic imperative. McKinsey research1 reveals that 75 percent of corporate officers were concerned about talent shortages and Deloitte reports that retaining the best talent is a top priority for 87 percent of surveyed HR directors. This need for talent and, therefore, its expert management is also driven by macro trends including: †¢ New cycles of business growth, often requiring different kinds of talent. †¢ Changing workforce demographics with reducing labor pools and, therefore, a talent squeeze. †¢ More complex economic conditions which require segregated talent and TM. †¢ The emergence of new enterprises which suck talent from larger organizations. †¢ A global focus on leadership which is now permeating many levels of organizations. The strategic importance of talent management:- On the basis of substantive research undertaken for our forthcoming report , they argue that good TM is of strategic importance and can differentiate an organization when it becomes a core competence and when its talent significantly improves strategy execution and operational excellence. For example, imagine your company has the right talent in pivotal roles at the right time. What difference will these people make to revenues, innovation and organization effectiveness compared with having to operate without them? What is the cost of the lost opportunities and the downtime and replacement costs of losing critical talent? What are the consequences of having to make do with the wrong kind of leaders and managers in the top two executive layers or of not having successors groomed and ready to replace them? Yet generally, organizations still struggle with TM. According to research, three-quarters of business leaders have invested dedicated resources in TM but most say they havent yet felt the impact of doing so.3 Why not? Through one of the research, they tried to provide reasons by asking these questions: †¢ Why are they doing TM? Is it for the individual, the organization or both? †¢ What do they mean by talent and talent management? †¢ What are their propositions for attracting and retaining talent? †¢ How do they manage and use the talent in their organization needs? †¢ How are internal roles and resources deployed appropriately to support TM? †¢ How is TM integrated across HR processes and with business planning and strategy execution processes? Talent management at FDC its focus, leadership, acquisition, retention, evaluation and tools has evolved over five years, and continues to be a work in progress. The evolving talent plan aligns with goals, business strategy and their organizational implications. The talent office annually reviews analytics and recalibrates talent to align with growth and other organizational needs. The current growth objective is 15 percent. Ours is a numbers business, which tends to reflect a short-term view, says Annmarie Neal, senior VP, organization development. Yet, we also have to build a leadership bench and talent pools, not around the execution capabilities were known for, but on a customer-solutions focus and strategic foresight. Investments in talent arent short-term they need at least three-year horizons to see returns. The key issue for FDC is to accurately identify high potentials with different capabilities such as strategic thinking, partnership building, results orientation, innovation and talent leadership and then build succession depth. In effect, they are building talent balanced with buying it, guided by the notion of critical positions that is, those positions that positively impact on the strategic goals or their execution. They are now applying their processes for identifying, assessing and growing future leaders to our more junior, untested populations who we expect to be our next VPs. Technology, as Neal explains, has allowed them to do more in depth and breadth with the same headcount. TM initiatives at FDC include: †¢ Talent profiling of individuals. †¢ Conducting calibrations of business performance and key results behaviors. †¢ Assessing and forecasting succession depth. †¢ Implementing organizational assessment summaries to give status reports for leadership talent. †¢ Using just-in-time, action-learning programs and talent-sharing assignments. †¢ Developing talent at risk tools based on potential derailers and defection triggers. †¢ Introducing a talent scorecard with five perspectives, each of which has critical indicators hiring. As we see it, TM is a strategic and holistic approach to both HR and business planning or a new route to organizational effectiveness. This improves the performance and the potential of people the talent who can make a measurable difference to the organization now and in future. And it aspires to yield enhanced performance among all levels in the workforce, thus allowing everyone to reach his/her potential, no matter what that might be. Though this interpretation of talent is inclusive, it strikes a strategic balance between performance and potential. Performance historically, the primary focus of measurement and management concerns both the past and the present, whereas potential represents the future. Our position assumes that potential exists, it can be identified and it can be developed. Here are specific ways that two case organizations inthe report define talent: †¢ Executive management team leaders, directors/VPs and A-player managers in all functions plus Bplayers as potentials. †¢ Future business leaders with more strategic capabilities than just operational excellence skills -plus specialist talent able to execute business integration projects on time and to budget. Clearly, there isnt a single consistent or concise definition. Current or historic cultural attributes may play a part in defining talent, as will more egalitarian business models. Many organizations acknowledge that talent, if aligned with business strategy or the operational parameters of strategy execution will change in definition as strategic priorities change. For example, in start-up businesses, the talent emphasis will be different to the innovative or creative talent needed to bring new products to market. Any definition needs to be fluid as business drivers change, so will the definitions of talent. What TM involves Talent management is the integration of different initiatives, or constructs, into a coherent framework of activity. There are certain crucial components and a useful model for defining TM is to think of it in these key words: †¢ Ethos embedding values and behavior, known as atalent mindset, to support the view that everyone has potential worth developing. †¢ Focus knowing which jobs make a difference and making sure that the right people hold those jobs at the right time. †¢ Positioning starting at the top of the organization and cascading throughout the management levels to make this a management, not HR, initiative. †¢ Structure creating tools, processes and techniques with defined accountability to ensure that the work gets done. †¢ System facilitating a long-term and holistic approach to generate change. Integrating TM through a system Its worth emphasizing that integration is critical. Our research shows that without integrating TM activities, the effort invested will tend to be dissipated with patchy results. Integration is knowing how all the pieces of TM fit together within a TM system. This will not operate in isolation from strategy, business planning and the organizations approach to people management. In this sense, the work of talent management cuts across what has been traditional HR silos. If integrated, it functions in a more facilitative, OD-like nature. It will also reach higher up the organization than other HR initiatives, often attracting the attention of boards and senior teams. Similarly, TM reaches down the organization, to include new recruits along with tenured professionals. Lastly, talent planning must be done in parallel with business planning, creating a rich integration of people and strategy. One way of achieving such system integration and alignment is the CRF Talent Management System (see Figure 1, above right). This systemic view of talent has five elements: Need the business need derived from the business model and competitive issues. Data collection the fundamental data and intelligence critical for good talent decisions. Planning people/talent planning guided by data analysis. Activities the conversion of plans into integrated sets of activities. Results costs, measures and effectiveness criteria to judge the value and impacts of TM Using this system can help TM become a strategic differentiator rather than a standard set of HR processes if the right conditions, context, timescales and offerings exist in the first place. System integration and alignment ensures that TM efforts are rational and fit for purpose. Since the arrival of the current era of talent is widely acknowledged, its not surprising that renewed significance is being placed on the management of that talent. And as talent continues to be viewed as a strategic differentiator, its management will take more of a strategic role. How fascinating it will be to take the pulse of talent management in the business community in another five years. We believe that while the management of talent will most likely become embedded in the fiber of cultures by then, the HR executives who led those initiatives will have achieved much more prominence. OBJECTIVES OF TALENT MANAGEMENT: There are some basic objectives which need to be fulfilled by the US corporate sector while applying Talent Management in the organisation and the objectives are:- 1) TO DETECT TALENT:- It is very important for the US corporate sector to determine or detect their best talent for the organisation and this Talent Management helps the selector to select the best talent among the pool of various alternatives present in the organisation. Because the best talent helps in generating more and more good ideas which help organisation to achieve or innovate something new. As Talent Management helps in detecting best talent of the organisation within the organisation, this helps organisation to achieve their goal more efficiently and effectively which are set by the organisation. 2) TO DEVELOP TALENT:- After detecting the talent in the organisation the US corporate next step for applying Talent Management is to develop the talent. It is not necessary that every person has a some talent in him or her but talent can also be developed through regular practice such as training, educating, providing them with the basic guidelines of the respective talent so that the talent of any person can be used for the effective utilization of the talent for the sake of the organisation which will be helpful for the organisation to came up with a new idea with the help of talent which will provide them with the best competencies among the competitor so that they can stay in long run of the business giving tough competition to their competitors and by developing talent US corporate sector tried to change the scenario of the employees by developing their talent and making them more confident, reliable and motivating factor for themselves and for others too which improves the behaviour and efficiency t o work. There is a huge change when a person come to some hidden talent in him and this makes them to be more responsible to the work and take the work as natural as play 3) TO MAKE TALENTS MORE RELIABLE:- Talent Management helps in making talent more reliable and US corporate sector use the Talent Management as their one of the important tool for making their employees talent more reliable as talent management helps in detecting and developing talent by the different mode they used while developing their talent they make the employees to be more confident in their talent which makes them more reliable which means that they will be confident in using their talent and organisation can rely on their talent while doing or making effective decision. Until and unless employees believe themselves in their talent then the organisation too will not have any faith on the employee and US corporate sector never keep such employees in the organisation as US corporate sector is best known for their talent and technologies and the technology is the result of the talent only. 4) TO PROMOTE TALENTS TO STRATEGIC PROJECTS OR TO HIGHER POSITION:- Talent Management helps in promoting talent to strategic projects or to the higher position because US corporate sector that every talent should be given their own position. If the talent deserves higher position then he should be given the higher position irrespective of any other things which might be taken in account such as education or qualification. They think that if the post deserves that talent then that talent should be given that post. When talent is promoted it acts as a motivating tool for the employees to make them more responsible and work towards the achievement of the goal set by the organisation which also enhance their style and attitude towards their work.

Teen Depression and Suicide :: Teenage Depression

Depression has become a big issue among the adolescent world these days. It is something that is overlooked much of the time, and is often even hidden by other things. The suicide rate for teenagers has increased more than 200% over the last decade. Recent studies have shown that more than 20% of adolescents in the general population have emotional problems and 30% of adolescents attending psychiatric sessions suffer from depression. Maurice Blackman MB, FRCPC says that, â€Å"The majority of teenage depressions can be managed successfully by the primary care physician with support from the family.† Teens with psychiatric illness are 20 times more likely to die from accidents or suicide than adults Is depression in adolescents a significant problem? As in the afore stated paragraph a baffling 20% of adolescents in the general population have emotional problems! Despite this, depression in this age group is greatly under diagnosed, leading to serious difficulties in treatment of this issue. Adolescence is a time of emotional turmoil, mood instability, gloominess, great drama and heightened sensitivity. Possible suicidal thoughts can emerge from this troubled mind. Adolescent depression may present itself primarily as a behavior or conduct disorder, substance or alcohol abuse or as family turmoil and rebellion with no obvious symptoms normally associated with depression. Significant acute crisis in the teenager's life may also involve depression. Significant stresses include divorce, parent or family quarreling, physical or sexual abuse and alcohol or substance abuse. The teenager who exhibits signs of depression may be going through these tough situations. Teenagers can be oppositional and negative when depressed. If the teenager is an active participant in the treatment process than the physician will be able to identify the problem or problems to the patient and the parent, to offer hope and reassurance, outline treatment options and arrive at a mutually agreed-upon treatment plan. When depressed the teenager may not wish to participate actively in the treatment program, but without that treatment is pointless and ineffective. There are two main types of treatment: psychotherapy and medication. Sessions of family therapy may be required to deal with specific problems or issues. Other disorders may also be treated during this process; such as obsessive compulsive disorder, learning disability or attention deficit disorder. For the more serious and persistent depressions, particularly those with suicidal consequences at stake, medication is much more effective and actually necessary to maintain the proper chemical balance in the body. Teen Depression and Suicide :: Teenage Depression Depression has become a big issue among the adolescent world these days. It is something that is overlooked much of the time, and is often even hidden by other things. The suicide rate for teenagers has increased more than 200% over the last decade. Recent studies have shown that more than 20% of adolescents in the general population have emotional problems and 30% of adolescents attending psychiatric sessions suffer from depression. Maurice Blackman MB, FRCPC says that, â€Å"The majority of teenage depressions can be managed successfully by the primary care physician with support from the family.† Teens with psychiatric illness are 20 times more likely to die from accidents or suicide than adults Is depression in adolescents a significant problem? As in the afore stated paragraph a baffling 20% of adolescents in the general population have emotional problems! Despite this, depression in this age group is greatly under diagnosed, leading to serious difficulties in treatment of this issue. Adolescence is a time of emotional turmoil, mood instability, gloominess, great drama and heightened sensitivity. Possible suicidal thoughts can emerge from this troubled mind. Adolescent depression may present itself primarily as a behavior or conduct disorder, substance or alcohol abuse or as family turmoil and rebellion with no obvious symptoms normally associated with depression. Significant acute crisis in the teenager's life may also involve depression. Significant stresses include divorce, parent or family quarreling, physical or sexual abuse and alcohol or substance abuse. The teenager who exhibits signs of depression may be going through these tough situations. Teenagers can be oppositional and negative when depressed. If the teenager is an active participant in the treatment process than the physician will be able to identify the problem or problems to the patient and the parent, to offer hope and reassurance, outline treatment options and arrive at a mutually agreed-upon treatment plan. When depressed the teenager may not wish to participate actively in the treatment program, but without that treatment is pointless and ineffective. There are two main types of treatment: psychotherapy and medication. Sessions of family therapy may be required to deal with specific problems or issues. Other disorders may also be treated during this process; such as obsessive compulsive disorder, learning disability or attention deficit disorder. For the more serious and persistent depressions, particularly those with suicidal consequences at stake, medication is much more effective and actually necessary to maintain the proper chemical balance in the body.

Odi Case

Optical Distortions (ODI) is a start up with limited resources and a product that can change the egg production business. Its product, contact lenses for chickens, would reduce the vision of the hen and achieve two desirable results in the behavior of the chicken. These behaviors include reduction in cannibalism and reduction in amount of food required for chicken. And as a further result, the reduction in cannibalism rate removed the need to debeak the birds, which adds further economic value to the farmers. These benefits far outstrip the costs of the contact lenses themselves.And for ODI, there are definitely profits to be had if the products can be marketed well before the competitors can enter the market in a few years. Therefore, ODI should introduce their product according to my analysis below. The issue ODI is facing is that it currently has no revenue flow. And to stay competitive in the industry, ODI is estimating it will have large expenses coming up quickly to grow quickl y enough to stay viable. Therefore, ODI must capitalize as soon as possible. Also, on the consumer front, the product is completely unknown to its customers.It will face a slightly uphill battle to convince potential customers that its product is better than the other more â€Å"conventional† methods provided by other vendors in the poultry egg production industry. On the competitor side, ODI has little breathing room. It expects that the competitors can be kept out of the market for at most two to three years thanks to patents and licenses that ODI currently holds. And ODI believes that competitors will likely try to enter the market as soon as possible because of the potential impact that the lenses hold on the egg production industry.Thankfully, ODI’s collaborator, New World, has entered into an exclusive contract with ODI on the non-human use of hydrophilic polymer. Given the general market information, we need more detailed understanding of the current market to d etermine a strategy for ODI. 1. How big is the market for ODI chicken lenses? First, we must determine the market size of the ODI’s contact lenses. According to information provided by Garrison, that ODI can only profitably sell to a farm if that farm had at least 10,000 chickens in its flock. As our first target market, California, we must determine the number of farms nd chickens in farms with more than 10,000 chickens. We are shown the distribution of farms in Exhibit 3. However, we are only shown break outs of farms with 20,000 more chickens. We can still use this information, because farms with just over 10,000 chickens is barely profitable, so we can concentrate on them later on in the process as ODI’s product becomes more mature. Hence, there are 521 farms with 20,000 hens or more, with 39,929,680 million chickens. (Please note that this is approximately 86. 4% of all chicken in California farms. ) The market size for ODI’s lenses in California is fairly big at 39,929,680 potential chickens.And nationwide, which will be the eventual target market for ODI, there are 197,970,487 chickens currently. And according exhibit 4, the trend in chicken farming shows that this market will continue to increase for two reasons. First, there is a net growth in the number of birds in flocks. Second, there is a trend for reduction of smaller farms and increase at the medium and large farms. And since we are targeting only medium and large farms, we can expect the number of birds in this market to continue to increase. 2. Who are the potential customers for such a product? Why would they buy it?Next, we need to identify potential customers for the product. The clear customers are farmers of the egg farms, we will call this the direct to consumer (DTC) market. The farmers would definitely buy the product if they are aware of the cost savings it provides. For each 10,000 chicken, the farmer can expect to see savings of $2,617. 60 ignoring the additiona l costs imposed by the lenses (please see appendix 1 for the estimated savings calculations). If we sell the lenses at the 8 cents per pair, then we will be adding approximately $800 to the cost of the farmer in costs. This means the farmer can see a net savings of $1,817. 0 by switching to the contact lenses over debeaking. In addition to these farms, perhaps, services firms that provide labor for debeaking may be also customers; this would be a business to business (B2B) market. These firms may wish to diversify their offering if they see additional value for their end customers (the farmers). These firms will buy if debeaking becomes less popular due to our new contact lenses. Since their primary offering is labor, they will want the advantage of being the one stop shop. The one stop shop here means that the farmers will only have to deal with 1 contract as opposed to multiple.This is an offering that the services firms will want to have when dealing the farmers, which means they will need to purchase our lenses. 3. Would potential customers eagerly adopt or would they resist adopting this product? Why? Next, is to understand the early adopters versus the market laggards. I believe that the early adopters would be the large farms. They have the most to gain from purchasing the lenses. Additionally, since they have so many birds, they can run a test trial on 10,000 or even 20,000 birds for the first year and observe the results before rolling out the lenses to the rest of the birds.This makes the switch a little easier on the farmers. Since the product hasn’t been on the market ever, I can imagine that there will be significant resistance at the start due to the lack of experience with the product. However, I would also like to acknowledge that there is a possibility that these large farms are likely to have existing contracts with other firms (for example for debeaking) that would make it hard to switch. Additionally, it may be more difficult to conv ince several decision makers to agree on the large farm to make the change happen.On the other hand, the medium farms only have one decision maker and may be converted to using the contact lenses quickly. But due to their size and amount of savings, I can see reluctance to take on the risk of an â€Å"unproven† product. The market laggards would definitely be the small farms and services firms. For small farms, it is just too much risk for the untested product. And services firm will not purchase until there is sufficient number of farms switching from debeaking to contact lenses and it’s starting to hurt their business. 4.Given the financial constraints faced by the company, are the ODI lenses an economically viable product? We should now understand if the product is financially viable. If we sell the lenses at 8 cents per pair, then must sell at least 13,229,167 pair of lenses to break even. This is due to costs of the $586,000 for the personnel and office for the re gional office (see appendix 2 for the cost assumptions) and then the $25,000 licensing fee then must to New World, as well as the $24,000 for the two injection molds they would need. And their margins are 4. 8 cents per pair, so $635,000 / $0. 048 gets use the 13. million pairs. Please note that this number is approximately 33% of the potential market (39. 9 million) that we identified earlier. Since Garrison that 50% penetration is feasible, we would be quite profitable. Even if we add in the $250,000 R&D expense, then our require # of lenses is 18,687,500 lenses (thanks to the need for a third injection mold). However, even at this number of required lenses, this is approximately 46% of the market, and under the 50% share of market rate that ODI is forecasting. This means that we will remain profitable. And as ODI expands to the nation, their costs rise to be about $4. 63 million (see appendix 3), which would require 84,645,834 lenses to break even, well under the 50% mark for the 197,970,487 chickens in farms with 20,000 chickens (42. 8%). Hence, the product should be profitable. 5. Would you recommend introduction of ODI chicken lenses? At this point I would recommend the introduction of ODI chicken lenses if the forecasts that we see in the case are accurate, because there is clearly benefits for both ODI and the customers. However, we need to explore the possibilities of alternatives. The only other feasible alternative is to license the product to larger agricultural supply firms.The benefit of licensing is that ODI would dramatically reduce its costs and recognize income right away. And they would not have to convince individual farms. All they have to do is pitch the product to corporate executives. However, they do face the issue that the large agricultural supply firm would likely kick ODI out as soon as the patent protection runs out. And without the on the ground presence, ODI would lose all revenue sources in three years. Therefore, this approach is extremely dangerous compared to actually selling the lenses themselves, which according to our analysis will be profitable.Therefore, ODI should introduce the lenses on its own. 6. If introduced, how should ODI segment the market? In which markets should ODI concentrate its effort and why? Now that we believe that ODI should sell the chicken contact lenses, we need to understand how to market the product. First, we need to segment the market into distinct, mutually exclusive, identifiable segments. The two segmentation metrics that immediately come to mind are Farm Flock Size and Cannibalization Rate of Strains at the Farm. Farm Flock Size will be broken into the 20,000 to 49,000, 50,000 to 99,000, and 100,000 or more identified in Exhibit 3.Cannibalization Rate of Strains at the Farm will be divided into High Cannibalization Rate, Medium Cannibalization Rate, and Low Cannibalization Rate. There are metrics that we can use to segment the farms, but we want to make sure that we d o not put so many metrics that there are only a few farms in each segment. The idea is to have large, identifiable, distinct, and stable segments. Here, Farm Flock Size and Cannibalization Rates make good metrics because not only do they divide the similar farms into the same bucket and different farms into distinct buckets, but they also measure the value of presented to the farmers.Flock size because larger size represent more potential for savings for farmers and more potential for earning for ODI. And high cannibalization rate also represent potential for savings for farms due to less hens lost to cannibalization and more likely ease of sale for ODI since the farmers have more incentives to try the lenses. And given these segments, ODI should focus on the large farms with high cannibalization rates (please see appendix 4 for targeting sequence). This group will have the highest market potential and be the most receptive to the product. 7. How should chicken lenses be marketed?Fi nally, we need to see how to actually implement the marketing plan. Our marketing plan will have the following components. One, sales force at the regional offices will be talking directly with the customers to convince them that there is value in the product. And two, headquarters will be responsible for advertising in industry related publications and attending trade shows to promote the product. As part of the messaging, we will advise our customers that the contact lenses as a product to substitute debeaking to reduce cannibalization rates with extra benefits.The benefits are three fold, reduction of cannibalization rates to ~4. 5%, reduction in trauma from debeaking (~50,769 eggs per 10,000 chickens), and finally, savings in chicken feed (14. 235 tons per 10,000 chickens per year). We want to concentrate on the fact that our product is more effective than debeaking at reducing cannibalization and has additional beneficial effects that far outweighs the costs of the lenses itsel f. And according to Garrison, because he customers are independent-minded type of men who would react unfavorable if they felt cheated, we cannot have low introductory rate that may upset the customer base. This also means that these customers are not likely to be the type to jump on the band wagon and we will need to make sure our sales representatives reach each of these farms. This would mean that even favorable word of mouth will not contribute significantly to our sales due to the characteristics of the customers. Our sales force should not only explain the properties our lenses, but also do demonstrations to let the farmers see for themselves.And we must have our sales forces reach out frequently the customers to reinforce the message throughout the year, so when we get to the few weeks where the new hens are bought, we can convince the farmer to try the ODI lenses on their farm. Additionally, at the trade shows, we would also demonstrate the difference between hens wearing ou r lenses versus hens that do not wear the lenses. This would serve to introduce the product to new potential customers. We should use the trade shows also as a CRM opportunity; we should also collect contact information for our sales representatives to follow up on.This type of reinforced messaging will be effective in convincing customers to switch. And after we’ve brought the innovators and early adopters on board, we need to ensure customer satisfaction for these influential groups. Bad word of mouth is generally stickier than good word of mouth, and could be damaging to our brand even if the customers are generally independent-minded. And to achieve good customer satisfaction, we need to address customer issues as they emerge. So by the time we get to the Early Majority and the Late Majority, we can address any concerns that they have with the product.We will use the following positioning statement until ODI diversify into other products: â€Å"For farmers in egg product ion who have more than 10,000 chickens in their flock, Optical Distortion, Inc. (ODI) is a specialty agricultural supplier that provides contact lenses for chickens intended to reduce food required and reduce cannibalization rate. Unlike other agricultural suppliers offering to debeak the birds, ODI provides a solution that results superior reduction in cannibalization rates, reduction in food wasted and required, and reduction in losses of production resulting from traumas associated with debeaking. Appendix 1: | | | | | Saving Opportunities for 10,000 chicken| # of Chicken Affected| Value Per Chicken| Value| Information from the case| Reduction in Canalbalism (4. 5% additional survive)| 450 | $0. 66 | $297. 00 | Exhibit 5 – 22 dozen per year @ $0. 03 per dozen per hen| Reduction of Trauma| 10,000 | $0. 01 | $126. 92 | Exhibit 5 – 22 dozen per year -> 22/52 dozen per week @ $0. 03 per dozen per hen| Savings in Food| 10,000 | $0. 22 | $2,193. 67 | 0. 78 lbs per 100 bir ds per day @ $158 per ton of feed| Appendix 2:Cost for Regional Offices| # of Item| Value Per Item| Value| Office and Warehouse1| 1| $196,000 | $196,000 | Sales Representatives2| 8| $40,000 | $320,000 | Tech Representatives3| 2| $35,000 | $70,000 | Total|   |   | $586,000 | 1. Office and Warehouse price from Table B. 2. Sales Representatives based on capacity of 80 farms, and the assumption that each sales will only cover farms of one particular size present in Exhibit 3 (20,000 to 49,000, 50,000 to 99,000, and 100,000 or more). 3. Tech Representatives based on ratio of 1 tech representative per 5 sales representatives.Appendix 3: Estimated National Costs| Units| Cost per Unit| Costs| Comments/Assumptions| Regional Offices| 5| $586,000| $2,930,000| Assumed that regional offices costs are similar to California| Headquarter Costs| 1| $614,000| $614,000| Estimated cost at 60 million pairs| Advertising| 1| $100,000| $100,000| Monthly advertising for 1 year in 8 leading industry publ ications| New World License| 1| $25,000| $25,000| $50,000 over 2 years| Injection Molds| 12| $12,000| $144,000| $12,000 per mold, which produces 7. million a year| R&D Costs| 1| $250,000| $250,000| Required for diversifying the company| Total|   |   | $4,063,000 |   | Appendix 4: | | Farm Flock Size| | | 20,000 to 49,000| 50,000 to 99,000| 100,000 or more| Cannibalization Rate| Low| 4| 4| 3| | Medium| 4| 3| 2| | High| 3| 2| 1| First target group 1, then followed by group 2, group 3, and group 4. ——————————————– [ 1 ]. In the analysis, I am assuming that 1kg ? 2 lbs and 1 ton ? 2,000 lbs.

Free Essays on The Saint Against Racism

Katharine Drexel was the second child born of Francis Anthony and Hannah Jane Drexel, on November 26, 1858. A month after Katharine’s birth, Hanna passed away, and for the next two years, Katharine and her older sister were taken care of by their aunt and uncle. After the time of two years had gone by, Francis had remarried to Emma Bouvier, and the couple had a child. All three of Francis’ children were raised in a home full of faith and love. The girls grew up teaching at a Sunday school that Emma had opened for the children of employees of their estate as well as their neighbors. They also spent a few days a week giving service to the poor. When Katharine was twenty-one, Emma became ill with cancer, and for three years Katharine nursed her. It was in this time she began to realize God might be calling her to a religious life. When Emma died, Katharine wrote to her spiritual director, Reverend James O’Conner, who in turn advised her to, â€Å"Think, pray, and wait.† About three years later, Katharine’s father passed away, leaving his daughters as the beneficiaries of his estate and fortune. The Drexel sisters did not use the inheritance for themselves; instead, a greater portion of it was used to support their charity and missionary efforts. Throughout her lifetime, Katharine had done much traveling, and had seen the lives of Native Americans, and had become astutely aware of the injustice of their suffering. She visited many reservations, taking into account the needs of the people, supplying them with priests, food, clothing, and salaries for teachers. Katharine was particularly interested in making sure that all were provided with an education. She was also becoming more aware of how the Blacks in the South and East were suffering, and did not hesitate to give them the same charities she had offered the Native Americans. By now, Katharine’s call to the religious life was stronger than ever. She desired to b... Free Essays on The Saint Against Racism Free Essays on The Saint Against Racism Katharine Drexel was the second child born of Francis Anthony and Hannah Jane Drexel, on November 26, 1858. A month after Katharine’s birth, Hanna passed away, and for the next two years, Katharine and her older sister were taken care of by their aunt and uncle. After the time of two years had gone by, Francis had remarried to Emma Bouvier, and the couple had a child. All three of Francis’ children were raised in a home full of faith and love. The girls grew up teaching at a Sunday school that Emma had opened for the children of employees of their estate as well as their neighbors. They also spent a few days a week giving service to the poor. When Katharine was twenty-one, Emma became ill with cancer, and for three years Katharine nursed her. It was in this time she began to realize God might be calling her to a religious life. When Emma died, Katharine wrote to her spiritual director, Reverend James O’Conner, who in turn advised her to, â€Å"Think, pray, and wait.† About three years later, Katharine’s father passed away, leaving his daughters as the beneficiaries of his estate and fortune. The Drexel sisters did not use the inheritance for themselves; instead, a greater portion of it was used to support their charity and missionary efforts. Throughout her lifetime, Katharine had done much traveling, and had seen the lives of Native Americans, and had become astutely aware of the injustice of their suffering. She visited many reservations, taking into account the needs of the people, supplying them with priests, food, clothing, and salaries for teachers. Katharine was particularly interested in making sure that all were provided with an education. She was also becoming more aware of how the Blacks in the South and East were suffering, and did not hesitate to give them the same charities she had offered the Native Americans. By now, Katharine’s call to the religious life was stronger than ever. She desired to b...

Free Essays on Harry Potter And The Order Fo The Phoenix

Plot Harry Potter and the Order of the Phoenix started out like every other Harry Potter book. Harry had to suffer at his aunt Petunia and his uncle Vernon’s square house on Privet Drive during the summer. Petunia and Vernon Dursley were what you call â€Å"muggles†. They were close-minded non-magical folk who despised all witches and wizards. That was the main reason why they treated Harry like he wasn’t even a human being. He found out he was a wizard on his eleventh birthday and has went through a lot ever since. Along with his aunt and uncle, Harry had to deal with his bully cousin Dudley. Without the use of magic, he was pretty much defenceless against him. In addition to all that, he was just like any other teen boy. He started to lose his temper a lot more and all the things only Harry had to deal with was getting too much for him. An example of this is on page 63. â€Å"But before he knew it, Harry was shouting. â€Å"SO YOU HAVEN’T BEEN IN THE MEETINGS, BIG DEAL! YOU’VE STILL BEEN HERE, HAVEN’T YOU? YOU’VE STILL BEEN TOGETHER! ME, I’VE BEEN STUCK AT THE DURSLEYS’ FOR A MONTH! AND I’VE HANDLED MORE THAN YOU TWO’VE EVER MANAGED AND DUMBLEDORE KNOWS IT – WHO SAVED THE PHILOSOPHER’S STONE? WHO GOT RID OF RIDDLE? WHO SAVED BOTH YOUR SKINS FROM THE DEMENTORS?† Then continued on page 64. â€Å"WHO HAD TO GET PAST THE DRAGONS AND SPHINXES AND EVERY OTHER FOUL THING LAST YEAR? WHO SAW HIM COME BACK? WHO HAD TO ESCAPE FROM HIM? ME!† â€Å"BUT WHY SHOULD I KNOW WHAT’S GOING ON? WHY SHOULD ANYONE BOTHER TO TELL ME WHAT’S BEEN HAPPENING?† â€Å" CAN’T’VE WANTED TO THAT MUCH, CAN YOU, OR YOU’D HAVE SENT ME AN OWL, BUT DUMBLEDORE MADE YOU SWARE. â€Å" FOUR WEEKS I’VE BEEN STUCK IN PRIVET DRIVE, NICKING PAPERS OUT OF BINS TO TRY AND FIND OUT WHAT’S BEEN GOING ON.† â€Å"I SUPPOSE YOU’VE BEEN HAVING A REAL LAUGH, HAVEN’T YOU, ALL HOLED UP HERE TOGETHER.† On a walk back from a park Harry went to, he m... Free Essays on Harry Potter And The Order Fo The Phoenix Free Essays on Harry Potter And The Order Fo The Phoenix Plot Harry Potter and the Order of the Phoenix started out like every other Harry Potter book. Harry had to suffer at his aunt Petunia and his uncle Vernon’s square house on Privet Drive during the summer. Petunia and Vernon Dursley were what you call â€Å"muggles†. They were close-minded non-magical folk who despised all witches and wizards. That was the main reason why they treated Harry like he wasn’t even a human being. He found out he was a wizard on his eleventh birthday and has went through a lot ever since. Along with his aunt and uncle, Harry had to deal with his bully cousin Dudley. Without the use of magic, he was pretty much defenceless against him. In addition to all that, he was just like any other teen boy. He started to lose his temper a lot more and all the things only Harry had to deal with was getting too much for him. An example of this is on page 63. â€Å"But before he knew it, Harry was shouting. â€Å"SO YOU HAVEN’T BEEN IN THE MEETINGS, BIG DEAL! YOU’VE STILL BEEN HERE, HAVEN’T YOU? YOU’VE STILL BEEN TOGETHER! ME, I’VE BEEN STUCK AT THE DURSLEYS’ FOR A MONTH! AND I’VE HANDLED MORE THAN YOU TWO’VE EVER MANAGED AND DUMBLEDORE KNOWS IT – WHO SAVED THE PHILOSOPHER’S STONE? WHO GOT RID OF RIDDLE? WHO SAVED BOTH YOUR SKINS FROM THE DEMENTORS?† Then continued on page 64. â€Å"WHO HAD TO GET PAST THE DRAGONS AND SPHINXES AND EVERY OTHER FOUL THING LAST YEAR? WHO SAW HIM COME BACK? WHO HAD TO ESCAPE FROM HIM? ME!† â€Å"BUT WHY SHOULD I KNOW WHAT’S GOING ON? WHY SHOULD ANYONE BOTHER TO TELL ME WHAT’S BEEN HAPPENING?† â€Å" CAN’T’VE WANTED TO THAT MUCH, CAN YOU, OR YOU’D HAVE SENT ME AN OWL, BUT DUMBLEDORE MADE YOU SWARE. â€Å" FOUR WEEKS I’VE BEEN STUCK IN PRIVET DRIVE, NICKING PAPERS OUT OF BINS TO TRY AND FIND OUT WHAT’S BEEN GOING ON.† â€Å"I SUPPOSE YOU’VE BEEN HAVING A REAL LAUGH, HAVEN’T YOU, ALL HOLED UP HERE TOGETHER.† On a walk back from a park Harry went to, he m...

The Netflix Financial Statement Essay Example | Topics and Well Written Essays - 1000 words

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Outsourcing Thesis Example | Topics and Well Written Essays - 1000 words

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