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December 2013

Overcome the Negatives of Globalisation

We all know, and it is universally acknowledged, that globalisation has dramatically increased competition and created unprecedented demands to be more responsive to customer needs and to do more with less. Down-sizing, outsourcing and off-shoring are all direct consequences of this.  Another manifestation has been to make organisations flatter, with less layers of management. Yet, while all these steps seem to have been unavoidable, you cannot help but wonder if they haven’t become a fashion. Is it perhaps inevitable that increased competition creates a follow-the-leader mentality, whereby actions instituted by high-profile leaders and organisations, created a standard solution that all businesses need to follow?

Maybe it is and that is just “the way of the world”. However, it is still worth asking the question. Not least because it is also possible, perhaps even probable, that the global reduction in employee engagement is a direct result of all these remedies. And therein lies a paradox, because without engaged employees your chances of remaining competitive are considerably reduced.

It is therefore worth asking the question, “Have our responses to globalisation been appropriate or have they led us down the wrong path?

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It's Time to Pull Together

This week brought confirmation of something that I have more than suspected for a long-time. Yet, while validation brings vindication, the picture portrayed is alarming. It would have been better to be proved wrong.

According to the 2013 Deloitte Shift Index Report the Return on Assets (ROA) for US business has declined from 4.1% in 1965 to 0.9% in 2012. (See the graph below.) That’s a decline of 78% over 47 years!

DUP505_Figure-11-960x543 Declining ROA

This is extremely alarming when one considers that the US is the world’s Number One economy. You can only wonder what the decline is for the entire block of “developed” economies. It helps explain just why China is closing so rapidly on that # 1 position!

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