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G100 Network Notebook | May 2013

Talent & Workplace Happiness

Blunt commentary from Cliff Oxford draws a sharp contrast between corporate cultures that cultivate “HR Happy” and “High Performance Happy” workers, linking the former culture to perks, elaborate work campuses, and outdated HR thinking: employees will work hard if you treat them nice. This, argues Oxford, may work in a “second-rate corporate culture,” but the fastest-growing companies use HR instead to recruit the best talent, who find fulfillment in responsibility and a company’s mission.

High Performance Happy is an attitude with a skill set that says we are on a mission that is bigger than any one of us. We find our happiness in being on a world class team that is making a difference. … High Performance Happy means you give employees tremendous responsibility, and they are happy to show that they are the best.

What are a CEO’s Greatest Weaknesses?

Talent development and board engagement, say boardroom directors in an illuminating study by Stanford University and The Miles Group. The findings “signal that directors are clearly concerned about their CEO’s ability to mentor top talent,” says Stephen Miles, founder and chief executive of The Miles Group. He adds, “Focusing on drivers such as developing the next generation of leadership is essential to planning beyond the next quarter and avoiding the short-term thinking that inhibits growth.”

Data Analytics & Your Supply Chain

The successful use of data analytics requires an ongoing dialogue between the business and IT department, a conversation underway at Kimberly-Clark, writes CIO Journal’s Steve Rosenbush. Kimberly-Clark’s use of data analytics helps streamline its supply chain with more accurate forecasts of inventory.

The analytic system allows the company to better manage manufacturing sites, distribution centers, and the flow of goods through multiple levels of the retail environment, from the stock room to the cash register. … Better management of the supply chain has led to corresponding improvements in operational efficiency and financial metrics such as working capital.

China’s Future

To sustain China’s fast growth rate, this S+B article recommends that China undertake robust improvements in productivity and technology, as well as institute systematic changes.

Two items high on the agenda should be bolstering the rule of law and further dismantling state-owned enterprises (SOEs) to spur private ventures. … China must boost domestic demand (in terms of consumption, investment, and government spending) to compete with its export sector. A shift toward services and away from agriculture would also help to increase urbanization, income, and business diversification.

For greater detail, consider China 2030, a road map for Chinese economic reform.

North American Oil Boom & the Global Energy Market

North American oil supply over the next five years will transform the global oil market in the same way China’s demand has reshaped the industry for the past 15 years, says an eye-opening report from IEA. Developing economies, meanwhile, have greatly increased refining capacity, which “will accelerate the transformation of the global supply chain, exerting downward pressure on refining margins and utilization rates and leave OECD refineries at risk of closure, notably in Europe.” IEA Director Maria van der Hoeven said,

“The technology that unlocked the bonanza in places like North Dakota can and will be applied elsewhere, potentially leading to a broad reassessment of reserves.”

Technological improvements in shale drilling and methane hydrate mining drive this month’s extensive cover story in The Atlantic suggesting that the globe may never run out of fossil fuel, a scenario that raises several geopolitical and environmental questions.

Getting More From Your Company’s Innovation Process

Don’t miss Accenture’s study contrasting the “perilous strategy” of renovation and invention with the upward spiral of innovation. Accenture found that companies with an integrated, formal process for innovation see better outcomes and higher satisfaction with their investments.

Renovation can limit innovation to small incremental improvements and fail to result in significant step changes and revenue opportunities. … [An invention trap means an] over-reliance on the invention process itself to produce success and a relative lack of systematic, enterprise-wide processes capable of commercializing inventions into products or services at scale, bringing them to market in a sufficiently timely fashion and reaping the expected returns.

Cyber Threats, Home & Abroad

Wired reports on a hacker from China who broke into the US Army Corps of Engineers National Inventory of Dams, which contains sensitive information about vulnerabilities. Homeland Security and DoD veteran Michelle Van Cleave observed: “In the wrong hands, the Army Corps of Engineers’ database could be a cyber attack roadmap for a hostile state or terrorist group to disrupt power grids or target dams in this country.” Corporate cyber-security has its weaknesses, too. Among them: “click-happy” CEOs, says this revealing article that explains how high profiles and exemptions from companywide rules make CEOs prime targets for a cyber attack.

Slow Growth in Health Care Spending Underestimated

Intriguing research from Harvard University’s David Cutler and Nikhil Sahni undercuts conventional thinking – and government actuarial forecasts – that link slowed growth in health care spending to the recession. Researchers argue that structural changes in the health care system – more efficient providers, increased patient cost sharing, and the slower development of imaging technology and new drugs – are more responsible for the decline in health care spending growth, suggesting a continued slowdown through the recovery.

If these trends continue during 2013–22, public-sector health care spending will be as much as $770 billion less than predicted. Such lower levels of spending would have an enormous impact on the US economy and on government and household finances.