CLIENT PERSPECTIVES:
In this issue of Breakthrough, we are proud to share with you the industry insight of three of our clients, Cisco, Checkpoint Systems and Talent2. The following three articles deal directly with the challenges facing corporations in challenging financial times.

Using IT and the internet to drive transformation

Howard Charney, senior vice president of Cisco
"Change and creative disruption will be our constant companions over the next few decades, and we need to respond creatively," said Howard Charney, senior vice president of Cisco, the worldwide leader in networking, during his inaugural speech at the first-ever Cisco Macau Showcase 2008.

Addressing government, business and technology leaders, Charney reminded the audience of how IT and the internet have been at the heart of revolutionizing the way people work, live, play and learn, and how the related development of technological innovation will help us find solutions to the challenges of the 21st century.

Highlighting the core issue of how technology plays a major role in the key facets of Macau's development, including integrated tourism, transport, manufacturing, and small- and medium-sized businesses, Charney shed light on how the three aspects of innovation—talent, investment and infrastructure—are supporting the transformation of Macau. He said this is true not only for Macau but also for countries and industries around the world.

He added that the internet can provide world-class education, training and access to information, and that as the world enters into a communication age that is completely dependent on IT and the internet, access to information and collaboration becomes critical. Plus, as people improve their learning, they also collectively improve the macroeconomic outlook, which ultimately results in economic gains for companies, governments, industries and countries.

Investment in new technologies is key. Cisco spends about US$5 billion on advanced technologies because infrastructure is simply critical to growth, productivity and, ultimately, prosperity. And in today's world, the internet is the critical infrastructure. In fact, Charney confidently believes that if "we take the internet away...things crash to a halt, worldwide."

Since 1975 the productivity gap between companies that have integrated leading technologies and the ones that do not has more than doubled. "If you are 40% less productive than your competitor, maybe you don't know it yet, but you are going out of business," Charney said, also citing an almost 99% correlation between IT investment and improvement in productivity.

With Web 2.0 unfolding and Web 3.0 evolving, internet technologies are creating an entirely new generation of productivity tools in which communication has become seamless and more effective. These technologies make geography almost irrelevant, and the impact of rising fuel costs and concerns about global warming are starting to eat away at the global sourcing strategies of the past couple of decades.

Charney concluded by saying, "The bottom line is information... having it, using it and sharing it to make the world a better place. That is powerful. It is transformational. It is something that can help people all over the planet collaborate and contribute and compete—here in Macau and all over the world."


Theft costs retailers and consumers US$104 billion

Rob van der Merwe, President and CEO of Checkpoint Systems, Inc.
Theft costs retailers and consumers, says Checkpoint
GolinHarris recently helped client Checkpoint Systems, Inc., the leading supplier of retail shrink management solutions, promote its second annual Global Retail Theft Barometer, which found that while global retail shrink as a percentage of total sales has declined slightly by 1.5% in the past 12 months, the overall cost of retail crime has increased substantially, reaching US$104.5 billion in the past year.

[Click here to read about how GolinHarris helped launch Checkpoints Global Theft Barometer in Australia]

"The cost of retail shrink is not just borne by retailers, but by consumers and society at large," said Rob van der Merwe, President and CEO of Checkpoint Systems, Inc. "Shrink is a serious threat to retailers' bottom lines and amounts to a hidden 'tax' on consumers who are already dealing with the strain of tightening household budgets during the economic downturn.

"The cost of retail crime, calculated on the basis of crimes by customers, employees and suppliers/ vendors (excluding internal error), plus the costs of loss prevention, were US$112.78 billion in 2008, compared to US$108.1 billion last year.

"This sum represents a tax imposed on honest people by retail criminals of US$229.73 per household, or US$71.12 for every individual person in the 36 countries surveyed," said Professor Bamfield, Director of the Centre for Retail Research. Globally, customer theft, including shoplifting and organized retail crime, remained the largest source of shrinkage loss in most individual countries, totaling more than US$43 billion (41.2% of total shrinkage). Employee theft accounted for 36.5% of shrinkage (US$38.15 billion), while supplier/ vendor theft and supply chain fraud represented 5.8% of shrinkage (US$6.09 billion). Internal errors and administrative failures (such as pricing, process or accounting mistakes) accounted for 16.5% of loss (US$17.22 billion).

Thieves are remarkably consistent in their choice of goods, regardless of geographic region, favoring merchandise such as razor blades/ shaving products, cosmetics/ face creams/ perfumes, alcohol, fresh meat/ expensive foodstuffs, infant formula, CDs and DVDs, fashion, electronic games, cellular phones and watches.

Retailers estimated that on average they lost between 2% and 5% of new product lines to theft. Popular products such as the Harry Potter books, electronic games and recent DVDs reached loss levels of up to 8%, causing supply shortages. Global loss prevention costs were $25.47 billion or 0.33% of retail sales, a decline from last year's 0.35%.

Electronic article surveillance (EAS) was the main method of protecting high-theft items (used for 38.3% of product lines). Other means of protection included safes display in locked cabinets or locked shelves, cables or loop alarms, and dummy cartons or ticket systems (4.1%).

"We hope retailers will use this year's Global Retail Theft Barometer as a tool to better understand current global shrink trends," concluded van der Merwe. "During a weak economic climate, shrink is more likely to increase, so it is even more important for retailers to remain vigilant. Our goal in sponsoring this report is to help the retail industry and loss prevention professionals formulate new and more advanced responses to combat shrink in an ever-changing global economy."


Downsizing in turbulent times

Shan O'Neill, Regional Business Development Manager, Asia, Talent2
Leading HR specialist Talent2—Asia Pacific's first end-to-end human resources outsourcing (HRO) business and a regional leader in executive recruitment, HR business process outsourcing and technology—is urging companies to do everything possible to protect their reputation and longer-term viability if faced with the unpleasant prospect of retrenching staff.

"With companies announcing a range of layoffs recently, it is a salient reminder that this is a critical issue for corporations to manage," said Shane O'Neill, business development director, Asia, for Talent2. "The methods used to retrench staff send a powerful message to your people, and they also have an influential impact on your corporate reputation. It is important that corporations offer support and assistance to affected people in areas such as finding their next job, while also offering support to remaining employees when morale has been shaken.

"O'Neill recommends that companies provide the following when dealing with retrenchment:

I. Understanding and managing change
• Provide counseling and guidance to help staff explore life issues and emotional awareness of change.
• Assist in developing coping strategies during stressful and uncertain times.
• Understand the transition process of the psychological and physiological cycles.
• Offer practical advice on financial management.
• Formalize a plan of next steps and remind people that leave should be kept to a minimum.

II. Self-discovery
• Work with departing staff to help them identify their strengths and personal aspirations.

III. Exploring future career options
• Help staff brainstorm future career options.
• Identify the best fit for each individual.
• Help individuals network in focus group sessions with likeminded professionals.

IV. Coaching and skill acquisition
• Offer personalized coaching in practical elements to approach the employment market.
• Give advice on how to write powerful resumes.
• Provide interview coaching.
• Help develop skills in sophisticated networking and prospecting.
• Provide tips for online applications.
• Help individuals consider alternate career skills.

O'Neill explained, "No matter the size or scale of the workforce downsizing, it is no easy task for a company to sustain morale among remaining employees. However, companies have a strong business as well as moral obligation to support employees who are suddenly subject to an enforced career transition and faced with a financial dilemma. They cannot simply close the door on them. They should provide them with the counseling and guidance of the available choices for their next job and future aspirations."


  Insidedge Special Feature
This issue of Breakthrough features a very relevant article about employee communications by Linda Kingman, executive vice president of IPG’s employee communications consultancy, Insidedge. You can learn more about Insidedge on their website, www.insidedge.net.

Not talking about it won’t make it go away
How senior communicators can help their companies during tough times
By Linda Kingman, executive vice president, Insidedge

 
 

By Linda Kingman,
executive vice president, Insidedge

  
In a recent USA Today Snapshot poll, 70% of respondents said their company’s leaders haven’t communicated with them about how the current economy might affect their company. Research conducted by Weber Shandwick in October came to the same conclusion, with 71% of those surveyed saying they would like to hear more from their senior leaders about the implications of the global financial crisis on their company.

Clearly, employees are crying out for their companies to explain the impact of the economic meltdown and talk about strategies they will use to navigate through these challenging times. So, why aren’t leaders and communicators talking with their people about what’s going on? I suspect there are several reasons:
• Things are changing so rapidly that what gets communicated might be out-of-date before employees have a chance to digest what they’ve been told.
• Leaders haven’t decided what strategy they will employ to address the crisis.
• Executives fear that whatever is shared with employees will be leaked.
• Communication just isn’t a priority when your stock price is tanking and your survival may be at stake.
• Companies worry that employees won’t react well to tough measures that might need to be taken.

While these are all understandable responses to the fear and uncertainty gripping companies today, it’s critical that companies communicate openly and candidly with their people as navigate this crisis. Good communication is key if companies want to keep their talent from fleeing at the first opportunity once the economy turns around. Here are some tips for senior communicators during these tough times:

• Encourage your leaders to be proactive communicators. This is not the time for anonymous missives from “corporate.” Leaders need to put a priority on communicating with their people both during this crisis and after the current economic environment improves.

• Enlist managers to reinforce the message and shut down rumors. Managers are where the rubber meets the road when it comes to employee engagement. Time and attention should be focused on making sure managers are informed about the company’s options and direction and prepared to effectively address misinformation and the rumor mill. Ask them what they are hearing from their people so you can identify common concerns.

• While it’s important to communicate actively, it’s also critical to have something to say. If you communicate without purpose, you’ll diminish the messenger and people will stop listening. Plan communications around key milestones, such as a year-end summary in January or a quarterly earnings call.

• Listen to your people and address what’s most important to them. Tie communication to feedback you receive from front-line employees so that your communication is viewed as relevant. Use your managers to help provide insight about what’s on people’s minds. Acknowledge fears over job stability and losses people are experiencing in their retirement funds as well as tough questions employees have about strategy, direction, alignment and performance. Use examples of people on the front line to make your messaging even more credible.

• Don’t be a fortress. Talk about what’s happening outside your walls to provide context for the decisions your company makes and the actions it takes. Take advantage of the contacts in your communications network to find out how others are explaining today’s economic challenges.

• Get through the really tough actions as quickly and comprehensively as possible. If workforce reduction is necessary, encourage your leaders to think long-term and announce all of the lay-offs at once, even if the departures are spread out over time. Better to take the painful action and then refocus the organization on the future as quickly as possible.

• Be the conscience of your company. Along with HR, corporate communications has a responsibility to hold the company accountable for doing the right thing. Evaluate decisions in terms of whether they are consistent with the company’s values and speak up if necessary.

• Look for the silver lining. In crisis, there is always opportunity. Encourage your leaders to reinforce your company’s key strengths and remind people of your competitive advantages. And, if you want to make changes to your communications priorities, vehicles or team, now is the time to do it.

Smart, strategic communications can truly make the difference between an engaged, committed workforce that sticks with you through troubled times and employees who punch the clock until they have an opportunity to go elsewhere.