If you haven't already noticed, driving business results in old fashioned ways just isn't working anymore-nor should it. Key talent is leaving organizations, a phenomenon expected to accelerate over the next few years. There are 77 million people approaching retirement and only around 40 million people behind them, creating a significant talent gap. The talent that is there to fill the gap just isn't ready to meet the challenges of today's globally competitive marketplace. In addition, Camden Associates says the average tenure of a newly employed executive brought into an organization today is less than sixteen months. Global competition requires a speed to market that just can't be met with the traditional employee model. The average product life cycle-historically five years in duration-is now under eighteen months, requiring deep and specific knowledge and expertise on a just-in-time basis. These marketplace dynamics are converging, but to help meet the needs are the new ranks of the independently employed-an unprecedented number of accomplished professionals looking to leverage their skills and talents in nontraditional ways.
What does all this mean? Progressive banks and financial institutions today are taking a critical look at their organizational structure and challenging the traditional models. They are realizing that with traditional employment practices, they are no longer organized in a way that allows them to be nimble, efficient, cost effective and responsive to today's global marketplace. The high fixed costs of running a business in a traditional way is at odds with the pressure to deliver results and to simultaneously operate at ever increasing efficiencies.
What can you do about it? Consider transitioning your business from one that relies exclusively on traditional employment practices to one that includes executing a series of independent critical projects and initiatives. Bring in resources who have done it before in another financial institution and who can give you access to their knowledge and expertise on a variable cost basis. This means maintaining a small core leadership team, accountable to your board and shareholders, that is then augmented by successful business executives and leaders who have completed similar projects, in similar kinds of organizations around the world.
The benefits: Using short-term or project-based talent means you get access to deep knowledge and expertise, for a variable cost (when the project is done, the costs go away without benefits or separation costs), and you are working with people who have no political agenda. That allows you to get honest, objective and independent feedback. These talented executives are there to simply help you get things done in a timely, efficient and cost effective way.
If an organization wants to open up an offshore operation, for example, why not engage someone who knows the drill - who's worked through the challenges and brings proven experience-and who can accelerate the completion of that business initiative. Or, progressive organizations like Sun Life, needing to comply with new international fund reporting standard requirements, found that rather than hire a full-time employee, they were open to changing the model in which it operated. Sun Life chose to engage a senior professional, well versed in this area, who worked side by side with them for several months assisting in conversion and in teaching the existing team how to manage it going forward. When the project was over, all associated costs were eliminated.
In today's ever-changing, complex risk and compliance environment, it makes sense to engage a short-term expert to help you assess your risk exposure and to establish practices to mitigate future liability. There are lots of people in the market who have lived through the mistakes and challenges of organizations that didn't adequately prepare. Tapping these executives will allow organizations to benefit from their experience and drive results while also managing headcount and related costs. This is the only way that businesses will be able to effectively meet the current pressure to deliver business results and to simultaneously operate at ever-increasing efficiencies in a competitive global marketplace. (c) 2008 U.S. Banker and SourceMedia, Inc. All Rights Reserved. http://www.americanbanker.com/usb.html/ http://www.sourcemedia.com/