Wednesday, December 29, 2010

Counting chickens

Last post of the year. Time to count chickens...

They say, "Don't count your chickens before they are hatched". Same people claim that once begun - half done. I began regular postings here nine months ago, and now I can proudly say that it has been a most rewarding experience. Nine months is a lot of time on the one hand, and it is nothing at all, on the other. It coincided with my studies at IE Business School, and surely this endeavor was inspired by one of our professors - Enrique Dans. Inspiration wades off, however, and I have seen many examples when my classmates started off quite enthusiastically and got off the track later. This is quite understandable: MBA is a demanding program; at times I don't have time to eat or sleep, so why should I write something that I am not sure anyone is reading?

Now that it is time to count my chickens, I would like to share my own insights of blog writing:
  • quality over quantity. People come to my blog because they hope to read something interesting, not just ramblings on a wannabe writer. It took me some time to realize that if I don't have something valubale to share, probably I should not write. October and November were difficult months for me personally, and I just was not able to produce anything worthy of public attention. Thus, I tried to refrain from even logging on here. At the same time, those two months were most prolific in my poetic activity, and here are some examples of my other muse:
  • be grateful for feedback. Irrespective of the form, in which the feedback reaches you, it is the most valuable thing you can get from your readers. I am thanking all of you, who sent me e-mail, Facebook messages, left comments or merely talked to me about what I am writing, and in many instances I have changed: the style (a little bit), the topics (a lot), and I started getting more and more hits - so listening to the audience is critical.
  • think! Merely reposting funny or insightful articles, images or videos is not enough. The pace of today's life is so fast that people want to get the knowledge in its condenced form. Hence, when you post something, provide your understanding of the issue, supply it with examples and maybe recommendations - that will grab attention. Pick contentious topics and interest is guaranteed. Support your post with an attention-grabbing title, and remember: great novels have great beginnings.
Writing has taught me to be disciplined. Not only in posting something, but also in the way I arrange my thoughts. Normally, when I travel, I write down things that I find interesting into my Moleskin notebook to convert into a post later. And a curious thing: the busier I am, the more rewarding is the blog-writing experience: it clears up the mind and helps me concentrate better, a similar feeling I get when I take a break and play my guitar.

Thank you for being with me this year. I will be on my way to Barcelona and Sevilla soon with no access to Internet, and I am incredible happy about it :)

Season's greetings to all!

Tuesday, December 28, 2010

Adverse Selection

The notion of adverse selection traditionally belongs to the realm of Economics or Banking. The Wiki definition of adverse selection (so that we are on the same page) is:

Adverse selection, anti-selection, or negative selection is a term used in economics, insurance, statistics, and risk management. It refers to a market process in which "bad" results occur when buyers and sellers have asymmetric information (i.e. access to different information): the "bad" products or customers are more likely to be selected.
Interestingly enough, this term has recently been borrowed by People Management sciences in studies of labor markets. The basic assumptions are the same: information is asymmetric, it is imperfect and the labor market is heterogeneous. Aggravated by the amount of applications, companies often make wrong recruitment choices, since the screening and background check efforts are well beyond their capacity. At the same time, applicants are likely to apply for jobs, for which they are overqualified or underqualified, which skews the entire talent picture and throws the employer into the trap of guessing.

Boyle (1999) identified four types of candidates from adversely selected pools:
  • The unhappy (and thus probably not a desirable employee); 
  • the curious (and therefore likely to be a job-hopper); 
  • the unpromotable (probably for a reason); and 
  • the unemployed (probably for a worse reason).
Nowadays that we are striving for leaner functions, it is highly improbable that the companies are able to avoid the negative consequences of adverse selection should they not resort to the services of various labor market intermediaries (LMIs). Examples of such may be background check agencies, executive search firms, career services at academic institutions, temporary placement firms etc., i.e. an agency reducing the amount of uncertainty in the process of candidate selection.

LMIs in one form of another have existed for thousands of years, but those were largely informal. These days such processes and services are highly formalized and higher proportions of those are moving into online domains. Online recruitment is now a reality, and such giants as or boast millions of resumes on file, and those portals are able to provide both parties, employers and seekers, with personally-tailored information at low cost, which is normally shifted onto the employer. The problem comes when the employment decision is to be made, because it is somewhat similar to getting married after a few weeks of online dating: you do not want to end up with an undesirable person next to you even if it is going to be a short engagement, but at the same time there is a lack of time and resources to do proper screening and matching. Then you would more to more expensive employment agencies or even contingency firms, but is that really the answer to the problem?

There is little research done on LMIs up to date. I am certain that we are going to see more literature on the topic soon, but, as we know, academic knowledge is always lagging behind - what is there that we have to do now?

Monday, December 27, 2010

Santa's Privacy Policy

I have a hunch this has been snuck off some corporate website... This provacy policy is toooooo well-written, I smell a lawyer behind it :)
- - - -



- - - -
At Santa's Workshop, your privacy is important to us. What follows is an explanation of how we collect and safeguard your personal information; the kind of information we collect; and your choices regarding our use and disclosure of this information.

Why Do We Need This Information?
Santa Claus requires your information in order to compile his annual list of Who is Naughty and Who is Nice, and to ensure accuracy when he checks it twice. Your information is also used in connection with delivering the kinds of goods and services you've come to expect from Santa, including but not limited to toys, games, good cheer, merriment, Christmas spirit, seasonal joy, and holly jollyness.

What Information Do We Collect?
We obtain information from a variety of sources. Much of it comes from unsolicited letters sent to Santa by children all over the world listing specific items they would like to receive for Christmas. Often these letters convey additional information as well, such as the child's hopes and dreams, how much they love Santa, and which of their siblings are doodyheads.

The letters also provide another important piece of information—fingerprints. We run these through databases maintained by the FBI, CIA, NSA, Interpol, MI6, and the Mossad. If we find a match, it goes straight on the Naughty List. We also harvest a saliva sample from the flap of the envelope in which the letter arrives in order to establish a baseline genetic identity for each correspondent. This is used to determine if there might be an inherent predisposition for naughtiness. A detailed handwriting analysis is performed as part of a comprehensive personality workup, and tells us which children are advancing nicely with their cursive and which are still stubbornly forming block letters with crayons long past the age when this is appropriate.

Our network of fully trained, duly deputized mall "Santas" file reports from the field, telling us which children are well-behaved, which are elf-phobic, which are prone to sphincter control issues, and which are squirmy beard-pulling monstrous little brats. Digital copies of photos taken with these "Santas" are automatically sent to our database for further evaluation, with particular attention given to the ones where the children are crying.

Santa also employs a paranormal method of observation known as "remote viewing." This enables him to see you when you're sleeping, know when you're awake, and know if you've been bad or good. He even knows if the cookies you're leaving out are homemade or store-bought.

What Do We Do With the Information We Collect?
Sharing is one of the joys of Christmas. For this reason, we share your personal information with our affiliates, non-affiliated third parties, and anyone else who has a legitimate financial stake in a successful holiday season. Mrs. Claus also likes to have a look-see.

Our affiliates include partners of Santa's Workshop who are actively involved in making Christmas happen. They include toy-making elves, flying reindeer, and Jesus. Non-affiliated third parties might include the Easter Bunny, the Tooth Fairy, and Hanukkah Harry.

We may also share your information with mental health practitioners—especially if, as a child, you asked for a particular present every Christmas but never got it. This information gives your analyst a better understanding of why you sometimes feel sad at this time of year and why you resent your parents.
Occasionally we share your Christmas wish lists with professional lyricists seeking inspiration for a catchy holiday song. In the past this information has inspired such holiday favorites as "All I Want for Christmas is My Two Front Teeth," "All I Want for Christmas is You," "My Grown-Up Christmas List," and "Santa Baby." Should your wish list inspire a hit single, you may be entitled to royalties, payable in the form of sleighfuls of Christmas cheer.

Finally, we make note of the condition of your roof and chimney in the course of our Christmas Eve deliveries. We share this information with appropriate third-party contractors, who may contact you to warn that your aging roof will soon be leaking worse than Julian Assange, or that you will die in your sleep of carbon monoxide poisoning if you don't replace your chimney liner right away.

How Do We Secure This Information?
We secure your information by keeping it at the North Pole, one of the most remote, inhospitable and uninhabitable places on earth. It is stored in a secure gingerbread facility deep in the Candy Cane Forest, behind an impassable barrier conjured by Elven magic. The facility is guarded by a full brigade of life-size wooden toy soldiers armed with Nerf Blasters and Super Soakers. The area is also patrolled by ravenous polar bears.

You Have Choices
You have "opt out" choices regarding certain disclosures we make about you. Please indicate your preferences below:

____ I'll be nice. Please collect, collate, analyze, disseminate and disclose my personal information in any way you see fit. I understand that my cooperative attitude will be taken into consideration when it comes time to compile the Naughty/Nice list next year.

____ I'll be naughty. Please don't share my personal information with anyone. You may use it only to ensure that I get as many of the specific items on my list as possible. I understand that my uncooperative attitude carries the risk that a lump of bituminous coal will be deposited in my stocking annually, either for the duration of my life or until I change my preferences.

You may forward your completed form to: Santa Claus, c/o Santa's Workshop, The North Pole. Or you may retain it for your own records—it doesn't matter. Whether your form is on file with Santa or not, he's gonna find out who's naughty or nice.

Please allow twelve days of Christmas for your choices to take effect.

Saturday, December 25, 2010

Work is Changing

The nature of work and the ways we think about it are undergoing fundamental changes. Give it a thought - even 10 years ago, would we think of work as:
  • alternative
  • nontraditional
  • market mediated
  • vulnerable
  • contract
  • freelance
  • e-lance
  • contingent
  • disposable
  • temporary
  • nonstandard
  • telecommuting
Since business is changing and the world is becoming more competitive, people become increasingly demanding towards the format they wish to render their services in exchange for some sort of value. Hence, there is more and more research on such topics as market mediation, non-traditional work and even new branches of science, e.g. “nonorganizational work psychology”.

At the same time, only a few countires are ready for such shift. The US and the Western European countries are leading the way, but elsewhere it is a far cry from where the labor markets are now. I am looking at the Russian labor market and I realize that while there are some early signs of drifting away from the "standard" models, outside the capital CEOs are vaguely familiar with such functions as HR or Marketing, so I cherish no hopes that all of a sudden we will shift to "non-standard" progressive modes of work.

Apart from purely traditional, conventional and customary issues hampering this transition, there are obviously practical questions concerning, for instance, legal issues, career management problems, and other aspects, encompassing motivational, organizational, controlling and other spheres of work environment.

Are we as HR ready to embrace these changes? Looks like we won't have a choice if we want to maintain a competitive Employee Value Proposition, but I doubt that it is a one-size-fits-all option. Obviously, this paradygm shift is geared towards knowledge workers, those whose skills are more portable, those who are more valuable and those who can work remotely. There is a great role for us to play in planning and shaping the 21st century work, but still something prompts me that the change will happen quickly, will hit us with the force of an avalanche and will spread faster than a viral infection.

Friday, December 24, 2010


I take my hat off to those who created Voss, sell it and, what is more, to those who buy it.

Really --- my heart filled with awe, I totally, truly and genuinely amazed at professionals who deal with branded commodities or with the art (magic?) of making a purse out of a saw's ear. Well, the metaphor is not 100% correct: there is some degree of transformation involved in the act, but what happens to the water in a Voss bottle we don't know and hope that nothing happens at all and it arrives on our tables in its pristine condition.

The beauty behind branded commodities is that with minimum of effort and cost you are all of a sudden able to charge next-to-premium prices, basically for a bit of wrapping paper and a beautiful story behind it. One of the ways to escape from commodity hell.

When you step out into the labor market, you are nothing else but a product as well. As any product, there is some/much marketing effort needed and most marketing concepts apply. Hence, as any product, you have a price tag and value, which is, to a large extent,a perception of you by your own self and other labor market players. Tweaking the basic concepts just a little bit, we can place ourselves onto the following diagram:

Nobody wants to be priced low. Every ambitious person or at least those who do not have issues with personal self-esteem, want to be positioned in Quadrants 1 and 2, i.e. being a luxury product or a branded commodity. We know that big companies get thousands of solicited applications for a single position, so getting a distinguished personal brand is nowadays synonimous with self-preservation and survival in the long run.

Sometimes I get a feeling that all these talks about personal brandings is merely a fad, created by image experts in a despearte outcry for money, but the reality is that nobody wants to be a commodity, fad or no fad. We comb our hair even if we do not plan to leave home and we do other things just to feel good regardless whether others are going to notice or not. Thus, I guess we are running out of excuses to invest in ourselves and add a couple of zeroes to that price tag we are all wearing.

Thursday, December 23, 2010

Leadership Story

Why Should Anyone Be Led by You?: What It Takes To Be An Authentic LeaderGoing for an interview, the most difficult question might turn out to be, "How did you get here?" - and it will not be about the mode of tranport you favored that day to get to the venue. It will be about you life map, or what have you done to be at this particular stage of your career. Another difficult question (as well as a famous namesake book) is "Why should anyone be led by you?" Think for yourself, how would you answer those?

We were asked to do someting similar in the Strategic Communication class a few weeks ago. I should say that we were lucky to have a highly entertaining and deeply knowledgeable professors Des Dearlove and Stuart Crainer, authors of Thinkers 50, which is a research on business thought gurus, most likely to influence the development of the business reality as we know it.

The task was to write a personal leadership story in less 250 words, which should be a distilled message to the world of your own persona. I should say it is so much easier talking at length about yourself, but when you are confined to mere 250 words, it is a mission impossible. Next, it brings you back to the same old questions: Why should anyone be led by you?

I am posting here what I wrote and submitted as my final project to the professors. Really keen on feedback!


Sergey Gorbatov

Personal Story
Strategic Communication
December 7, 2010

My most respected high school teacher told me shortly before I graduated, “Sergey, if you want to achieve something in this life, you need to be the first, the best, or different”. I did not grasp the full value of that advice at the time, but I heeded it nonetheless. Looking back (and most importantly – looking forward), I see with clarity why I am where I am and how I got here: by being the first, the best or different.

There are few things I have been the best at. Well, in relative terms, I did gain a considerable number of awards and on a number of occasions I had to blush in front of an audience receiving an accolade or praise. Being the first gained me the reputation of an innovative first-moving go-getter. However, what truly advanced me in life is being different.

A distinct way of clothing, an atypical career path, a very special circle of friends, and many other uncommon aspects, granted me that edge I could use to stand out. Yet, it has always been a unique way to look at the world, a peculiar manner of thinking and seeing the connections that elude others that have prevented me from blending with the background or getting lost in the crowd.

I bow with utmost respect to that teacher for her invaluable lesson. It is ambitiously pleasing to be the first. It is painstakingly rewarding to be the best. It is ostentatiously crucial to be different.

Tuesday, December 21, 2010

10 Minutes: Call Center Reality

I am urging you to watch this short movie, it's just 15 minutes and it gets one message across: the way we communicate is changing.

The crude reality of call centers is that an operator is often taken away all latitude of decision-making or a personal impact whatsoever. Strict manuals and procedures truly convert people working there into answering machines (if you are lucky to get one after minutes of listening to options and some cheesy pseudoclassical music).

Have you noticed in the movie that actual communication starts when Nuria keeps silent? Is that the new frontier? At the same time what would be better: lose her job because she violates the prescribed procedures? Talk to the boss and get reprimanded for not dealing with it herself?

One of the aspects I have noticed about call centers is that the atmosphere there is permeated with the feeling of fear. Fear hampers productivity and creativity of the employees. Disempowerement corrupts.

Still, where do we find the balance between the efficiency and personal connection?

Friday, December 17, 2010

Limits of Online Recruitment

Internet is a reality. Blogs are now a part of business. People spend their productive work time in 2.0 applications and are getting money for it. I get it: the world has changed, but how far can we go?

I had a very interesting chat this week with Miguel Mangas, Online Marketing Director for Spain and Portugal at Meetic. Meetic is a dating site. One of those... "join thousands of singles looking for love today". Noble cause and I am sure many people did find someone to spend an evening together, a couple of months or an entire life. However, what Miguel is trying to assess now is opportunities of this web service for recruitment.

The idea is that this tool can work for fresh graduates from universities in the initial steps of their careers. Before you start using the site, you have to complete a 90-question questionnaire, which translates into your psychological profile, which is shared with you free of charge. Unlike the assessments that you go through when entering a company, it is likely that you will be more sincere and honest with yourself answering the questions in hope that this will help you meet your other half. Hence, the validity rates are high. Drawing on other personal information, such as education, areas of interest and maybe current company or at least industry, it is possible to concoct an aggregated job candidate profile, which then can be shared with recruiters.

This has not been launched yet, and my question to Miguel was whether any data privacy laws could be violated. The conversation turned onto a slippery road, and I posed another challenge: how would a person feel if s/he is selected for the job, but then every day the recruiter (whoever that might be) or even the line manager are aware of that person's "romantic profile". The third question I asked was about the company image if it resorts to such search techniques and who actually would be most interested to use this service.

That was a conversation over a glass of gin&tonic and obviously we were just swapping ideas and chatting, but the problems remains on a larger scale: how sure can we be that our personal information is not shared across the web with anyone but those we want it to be shared with? In Germany there is already a law that Facebook information cannot be used in the recruitment process. In the UK a teacher was fired for posting a private comment on Facebook. The borders between private and public are getting blurry. Obviously, it is your personal responsibility to filter what is appearing in the www, but protection from unsanctioned access to your data is an acute problem yet to be resolved.

Thursday, December 16, 2010

HR in the Luxury Industry

Yesterday I attended a conference at IE Business School boasting a loud name of "Career Development and Management in Fashion, Cosmetics and Luxury Industries". The timing of the event could not have been worse: right in the middle of my exam week and one day before the most feared Advanced Financial Management exam. Still, as curious as I am, I decided to attend, and my expectations did not tumble short. Apart from an insight into an industry which I had not had much dealings with apart from being a loyal customer, it was a great networking opportunity. Thanks to coffee breaks, workshops, round tables and the cocktail party at the end, we got a chance to rub shoulders with CEOs and HR VPs of such companies as LV, Carrera y Carrera, Loewe, Diageo, Pernod Ricard and the like. Quite a fascinating crowd, really, and refreshing as well. I caught myself musing over the peculiar combination of business savvy with an appreciation for what is beautiful to the extent of being useless from the layman's perspective.

I will just share with you the main points that I took away from the conference, in no order of importance whatsoever:

  • You must be passionate about the world of luxury. People there work for the idea and the feeling of belonging to the domain of gods, not the money. Luxury pays poorly, worse than FMCG. Luxury brands compensate with a "psychological salary" of being proud for working for that particular brand.
  • Cognitive dissonance: selling goods worth thousands of euros while getting very modest wages: potential entrants need to be well-aware and prepared for this step.
  • What they are looking for: creativity, innovation management, strategic capacity, brand management, building shared vision.
  • Where will an MBA candidate most likely start? Retail. Fresh business school graduates should not expect doing big growth projects - otherwise current CEOs will be left without jobs.
  • What value will you create working in the Luxury industry? A dream. You will give your customers a dream they will be living.
Carlos Delso, General Director of Louis Vuitton for Spain, Portugal and Marocco shared his four rules for success in the industry:
  1. Set yourself stretched goals
  2. Innovate to achieve them
  3. Know yourself a bit better each day
  4. Love your neighbor
Those might sound trite and common sense, but they are particularly important in an environment where dreams are "made and used and wasted". Otherwise, how will you be better than the others in dream creation?

Thus, if you are considering to enter the world of glamor, think well about the the first question you are likely to be asked at the interview (any interview, in fact):
Why are you here?

Friday, December 3, 2010

Cost Cutting Your Talent?

There is an article in Cinco Días published today, where John M. Scott, president of KPMG Spain talks about cost cutting and possible implications it might have on the competitive advantage of an organization. "Reducing costs cannot be cutting talent," says Scott and there is little disagreement with him. There are multiple publications about cost reduction in times when bottom lines don´t look particularly rosy, and undoubtedly getting rid of headcount is the easiest way to push the fixed costs down. However, there are many examples when companies were able to stay close to their proclamations of "people are our greatest asset" without actually divesting of that very asset at the first sight of an approaching storm. Southwestern Airlines is one of the best example, I think, and there are many others that would explore a multitude of other opportunities before they say  good-bye to their staff.

Following Scott in his speech, he claims that this "passivity" of not being able to overcome tough economic problems by other means than letting go of people is "losing the opportunity to face the future". In fact, what will the companies do when the markets pick up? Recruit again? Well, as an old Latin proverb goes, Even a healed wound leaves a scar (free translation of vulnus sanatum est, cicatrix manet :)

What will happen if you "divest of your most valuable asset" and your competitors will not? In any business school you will hear that the only true competitive advantage is your people. Cannot agree more - look at the heading of my blog. Still, I guess we have seen too many people lose their jobs this last crisis. Oops, sorry, I am not supposed to say the word "crisis"... financial downturn! or yet better - economic slowdown.

But - there is a worrying thing that Mr Scott is saying, "I have not seen in Europe the willingness, the ambition that is there among the youngsters of India for the past at least ten years". So, the developing world is eagerly looking towards the West, wishing for nothing else but for jobs to be cut, because we all know where those jobs will be migrating. I do not wish to go into the issues of outsourcing here, but the point is clear: by letting your people go, you are letting go of your business, and most likely... it is not coming back.

Full article:


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