MAD: Opinion: What makes good leaders?

¹Steven Tan Chong Yew

¹ Brand & Marketing

¹(chongyew.tan@gmail.com / steven_tan@oum.edu.my)

Abstract

What makes good leaders have been profoundly research? The academic world has also given many brilliant definitions for leadership, and devises many leaders’ attributes, and yet there is no absolute answer of what constitute a good leader; even in English lexicon is defined only as the state or position of leading a group of people or organization. There are no perfect leaders in the market, there is only ‘model’ for leader to practice, and develop their leadership skills.

Keywords: Self-improvement, leadership, model, management

1.0 INTRODUCTION

What makes good leaders have been profoundly research. The academic world has also given many brilliant definitions for leadership, and devises many leaders’ attributes, and yet there is no absolute answer of what constitute a good leader; even in English lexicon is defined only as the state or position of leading a group of people or organization. There are no perfect leaders in the market, there is only ‘model’ for leader to practice, and develop their leadership skills.

2.0 THE DOCTRINE: ‘CHANGE IS VALUE’

A leader with inappropriate leadership attitude is difficult to change, this is especially true for some corporate people climbing up each and every stages of the corporate ladders, they are up many ‘level’ but hardly change their attitude to be better. The organization is then said to be ossified when it consists of many of these people. So before we venture into our discussions, let’s believe that ‘Change is Value’, and leader must be willing to change their attitude, and reset their mindset for greater management challenge ahead.

3.0 UNDERSTANDING THE 3 DIMENSIONAL LEADERSHIP FOR SELF-IMPROVEMENT

The simplicity of leadership model as I perceive should consists of three elements supported by an inner value; the element of Education & Delegation, Motivation & Control, and Sharing & Recognition, and all these are supported by the inner value of ‘Passion & Patience’.

4.0 EDUCATION & DELEGATION: MENTORING AS THE NEW ERA OF MANAGEMENT

Organization starts to adopt mentoring management; ‘Mentoring’ is believed to be able to stimulate the inner ability of employees to be proactive. It cultivates the correct attitude in employees, and nurtures the sense of responsibility and creativity. Although ‘Mentoring’ is a new name that is easily understand, but it is difficult to execute. Managers, who well-adapt to their own set of management value, may find this difficult to comprehend.

4.1 MANAGEMENT IS TO PROVIDE EDUCATION IN ORGANIZATION FOR EMPLOYEES

Mentoring is possible to implement with, firstly, the understanding of ‘Education’ in management. Education is about teaching, and as a leader, you must be willing to teach, and leaders must understand that it is part of their role and responsibility to nurture their successor for long term success.

The essence of teaching through mentoring process is to provide guidance. Employees are not lone-ranger in an organization; they belong to a team, and require guidance from the leader. Managers as leaders, should not expect subordinates to acquire certain skill by reading a manual, proper guidance is still needed. This is Education before delegation, you can’t delegate without educate. Leaders need to be passionately and patiently educate employees, and to provide the proper guidance to perform their function.

Organization must also understand that the failure of employees in task execution is blamable on leaders, because leaders may not have taught their subordinate well, and also,

You often heard leaders said, ‘I have taught them, I have advised them, but all were not taken seriously, that’s why they make mistakes’, ‘I have reminded them many times, but it happens again, its frustrating’

As important as Education, leaders should move on to delegation when subordinates have gone through the proper modules. Delegation is about trust between leaders & subordinates; which both has to build on this platform of trust in order to have the best delegation.

Leaders may perceive delegation as if passing off responsibility, so that they’re personally off the work! Hence, you may hear this sometimes, ‘Please keep me out. I am not responsible anymore! I have done my job!’

Delegation is absolutely not giving away responsibility! Leaders still have to perform follow-up, provide guidance, and assist subordinate when needs arrive. Delegation also means ‘empowering’ in management, when a subordinate is delegated a task; they should also be empowered for decision making. Leader can devise criteria where subordinate can make reference when trying to reach a decision.

5.0 INJECT MOTIVATION INTO CONTROL MECHANISM

Often, leaders perceive control as monitoring. In fact, monitoring and control are not similar. Control is too harsh for management, and often creates dissatisfaction. Monitoring, on the other hand, is a new term to management and often empowering employees.

Leaders who use ‘control’ in organization tend to overdo. When leaders exert too much control over subordinates, they become self-obsesses, and start to over-do. This is more commonly seen in local context, Leaders tend to deprive subordinate’s weekend, keep subordinates after working hours, or delegate subordinates more task simply to keep them busy (to justify company spend on head-count!). Eventually, it would turn out a disastrous relationship between the leaders & followers.

Leader should transform controlling into monitoring. Monitoring does not mean reprimanding or scolding upon mistakes. Monitoring does not mean asking your subordinates to report every moment, every minute. Monitoring means giving proper guideline to subordinates to ensure things done smoothly before the given deadline.

It is also widely believe that employees need to be motivated before they are willing to be ‘monitored’ – to bridge a harmonious relationship between leaders and subordinate. Leader must also understand that monitoring is to ensure work done has achieved the set quality and standard.

Monitoring allows organization to practice decision making at the bottom of hierarchy, while bring forth the effectiveness of the task handled by their people. In the progress, is to inject Empathy into the monitoring system, the process itself is creating psychological motivation that works as a push for employees. The process itself is motivating, where people realize their learning curve in the company.

6.0 BOAST MORAL THROUGH SHARING & RECOGNITION

Sharing and recognition are not difficult to understand. Sharing can come in many forms, share of credit, share of company vision, share of company benefits, and many more. Leaders are always encouraged to be open to ‘share’ with subordinates because sharing helps to create a strong team, and in return, enhance subordinates’ learning, and increase job satisfaction.

Sharing needs to be positive, leaders need to have positive thinking in order to have positive sharing with subordinates. Hence, Positive thinking is important; when leaders are positive, their sharing and recognition are sincere, and truly for their subordinates. All these can help to boast morale of the organization.

Recognition means appreciation of the effort contributed by employees, it can be in many form, promotion, pay increase, incentive trips, but for Asian, the most expected appreciation are in monetary term. Leaders also need to understand what subordinates expect in term of recognition. Sometimes, high employees turn-over leave good company wander for reason. They simply neglect the employees’ expectation for recognition.

Sharing & Recognition are part & parcel of leadership, both are important to boast employees’ morale. However, there are no clear guidelines of what should be shared among the subordinates or how recognition should be given; but all these can be done if leaders are willing to understand the need of employees better.

7.0 PATIENCE MAKES THEM HAPPY WITH THEIR WORKS; PASSION MAKES THEM MAKE LOVE WITH THEIR WORK

‘Patience makes them happy; passion makes them make-love with their work’. Leaders need to have the passion to teach, passion to learn, passion to work, and many more. Passion is crucial for leaders because leader with little passion could not exert high influences in organization.

Passion can only nurture through continuous reinforcement from top down. People with passion are the possible influential factor for others; they are always happy, energetic, enthusiastic and love the work; those around tend to feel release, joyful, open, and active.

Passionate leaders are willing travel extra miles, and make the 3 dimensions possible to achieve, and fostering high employees morale. For example, leaders who are passionate to teach could enhance employees’ learning curve, and more delegations make possible. Let’s not forget about patience too, one example is that leaders with this quality can teach patiently, and patiently adapt to your speed of learning, to ensure you absorb the skills taught.

Organization culture is built around people in the organization, and Company will have good culture if leaders are willing to change for betterment. Sometimes, company environment may not be conducive but leaders must stand for change, and spreading their aura of positive thinking to others, they can become a positive in organization, and to work towards the model of this leadership.

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(1) Worth sharing: Is empowerment meaning the ‘lost of power’?

It is especially true for some leaders, who may believe empowering staff means losing power on their end. Empowering is difficult when leader is shadow with this concern of the ‘lost of power’. You can find this type of leader in any organization. This fall on human thought of jealousy and self- defend. This leader will only teach you the minimal to allow your routine operation run smooth as expected. Leader of this category will make change management difficult.

(2) Worth sharing: Management can assist leaders to be good leaders

Management should design a training modules, which should pervasively used in organization. The modules should also state the duration of the training, and what employees should expect to learn in the process. In the modules, it should clearly specify the role & responsibilities of employees for pre- training & post- training. An effective module, should also cover assignment given from time to time, and ensure every participant understands the job role. For example, FMCG products always engage seasonal promotion. Participants may be given task to implement those promotion activities with a mentor for guidance.

(3) Worth Sharing: Professional Salary Man, how does it become?

Company without the correct leadership skills will resort to two possible-ends, (1) high employee turn-over, or, (2) transforming employees into one of the many professional salary-men. Salary man are neither love nor like their work, they work for living, and do not emotionally attach to their work, and hence, it makes re-structuring tougher in organization.

Steven Tan Chong Yew

B.A (Hon) Bus. Admin (Marketing Mgt), Anglia Polytechnic University, UK

MBA (International Business), University of Southern Queensland, Australia

NOTE: The views expressed herein are solely writer’s personal opinion. Readers may email writers at chongyew.tan@gmail.com

MAD: Malaysia Retail Industry: Should start to think about branding?

¹Steven Tan Chong Yew

¹ Consumer Marketing

¹(chongyew.tan@gmail.com / steven_tan@oum.edu.my)

Abstract

The retail industry consist of local chain-retailers, International retailer, small-medium and stand alone retailers. It is foreseen that the retail industry will be saturated in the next five to ten years. Are they prepared for the challenge and what should they be doing now? In order to be competitive, retailers are no longer able to compete solely on price or economies of scale. They should start to think about branding, and strengthening their product quality.

Keywords: Retail branding

1. INTRODUCTION: THE POPULATION GROWTH MAY REPRESENT ANOTHER POSSIBLE RISE IN CONSUMER CONSUMPTION?

The Malaysia Social Statistical Bulletin 2003 from Department of Statistics shows that Malaysia’s total population stood at 25.0 million, and over the last 11 years, Malaysia’s population has been growing at a steady rate of 3.0% per annum. The growth of Malaysia’s population may have contributed to the growth of consumer consumption, which in turn leads to the increase number of convenience store, supermarket, shopping centre, and hypermarket. The growth has also acted as a catalyst to the growth of retail industry as a whole. However, overall expenditure by consumers in the market may have just risen vaguely. The saturation of retail outlet in Malaysia have not significantly seen or discussed but the growth of retail outlet in Malaysia posses some skepticism into the future market movement due to the swamp of domestic and international retail investor into Malaysia market.

2. THE POPULATION MAY HAVE RISEN BUT THE SPENDING POWER IS OBSCURE

The retail market consists of domestic and international players. The competition is intensifying from time to time, and the growth of population is not on a par to the growth of retail industry. It does not significantly demonstrate the rise of spending power. It is foreseen that the Malaysia retail market will be saturated in the next five to ten years due to the increasing number of retail opening, and it has also shown that the retail industry is possibly hitting the condition where “supply is more than demand”.

3. RAPID EXPANSION TO ACHIEVE ECONOMIES OF SCALEIS NOT A PANACEA

Retailers are overemphasized on economies of scale; hence, rapid geographical expansion has become a common strategy. They believe rapid expansion offers the necessary economies of scale to compete, and also the strength to exert power over suppliers in so they are able to purchase at lower cost, and priced competitively.

This common strategy ignores the benefit of individual store, quality and standard which may not justify the sole desire for economies of scale. This common strategy has also confined retailers to compete only on price by monitoring their Stock-Keeping Unit (SKUs), analyzing and comparing rival’s price to remain competitive.

Retailers will soon face challenge when competition grows stronger over time with increasing market entry. When the market is eventually saturated and stagnant, either local or International retailers will have to vote for international expansion, again, somewhere around the world, which is rather questionable as internalization of operation will increase cost; the further the distance of expansion, the higher the cost of operation. It also attaches certain crisis which you may need to overcome in foreign country such as the cost and purchasing crisis, management and investment crisis, and many more unforeseen circumstances.

4. WINNING PRICE WAR DOES NOT BRING HEALTHY GROWTH; IT IS NOT SUSTAINABLE!

Most retailers are invariably clinging to ‘pricing strategy’ which ignites price war, and eventually everyone will suffer due to low profit margin. They will also have problem to maintain and foster customer loyalty due to a large number of rivals in the market, and eventually lead to the fissure of customer loyalty. In addition, some retailers are self-confined to serve certain target group, and will soon face difficulty to expand the customer-based as well.

Supermarket such as The Store, Jusco, Bintang, are all expanding, and they commit to provide a better shopping environment with much variety. However, the number of consumer visiting the store is near stagnant. Retailers need to consider the demographic condition of the local market too. With the increasing cost of living of consumers, coupled by the growing retail competition, this will eventually split the market shares, and business may not profitable anymore with constant price competition.

Gradually, the sale of individual retailers will be stagnant. Perhaps, the big players will be able to perform better with their big variety. But, small-medium retailers will probably suffer because they are always the followers, and unable to offer as much.

5. NOT GOOD ENOUGH, NOT BIG ENOUGH OR NOT FAST ENOUGH?

Retail branding has been an emerging trend in the retail market which modernizes current retail tradition. The industry common strategy of rapid expansion for economies of scale may not be so effective anymore. Retailers should focus on branding their services to consumers. Over all, they should commit to create a brand that sells, and penetrate the consumers market. They should first emphasize on brand positioning instead of rapid expansion.

Most retailers are at the stage of self-hypnosis therefore they believe that they are good enough. With current promotional gimmicks, retailers are anticipating customers instead of building customers. Most promotional tactics have become ineffective due to its passiveness. Retailers should not rely solely on discount, display, bundling or free gift to compete; they need to find way to surprise and capture their customers in the market. Hence, they should switch their branding activities to both passive and active-mode. Retailers are no longer selling product; they should start selling ‘brand’, and the brand must be socially and psychologically appeal to create the desire to visit, and the urge to visit your outlets to buy your product.

6. THINK OUT OF ‘YOUR’ BOX

‘Problem may not be solved with past solution’. The retail world is evolving, thus, past branding activities may not be applicable in current retail environment. Furthermore, if branding activities are repeated consecutively, employee will soon take for granted. Employee productivity will become stagnant as employee no longer need to seek for new ideas. It also reduces the momentum for creativity, and it will nurture unpleasant behavioral trend in an organization such as the problem of ‘cognitive branding experience’.

Cognitive Branding Experience is past experience that will bring forth past creativity. This behavioral problem will prevent brand manager to move forward with the market trend. They tend to lose-sight of the market information, and their creativity is shaped through their past experience which may not be applicable in current retail environment. Hence, brand manager needs to creatively find way to plant their brand in consumers’ subconscious mind without affected by their cognitive experience.

7. BRAND CONFUSION VS BRAND ADDICTION

Brand confusion is a branding-plague. It kills the whole branding effort. Retailers must understand that a brand starts with what you do best in the market. Taking Giant Retailer as an example, the name connotes ‘cheap’, compare to Tesco where it means ‘Value’ although their price offer for consumer products is relatively cheaper or on par.

Brand determines the perception of your customer towards your stores and products. It encourages repeat purchase. Skinner in his book, ‘Marketing’, published in 1990, also mentions that, brand signals quality level to consumers, and can be effectively use to gain competitive advantage.

A brand name will tell customer what you are and who you are, most importantly, It also tells what you are good at. A brand must be able to ignite ‘the brand addiction’. Brand should give customers the personal-buying-experience which appeals to customers verbally and non-verbally. Thus, a brand must appeal socially and psychologically as these both factors help to nurture brand addiction that increase customer dependence on your store.

In addition, a brand must be able to build a positive image because brand inference is possible. It occurs when customers are able to relate the quality of the product to the brand. Furthermore, Brand inferences do helps, especially when retailers are looking into ‘house-brand’ initiatives.

8. STRIVE WITHIN THE SATURATION

Apart from geographical expansion, retailers must also refrain from price war, and commit to increase the value of their brand offer. They can build a better customer service program that would increase customer loyalty in order to compete. Retailers also need to ‘think out of the box’. They need to be receptive to change, and understand the future challenge. Therefore, is able to make a quantum leap ahead of their competitors. More crucially, they must provide services that beyond customers’ expectation and strive within the ‘saturation’ in future.

9. REFERENCES

Skinner, S.J (1990), Marketing, Houghton Mifflin Company, Boston, M.A.

Guy, C.M (1994), Grocery saturation: Has it arrived yet?, International journal of retail & distribution management, Vol. 22, No. 1, pp. 3-11.

*************END************

Steven Tan Chong Yew

B.A (Hon) Bus. Admin (Marketing Mgt), Anglia Polytechnic University, UK

MBA (International Business), University of Southern Queensland, Australia

NOTE: The views expressed herein are solely writer’s personal opinion. Readers may email writers at chongyew.tan@gmail.com

MAD: Malaysia Pre-School Education: The Present, And the Future

¹Steven Tan Chong Yew

¹ Consumer Marketing

¹(chongyew.tan@gmail.com / steven_tan@oum.edu.my)

Abstract

The future of the pre-school education industry in the next five or ten years – one is tempted to say the market will be saturated, fragmented, and run mostly by individual on the basis of sole-proprietorship. This is because the industry is less-regulated by the government, and individual with a diploma in Montessori teaching will be able to start their own kindergarten somewhere within the residential areas. All it requires is a small start-up capital. With the growing number of converted corner-house into kindergartens in the market, eventually, they all will have to fight for the big pie with each share only tiny portions of the market…

Keywords: Kindergarten, Pre-School Education, Core-Competency

1. INTRODUCTION

The future of the pre-school education industry in the next five or ten years – one is tempted to say the market will be saturated, fragmented, and run mostly by individual on the basis of sole-proprietorship. This is because the industry is less-regulated by the government, and any individual with a diploma in Montessori teaching will be able to start their own kindergarten somewhere within the residential areas. All it requires is a small start-up capital. With the growing number of converted corner-house into kindergartens in the market, eventually, they all will have to fight for the big pie with each share only tiny portions of the market…

One must understand that the essence of a kindergarten business is no longer about child-play, but it is about providing quality pre-school education. The young and emerging executives in Malaysia are brought-up with different family-value under the society, and the trend in this society puts parental planning importantly, hence fewer off springs. The urge towards setting-up small family has led to the growing parental concern on their children’s education, and for this reason, parents are becoming demanding and pushy with their child’s interest.

Nowadays, parents are better-paid and have more saving with fewer children in the family. They are willing to enroll their kids in luxurious-kindergarten with better teaching qualities and for the better environment for children developmental needs. Some parents are already paying as much as RM 1,000 monthly for a half-day program in kindergarten. Unfortunately, there are only a number of ideal-kindergartens around, and those kindergartens are yet considered as providing the best quality.

2. KINDERGARTEN NO LONGER ABLE TO SUSTAIN, THEY NEED TO CHANGE!

The marketing gimmicks for kindergarten are remarkably predictable. They often engaged in routine marketing activities such as open day, banner advertisement, and brochures distribution while established kindergartens such as Smart-Readers and Q-Dees will leverage on economies of scale to invest in newspaper advertisement. Nevertheless, most kindergartens are engaging in passive marketing activities and passive branding approach. Some kindergartens believe that branding is achievable when the products enjoy a significant presence in the market or be in the market for certain duration; they believe that time is the factor, thus, requires neither creativity nor innovation for their branding approach.

And, parent loyalty tends to nurtured through the relationship of the principal with parents. The way the relationship is bridged is called the ‘principal-parent-relationship. It is the personal relationship of the parents with principal. However, with the ability of the principal alone, it is impossible to serve every parent.

Kindergartens lack of the knowledge to build strategic response to face the changing demography, and their shallow marketing and management knowledge does not make any significant contribution to the recruitment and branding activities, as well as to the whole kindergarten industry.

3. KINDERGARTEN NEED TO MOVE TOWARDS CORPORATISM

There are hundreds of kindergartens locked in the markets, whose operation is still described as ‘individually-approach’. It is still a long way for the industry to move toward ‘corporativism’. For kindergartens to outperform competitors, they cannot rely solely on routine marketing activities alone, but also areas to build their internal-strength. There are a few areas which a kindergarten can improve to create competencies, and most importantly, becoming the market leader.

4. SERVICE QUALITY IS YOUR COMPETENCY

Organizations are looking forward to transform their services into one of their competencies because they believe that service quality is one of the criteria to becoming a successful organization. Similarly, Kindergartens should improve their service quality because tip-top service quality allows kindergartens to market their product more effectively, and to be outstanding among the competitors, most crucially, it ensures parent-children satisfaction.

Quality service means responding to parents’ enquiry and complaint tactfully within a certain timeframe. Kindergarten can create positions such as a Parent Liaison Officers, whom take responsibilities to communicate with parents and becoming a bridge between the academic team and parents. Parent Liaison Officers can eventually help to give constructive comments to improve academic standards based on their understanding of parents’ need.

Children are the end-users whom emotions and moods are deeply associated with kindergarten. Therefore, children are the reflection of your quality. With this, kindergartens must ensure that children are happy, safe and healthy in the campus, i.e., the food provided must be under strict nutrition control and the campus must be able to ensure children’s safety with constant monitoring through CCTV.

5. STRONG ACADEMIC TEAM STRENGTHENS YOUR MARKET POSITION

Kindergartens cannot be competitive without a strong academic team. The academic team is the heart of kindergartens and it helps to produce the desired results. Not forgetting children are the product, and that quality refers to the ability of children to read and write well, thus, a good academic team contributes to quality product. Kindergartens can then compete remarkably well if the academic team do markedly better.

Kindergarten is an educational service, which requires human capital. They must ensure employees are satisfied with the organization in order to have high degree of parent-satisfaction. Kindergartens can introduce share-ownership or partnership program as one of the employees’ retention strategy. They can also create the position of ‘Vice Principal Trainee’ to train the teachers for future expansion needs; in addition, it is also part of career advancement pathway for teachers.

HR function also plays an important role in determining the quality of the academic team. They need to be more cautious in recruitment services, and set minimum criteria for recruitment function to perform effectively. It is also crucial for kindergarten to improve their productivity through extensive training to get the most out of each and every academic staffs. Kindergarten should also provide continuous training to enhance their knowledge in customer service, childcare skill and classroom management skill.

6. ECONOMIES OF SCALE RELY ON THE SIZE OF KINDERGARTEN

‘Size does matter’, of course, you cannot expect children to grow up in a confined environment. The campus environment must be conducive. Furthermore, bigger kindergartens can leverage on their economies of scale, and it determines the number of children that can be recruited.

7. PARENT-CHILDREN RELATIONSHIP MANAGEMENT & VALUE ADDED SERVICE

Investment in computer system is a must to ensure smooth flow of day-to-day operation. Kindergartens need a computer-system that is able to access by every department for different purposes.

For example, Administration department can use the system to record children data such as allergy, personal doctor or family contact number; Account and Finance Department can utilize the system to check transaction and payment history; Marketing department can use the system for direct mailing and performing parent-children profiling; while Academic team can provide constant update on children performance through the system. Upon emergency, system can also help to swiftly look up on the children information.

In addition, the system must be able to integrate with kindergarten web-system to allow parents to access to their children record-book online. Kindergartens can also invest in online CCTV as a value added services for parents; parents can then log in with their password and user name to observe the teachers conducting the class.

8. THE BUSINESS MODEL MARKS THE DIFFERENCE BETWEEN COFFEE BEAN, STAR BUCK & TRADITIONAL COFFEE SHOP

There is a different if you compare Seven-Eleven outlets with the traditional grocery store around the corner. They may be selling the same groceries in the shop but with different brands, and more crucially, Seven-Eleven is able to expand in quick-pace.

This is attributing to the good business model. Seven-Eleven is adopting a model called the ‘Retail Business Model’. Another good example; you can expect the same service, product and design in every McDonald outlet. It is neither Machine nor ‘Ronald McDonald’! It is because they have the business-model! McDonald planted their model from outlet to outlets, creating the similarity and standardization in each outlet.

Similarly, Kindergartens need to have a business model for expansion and move forward to becoming a corporate entity. They can start with designing policy handbook, and guidelines for each different department.

Each department will have to generate a policy that congruent with organizations’ vision. The policy handbook will be planted in the new outlets. Employees from the headquarters will be sent to the new outlet to ensure the model is properly planted. Employees must understand the policy thoroughly in order to uphold the quality of the kindergartens. The policy handbook will also guide the outlet employees in handling day-to-day routine to ensure smooth flow of operation. It also helps to maintain certain degree of service quality which benchmarks the headquarters.

The changing demography will affect the kindergarten industry in totality. Hence, kindergartens need to strategically response to the changes by building their brand in the market; through the systematization of the business-operation, consolidation of the academic team, building service quality, nurturing creativity in marketing, and last but not least, the application of the correct business model.

*************END**************

Steven Tan Chong Yew (012-3835128)

B.A (Hon) Bus. Admin (Marketing Mgt), Anglia Polytechnic University, UK

MBA (International Business), University of Southern Queensland, Australia

NOTE: The views expressed herein are solely writer’s personal opinion. Readers may email writers at chongyew.tan@gmail.com

MAD: Human Capital, Competency & Service Cycle, leading to Internal Branding!

¹Steven Tan Chong Yew

¹ Consumer Marketing

¹(chongyew.tan@gmail.com / steven_tan@oum.edu.my)

Abstract

The evolution of the business environment has brought many challenges to the business organzation. As such, it is important for organization to fine- tunes their operation, and builds their competency, without limiting the creativity and innovation. Human capital is an area an organization can build their core competency without engaging external investment, and, it is difficult to imitate and reproduce by competitors. Yet, many companies do not realise that human capital, is in fact, an area which they can tap-on.

Keywords: Core Competency, Human Capital, Service Cycle, Internal Branding

1. INTRODUCTION

The changing nature of the business world has brought many challenges to the business manager; to cope with the changing demand in the market, as well as to face the overwhelming international and domestic market competition. As such, it is important for organization to fine- tunes their operation, and builds their competency, without limiting the creativity and innovation.

An area an organization can build their core competency without engaging heavy external investment is ‘Human Capital’, and it is difficult to imitate and reproduce by competitors. Yet, it is a management dilemma to create competencies, and with ‘constraint-knowledge’ in the field, could in turn bring pandemonium in the organization.

2. THE DILEMMA: INVEST IN HUMAN CAPITAL OR BUSINESS EXPANSION, WHICH ONE COMES FIRST?

There are many different management beliefs in the world, leading to a different management thought. One of the pervasive yet paradoxical doctrines are the saying of ‘expanding the business before investing in human capital’ or vice versa; it has inflicted much debate among the business managers; while, if the question is raised, which one would an organization prefers?

Major organizations; especially in Malaysia, are falling into the dilemma of having to make the decision in between ‘expand before invest’, or vice versa. Although, it is possible to vote for both, a wrong choice will certainly lead the organization to a catastrophic failure in human management; derail from organization vision, and leads to imbalance energy flow~ when employees start to suffer imbalance lifestyle!

3. SOCIETY IS FULL OF KNOWLEDGE WORKER, HOW TO MANAGE THEM IS DEBATABLE…

‘Managing-knowledge-worker’ has been a debatable topic in the current business environment. In order for an organization to step onto the competitive arena, they need human capital, and for that, we mean skilled and knowledgeable worker.

Years back, service industry is the only industry focusing, and investing heavily in human capital, yet in the evolution of business environment, investment in human capital is no longer confine to the service industry alone; but to any industry who wishes to transform their human capital into one of their competencies.

In relation to HR function, it is an organization entity that manages the human capital investment, and they play an important role in determining the future direction of an organization; and to create a pool of knowledge worker internally, they need to set their vision, and criteria for recruitment function to operate efficiently, and of course, congruent with organization vision.

HR no longer indulges in hiring an executive just for the sake of filling the vacancy, but to ensure that the hired executives posses certain skills which the organization can utilize for future expansion needs. Investment in Human capital can also help to eliminate ‘parasite-worker’ in the organization by giving appropriate training to transform them into one of the organizational asset. Human capital is not like a bank account; they are intangible capital of a firm toward future success. As such, it is important for organization to invest in Human Capital as a way to build their competency to strive further in the market.

4. EMPLOYEES ARE THE PILLARS OF AN ORGANIZATION

In marketing we believe ‘Money’ is the ‘Ammunition’; any marketing program will fail without sufficient monetary support; ‘it is like a war without machine-guns and bullets’. However, direct monetary value is not a panacea to any marketing problem, Human capital is. ‘Country can not fight a war without good soldiers’; similarly, organization can not compete effectively without good people. Human capital is thus a crucial investment in an organization in order to achieve the desirable outcome.

5. EMPLOYEE IS ALSO YOUR BRANDING

A leading educational consulting company founded and chaired by management guru, Tom Peters, in his article ‘Corporate Employees Clueless about Branding’; stated that "When we say brand, we normally refer to the marketing program, the logo or a dozen things associated therewith. That is not complete, and it misses the point. It is the brand inside that really matters." Tom Peter in his research found that more than 90 percent of employees do not understand how to effectively represent their company's brand.

Undeniably, employee is a service representative of an organization to the marketplace regardless of any industry. Employee is the front person who engages in face-to-face communication with customers, and they must be able to portray a good first impression of the organization. Unfortunately, many organizations do not realize that employee is their branding-pillar. Monetary investment in marketing and branding activities will not be effective, nor impact if you do no have the right people, and attitude to carry organization’s branding.

6. WHAT ORGANIZATION SHOULD DO IS TO TRAIN, AND CREATE SERVICE CYCLE BECAUSE GOOD EMPLOYEES MAKE SERVICE CYCLE BRANDING POSSIBLE

Employee branding starts with the service cycle. Service cycle is one of the branding activities that help to create total customer satisfaction; while it utilizes mainly the organizational human resource, it is a cycle used to ensure the total customer satisfaction by creating an absolute advantage to the organization and also enriching customer experience.

The branding itself is originating from how you treat your customer from the customers first contact with the organization till the end of the transaction; leading to repeated sales, and it is achievable through the service cycle. Unfortunately, only a limited number of organizations realize the importance of service cycle.

Service cycle is the micro of customer service framework, and it is the focus of each contact with customer through a continuous flow of customer communication from their first engagement with employee to another employees; which forms the total customer experience in dealing with the organization. The flow starts with the employee first contact with customer and leads the customer into another contact with the organization employees.

Taking banking industry as an example; when a customer is seeking advice for loan application, therewith the customer experience starts when customer first walk into the bank. The customer first contact may be the door man or security guard, who will lead the customer to the banking officer. After filling-up the application form, customer may proceed to meet the front desk officer as the third contact person in the organization. Each contact will determine the customer perception toward the bank while building an impressed customer experience. Of course, employee has to understand their presentation to the customer in each contact in order to create the first good impression.

Customer service is all about attitude that matter; it is directly proportional to the employee attitude about quality service, and aims to earn customer trust and subsequently their confidence in your ability to serve them. Hence, the attitude of every staff in an organization plays an important role. You can brand yourself as “We care for Customer” but still loses customers trust and loyalty if employee attitude does not show this.

7. SERVICE CYCLE IS POSSIBLE WITH CONTINUOUS TRAINING TO MOULD EMPLOYEE ATTITUDE

Service cycle will not work without the right people, and organization can not guarantee their recruitment of the ‘right people with right attitude but they believe they can nurture attitude’. Thus, managing knowledge workers also mean cultivating the right value to foster the right attitude in employee by investing in training.

Continuous training is thus important to foster the right attitude in employees to ensure an effective service cycle. Company such as Shell, Motorola and etc; are organizations that commit to provide continuous training to employees; and ensure that employee benefit given is in increasing-value. The investment in human capital, of course, it will, at the end of the day generates more revenue to company. Their fundamental belief is that ‘high employee satisfaction leads to high customer satisfaction’, eventually, leads to total service efficiency.

A frustrated employee will not fully absorb training knowledge compare to a satisfied employee. As the saying, ‘if you pay peanut, you will get monkey’; Thus, organization needs to first improve their employee benefit, and impart the right value internally before further investing in skill-enhancement-training. An organization should ensure that they are providing above-market-benefit to their employees; follow by the prerequisite training that focuses in building the correct employee personality and mindset, subsequently, design training that will enhance their skills.

7. KEEP EMPLOYEE - KEEP SERVICE CYCLE STRONG…

No organization programs can success with high employee turn-over, and high employee dissatisfaction. Organization needs to look into the ways to retain their employees and to keep their employee happy. Company should anchor their programs toward emphasizing on employee-personality-building, not just skills-enhancement.

Organization can also adopt an open door policy in their organizational-management-system by having weekly meeting with employees, giving them a channel to voice out their dissatisfaction.

No human being is willing to work for free. Organization needs to pay competitive wages to retain their employees; Organization can also pay out bonus by installments; this is when you give them a reason to work. Organization should not be parsimonious in dispersing extrinsic value to employees. It can help to construct the Organization belief of ‘employees are the greatest asset’, and enhance the perceived extrinsic value by the employees.

Most employees leave a company due to inconsiderate leader, thus, a good leader should adopt positive reinforcement such as praising employees, giving personal recognition and many more which helps to push-up employees’ morale. Leader must be people oriented. This is the Intrinsic Value that arrives in the form of motivation which the leaders have for themselves.

Investment in human capital requires not just in monetary value, but also passion and patience in creating value in organization, and it works hand-in-hand with service cycle, in so that it produces an effective employee branding.

8. REFERENCE

Becker, G.S (2002), The concise encyclopaedia of economics: Human Capital, [Online] Available: http://www.econlib.org/

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Steven Tan Chong Yew

B.A (Hon) Bus. Admin (Marketing Mgt), Anglia Polytechnic University, UK

MBA (International Business), University of Southern Queensland, Australia

NOTE: The views expressed herein are solely writer’s personal opinion. Readers may email writers at chongyew.tan@gmail.com