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Report From Hong KongFuturist Inspires HR Leaders Convenes

September 1, 1996
The city of Hong Kong pulsates with life. Activity from every corner tumbles onto the street. A colorful, moving parade of 6.2 million people accentuates a backdrop of red, blue, orange, purple storefronts and signs in Chinese pictographs. The back streets look as they could have in the 1840s when the British colonized the territory—except for the endless, honking traffic. On the waterfront facing Victoria Harbor, so many hundreds of glass-and-steel sky-scrapers tower upwards, standing watch above the constant activity on the water. Shapes are round, rectangular, even triangular. Behind the buildings are lushly covered, ragged-edged hills that support apartment buildings like so many little Monopoly™ hotels stair-stepping up to the top. It's a teeming, vibrant metropolis.

The scene is a metaphor for global business in Asia: The juxtaposition of cultures—the old and the futuristic—driven by an urgent marketplace and its frenzied energy. Hong Kong is a conduit for cross-cultural business, where, for example, more than 60% of capital headed for China is channeled. It's an Asian territory known to be relatively free of corruption and politically stable.

Hong Kong sets global perspective.
From June 25 through 28, more than 1,000 human resources professionals converged on Hong Kong to attend the 1996 World Congress on Personnel Management (part of the World Federation of Personnel Management Associations). They came from almost 50 countries. The numbers, as well as the distances people traveled, attest to the tremendous interest in this field, and the huge hunger for current information about the topic. The theme: "Global Challenges and Country Practices in People Management."

Indeed, HR professionals need look no further than Hong Kong if they want to see the diverse challenges awaiting today as well as the problems lurking just over the horizon. Global trends, country-specific practices, regulations and expectations, as well as corporate cultures, will interplay throughout the world. But Asia is where it will be most intense.

The participants who came to the conference were eager to learn what they could to help them in their daily strategic and tactical HR decisions. All know that it's the region of the world to watch in the coming decade, not only for the political ramifications, but also for emerging business and HR issues. People within the greater Asia region, and in Hong Kong in particular, are focused on the future as Hong Kong prepares for its historic hand-over to the People's Republic of China (PRC) at midnight on June 30, 1997.

As HR professionals from around the world gathered here, conference keynote speakers focused on the implications of the present global business environment and the future of people management issues internationally. Workshop panelists focused on the very specific details of HR management within certain countries, how HR is viewed in the region and expatriate management. One of the most thought-provoking and inclusive presentations was given by keynote speaker Karl Albrecht.

Globalization and tribalization paradox.
The futurist spoke about the complexities of managing human resources in an ever-changing environment. A management consultant and author of 22 books, including "The Northbound Train: Finding the Purpose, Setting the Direction, & Shaping the Destiny of Your Organization," Albrecht framed the current global business environment as chaotic. He talked about this chaos in terms of the Third Wave of human cultural evolution and how that impacts the workplace.

The Third Wave is an idea built around Alvin Toffler's theoretical work in "Future Shock" (Bantam Books, 1971). The theory states there are three great waves of human endeavor, each one building upon the previous one—and overlapping. The First Wave occurred when people moved from being nomads and gatherers to an agrarian society. The Second Wave emerged when people moved into an industrialized society and relationships became more complex. The Third Wave (generally set at the 1960s), began when the newest release of energy drove human resources into information technology and the Digital Era. (Many people also refer to this Third Wave as the Information Age.)

"The Third Wave is a wave of paradoxes," he says. "In other words, there's simultaneous globalization and tribalization; simultaneous information that's passing around and through all of us, and yet atomization [narrowing] of our interests and focus."

And, there are tremendous implications for HR professionals. Simply put, companies can't enter a new region of the world and expect to approach the workforce with the same attitudes they've always relied upon. In fact, it's far more difficult than simply understanding the culture of the different society. Whether a country is in the First, Second or Third Wave affects its needs and reactions to workplace issues in a profound way as well. For example, in a Second Wave country, global HR might deal with product assembly or union-related issues. In a Third Wave country, the issue may be information security.

Albrecht explains that the current situation is driven by the recent past activities of economic downsizing and restructuring, an atomization of markets (that result in very few mass markets) and the deconstruction of business (in which there's a disassembling of companies and countries). At the same time, commerce is borderless, there's a tremendous sense of acceleration, and the impact of technology is ever-increasing.

All of these elements bring forth varied scenarios. Notice, for example, that companies such as Disney are acquiring other firms and becoming larger at the same time that giant companies, such as AT&T are disassembling and attempting to become smaller. The complexity continues as you realize that with borderless commerce, we're becoming more open to different ways of thinking and doing business than we've ever been before. But at the same time, business is more tightly focused on selected areas. There will be greater movement away from diversification and broadening, and more frequent use of outsource providers, independent consultants and specialists. Furthermore, the idea of long-range planning is going to look more like conceptualizing what things will look like at the end of the month rather than months ahead.

"There's an intuitive sense that since we have all this international communication and a worldwide image environment (McDonald's Golden Arches, the Coca Cola logo, Mickey Mouse), we would think that we're all converging at some sort of similar frame of mind, outlook and values," Albrecht says. "But it turns out to be exactly the opposite. The differences in values, preferences and ethnic identification are actually becoming emphasized by this Third Wave phenomenon, rather than diluted." It's what is referred to as the Global-Tribal Paradox.

This Third Wave, he says, continues to be driven by several interrelated factors:

  • Unrelenting increase of productivity
  • Mixture of cultures because of business and tourist travel
  • Telecommunications
  • Worldwide image environment (television and mass media).

Three waves in China?
Albrecht uses China as an example of a developing country with elements of all three waves. There's virtually no HR profession or function in that country. And yet, people are beginning to try to put one together. As bigger companies move into the Asian country, the idea of managing human resources becomes a credible concept. However, in the recent past, when it was primarily an agrarian economy with small businesses and a few large businesses owned by the State, the concept of an HR profession wasn't even formed.

Once such a country accepts the concept of HR, and develops a management premise in terms of developing people, educating them, creating effective job recruitment and job mobility, HR professionals can begin to look at the workforce in those terms.

China, he says, actually has elements of all three waves happening simultaneously. On the one hand, it hasn't really achieved the level of agricultural productivity that the developed economies have, so it hasn't completed the first stage. At the same time, it has begun to develop Second Wave industries, such as steel and automobile manufacturing, along with a small, developing entrepreneurial sector that's allowing individual farmers and merchants to sell their goods in a somewhat freer market economy. So, you have evidence of the two elements.

"And now, China is struggling to figure out its stance with respect to the Third Wave. You have a situation in which the leaders of China are very much in a quandary about opening up global information, images and communication," says Albrecht.

The complexity of China is instructive for global HR. Managers who had an expectation that people operate according to a certain kind of work style or work ethic will face enormous difficulty. Managers can't just assume people are prepared to compete with each other for economic status; nor can they assume that patterns of responsibility and organizational functioning are equivalent to what they've known from their past experiences.

Some of the more obvious challenges include recruiting and educating the workforce. Others relate to the strategic plan of human resources involvement. "You have the question of do you essentially clone a Western business structure or do you try to enter into more of a Third Wave concept and partner or network a set of alliances with a company already established in China," says Albrecht. Obviously, the approach you take will make a big difference in your human resources approach. He believes that cooperative partnerships that promote smaller, more flexible businesses hooked together is more likely to occur. Since this already is evident in many ways by the atomization of Third Wave environments, it seems to be a natural progression as Third Wave companies enter Second Wave environments.

If, however, multinationals form business partnerships—bringing in technology, marketing and finance expertise—and also hook up with a group of partners in the local country (choosing a flat organizational relationship as opposed to the traditional hierarchical one), nobody is in control. Work is accomplished not by command-and-control, but by influence. So this gives HR people a different set of issues to contend with. For example: How are you assured of the labor force talent; what training and orientation is required to be sure the company can produce a top quality product; how do you handle training and development when the people aren't even on the payroll? Moreover, what kind of work standards do you set? What expectations can you have? It's quite profound and gets to the very nature of how you define work, define occupations and define moving up through an organization.

Says Albrecht, the concern is to see if we can manage well enough in this chaotic environment to stay on top of things and handle future possibilities. In other words, as we move into the international arena and begin to experience cultural differences, we simultaneously become more aware of, recognize and value our individuality. Consequently, our differences become more accentuated. Given these differences—as well as the continuing differentiation of products and focus, accelerating technology and the increased use of partnering and outsourcing throughout the business environment—more complex responsibilities fall to senior management. Global human resources managers, especially, provide the critical link that will hold together the various workforce participants. The trap, he says, is to apply Second Wave thinking to Third Wave challenges.

It's at global conferences of this sort that theorists, practitioners and other professionals come together to share thoughts and insights. Through this synergy, the complexities that await will indeed be challenges and hurdles to overcome, but not insurmountable blockades.

Personnel Journal, September 1996, Vol. 75, No. 9, pp. 78-85.