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Is this the greatest business challenge of the next thirty years?

For years we have been told that the greatest business differentiator is the quality of the people we employee. Sure, this is important, but is it the greatest differentiator? After all aren’t there plenty of others that are at least as important - innovation, scale, efficiency, quality …

But now, there are several universal trends that indicate ‘people’ will almost certainly be the most important differentiator for the next few decades, and the reason is simple – scarcity.

The western world and to some extent the developing world will find it increasingly difficult to find employees. Those organisations that compete effectively for labour will thrive and those that don’t will disappear. The labour market will become increasingly competitive as employers position themselves to attract and then retain the people they need.

The GFC was nothing more than a temporary distraction from this on-going issue. The trends across all of the western world and much of the developing world are the same:

1)            Lower birth rates

2)            People living longer

3)            A shortage of skilled labour

4)            Greater work mobility

So what are the implications?

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The other day I had the pleasure of catching up with Kelly Magowan - CEO of Six Figures Executive Recruitment.

Over a coffee we spoke about the definition of Responsible and Effective Leadership and where we were heading.

Kelly pointed out we are now moving into a new area where executives are considering more and more about 'Protecting People' versus 'Protecting Profits'.

And how this was brought about by the concept of loyalty dissappearing...

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For me, the most interesting feedback was to learn how now...

A Longer Term vision is much more important...

The Tenure of Leaders is getting short - such as the 10 week Country Road Chief Executive example recently published in The Australian

What is becoming ever more obvious is a longer term vision and succession planning is the key to a successful business.

"You can't expect staff to follow a short term leader" Kelly explains.

Focusing on Leadership is key to empowerment of staff. They must be allowed to make mistakes.

If everyone is focussed on the short term - as are their leaders - the future is frowned upon - staff are immobilised and the business stagnates.

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Leaders need to give people opportunity to try things. As a leader this is part of your responsibility...

Let them make decisions...

Help them be innovative and creative and competitive...

The Executive Monitor Report conducted by Six Figures shows these are not just simple thoughts.

The top of executive desires is to be driven from the top - 'Leadership'

People are happy to be brave and fearless.

Responsible Leadership is not about 'holding the fort' - it is about leading the way forward - let everyone else catch up - if they can.

Recruiting executives is about finding the best people who want to try and do new things.

Despite being in the business of recruiting, Kelly believes companies should look internally more - plan for succession - hire - but also firstly retain and promote.

Many staff also like to have a little skin in the game - so don't be afraid of providing share options for staff.

And when it comes to performance review time, if someone isn't performing well - look for the cause - where is the engagement? Why are they not engaged?

Executives on boards are the same - how can they be further engaged?

Technology also came into conversation as we discussed the age of technology and capturing peoples hearts and minds with knowledge.

How many organisations are doing that wonderfully? How many are still stuck in the 'industry age model?'

Both of these models can collaborate - together with staff - to provide better futures.

Six Figures

You may recall a while back when we published some videos with Kelly speaking here - worth a look