Mapping Global Talent: Essays and Insights - Heidrick & Struggles

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Consumer I shop therefore I am Torrey Foster Consumer practice tfoster@heidrick.com Heidrick & Struggles Mapping Global Talent: Essays and Insights How do you cater to a fickle global consumer who wants the latest and greatest product for half the price? That is the question troubling the consumer industry. Higher levels of discretionary income with the rise of the middle classes in India and China, combined with ever more sophisticated consumer tastes, have created a world where the customer is king (but always on the look out for a bigger, better value crown!) The growing spending power of the developing world is startling. Today in China the middle class numbers over 300 million people – that is the same figure as the current population of the USA. Meanwhile, assuming steady growth over two decades, India is poised to overtake Germany as the world’s fifth-biggest consumer market by 2025. The developed world cannot match this aggressive consumerism, but the next five years will see a rise in tempo as key retail giants fight over a population that is developing ever more precise ideas of what they want to spend their money on. The pressures this consumerism puts on product development, supply chain and price has resulted in strong retail concentration – for example, in the US, Home Depot and Sears hold sway in the homeware arena, in the UK grocery store Tesco is the leader, while Carrefour dominates in France. These giants expect the very latest in product development, durability, design and price and small scale suppliers – finding it hard to keep up – are increasingly being incorporated into larger conglomerates with only the Nestlés, the PepsiCos and the Krafts able to square up to the big retail firms. In talent terms this never-ending drive for innovation will see an exponential increase in the value of R&D expertise. The pipeline must be primed to produce a constant stream of new products that will impress the consumer. Throwing money at innovation isn’t the solution – many large companies have been tripped up by this in the past and have in turn been outsmarted by smaller, more nimble competitors. Outsourcing will become an important pressure valve, as some companies are already finding to their advantage. At Procter & Gamble, 35% of all its new products have elements that originate from outside the company, up from about 15% in 2000. They say this kind of collaboration has seen R&D productivity increase by nearly 60%, while R&D investment as a percentage of sales has fallen from 4.8% in 2000 to 3.4% today.
The case of Procter & Gamble highlights the fact that survival in the consumer industry will come to rely not just on investment of resources but also on good management. Their R&D operation is working because it is being well-directed with a clear strategy. This has important implications for managerial talent in the sector. Those individuals who will perform best in 2012 and beyond will be those who are able to manage the R&D function in a global context. These managers will be skilled at forecasting customer and supplier behavior and trends, and they will have an extremely detailed understanding of supply chain vagaries and imperatives. They will also need to be media-savvy. The single biggest challenge in the consumer sector over the next five years will be the increasing difficulty of communicating to consumers and potential employees. An astonishing range of media channels compete for the consumer’s attention, and the industry’s dilemma will be how to ensure their brand message – be it about online stores, green policies or the latest new products, is actually seen by their customers (before they see what the competition has on offer). So where will this talent be found? The educational ranking of the Global Talent Index indicates that unsurprisingly, over the next five years the US, Canada and Europe will be the predominant suppliers of top quality graduates. What is surprising and perhaps the consequence of heightened visa restrictions is that the United States registers a low score for mobility of labor and relative openness of its labor market. This measure records the language skills of the population, the number of international students studying in the country and the number of nationals studying in foreign universities. The USA scores 9th place in 2007, and falls to 10th place in 2012, overtaken by India. This is not the case in Canada, the UK or Germany, which score 1st, 2nd and 3rd place respectively in this particular ranking, both today and in 2012. This would suggest that, if it is to realize its full educational and demographic potential, the US must encourage greater immigration and emigration, helping future American managers gain the international experience which will allow them to compete in (and fully understand) the global consumer market. American companies in the consumer sector have not traditionally had a reputation for nurturing their own talent, innovation being the key concern. However, there is evidence that the giants in the industry are realizing the value of managing and developing the talent they have – Wal-Mart for example, has ongoing initiatives to develop its own talent, including a leadership-in-training program and a leader-to-leader project for managers, aiming to push decision-making power down the management ladder. They have also introduced a new pilot program through which employees can alert the company of their talents and ambitions and, once assessed, managers recommend ways for them to pursue their skills, through secondments, evening classes, language lessons etc. This idea of temporary foreign work placements recalls that key talent trend – to be fully successful in the world of tomorrow, international experience will be indispensable. “to realize its full educational and demographic potential the US must encourage greater immigration and emigration, helping future American managers gain the international experience which will allow them to compete in (and fully understand) the global consumer market” Global Talent Index, developed in co-operation with the Economist Intelligence Unit
Page 1 and 2: Mapping Global Talent P A C I F I C
Page 3 and 4: contents Executive summary, 2 Essay
Page 5 and 6: BRIC is IC A key finding revealed b
Page 7: From a search consultant’s point
Page 11 and 12: universities and business schools w
Page 13 and 14: employee turnover, which it attribu
Page 15 and 16: “In a recent survey of US and Eur
Page 17 and 18: have the competitive advantage of b
Page 19 and 20: There will also be significant dema
Page 21 and 22: Appendix A Methodology The Global T
Page 23 and 24: Puerto Rico Venezuela Guyana Surina
Page 25 and 26: Appendix D Overall GTI rankings The
Page 27 and 28: Appendix F Quality of compulsory ed
Page 29 and 30: Appendix H Quality of the environme
Page 31 and 32: Appendix J Stock and flow of foreig
Page 33 and 34: Further reading available on www.he
Page 35 and 36: Nepal Bangladesh Bhutan Bay of Beng

Mapping Global Talent: Essays and Insights - Heidrick & Struggles

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