True North A COMPASSX CONSULTING PUBLICATION
Inside This Issue The Effects of AI How to Hire a World- Page 1 Page 2
Class Consultant By the Numbers Book Review Will Your Next Car Be Electric?
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large volumes of data with scenario-planning mechanisms to generate enhanced insights into their market segments. Personnel engagement is the use of a platform to interact with employees or customers based on extracts from various sources of data. Example: an application used by field salespeople to better target a prospective customer base. The shared service center concept brings obvious benefits — providing mostly repetitive, transactional services with lower labor costs while capturing synergies and expertise by consolidating that work in one location. Business functions such as finance, HR, and IT are some of the most popular that utilize this concept. However, the dynamics of these centers are changing with the rapid adoption of artificial intelligence, particularly since SSCs are expected to perform work that is highly transactional and the ripest for the current generation of AI. If they have not already, leaders who manage SSCs need to seek a greater degree of functional business acumen from current and new employees. Changes resulting from the AI phenomenon in the corporate environment will require leadership to transform the vision and strategy behind these centers. Leaders, in turn, should redefine expectations and communicate these to center employees while reserving even higher areas of the business-value chain for those able and ready to embrace it.
THE IMPACT ARTIFICIAL INTELLIGENCE WILL HAVE ON SHARED SERVICE CENTERS
Artificial Intelligence (AI) has generated countless discussions over the past few years, with some of these conversations progressing into how AI will affect the workforce both positively and negatively. For example, great efficiencies are being promised, but one significant downside is potential staff reductions. Most Fortune 500 companies utilize shared service centers (SSCs) to perform work tasks that are ripe for deploying AI. Although executives long for greater and greater workplace productivity, large, involuntary workforce reductions carry a heavy weight, create an adverse culture, and bring forth negative publicity. Leaders should begin thinking about their road map, particularly those leaders who oversee SSCs. Robotic process automation (RPA), machine learning, and deep learning are a few phrases that describe the nature of artificial intelligence. These terms bewilder many, so let’s first clarify what artificial intelligence is and the various categories
that exist within its framework. Artificial intelligence (AI) can be defined as the use of advanced technology to execute business tasks that would otherwise be manually performed by people, which is why there will be a significant impact on future workforce planning. The Harvard Business Review has appropriately categorized AI into three distinct areas to cover the entire spectrum of activities. Business process automation is the automation of repetitive and simple transactional tasks. Example: the systematic collection, processing, and approval of invoices with specified threshold amounts. Data analysis and insight generation is the gathering and transformation of multiple sources of input data to generate specifically tailored outputs so that decision-makers are better informed in their roles. Example: a demand-forecast platform for company products, which combines
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HOW TO HIRE A WORLD- CLASS CONSULTANT
A quarter-year is in the books, and our focus continues to be on what we sell — our world-class consultants. Hiring the next great consultant at CompassX, a specialized boutique with a local model, requires a great deal of effort to identify, screen, and eventually hire. Our recruit-to-hire process is extensive and rigorous, tailored to fit the difficult work we are asked to do for our customers.
pain. The greatest consultants have a knack for uncovering and bringing forth solutions to meet these often complex and challenging corporate problems. Customers will always value fresh, thoughtful insights and out-of-the-box thinking; new perspectives are often key to innovating and solving the biggest of problems. I’m extremely proud of our talent-screening process here at CompassX. We built it from the ground up, tossing out old assumptions without copying competitor models and always, always improving our playbook. When searching for the next great addition to your team, I recommend starting with these traits. Kyle J . Heppenstall Kyle J. Heppenstall Founder | Managing Director
What do we look for when hiring the next addition to our team? Ultimately, the question comes down to this: What makes a world-class consultant?
Consultants often must be able to work directly with both the analyst and the C-suite executive and adjust their messaging accordingly. Without this, your audience can become lost. Being able to communicate with this degree of flexibility is an invaluable asset.
METHODICAL MINDSET
Consultants have to survive and thrive in ambiguous environments. They must not only quickly obtain a conceptual understanding of a client’s complex problems but also apply a proven approach to turn chaos into order. Consultants do not have the luxury of being the end user to a problem or knowing all of the client’s protocols (or lack thereof) on day one. Applying proven methods to quickly process, understand, organize,
POISE AND GRIT
The job of a consultant is to make clients’ lives easier — often while temporarily sacrificing her own. Consultants put the client first with confidence, calmness, and passion. Whether it be fulfilling last-minute requests, being responsive during off-business hours, or not buckling under the pressure of tight deadlines, great consultants are sure of themselves and deliver the best solutions possible to their clients.
and then begin solving client problems is paramount to success in this industry.
COMMUNICATIONS AND COLLABORATIVE FLEXIBILITY
FINDS OPEN ‘WHITE SPACE’
The ability to tailor messages to different audiences is imperative for a great consultant.
Within an organization, “white space” is the initial unarticulated, undocumented areas of chaos and
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BOOK REVIEW The Four Obsessions of an Extraordinary Executive
BY THE NUMBERS
Percentage the U.S. economy (GDP) expanded in 2018 (full year) 2.9% 13% 15% Percent higher the S&P 500 finished in the first quarter of 2019 (its best three months since September of 2009) Percentage of millennials ages 25–35 currently living at home (up 5 percent from generation X and double that of baby boomers during those same ages) Amount parents spend annually on adult children ages 18–34 (double the $250 billion spent annually on their own retirement-account contributions) .728% Percent representing on-base plus slugging (OPS) MLB league average in 2018 (.248 batting average, .318 on- base, and .409 slugging, with 4.45 runs scored per game — play ball!) 10 p.m. Time when most of us should be asleep, because research has proven that circadian rhythms are distorted after 10 p.m. for the majority of people
“If everything is important, then nothing is.”
This is the powerful start to Patrick Lencioni’s “The Four Obsessions of an Extraordinary Executive: A Leadership Fable.” Most executives, Lencioni argues, are too distracted by other pursuits to focus on what really matters: organizational health. This is a crucial mistake. Leaders are in a prime position to make their company healthy. Organizational health, as defined in the book, is the absence of politics and vague missions, leading to “higher morale, lower turnover, and higher productivity.” Put that way, it’s clear every leader wants a healthy culture. So, how do you achieve one?
Using a story to illustrate his points, Lencioni focuses on the fable of one leader, Vince Green, who faces competitor challenges and brings to light the simplicity and power of organizational health. The narrative is an entertaining departure from other business books and conveys a lesson without making it feel like a lecture. Lencioni goes on to share the four steps leaders can follow to create a healthy organization. He names these by discipline and illustrates each one.
$500 billion
DISCIPLINE 1: BUILD A COHESIVE LEADERSHIP TEAM
It starts with building a leadership team in which everyone’s on the same page. Alignment means understanding each other’s strengths and weaknesses, holding each other accountable, and fully committing to group decisions.
DISCIPLINE 2: CREATE ORGANIZATIONAL CLARITY
Lencioni points out how even a slight lack of clarity between leaders at the top can lead to overwhelming confusion for employees. He advises diving into the typical business “who, what, why, how, when” questions to guide leaders deeper and deeper into creating clarity.
DISCIPLINE 3: OVERCOMMUNICATE CLARITY
Once leadership has created clarity, then it becomes their job to convey it. The simpler the message the better. It should be a basic message with heavy doses of repetition, so much repetition that employees should grow tired of hearing it. This is typically when they can be sure the message has been adopted.
DISCIPLINE 4: REINFORCE CLARITY THROUGH HUMAN SYSTEMS
Finally, reinforce clarity by weaving the messages through every aspect of the organization, including hiring, performance management and incentives, and compensation. For executives seeking additional perspectives on performance management, Patrick Lencioni’s “The Four Obsessions of an Extraordinary Executive” is our recommended book this month.
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DID YOU KNOW?
The first ever photograph of a black hole, taken from 55,000 million light years away … has a mass 6.5 billion times that of Earth’s sun. Million. Light years. Mind-blowing.
WILL YOUR NEXT CAR BE ELECTRIC?
General Motors, Ford, Toyota, and other auto industry leaders are turning their focus toward electric cars. This might seem out of place for companies that have traditionally made their biggest profits on heavier trucks and SUVs. However, as auto writer John Voelcker points out, these companies are looking to the future. Car companies obviously don’t know exactly which technology trends will be the most profitable in 10–15 years, but right now, they are betting it will be electric vehicles. In the past, purchasing an electric car wasn’t an option for many people because of the high initial cost and low single-charge distance. But each year, the cost of battery cells goes down by about 7 percent, making the vehicles much more practical. In the early to mid 2020s, the cost of a plug-in car with a range of 400 miles will be comparable to its gas-fueled counterpart. This range of around 400 miles is ever so important because it is what consumers today obtain in gas vehicles.
With more car companies investing in electric, consumers will benefit from variety. A landscape initially dominated by only a few now offers a wider selection of vehicle options and price points. Upcoming offerings include Audi’s E-Tron GT, a sleek four-door, battery- powered sedan, and the upstart Rivian, which took over an abandoned Mitsubishi factory to build electric trucks and SUVs. Those close to the industry, like Voelcker, predict that the battery-powered auto trend will continue to rise as the price of battery cells goes down, innovations continue, and more consumers start to see electric cars as an affordable, and perhaps even cost-saving, option. So will your next automobile purchase be electric? Personal preferences, commuting range, and price points may very well make your answer “no.” But the chances increase dramatically when someone asks, “Will your car after next be electric?”
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