IBJ Leadership & HR Business Arena 2015

Business Journal YOUR BUSINESS INTELLIGENCE AND NETWORK PARTNER

| Official Newsletter of the Leadership & HR Business Arena 2015 | April 2015 | No. 01 |

Leadership & HR Business ARENA 2015 Leadership & HR Business Arena will take place from 23rd – 25th April in Dubrovnik, Croatia. The Arena will provide learning opportunities for you to take back to your organisation and to help you think about your company’s growth in the next decade. You will also have the time and opportunity to engage in both group and one-on-one discussions with speakers and fellow Senior & HR executives from some of the most prominent organisations in CEE region from very different countries and industries. This conference will provide an atmosphere of learning, networking, inspiration and collaboration that are unprecedented.

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hrough the delivery of resultsbased case studies, along with interactive networking sessions, Leadership & HR Business ARENA 2015 will serve your needs at any stage of your growth. This conference will provide an atmosphere of learning, networking, inspiration and collaboration that are unprecedented. Take part in networking and benchmarking opportunities with your peers from global and medium sized organisations from a range of different sectors.

Do not miss this unique opportunity to get new ideas, new business opportuni-

ties and in the same time having a great pleasure to spend three wonderful days in magic Dubrovnik! 

TOPICS OF THE CONFERENCE WOULD COVER: ENTREPRENEURIAL SPIRIT: How to ENGAGEMENT: How to develop increate entrepreneurial spirit - the novative and entrepreneurial spirit challenge for the future - Emerging in the company. How to inspire, modes of co-operation between Edumotivate & help people to become cation Institutions, Private and Pubmore passionate at what they do lic sector - future trends & challenges EXECUTION: How to develop and GROWTH: How to ensure the company implement a robust employee growth for the next decade - Strategic engagement in order to be a truly vision of regional & global growth high performance company

<p.03> INTERVIEW: CARMEN MAJETIĆ PAVIĆ

<p.05> INTERVIEW: DR. TED MARRA

The fact is that doing more is not enough

The organization must have a ‘sensing system’

<p.10> TESTIMONIALS

What participians say about us...

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Business Journal • page 02

TIMES ARE CHALLENGING:

How to Manage Challenges and How to Seize the Opportunities.

How to Get People More Engaged.

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ach company has its own unique characteristics, its own set of opportunities and challenges. Even so, in general, every CEO will have to successfully address five dimensions: the company’s geographic position, the rapid pace of change, the company’s organisation model, its culture, and the CEO’s own personal leadership.

Whatever your current geographic position, the certainty of globalisation should determine your aspirations, your mindset, and, ultimately, your approach.

Companies — whether they are multinational or locally based—will, therefore, need to raise their investment in talent management, treating human capital with the same rigour as a capital asset investment in order to overcome some common challenges. However, there’s a catch: talent is increasingly difficult to find, and the talent shortage will only worsen over the next decades.

LEADERSHIP & HR BUSINESS ARENA contributes to the better understanding of the key topics in this field for the next decade.

It provides the benchmark for those who wish to know whether their company is on the right track. Our intention is to bring inspiration and insights allowing individuals to react to the opportunities that lie ahead.

GLOBAL HUMAN CAPITAL TRENDS 2015 (Source: Deloitte)

1) Leadership: companies are struggling to develop leaders at all levels and are investing in new leadership models 2) Learning and development: companies are actively exploring new approaches to learning and development as they confront increasing skills gaps 3) Culture and engagement: there is a need to focus on culture and improve employee engagement as companies face a looming crisis in engagement and retention 4) Workforce on demand: companies are taking a more sophisticated approach to managing all aspects of the workforce including hourly, contingent and contract workforce 5) Performance Management: companies are replacing traditional performance management with innovative performance solutions 6) Reinventing HR: HR is undergoing an extreme makeover to deliver greater business impact

7) HR and People analytics: very few companies are actively implementing talent analytics capabilities to address complex business and talent needs 8) People data: HR and talent organisations are expanding their HR data strategies by harnessing and integrating third-party data about their people from social media platforms 9) Simplification of work: companies are simplifying work environments and practices in response to information overload and increasing organisation and system complexity 10) Machines as a talent - collaboration, not competition: the increasing power of computers and software to automate and replace knowledge workers is challenging organisations to rethink the design of work and the skills their employees need to succeed Most companies are not ready to respond to such trends; thus there is a need for developing more effective and more innovative HR strategies.

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Business Journal • page 03

INTERVIEW: Carmen Majetić Pavić

The fact is that doing more is not enough I

believe that people are the most valuable assets of each company.

The most effective leaders always surround themselves with the right people and the right people today must have an entrepreneurial spirit to be successful on labour market.

What are the critical global human capital trends today?

Today the fact is that doing more is not enough. Today, companies have to manage people differently - creating an imperative to innovate, transform and reengineer human capital practices. Global social, political and regulatory shifts are changing the focus of business.

Consumer and talent markets are making new demands on business, with social and community concerns rising to new levels of priority. The ‘Millennium Generation’ is entering the workforce in greater numbers and reshaping the talent markets with new expectations.

They are projected to make up 75% of the global workforce by 2025, and are ready to take the lead - very soon.

Technology is changing how we work and the skills we need today and in the future. Collaborative technologies continue to make it possible for teams to work in remote locations across the world, easily accessing experts within and outside the company. The skills we need today and in the future are dramatically different from those only few years ago. These changes in the workforce are significant and disruptive. It is not easy for the companies to thrive in this era of rapid changes and uncertain environment. Today the strategic focus is on three key areas in the field of human resources management. The first one is to lead and develop. The need to deepen and accelerate leadership development at all levels; re - energise corporate learning by putting employees in charge and fix performance management. In a world where knowledge doubles every year and skills have a half - life of three to five years, leaders need constant de-

Carmen Majetić Pavić has over twenty years of experience in marketing & sales and hr activities in three verticals: cosmetics and hygiene, pharmaceuticals and food industry, also a wide range of managerial and consulting experience in marketing & sales, customer relationship management and human resources. She has a long experience in the international enviroment, leading international teams mostly in the CEE region. She was developing and implementing sales force effectiveness in several markets. Furthermore, she was responsible for conducting innovative marketing initiatives and CRM philosophy during her work experience in Pliva Pharmaceuticals. Today she is owner of tagoras company and she is working as interim manager, business consultant and executive coach. She is also working as a program director for HR Business Arena for the last five years. velopment and coaching - mentoring programs are the most valuable learning technique today. The second is attract and engage. There is a need to develop innovative ways to identify, attract, recruit and access talents and then retain them in the company. Passion and engagement of employees are crucial for companies’ competitiveness on the market. Companies should redefine their engagement strategy to move from keeping people to attracting them and creating a passionate and compassionate place to work. The third one is transform and reinvent because there is the need to create a global HR platform

that is flexible enough to adapt to local needs. HR professionals must be transform into skilled business consultants.

An essential part of this change is the reorganisation and transformation of HR and its relationship with business leaders.

We can conclude that leadership, retention and engagement, transforming HR skills and talent acquisition are the most important human capital challenges that require attention in near future.

Unemployment rates are increasing due to the economic crisis. More and more young people are without em-

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nounced to sign at the “Leadership & HR Business Arena” in Dubrovnik, on 24th April 2015.

Whether you like it or not, you are "competing for the future" and the choices you make now will determine if you will be a "winner or a loser" ployment. How can we decrease the unemployment rate among the youth generation?

The European Union faces a number of fundamental policy challenges, including aging population, global competitiveness and growth, and the sustainability of social security systems.

Unemployment levels have been reaching new peaks in almost every country, hitting young people particularly hard.

That means that young people with education are unable to find employment, that frustrations build and brain drain takes off. Now, to claim for this situation the economic downturn is only one side of the problem. The millions of young people out of work are result also of big technological, business and political transformations that we are facing today. Moreover, next decade will be even more challenging for youth generation. According to World Economic Forum, it is expected that more than 1.2 billion young people will enter labour market in the next 10 years while only 300 million jobs await. That’s why we initiated Youth Employment Initiative last year during the HR Business Arena and 25 regional companies were signed the Charter of cooperation. We

want to stimulate cooperation between different regional companies as well as public and educational sector in the field of employment of young people (aged 18-30 years). The purpose of the Charter is to connect representatives of the business, public, educational sector and other stakeholders in a systematic process of developing project ideas and project partnerships to achieve the improvement of human resources development and reducing the rate of youth unemployment in Adriatic region. The focus will be on development process and the design of projects that will be able to apply for funding in tenders, e.g. from EU funds. Therefore, the process should result in concrete regional and local projects in cooperation with local partners from the Ministry of Labour, Ministry of Education and Employment Bureau. In April 2015, at the LEADERSHIP & HR BUSINESS ARENA, we will consider the results and concrete actions initiated in the meantime. Support for the initiative was also given by the European Bank for Reconstruction and Development (EBRD) and the Croatian Employers’ Association. Currently we have 25 signatories of the Charter and several new organizations have an-

What is the role of the government and their programmes to help young people to find a job and start to work?

Personally, I really believe it is an entrepreneurship mindset. IBM, Disney, Apple, among many other, were all launched during recessions. Today, 80% of new jobs in USA are created by medium & small business. Moreover, start-ups have become the largest employer of recently graduated students. So, if we would like to have more jobs we need to launch more companies but before we launch more companies we need to launch more entrepreneurs. The role of the governments is to provide the best education system needed to be competitive and to thrive in 21st century and to align entrepreneurship mindset in all structures of the society.

That’s why this topic will be on the agenda during the conference Leadership & HR BUISNESS ARENA in Dubrovnik.

We invited representatives from public, private and educational sectors to discuss this issue and make some agreement about the possible changes in society.

How to prevent the outflow of young labour force?

In Europe, key migration motivators in the first place are employment - related factors, such as higher income, better working conditions and opportunities of finding a suitable job. The brain-drain is already the fact especially for almost all Eastern European countries. Unhappiness with the life, dissatisfaction with the salaries and working conditions, concerns about the availability of good jobs and insecurity about the jobs are the key reasons to move abroad for Eastern Europeans, according to Blanchflower and Lawton study in 2008. However, I don’t see a problem in youth leaving the country but how to motivate them to come back after some time. Looking back to my career path the most important learning experiences and networks have been created while I have been working abroad. In this regards I would support youth to go abroad for a few years and to gain global business self-confidence and to motivate them to come back. Finally, to finish with some optimistic spirit, according to A.T. Kearney research in 2013, youth believe, that Central and Eastern European countries don‘t offer enough challenging jobs, but situation is improving and 74% are ready to stay and work in CEE region. 

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Business Journal • page 05

INTERVIEW: Dr. TED Marra

The organization must have a ‘sensing system’ D

r. Marra, you have had a long (some 42 years) and varied experience (lived or worked in 37 countries) around the world, assisting nearly 160 organizations of every type from private to public and NGO, large and small. What is your most important observation based upon your experience?

As I have shared in my new book, ‘The Wisdom Chronicles: Competing to Win’, what I have seen is that true success for any organization comes down to a relentless focus on just a few ‘vital’ factors. In my opinion, those factors are the following: I. The ‘business model’ designed and driven by the leadership team and consisting of a number of components: (a) culture (values/beliefs and practices); (b) core shared purpose – why you exist as an organization and making sure you remain true to that purpose over time; (c) renewal – an integration of adaptation, innovation and learning which ensures your organization is, in essence, ‘forever young’ – that is it continuously renews itself overtime to remain relevant regardless of the dynamic nature and turbulence of the operating environment; (d) vision – capturing the future vision of what your organization aspires to be – that desired future state; and ; lastly, what I refer to as the ‘principles of engagement’ with communities and society – that is, what the organization is doing to ensure people in communities and society in general have a better quality of life as well as building trust II. ‘Aligning the organization’ around the ‘vision’ 1. Formulating a vision can be challenging, but truly the most challenging activity is executing to ensure the vision is achieved a. It is here where the leadership team must continuously reinforce, inspire, engage, empower and build capability

stakeholders and (2) the key source of competitive advantage for an organization – what enables it to distinguish itself 3. I am not speaking, however, of ‘stakeholder value’ that too often is just a fancy smoke screen for maximizing profits and the bonuses of senior executives. In fact, the research has shown time and again that those organization that place inordinate or too much focus on this actually, over the longer-term, perform worse than those who do not have this focus.

among their people – ensure they all know the contribution they can make and need to make and have the competencies, tools, systems, technology and techniques to help them reach their full potential in contributing to achievement of the vision b. During this alignment process, the critical success factors, key business objectives and strategies are developed and executed. Again, the challenge is in the execution – it needs to be as flawless as possible, yet most Chief Executives would tell you that doing this is consistently one of the hardest challenges and many of them fail to get it done effectively and efficiently III. ‘Creating and delivering value to all key stakeholders’ 1. To me, what should come from all the efforts of an organization – everything that takes place in step (ii) above must result in the creation and delivery of value. To me, in fact, this is the ‘true purpose’ of any organization.

2. Why is it so important? Because value as I have seen in over my 42 years is (a) it is the single most important factor in enabling an organization to build exceptional relationship with their key

IV. Today, organizations need to be more ‘agile’ than ever because of the constantly changing, turbulent environment in which they must operate. To me, ‘agility’ is the capability of an organization to identify, assess and act e.g., decide and execute better and faster than competition or other providers.

1. To be able to do this, the organization must have a ‘sensing system’, a ‘strategic information architecture’ which enables it to get the information it needs when it needs it to make better decisions faster – to act to take advantage of opportunities or to blunt impending threats.

2. Such as system enables an organization to anticipate – be proactive rather than reactive 3. Such a system must give an organization the capability, for example, to identify emerging trends, changing requirements, competitive intelligence and more – to be out in front, not behind the ‘8 ball’ and trying to play ‘catch up’.

V. Lastly is making sure that the organization has the right focus on outcomes – that it has identified the ‘vital’ few key performance indicators (KPI’s). In my estimation, if I had to pick just four (4) that I believe are of greatest importance based upon my experience they would be:

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1. Agility/resiliency (note, we spoke of agility above, but resiliency is how quickly and effectively an organization can return to a normal performance level overall or in a certain area after a problem situation) 2. Creating and delivering value 3. Competitiveness 4. Societal benefits Leadership is always a topic on the minds of senior executives as well as many others such as academicians and consultants to mention just some. Do you have any observations you could share with us on this important topic?

Leadership, as I understand it, is the single most written about social issue in the world. You would think that by now, we would have all the answers, but somehow they still seem elusive.

I. If you were to refer to the classic, ‘Good to Great’ by Collins, he breaks leadership into five (5) categories. If you were to assume that leadership follows a normal distribution, then less than 2.5% of those falling into a ‘leadership position’ in any organization around the world be Level 5 – or your most gifted and talented leadership group. That’s not a lot.

II. I could go further and give you my observation – it may seem cynical, but I think it accurately reflects the situation:

1. 20% of leadership teams are basically ‘clueless’ – they don’t know what they don’t know and in most cases they don’t want to know because they think they already do, even though they don’t! These are what Peter Senge of MIT wrote about in his works on learning Organizations. This group is what he refers to as the ‘unconscious incompetents’ 2. 60% of leadership know something is not quite right in terms of their organization and they may be fumbling around with initiatives here and there that tend to address ‘symptoms’ and not the disease – or they may even have a decent plan, but they fail to

execute, so in the end they get nowhere or at best nominal results 3. 15% have plans and execute well enough to get some results which may even address part of the root cause of the underperformance 4. 5% (and this is very generous) have their ‘collective’ act together – as a leadership ‘team’ III. While I too could fill a small book easily with my observations on leadership and ‘leadership teams’, the following would represent, from my perspective, some of the most important ones: 1. It must be a ‘ team’ – ‘ all one team’ a. This includes valuing diversity in gender, culture, experience, generation 2. All leadership team members must be passionate and embrace the core values/beliefs of the organization – ensuring they are role models and are leading by example 3. Relationship mastery a. They each must be able to build exceptional working relationship with one another, but also with all key stakeholder groups – listening, learning and acting with the appropriate sense of urgency on what they learn 4. They all must have a common understanding and commitment to achieving and the regular reinforcement of the core purpose & vision

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5. They should provide Inspiration to the orga- nization– always looking for ways to help their people reach their full potential; engage them; involve them; empower them; motivate them; bring out their creativity and passion 6. They all must earn and maintain the trust and confidence of all stakeholders 7. They must engage in doing the right things right – holistic not parochial thinking; excellence, not just quality; long-term view, not expediency. In fact.

Noted business guru, Peter Drucker has said that ‘leadership is far more about ‘doing the right things’ than ‘doing things right’. However, the ideal is to get both done. a. One of the critical activities the leadership teams needs to be engaged in is taking every opportunity to ensure their organization is creating and delivering value to all key stakeholders. In my opinion, this falls under ‘doing the right things’ for the organization.

You have seen a lot of organizations that have grown successfully and some that have not. What would you say are some of the factors that can be key to successful growth – whether you are an SME or larger organization?

Yes, no question as I have seen some organizations self-destruct around this issue of growth. First, I must say that any organization that takes a ‘growth for growth’s sake’ approach is playing a high-risk game that it may later regret.

I. Take the Royal Bank of Scotland Group (RBSG) based in Edinburgh.

They were a client of mine for many years while Sir Fred Goodwin was CEO. His philosophy, despite occasional words to the contrary, was ‘growth for growths sake’. When he tried to merge – or maybe it was acquire, ABN Amro bank from Holland, I knew he had just swallowed the ‘poison pill’, especially since I had done some work for ABN Amro bank and knew the ‘inside story’ on how they worked. Sure enough, the transaction ended in a disaster for RBSG and that together with other management issues led to Sir Fred’s rapid departure and the bank requiring a government bailout to where the UK government now owns 65% of the bank.

1. Frankly, the EU has been following a somewhat similar approach as it has expanded to some 28 countries. Be prepared is all I can say.

2. Ramping up is not a trivial pursuit. If you move too quickly to grow without appropriate infrastructures and management systems (including systematic processes) in place not to mention trained and capable people, you will self-destruct. SME’s, for example, find this to be the case in going from 75-100 people up to 200-250 people. It is a critical phase and must be planned for extremely well – especially if new locations are coming on stream simultaneously either in the home country or other countries.

II. To me, the foundation for growth and expansion must be operational excellence. One of my clients, and SME in Croatia, has been successful, but only because it has distinguished itself for excellence. It has achieved a reputation for innovation, relationship building and extraordinary people and has a culture of fun, passion, creativity and results – the vital few most important ones. Having this as a foundation is essential to successful growth – effective and efficient growth, which avoids a great deal of the pain often associated with it.

III. It is also critical in my mind to find the right business partner(s) for expansion. In some cases those ‘partners’ may be a larger regional or global company which is doing well – especially one which I would define as being ‘value oriented’ 1. To me, a ‘value oriented’ organization is one which has a strategic focus – not just an operational one; they don’t focus

just on cost, availability issues, but want ‘value’; they are not looking for a ‘vendor’ but want a business partner who they believe can help them be more successful; they are willing to share information on plans, share technology and resources if need be. These are types of ‘partners’ an organization who wants to grow and expand, needs to find. Not always an easy task, but the consequences of doing otherwise can and often will be disastrous.

IV. Lastly, the senior management team and other high potential – leaders of tomorrow, in the organization need to have some ‘multicultural’ training and development that may be on-going and include coaching. There are some ‘foundation elements’ which need to ‘travel across borders’ such as cultural values of the organization, relationship mastery and focus on the right and consistent set of measures for competitiveness to mention just a few. In addition, there needs to be some new imperatives as well such as looking at the confluence of trends – technological, generational, for example; Hofstede Center’s unique work in gaining insight into the cultures in other countries; and building a neural network for sharing ideas, emerging trends, competitive intelligence and more just, once again, to mention a few.

V. Proper planning – doing your homework; finding the right partner; building a reputation for excellence, innovation and relationship excellence – then executing as flawlessly as possible; building competencies in multicultural leadership – all will enable you to get where you want to go – to grow and expand without self-destructing along the way. 

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Check out the atmosphere at the HR Arena 2014!

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List of companies - Participants at HR Arena 2014 # 3M (East) AG Croatia A A.T. Kearney Abak Adizes Southeast Europe ASEE Agency for Electronic Communications, Republic of Macedonia Agrokor Alca Zagreb Allianz Zagreb Amrop Adria Anglo-Adria Management Consulting Arenaturist ARGO Assessment system Croatia Assessment system Serbia Association of Montenegrin Managers Atlantic Grupa B B Network Beyond20:21st century Bilfinger Đuro Đaković Montaža Bingo Biomelem Bisnode Bosnalijek Business Conferences C Challenge:Future & TMK lab Ciklopea Club of Rome Coca-Cola Hellenic Combis Cotrugli Business School Crnogorski Telekom Cromer Group d.o.o.

D Danube foods Delta Agrar Delta Holding Dukat Dunav osiguranje E Elektro- kontakt Elektroprivreda BIH eTalent sistem European Bank for Reconstruction and Development EY Belgrade EY Zagreb F Faculty of Economics Podgorica, University of Montenegro Faculty of Law Zagreb Faculty of Philosophy Zaagreb Fidelta Futura edukacija FVS G Galagan Advisory

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Giacomelli media Gorenje Grad Dubrovnik Grafik.net Gras Savoye Signature Helvetas Swiss Intercooperation/ CEED Kosovo HEP-Obnovljivi izvori energije Holding Slovenske elektrarne HROK Hrpro Hrvatska banka za obnovu i razvitak Hrvatska pošta Hrvatska udruga poslodavaca Hrvatske telekomunikacije Mostar Hrvatski Telekom Hrvatski zavod za zapošljavanje Human Consulting Human Factors AS Human Synergistics IBM Serbia IBM Croatia IBM Czech Republic Idego IEDC Bled School of Management Integra znanja International Airport Zagreb Ipsos Karmen management consulting Komercijalna Banka Skopje Kulturni Centar Lazarević i Pršić Advokati Limundo London School of Commerce LQ Diagnostics Mercator Mercer Balkans Ministry of Labour and Pension System Croatia Ministry of Science, Education and Sports Croatia MK Group MK Mountain Resort Mokra Gora School of Management Momentum strategies Naſtna industrija Srbije National University of Singapore Nelt grupa Nestle Adriatic NIS Gazprom Neſt Nova Ljubljanska Banka Odvjetničko društvo Dominković i partneri

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Omega Business Development Opulento Oracle BiH Oracle Croaia Orbico Petrako Pliva Podravka Poslovni sistem Mercator Pozavarovalnica Sava Primus Group Privredna banka Zagreb Pro.Max.Team ProConsulting PwC RALU logistika Roche Rochester Institute of Technology Croatia S&T Samostalna djelatnost SAP Sberbank Sika Croatia Spona State Inspectorate Stipis Styria Croatia Špica International Špica Sustavi Tagoras Tanjug Telekom Srbija Telenor Monte Negro Telenor Serbia The first gymnasium in Zagreb Trade consulting Unicredito Zagrebačka banka University of Montenegro/Digitalizuj.

Me Univerzitet Niš Uphill Valoviti papir Dunapack d.o.o.

Verantius VIPnet Wienerberger Ilovac WIFI Croatia Wireless Media Ypsilon Institute Zagrebacka škola ekonomije i managementa Zavarovalnica Maribor Zavarovalnica Tilia

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What participians say about us...