dean of cba business school zagreb/ eu expert brussels. 1 bhrmda albena, may 19, 06 human relations...

DEAN of CBA Business School ZADEAN of CBA Business School ZAGREB/ EU Expert Brussels.GREB/ EU Expert Brussels.

11BHRMDA Albena, May 1BHRMDA Albena, May 19, 069, 06

HUMAN RELATIONS :HUMAN RELATIONS :THE KEY OF THE KEY OF

COMPETITIVENESS IN THE COMPETITIVENESS IN THE EU LISBON STRATEGY EU LISBON STRATEGY



CHAPTER 1:CHAPTER 1:

A SHARP A SHARP TRANSFORMATION…TRANSFORMATION…

(Peter DRUCKER)(Peter DRUCKER)

BHRMDA Albena, May 1BHRMDA Albena, May 19, 069, 06


33

P. Drucker: TransformationP. Drucker: Transformation

Every few hundred years in Western History Every few hundred years in Western History there occurs a sharp transformation. there occurs a sharp transformation.

Within a few short decades, society rearranges Within a few short decades, society rearranges itself : its worldview (paradigm), its basic itself : its worldview (paradigm), its basic values, its social and political structures, its values, its social and political structures, its arts, its key institutions. arts, its key institutions.

Fifty years later there is a new world.”Fifty years later there is a new world.”

Peter DRUCKER: Peter DRUCKER: “Post Capitalist Society”.“Post Capitalist Society”. p.1. p.1.



44

Transmodern Business

Knowledge SocietyTRANSMODERN

Danger

Industrial leftovers who have not grasped the changeAgrarian

premodern

Agrarianleftovers

Culturalcreatives

IndustrialMODERN

Sept. 11, 2001?

New Women-Men Partnership Society

End ofPatriarchal Society

Transmodern Business

Knowledge SocietyTRANSMODERN

Danger

Industrial leftovers who have not grasped the changeAgrarian

premodern

Agrarianleftovers

Culturalcreatives

IndustrialMODERN

Sept. 11, 2001?

New Women-Men Partnership Society

End ofPatriarchal Society

Transition to Transmodern

Death ?



55

One of the most fundamental One of the most fundamental shiftsshifts• ““We are living through one of the most We are living through one of the most

fundamental shifts in History: fundamental shifts in History: • a change in the actual belief structure of a change in the actual belief structure of

Western Society. Western Society. • No economics, political or military power can No economics, political or military power can

compare with the power of a change of compare with the power of a change of mind. mind.

• By deliberately changing their images of By deliberately changing their images of reality, people are changing the world.” reality, people are changing the world.” Willis HARMAN Stanford Research Institute, Willis HARMAN Stanford Research Institute, Founder of the “World Business Academy” Founder of the “World Business Academy” (+1997)(+1997)



CHAPTER 2:CHAPTER 2:

WHAT IS KNOWLEDGE WHAT IS KNOWLEDGE SOCIETY?SOCIETY?



77

ONE EXAMPLE ONE EXAMPLE The EU web masterThe EU web master

• One small entreprise won the bid for One small entreprise won the bid for the EU Web. Big contract.the EU Web. Big contract.

• Capital and technology are 10%Capital and technology are 10%• Human capital = 90%Human capital = 90%• Management is “humble” Management is “humble”

– FacilitatorFacilitator– NetworkerNetworker– Caring for HR: Please come back Caring for HR: Please come back

tomorrow!tomorrow!



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EXAMPLE IIEXAMPLE II

• Entreprise was sold. Very expensive.Entreprise was sold. Very expensive.

• New management was “industrial” New management was “industrial” arrogant, pyramidal. Failure.arrogant, pyramidal. Failure.

• Return of the old CEO!Return of the old CEO!

• Back to new HR management! Back to new HR management!

• SUCCESS again.SUCCESS again.

• Crucial importance of HR managementCrucial importance of HR management



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DEFINITIONSDEFINITIONS

• Data:Data: what is on the web, unorganised what is on the web, unorganised

• Information:Information: is already sorted by is already sorted by google. Too muchgoogle. Too much

• Knowledge:Knowledge: is digested by is digested by human human brain. brain. not enoughnot enough

• Wisdom:Wisdom: is rare. Not enough. New is rare. Not enough. New mission of the bsuiness.mission of the bsuiness.



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DEFINITIONS Info-DEFINITIONS Info-KnowledgeKnowledge• FREE TRADE (ICT S)FREE TRADE (ICT S)

• Industrial PyramidIndustrial Pyramid

• + I.C.T. (technology)+ I.C.T. (technology)

• PyramidsPyramids

• FREE TRADEFREE TRADE

• UnemploymentUnemployment

• PollutionPollution

• Quantitative growthQuantitative growth

• FREE SHARE (KS)FREE SHARE (KS)

• Post-industrial-capit. Post-industrial-capit.

• A new Society A new Society

• Network =value Network =value creationcreation

• FREE SHARINGFREE SHARING

• self-creation of jobsself-creation of jobs

• Immetrialization of Immetrialization of prod.prod.

• Qualitaitve growthQualitaitve growth



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Knowledge society= Post Knowledge society= Post capitalist?capitalist?

(Peter Drucker 1993) (Peter Drucker 1993) Value creationValue creation is linked to is linked to

knowledge applied to knowledge applied to knowledge.= knowledge.= new tool of production new tool of production >capital>technol. >capital>technol.

QualityQuality of knowledge is more of knowledge is more important than quantity. Progress important than quantity. Progress becomes more becomes more qualitativequalitative than than quantitative.quantitative.

MEASUREMENT is more qualitiative: MEASUREMENT is more qualitiative: Two Schools of economists…Two Schools of economists…



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Knowledge society= Post Knowledge society= Post capitalist? IIcapitalist? II

Knowledge is increased only by Knowledge is increased only by sharing in a network. sharing in a network. This is anThis is an inclusive inclusive logic. (like love !).logic. (like love !).

From From FREE trade FREE trade towards towards FREE FREE sharing sharing

Thus crucial importance of being in Thus crucial importance of being in a good a good network network in order to in order to increase knowledge by sharingincrease knowledge by sharing. . ((See Verna ALLEE)See Verna ALLEE)



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Knowledge society IIIKnowledge society III

• Secrecy and patenting are in crisisSecrecy and patenting are in crisis

• The global strategy is shifting The global strategy is shifting

• from win-loose (industrial) to Win-Winfrom win-loose (industrial) to Win-Win

• From exclusion(industrial) to inclusionFrom exclusion(industrial) to inclusion

• From command and control to From command and control to enabling creativity and sharingenabling creativity and sharing



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The “Human capital”The “Human capital”

• Management : shifts 180° towards human Management : shifts 180° towards human centeredness = more creativity-centred, centeredness = more creativity-centred, gender & culture – centred.gender & culture – centred.

• The “Common good” (human) aims of the The “Common good” (human) aims of the enterprise towards society at large are enterprise towards society at large are becoming more important : because of becoming more important : because of reputation & brand and intangible assets.reputation & brand and intangible assets.

• Example: “ASCII” which manages EU site: Example: “ASCII” which manages EU site: “www.europa.eu.int “www.europa.eu.int



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HUMAN RELATIONS = HUMAN RELATIONS = CRUCIALCRUCIAL• Caring for Human relations are at the Caring for Human relations are at the

source of value creation. source of value creation.

• Because this is enhancing “human Because this is enhancing “human capital”capital”

• HR policies are thus becoming central…HR policies are thus becoming central…

• Unless the negative scenario of Unless the negative scenario of manipulation of human brain becomes manipulation of human brain becomes effective…effective…



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INTANGIBLE ASSETSINTANGIBLE ASSETS

• « Intangible assets » is a new « Intangible assets » is a new concept invented by Karl Erik SVEIBY concept invented by Karl Erik SVEIBY (Sweden)(Sweden)

• They are becoming more and more They are becoming more and more important in the knowledge societyimportant in the knowledge society

• Because the knowledge society is Because the knowledge society is about knowledge which is intangible about knowledge which is intangible and qualitative.and qualitative.



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INTANGIBLE ASSETS IIINTANGIBLE ASSETS II

• Intangibles assets = Intangibles assets = – Know how, Know how, – Reputation, Reputation, – Trust in the company, Trust in the company, – Relations with personnel, Relations with personnel, – Relations with clients, Relations with clients, – Relations with stakeholders, Relations with stakeholders, – Relations with neighbourhood +natureRelations with neighbourhood +nature– Relations with civil societyRelations with civil society



1818

MEASURING INTANGIBLE MEASURING INTANGIBLE ASSETS IASSETS I

• Two Schools of economistsTwo Schools of economists– Majority: trying to quantify the Majority: trying to quantify the

qualitativequalitative– Minority: accepting to cope with Minority: accepting to cope with

qualitative dimension in NEW qualitative dimension in NEW economics…economics…



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MEASURING INTANGIBLES IIMEASURING INTANGIBLES II

• Stock exchange measurements are still Stock exchange measurements are still looking at financial “tangible” assets looking at financial “tangible” assets (quantitative) but they increasingly look at (quantitative) but they increasingly look at “intangible” assets (qualitative). “intangible” assets (qualitative).

• Today a company is measured more and Today a company is measured more and more by its intangible assets. more by its intangible assets.

• Example: “Example: “Men’s WearMen’s Wear” USA. & “” USA. & “World World Business Academy”, “Spirit in Business”.Business Academy”, “Spirit in Business”.

• See also Neskey: See also Neskey: www.neskey.comwww.neskey.com

http://www.neskey.com/



2020

Intangible indicators growIntangible indicators growT

rans

par

en

cy

ICT Proliferation

Financial indicators remain important

Non-financia

l indica

tors

grow in im

portance

Potential for greaterparticipation and

wider accountability

PAST PRESENT FUTURE



2121

GROWING IMPORTANCE OF GROWING IMPORTANCE OF INTANGIBLE ASSETS (II)INTANGIBLE ASSETS (II)

0%

10%

20%

30%

40%

50%

60%

70%

80%

1980 2006 2010 2020

Tangible

Intangible



2222

BUSINESS & SOCIETY:BUSINESS & SOCIETY:a new relationa new relation

• Industrial objects are “tangibles” & Industrial objects are “tangibles” & ethically neutral.ethically neutral.

• Knowledge is “intangible” & always Knowledge is “intangible” & always linked to a meaning and thus to linked to a meaning and thus to ethics.ethics.

• Producing knowledge thus involves a Producing knowledge thus involves a meaning and a business reputation = meaning and a business reputation = an an “intangible” “intangible” asset.asset.



2323

SUSTAINABILITY & SUSTAINABILITY & INCLUSION AS KEY INCLUSION AS KEY “INTANGIBLES” “INTANGIBLES” • Because of the steady increase of Because of the steady increase of

importance of intangible assets importance of intangible assets • Because of the link between Because of the link between

sustainability + inclusion and sustainability + inclusion and Humanity’ s futureHumanity’ s future

• Companies that will be seen as caring Companies that will be seen as caring for Humanity’s future will have an for Humanity’s future will have an increasing intangible value.increasing intangible value.

• Their stock value will skyrocket soon…Their stock value will skyrocket soon…



2424

HR ANOTHER MAIN HR ANOTHER MAIN INTANGIBLEINTANGIBLE

• HR is important because it is another HR is important because it is another intangible asset.intangible asset.

• Not only it increases Human Not only it increases Human creativity and thus the value creativity and thus the value creation…creation…

• But it increases the positive energy But it increases the positive energy inside and around the company… inside and around the company… Thus the intanbgible assets…Thus the intanbgible assets…



2525

BUSINESS STRATEGIES IN BUSINESS STRATEGIES IN KNOWLEDGE SOCIETY (I)KNOWLEDGE SOCIETY (I)

• 90 % of the EU Business leaders choose 90 % of the EU Business leaders choose the the « information society »« information society » appraoch appraoch =FREE TRADE:=FREE TRADE:– More capital + advanced technologyMore capital + advanced technology

• 10% of the EU Business leaders choose the 10% of the EU Business leaders choose the « knowledge society »« knowledge society » approach: approach:– human human creativity > € >technol.creativity > € >technol.– Enterprise in Enterprise in NetworkNetwork: : win-win strat.win-win strat.– Human capital= not a cost but Human capital= not a cost but key assetkey asset



2626

Consequences for the Business Consequences for the Business (II)(II)

• IN US, only the « Knowledge society IN US, only the « Knowledge society » business (10%) have survived the » business (10%) have survived the dot.com crashdot.com crash: Example: CISCO: Example: CISCO

• Because they have changed :Because they have changed :– The tools (ICT)The tools (ICT)– The structure of their enterpriseThe structure of their enterprise– The underlying vision of their scope and The underlying vision of their scope and

values values (Verna ALLEE)(Verna ALLEE)



CHAPTER 3: CHAPTER 3:

THE LISBON STRATEGIES THE LISBON STRATEGIES AND AND

THE FUTURE OF EUTHE FUTURE OF EU



2828

LISBON STRATEGIESLISBON STRATEGIES

• LISBON I 2000-05LISBON I 2000-05

• FREE SHAREFREE SHARE

• Post industrialPost industrial

• Post capitalistPost capitalist

• NOT EXPLAINEDNOT EXPLAINED

• ……FAILUREFAILURE

• LISBON II 2005-10LISBON II 2005-10

• FREE TRADEFREE TRADE

• Old IndustrialOld Industrial

• CapitalistCapitalist

• Business as usualBusiness as usual

• EasierEasier



2929

LISBON STRATEGIESLISBON STRATEGIES

• CONCLUSION:CONCLUSION:• Lisbon strategy I had thus done the right Lisbon strategy I had thus done the right

choices: KS+ sustainability + inclusion!choices: KS+ sustainability + inclusion!• BUT it failed to explain the new vision and BUT it failed to explain the new vision and

the new economic frame: FREE SHAREthe new economic frame: FREE SHARE• Lisbon II strategy weakens EU’s Lisbon II strategy weakens EU’s

competitive position in the long term.competitive position in the long term.• BUT it is easier to apply in short term.BUT it is easier to apply in short term.



A WIN WIN STRATEGY FOR A WIN WIN STRATEGY FOR EUROPE?EUROPE?



3131

EU : A WIN-WIN STRATEGY EU : A WIN-WIN STRATEGY

• The The obstaclesobstacles to the free to the free trade/industrial information society trade/industrial information society strategiesstrategies

• ……become become advantages advantages in the in the knowledge society. knowledge society.

• BECAUSE The basic logic is different, BECAUSE The basic logic is different, almost opposite.almost opposite.



3232

WHEN OBSTACLES BECOME WHEN OBSTACLES BECOME ADVANTAGESADVANTAGES

• Free trade Free trade obstaclesobstacles

• Social protectionSocial protection

• Environm.protect.Environm.protect.

• Women family Women family prog.prog.

• Development progDevelopment prog

• Sharing technologySharing technology

• Advantages Know. Advantages Know. SoSo

• Help natural Help natural networksnetworks

• Intangible assetIntangible asset

• Increase creativtyIncrease creativty

• Win-Win for EUWin-Win for EU

• Win-win strategyWin-win strategy



3333

EU: CONDITION of SUCCESSEU: CONDITION of SUCCESS

• The only condition for success in this The only condition for success in this KNOWLEDGE society is to understand KNOWLEDGE society is to understand that we are entering in a that we are entering in a new society: new society: new vision, new structure new new vision, new structure new economic logic.economic logic.

• It is easier for the business to say this It is easier for the business to say this than for politics and administrationsthan for politics and administrations

• Hence the new mission of the world Hence the new mission of the world Business.Business.



3434

BULGARIA: WIN-WIN?BULGARIA: WIN-WIN?

• When society changes, the new winners When society changes, the new winners are rarely the same. Innovation comes are rarely the same. Innovation comes from the periphery, or from new actors.from the periphery, or from new actors.

• Will Bulgaria become a Will Bulgaria become a leader in this Free leader in this Free ShareShare, post-industrial approach? , post-industrial approach?

• Will Bulgaria become a Will Bulgaria become a hub of societal hub of societal innovationinnovation towards this new economy? towards this new economy?

• This could be a win-win for the whole of This could be a win-win for the whole of the EU.the EU.



3535

Some good Books…Some good Books…

• Peter DRUCKER: “Peter DRUCKER: “Post capitalist societyPost capitalist society”, ”, Harper Business, New York, 1993.Harper Business, New York, 1993.

• Verna ALLEE: “Verna ALLEE: “The future of knowledge” The future of knowledge” Elsevier Science, 2003, USA.Elsevier Science, 2003, USA.

• Rob CROSS: Rob CROSS: “Networks in the Knowledge “Networks in the Knowledge economy” economy” 2003.2003.

• LEIBOLD and al. : LEIBOLD and al. : “Strategic Management “Strategic Management in the Knwoledge economy” in the Knwoledge economy” 2002.2002.

• David ROONEY (Australia): David ROONEY (Australia): “Handbook on “Handbook on the Knowledge economy”the Knowledge economy” 2005. 2005.



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BOOKS IIBOOKS II

• Jeremy RIFKIN: “Jeremy RIFKIN: “The European Dream: The European Dream: when Europe’s vision of the future is when Europe’s vision of the future is silently eclipsing the American dream” silently eclipsing the American dream” Penguin 2004.Penguin 2004.

• Ray ANDERSON: “Ray ANDERSON: “Mid Course correctionMid Course correction” ” 1998. 1998. www.chelseagreen.comwww.chelseagreen.com (Interface) (Interface)

• World Business Academy: World Business Academy: www.worldbusiness.orgwww.worldbusiness.org

• ““Neskey” on intangible measurements : Neskey” on intangible measurements : www.neskey.comwww.neskey.com

http://www.chelseagreen.com/

http://www.worldbusiness.org/

http://www.neskey.com/

dean of cba business school zagreb/ eu expert brussels. 1 bhrmda albena, may 19, 06 human relations...

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