Wed, Feb 12, 2014 - Page 8 News List

Investing in personnel is key to firms’ survival

By Liu Yung-sheng 劉容生

During an event to celebrate the new lunar year, President Ma Ying-jeou (馬英九) said he hoped that everybody would work to improve the economy and that crucial in this endeavor would be cultivating skilled professionals. At the latest CommonWealth Economic Forum, Taiwan Semiconductor Manufacturing Co (TSMC) chairman Morris Chang (張忠謀) talked about Taiwan’s lack of skilled personnel. Working in education, I could not agree with him more. Taiwan does have a problem. Why?

Our education system is not perfect, from elementary through high school to the university level. As Chang said, students study purely in order to pass exams and to get into the best high school or university. Chang also said 99 percent of what he knows, he learned after the age of 24. Therefore, a less explored question, and yet one crucial for how we cultivate skilled workers, is this: What responsibilities do companies have in cultivating skilled personnel and what role do they have in this?

TSMC is a world leader in wafer manufacturing. Measured by any business indicator you wish to name, TSMC is an outstanding private enterprise. And yet, how is it that such an exemplary firm, which every year takes in the best graduates from the nation’s top universities, which has had someone of Chang’s caliber at the helm for so long, failed to produce a single person capable of succeeding him?

I worked for General Electric (GE) in the US for 26 years. For 18 of those I worked under former GE chief executive Jack Welch. GE is rated as one of the best-managed companies in the US. Its business is about 10 times the size of TSMC’s, as are the complexity and scale of its operations. Welch was named “Manager of the Century” in 1999. Nevertheless, when Welch stepped down in 2000 after reaching retirement age, the reins were handed over to his successor, Jeffrey Immelt.

Why is it that GE was able to do something that TSMC cannot? The fundamental difference is one of them has implemented, and invests in, a system to cultivate job and professional skills.

Immelt was asked once what occupies his time when he is working. He said the vast majority of his time is spent communicating, cultivating, training or providing guidance for GE’s 300 or more executives. He emphasizes the importance of in-house cultivation of personnel.

GE’s human resources system is well-known for its pioneering role in the business world. GE has its own management institute in Crotonville, New York. Welch used to go there give the upcoming crop of executives the benefit of his experience.

This is not to say that TSMC is the only Taiwanese firm with problems cultivating leadership. Many other successful firms, including Hon Hai, Quanta Computer, Acer, Asustek Computer and Kinpo are facing leadership succession problems.

I used to teach a course for top business executives at National Tsing Hua University on how GE, under Welsh, was transformed from a good company to an outstanding one. It also explored how a company could be turned into an educational organization by implementating a staff training program and how firms could continue to challenge themselves.

We also discussed how outstanding leaders could infuse their own management philosophy into a company to create a comprehensive company culture and corporate DNA, ensuring a firm’s sustained success and enabling it to continue innovating and maintaining its international competitiveness.

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