The U.S. Securities & Exchange Commission (SEC) yesterday adopted a proposed roadmap towards the American use of an international accounting system called International Financial Reporting Standards (known as IFRS).

Here’s what happened: The SEC voted to open for public comment the use of International Financial Reporting Standards (IFRS) by 2014. This issue has been gathering steam among multinational companies for some time, and has more recently become a favorite of SEC Chairman Christopher Cox. He sees the adoption of IFRS as a way to smooth the transition to a global economic regulatory structure.

Yet the SEC seems to have delayed making the decision if the system should be mandatory until 2011 when it will again review the issue.

Most countries in the world already use IFRS for their business accounting. Currently U.S. firms use the U.S. Generally Accepted Accounting Principles (GAAP), but the SEC has been considering allowing U.S. firms to select one of the two systems when they file required financial and regulatory reports. U.S. firms that operate overseas and file reports with non-U.S. securities regulators are already familiar with IFRS.

There are going to be some fundamental challenges coming down the road. Notably:

• There are very few educational offerings available in the U.S. to teach IFRS. Both at the university level, but also for industry practitioners.
• The consulting industry is just beginning to come up to speed on IFRS.
• Small to middle-sized companies may find it more expensive to implement IFRS (this brings up the analogy to SOX).

Major take-ways: Chairman Cox is pushing the U.S. towards the reality of the global economy. This is a good thing. Unfortunately, the SEC was non-commital on the timing of adoption, or whether it will be mandatory. There will surely be more to come on this important issue. In either case, there will undoubtedly be a lot of consulting work in the U.S. as a result of IFRS.

ExecuNet publishes a monthly survey of executive recruiters, where they gauge recruiter sentiment and attempt to project hiring trends. July’s Recruiter Confidence Poll found that demographics are expected to drive the pace of executive management hiring through the end of 2008, as recruiters believe demand for health services and energy will push the most growth in six-figure hiring.

The survey results also registered significant recruiter optimism about projected corporate management hiring in the life sciences (pharmaceuticals, biotech, medical), technology and business services sectors of the U.S. economy. The table below shows projected executive hiring through December 2008. From an M Squared perspective we certainly expect consulting demand to follow this same trend.

1. Healthcare (12.4%)
2. Energy/utilities (11.6%)
3. Life sciences (9.3%)
4. High tech (8.8%)
5. Business services (8.3%)
6. Defense/aerospace (6.5%)
7. Environmental products/services (6.4%)
8. Manufacturing (6.1%)
9. Internet/online services (4.8%)
10. Financial services/banking (4.1%)
11. Consumer products (3.7%)
12. Communications/telecom (3.7%)
13. Government/nonprofit (3.3%)
14. Natural resources/agribusiness (2.7%)
15. Electronics (2.4%)
16. Chemicals (2.2%)

As anyone who survived the dot-com crash will tell you most new technologies have more hype than substance behind them.

New technologies tend to follow predictable trajectories of hype, hope, and despair as they are discovered by different groups of people and ultimately adopted or rejected by the marketplace. The analyst firm Gartner actually charts this hype cycle for different technologies. Its latest hype cycle for 2008 is shown here:

According to Gartner, the visibility of new technologies tends to peak early as the initial excitement creates a buzz in the marketplace. This phase is followed by a “trough of disillusionment” where the inflated expectations are confronted by the harsh reality of the marketplace. As technologies prove themselves, their visibility begins to grow again at a more measured pace.

Of course, not all technologies go through these phases. Some disappear just as quickly as the emerged, some wander around for years and don’t hit their hype cycle until later in life, and some build at a steadier pace. But it is still a nice visual metaphor, and serves as a good reminder that every product and service is unique.

One can see many interesting parallels to the consulting industry. Reengineering, outsourcing, TQM, and supply chain management come to mind as examples of consulting innovations that have progressed through the hype cycle to provide lasting value.

I’ve been working on a number of high level “thought leadership” presentations lately, which has put me in a reflective mood. I guess you could say I have PowerPoint on my mind.

It is an uncontested article of faith that technology enables knowledge workers to become more productive and effective in their work. Yet so often it feels like the very technology that is supposed to help us has become a hindrance.

Case in point: PowerPoint. (Or, KeyNote for the Apple crowd!).

While it has the stated purpose of being a visual communication tool for presenters it frequently becomes a sub-optimal crutch at best and a sleep-inducing toxin at worst. But upon further examination, is it the tool or the operator who is at fault? The old database maxim of “garbage in, garbage out” seems to apply here.

Much like a chisel to woodcarver, in the hands of a master the tool can be used to produce works of art, yet in that hands of an amateur the tool can be quite destructive. Having witnessed a few masterpieces and many train-wreck presentations over the past few years I’ve come to a few conclusions on how to create effective presentations:

• PowerPoint is merely a tool. It is the operator who is at fault for using the tool to create a poor presentation, not the other way around.
• Most presenters don’t take the time to craft a compelling presentation. It is much easier to throw up a bunch of bullets and diagrams than to invest the time to make it great. I’m reminded of a great Mark Twain quote: “It usually takes me more than three weeks to prepare a good impromptu speech.”
• An effective presentation is really the telling of a story. Storytelling is an art, not a science. It can be learned. There is no formula…you must work with what you have. Begin with the end in mind. What is the takeaway, logical conclusion, or action step you want the audience to take after your presentation? Begin there and build your presentation around that.
• PowerPoint is a visual medium. Instead of boring bullets and complex diagrams, consider a simple metaphor or a striking image to make your point. It has been scientifically proven that retention goes up when we both hear and see the same subject. A picture truly can be worth a thousand words! A short video can also be very engaging.
• Anyone can become a better presenter. There are two components: delivery technique and the presentation itself. They must, by necessity, be in concert. They both take an investment of time and effort.
• Remember that learning increases dramatically when you appeal to the visual and the auditory senses of your audience. Your slides and your spoken words should reinforce one another.
• If you have to prepare a presentation and need help don’t hesitate to bring in an professional. There are many communications experts who can help you write speeches, prepare presentations, and coach you on their delivery.

Much like three blind men touching different parts of an elephant and describing a different animal, talent management seems to be an entirely different beast to its many different corporate stakeholders.

Usually it’s mixed up with the notion that human resources, human capital and talent management are somehow extensions of one another, or the same thing stated in different ways. Actually they are three very different concepts:

Human Resources is a vital corporate function, typically a department, arguably a profession. Born at the turn of the 20^th Century, for the past 50 years it has grown increasingly administrative, often times relegated to administering employee benefits and dealing with employee relations issues, all the while struggling to have a voice in business strategy.

Human Capital Management is a theory that considers the sum of a person’s knowledge, talents and motivation to represent an asset, that should be acquired and developed by the employer to yield a measurable (and maximum) return on investment. For the decades of human resources executives who’ve been rewarded for hiring fast and cheap, this is a major paradigm shift.

Talent Management is an even newer decision science created to deliver the results promised by human capital theory. If talent represents the most powerful and sustainable competitive lever in a global economy (as most economists, academicians and enlightened executives tend to agree), then knowing how to acquire, align, engage, deploy, develop, advance, retain and measure the contribution of great talent is critical knowledge for leaders throughout any organization.

Just as finance has grown into a vital strategic practice within the modern organization, so too will talent management. Encouraging today’s business leaders to consider talent as fundamentally as they consider finance is a core challenge for all organizations that hope to secure the talent they need to compete.

The notion of flexible knowledge work, one that allows subject matter experts to be deployed on a project or interim basis, only for as long as needed, is a natural extension of effective talent management. Savvy human capital managers realize that some segment of their talent strategy is best served by using the flexible workforce.

A recent survey reveals growing acceptance of the global economy among the workforce worldwide. According to a study conducted by staffing giant Manpower Inc. (NYSE: MAN), “Borderless Workforce,” which surveyed nearly 31,000 employers across 27 countries and territories, 31% of employers worldwide are concerned about the impact on the labor market of talent leaving their country to work abroad. A parallel study called “Relocating for Work survey” said that 37% of individuals would be willing to relocate anywhere in the world for a better career.

Additional findings of the survey show that 78% of individuals would be willing to relocate within their national borders or abroad for work and 41% of those would be willing to relocate permanently. Respondents from the Philippines (96%), Ireland (93%), Brazil (93%), Portugal (92%), Colombia (92%), Mexico and Central America (92%) and Peru (90%) were the most likely to consider relocating for employment opportunities in the future.

Respondents under 30 years old were more receptive to moving for work than their older colleagues. And the most popular destinations that people would want to relocate across borders for work are the United States, the United Kingdom, and Spain.

A business plan…workforce strategy…brand positioning…focus groups and research…market segmentation…integrated marketing campaign…globalization strategy…web site…the list goes on.

No high tech start-up worth its salt would consider opening its doors without all these ingredients along with a team of executives, venture capitalists, consultants, attorneys, developers and others on-board before the launch.

Could a new business actually succeed without this foundation?

Here’s an interesting perspective:

I know a local electrical contractor who has been on his own for 20 years now. He doesn’t have a fancy logo, signage, website, marketing plan, brand strategy or even staff, yet his services are booked for months in advance. Except for the small unchanging display ad that runs in the weekly local paper, he is almost completely under the radar.

Word-of-mouth and referrals, the foundation of many million dollar viral and social networking strategies, is what has driven his small business to consistent success. He gets most of his business from a handful of general contractors who he has built trusted relationships with over the years.

Quality, service and customer care have been his brand. Word gets around when a contractor leaves a worksite more spotless than when he arrived; customers appreciate when their phone calls are returned and appointments are kept; and personal attention in choosing fixtures and planning details is valued.

He didn’t have to strategize over his mission, or spend months deciding how he was going to treat his customers. He started up and operated on the basic principles of building, maintaining and nurturing relationships with people, and organically, the business grew. He’s recently added customized design and installation of solar power systems to his original model of electrical system repairs and installation, to maximize revenue and satisfy customer demand.

He may not ever become a multi-million dollar business with a staff of workers and a fleet of trucks, but that wasn’t his plan. It was just to create a nice income for himself, do something he loved (working with his hands) and to make each customer feel as if they were the most singularly important person to his business.

His “strategy” has paid off with considerable financial rewards, a steady stream of projects and job satisfaction beyond his wildest dreams. We could all learn from his example.

How does this translate into the corporate setting? While it is absolutely necessary to have an overall company vision, strategy and organization-wide objectives that filter down to individuals, my view is that we should focus more on execution and less on strategy. We often help companies that have plenty of strategy but are lacking in execution. Our seasoned consultants can come in, refine strategy if necessary, then quickly hit the ground running to execute on the project deliverables.

Despite a macroeconomic slowdown that has kept the threat of recession looming for the past nine months, pockets of job market growth continue to emerge in the technology, healthcare and defense sectors.

According to TheLadders Quarterly Executive Job Market Trends Report for Q208, 71% of $100,000+ job seekers said they have noticed a slow-down this quarter. However, undeterred by the economic slow-down, 58% of those surveyed described the high-end job markets in their cities as stable and 59% said they expect to land a new job in six months or less.

This optimism is echoed in the hiring patterns among the large American corporations according to TheLadders Quarterly Report. While hiring in the financial and consumer discretionary sectors has clearly been impacted by the continued fall-out from the mortgage market collapse, the technology, healthcare and defense sectors are all adding to their executive-level ranks nationwide.

There were 12,000 more $100,000+ jobs posted on TheLadders in the first quarter of 2008 than there were in the first quarter of 2007. The recession is grabbing the headlines, but there are always countercyclical segments of the market that thrive in a down economy. The reports are showing a lot of reliance in this marketplace.

This trend mirrors what we’re seeing in the consulting sector.

After six years of existence, and untold $Billions in compliance costs to US industry, it now appears that a constitutional technicality could derail the far-reaching Sarbanes-Oxley Act.

At issue is a case before the U.S. Court of Appeals in Washington, D.C. that challenges the constitutionality of the Public Company Accounting Oversight Board (PCAOB). The PCAOB was set up by the Sarbanes-Oxley Act (SOX) to create better accounting standards for companies and help enforce them.

Although controversial, the PCAOB has played an integral role in toughening the accounting standards for publicly-held companies and providing better, more transparent, financial statements to the advantage of investors, boards and management alike.

The court challenge is a technical one having to do with the constitutionality of having the U.S. Securities & Exchange Commission (SEC), which works intimately with the PCAOB in enforcing SOX, to appoint PCAOB members. The lawsuit plaintiffs argue that perhaps the U.S. President should be making the board appointments.

What happens if the PCAOB is found to be unconstitutional? A stay might be put in place which would allow the PCAOB to continue and move the court case to the U.S. Supreme Court. But if it goes further and Congress does nothing to correct it, all of SOX might become unraveled. How can this be? It appears that lawmakers made a critical mistake when they crafted SOX, it does not contain a “severability” clause, meaning that if any one of its provisions is found to be unconstitutional, then the whole law goes down with it.

It seems implausible to me that Congress would allow this powerful legislation to fall apart. Given that it was enacted to restore investor confidence after the Enron and Worldcom scandals, it is certainly not good timing to rattle an already worried U.S. stock market by questioning SOX. The scary reality is that although Congress could simply amend how the PCAOB is constituted, there are many special interest groups who would like to see SOX radically altered or even eliminated. Time will tell…

If you’re already checking email from a mobile device, developing presentations on the weekends, and taking international calls during the night, why not take your remote accessibility one step further and regularly work from home?

Many knowledge workers, and their managers, are asking themselves this question today. Many companies are re-thinking their historical ambivalence to telecommuting.

With technology advancing at the same pace that gas prices are increasing and environmental concerns are mounting, a couple of days per week at the home office can save time, money, employee sanity, and the planet.

Back in 2006, when $10 bought roughly four gallons of regular gasoline, companies were already adjusting their benefits to accommodate for rising fuel prices. According to recent research conducted by WorldatWork through The Dieringer Research Group, 12.4 million Americans were allowed by employers to work from home at least one day per month - up from 9.9 million in 2005.

A 2007 study from the Society for Human Resource Management (SHRM) revealed that more than half of surveyed employers offered some form of telecommuting option. If employees worked from home just one-and-a half days per week, research from the University of Maryland found a cost savings of $4.5 billion annually (note that this was based on gas at $3.33 per gallon, which seems like a distant memory as the price of gas is rapidly approach $5.00 per gallon here in California).

According to a recent Sun Microsystems flexible work program study:

• Employees saved more than $1,700 per year in gasoline and wear and tear on their vehicles by working at home an average of 2.5 days a week.
• The office equipment energy consumption rate at a Sun office was two times that of home office, from approximately 64 watts per hour at home to 130 watts per hour at a Sun office.
• Commuting represented more than 98% of each employee’s “carbon footprint” for work, compared to less than 1.7% of total carbon emissions to power office equipment.
• By eliminating commuting just 2.5 days per week, an employee reduces energy used for work by the equivalent of 5,400 Kilowatt hours/year.
• Working from home 2.5 days per week saved the employees in the study an average 2.5 weeks of commute time (8 hours/day, 5 days/week).

Coupled with these cost and environmental savings, companies are finding telecommuting also enhances their ability to recruit and retain employees. This is particularly true for highly compensated (and self-motivated) knowledge workers. Organizations that build telecommuting into their recruitment programs are likely to competitively fare better when they can attract workers with critical skill sets from beyond their zip codes and also eliminate relocation expenses.

On an emotional level, there’s no doubt that transportation is causing a great deal of stress. “Length of commute” was among the top 10 reasons senior-level executives recently told ExecuNet they were dissatisfied in their jobs, and “flexible work options” ranked 5th on the list of reasons for satisfaction.

When you combine the movement towards more telecommuting with the parallel knowledge workforce trend towards greater flexibility you end up with a compelling argument for flexible workforce models like M Squared Consulting. We enable independent knowledge workers, and employers who need their expertise, to find one another and get vital work done. Quite often a significant portion of this work can be done remotely.