The main objective of financial reporting is “accountability,” so that one of the major features of the reports or annual declarations is that they be clear, that is, the user must understand the facts and events that happened in an organization during an accounting period to be able to properly make decisions.

For information to be clear, it must be concise and written in simple language. It must also show a link between the activities of the business and financial performance. To ensure information is concise, entities must apply their professional judgment to make decisions about what to report, how to report and how much to report.

Recently, since the adoption of international standards in Mexico and in other countries, to which their local rules had to be standardized, one of the main complaints of the accounting community has been the amount of disclosures that must be made to comply with what is required in each of the concepts of the financial statements.

Comptrollers and financial directors of Mexican organizations subject to these disclosures have commented in various media and interviews that in the year of adoption “the information presented in the financial statements grew exponentially, and this meant that now the annual reports were books rather than reports.”

Similarly, Russell Picot, finance director of HSBC, commented in the discussion forum organized by IASB on January 28, 2013:

There is a big risk that the financial statements and annual reports become only an exercise in compliance rather than a communication tool, as there is pressure from regulators to add more and more information. Many companies have chosen to communicate information through other means that are not financial statements, since users feel that the reports lack structure, have duplicate disclosures and these do not focus on the important or new concepts; in short, the disclosures do not respond to the needs of the market and the rapidly changing environment in which companies exist.

However, from the point of view of the user, having more information should not be a concern; on the contrary, it should be seen as a battle won against such common comments like: “I can’t give you that information because it is confidential.” “I don’t understand what the entity is reporting because I don’t have more information in the notes, since the entity is simplifying the disclosures it makes of some elements of the financial statements.”

From these comments, it can be concluded that those preparing the information and those who use it have a different opinion on the need for such information. Preparers complain that there is an excess of disclosures, and users say that there is no proper communication about what actually happens in the companies and that important information to make decisions is lacking.

However, it is not difficult to postulate what features financial information should have. It must be organized, be linked, business clearly linked to financial performance, be timely, clear, concise and written in plain language, be entity-specific (that is, reflecting the situation of the entity that is reporting) and explain the substance of the transactions carried out by the entity during the reporting period.

On June 27, 2013 in Amsterdam, Hans Hoogervorst, president of the International Accounting Standards Board (IASB), said in a conference entitled “Breaking the Boilerplate,” that “in many companies, the size of their reports for the year 2012 was stratospheric.” But the volume of information did not necessarily imply that the amount of useful information for the user had increased. The risk is, therefore, that annual reports become documents to comply rather than documents to communicate” (Hoogervorst, 2013).

At the same conference, 10 actions that the IASB would perform to seek a solution to the problem of the disclosures were announced. However, to begin with, the IASB called them simple and not particularly revolutionary:

1. Be clearer on the materiality principal defined in the IAS 1, Presentation of Financial Statements. This principal not only implies that concepts identified as materials should be included, but also that non-material disclosures should be excluded.
2. Emphasize that the assessment of materiality applies to the whole of the financial statements, including the notes.
3. Note that if an accounting standard is considered relevant to the entity, it does not necessarily mean that the entity must include each and every one of the disclosures that the standard establishes. Instead, each disclosure must be judged individually in light of the materiality principal.
4. Remove from IAS 1 certain paragraphs that preparers of financial statements have interpreted as establishing an order in the presentation of the notes, so that it seems that it is obligatory to present all the notes that are indicated in the specific rules. This is not the case, but that the preparer must exercise professional judgment based on the principle of materiality.
5. Add in IAS 1 some flexibility for entities to decide where and how to disclose their accounting policies, using their own criteria of relevance and reliability.
6. Add the requirement for reconciliation of net debt so that the user can integrate the debt and link the disclosures made in the financial statements.
7. Generate teaching material and implementation guides on the materiality principal.
8. Explain clearly the purpose of the disclosures and use them as an example to develop new standards, leaving more room for professional judgment about materiality.
9. Start a research project to revise the standards (rules): IAS 1, Presentation of Financial Statements; IAS 7, Cash Flow Statement; and IAS 8, Accounting Policies, Changes in Accounting Estimates and Errors. The goal of this project will be to replace these rules with a comprehensive conceptual framework for the disclosures.
10. Review the requirements of the disclosures of each of the existing rules.

As a result of the actions announced, the IASB began working with the project called: “Disclosure Initiative”, which includes three areas of research: Materiality, Principles of Disclosure and Standards-level review of Disclosure.

The Materiality¹ project includes research of how the materiality principle has been implemented in accounting practice, in order to develop a guide on its implementation. Since March 2014, the IASB has published several research articles that it has added to its work agenda.

The Standards-level review of Disclosures is a longer-term project that the IASB has not yet begun and aims to review the disclosure requirements of all the rules to check for conflicts, duplication or overlap in all the disclosures.

In March 2014, the IASB issued for review and comment a draft standard entitled “Disclosure Initiative. Proposed Amendments to IAS 1.” This project focuses on two main changes:

¹ See http://www.ifrs.org/Current-Projects/IASB-Projects/Disclosure-Initiative/Materiality/Pages/Home.aspx.

² See http://www.ifrs.org/Current-Projects/IASB-Projects/Disclosure-Initiative/Principles-of-Disclosure/Pages/Home.aspx.

1. Amendments to IAS 1 on the relevance principle and the aggregation of items, the financial statement and the statement of results, and the formation of other comprehensive income, the structure of the notes and disclosure of accounting policies.
2. Presentation of the effects on capital investments (investments in association or joint control agreements) in the other comprehensive income.

The IASB received more than 100 letters in response. Most users agreed with the proposed changes and emphasized that the concepts of materiality and professional judgment are essential to improving the quality of accounting information and the notes in the financial statements.

Therefore, in addition to the actions undertaken by the IASB, some recommendations that can be made to try and solve this problem of disclosure are:

1. Encourage professional judgment.
2. Work with the regulators to define the areas that produce more problems and focus on them to improve the quality of the disclosures.
3. Use more and better technology that allows for reporting and extracting financial information in a more efficient and simple manner (XBRL: eXtensible Business Reporting Language).
4. Develop further the materiality principle on all levels.

Finally, the accounting profession has a great responsibility in the problem that users and entities perceive with regard to our accounting maxim – that information must be useful in order to make decisions. We are all involved – preparers, auditors, regulators and users. We must all take urgent steps to ensure that the product of our profession (reporting useful financial information for decision-making) does not deteriorate and lose the importance it has had historically.
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References

• Hoogervorst, H. (2013). “Breaking the boilerplate”. IFRS Conference in Amsterdam. IASB. 27 de junio de 2013, en www.ifrs.org/Alerts/Conference/Documents/2013/HH-Amsterdam-June-2013.pdf, consulted on October 31, 2014.
• IASB (2014). “Disclosure Initiative”, en ifrs.org/Current-Projects/IASB-Projects/Disclosure-Initiative/Pages/Disclosure-Initiative.aspx, consulted on October 31, 2014.
• IASB (2014). “Discussion Forum: Disclosures in Financial Reporting”, en www.ifrs.org/Current-Projects/IASB-Projects/Amendments-to-IAS-1/Project-news/Pages/Update-January-2013.aspx, consulted on October 31, 2014.

Today’s society demands skills in different areas of expertise and knowledge. Ideally, public and private universities should prepare students for an efficient professional work experience and to know how to fully assume the responsibilities of the position for which they are hired.

Narrowing the Gap

However, the transition from the industrial to the information age, where we are now, has produced noticeable changes, especially if we take as a basis the definition in UNESCO’s report “Learning: The Treasure Within” on “the four pillars that education should aspire to in the 21st century.”

1. Learning to know. It refers to acquiring the tools of understanding. It involves learning how to understand the world around us in order to know and discover. It is necessary “to learn to learn”, exercising the powers of concentration, memory and thought.
2. Learning to do. It consists of influencing one’s own environment. It involves training to cope with a large number of interactions and teamwork. It is necessary to strengthen professional skills for the work world.
3. Learning to live together. It refers to participating, cooperating and living with others. It involves understanding others and their ways of tackling projects and common conflicts, and to honor diversity, tolerance and peace.
4. Learning to be. It deals with the three previous concepts. It involves developing the personality and autonomy, judgment and personal responsibility.

UNESCO defines well the principles that should govern our current education system, and this change will be gradual and complete.

We have an educational process whose purpose is, or should be, to develop skills in students that will enable them to be productive and that such productivity be remunerated financially. However, continuity and updating theoretical and practical subjects taught in the career are obsolete by the time students are faced with the reality of working life. This has a systematic origin: We are educated for an end, but we are not educated to manage the process and the results that take us closer to that end. Therefore, it is an incomplete, incompetent, absurd and inconsistent system (in addition to extremely expensive). It is like teaching someone to fish, explaining the entire art of fishing, but you do not teach what you should do once you actually go fishing.

Types of Education

There are three types of education, which I will elaborate on below:

• Formal
• Non formal
• Informal

Formal education rests on the foundations we have just seen. To be formal, it must be accredited by the government agency that gives official recognition of the content being taught. It is worth mentioning that the people who decide whether or not to validate the content lack practical experience in the field, even though they are highly competent in the administrative processes that they carry out.

Formally Individualistic

Today we know that individualism leads to failure, while cooperative efforts make nations, businesses, schools and families come out ahead.

The main failure of the formal education system occurs at the time it rejects those who should be the main beneficiaries and supported by the system: the so-called “slow learners.” In other words, if a student is bad in math, he/she does not receive the support or sympathy of the teachers, principals and other educational authorities, which is a major contradiction and constitutes an “anti-democratization” of the education process, because it contradicts the fundamentals of the era of knowledge and the dissemination and democratization of information.

Compete or Cooperate!

Another serious problem of the formal education system is that it does not prepare students to work as a team, that is, to engage in cooperative work, rather quite the contrary: It teaches us to be competitive. Even in the teamwork that is assigned at school, students compete to see who turned in more material, the one who spoke the best, the one who looked for more information – and disqualifies the worst one, the one who did the least. In contrast, for example, Finland has a system of cooperative work in which everyone contributes according to what they do best, regardless of whether it was more or less than the next student, as they are focused on achieving the set result.

The education system prepares us to believe we are in a zero-sum system: for one to win, the other must lose.

Find the Error and Reward It

By basing education on the fear of making mistakes, some students take advantage of others. That is, instead of the strong helping the weak, they take advantage of their strength and harm the less competent in that particular area. Since the main objective is to get the best grade, the values of honesty, loyalty, friendship, etc. are discarded implicitly. Survival is worth more than ethics. To better understand the shortcomings of the education system, let’s take the example of automobile mechanics.

Specialization and Expertise

To illustrate a fundamental flaw of the education system, let’s talk about the skills we need to develop to get a job, which involves specializing in a specific field or area of practice. If my car breaks down, I don’t have the slightest idea how to fix it. My level of knowledge is practically zero in this area. A mechanic who checks the car will tell you what is the problem and resolve it. Does that make me less intelligent? Of course not, it simply is a reflection of knowledge that I do not have and someone else does. So, is specialization bad? No, specialization is good because the mechanic will solve my problem since he/she is specialized in this area. The problem is overspecialization. Blindness that results from overspecialization can be serious if the acquired skill merely depends on another area in which employees cannot grow or cultivate new skills. If we return to the example of the mechanic, suppose that he does not know how to manage the finances in his business, how to sell more, how to improve. Therefore, overspecialization is a problem because it does not allow him to take in the overall picture to solve his problems or propose solutions or innovations. Overspecialization leads to extinction.

Types of Learning

There are three types of learning:

1. Mental. This is reduced to memorizing facts, which consists of selectively storing data in the brain, such as when information is stored in a computer.
2. Physical. This is learning by first-hand experience, involving all the senses and most of the nervous system.
3. Emotional and subconscious. This is learning that occurs through feelings of joy, fear, sorrow, love, compassion or exaltation.

The combination of the three types represents the maximum learning potential of human beings. Unfortunately, the current formal education system focuses on mental learning, so that students function like computers: If no information is entered, no knowledge comes out.

The Error

Education that only deals with mental learning slows down physical and mental development. The biggest objection that can be made about the education system (depending on the conditions in which it is found, Kiyosaki, 2005) is that students are not taught to learn from their mistakes, but they have been conditioned to believe that mistakes are bad. However, in true learning, mistakes are essential. Rarely a person is able to respond well the first time, so that learning is achieved by trial and error. A new educational system that prepares people to be happy and successful in life should be constituted around the mistakes that they make.

To limit students to think in terms of right or wrong removes their capacity, crushes their curiosity, dampens their enthusiasm, and atrophies their creativity. In the long term, the use of this process not only causes boredom, but also teaches students to rely on an external authority figure who will tell them the “right” answers. Ultimately, it prevents students from developing their full potential to succeed in life. [Kiyosaki, 2005]

An example of the importance of making mistakes is in the skills that we have. This theme is universal and can be applied to business, sports, school, interpersonal relationships, etc. First, we will look at general cases and then we will include more concrete examples.

1. Unconscious Incompetence. You do not know what you do not know. The person has an idea or a challenge that is completely unknown.
2. Conscious Incompetence. You do not know what you know. The person realizes that he makes mistakes in carrying out an idea or challenge. He realizes how much he does not know and the need to make even more mistakes to continue learning.
3. Conscious Competence.You know what you know. Now the person is aware of what he should know and put into practice. This is the point in which mistakes are defined, you learn from them and they are repeated with the goal of improving and learning them thoroughly to avoid making them again.
4. Unconscious Competence. The person already knows everything and does not need to think about the mistakes or the idea or challenge that he had in his mind, since he has mastered them. That is why it is called unconscious competence because it is the point at which the individual is competent in this activity in a natural way.

To illustrate the above, we will use the steps to learn how to ride a bike as an example:

1. Unconscious Incompetence. A person is excited about the idea of learning how to ride a bike, but since he has never done it, he does not know what he needs to learn.
2. Conscious Incompetence. The person gets on the bike and starts pedaling. He suddenly falls and realizes that there are things he still does not know yet.
3. Conscious Competence. Through trial and error, the person corrects the mistakes. He has observed, usually at the unconscious level, what he did and what caused him to fall and, forced to try different movements, he eventually becomes competent.
4. Unconscious Competence. He no longer thinks about what he does. The person has the necessary knowledge and automatically uses it to ride the bike.

If it is important to make mistakes (when learning to ride a bike) and learn from them, it is the same for business, but this is not taught in school. A direct and greater participation in the education process of the student is required.

Education, as proposed today, is seen as an end – not as a process that lasts a lifetime, by the simple fact that the world, society, is in constant change.

Non Formal or Informal Education

Precisely because of the problems and the gap that exists between the skills acquired at college and the requirements of a specific job, non-formal or informal education arises to complete, update and align competencies with business.

The advantages of this education are that the knowledge is current, practical and can be linked and segmented in each particular case, according to the needs of the company and the employee. In addition, you can generate performance indicators that are better than the now obsolete quantitative rating.

The disadvantage is that they do not have official validation, and, therefore, no professional titles are issued, which seems to be the ultimate goal of studying a career, and not the learning and knowledge.

Non-formal education is flexible, agile and adaptable. It is the solution to the needs of the employees and businesses and can be provided in the form of courses, seminars, workshops, programs, and face-to face or at-a-distance graduate courses.

Business training is expensive, but in a phrase by Derek Bok explaining the importance of the update, he says: “If you think preparation is expensive, check out the price of ignorance.”?

In the last three years, a new variation of social networking has become popular among many users. We’re referring to visual social networks, in which users share images and photographs, more than personal news, such as in Facebook or Twitter.

Although since their inception Facebook and Twitter have had the capacity to share photos (as demonstrated in the dramatic photo of the landing of US Airways Flight 1549 on the Hudson River in 2009), Instagram and Pinterest, the most widely known of this new genre, were specifically designed to display and share photos and images

Pinterest is organized in the form of visual boards, as seen in Figure 1, which shows the official site of Ralph Lauren. Instagram, on the other hand, displays on the cell phone screen photos recently uploaded by other users and the comments they received. Figure 2 shows a photo uploaded by Mercedes Benz illustrating the unspoken rule of Instagram: uploading high quality photos.

If an image is worth more than a thousand words, these examples reveal that for brands with high visual content (such as cars, fashion and travel) these networks provide an alternative way of generating engagement among followers of the brand, with better measurable results than Facebook or Twitter.

Among the things that have drawn attention to these new networks is their rapid dissemination, even in the volatile world of social media. It took Pinterest only 22 months to reach 10 million users, and Instagram followed in half that time. Both have been extremely successful, although their philosophy and value proposition are very different.

Ben Silbermann, Evan Sharpe and Paul Sciarra launched Pinterest as a digital scrapbook in March of 2010. Sharpe was studying architecture at Columbia University and had a large collection of drawings and sketches that he found increasingly difficult to organize (Bercovici, 2014). He was not the only one with that problem. The idea of organizing scrapbooks dates back to the last decade of the 19th century with the advent of color display advertising in catalogues like Sears and magazines like Good Housekeeping. Some of the scrapbooks of that era ended up in historical archives such as that of the Schlesinger Library at Radcliffe Institute at Harvard University (Zhong, 2014). Pinterest solved a problem for millions of collectors of graphic material, most of whom were women. The tool made it easy to take an image from any website on the Internet and “pin it” to a personal board.

Each user can have multiple boards with images selected and organized thematically. Moreover, as Pinterest is a social network, the boards are public. The traditional scrapbook could be shared with the family and some friends. A good Pinterest board attracts thousands of followers, anxious to know the next image to be added. In addition, they access this on their cell phone, since more than 90% of the use of Pinterest is mobile, surpassing even Twitter (Bercovici, 2014). Navigating on Pinterest boards thus becomes a way to get inspiration, to share good taste and contrast it with that of others, and to feed nostalgia and life projects (Zhong, 2014).

This is how Pinterest can make a real revolution. In a recent interview with Forbes, Silbermann muses, “How do we do for discovery what Google did for search? How do we show you the things you’re going to love even if you didn’t know what you were looking for?” (Bercovici, 2014)

As Twitter popularized the term “retweet,” -as indication that many users liked some content – Pinterest has popularized “repin,” referring to the images chosen by many users to add to their boards. In fact, repin is the most frequent activity on Pinterest (80% of the pins are repins), and it has a special appeal for brands because it contributes to the viralization of the branded content that users find attractive. One study found that of 17 million manifestations of engagement with brands – including pins, repins, comments and “likes” – only 15% occurred on the official brand boards, the other 85% occurred on the boards of users who had repined images on their own boards (Zhong, 2014).

Pinterest has started selling ads under the Promoted Pins format, and since the profile of the website is 80% female and with a strong purchase intent, it can charge advertisers higher fees than Facebook (Bercovici, 2014). When a user pins a wedding dress or a dining set on her board, she is probably expressing an intention to purchase, and the manufacturers would be interested in showing her ads of their products. However, Pinterest is being cautious with the quantity and the quality of Promoted Pins to avoid damaging the experience of the users. Every Promoted Pin, such as the photo of a woman’s handbag, should fit naturally on the advertiser’s official board, and will only appear among the results of users who are searching for handbags.

If Pinterest was created to collect existing images on the Internet, Instagram was built to facilitate the creation of new images. Developed by Kevin Systrom and Mike Krieger, it is an iPhone application that lets you easily upload photos taken with a cell phone to Facebook, Twitter or other social networks, in addition to sharing them and commenting on them with other Instagram users.

It was started as a mobile-only social network, which in the first two years was only accessible from the iPhone screen. This limitation did not affect its popularity, as people increasingly accessed the Internet from their phone. Instagram was launched on the Apple App Store on October 6, 2010. It attracted 100,000 users in the first week, and has remained among the 10 most downloaded apps for the iPhone. This success caught the attention of Facebook, which in April 2012 bought Instagram for a billion dollars, when it had just a dozen employees (Hempel, 2014). At that time, the purchase seemed extravagant, but two years later it is evident that it was a bargain because of its strategic value, comparable to the acquisition of YouTube by Google in 2006.

Among the innovations that contributed to Instagram’s success was the use of filters to enhance the appearance of the photos taken by its users, who were almost all amateurs. In this way, many people became interested in photography and, with practice and feedback from other users, obtained results that once would have been considered professional. Luxury brands also found that Instagram is an effective way of distributing high quality photographs of their products, and this is the type of advertising that users actually want to receive and enjoy on their phones.

The profile of an Instagram user (55% female) is more gender balanced than that of Pinterest, although it is younger, with 54% of its users between 12 and 24 years of age, compared to 30% of Pinterest users. They are also, overwhelmingly, smartphone owners, resulting in a very attractive demographic profile for advertisers. Instagram introduced its ads in November 2013 with the Sponsored Photograph and Video formats, which appear in the “Latest News” app. The company uses Facebook user profile data to select which ads to display and it has a feedback button, in case you do not like the ad. This willingness to listen to the user reduces the annoyance of introducing publicity on the platform, and helps Instagram to improve the targeting algorithms it uses

The rise of visual networks has not gone unnoticed by the major international brands. Of the 100 most valuable brands listed by Interbrand, the vast majority already have both an official Pinterest and Instagram page. Each in its own way provides excellent marketing results that complement what these brands already do on Facebook and Twitter. Recently, the consulting firm eMarketer reported that while Facebook, with more than a billion users, redirects more users to e-commerce sites than Pinterest and Instagram, the average purchasing amount is greater for the visual networks: 65 dollars for Instagram, 58.95 for Pinterest and 55 for Facebook (eMarketer, 2014). Meanwhile, Forrester Research found that on average users have 58 times greater engagement with brand content distributed via Instagram compared to Facebook, and 120 times more compared to Twitter (Elliot, 2014).

At the end of 2014, these networks continue to add new users at amazing speed. Instagram already has 200 million, almost as many as Twitter, and more than LinkedIn (Hempel, 2014). Pinterest has only 70 million, but with a particularly attractive demographic profile for brands. In Mexico, the penetration of these networks is significantly less than in the United States, but in light of recent history it is not difficult to predict what will happen in the next two or three years. Therefore, it is likely that Mexican brands, whose page is already established on these networks and which are experimenting with this new social-visual phenomenon, will soon find themselves in an enviable position. Among the most outstanding are: El Palacio de Hierro, with 51,500 followers on Instagram and 7,000 on Pinterest; Volaris with 9,800 followers on Instagram and 3,000 on Pinterest; and Pinturas Comex with 2,300 followers on Instagram and 5,800 on Pinterest. The moral for Mexican brands is that 2015 could be the time to decide whether to be a leader or a follower as they move into these new digital marketing platforms.
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References

• Bercovici, J. (2014). “Inside Pinterest: The coming ad colossus that could dwarf Twitter and Facebook”. Forbes, November 3th, 2014
• Elliot, N. (2014). “Instagram is the king of social engagment”, en http://blogs.forrester.com/nate_elliott/14-04-29-instagram_is_the_king_of_social_engagement.
• eMarketer (2014). “Facebook is No. 1 for social commerce”, en http://www.emarketer.com/Article/Facebook-No-1-Social-Commerce/1010721.
• Hempel, J. (2014). “Instagram: Big, bad and ready to make money”, Fortune, July 9th, 2014.
• Zhong, L. (2014). ”My pins are my dreams: Pinterest, collective daydreams, and the aspirational gap”, tesis de maestría oinédita inédita, Massachusetts Institute of Technology, en http://dspace.mit.edu/handle/1721.1/89975.

Regardless of its size, every organization has two major challenges: the first is to design, implement, disseminate and execute its business strategy, and the second is to define the indicators to measure compliance with the strategy and the individual contribution of its collaborators.

The first challenge begins with the definition of the mission, derived precisely from its reason to exist, from its business perspective to create value. Likewise, a vision – which is the point where the organization wants to be at a given time – is established. Another very important pillar are the values, that is, the principles that guide the relations among collaborators, customers, suppliers and strategic partners. The strategy is made up of the way in which that aspiration is materialized and how the components of the business model are executed.

The concept of the strategy implicitly involves two aspects: 1) to achieve the specific strategic objectives that the company has defined as a guide based on its mission, vision and analysis of its current and future situation, and 2) decision-making and the definition of the plan of action during a certain period of time.

It is very important that the company’s mission and vision are well understood and disseminated from the highest level to the bottom of the organizational pyramid; that is, that all employees make that mission and vision theirs so they can embody and model the behavior required by its organizational values. A well-articulated vision cannot make its transformative power a reality if it is abandoned in a corporate planning folder. Therefore, companies with the best work experiences have the ability to execute what they propose.

It is essential to anchor the mission, vision, values and strategy in clear objectives, actions and conducts, in responsible people, delivery dates and sense of timing that yield the best results.

Grupo Nacional Provincial (GNP), a 100 % Mexican insurance company with a presence in the market for more than 112 years, has been inclusive, meticulous and disciplined in the design and implementation of its mission, vision and values, and thus, in the execution of its strategy. In 2014, it redefined the direction of the company and launched its new Vision 2019, with which it wants to be the best in three dimensions – economic growth, unsurpassed service and a vanguard institution with two focuses, in people and in business, and in three stages: win market share, consolidate market leadership and set the standard in the industry.

A key element of follow-up has been the annual strategic planning process and its model of government, with which the key business decisions are administered by the Management Information System (MIS). The MIS integrates organizational intelligence in order to have a sufficient capacity for analysis of what happens in the business and how things are going in the direction of strategic initiatives.

The GNP has established parameters for the members of the organization by defining and aligning performance indicators from the first level (General Direction) to the supervisory level (a level below middle management), involving more than 1,700 employees, who adopt what has been defined as a performance contract.

The second challenge of any organization, as already mentioned, is to define the metrics to determine compliance with the strategy and the individual contributions of its employees.

Without clear, measurable and achievable indicators, the vision and strategy would be just a dream. Instead, having a management methodology with goals allows a distinctive culture of performance to be cultivated that represents a competitive advantage for the organization.

METHOD OF THE INDICATORS

In GNP, every year performance contracts are signed that include three to seven indicators per employee. At the close of the financial year, they are converted into a key element in the individual performance assessment.

The definition of the indicators is based on a top-down process, once the annual operational plan is approved.

The best way to define the indicators and their respective relative weights is by forming committees of design and approval of the performance contracts, which have as their main function to ensure the alignment of the objectives and the expected contributions of each employee.

Figure 1. Example of contract

There are different types of indicators, including:

1. Financial. Measure the impact of profitability and productivity, as well as the costs, expenses and savings.
2. Service. Define service levels. They are assessed by satisfaction surveys of internal and external customers.
3. Projects. Measure the projects in terms of benefits, costs, time, and end-customer satisfaction.

All indicators have a relative weight on a base of 100, a goal or expected plan, and ranges of compliance that depend on the aspirations of the organization. These ranges are used to reveal the expected levels of each indicator and the consequences arising from the results. The ranges are based on a scale of 1 to 5, where 3 is to meet the expected goal, 1 is to be significantly below and 5 far exceeding the goal.

During the annual exercise, each employee and immediate supervisor are responsible for managing the individual performance and making the necessary adjustments to the performance contracts, according to the needs of the company and with the approval of the committee that evaluates the changes.

Figure 2. Annual cycle of design and approval of performance contracts.

Over time, this model has compiled a database of more than 1,200 indicators and progress has been made toward a culture of individual measurement and alignment of the objectives with the contributions of each employee.

The main challenges in implementing the model are:

1. Overcoming the natural resistance of the collaborator to being measured.
2. Ensuring equity in the “acidity” of indicators.
3. Establishing indicators of co-responsibility.
4. Ensuring that the performance contracts are a tool of daily management of the employees.

Given these challenges, it is recommended that communication campaigns are prepared and that directors display strong leadership, to reinforce the importance of the model and detect and constantly update the indicators that reveal the contribution of each collaborator.

RESULTS

Having established this system of Design and Approval of Indicators in GNP has allowed the alignment of individual efforts and, therefore, the building of the platform on which opening new opportunities on a large scale can be contemplated, meeting the challenges of the market and, mainly, achieving the goals of Visión 2019.

The impact on the GNP staff has been very satisfactory, as evidenced by the results of the performance survey, which measures the satisfaction and health of the organization in three dimensions: alignment, implementation and renewal of the strategy, and in nine components.

The survey is conducted every year. More than 90% of the employees evaluate direction, environment and values, accountability and motivation, among other components. These components show growth in the following manner:

CONCLUSION

To successfully implement the design methodology and implementation of the mission, vision, business strategy and definition of the performance indicators, the involvement and commitment of the General Director, the leaders of each area and the employees is essential. The system must be sponsored and promoted by the General Director, and executed by his/her management team, so that the entire organization adopts it and carries it out.

It is essential that the leaders of the areas routinely manage the performance of their employees, for which the performance indicators for each one must be updated, depending on the needs of the company.

References

• Becker Brian E., Mark A. Huselid y Dave Ulrich (2002). El cuadro de mando de RRHH. Barcelona: Gestión 2000.
• Brickley, James A., Clifford W. Smith Jr., Jerold L. Zimmerman y Janice Willett (2003). Diseño de organizaciones para crear valor. México: Mc Graw-Hill Interamericana.
• Fitz-enz, Jac (1999). Cómo medir la gestión de los recursos humanos. Bilbao: Deusto.
• Freeman, J. y M.T. Hannan (1990). Technical change, inertia, and organizational failure. Technical report #90-4. Ithaca: Cornell University Press.
• Porter, Michael E. (1980). Competitive Strategy, Nueva York: Free Press.

One of the many aspects brought into question after the great crisis of 2008 is whether what we teach in finance and economics, and how we do it, is still appropriate. In recent years, academics from universities in the United States have raised the question, what should we tell our students about our theories and our models?

What should be taught about the new paradigms of financial markets? Should traditional theories of finance continue to be taught? (Fabozzi, Focari and Jonas, 2014).

Financial Theory

Teaching finance and economics is not easy. Economics is the science that studies the management of resources to meet human needs, from its creation or production to distribution and consumption. Finance, on the other hand, is the field in which optimal investment portfolios are designed. Both study extremely complex phenomena that are difficult to analyze under replicable methodologies and in a systematic manner. The human factor plays a central role in both fields, and it is very difficult to elaborate good scientific theories. In fact, some academics consider that so far, there is no adequate way to generate good theories and it is likely that it will take a long time to reach that point. Part of the dissatisfaction with teaching finance and economics is that the models that are given in the classroom are ephemeral and therefore do not serve students in real life.

Having no good and lasting theories – and therefore no systematic way to predict major economic events such as financial crises – the cause of these is attributed to the economy and finance. They become the favorite culprit of major crises. Finance is the villain responsible for the sudden disappearance of the wealth of families, businesses and governments, and we forget that the fundamental role of finance and financial innovation is to be the means to achieve the life goals of individuals and institutions. Andrew Lo of MIT says, “Blaming financial innovation for the crisis is like blaming accounting and accounting standards for the big frauds of public companies in the United States. Unfortunately, the misuse and abuse of financial tools is what causes the crises, not the tools per se.”

Teaching Finance

What should we teach future generations about finance? Should we point to the great villain destructor of capital and highlight its shortcomings? Or should we teach finance as the vehicle that can make a wider range of individuals, and not just the privileged sectors, more prosperous?

In his book Finance and the Good Society (Princeton University Press, 2012), Robert J. Shiller postulates that educators had a role in the creation of the mortgage crisis of 2008 by putting too much emphasis on the efficient markets theory, which helped create speculative bubbles. According to this theory, agents are rational and information is available to everyone. The errors the market made by valuing instruments will be corrected with time and market equilibrium will prevail, even without ethical behavior. Unfortunately, sometimes prices deviate too much from their fundamental value because of unethical conducts, panics or excessive excitement, and systemic crises arise as consequence: first the excitement and greed, and then panic and runs afterwards. Prices will correct eventually, but wealth destruction is inevitable when deviations are so big.

Shiller suggests that, in addition to teaching theory and applied tools, finance should be explained and understood as a force for the common good. Finance that is well understood contributes to creating a better society, what he calls “a good society.” Finance is not an end in itself. It is a functional science that exists to support the goals of society. Those who study finance must find a purpose beyond it. Finance is a means to an end. The “end” is defined by the people. Finance experts should be only “administrators” or “protectors” of resources to achieve that end.

A Vocation in Finance

Financial tools and financial innovation are only useful to the extent that they help reach the goals of individuals, companies and governments, but always contributing to the building of a “good society.” The financial profession must be vocational; the financier should want to be a “facilitator” for others to achieve their goals.

What do financial professionals do? Mainly, Shiller explains, they “close deals” between entities with complementary needs, facilitating the arrangement that translates into real actions between persons or real entities. Any activity, from the design of an infrastructure project or sale of company stocks on the stock exchange, to a credit card transaction or a savings account, means an actual interaction between real persons or between real companies. Financial professionals – through financial institutions – make it possible for these transactions to exist.

In addition to a vocation, very specific skills are needed. The financial professional must cultivate expert thinking, which implies having a broad vision of the world and the ability to interpolate various sources of information and evaluate it from different perspectives. He/she also needs complex communication skills that combine interpersonal abilities and the capacity to understand complex situations. With these skills, the financial professional meets a client’s needs with options that best serve them. The financier must understand the technical complexities of the tools and services and apply that knowledge and sensitivity to resolve people’s problems. Therefore, teaching finance went from being descriptive and based on the memorization of concepts, to being a mathematical and empirical science. Today, we need to learn about abstract theory, practical applications and ethical issues that sustain the business. What is taught should focus more on what is not known to what is already known, given the enormous number of unpredictable elements in markets and economies.

In What Direction Do We Need to Go?

Shiller says that our integrity as educators must lead us to acknowledge before students the weaknesses of financial theory. On the other hand, it is clear that in most universities, ideas have emerged that have helped to create new instruments and make markets work more efficiently every day. In the universities, students should learn the mission of “protectors” and “administrators” of other’s resources, and it should be where they are given the tools for managing these resources.

Most of the time financial innovation has brought significant benefits. Simple instruments such as credit cards, or slightly more complex ones, like options or private capital, greatly facilitate the daily work in an economy. A more elaborate example that Shiller (2013) presents is the cap and trade initiative, which regulates carbon dioxide emissions from companies by setting maximum limits. Whoever exceeds the limit makes an “exchange” with another company that has reduced its emissions, that is, it purchases a certain amount of extra CO2, which it can emit. Today, there are five stock markets in the world where carbon emissions are exchanged under the cap and trade system.

Financial innovation should not be limited, but on the contrary, its area of operation should be increased, correcting past mistakes and aligning the incentives of all the participants again. What should be done in the classrooms is to incorporate points of view of other social sciences such as psychology, sociology, political science and anthropology without losing sight of the central role of institutions already established. When financial institutions focus on supporting the societies they serve to achieve their ideals and goals, those societies will be more successful. The central point is that when finance functions correctly, it has the unique potential to promote high levels of prosperity for the majority?.

Referencias

• Fabozzi, F. J., Focardi, S.M., Jona, C. (2014). Investment Management: A Science to Teach or an Art to Learn? CFA Institute Research Foundation, May 2014, Vol. 2014, No. 3.
• Shiller, R. J. (2010). How Should the Financial Crisis Change how We Teach Economics? The Journal of Economic Education, 41(4).
• Shiller, R. J. (2012). Finance and the Good Society. Princeton: Princeton University Press.

In the business world, there are two irrefutable truths, and yet they are often forgotten. On the one hand, intangible assets constitute the fundamental value of the company, providing it with a competitive advantage. On the other hand, among those assets, human capital is unique and unrepeatable within the company.

An organization with the best equipment and technology is not effective unless it has trained employees to use and take advantage of these assets.

Imagine a company that does not train its employees. When there is a lack of training, employees make mistakes. The errors, which can be of any type, will cause the organization to lose time, and as we well know, time is money. The lack of training starts a vicious circle in which the organization suffers deterioration in various ways (staff frustration because of their own inefficiency, delays in schedules, lost customers, unnecessary expenditures, etc.)

Many companies apply ineffective training methods and end up within the same vicious circle. If training is only provided when there is time or resources, or if the employee is unable to do their job (training), we are talking about minimum training, which is poorly planned, does not have a clear focus and that is not aligned with the vision of the company. Minimum training holds back the processes of the company, which, therefore, gradually ceases to be competitive.

In the book Theory of Human Capital (1993), author Gary Becker explains that what makes the difference between developed and developing countries, successful and unsuccessful organizations, is their human capital. Human capital has little to do with people as such, but rather it refers to what is inside them. Human capital is knowledge, skills, abilities, and even health – that is, all the attributes with which employees contribute an intangible, inimitable value that gives organizations a competitive advantage.

To form true human capital it is necessary to consider training from a strategic point of view. As in any strategy, it is necessary to analyze where we want to go as an organization and how we want to achieve it. For that, the first step is to know exactly where we stand. There are various tools that the company can use to know its current panorama, such as the SWOT analysis, the development of medium-and long-term vision, Porter’s 5 Forces, etc. By having an overview of the company’s situation, a training strategy can be planned that goes hand in hand with the vision of the organization.

Goldstein’s classic model of training (1991) is an example of how you can plan training. This model includes three phases: 1) assessment of learning needs, 2) design and training, and 3) evaluation of the training, in a feedback loop. This classic model is complemented by the model of West and Woods (2010), which emphasizes the importance of aligning training with the strategic vision of the organization. A syncretic way, based on both models, provides a third model that includes both the feedback loop, such as strategic planning, and a comprehensive evaluation as a key aspect in learning.

Figure 1. Based on Goldstein (1991) and West and Woods (2010)

Thus, for the assessment of learning needs phase, West and Woods (2010) established a model to identify where interventions are needed. This consists of five steps ranging from organizational factors to individual ones. First, it determines the level of support that a strategic training initiative would have and its real need. Second, it analyzes what the organizational culture is like and the climate for learning and training. After, the posts and jobs are analyzed and compared with the information about the respective occupation and with other organizations. Here area managers can be spoken with to obtain information. The next step is to analyze the knowledge, skills and abilities (KSA) that each post requires, as well as the skills needed for the various jobs. Finally, there is an analysis of the people with the intention of discovering the differences between their knowledge, skills and abilities, and the KSA required for the post.

In the second phase, a strategic plan for the training and its implementation based on the strategic needs of the organization (in anticipation of possible needs) is outlined. Also, identified needs are covered in the examination of the gaps that exist between the KSA of each post and the skills of its occupants. This is the moment to create the learning interventions and training. This phase is important, since to the extent that the interventions are aligned with the vision of the organization, they contribute to it.

The third phase covers the design of the training and its delivery. With the information obtained in the previous phase, the type of training considered most appropriate should be chosen. It is important to mention that people learn in different ways, and therefore, it is necessary to seek among the training alternatives that which will bring the greatest benefits to each post. Training can be given collectively or individually, whatever is most appropriate. There are a wide variety of training methods that range from lectures, demonstrations and simulations to on-the-job courses, coaching, mentoring and online learning, among others. In this phase, it is important that the design of the training is adjusted to the contents and the characteristics of the employees to be trained.

The last phase is crucial because it deals with measuring the results of the individuals at the end of the training program. To be objective, it is necessary to establish evaluation criteria. You can analyze the reactions (for example, surveys of satisfaction with the course), learning (such as a knowledge test), behavior (transference to the post) and the results of individuals after having gone through the learning process (for example, increased productivity). This assessment should culminate with the return to the first step. In the feedback from the training, and by aligning it with the strategic objectives of the company, you have to analyze what the new needs are and what can be improved in the current training program. It is necessary to measure; it is the most important part of the process, “What is not measured, does not grow.”

If this model is applied methodically, organizations can break the deadlock of the vicious circle and move to a value-generating circle. Strategic training based on the fulfillment of the strategic objectives of the organization develops individuals capable of performing effectively and achieving the strategic goals that the company has assigned to them individually. This has a multiplier effect as the organizational strategic goals are met. Lastly, we must not forget that training is intended to strengthen the members of the organization, to increase their human capital and their ability to generate value as citizens.

References

• Goldstein, Irwin (1991). Training in work organizations. Los Ángeles: Consulting Psychologists Press.
• Becker, Gary (1993). Human capital: A theoretical and empirical analysis, with special reference to education. Chicago: University of Chicago Press.
• Woods, Stephen, y Michael West (2010), The Psychology of Work and Organizations. Hampshire: CENGAGE Learning Business Press.

In my contact with Mexican executives I have found that most have a great desire to continue their professional development. Therefore, they enroll in a master’s degree program or take professional courses, thinking that by improving their academic preparation, their chances of achieving more prominent positions will be ensured.

Yes, knowledge and skills help, but they do not guarantee the development of executives, who might be carrying emotional burdens that hamper their growth and rob them of their inner peace.

This article is intended to share with the reader the main emotional burdens that I have identified in executives based on my professional experience, both as a professor of the MBA at ITAM and as a therapist, in order that they become aware of which ones they may have and find ways to overcome them. In other words, so they can get rid of the excess baggage that weighs them down and thus feel freer to continue to grow.

The article includes real examples of executives, but to safeguard confidentiality, names have been changed as well as any information that might identify them. The word “executive” is used interchangeably to refer to men or women, unless otherwise indicated.

Emotional Burdens of Executives

• Poor stress management
• Panic attacks
• Burnout syndrome
• Imbalance between work and family
• Problems with authority figures

Poor Stress Management

In my opinion, stress is the emotional burden that most frequently limits executive development. Let’s consider Juan’s case.

He is the director of a finance department of a large Mexican corporation. He is 40 years old and married. Less than a month ago he suffered a heart attack and the company granted him a one-month leave to recover. Juan acknowledges that the cause of the heart attack was the level of stress at work, since he must make risky decisions. However, he likes what he does and wants to keep his job, so he decides to seek psychological counseling to learn how to manage stress.

What is stress? To understand it better, let’s define it:

Stress is a dynamic condition in which an individual is confronted with an opportunity, constraint or demand related to what s/he desires and the result of which is considered both uncertain and important. [Schuler, 1980. p.189].

Also, stress can be defined as:

A general adaptation syndrome, which occurs in human beings in response to difficult or dangerous situations, whether they are triggered by internal or external stimuli. [Robles, 1995, p. 47].

The main factors that cause stress are: work overload and time pressures; assignment of difficult-to-achieve goals on the part of the company; working excessive hours of more than 10 hours a day; exaggerated growth expectations of the executive within an unrealistic time frame; difficult economic environment in which companies put pressure on executives, as if the achievement of results depended solely on them, etc. It seems that executives and directors have plenty of reasons to feel stressed.

Stress is not always harmful; average levels can serve as a stimulus for an individual. When people do not have goals and challenges, they fall into a comfort zone in which they lack incentives. But when pressures are excessive overcome chronic, a person becomes ill or fatigued. The important thing is to learn to manage stress so that it is kept at optimal levels. It seems that Juan ignored the signals that his body sent him to indicate that the pressure he was experiencing was exaggerated. These signals can be a headache, stiff neck and shoulders, tightening of the jaw, high blood pressure, feeling tense, anxiety, insomnia, eating or smoking compulsively, etc. If the symptoms of stress are not attended to and become chronic, psychosomatic illnesses, like ulcers, colitis, migraines, clogged arteries from high levels of cholesterol or triglycerides or, more seriously, a heart attack, can occur.

So, we either lower the stimuli that cause us stress – for example, work fewer hours – or we learn and practice techniques to relieve stress. If the person is active, it is recommended to relieve stress with exercise or by practicing a sport. If the person is rather calm, it is best to do relaxation exercises or meditate.

Another way to deal with stress is to join a support group. The difficult moments of life are easier to cope with when we have people around us who understand and accept us. For Ibarra and Hunter (2007), an executive must have three support groups: operational, personal and strategic. The operational group includes the necessary relationships with colleagues and peers to do the job efficiently. The personal group involves the ties that support personal and professional executive development (for example, a coach), and lastly, the strategic group includes contacts with people who have the power to influence professional career advancement, such as directors or managers of the organization.

There are other techniques to manage stress, like massages, breaks and vacations, hobbies, etc. The important thing is to assess the level of stress that we can tolerate without getting sick and learn to relieve tension through compensation techniques, so that stress does not accumulate or become chronic.

Panic Attacks

While stress is commonplace among executives, panic attacks are now becoming more frequent. This happens when the pressures and concerns surpass the person’s level of endurance. Let’s look at what happened to Carlos.

Carlos is a 38-year-old engineer who works in the construction and sale of low-income housing. After having a very successful career, both professionally and economically, he begins to feel an uncontrollable fear of leaving his home alone. He gets heart palpitations (tachycardia) and, during those moments, he sweats and feels like he is going to die. The idea of death causes a feeling of panic that immobilizes him. Now he feels unable to do the work that he did before with confidence and security.

Panic attacks occur during high levels of anxiety, when the executive can no longer manage and control the stress. When the individual suffers anxiety, s/he feels an inner restlessness, tightness of the chest, trouble breathing, is nervous, accelerated, and fears that something bad might happen to him…s/he has lost his/her inner peace.

Although the symptoms of anxiety and panic attacks are terrible and painful, if they are treated properly they are resolved in a few months. When the anxiety level is low or average, psychotherapy is enough. When it is so high, causing panic attacks, a mixed treatment is required, with medications prescribed by a specialist, usually a psychiatrist, and psychotherapy sessions. We must be careful with general practitioners who prescribe anxiolytics, since they are not experts in the handling of medication for the nervous system.

Burnout Syndrome

Laura is a senior executive in the marketing department at a multinational corporation. She is 35 years old, single and lives alone. She has the goal of becoming a director in the organization, so she is willing to work 12 or 14 hours a day, taking work home on weekends, traveling for work and accepting all the projects that her boss offers her. After several months working at that pace, Laura feels exhausted. Despite a weekend of rest, she is just as tired the following Monday. She begins to feel like not going to work, she retreats from her clients since she blames them for her fatigue, she stops seeing friends and spends very little time with her family. The excess of work and the lack of rest exhausted her. Although before she was full of energy and enthusiasm, now she feels tired all the time, has difficulty concentrating, doing mental work and making decisions. The time comes when she feels so depleted that she becomes inefficient and needs an obligatory rest. Laura suffers from the burnout syndrome.

When Freudenberger chooses the word “burnout” to describe what happens to certain professionals, he was thinking about what remains after a fire:

If you have ever seen a burned building, you know it is a devastating picture. What was once a vital structure, now is desolation; where there was activity, now there are only traces of energy and life [...] In my psychoanalytic practice, I’ve noticed that people, like buildings, sometimes get burned. [Freudenberger, 1980, p. XVI]

In Mexico, according to research conducted by Robles (1995), two factors are related to the burnout syndrome: 1) chronic job stress caused by overwork and time pressures, difficult contact with customers and lack of support from superiors and colleagues; and 2) chronic job dissatisfaction due to the lack of recognition and achievement, little variety in the workplace and poor professional development.

Burn out does not suddenly come, but it is the result of months of exhaustive work, with little rest and no exercise. Executives can be aware that they are in the process of becoming exhausted if they have the following symptoms: chronic fatigue, irritability, impaired cognitive functions – such as concentration, attention, problem analysis, etc. – negative attitudes toward work and the customers.

If Laura had been aware that she was becoming exhausted, she could have reversed the process in time, since when it is in its initial phase, it can be overcome with rest, good nutrition and vacations, that is, through a process of revitalization.

To avoid to get burned out, Schwartz and McCarthy (2007) propose the strategy of managing energy rather than time, which is a limited, non-renewable resource. For executives to be able to conserve their energy, they make the following suggestions: get enough sleep by going to bed earlier; reduce stress through cardiovascular exercise; eat a light snack every three hours; take short breaks away from the desk every 90 to 120 minutes. To conserve mental energy, they suggest reducing interruptions when you are doing tasks that require a lot of concentration, using an answering machine and setting up a schedule for reviewing and answering emails. As we see, the solution is to balance work and rest.

When the executive is burned out, the solution is total rest, with a full withdrawal from work and concerns, a healthy diet, and taking Vitamin B complex, all supervised by a physician.

In my experience as a therapist of “burned out” executives, I have found that some personal characteristics make individuals more prone to exhaustion: not knowing how to say no to excessive work assigned by their boss, for fear that it might slowdown their development; having such high growth expectations that they impose exaggerated work loads on themselves; or finally, not delegating, but doing all the work themselves, thinking only they can ensure its quality.

Reaching a state of exhaustion has painful consequences for executives since their performance deteriorates, they suffer from not being able to react as before, and they see the recovery period extended to at least a month.

Imbalance between Work and Family

There are three main reasons why one becomes totally absorbed by work and neglects the family. Some executives, like Laura, feel such a strong drive to advance professionally that they are willing to devote most of their time to work. Others are workaholics and feel the need to work nonstop, because they think their worth is measured by what they do rather than who they are. However, most of them are motivated by the intention of providing their family with a good standard of living (at least equal to or better than what they had) so they go too far in seeking a high salary, as in the case of Agustin, which is presented below.

Agustin is a 36-year-old executive, married with three children, who feels pressured to achieve sales quotas set by the marketing director, because like any salesperson, his salary is reduced by half, if he does not receive the incentives for goals achieved. He needed all the income, salary plus commissions, to cover family expenses. Agustin had to visit customers in different cities, which involved making one or two trips a week. His wife was upset because she was left in charge of the kids and the house and because he was never with her. Meanwhile, Agustin was very tired and on the brink of exhaustion.

Although Agustin may seem justified in neglecting his family, in reality his life was unbalanced to such a degree that, trying to give them the best, paradoxically he began to harm his children, his wife and his health.

The imbalance between family life and work is very common among Mexican executives, both men and women. When my students in the MBA program make their life and career plan, most, if not all, recognize that they neglect their family because of work. In seeking solutions to this situation that concerns them, the following have been proposed: spend quality time with family rather than quantity; establish fixed times to spend with them, with hours and days to spend with the children, and have dinner with their spouse or partner at least once a month; on weekends engage in family activities, such as practicing a sport together, spending a day in the country or taking short trips, and going on family vacations at least once a year.

In addition, Groysberg and Abrahams (2014) propose to deliberately choose what opportunities worth accepting and which are not, whether it is in family life or at work, instead of only reacting to emergencies. When interviewing executives of both genders, these authors concluded that the tension between work and family is a more serious problem for women, so it is essential that they count on the collaboration of their partner, as well as on support networks both in the family and the workplace.

One might think that single women do not have these problems of balance, but some, wanting to reach managerial positions, concentrate so much on their career that they neglect their personal life. They do not give themselves the opportunity to cultivate a relationship with a partner that will enable them to start a family, when that is also important to them. It is common for successful female executives, between 33 and 35 years old, to come to psychotherapy feeling desperate because they cannot find a partner and want to have a family.

Most people tend to ignore the imbalance between family and work, until a crisis occurs, such as a heart attack, a teenage son or daughter who is addicted to drugs or the threat of divorce. They do not realize that spending time with their family would give them a support network to relieve stress and avoid exhaustion.

Problems with Authority Figures

Another burden that limits an executive’s performance is the inability to establish a harmonious relationship, of respect and cooperation, with his/her immediate superiors. This is due to two causes: rebellion or submission. Rebellious executives feel that their bosses abuse their authority, and so they resist it. Submissive ones allow their bosses to abuse them, not daring to confront the abuse or injustice. Let’s take the example of Santiago, who belongs to the first group.

Santiago is a 32-year-old executive, single, who works in one of the largest banks in Mexico. He joined the institution upon completing his career in business. He has worked for several years for the same boss, who considers him to be a good employee, since he is well prepared and is committed to his work with the bank, and is professional. Due to his performance, Santiago receives an offer for another position at the same bank in another city of the country. He talks with his boss about it and his boss tells him he thinks he is well off where he is and should stay. Santiago gets angry because he thinks his boss is blocking him and limiting his development, so he decides to go above him and talk with the area director to get an authorization for his transfer. Two years after taking the new job in the other city, he realizes that his boss was right, that there were better development opportunities in Mexico City, in addition to the emotional cost of living far away from his family and friends. He asks for his reinstatement in the department of his former boss with whom he was angry, and, surprisingly, he accepts him without resentment or anger.

Analyzing his behavior in therapy, Santiago realizes that this act of rebellion led him to make the wrong decision. He also recognizes that it is not the first time that he has done this, because he has had problems with other authority figures, starting with his father, teachers and other superiors.

When executives have had difficulty with several bosses, it is likely that they are the cause of the problem. Faced with their rebellion against accepting authority, they can do two things: start their own business so that they do not have anyone over them or try to understand the origins of their rebellion and provide a solution. If the origins date back to their childhood, it would be best for them to go into psychotherapy.

On the other hand, submissive employees accept responsibilities beyond their possibilities. The boss leaves work at the normal hour, but expects his/her subordinate to stay in the office until 10 or 11 at night, and if s/he has not finished the work, that s/he take it home on the weekend, “because it must be presented at the meeting on Monday.”

It would be advisable for submissive subordinates to ask why they allow their boss to abuse them, they courageously confront him/her, they learn to set limits, demand respect or say no.

General Solutions and Recommendations

The following are some general recommendations to overcome emotional burdens, to get rid of excess baggage and lessen the weight to continue to grow in harmony and balance:

• To overcome burdens and create new habits, the following steps are recommended:
  • Become aware of your emotional burdens. Improve your self-awareness with tests, assessments, self-analysis, feedback, etc.
  • Develop a plan of action to overcome the burdens.
  • Practice the actions that you have planned until they have replaced old habits.

• Learn to manage stress.
• Set up and cultivate support networks, both professionally and personally.
• Seek support from a coach or mentor.
• For single female executives who want to have a family, allow time to cultivate relationships and look for possible future partners.
• Develop your emotional intelligence to learn how to handle negative emotions, such as fear and stress, and strengthen yourself in order to face the demands that institutions exert over executives.
• Seek a healthy, balanced life, taking care of your body, mind, emotions, social life and spiritual dimension.
• Develop a career and life plan in order to define personal and professional goals. Decide on the price you are willing to pay to achieve them, without being influenced by work or social pressures.
• Finally, if the burdens originate in old, emotional wounds heal them in psychotherapy.

Bibliography

• Berglas S. (2006). How to Keep A Players Productive. Harvard Business Review. September.
  Freudenberger H.J. (1980). Burn Out .How to Beat the High Cost of Success. Nueva York: Bantam Books.
• Groysberg B. and Abrahams R. (2014). Manage Your Work, Manage Your Life. Harvard Business Review. March.
• Ibarra H. and Hunter M. (2007). How Leaders Create and Use Networks. Harvard Business Review. January.
• Maslach C. (1982). Burn Out: The Cost of Caring. Upper Saddle River: Prentice Hall.
• Robles G. (1995). Identificación de Factores Asociados al Síndrome de Agotamiento en Maestros de Universidades Privadas Mexicanas.Tesis doctoral. Universidad Iberoamericana. México.
• Schuler S. (1980). Definition and Conceptualization of Stress in Organizations. Organizational Behavior and Human Performance. April.
• Schwartz T. and McCarthy C. (2007). Manage Your Energy, Not Your Time. Harvard Business Review. October.

In an account of workplace bullying, a victim noted, “My boss never liked me and why she hired me is still unclear. She bullied me extensively, yelling at me in front of my coworkers, threatening my job privately in her office, and discouraging alliances with coworkers. She treated people similarly in other departments, yelling at them in meetings.”

Unfortunately, the scenario above is more common than we expect. While statistics vary, a 2012 survey by the Society for Human Resource Management (SHRM) found that 51% of organizations reported that there had been incidents of bullying in their workplace. More recently, the 2014 Workplace Bullying Institute U.S. Workplace Bullying Survey found that 27% of Americans have suffered abusive conduct at work; another 21% have witnessed it; and 72% are aware that workplace bullying happens. In other words, a total of 65.6 million people are affected by workplace bullying and 37 million of U.S. workers report being subjected to “abusive conduct”. Internationally, Scandinavia has reported that 3-4% of their working population is affected regularly and Finland and Great Britain have reported a 10% prevalence rate.

Mexico is unprotected from this silent epidemic. Bullying has increased in the Mexican society and schools. CNN-Mexico reported that the Mexican press has indicated that in a two-year period (2011-2013), the practice has grown by 10%. Although this number may not seem to be large, it is extremely disturbing since many of the victims are young school children. It is estimated that 65% of schools in Mexico are impacted by bullying. In other words, more than six out of every ten kids are receiving inappropriate treatment from peers and other influences in their lives. Given the effect of socialization on these youngsters, bullying behaviors in schools may translate in organizations and further breed workplace bullying.

Although workplace bullying is four times more likely to occur than some forms of illegal harassment, there is no anti-bullying workplace legislation in the U.S. to prevent workplace bullying. The U.S. Congress created the Occupational Safety and Health Administration (OSHA) to assure safe and healthy working conditions by setting and enforcing standards and by providing training, outreach, education and assistance with the Occupational Safety and Health Act of 1970. In 2011, OSHA adopted a safety program for its own workers that included a workplace anti-bullying policy. The policy outlines safety practices for OSHA’s field offices. OSHA’s workplace bullying policy is significant because the General Duty Clause of the Occupational Safety and Health Act of 1970 requires employers to “furnish to each of his employees employment and a place of employment which are free from recognized hazards that are causing or are likely to cause death or serious physical harm to his employees … .” However, there have been claims that OSHA has not enforced that provision with respect to workplace bullying, despite overwhelming research that workplace bullying may cause severe damages to a target’s mental and physical health. Since workplace bullying is often viewed as a precursor to workplace violence (an occupational hazard), employers have a responsibility to their employees to correct and prevent any bullying behaviors that may occur. More recently, healthy workplace bills have been introduced in 15 states in the U.S. as of June 2014 to make repeated, severe and pervasive behavior directed toward a worker illegal. A recent Wall Street Journal article also announced that Mexican President Enrique Peña Nieto proposed a bill for bullying in Mexico.

Countries, such as England, Sweden and Australia, have been faster to adopt anti-bullying workplace legislation. More recently, the U.K. has been taking a look at Anti-Cyber Bullying legislative issues. According to U.K law, criminal internet bullying laws such as the Protection from Harassment Act 1997 and the Crime and Disorder Act 1998 may apply as cyberbullying laws in terms of harassment or threatening behavior. In October, 2014, Justice Secretary Chris Grayling said that Internet trolls and cyber bullies might face up to two years in jail under new laws protecting users against cyber threats, cyber bullying, internet trolling and cyber blackmail.

Workplace bullying is a key issue that needs to be addressed. More companies are recognizing the negative implications of bullying on organizational productivity and team morale. Workplace bullying can have a detrimental impact on individuals. Employees who have been bullied are more likely to feel anxious, stressed, they have lower self-esteem, less self-efficacy, and they may consider leaving their position. A key step in preventing workplace bullying is the understanding of workplace bullying.

What is workplace bullying?

While various definitions for workplace bullying exists, workplace bullying has been defined as persistent, offensive, abusive, intimidating or insulting behavior or unfair actions directed at another individual, causing the recipient to feel threatened, abused, humiliated or vulnerable. Workplace bullies and targets may be employees, clients or vendors of the affected organization.

Bullying is an escalating process in the course of which the person confronted ends up in an inferior position and becomes the target of systematic negative social acts. A conflict cannot be called bullying if the incident is an isolated event or if two parties of approximately equal ‘strength’ are in conflict.”

Although the definitions vary, it is important to note that there are three important aspects of any bullying situation: 1) a power imbalance is involved; 2) the incidents occur on a regular basis over an extended period of time; and 3) the actions or inactions of the perpetrator directly cause the victim unwanted psychological stress. Incivilities that occur and do not meet these three aspects are not considered bullying incivilities.

What types of behaviors fall under workplace bullying?

The negative behaviors that are considered bullying behaviors are just as varied as the definition of bullying itself. These behaviors include verbal aggression, excessive monitoring of work (micromanaging), social isolation, rumors, depriving responsibility, attacking the victim’s private life or attitudes, ridiculing a colleague in front of others, and the withholding of necessary information. With unclear definitions and so many possible bullying behaviors, it is not surprising that organizations have a hard time determining what is acceptable and what is not.

What is the impact of bullying?

According to the literature, bullying can occur at three different levels: (1) Dyadic level – bullied/victim’s physical and mental well-being; (2) Group/meso level – relationship norms, and, (3) Organizational/macro level – corporate reputation.

Bullying that occurs between a perpetrator and a victim does not only affect the dyad, but also has an effect on the relationships between the perpetrator/other co-workers and the victim/other co-workers. Peers, subordinates, and immediate supervisors are sometimes frightened of the bully or the retribution they may face if they try to intervene. In addition, being exposed to repetitive bullying without any corrective action can lead to an acceptance of the behavior among the group. At the organizational level, bullying has been shown to result in higher absenteeism, higher turnover, and earlier retirement, all of which directly contribute to decreasing the organization’s profitability and bottom line. Bullying in the workplace effects the whole organization, not just the perpetrator and victim who are directly involved.

What can I do to prevent workplace bullying?

Managers have a responsibility to their employees to correct and prevent any bullying behaviors that may occur. As a manager, you can play an active role in preventing bullying by taking the following steps:

Participate in a training workshop. By enrolling in formal training, you will be equipped with the skills needed to identify, diffuse and respond to aggression in your department. Training seminars in conflict management and communication have also shown to be effective in reducing aggression among employees.

Become familiar with the anti-bullying policy in your organization. By becoming familiar with the anti-bullying policy in your organization, you will be able to better communicate the policy with your subordinates. If your organization does not have a policy, you can advocate an anti-bullying policy in your company. A well-developed anti-bullying policy prevents workplace bullying.

Communicate with HR if you suspect workplace bullying. If you are unsure that workplace bullying is occurring in your department, it essential that you contact HR so that they can further investigate the situation.

Promptly address complaints by employees. It is also important that you promptly address complaints by employees who report bullying incidents to you. It would be disturbing if nothing is done after employees have come to discuss the incident with you.

Support work-life balance benefits. Past research has demonstrated a trend that offering work-life balance benefits (e.g. flextime, telecommunicating, and compressed workweek) increases job satisfaction, productivity, commitment, and promotes lower stress levels. Furthermore, employees who are satisfied with their jobs tend to have lower levels of job-related stress, and therefore are less likely to engage in bullying behaviors. By being a proponent of work-life balance, you can play an in direct role in preventing workplace bullying.

All in all, workplace bullying is a widespread problem that faces organizations around the globe. With the rapid technological changes, it is important that countries across the globe adopt cyberbullying laws. Our communication patterns are moving at rapid strides, and hence the law may not keep up with on line behaviors. Some challenging issues that cyber bullying policy makers are faced with include: How should lawmakers define cyber bullying and cyber stalking? If you re-share or re-tweet something that breaks the law, have you committed the same offense? What happens when the cyber bullying offence is committed by someone in another country where there is no cyberbullying legislation in place? Should Twitter, Facebook or other media sites be held criminally responsible for allowing their sites to be used in these offences?

While more organizations are recognizing the detrimental implications of workplace bullying on the organization and individuals, additional steps are needed to fight this silent epidemic. As a manager, you have a responsibility to prevent any workplace bullying behaviors and make your organization a healthier and happier environment.?

Suggested Readings

• Einarsen, S., Hoel, H., Zapf, D. & Cooper, C. (2010). Bullying and Harassment in the Workplace: Developments in Theory, Research, and Practice. Second Edition (Google eBook). Boca Raton, FL: CRC Press.
• Namie, G. & Namie, R. (2011). The Bully-Free Workplace: Stop Jerks Weasels, and Snakes from Killing Your Organization. Hoboken, New Jersey: John Wiley and Sons Inc.
• Shavin, N. (2014). What Workplace Bullying Looks Like In 2014 — And How To Intervene. Forbes, 6/25/2014. Retrieved from www.forbes.com/sites/naomishavin/2014/06/25/what-work-place-bullying-looks-like-in-2014-and-how-to-intervene/
• Tehrani, N. (2012). Workplace Bullying: Symptoms and Solutions. London: UK. Routledge.

In today’s world where technology is advancing at lightning speed, the opportunity to work away from the traditional office becomes increasingly more accessible. With applications such as Skype, Google Documents, and Drop Box, many office jobs have become doable from outside the conventional office, such as home, coffee shops, or libraries. We refer to this as “distributed work.”

Unfortunately, with this freedom comes the risk of decreased productivity through cyberslacking, which involves getting distracted with Internet activities when employees should be doing their jobs (O’Neill, Hambley, & Bercovich, 2014). Indeed, in that study we reported that cyberslacking appears to reduce job performance during distributed work. In a follow-up study, we investigated the link between personality traits, cyberslacking behaviour, and an employee’s level of engagement during distributed work (i.e., working away from the traditional office; O’Neill, Hambley, & Chatellier, 2014), reported on below.

Results indicated that Honesty and Procrastination were personality traits that accounted for significant variance in both cyberslacking and engagement during distributed work. Accordingly, how honest, sincere, and genuine a person is accounts for 22% of their cyberslacking behavior, so someone who is very honest is unlikely to lose a lot of time “getting lost” on the internet when they should be working. Honesty also accounts for 31% of a person’s engagement in their job, meaning that people who are more honest tend to be more energized, focused, and excited by their work.

In terms of Procrastination, we found that the extent to which people have a tendency to delay and put off work can account for 37% of cyberslacking behaviour during distributed work. In other words, people who tend to procrastinate more are much more likely to waste time on online pursuits when they need to be working. When considering engagement, Procrastination accounts for 30% of variability during distributed work, which means that individuals who tend to Procrastinate also report lower engagement during distributed work.

We also examined the role of three sets of behaviours that may explain the link between personality traits and how effective an employee is when working away from the traditional office. These three sets of behaviours were: regular upward communication, self-management tactics, and conscious socialization efforts.

Regular upward communication refers to an employee’s efforts to keep their superior informed on their work progress, whether it be through e-mails, phone calls, or progress reports. Individuals who were high in Conscientiousness tended to engage more in upward communication, which lead to less cyberslacking, as well as more engagement in their work outside the office. Thus, individuals who regularly update their superiors on their work are less likely to waste time cyberslacking and will also be more engaged by their work.

Self-management tactics while working remotely include: setting start and end times, planning breaks, setting and achieving goals, as well as any other planning/organizational activity that is done in order to stay on track. Like upward communication, highly conscientious individuals used more self-management tactics, which lead to less cyberslacking and greater engagement in their work. Our research suggests that employees who think ahead and explicitly plan out their time are less likely to cyberslack and are more likely to feel engaged by their work.

Conscious socialization efforts refer to an individual’s efforts to keep in contact with other people while working away from the office. This would include Skype lunches, going to networking meetings, and staying in touch with team members virtually. Individuals who were high on Extraversion and Agreeableness were more likely to use conscious socialization tactics, which lead to a higher level of engagement in their work. Therefore, our research suggests that individuals who make an effort to network, have lunch meetings, and find different ways to keep in contact with colleagues are more likely to be engaged by their jobs when working away from the office.

Our research found the most successful combination of personality traits involved high Honesty and low Procrastination. This combination of trait levels leads to the least amount of cyberslacking, and the highest amount of engagement when working away from the traditional office. Further, Conscientiousness, Agreeableness, and Extraversion were also important for various sets of distributed work behaviors.

Other traits examined in our research program have been linked to distributed work outcomes (O’Neill, Hambley, Greidanus, MacDonnell, & Kline, 2009). In that study we examined employees from variety of organizations in which some employees participated in telework and others did not. We found that there were differences between traits that wree needed for success in telework compared to work conducted in the conventional office. For example, we found that sociability exhibited a negative relationship with job satisfaction in teleworkers but not-non teleworkers. This is because of the impoverished interpersonal environment that characterizes much distributed work. Even in distributed teams it seems that the higher the team’s level of sociability, the worse their ability to form a cohesive and collaborative work unit (MacDonnelly, O’Neill, Hambley, & Kline, 2008). Yet, if “high socials” can reach out using conscious socialization efforts, they would be more likely to adjust and achieve a more satisfying outcome. In O’Neill et al. (2009) we also found that Need for Autonomy and high Organization were particularly important for teleworkers. When individuals work from a distance, they need to be comfortable with the reduced structure and increased need to actively self-manage and build structure into the work.

In sum, we believe that personality is extremely important for engagement, satisfaction, cyberslacking, and performance during distributed work. By identifying the links between personality and success during remote work, we can better select, develop, and support employees who work remotely. Additionally, we can contribute to increasing the efficiency and productivity of distributed work thereby helping to make it work a more viable, satisfying, and successful option for everyone. As Dr. O’Neill pointed out in a media interview with Time, “Knowing yourself and your personality, however, can help you better manage yourself and others when working from a distance, so part of the puzzle is figuring out your own personality and where you have strong and weak fits with telework” (White, 2014)?

REFERENCES

• MacDonnell, R., O’Neill, T. A., Kline, T. J. B., & Hambley, L. H. (2009). Bringing group-level personality to the electronic realm: A comparison of face-to-face and virtual contexts. The Psychologist-Manager Journal, 12, 1-24.
• O’Neill, T. A., Hambley, L. H., & Bercovich, A. (2014). Prediction of cyberslacking when
  employees are working away from the office. Computers in Human Behavior, 34, 291-298.
• O’Neill, T. A., Hambley, L. A., & Chatellier, G. (2014). Cyberslacking, engagement, and
  personality in distributed work environments. Computers in Human Behavior, 40, 152-160.
• O’Neill, T. A., Hambley, L. A., Greidanus, N., MacDonnell, R., & Kline, T. J. B. (2009).
  Predicting teleworker success: An exploration of personality, motivational, situational, and job characteristics. New Technology, Work, and Employment, 24, 144-162.
• White, M. C. (2014). Are you too lazy to work from home? Retrieved November 8th, 2014, from time.com: http://time.com/42161/are-you-too-lazy-to-work-from-home