090519 The Shape of Things to Come: Learning to See Human Capital Markets

4. Agenda: Spiky and Flat • Lively Conversation on Demographic Changes • Deliver Meaty Demographic Detail • There Is No National Anything • Deﬁne Opportunity • Offer Solutions / Framework © 2009 Two Color Hat, Inc., Bodega Bay, CA 94923 www.twocolorhat.com 415.683.0775 john@twocolorhat.com 4

5. Declining Fertility Rates 1950 2007 8.00 6.7 6.9 6.00 5.9 5.9 5.5 4.00 3.5 3.1 2.5 2.7 2.00 2.4 2 1.5 0 Sub Saharan Africa Middle East / N. Africa Asia Latin America / Carribean N. America Europe © 2009 Two Color Hat, Inc., Bodega Bay, CA 94923 www.twocolorhat.com 415.683.0775 john@twocolorhat.com 5

8. Demographic Transition Digital, Cell, Internet, Technology Other Transitional Forces Economic Miracle Demographic Gift Youth Demographic Investment Sustainable Growth 1945 1960 2010 2025 GDP Per Capita Growth Rate © 2009 Two Color Hat, Inc., Bodega Bay, CA 94923 www.twocolorhat.com 415.683.0775 john@twocolorhat.com 8

13. Pyramids • Embedded Historical View • Familiar • “They’re Everywhere” • Family • Community • Organizations • Government • Invalid Assumption © 2009 Two Color Hat, Inc., Bodega Bay, CA 94923 www.twocolorhat.com 415.683.0775 john@twocolorhat.com 13

17. Recap: Opportunity • Organizational Shape Deﬁnes Opportunity Flow • Opportunity Availability Deﬁnes Growth • Opportunity Consolidates With Tenure • Inexperience = Agility + Resilience = Growth • Experimentation and Failure Essential For Survival © 2009 Two Color Hat, Inc., Bodega Bay, CA 94923 www.twocolorhat.com 415.683.0775 john@twocolorhat.com 17

43. No One Story, No One Nation • Fencepost is the Midwest. • Young are leaving fast • Cities saved by immigrants • Floating Box is Manufacturing, Metals, Agri • Young are Gone • Remnants are cash cows © 2009 Two Color Hat, Inc., Bodega Bay, CA 94923 www.twocolorhat.com 415.683.0775 john@twocolorhat.com 43

45. Take Aways #1 • Generalizations Fail • Paradoxical Trends • Shrink while Growing • Diverse Within Structure • Spiky and Flat • The Kids Are Leaving The Middle © 2009 Two Color Hat, Inc., Bodega Bay, CA 94923 www.twocolorhat.com 415.683.0775 john@twocolorhat.com 45

46. Take Aways #2 • Let’s Discuss Conventional Wisdom • Attrition is Bad • Experience Is Good • Circle of Trusted Advisors • Retention Is Good • Referral Programs are Smart • HR/Recruiting Are Uniform © 2009 Two Color Hat, Inc., Bodega Bay, CA 94923 www.twocolorhat.com 415.683.0775 john@twocolorhat.com 46

47. Take Aways 3 • Regional Culture Trumps National • Many, Many Niches, All Different • Elements of Culture • Ethnicity • Life Expectancy • Manners and Customs • Geography, Trafﬁc, Politics, Density © 2009 Two Color Hat, Inc., Bodega Bay, CA 94923 www.twocolorhat.com 415.683.0775 john@twocolorhat.com 47

57. http://sdrurallife.sdstate.edu/populationpyramids2.htm Hughes County South Dakota McPherson County © 2009 Two Color Hat, Inc., Bodega Bay, CA 94923 www.twocolorhat.com 415.683.0775 john@twocolorhat.com 57

64. Migration Life Expectancy Ethnicity Education Shaping Baby Boom Factors College Town Industry Religion Manners © 2009 Two Color Hat, Inc., Bodega Bay, CA 94923 www.twocolorhat.com 415.683.0775 john@twocolorhat.com 64

71. ■High Growth ■Hierarchical ■Innovative ■Entrepreneurial ■Startups, Bio-Tech ■Modest Growth ■Distributed ■Incremental Improvement ■Procedural ■New Fortune 500 ■Very Low Growth ■Increasingly Hierarchical ■Opportunity Consolidates at Top ■Procedural ■Old Media, New Mfg, Retail ■Death Spiral ■Punitive Cultural Enforcement ■No Retention of the Young ■Grasping ■Autos, Metals, Old Mfg © 2009 Two Color Hat, Inc., Bodega Bay, CA 94923 www.twocolorhat.com 415.683.0775 john@twocolorhat.com 71