ASLEEP ON THE JOB Time, attendance & fatigue management
HUMAN RESOURCES DIRECTOR
THE L&D INNOVATOR HR best practice at Amway
HCAMAG.COM ISSUE 13.03
BLIND FAITH Why your CSR initiatives are failing
ARE YOU THE NEXT CEO?
CEOs on HR Priorities, challenges & opportunities
INSIGHTS FROM: DHL EXPRESS / BAYER / HILTI / OGILVY
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EDITORIAL www.hcamag.com MARCH 2015 EDITORIAL
SALES & MARKETING
Editor Iain Hopkins
Marketing & Communications Manager Lisa Narroway
Journalists Chloe Taylor Jill Gregorie Production Editors Roslyn Meredith Moira Daniels Carolin Wun
ART & PRODUCTION Design Manager Daniel Williams Designer Marla Morelos Traffic Coordinator Lou Gonzales
Business Development Managers James Francis Steven McDonald Gareth Scott
CORPORATE Chief Executive Officer Mike Shipley Chief Operating Officer George Walmsley Managing Director Justin Kennedy Chief Information Officer Colin Chan Human Resources Manager Julia Bookallil
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It’s a long way to the top WATCHING OUR current prime minister constantly under fire for myriad real and media-hyped debacles, as well as the government’s struggle to ‘get things done’ (including such minor details as passing a budget), I often think to myself, “Who’d want to be a prime minister?” Of course, we encourage our kids to aim that high, and in the US “you could be president someday” is almost drilled in from birth. But who would want that responsibility, that pressure, or that scrutiny? Political life is a different beast to corporate life, but there are some correlations. Number one, of course, is that CEOs face (on a much smaller scale) similar seemingly insurmountable challenges. This issue’s focus on CEOs looks at just one aspect of their mandate: the people component. Some would argue that’s the most critical component – and that is borne out in survey after survey which states that most CEOs place ‘talent challenges’ at the top of their priority list. What about senior HR professionals? Would they ever want the top job? Is it possible to move beyond the historical bias that has plagued the HR profession (as ‘back office’ workers, cost centres, etc.) and make
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Human Resources Director is part of an international family of B2B publications and websites for the human resources industry HUMAN RESOURCES DIRECTOR MAGAZINE CANADA iain.hopkins@keymedia.com.au T +61 2 8437 4703 HRD SINGAPORE hrdmag.com.sg
Research by global HR advocate Dave Ulrich indicates that the prejudices are slowly being eroded that move? And if so, how would one do it? Research by global HR advocate Dave Ulrich (see p14) indicates that the prejudices are slowly being eroded. It’s possible we’re entering a new, exciting era for senior HR practitioners, in which they are real contenders for the top role. For now, I wanted to share a great anecdote given to HRD Australia’s sister Canadian title by Adrianne Sullivan-Campeu, VP, HR, at Allstate Canada. Other HRDs – or indeed anyone working in the profession who is looking to advance their career – might take the words to heart. “I received a great piece of advice when I first started HR,” she said. “It was ‘Take the project no one wants to work on and turn it into the project everyone wants to work on’. It speaks to the need to make the most of every opportunity that comes your way, and that there is a positive learning in everything you take on. I still live by that advice today.”
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Iain Hopkins Editor
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CONTENTS
14 COVER STORY
CEOs on HR With new research indicating that CHROs are ideal candidates for the top role, we talk to leading CEOs about what they expect from their HR heads and what their people-related challenges are
10 Profile: Riding the ‘dining boom’ Iain Hopkins chats to Jo Blackwell, GM, people & performance, at SunRice, about building a high performance culture and why the EVP matters
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34 Fit for work? Not likely... Employee fatigue is impacting not just the health and safety of blue-collar workers but the productivity, morale and financial outcomes of white-collar businesses. What can your organisation do to reverse this potentially deadly trend?
48 Blind faith: Why CSR initiatives fail If your CSR program doesn’t promote shared experiences, it’s set to fail, writes Peter Baines OAM
Small project fundamentals Most HR professionals are past masters at managing major transformation projects, but what about the numerous follow-up smaller projects that spring up? Peter Szilagyi provides his tips
REGULARS 04 | Things you should know: March 2015 06 | News analysis: Payroll blunders 56 | Head to head: Performance management
CHECK OUT THE HRD ARCHIVES ONLINE: hcamag.com
2 | MARCH 2O15
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MARCH 2015
THINGS YOU SHOULD KNOW Key findings (all industries) The representation of women steadily declines when moving up the management levels, with women comprising only 26.1% of key management personnel (KMP) positions, and 17.3% of CEO positions.
One-third (33.5%) of employers have KMPs who are women, and 31.3% of organisations have no ‘other executives/ general managers’ who are women.
19.9% the gender pay gap - full-time base remuneration 24.7% the gender pay gap - full-time total remuneration
GENDER EQUALITY SNAPSHOT The Workplace Gender Equality Agency’s 2013-14 reporting data is based off 4,354 reports submitted on behalf of 3.9 million employees and 11,000+ employers. The results indicate Australian organisations have a long way to travel before any semblance of gender equality is reached 4
Less than one in four employers have conducted a gender remuneration gap analysis to check for potential pay equity issues.
Only 13.6% of employers have a strategy for flexible working and only 13.2% of employers have a strategy to support employees with family or caring responsiblities.
Few employers are taking a strategic whole-of-enterprise approach to gender equality. Only 7.1% of employers have a standaline overall gender equality strategy.
Less than one in 10 organisations have set a target to lift the number of women around the boardroom table despite only 23.7% of directorships being held by women, and just 12.0% of chairs being women.
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9.4%
Casual male
Gender composition of the workforce
20.6%
5.1%
Full-time female
Part-time male
51.5%
48.5%
male
female
● There are broadly even numbers of female (49.5%) and male (51.5%) employees in the Agency’s dataset
15.3%
Part-time female
● Full-time employees comprise 57.6% of employees, part-time employees comprise 20.3% and casuals comprise 22.1%
37.0%
Full-time male
● Women comprise only 35.8% of full-time employees. They make up 75.3% of part-time employees and 57.2% of casual employees
12.6%
Casual female
Gender composition of governing bodies/boards, managers and non-managers Directors 76:24
Grey indicates a male-dominated management level or occupational category, while yellow represents a female-dominated management level or occupational category. It is evident that senior management levels and governing bodies/boards are maledominated.
Chair 88:12
76-100% female 61-75% female 40-60% male / 40-60% female
CEO 83:17
61-75% male 76-100% male
KMP 74:26
The ratio refers to male:female
Other executives / general managers 72:28 Senior managers 68:32
Othe rs
Profession als
Ma ch ine ry
56:44
48:52
40:60
e tiv tra nis mi ad nd al a ric vice Cle ser
72:28
al son per and
88:12
nity mu Com
89:11
Sales
op era tor sa Tec nd hni dr cia ive ns rs and tra des Lab our ers
Other managers 60:40
27:73
24:76
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NEWS ANALYSIS
PAYROLL
HALL OF SHAME: AUSTRALIA’S PAYROLL BLUNDERS As high profile incidences of payroll errors continue to plague Australian companies, HRD looks at why this is occurring and what can be done about it IN SEPTEMBER 2014, the public service was left redfaced when Canberra’s Prime Minister and Cabinet (PM&C) department was forced to repay former staff members whose redundancies were underpaid – in one case, by $17,000. In February this year, national advertising company OHMedia Melbourne and its director were fined $85,000 and $15,000 respectively after failing to properly pay several workers in Brisbane, Sydney, Melbourne and Adelaide. The embarrassing headlines – which often seep into mainstream media and do untold brand damage – are bad enough. When combined with the obvious requirement to repay employees in cases of underpayment, steep penalties by the likes of the Fair Work Ombudsman, and the payments to consultants who are inevitably required to sort out such messes, it’s highly likely that instead of counting sheep at night, you might be counting the thousands of dollars your company is at risk of losing through poor payroll practices. With good reason. The financial penalties alone are a deterrant. For employers it’s up to $51,000 per breach; for individuals it’s $10,300 per breach. In other words, 10 underpaid employees could mean 10 breaches. “There’s an example from a couple of years ago where an employer underpaid wages and super to the tune of $260,000. An employee brought this to Fair Work’s attention, the company cooperated fully with Fair Work, yet the company still received a $200,000 fine. Fair Work normally gives 28 days to get your act together – and you really do just get 28 days,” says Tracy Angwin, managing director, Australian Payroll Association. For individuals, the main thing to worry about – particularly HR managers – is Accessorial Liability.
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“This little known clause of the Fair Work Act says if you’ve knowingly done something wrong we will go for you personally. There have been examples where HR managers have been fined $10,000–15,000 for being complicit,” says Angwin. While the media reports on high profile cases of underpayment and payroll fraud, there are countless cases that don’t get reported because companies don’t get prosecuted. Instead, Angwin says “there’s a lot happening on the steps of the court”. It need not occur at all, but there are a number of factors wreaking havoc on the seemingly straightforward ability of employers to pay their employees what they are owed.
Why is it happening? Australia is regarded internationally as having complicated payroll obligations. This is exacerbated by Australia increasingly becoming an entry point for multinational groups expanding into the APAC region. However, the numerous obligations and the ambiguity in the treatment of certain payments is leading to recurring non-compliance. Thomas Isbell, head of global mobility services, Grant Thornton, says that another contributing factor is the lack of clear guidance on key conceptual terms and even types of workers. “Contractors are a significant risk area of non-compliance of payroll tax and superannuation,” he says. “As part of the ATO’s recent website overhaul they have introduced a contractor calculator. However, this can actually result in a misleading representation of a complex area of tax law. As such, an employer may not be aware that obligations for superannuation and payroll tax are not being met as the extended legislative requirements are not encompassed and require greater technical analysis.” There are also different state and federal obligations, especially in relation to certain taxes and leave policies (annual leave, long service leave etc). “It sometimes appears there’s no rhyme or reason for the differences,” says Angwin. “For example, annual leave is governed federally while long service leave is governed by statebased legislation.” Long service leave is a good example; Angwin says most organisations get it wrong in some form – even if it’s simply not recording it correctly. “We go into organisations and find both under- and
“Typically employees think, ‘well, the payroll people know what they’re doing’ ” Tracy Angwin over-accrual. If you’re a large organisation, certainly if you’re publically listed, you don’t want to have incorrect leave accruals on your balance sheet. The same applies to overpayments and underpayments. If you’re underpaying, obviously you’ve got a liability that you haven’t accounted for and if you’re overpaying you’ve got a cost in your balance sheet that is incorrect.” She says that typically employers do find out about underpayments because employees generally know the minimum they are entitled to and will report it to their employer; overpayments, less so. “In my experience it’s not that people don’t report overpayments because they want to fraudulently collect money that is not owed to them; typically employees think, ‘well, the payroll people know what they’re doing’.”
The training issue Complexity aside, there are other issues at play. For example, there are very few qualified payroll professionals
Outsource vs inhouse Having an outsourced payroll function is more prevalent at the less than 200 employee and the over 10,000 employee ranges.
Outsourced: 25.4%
Inhouse: 74.6% Source: Australian Payroll Association’s 2014 Payroll Benchmarking Report
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NEWS ANALYSIS
PAYROLL Payroll reporting lines It’s a misnomer that payroll rarely reports to HR. Based on APA survey data, as organisations get larger employee populations they are more likely to report to HR than finance. There is also a trend for larger organisations to have payroll report to a separate department, often shared services.
56.2%
60% 50% 40%
33.4%
30% 20%
10.4%
10% 0% Finance
HR
Other
Company size (number of employees) 200-499
HR Finance Other
37.4% 57.5% 5.1%
500-1,999 42.5% 54.1% 3.4%
2,000-9,999
10,000+
54.9% 39.4% 5.7%
58.3% 33.4% 8.3%
Source: Australian Payroll Association’s 2014 Payroll Benchmarking Report
in Australia. The only nationally accredited training program is offered through the APA and TAFE NSW, and these have only existed for a few years. “There’s only a small percentage of payroll people qualified to do the job. You’d expect your accountant, your lawyer, your IT folk to have qualifications in their area of specialty. We don’t with payroll, purely because there’s never been a qualification,” Angwin says. There are also incorrect assumptions. One is that payroll is like accounts payable. That couldn’t be further from the truth. Payroll is a highly technical field. Angwin cites one client’s conversation with her CFO, who had lumped payroll in with accounts payable. The payroll officer produced a list of 50 compliance issues an employer must know the answer to in order to correctly calculate and tax a redundancy payment. “She put this list in front of the CFO and said, ‘when accounts payable can answer all these questions you can group us with accounts payable’,” Angwin says. But in reality, she adds, most payroll professionals themselves might get 20 or 25 of those items right. This leads to the most glaring reason why so many payroll errors occur in large companies and government agencies: lack of training. Angwin says the assumption in many organisations is that the rules are static. “They know things change but overall they think that once they set up the payroll system they don’t need to look at a continuous improvement program. And that includes upgrading the skills of payroll employees.” And if the payroll system has been set up incorrectly, or if a payroll employee does
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what they’ve always done, it can have a devastating impact on payroll costs. Angwin cites one client, a Catholic charity, which employed 200 casuals. Just in the way they were calculating the casuals’ payments on weekends, APA identified over $500,000 worth of overpayment.
Improving the situation There are three ‘problem areas’ to resolve: 1. People. You’ve got the wrong people, or they are undertrained. The APA runs a help desk for payroll professionals and Angwin is shocked by the fundamental questions they are asked by people who are running national and sometimes global payrolls. 2. Processes. It doesn’t matter how great your people are but the old mantra of ‘rubbish in, rubbish out’ comes to mind. If your processes are rubbish you’ll have problems. 3. Technology. You could have poor technology or too much manual input. But again, if you have the best technology in the world but your processes aren’t right or you have undertrained people, you’ll still have an inefficient payroll function. “You may feel under-resourced but sometimes just your processes are wrong,” says Angwin. “What do we do manually, what can we automate? Where are the efficiencies, where can we use technology to do this? But don’t look at that technology piece until you get the other two elements right. Companies can spend hundreds of thousands of dollars updating their technology but they don’t see any benefit. The reason is they’ve just replicated their old processes. Driving a Ferrari doesn’t make me a good driver.”
Technology With Angwin’s warning about the importance of people and processes in mind, Nick Southcombe, general manager, Frontier Software, says that HRIS and payroll systems are programmed to address many of the complexities in payroll, albeit to varying degrees. This can include time collection, award interpretation, leave liability calculation, calculation of superannuation contributions and of course the taxation on all of these elements. “Not all payroll software vendors have programmed their software products for all payroll factors and often additional manual entry or overrides may be required which means human error can still be a factor,” he says. Fortunately technology continues to evolve and software vendors are working to close the gaps. Today a best practice payroll system that will reduce the risk of future unfunded liabilities will include: • Automation of time collection
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Average accuracy rates To calculate accuracy, the Australian Payroll Association’s 2014 Payroll Benchmarking Report took the number of errors per pay period as a percentage of the total payslips produced. Errors are defined as those requiring recalculation.
99.25% accuracy
1,000 payslips per annum
99.42%
1,000-10,000 payslips per annum
99.61%
10,000-100,000 payslips per annum
99.69%
100,000+ payslips per annum
accuracy
accuracy
accuracy
The average accuracy rate for all respondents was 99.53%
• Interpretation of hours worked against awards and EBAs • Online Employee and Manager Self Service which reduces error-prone manual tasks for staff, managers and the payroll team • Workflow to automate processes • Expense management • Access to the payroll system from mobile devices • Strong reporting and auditing tools, including dashboards, which provide management with an additional level of review and control “Clearly the more automation the better,” Southcombe says. “However, there is always at least one person behind each and every payroll system who must also be managed and trained to use the system accurately and efficiently.”
Payroll audits To minimise the chance of errors, the more proactive companies are undertaking payroll compliance audits. Angwin admits this is the biggest growth area in her organisation. She says although the move is heading towards companies being proactive, it’s still not quite there. “The audits tend to happen particularly when there’s a change of HR leader and that new HR person starts asking questions. When they’re not being given straight answers they tend to smell when something is off.”
An audit is really a reconciliation of what employers are actually doing and what they should be doing. It will look at all the applicable rules – from the ATO, from Fair Work, from the Offices of State Revenue – and check that these are being correctly applied in the workplace. “We also spend some time reviewing policy and procedures,” says Isbell. “Mistakes are often made due to contractual wording or internal procedures being outdated or often based on overseas policies. There is often confusion over what payments are subject to superannuation guarantee as it can be dictated by legislation, enterprise bargaining agreements or company policy.” From there, organisations will receive a set of recommendations. This might include an outline of the risk of fines: the APA might, for example, point out that the company is doing something incorrectly, which might mean they are underpaying staff, which in turn puts the company at risk of a fine from Fair Work. Or it might be around efficiency. Usually it’s a combination of the three factors above: people, processes, technology. “In one national company at the beginning of the audit we calculated it was costing $8 per payslip,” says Angwin. “At the end of the audit, and after they had taken up the recommendations, it was less than $2. So that was mostly around processes. Other companies would have different problems. We’ve worked with companies that were underpaying and genuinely not aware of it. You’d much rather find that out yourself. You don’t want Fair Work to tell you you’re underpaying people.” This last point is important. If Fair Work is notified of a breach and demands an audit be conducted, Angwin says there’s a fair chance of a superannuation audit from the ATO. And possibly a call from the Office of State Revenue for underpayment of payroll tax. “It doesn’t end with Fair Work. They all share information,” she says.
OUTSOURCING THE PROBLEM Tracy Angwin’s top tip: “If you’ve decided to outsource payroll because it’s so complicated, remember that you can outsource the payroll function or the labour, but you never outsource the responsibility.” Here are her three essentials to check before outsourcing payroll: 1. Are they registered? “Make sure your outsource provider is a registered tax agent with the Tax Practitioners Board. It’s a littleknown law that if you’re providing payroll outsourcing services for a fee you must be registered with that board. At last count I found about 16% of payroll outsourcing providers have that registration. The majority don’t have it. One implication of that is, for example, if you are underpaying your staff, you don’t get the safeharbour provisions from the ATO that you might otherwise have. The ATO can demand the money be paid in 24 hours.” 2. Who’s doing what? “Understand which party is responsible for what. Ask the outsourcer to explain it like you would to a five year old. A lot of time people think, ‘great, we’ve outsourced the payroll function’ but what they’ve really outsourced is something very different.” 3. Do they have the qualifications? “Know who is processing your payroll. Are they qualified to do it? Are they based in Australia? Often, outsource payroll organisations might have an office in Australia and you assume they have Australian qualified staff to process your payroll but often that’s not the case. It might be offshored. If that’s the case, where is your data being stored and is security an issue?”
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PROFILE
HR AT SUNRICE
RIDING THE ‘DINING BOOM’ Iain Hopkins chats to Jo Blackwell, GM, people & performance at SunRice, about building a high performance culture and why the EVP matters
LIFE IS ALL ABOUT TIMING – sometimes the timing is just right; other times it’s off. Often, when forces are out of your control, you simply have to play the cards you are dealt. Such was the case for Jo Blackwell, general manager, people & performance at SunRice. When she completed her Bachelor of Business degree in 1992 she emerged into a working world decimated by the recession. She heard of a HR graduate role available at Ford Australia. Although it was based in a manufacturing plant in Geelong (she lived in Melbourne), there were so few jobs that she applied and eventually landed the role. The commute distance, she says now, “was a small price to pay given the scarcity of roles”. As it turns out, her Ford tenure lasted nine years and Blackwell says she learned the majority of her functional and technical skills at the motor co. “They had a really strong development program where you moved roles every 18 months,” says Blackwell. “Instead of how things typically operate today where employers search for candidates who have all the desired competencies, at Ford they would purposely develop you if you were weak in any particular competency. They were very proactive in that sense.” Manufacturing was also the ideal industry to learn about some of the harder
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tasks that HR professionals face. When Blackwell joined the company in 1992, it was involved in its third round of redundancies in the space of 18 months. “It was the first time the car industry had started scaling back,” she says. “It was coming out of the late 1980s where cars were rolling off the line with high tariff protection. Suddenly those tariffs were coming down, the market was opening, and people had access to much cheaper foreignmade cars.” While the company focused on lean manufacturing, Six Sigma, and other efficiency measures, Blackwell stayed with HR in manufacturing for four years, then moved into the HR functions within the sales & marketing teams, and also had a stint at Ford Credit. Rounding out her tenure, she spent time looking after HR for Southeast Asia and had a final role in Perth establishing a HR function for a group of six retail dealerships. “It was an amazing experience in terms of building HR technical experience, but also in building relationships and interfacing with people on the shop floor all the way up to the CEO,” she says. A high performance focus at SunRice Today, SunRice has operations in Australia, the US, Papua New Guinea, the
Middle East and the Solomon Islands. The HR team of 15 holds global responsibilities for over 2,100 people, approximately half of whom are based in Australia. The company delivers strong, sustainable business results and delivered a profit in 2014. It hasn’t always been the case. When Blackwell joined SunRice in 2012, the company was emerging from the impact of 10 years of drought. There had been limited investment and a large reduction in people and capability. It was time to refocus. Blackwell was involved in a strategic review of business operations. Out of that review, the company values were identified and systems implemented to support those values. “We used a high performance culture program focused on three areas: accountability, collaboration and conflict resolution. To support the creation of a high performance culture we needed to have a performance management system that provided people with clarity around what they were accountable for and how they lived the values and behaviours.” She says SunRice had no desire to have lots of policies, structure and processes; instead there was a belief that empowering people would deliver results. SunRice senior management also understood there will, at
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PROFILE
HR AT SUNRICE IN HER OWN WORDS… On working with the CEO “You need to be credible. Take time to understand the business, go out to sites, be visible. I also think you need to be courageous. Your CEO is operating in a space where they don’t see everything, and a good CEO values advisers who can bring different points of view to the table as an equal member of the executive team.” What I like most about HR is…“The opportunity to create an environment that enables people to reach their potential.” “What I dislike most about HR is…”Getting the balance between policy and process and fostering an engaging environment where people can reach their full potential. As a profession we’ve journeyed from ‘here’s the policy, there’s no deviation from that’, to business partnering and being much more flexible, but it’s a constant balance. You need the processes and policies – particularly in employment law.” times, be conflict, so people needed to understand how to navigate that, while also collaborating successfully across the group. People also needed to be accountable for their own performance. “The performance management process put in the key pieces around accountability, clarity, coaching and development,” she says. The performance management system is a mix of traditional and new. The company still conducts two half-year reviews as well as monthly WIP meetings for all salaried staff. There’s a fluid discussion around performance against KPIs but also performance against corporate behaviours. Following research on the SunRice employment brand, the company identified eight corporate behaviours, each of which can be clearly defined at all levels of the business. “In any performance discussion, we can provide clarity to the employee on what
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personal leadership and alignment looks like. So if you’re an individual contributor and you don’t have a team, there’s still a rating for you in terms of your personal leadership and your interpersonal skills, from a direct report through to the executive team. It has significantly increased the focus on how you performed rather than simply what you performed.” At half-yearly intervals, the company introduced ‘calibration’. Blackwell explains: “Each manager submits their proposed rating on their team members, and the executive team or respective management team reviews that proposed rating in light of their experiences as a customer or supplier. The aim is to ensure equity across the board – the way I rate you is the same way I rate someone in finance.” An interesting anecdote is that SunRice implemented all this without technological
support. “We don’t have a formal online system,” says Blackwell. “I focused on the organisational behaviour aspects first. I also wanted to engage people about our value proposition and what they need to do in order to succeed at SunRice. I didn’t want to lose focus on the big picture, which was this significant organisational change. Now, two years in, we’re looking to put it online.” The future For Blackwell, 2015 will mean communicating the company’s EVP to workers in remote or regional areas. A large proportion of the SunRice workforce is based in the Riverina area of southwestern NSW and also in Papua New Guinea. “Attracting talent to these areas can be a challenge,” she says. “It’s prompted us to have clarity around what our value proposition is. We’re an Australian-owned company. What does that mean for an employee? It means you have the ability to come in, really make a difference, and the decisions are made here in Australia.” Blackwell dismisses the notion that an EVP is only useful when recruiting and can then be disregarded. “If people think that, it’s the same as buying a pair of Nike’s and having them fall apart within days. I’ve paid a lot for those shoes, and I’d feel incredibly let down. Nike would have broken their promise to me. The EVP touches on each stage of the employee lifecycle. We need to live up to our brand – we’ve advertised it, we emphasise it in job interviews – so if we don’t deliver, we’re letting people down.” And as Australia migrates slowly from the mining boom to the ‘dining boom’, Blackwell believes the agriculture industry will play a huge part on the future Australian economy – something else she’s keen to tell potential candidates about. “Everyone wants to be part of a long-term profession,” she says. “We can position our company as being part of a much larger element of the Australian economy where in 20 years’ time they’ll be able to say, ‘clean, green Aussie food was becoming more and more important – and I was part of it’. ”
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COVER STORY
CEO SUCCESSION
WHY THE NEXT CEO COULD BE
YOU The research is in and it might surprise some: CHROs are perfect candidates for the role of CEO. Iain Hopkins talks to research lead, Dave Ulrich, about what this breakthrough means for HR
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THE TRADITIONAL NOTIONS of HR being a costcentre, bogged down in back-office tasks and unable to contribute at a senior level – let alone make a move to the CEO role – have just been shot to ribbons. New research conducted by Ellie Filler, a senior client partner at Korn Ferry, and Dave Ulrich, University of Michigan professor and global advocate of HR, demonstrates that CHROs make ideal CEOs. In looking at several data sets, Ulrich and Filler discovered surprising evidence of the growing responsibility and potential of CHROs. They found that, increasingly, CHROs report directly to the CEO, serve as their key adviser, and make regular presentations to the board. Most importantly, they have become business strategy enablers. Research was conducted in two key areas: • To gain perspective on the importance of the CHRO to other executives (CEOs, COOs, CFOs, CMOs, CIOs), Ulrich and Filler looked at salaries. They averaged the annual base compensation of each group, concentrating on ‘best performers’ (the top decile of earners in each role). Their finding: CEOs and COOs are the highest-earners, but CHROs are next, with a base pay of US$574,000 – 33% more than CMOs, the lowest earners on the list. “Great CHROs are very highly paid because they’re very hard to find,” Ulrich says. • Proprietary assessments were conducted on C-suite executives over more than a decade. These concentrated on 14 aspects of leadership, grouped into three categories: leadership style, or how executives behave and want to be perceived in group settings; thinking style, or how they approach situations in private; and emotional competency, or how they deal with ambiguity, pressure, risk-taking, among other pressures. Their finding: Except for the COO (whose role and responsibilities often overlap with the CEO’s), it was CHROs who had the most overlap with CEOs. Ulrich outlines this research approach to HRD: “We created a ‘distance’ measure between the CEO and each of these four staff groups. Across the 14 dimensions,
CHROs had a closer profile [lower distance] than the other three staff groups. CHROs were a bit higher than CEOs on social skills, flexibility, tolerance of ambiguity, empathy and energy. Conversely, CHROs were a bit lower on perceived task orientation, intellectual ability and confidence. But, the overall distance across these 14 dimensions was lowest for CHROs.”
DISTANCE FROM CEO 0.735 CHRO
0.820 CFO
1.031 CIO
1.039 CMO
Korn Ferry assessed the 14 personal qualities of leaders. They compared these 14 dimensions for the highest paid CEOs with the highest paid staff functions (CHRO, CIO, CFO, CMO). They created a “distance” measure between the CEO and each of these four staff groups. Across the 14 dimensions, CHROs had a closer profile (lower distance) than the other three staff groups. There were other findings that indicate CHROs are worthwhile candidates for the top job. In research conducted on leadership derailment, Ulrich explains, scholars often find that as leaders move up the organisation, they fail most often from an inability to manage individual talent and organisation culture. CEOs need insights on talent and organisation issues to succeed over time; most CHROs already have this. Increasingly, Ulrich adds, technical skills are being viewed merely as the starting point for CEO succession; ideal candidates have a balance of technical and people skills. “CHROs should be architects on talent and organisation issues,” Ulrich says. “If and when CHROs also master strategy, customer and finance, they could be candidates for a CEO role.”
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COVER STORY
CEO SUCCESSION “CHROs should be architects on talent and organisation issues. If and when CHROs also master strategy, customer and finance, they could be candidates for a CEO role” Dave Ulrich Good news, but...
‘The C-suite consigliere’
However, there are two main caveats. First, Filler and Ulrich studied only the best performers, so it’s only a small percentage of overall CHROs who may have this CEO potential.
In Ulrich and Filler’s research, the changing nature of the CHRO’s role was also highlighted. Several CEOs now view their CHRO as ‘the C-suite consigliere’ and a key sparring partner on topics like talent development, team composition and managing culture. For Ulrich, the key to this shift is the increasingly ‘external’ view that HR professionals are taking towards their business. “When I do workshops with HR professionals, I often ask two telling questions: First, what is the biggest challenge in your job today? And two, who are your customers? Traditionally, the answers were inside the company (challenge of hiring, training, paying people or HR customers as employees). Today about half or more than half of HR professionals say that their biggest job challenge is helping the business win in the marketplace and their HR customers are the customers of their organisation. This is a major perspective and mindset shift for HR.” For now, in 2015, CHROs should not underestimate what they bring to business discussions. Ulrich suggests there are three key content areas they can add value to: • Talent (competence and commitment of the workforce) • Leadership (leadership brand throughout the organisation) • Organisation (creating the right capabilities and culture) “Too often HR focuses only on talent, without the value they can create from shaping culture,” he says. “We also propose process skills such as coaching individual leaders, facilitating change processes, and delivering integrated solutions to talent, leadership, and organisation.”
FEMALE CHROS LEAD THE PACK 42% of high performing CHROs are female – more than double the share in the CMO position, the next highest at 16%. This means that if more CHROs get the top job, the number of female CEOs would likely dramatically increase. Secondly, there is limited opportunity for advancement to CEO level for HR professionals who have spent their entire careers in HR. While the best CHRO performers may have run an HR department at some point in their career, they have broad managerial experience. Ideally, these business leader roles would include P&L responsibilities. “Obviously, without these business literacy skills, CHROs would not be qualified as CEO. Gaining these skills may come from assignments as business leaders,” Ulrich says.
Getting it right Companies such as Zurich Insurance and Nestle focus on job rotations at the executive level – and this is Ulrich’s recommendation for upcoming HR professionals. CEOs
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such as Mary Barra, CEO of General Motors, served as the carmaker’s VP of HR for 18 months early in her career, and Anne Mulcahy, Xerox’s CEO from 2001 to 2008, ran that company’s HR operations for several years in the early 1990s. “Career rotations can help leaders learn different skill sets before they move up the organisation,” Ulrich says. He cites research conducted several years go in which he surveyed different companies. “In one company, officers had worked in an average of 1-3 functions. In the other, it was 4-3. In the first company, leaders identified with their function [‘I am from marketing, finance, manufacturing’]. In the second company, leaders identified with the company [‘I work for XYZ company’]. This broader perspective helps leaders offer integrated solutions to business problems.”
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13/03/2015 6:28:08 AM
COVER STORY
CEOS ON HR
One-on-one:
GARY EDSTEIN
CEO, Oceania, DHL Express The comeback of DHL Express can be attributed to one defining enterprise-wide feature: a renewed focus on ‘respect-focused behaviour’. HRD talks to one CEO who considers HR the “conscience” of the company
BACK IN HRD’S September 2014 issue (‘Swinging the pendulum back: Humanising human resources’), we asked HR practitioners to ponder an important question: has the profession moved too far towards a focus on big data and financial analytics at the expense of the ‘human’ element of human resources? It’s a dilemma Gary Edstein, CEO, Oceania, DHL Express, has also grappled with. Like most businesses, DHL Express has had its fair share of ups and downs. Through it all the company has remained focused on financial results and hitting KPIs – sometimes at the expense of the more human elements of ‘doing business’. Instilling into both employees and managers “respect-focused behaviour” has been Edstein’s primary people-focused initiative over the past three years. “We’re really trying to ensure our staff are engaged with the business,” he says. “Not just engaged but emotionally engaged. And that doesn’t just come through always meeting hard KPIs but also the soft
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measurements as well; it’s not just reaching targets but how you reach those targets.” DHL Express’ employee opinion surveys are encouraging – hovering around the 79 mark. However, Edstein wants to boost this further, and his primary means of doing so will be improving what he calls “active leadership”. “It’s instilling those respect-focused leadership qualities into our management/supervisor level. We’ve got a strong team who are very committed to providing support to their staff, but they get very hands on. And sometimes they need to back away a bit and provide more of those leadership qualities.”
Back to the future In an odd way, this respect-focused behaviour will be a return to the company’s culture of the 1980s and 90s when the focus was on customers and staff. “We tried at one stage 10 years ago to break into the
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12/03/2015 4:25:48 PM
COVER STORY
CEOS ON HR CEO SUPPORT OF HR In July 2014, HRD asked over 4,000 HR professionals globally for their opinions about their profession. One question was how much time HR professionals believed their CEO spent on HR-related issues
% of time s pent on HR issues
0-10%
11-20%
21-30%
Just about all senior HR practitioners profiled or interviewed by HRD over the years indicate that CEO acceptance – or otherwise – of the HR role is perhaps the most important factor in the function’s success at a strategic level. Without that support, or if the CEO has ‘old-school’ thinking about the role as a transactional cost centre and does not appreciate the potential ‘value-add’ HR can bring, it’s an uphill battle all the way. Readers agreed: “My CEO is highly committed to people & culture. Business communications, analysis, development, performance begin with people first, followed by the financials etc”
31-40%
“My CEO spends time on the wrong HR-related issues”
41-50% More than 51% 0%
10%
20%
30%
40%
50%
60% 70% 80%
90% 100%
“HR has a voice and a chair in the C-Suite. Recommendations may not always be supported but they are given real consideration, debate and mostly buy-in”
domestic market. We didn’t succeed and we had to excise our non-performing assets – mainly our domestic businesses. The business was struggling and around four years ago we embarked on a culture change journey. We wanted to return to the old culture where employees and customers came first.” Two new training programs were introduced: Certified International Specialist (CIS) and Certified International Management (CIM). CIS involved putting all 100,000 employees globally through what was essentially a new induction program. This was further developed into the CIM, which involves all supervisors and managers going through two threeday programs over a two-year period. The CIM program has been designed by leaders, in conjunction with an external provider, and is delivered by senior leaders – including Edstein – in each region. It is sponsored by the DHL Express global CEO and global management board and is a substantial investment for the organisation both at a global and local level. “It’s all about this mix of respect and results-focused behaviour and making sure we’re providing ongoing feedback to our staff. To me the biggest success factor is the fact that the facilitators are the leadership team. It means I have a vested interest, and I also have to believe and understand what I’m delivering.” DHL Express Australia’s leaders are now truly embedded in the operating structure. Across the organisation, leaders are encouraged to spend 70% of
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their time in the business, personally attending sales calls and courier runs. Even Edstein joins in on these tasks. He also dedicates up to 40% of his time to talent related activity. Edstein says an unforeseen benefit of the program was that it “brought down barriers”. Specifically, he found the interaction with supervisors and managers and the feedback obtained to be invaluable. “You start to be seen as just a normal person, not a person with a big job title. I wanted to know what was going on in the business, and I wanted to understand the issues employees face. The CIM program allowed me to get these insights.” Since the implementation of the CIM program the DHL Express division has gone from being the biggest loss-making division of the broader business in 2008, to posting increased profit year-on-year since 2010. Significantly, DHL Express was also awarded a Top Company for Leaders award by Aon Hewitt in 2014. “There’s been a huge turnaround in our overall hard numbers. Our revenue numbers are the best they’ve ever been, and our profitability is the best it’s ever been,” says Edstein. “But we’ve also seen positive moves on employee opinion surveys as well as customer measures, such as the customer satisfaction index and Net Promoter scores. I put it down to the CIS and CIM initiatives.”
The “company conscience” “If we talk about strategy, we have four pillars – but
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having motivated people is the first pillar,” says Edstein, echoing Peter Drucker’s idiom, ‘culture eats strategy for breakfast’. He adds that he interacts on a formal and informal basis with his head of HR every day. Edstein sees HR as the custodian of motivated people. “They have an opportunity to go into the business along a different dimension than any other department,” he says. “They form the business plan that we roll out for our staff in reward and recognition, in training and development, and so on. At the same time, I expect my head of HR to be as commercially focused as my CFO or any other executive.” Returning to the theme of HR’s role in ‘humanising’ business, Edstein says HR could be considered DHL’s “conscience”. “They’re making sure we’re not driven totally by numbers and hard KPIs,” he notes. “Every company these days talks about their employees being their number one asset. If that’s the case, we’d better look after them and make sure we’ve got that balance between driving verses caring.”
IN HIS OWN WORDS… What piece of advice would you pass on to other HRDs who want to build a meaningful, successful relationship with their CEO? “Get a clear understanding of the vision of the organisation and regularly work with the CEO to make sure the power of that vision is released. With that common ground as a CEO you can have a very strong relationship with your HRD.” Finish this sentence: ‘In 2015, I expect my HR team to…’ “Continue to drive the employee engagement agenda, with a strong focus on active leadership and developing a more customer-centric culture.” Finish this sentence: ‘In the future, I anticipate that the HR function in businesses will…’ “Be the first pillar of any strategy. If you don’t have emotionally engaged employees and your employee engagement score isn’t best of class, you’re going to run a poor second to the market leaders.”
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COVER STORY
CEOS ON HR
One-on-one: JACQUELINE APPLEGATE CEO, Bayer Australia/NZ As it transitions towards being a ‘life sciences’ company, global powerhouse Bayer has taken a unique approach to unlocking the great ideas from within – and HR is playing a critical role
BAYER CEO Jacqueline Applegate knows the importance of innovation in business. As a global enterprise with core competencies in the fields of health care, agriculture and high-tech polymer materials, it relies on research-intensive innovation. To ensure it stays ahead of the pack, Bayer has undertaken a global transformation project. Its goal? To create a culture of innovation and a different approach to leadership. The drivers of this change? HR. “We’re creating an environment where our people are willing to step forward, are willing to take risks, to be proactive and to challenge the status quo,” Applegate tells HRD. “The way we feel we’ll do that is by building our leadership capability.” Yet this is easier said than done. Employing 112,000 people worldwide, and around 1,100 in Australia/New Zealand, the Bayer Group has operations in nearly all countries of the globe. Any change is fraught with difficulty. That’s where people-power comes into play…
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“We don’t want a typical scorecard project management approach… This is based on passion. Passion to innovate, power to change – that’s part of our employer brand” Jacqueline Applegate
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Applegate on a Bayer field trip www.hcamag.com
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COVER STORY
CEOS ON HR
IN HER OWN WORDS… Finish this sentence: ‘In 2015, I expect my HR team to…’ “Continue the cultural journey, particularly as the company transforms into a life sciences company. We have a strong foundation now with our focus on our culture and people. I’m a firm believer that if we support our people, if we get the ‘how’ right, the financial results – or the ‘what’ – will follow.” Finish this sentence: ‘In the future, I anticipate that the HR function in businesses will…’ “Be elevated and have an even greater importance. I believe that HR will move more to a consulting model, rather than focused on the systems and transactions. With centres of excellence, for example, when you talk about developing people, HR will act kind of like consultants and coaches. But really their focus will be building leadership capability. Getting that right will enable an innovative culture to grow. In the end, we’ll have a more successful and sustainable business.”
A bottom-up approach to innovation The journey started with Ambition 2015, a strategic program that focuses on building mindsets, skillsets and culture. At its core are three “hairy, audacious goals”, as Applegate describes them: 1. To be an employer of choice 2. To be an identified innovation leader 3. To be a billion dollar company To achieve these goals, the company has embraced the concept of communities. There are five of them: people, innovation, customer, brands and business excellence. Around 250 people, or about 25% of the Australian organisation, are involved in communities. “These are volunteer communities that sit outside the norm of the corporate hierarchy,” says Applegate. “People volunteer as part of the community, they have input into topics they are passionate about, and they can bring forth recommendations for change from within these communities.” Sharing characteristics with the ‘agile approach’ to business (see HRD 13.02), the community concept thrives on having multiple projects running simultaneously with key focus groups within each
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community. People are sourced from different departments, they convene, work on a project, contribute their expertise, and then pitch an idea to senior executives. If it’s successful, great; if not, they move onto the next project. “It’s teaching agility,” says Applegate. Informality is the key. “We don’t want a typical scorecard project management approach where a few individuals get burdened with a few projects. This is based on passion. Passion to innovate, power to change – that’s part of our employer brand,” Applegate adds.. While there have been over 100 suggestions made in the communities that have gone from concept to reality, there is one in particular that has been an instant hit: Me Days. This is five additional days of leave that people can take one at a time. The idea is for employees to go and do something for themselves – be it sit on a beach and read a book, or attend their child’s school play. Borne of the requirement to “re-energise” in a hectic world, Me Days have now become a critical part of the
THE CEO/HRD RELATIONSHIP: TOP TIPS 1. With any relationship you need to know each other. You need to have a trust and respect for one another. Be clear on the journey you want to go on. My HRD Isador and I spent the time to get to know one another. I got to understand where he comes from, what values drive him. He understands the values that drive me. 2. Have each other’s back. It’s so important when you’re working together and it’s critical when you’re working in a multinational. You’re dealing with lots of levels, lots of stakeholders. Again, trust is critical. 3. Always encourage different opinions. I like to hire people who are smarter than me. I expect my people to constructively challenge me and give me timely feedback. If I had a bunch of mini me’s around I would not be successful. The worst dynamic you can have is groupthink. It’s very dangerous.
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company’s employee value proposition. This ‘bottom up’ approach to change is in stark contrast to the standard ‘top down’ approach, and it’s getting results: In the space of two years the company has become a $1.1bn revenue company in Australia and New Zealand, it has been recognised twice as an innovation leader, and in 2015 the focus is to become an employer of choice. “Where everything in business is changing so fast, these communities have provided a foundation and for us as a company to have a sustainable future,” Applegate says.
TRANSFORMATION: TOP 3 TIPS Applegate says there are three “essentials” for getting transformation projects over the line. 1. Your top leaders must be onboard with you. You need that buy in. 2. You must have the right people and tools in your HR department. We transformed our OD area and brought in powerhouse people who can help us above and beyond leadership development. This benefits not just the top leaders but also middle management. Never underestimate the middle management; they can be a filter up and down, so you need to take them on the journey with you. 3. Try to get engagement from all levels. That’s what we did. We transformed and focused on the leadership development of our top and middle management, and at the same time, we set up these non-hierarchical communities where people can engage and volunteer, step in and step out.
Always something to improve upon While Applegate says she works “very closely” with her HR team, and her HRD “is my right hand”, she concedes there are core competency areas she’d like the team to focus on in the future. “Knowledge management and big data is fundamentally important. The connectivity of the world is closer than it’s ever been. In corporations historically, information was siloed. Today, we need to bring connectivity to that data. It’s about knowledge management. “But I’ll be frank – think about that landscape and how fast that changes. You start to work on something in this area and you think you’ve got it, and then there’s another big leap forward. This is something we must work on. The companies that get this connectivity of data right will do even better in the future.” She also wants to ensure her HR team is adding as much value as possible to day-to-day line managers – those critical but often overlooked ‘filters’ from the top to the bottom (and vice-versa) of an organisation. “The really effective companies provide a repertoire of tools that managers can pull out. Take a standard departmental meeting. Managers should be able to take a few minutes out and use those tools to work on the culture, to work on the team. Our managers also need to be self-aware about themselves and how they’re developing themselves. We’re aware of that and working on it – but it takes a lot of effort to build that toolbox.”
What I need from my HRD... Ultimately, Applegate relies on her HR team to develop these tools. And at the senior level, she expects something different from her HRD, Isadore Payne, that she might not get from her other executives: EQ, or emotional quotient. “Isadore brings the EQ, which we desperately need at times. Whether it’s the behaviour of our people, or the potential reaction to a business decision, it’s that human side of business. It’s asking and challenging our business: What’s in it for our people? Although he brings that side, it’s always relevant. It’s focused on the business issues at hand.”
Turn to p54 for an exclusive interview with Bayer’s HRD, Isadore Payne
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COVER STORY
LEADERSHIP BEST PRACTICE
EXTRAORDINARY LEADERSHIP IN ACTION
Jim Kouzes, Barry Posner and Michael Bunting provide five mini profiles of leaders who are excelling in Australia
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AUSTRALIANS ARE FIERCELY egalitarian. They don’t tolerate hypocrisy, and they certainly won’t follow leaders just because they have a ‘leadership’ title or position. That is why people who can truly lead in this country, who can gain the voluntary engagement of their people, are worth learning from. These are leaders who display the five practices of exemplary leadership – an evidence-based and proven framework. These five practices have proven to be successful foundational principles that, when put into practice, can overcome the special challenges found in Australia and New Zealand, and they are described in our new book, Extraordinary Leadership in Australia and New Zealand: The Five Practices that Create Great Workplaces. Consider the lessons learned from leaders we profile who achieve extraordinary results by applying ‘The Five Practices’.
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INSPIRING A SHARED VISION: JAN PACAS Jan Pacas is managing director at Hilti Australia, a premium brand that makes electrical power tools and fastening technology. He had worked for the company in other parts of the world and was surprised to find that the Australian division was a “very average company”. He believed that they needed a new vision – “something to give us the motivation to work together in one direction … constantly striving for something bigger and better”. Pacas knew that simply having strategic objectives wasn’t enough, and that they needed to translate their comprehensive strategy into something that every person could easily see and describe; that is, a shared vision. ‘We’re Painting Australia Red’ is what they came up with. Pacas explains: “We painted the picture that we wanted to see a much bigger share of Hilti’s signature red colour on every job site.” That vision quickly caught on, and ‘Painting Australia Red’ provided a rallying point that got everyone excited about playing a role in the company’s success. Pacas realised that by envisioning exciting future possibilities leaders get people to feel that they’re a part of something special. People get energised when they can envision where the company is heading in the future. Revenues have since grown in double digits every year; and in 2011 Hilti in its first year of entry received the top honour of ‘Best of the Best’ in Aon Hewitt’s Best Employer in Australia and New Zealand citations.
CHALLENGING THE PROCESS: JOHN STUDDERT John Studdert is an Australian leader who never says never. He built a successful consulting business, sold it to the Ogilvy Public Relations organisation, and then served as their CEO and executive chairman in Australia. While in that role, Studdert was persistently searching for opportunities beyond the visible horizons. Studdert’s direct reports describe him as a restless explorer, constantly pushing the envelope, constantly
Hodson understood the need to empower everyone on her team to act like leaders. She enabled them to “proceed until apprehended”, meaning that they were free to “have a go and keep going” thinking, ‘Are we doing it right? Could we do it differently? Have we thought hard enough? Let’s start a little something and see if we can grow it’. This is what challenging the process is about. It is expanding the boundaries and looking beyond the current reality to future possibility. It does not require the leader to do all the innovating but rather to create a culture that welcomes and rewards innovation from every team member. Under his leadership, both the revenue and reputation of the firm has grown.
ENABLING OTHERS TO ACT: CELIA HODSON Celia Hodson is the CEO of the School of Social Entrepreneurs Australia, an organisation that helps local leaders set up, manage, fund, and lead successful social ventures. Shortly after settling into her new role, Hodson discovered that the school had run out of money. Knowing that this was a challenge beyond the capacity of any single individual, Hodson understood the need to empower everyone on her team to act like leaders. She enabled them to “proceed until apprehended”, meaning that they were free to “have a go and keep going”. Once team members felt motivated, and empowered, Hodson encouraged them to be leaders of those initiatives. They took ownership and responsibility for the organisation’s success. Leaders enable people to see that they can develop their skills, and actually do more than they thought possible. Hodson’s action of enabling her team to act increased their self-determination, and produced a complete turnaround of the school. Making each team member the CEO of their own area helped lead the business from the edge of bankruptcy and closure to a thriving and inspirational organisation.
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COVER STORY
CEO SUCCESSION MODELLING THE WAY: TYRONE O’NEILL The leadership-follower relationship, particularly in Australia, is predicated on building trust. Tyrone O’Neill, responsible for customer marketing at Optus, one of Australia’s major providers of internet and mobile phone services, well understands. Trust begins with people knowing who you are and witnessing that your behaviour is consistent with your values. “It’s only through your actions that you prove your trustworthiness,” explains O’Neill. Leaders must walk the talk and hold themselves, as well as others around them, accountable for putting values into action. O’Neill and his team, challenged to improve customer retention, realised this would require a fundamental change in the operational habits at Optus. In order for people to really embrace a customercentred focus, there would have to be a change in behaviours, and he began with his own. O’Neill assigned everyone on the team who was not in a customer-facing role a list of customers, and expected them to call customers directly and go through customer satisfaction surveys with them. Although everyone hated the calls at first, when they saw O’Neill performing the same tasks, their attitudes changed. Everyone witnessed O’Neill calling and surveying customers personally, even after work hours. He would also visit the call centre and listen in on survey calls and discuss survey results with the call agents. By ‘modelling the way’, O’Neill set a path for his team to follow. The effect was that everyone wanted to get involved and mimic his behaviour. In less than two years, they achieved the best customer retention rates in the company’s history.
Jim Kouzes and Barry Posner are the co-authors of The Leadership Challenge. Michael Bunting is a co-author of Extraordinary Leadership in Australia and New Zealand: The Five Practices That Create Great Workplaces, from which portions of this article are excerpted. Michael is also the founder of leadership development consultancy WorkSmart Australia (worksmart.net.au).
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ENCOURAGING THE HEART: DEVEN BILLIMORIA Few things give people greater courage and confidence than feeling they are a part of a team that shares their values and watches out for their best interests, which is how leaders ‘encourage the heart’. Deven Billimoria is CEO
of Sydney-based Smartgroup Corporation, a mediumsized holding company that presides over a group of companies, including Smartsalary. The company works with HR and finance departments to help employees properly structure their salaries and benefits. He’s described as having a “real loyalty and commitment to the people around him. Once he’s made an emotional connection with you, you’ve got his support for life”. Billimoria believes that you cannot really lead people, particularly in Australia, until you build a relationship, and you cannot begin building a meaningful relationship without first knowing people’s names. He makes it a point to know every one of his 340 team members by their first name, and demonstrates by this action that he values each team member with a deep care and concern. Not so long ago, the Federal Government explored elimination of the principal fringe-benefits tax concession which was the foundation of the company’s business model. While some of his competitors reacted by drastically reducing staff, Smartsalary decided not to immediately retrench anyone or manage leave liabilities. They were taking a bold stance, sending a strong signal that they would either find a way out together, or fail together, as a team. Smartgroup used this opportunity to strengthen their collaborative culture. Everyone was encouraged to work together to find solutions. “We came together as an entire organisation,” Billimoria explains, and he told his team: “This is a problem for us. Let’s figure it out.” Leading the business through a major legislation crisis and ultimately managing to keep his staff engaged and efficient contributed to Billimoria and Smartsalary winning multiple accolades, including an Aon Hewitt Best Employer accreditation for the past two years.
You can be next These five examples are just a sampling of the difference that implementing ‘The Five Practices of Exemplary Leadership’ can mean in Australia. We share scores of additional examples in our book about Australians and New Zealanders who have applied these leadership principles within a variety of industries. While the contexts vary, organisational success is not so much about any unique characteristic of the individual leaders but the common application of these leadership practices. Great leadership creates great workplaces that produce extraordinary results. Put these leadership practices into your organisation.
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COVER STORY
CEO PRIORITIES 2015
WHAT’S ON YOUR CEO’S MIND? The 18th Annual PwC Global CEO Survey report highlighted key priority areas for Australian CEOs at the start of a new year
38%
see global economic growth improving
43%
feel very confident about their own organisation’s ability to grow
Domestically, the landscape will change...
55%
plan to increase headcount
92%
40%
believe business performance has been enhanced by talent diversity and inclusiveness
are looking to complete a domestic M&A
67%
see China as the top destination for offshore growth
Cultural diversity and experience will become paramount to capture opportunities abroad
New alliances will be made... will enter into a new joint venture or strategic alliance
40%
52%
More than half are collaborating with new partners to build and strengthen innovation capabilities
Tax reform plays a vital role in encouraging innovation, as well as helping to foster economic growth...
83%
see digital technologies creating value for internal and external collaboration
69%
of CEOs said the government’s attempts to achieve an internationally competitive tax system were ineffective
Source: PwC’s 18th Annual Global CEO Survey report: A marketplace without boundaries? Responding to disruption
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13/03/2015 9:49:21 AM
HR STRATEGY
PROJECT MANAGEMENT
Major change ripples: Small project fundamentals Most HR professionals are past masters at managing major transformation projects, but what about the numerous smaller follow-up projects that spring up? Peter Szilagyi provides his tips
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THE TRANSFORMATIONAL MOMENTUM of last year continues to carry through this year for many businesses. What’s interesting about this pattern of major change is the long tail of smaller changes that follow. In some ways they are like the smaller waves that follow a major breaker at the beach. The challenge with these projects is they are numerous in nature, often urgent and usually carried out by employees with operational responsibilities. While these small projects often generate immediate value, due to various constraints such as time or resourcing, they can be as challenging as larger projects! How can we best manage smaller projects to ensure success?
recruitment process improvement or the enhancement of existing technology platforms. Small projects often lack the infrastructure of larger projects such as a dedicated Project Management Office (PMO) with methodologies, tools and templates. Even such infrastructure project management methodologies (eg, Prince2) are usually not suited for the small scale. At times, there is the additional complexity where HR practitioners responsible for delivering the project have limited project management training or experience. While this is a perfect opportunity to build capability through ‘trial by fire’ it is an additional dimension that needs consideration.
What are small projects? Small projects can be defined either in financial/ budgetary terms (eg, <$100,000), time (eg, 3–9 months for implementation), stakeholders (eg, 2–5 key stakeholders) or by team structures (often blended project and operational team members). While these definitions could be debated, what is consistent are the challenges of limited budgets, balancing operational priorities, and delivering within a short timeframe. Some good examples of small projects include business partnering support of restructure initiatives, a
Building a small project roadmap At its most fundamental, a project is ‘what needs to be done by whom and by when’. As small projects are exactly that – small – and part of a larger landscape of major changes, they may not always get the attention they need to steer them in the right direction. For project managers of these smaller projects it can also be tempting to skip planning and ‘get stuck into it’ without consideration to some basic foundations that all projects need. It is important to recognise that there are some fundamental ‘elements and phases’ to a project that
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need to be managed to ensure successful delivery for a small project. While the level of detail required to skip through these will vary depending on the size of the project, they are all important to work through. These fundamentals are referenced in the table below:
SMALL PROJECT FUNDAMENTALS A. Key project elements Each project should have the following elements as key artefacts produced or managed across each project phase: • scope and stakeholders • resourcing plan • risks and issues • project schedule • change management B. Key project phases Each project should move through the following phases with some key artefacts produced in each phase: • discovery/requirements • design • build • training and test • delivery
KEY PROJECT ELEMENTS
SCOPE AND STAKEHOLDER ELEMENT Scope defines what is and what is not being worked on. Scope gives the clearest view on what will be delivered at the end of the project. Every small project should produce an artefact of scope that is agreed to by all key stakeholders. A scope statement on a page creates commitment from stakeholders and the project manager to deliver against that statement. Scope ultimately needs to present a picture of ‘what is changing to whom’ (eg, either services, processes to regions or business units). There are various templates that can be obtained internally within your organisation or externally online (see the references listed at the end of the article). Ensuring all the key stakeholders are identified with an interest in the project is as equally important as scope. A small Steering Committee should be established for key decision makers to contribute into the project and provide a forum for decision-making and awareness (ie, could be as few as 2–3 people). The cadence has to be regular (ie, fortnightly) and this will give all parties, particularly the project manager, a forum for input and issue management. A regular
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HR STRATEGY
PROJECT MANAGEMENT cadence also places incentives on the project manager to prepare in respect of the ‘key phases’ of the project such as discussing the training or test plan.
RESOURCE ELEMENT Project managers on small projects may have a team that directly supports them such as operational team members or business analysts. In most cases, however, even with a small team there is a lot of ‘borrowing time’ from various groups across the business. This could, for example, involve taking operational SMEs time (eg, to attend workshops), support from IT, finance departments or change management teams. All too often time can be borrowed at short notice and this creates tension for the project manager and the operation or supporting business units. Gaining support from the executives who own these resources is therefore an important exercise. A good artefact that helps manage these requests is a forward plan of resource requirements one month ahead of time. The Steering Committee is an important forum to help channel or influence these requests.
RISKS AND ISSUES ELEMENT Small projects, like large projects, will have numerous risks and issues to manage. Risks represent events that could happen in the future and need to be managed (ie, accepted, mitigated or removed, etc) while issues represent events that have already occurred and require management (ie, decisions on resourcing or decision-making authority, etc). Risks and issues can be captured in various formats (ie, Excel or PowerPoint presentations). The key to effectively managing risks is good process and regular documentation, review and action. Risks and issues should form part of the Steering Committee cadence. The role of the HR director and members of the Steering Committee is to help unblock issues and mitigate risks.
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PROJECT SCHEDULE ELEMENT Without a good schedule, small projects can get terribly lost. The starting point for the activities is a work breakdown structure (WBS) which is basically a laundry list of the key activities for the project grouped up into logical buckets. This then forms the inventory in which tasks are created, deliverables defined and owners identified. Like risks and issues, the tool to document the schedule is not too important (ie, Excel vs MS Project). The key to schedule management is a good outline of activities and deliverables (ie, ‘the what’), due dates (ie, ‘the when’), and owners and statuses (ie, ‘the who’) that are all agreed to. The project schedule needs to be reported on a regular basis and visible to all stakeholders.
CHANGE MANAGEMENT ELEMENT Change management is the exercise of building awareness, commitment and ultimately buy-in from people impacted by an initiative. For small projects, change management planning is important given it has to vie for air space from the competing priorities of other smaller and larger projects, information overload from the digital age and operational priorities which demand more from less. The starting point for a solid change plan is to understand the changes to impacted audiences. This is done through an impact assessment which would describe current state, future state and degree of change by audience group. This short, sharp assessment becomes an input into communications planning and deliverables which would include a communications schedule and associated deliverables (ie, presentations, FAQs, leader talking points). The above Key Project Elements are important across all the Key Project Phases. While the level of detail in which these items is completed varies depending on the size of the project, they are all crucial considerations to the success of a small project. Let’s turn our attention now to the Key Project Phases.
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KEY PROJECT PHASES
DISCOVERY PHASE The Discovery Phase primarily involves validating the Key Project Elements outlined previously and is a focused effort within the first few weeks of the project. This phase should build a strong understanding of business requirements and options for scope and implementation. Through this process, key stakeholders are identified and a Steering Committee established. Once scope has been agreed, an initial project plan should be built and a view of risks and issues identified. The best way to formalise these data points is to hold targeted brainstorming sessions with the right SMEs. The Steering Committee would then validate scope and the overall direction of the project. The exit from the Discovery Phase occurs when the project scope and broad timelines are agreed, the required resources are understood, and risks and issues are clarified with actions to manage them.
DESIGN PHASE The first step of the Design Phase is to build a detailed project schedule outlining all the key activities of the project through the design, build, test and delivery phases. Depending on the nature of the project, the Design Phase could have several different deliverables which may include: process maps, organisational structure, technology requirements or configuration, audience analysis or stakeholder map, and change management plan. The exit for the Design Phase occurs when there is a clear understanding of how the future state operation would physically operate. For example, in the case of a recruitment redesign, how recruitment requisitions would flow under the new model.
BUILD PHASE The Build Phase is typically the longest phase of a project. In this phase the actual design artefacts are built out so they can be operationalised. In the case of process maps, this could mean developing clear accountabilities, handoff matrices or detailed step-bystep work instructions. In the case of organisational structure, it could mean updating roles and responsibilities or recruiting for new roles. In the case of technology requirements, it could mean working with the relevant teams to conduct configuration changes or enhancement. Finally, in the case of change management, a detailed impact assessment would be conducted. All of these initiatives should be developed with the view of leveraging them for training and communications materials for impacted audiences. Process maps, accountability
matrices and related documentation form the basis of great training materials. The exit of the Build Phase occurs when there is sufficient definition in the form of physical artefacts and system changes that enables the intended changes to be tested and operationalised.
TEST PHASE The Test Phase is where all the fun happens. In this phase there is a dedicated effort to test the build and identify and rectify faults. Ultimately, testing involves getting operators into the room and roleplaying the new model with the intention of ‘breaking it’. Where the testing outcome is different to the expected outcome, an error is identified, catalogued and plans put in place to rectify them (ie, such as updating system workflow, accountabilities or step-by-step instructions). Throughout this phase more detailed communication should be provided to impacted audiences on the nature of the change and the likely go-live date. The exit of the Test Phase occurs when the Steering Committee has sufficient confidence in the outcomes of testing including identified errors and resolution plans in place.
DELIVERY PHASE At this point the rubber hits the road. There are a few key deliverables in this phase which lead up to, during and following go-live. In the lead up to go-live, all key users need to be trained on their roles and responsibilities, new process or systems. At go-live, the Steering Committee should review a readiness checklist to make a final go no-go decision. This checklist outlines all the key artefacts of the project and the percentage complete to make a final determination to approve a go-live decision. In parallel to this, a post go-live support plan should be established that outlines how issues are identified, escalated and resolved. This plan includes nominating key operational staff as expert users (ie, super users) who ultimately carry and own the change post go-live. The exit of the Delivery Phase occurs a few weeks after go-live when there is sufficient activity processed through the new model and agreement that open issues can be handled by the operational teams. Bringing it all together The challenges of small projects are not insurmountable, and with the right level of discipline and engagement they can result in important and positive outcomes. Small project resource library projects.uts.edu.au/resources/templates.html businessballs.com/project.htm mindtools.com/pages/main/newMN_PPM.htm
Peter Szilagyi, CHHRI, GAPHR, HRMP, is an experienced HR leader in talent management, transformation and change management.
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12/03/2015 4:30:58 PM
WORKFORCE MANAGEMENT
FATIGUE
FIT FOR WORK? NOT LIKELY…
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Employee fatigue is impacting not just the health and safety of blue-collar workers, but also the productivity, morale and financial outcomes of white-collar businesses. What can your organisation do to reverse this potentially deadly trend? IN NOVEMBER 2013 a young intern working in the banking/financial services industry suffered an epileptic seizure – believed to be caused by overwork – and consequently died. In October that same year, the so-called ‘Mona Vale inferno’ in Sydney’s northern beaches was a devastating trucking accident caused by fatigue. The human cost was tragic: two dead, five injured. Add to that the environmental damage caused from leaking fuel and massive business costs: Cootes Transport Group was hit with more than $50,000 in fines and penalties, incurred $9m in compliance costs, lost major contracts and restructured from being one of Australia’s largest transportation groups into a small, specialist transport company. While it’s true that fatigue-related incidents in transportation and frontline industries such as mining, healthcare and aviation land in the headlines, the first example above – as extreme and isolated as it might appear – demonstrates that white-collar professions could also benefit from a focus on fatigue management and more effective time & attendance management. Fatigue management brings wider benefits as part of an overall workforce management strategy. Aberdeen Group’s 2014 report, Bottom Line Reasons for a Total Workforce Management Strategy, highlighted: • 4% increases in revenue per FTE for those organisations with a workforce management solution • 9% boost in workforce utilisation capacity • 6% improvement in customer satisfaction scores James Kissell, director of marketing at WorkForce Software, says that in any industry, regulated or not, fatigue can take a toll on business performance. There are strong parallels (and research) showing how working
as a fatigued employee is akin to working under the influence of alcohol or drugs. In fact, being awake for 17 hours straight has been equated to having a blood alcohol content of .05 – the legal limit for most drivers in Australia.
Why it matters The most significant impact is on productivity, worker safety and even employee satisfaction. WorkForce Software’s white paper, titled Examining the hidden costs of fatigue: Risks & remedies for Australian businesses, provided these insights: • There is increased likelihood of errors amongst fatigued workers. When tired workers are faced with tasks that require alertness, mental acuity or decision-making (in short, most jobs), a measurable decrease in accuracy and quality will result. Fatigued persons are slower at interpreting visual information than alert peers – a limitation that can have significant impacts on job performance.
A NATION OF WORKAHOLICS According to the Australian Institute, the average Australian worker is carrying out two hours of overtime each week. That’s the equivalent of: • 6 weeks of unpaid overtime each year • $72bn unpaid work • 1 million full-time jobs Australia ranks 30th out of 34 ranked nations in the OECD for working hours.
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WORKFORCE MANAGEMENT
• Fatigue can also lead to an increase in tolerating or undertaking risky behaviour. Fatigued individuals frequently have a very different opinion of what’s ‘good enough’ compared to fresh, non-fatigued colleagues. Fatigued workers are prone to cutting corners, which can have a negative impact on everything from worker safety to the quality of your brand and its products and services.
Fixing the problem Fortunately, there are solutions. The first essential step is preventing the work conditions that cause employee fatigue in the first place. A thorough review of all jobs and shifts within the organisation will identify those functions that cause fatigue, require statutory rest periods or are at risk of fatigue-related incidents. A step further is to provide an automated technology solution in order to better manage the three components that make up fatigue management. • Time & attendance: This is your master record of hours worked, spelling out who worked, on what task and for how long. Having accurate information
What impact does fatigue have on employee performance in your organisation? 22% minor impact 47% moderate impact
7% no significant impact
24% major impact
Different industries identified different impacts from fatigued workers • Safety risks: Energy, healthcare, and manufacturing • Performance, morale and business outcomes: Finance, retail/hospitality, public sector/education, and business services
Source: RosterLive, a WorkForce Software company
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about time worked is crucial to knowing which employees may be approaching the threshold of fatigue. • Rostering: Here you define who is going to work on what project, as well as when they’re going to start and stop. This view into projected work hours allows managers to avoid fatigue risks in advance when scheduling employees. Fatigue management alerts prevent managers from trying to schedule an employee who is fatigued or could become fatigued as a result of working a specific shift or shifts. • Fatigue factors: A configurable rules engine tracks the rules, regulations and policies that govern your organisation’s fatigue mitigation strategy. This allows you to create a system that meets the unique needs of your business and allows managers to override alerts in certain circumstances. To be maximally effective, it must be able to consider different factors for specific jobs, in order to accurately reflect the distinct risk profile of a given shift and type of work. Automating your fatigue management strategy allows managers to mitigate risks throughout your organisation, across all shifts and all employee groups. Managers are provided instant access to realtime information on employee work hours and rosters, including: • complete, current views of rosters and employee fitness for duty • triggered alerts if an employee’s fatigue risk changes • guided processes for replacing fatigued workers with eligible call-ins • detailed reporting on fatigue management policy compliance In addition, automating time & attendance and rostering processes provides proof of compliance. The audit trail within a time & attendance system captures all activities, while historical records support employers against any litigation/regulatory actions. With the shift towards self-service technology, it stands to reason that employees themselves should have more say in their work schedules. However, research
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from Kronos, Live to Work, or Work to Live?, found that only 13% of workers could change their rosters through a work computer, while only 9% could do so through a website, and 7% through a mobile application. More than half (54%) of rostered workers said their rostering system could be improved if they could collaborate online with other workers to change shifts.
Where to next? Don’t wait until there’s an accident! Business leaders should act now. The gold star for modern fatigue management practices goes to the US nuclear industry – for obvious reasons. Organisations in that industry have to comply with the Nuclear Regulatory Commission (NRC) Regulation 10 CFR 26, which includes a set of complex rules defining limits for work hours, scheduling, break constraints, periodic employee assessments and other regulations. To ensure NRC compliance companies assign proper rosters to employees, tracking time against those rosters, issuing compliance notices to employers and supervisors and extensive reporting. In addition, they have available to them: • ‘what if?’ scheduling/rostering scenarios • staff call-out lists based on qualifications, preferences and NRC requirements • equalisation based on qualifications, preferences and NRC requirements • shift-swapping availability • regular updates on NRC reporting requirements At a more modest but no less effective level, employers in Australia can kick their fatigue management systems to the next level by: • monitoring employee productivity • focusing on the roster cycle - an important part of the solution but not the whole solution - provides strong indications of when employees need resting • checking on absenteeism • implementing an IT-driven fatigue management policy - IT solutions will automate processes, remove complexity and give you greater coverage across the organisation.
KEY TAKE-AWAYS “There are many approaches to setting up a fatigue management policy,” says James Kissell, who provides six easy steps that organisations can use to start themselves off on the journey to a full fatigue management policy. 1. Equip the management team and line managers to implement the FMP • Provide them with a complete and current view of rosters, employees and employee profiles • Empower those managers to assess and decide on an employee’s fitnessfor-duty • Set up alerts within your IT system that set off triggers if an employee’s fatigue risk changes • Establish processes for replacing fatigued workers with eligible call-ins • Ensure your system gives regular, detailed reporting on fatigue management against the fatigue management policy 2. Within your organisation, review and identify all job groups/families – and isolate those which are identified as fatigue inducing 3. Institute the policies and programs to minimise the impact of identified fatigue-inducing jobs 4. Avoid scheduling employees who are either not ‘fit-for-duty’ or who have not completed required rest periods 5. Use the IT workforce management solution to automate processes and policies 6. Review at regular and calendarised intervals
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TECHNOLOGY
INNOVATION
STAYING AHEAD OF THE CURVE Want to shake things up in your organisation? Want to be seen as an innovation leader? Perhaps it’s time to look at what SMEs are doing THE MAJORITY OF senior HR professionals interviewed by HRD Magazine over the past 12 months have shared one thing in common: they are trying to inject innovation into everything their organisation does. In a ‘do more with less’ climate, this focus is hardly surprising. Another recurring theme is just how difficult it is to create a culture of innovation. In large organisations in particular this can be a challenge. Changing systems and turning great ideas into action often gets bogged down by bureaucracy and slow processes, hence large organisations may struggle to change quickly. Is it any wonder innovative big business leaders cast jealous eyes towards their smaller, more nimble counterparts? To cite one business leader’s thinking along these lines, Survey Monkey’s CEO, David Goldberg (husband of Facebook COO Sheryl Sandberg), has stated that he wants everyone in his company to think like small business owners but be able to work in a big business environment. As usual, when it comes to skills, there are two options: buy them, or develop them from within. Some companies (Coca-Cola, Telstra) have adopted a hybrid approach by creating in-house innovation incubators. Others have looked externally to partner with start-ups and SMEs. Georgie Drury, founder and CEO of Springday, says this third option is gaining traction. “Small companies are creative because they’re forced to be creative,” she says. “We don’t have big budgets, so we have to think outside the box. Henry Ford’s quote has always resonated with me: ‘If we had asked people what they wanted, they would’ve said
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faster horses’. So people often don’t know what they want because it doesn’t exist yet. We can go in and say, ‘Have you thought about this?’ In that way, larger companies can get the innovation without the risk.” Her own company works at the intersection between HR, technology and wellbeing. Historically, corporate wellbeing has been solely viewed in terms of physical health. Springday takes a more holistic approach by looking at wellbeing across five pillars: physical, social, emotional, financial and career. Large corporates will partner with Springday, who will act as the technology innovators on behalf of their clients.
Drury, who has worked in large organisations herself and understands (and sometimes adopts) some of the large company processes in her current work, says Springday started as a consumer software platform. “We have all the learnings of what consumers want in terms of wellbeing,” she says. “We understand the importance of gamification to make wellbeing exciting and interesting to people; we understand that people want to keep track of what they’re doing anywhere, anytime, via wearable technology. We’ve taken all that into businesses, across those five pillars. We also integrate all the third-party programs a company may have in
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place – all the experts, all the other small businesses they work with – and we can be the front face of that.”
The appetite for innovation The first step in such a partnership is defining exactly what innovation looks like and where the appetite for innovation lies.
PRODUCT ADOPTION CURVE Pragmatists Visionaries
Conservatives
Tech enthusiasts Innovators
Sceptics Early adopters
Early majority
Late majority
Laggards
“If you want to be in the early innovators or early adopters categories, let’s challenge the thinking and try something else,” Drury says. “We can put something in place, and if it’s not working we can try something else. So they’re almost using their employees like testers until
we find something that sticks.” She adds that her ambition is “to turn HR on its head” by thinking outside the traditional tried-andtrue ways. There is, of course, risk involved in trying something new. However, Drury says there’s also risk in not trying something new. “So many HRDs have a focus on being innovative, but you cannot do that unless you want to be that early adopter at the front end of the majority. Therefore there will be risk. But there’s risk in not doing it as well. You end up being left behind.” Drury suggests there are several key steps to follow if a partnership with a smaller company is to succeed: 1. HAVE A BASELINE: “I’ve always been a big fan of the phrase ‘You can’t manage what you can’t measure’. So the first thing you need is a baseline to understand what’s going on inside the business. From an HR perspective, do they have high turnover? Do they have poor engagement scores? Do they even have an engagement survey? What’s the major issue that the business is facing?” 2. PRESENT SOME OPTIONS: “Before you spend money, let’s get a snapshot to see what the CEO’s goals are, what the HRD’s goals are, and what the employees’ goals are. Then we can work together to present solutions. We have a diagnostic tool called the Springday Wellbeing check. From a wellbeing perspective there are five pillars: physical, social, emotional, financial and career – so we work with the client to tackle each of those five pillars.” 3. GET BUY-IN: “With the most successful programs, you’ll see they have executive leadership engagement plus employee engagement. For example, one client of ours, Randstad, surveyed all their staff, and then I presented to their executive team to obtain the buy-in of those 22 people.” 4. DEPLOY: “We determine when in the business cycle it’s going to be well received.
You don’t want conflicting or competing messages in your communication. You don’t want to be rolling out all these internal and external programs all at the same time. For me there are two obvious choices to roll out a wellbeing program: the start of a new year, and springtime – because the appetite is there to receive the message.” 5. FOLLOW UP: “I define how we work with businesses around how much handholding they want. Some clients don’t need a lot of hand-holding and may have the skills internally. Others will need weekly WIP meetings because they don’t have the resources, so we’ll act more like an outsourced bureau service.” As a final tip, large organisations should note the Sigmoid Curve. The s-curve is about the nature of change. With any change there is always a first period of experimentation and learning followed by a time of growth and development. Ultimately, however, every curve turns downward. The only variable is the length and duration of each part of the curve. As shown in the illustration below, the best time to start a new ‘curve’ is before you reach the peak of your existing one (point A). That way, you will be starting something new when you still have the resources, and the spirit, to take it to new heights. THE SIGMOID CURVE
B A
“Large organisations are well established,” says Drury. “They’re already on their curve because they’re part of a mature market. They need to find the next wave. Perhaps looking externally can help them find that next wave.”
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INTERNATIONAL PROFILE
AMWAY
AMWAY’S ‘READY ENOUGH’ APPROACH TO L&D With over 21,000 workers and 92% of business conducted internationally, managing Amway’s employee base is daunting. Kee Meng Yeo explains to Jill Gregorie how he’s navigated these global challenges and helped launch one of corporate America’s greatest L&D success stories 40
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BACK IN 1994, Kee Meng Yeo traded the bustling streets of Singapore, a city with over three million residents, for a town whose landmarks include covered bridges, streams, and meadows. He initially arrived in St Louis, Missouri expecting to only reside there for a six-month assignment with Monsanto, a sustainable agriculture company. That six-month rotation turned into a two-year assignment, and now, over a decade later, Yeo serves as global head of talent management with direct selling firm, Amway. This is no easy role, as the position requires him to oversee the development of about 21,000 international employees – a significantly larger number than the population of the company’s hometown, Ada. Last census, Ada reported a mere 18,701 residents. This challenge has only propelled Yeo forwards. His international background allows him to understand the complexities of global human capital and developing talent across geographic and cultural boundaries. As a result, he has implemented a number of initiatives that allow for employee growth at each level of the organisation, as well as in every location – from Kuala Lumpur to Moscow, and Guangzhou to Mexico City. These efforts have transformed workers into leaders; they form the backbone of Amway’s success. LeAPing ahead One of Yeo’s greatest triumphs is the executive development initiative known as LeAP, or Leadership Acceleration Program. Conducted every other year, it’s been recognised by Bersin by Deloitte as one of the foremost platforms in experiential learning. The endeavour begins with a ‘mini MBA’, whereby 15–21 executives, nominated by senior leadership, take part in academic training at the Thunderbird School of Global Management, now part of Arizona State University. “It’s a program that doesn’t have a lot of soft leadership lessons, or things like leadership derailers, but the focus of the content is on global strategy, both in creation and implementation,” Yeo says. Participants are divided into three groups and assigned a business
challenge that parallels an obstacle Amway faces in the marketplace. One recent example is, ‘How do you accelerate and sustain business in Brazil?’ The students are then instructed to produce “practical, implementable” solutions that are concrete enough to be executed in the near to intermediate term. After class ends, attendees have four months to continue work on the project virtually. In order to simulate the global nature of most business enterprises, they are not allowed to meet in person. In addition, the academic director checks in every month or so, to ensure that they are progressing on the challenge and not procrastinating until two weeks before deadline, only to “Google a few things and put it together in a bland PowerPoint presentation”. Finally, they present their findings to Amway’s executive staff, consisting of the top 12 executives in the company. Since it is “first and foremost, a learning experience”, the LeAP participants’ findings typically aren’t implemented wholesale in Amway’s business directives. Still, strategic leaders outside of the executive staff do watch recordings of the presentations and often poach students’ ideas. “We’ve had great feedback,” says Yeo. “In fact, we just named a new chief marketing officer because the previous one became regional president for the Americas region, and the new CMO is an alumna of the program.”
SNAPSHOT: L&D AT AMWAY • LeAP executive development – mini-MBA training followed by a four-month business challenge • Enterprise corporate university – job training from experts, employee-led classes, and career mapping • Evaluation and constant improvement of L&D through the five pillars model • Investment in imperfect but high-potential employees • Commitment to workers, despite government obstruction • Promotion from within
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INTERNATIONAL PROFILE
AMWAY
BENEFITS OF L&D • 76% of employees are motivated by growth and development opportunities • 25% of employees believe that they would be more satisfied at work if they could focus on areas where they demonstrate potential • US companies increased spending on training & development programs by 15% in 2013, representing the largest growth rate in corporate learning in seven years • Lack of opportunities in L&D is one of the most frequently cited reasons for employees leaving their jobs. In fact, 40% of workers who receive inadequate training depart from their organisations within one year Source: ClearCompany
Looking beyond the horizon While LeAP has been an asset for the organisation, it is only enjoyed by a very elite group of Amway employees. As a result, Yeo has other programs in place for the bulk of employees who are not among these top-ranked performers. To earn the designation of ‘high potential’, Amway’s high performing employees are assessed against the benchmark of whether or not they will be ready for a more senior position in the next two to three years. The majority of employees do not earn this status, and Yeo works to ensure that they are not neglected. “If people are three to five years out, we still pay attention to them, but we call them ‘horizon candidates’ and keep an eye on them,” explains Yeo. Horizon candidates are offered development opportunities
through the Corporate University, which was designed to take formal learning programs one step further “to enable day-to-day learning as you are doing your job”. “It’s trying to break the notion that learning and work are mutually exclusive,” says Yeo. Implemented in August 2014, the Corporate University consists of an online marketplace where employees can connect with specialists, selected either by leadership or deemed an expert by fellow workers. While Yeo initially received resistance on the latter, he found that as long as employees are learning, the ‘expert’ label is fine. “Initially I got pushback and I was asked, ‘what if people are linking with the wrong experts or learning the wrong things, they might not be effective on the job or stop going to the so-called expert’, ” says Yeo. “I said, if it’s helping them to be more productive and it’s aiding the company, what do we care if it’s a supposed ‘wrong’ expert?” Yeo is hesitant to label this initiative ‘social learning’ as there are structured elements to it, including the LeAP program and functional schools that outline the competencies needed to become eligible for promotion or transfer. Still, the social aspect is undeniable. One of the program’s greatest successes is the language tutorial developed by an employee who felt passionate about Spanish and wanted to teach others. Her sessions are now attended by staff as far away as China. “We’ve started formal language classes, and they go fine for a few weeks, but by the third month, there’s only two people in the class,” says Yeo. “Instead, this tutorial is a great example of learning taking place on its own.” Pillars of learning In order to determine whether these educational endeavours are worthwhile, Yeo prefers to evaluate them with the five pillars of organisational learning model, developed initially by the Sloan Consortium. The five pillars are: • Is learning effective, and do employees acquire what they set out to learn? • Is it cost-effective; do programs operate within the company’s budget? • Is it accessible to employees throughout the organisation? “This is the piece that Amway University hasn’t totally solved. There’s a large group of hourly employees in manufacturing and warehouse operations, who don’t always have access to their own PCs. We try to provide access through terminals, but that’s not an ideal solution.”
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Student satisfaction
Faculty satisfaction
Cost effectiveness
Learning effectiveness
Access
FIVE PILLARS OF ORGANISATIONAL LEARNING
Source: Kee Meng Yeo, The Sloan Consortium
• Are employees satisfied with growth and development opportunities? • Is management satisfied with the financial investment? “I look at this from the standpoint of the budget. If management continues to give me money, I assume they’re satisfied.” It’s worthwhile to note that this model can be applied both to individual programs and organisation-wide L&D processes. “This model allows you to look at learning as collective across the enterprise or to separately measure programs and individual initiatives. We do both,” says Yeo. Planning ahead Of course, no development story is complete without the succession planning part of the puzzle. Part of building leaders, in Yeo’s opinion, is making sure they’re ready to move into executive positions when required. Of course ‘ready’ is a relative term. “Part of the reason we’re successful is we don’t use terms like ‘ready now’, ” says Yeo. “We don’t use those words because if you say somebody is ready now, you’re likely just trying to duplicate the incumbent, who typically has years to grow into who they are today.” Instead, Amway uses ‘ready enough’. A major pitfall in talent management is not taking chances on employees with potential, but the company overcomes this by empowering employees to reach outside their comfort zone.
“When a vacancy opens, we look for candidates who are ‘ready enough’. We know they’re not perfect and may have things that need development, but they are ready enough,” says Yeo. This process has been so finely tuned that when Amway’s CMO transitioned to regional president, her successor was appointed and fully onboarded in a mere two weeks. Tale from the East Another advantage of these initiatives is that they are nimble. This came in handy when Amway faced one of the biggest obstacles of its existence: establishing a presence in China. When Amway entered the Chinese market, bad marketplace practices by some questionable companies led to the government putting in place laws that prohibited direct selling – the basis of company operations. Without being able to generate sales, the company didn’t just leave the market. Instead it spent time and resources working with the Chinese regulators to ensure that legitimate direct selling companies can earn the right to operate within the Chinese market. Similarly, on the HR front, the company needed to make adjustments to its practices to suit the local management and leadership culture. One way it did this was by transforming performance reviews from individual assessments to a more collective and team-
“If it’s helping them learn to be more productive and help the company, what do we care if it’s a supposed ‘wrong’ expert?” Kee Meng Yeo
oriented process. But the biggest accomplishment was that Amway’s HR team didn’t allow the setback to affect its positive culture, even after enduring two years without a single sale. “There were employees there who looked to us for their livelihood,” says Yeo. “Our company’s vision is to help people live better lives, and simply walking out of a country doesn’t embody that vision.”
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RECRUITMENT
GAMIFICATION
ENGAGE AND CONQUER: Graduate recruitment Interviews and assessments are notoriously nerve-inducing processes, particularly in the ultracompetitive graduate market. Is there a way to engage grads and also reduce the intimidation factor? Gamification might be the key, as Chloe Taylor reports WE ALL REMEMBER the thrill of playing games as children. Games encouraged us to use our minds and imaginations, from climbing trees to pretending to be ‘grown-ups’. While Millennials will have grown up playing games on consoles and computers, children of every generation have shared the traditional gameplay of toys and puzzles. And now, gamification – which takes elements of those games we played as kids – has worked its way into the workplace. Not surprisingly, given the Millennial predilection for electronic gameplay, graduate recruitment is ripe for smart use of gamification. Revelian’s new applicant assessment tool is Australia’s first gamified recruitment assessment that combines gamification with analytics, data, predictive psychometric models and cloud technologies. The game, ‘Theme Park Hero’, is designed to measure candidate ability and enhance brand reputation while streamlining the recruitment process and increasing efficiency for businesses. “Theme Park Hero is revolutionising psychometric testing,” says Salih Mujcic, project manager at Revelian. “It’s a gamebased assessment. Every aspect of it includes game thinking and game design to help engage
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test-takers in a deep and immersive activity.” The game’s features accurately measure candidate ability including agility, cognitive speed, attention span, spatial aptitude and numerical reasoning.
GAMIFICATION EXPLAINED “Gamification is a process of embedding game mechanics into non-gaming experiences to engage users,” says Mujcic. “It has been highly successful in a myriad different industries and environments, from performance management, achievement and recognition programs to simple mundane tasks such as filling out forms. Businesses also use it to retain users and engage them at a deeper level. Think about checking into your favourite restaurant many times and then unlocking a special deal or discount. Using gamification can have real world benefits and impacts on the bottom line.”
Candidate experience + psychometric rigour Cherie Curtis, head of psychology at Revelian, says this is more than just harmless gameplay. “The key difference here is we’ve actually been able to maintain psychometric rigour while enhancing the candidate’s experience,” she explains. “This allows them to enjoy the experience rather than be intimidated by it, and when people are comfortable we get a better evaluation of their strengths and weaknesses. People tend to get lost in the gameplay, so we get a pure insight into the individual.” She adds that traditional assessments tend to rely on right and wrong or clear yes or no choices, whereas Theme Park Hero is different in the way it captures data. “The system still has yes or no answers, but the playing experience gives us tens of thousands of pieces of data,” Curtis says. “There are additional angles and evaluations which extend beyond just the right or wrong answer. Theme Park Hero detects strategy and patterns in response, which is far more widely applicable and transferable from a cultural perspective.” “We’re changing the way testing is done,” Mujcic adds. “Typically it’s an anxietyprovoking experience. The word ‘test’ can bring up a lot of negative emotions, whereas when you say ‘game’ it usually means a fun
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BROUGHT TO YOU BY experience. We’ve used the thinking and scientific approach behind traditional tests and blended it with game design to offer something fresh and unique.”
HOW IT WORKS: THE PROCESS 1. Candidates have 10 minutes to complete the game, and unlike traditional assessments, Theme Park Hero analyses more than the answers given, providing a deeper insight into users’ strengths and abilities. 2. Following completion of the game – which consists of four sub-games – an overall ‘hero’ score is provided for each candidate. This is calculated by a weighted combination of metrics that encompass candidate responses and general game play across each of the four short activities. 3. Employers are provided with a percentile rank for the individual in a report. It allows employers to quickly identify top talent. “We’re also looking to explore our data and identify different personality factors we can elicit through play,” says Mujcic. “This means that the reports will change over time – this version is only the start.” The system was constructed through multiple scientific processes, from the development of the theme to the validation of the tool as a psychometric instrument, and was tested on 2,500 candidates. Revelian has also created a proprietary analytics engine to be able to ingest and analyse all of this data, and in real time. “On
“Recruitment and selection is an exercise of arriving at confident decisions or outcomes” the surface it simply looks like a game, but under the hood there’s a serious technology layer that helps provide employers with meaningful information about applicants,” says Mujcic. “Apart from its ability to find the most suitable candidate, one of the key benefits of the game is brand alignment,” Curtis says. “This helps companies to be perceived as an employer of choice. Companies spend a considerable amount on recruitment process as a whole, and tend to invest a lot in sophisticated technology with applicant tracking systems. However, traditional assessments are generally not aligned with company brands. This gamification system provides an assessment which is no longer
disconnected from the core brand that companies are trying to present.” But is there anything that HR managers can use alongside the game to enhance it? “Recruitment and selection is an exercise of arriving at confident decisions or outcomes,” Mujcic tells HRD. “We would never recommend that any HR manager relies on just a single piece of data or just an assessment to make a hiring decision. They should use their expertise, interviews, and resumés –everything they can to find out about the candidate to make a much more confident decision. It’s all about reducing error in judgment, and the more information we have the more confident we can be that we’ve made the right decision. Game-based assessments form only a part of the decisionmaking process.” Leading Australian people analytics company, Revelian, has launched a world-first game-based psychometric assessment. Theme Park Hero combines gamification with analytics, big data, predictive psychometric models and cloud technologies to accurately measure aspects of candidate ability including mental agility, cognitive speed, attention, spatial aptitude and numerical reasoning. Visit revelian.com/themeparkhero for more information
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EXPERT INSIGHT / WORKPLACE RELATIONS
DEAL OR NO DEAL: Bargaining for success Lisa Burrell outlines key considerations that employers should keep top of mind when entering into Enterprise Agreement negotiations ENTERPRISE AGREEMENT (EA) negotiations can effectively ‘set’ the parameters of a significant proportion of ongoing costs for most organisations: labour. The ABS recently reported1 that over 40% of workers are employed under EAs, with individual arrangements slightly behind this figure and ‘award only’ arrangements lagging significantly behind at under 19%. Through assisting employers on a daily basis to negotiate EAs, VECCI is acutely aware of the complexities associated with this process. For organisations facing an upcoming negotiation, we share some top tips from our experience:
Know your process VECCI counts 14 procedural steps from start to finish of the negotiation process, with the potential of significant time, effort and money invested within these stages. As I explained in the February edition of HRD, getting a step wrong can send your entire process back to the drawing board, so it is vital that current requirements are understood and integrated into your process.
the need to have the best negotiators present, which may include engaging external assistance. This can be particularly relevant given employers may only undertake this process every three years, compared to union officials who have very specialised skills from continual work in the area.
Get your mix right
Be cautious of ‘backdating’ arrangements
Considerable value can be achieved by ensuring you have a balanced mix ‘at the table’. We have found that in many cases employees who could add real value don’t get involved, as it is seen as a ‘union matter’. While a union may have a seat at the table, union membership in Australian workplaces is less than 20% (only 12% of the private sector),2 so it certainly shouldn’t be the only seat. Encouraging key employees to be involved can be crucial. Likewise, if an EA is viewed as a commercial contract – where even incremental concessions add up considerably over the life of the agreement – it highlights
This is a key area where we see employers stumble. By agreeing to ‘backdate’ certain increases or entitlements to the negotiation commencement (or expiry of the previous agreement), this can slow the process down and encourage employees ‘holding out’ for perceived maximum increases – because a crucial component is ‘locked in’ and the eventual payoff seems assured. Alternatively, arrangements around sign-on bonuses or a backpay date tied to the final stage of the negotiation (such as a successful vote) can be effective in retaining a shared focus on a timely outcome.
Communication is key While regard for the requirements is needed to bargain in good faith, this does not prohibit regular and informed communication with your employees. Any change process will be more favourably received if the rationale is understood. If there are economic realities that inform your negotiation boundaries, this should be shared where possible. Data is often underused in these processes and can help avoid circular arguments on excessive claims. An effective and open process can result in positive outcomes for both sides. Proactive management of negotiations will always underpin the best strategies for success. Sources: 1 ABS, 6306.0 – Employee Earnings and Hours, Australia, May 2014. 2 ABS, 6310.0 – Employee Earnings, Benefits and Trade Union Membership, Australia, August 2013. Lisa Burrell is general manager of the Victorian Employers’ Chamber of Commerce and Industry (VECCI). VECCI is Victoria’s most influential employer group, servicing over 15,000 Victorian businesses per annum. An independent, non-government body, VECCI was founded in 1851 by the business community to represent business.
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BEST PRACTICE
CSR
BLIND FAITH: Why CSR initiatives fail
If your CSR program doesn’t promote shared experiences, it’s set to fail, writes Peter Baines OAM
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IT CAN SEEM like such a great idea at the time. The company is in a good position, there are profits to share, the time to ‘give back’ to the community is now – how can it go wrong? Normally, someone senior within the business will have had a personal experience or gone to a charity gala dinner on the weekend and has been touched by all the good will. As the night goes on, the realisation is made that ‘this is what is missing in our business’. Before you know it, funds have been found and a cheque has been handed over to the head of the charity during a coffee and cake morning tea. Photos are taken of the presentation.
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And sadly, that pretty much describes the sum total of the CSR strategy for many businesses. It’s not the lack of desire to engage effectively, it’s often the lack of understanding of the opportunities and then the lack of resources to execute. An easy way to assess the effectiveness of your CSR program is to ask a random selection of your team the following questions: 1. Can you name those who benefit from our CSR program? 2. What is the commitment we make to the community? 3. What is the change that has occurred as a result of our commitment? My suggestion is that the percentage of correct answers to those three simple questions will be in a diminishing value. And if your team don’t mention themselves or the company you work for in their answer to the first question, your current program is not effective. If their response to the second question is “the company matches my donation and gives me a day off a year to volunteer”, I would suggest your program is set to fail. When your CSR program is viewed as a “gift back to the community”, which those in accounting will call a cost centre, then there is little opportunity for real engagement and growth. There will be little time spent talking about or focusing on the program because it is not part of the core business of the company and is certainly not a profit centre.
Opportunity for change But, herein lies the opportunity for change. If you can create shared experiences as part of your CSR program, then you will see it become an important part of what you do. When there is alignment between the values of your organisation and those you are supporting, when you start to measure the true cost of the program and the return to the business, then you will hear it talked about in the hallways, around the water cooler and over coffee. For those conversations to occur there needs to be a reason for people to engage, and that reason is the opportunity for them to participate in shared experiences. Donating money is the least effective form of engagement between a business, or individual, and their charity of choice. How does the donation of money alone change your day? Handing over the cheque or processing the online donation makes you feel good for a fleeting
“Donating money is the least effective form of engagement between a business, or individual, and their charity of choice” moment, but it is a bit like a warm bath. You feel good while you are in it, but once you’re out, the feeling is gone.
Cost centre to profit centre To make your CSR program a success for all involved – that is, to change it from a cost centre to a profit centre – there are a number of points to consider: 1. What experiences are we creating that allow our team members to engage with our partners? 2. What are we doing beyond donating money? 3. What change occurs with our charity partner as a result of our relationship? 4. Do we satisfy the ‘but for test’ ie, this (here you insert the change your company has achieved through your CSR commitment) would not have occurred but for our support… 5. What is the true cost of our program? 6. What is the ROI we are making? An effective CSR program doesn’t have to be complex, and it doesn’t have to consume great resources to execute, but it does require more than a fleeting commitment once a year when a cheque is cut. Someone, somewhere in the business is foregoing a slice of the pie that you are currently giving to charity as part of your program. They deserve to understand the true cost and they deserve to see a ROI. How many other areas in your business do not understand the cost of production and the ROI? Why should your CSR program be any different? When you get it right, there will be a positive return to your business. You will see greater engagement, positive staff retention, increased morale, new business opportunities leading to innovation, and growth through shared value. Without the focus on shared experiences as the cornerstone to your CSR program, it will remain this isolated part of the business that few care or even know about. It runs the risk of being viewed with skepticism and can do more harm to the business than good.
Peter Baines OAM: In late 2005, Peter established Hands Across the Water, a charity that raises funds for and awareness of Thai children who were left orphaned by the 2004 Boxing Day Tsunami disaster. Today, Peter helps businesses build effective sustainable leadership while travelling the globe as a keynote speaker. Published by Wiley, Doing Good by Doing Good is available in paperback (RRP $34.95) from peterbaines.com.au.
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HR SUMMIT 2015
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PEOPLE
IN PERSON
ISADORE PAYNE
Bayer’s Australia-New Zealand workforce of 1,100 may seem small compared to the company’s 112,000 globally, yet as HR director Isadore Payne explains, there are best practice lessons flowing both ways. He talks to HRD about ‘glocalisation’, innovation, working with the CEO, and why he “wouldn’t trade” his career in HR 54
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HRD: What was your first HR role, and what drew you to the profession initially? Isadore Payne: I always wanted to be in HR and was keen to specialise in IR. I started first off in Anglo-American mines in South Africa. What a nice way to jump into HR. Lots of union issues and negotiation – the equivalent of EBAs in this country, strike management, health and safety issues. You grow up pretty quickly. There’s nothing like having 3,000 people on strike – university doesn’t really prepare you for that. Why was I drawn to it? I wanted to be in business but also wanted to work with people – and what a nice mix. I still believe that’s the appeal 27 years later – and I wouldn’t trade it. I can influence both the business and the culture at the same time. It’s so dynamic and interesting. HRD: Have those negotiation skills helped you in subsequent HR roles? IP: Absolutely. I went on to work at a large FMCG company, and I spent the next eight years being group IR manager, managing multiple unions. Then I moved more into OD and general HR management in a number of countries and industries. But that early experience has been incredibly useful to have a solid basis in industrial relations and negotiations, especially understanding where parties are coming from, and being ready to listen. That’s been important – to understand the other party and the fears they have – because you can never get to the solution unless you really understand where the other party is coming from. HRD: How have you navigated innovation in a multinational company? IP: Innovation can only take place if the culture allows it to happen. Our cultural transformation journey [see profile of Bayer CEO Jacqueline Applegate, p22] is not just about a program; it’s about creating a free-flowing culture. Doing that within an international matrix within a German company is not easy. Globally the company wants to create a culture of innovation, and it’s been up to us in ANZ to ensure that goal also reflects our employer brand: passion to innovate, power to change. That’s a brand promise – and we want to give people the power if they supply the
passion. Fortunately we have a very strong collaborative culture. One thing I find from our global and regional centres of excellence is they’re open to best practices and learning from each other, so there’s a good exchange at all levels. When we undertook the local analysis of our EVP off the back of the global EVP, for example, our international colleagues were intrigued to know more: What does that look like? Does it align with global? I call that mix of local and global, ‘glocal’. HRD: Given the theme of this issue is ‘CEOs on HR’, what’s the key to a successful relationship with a CEO? IP: It’s having a shared vision. Then it’s about forming a real partnership in terms of what you’re trying to achieve. Once you have that, for me, you can start looking after each other. You can back each other up. HRD: Does your CEO expect something different from you as an executive that she might not get from the rest of her executive team? IP: She expects me to be the one making sure we test all our decisions against our people and culture. Yes, the numbers stack up, but what about the people? What about the culture? We must bring that EQ component to sometimes very heated debates at the executive table. We must deliver the numbers, but at the cost of what? So it’s a long-term, sustainable view – it’s not all about tasks and processes and systems. Unless we keep hearts and minds engaged, all of that doesn’t matter and we’ll lose in the longer term.
“There’s nothing like having 3,000 people on strike – university doesn’t really prepare you for that” HRD: What’s the biggest HR challenge you face in 2015, and how do you plan to overcome that? IP: For me it’s about agility. The world is becoming very fast-paced. How do we keep the organisation agile, and how do we equip our
ISADORE PAYNE CAREER TIMELINE
Qualifications 1982–1986 University of the Free State/Universiteit van die Vrystaat Master’s in Human Resources Management (including study in HR management and industrial relations)
Work summary September 2007–October 2008 HR director Sara Lee Australia & New Zealand October 2008–June 2011 Group HR director Barloworld June 2011–February 2012 Head of HR Kimberly-Clark February 2012–Present Head of HR ANZ Bayer leaders to cope with change? With so many more demands on our people, we need to help them prioritise and make sense of all the noise – to help them see that these items are the important ones and these are the must-win battles. We need to be thinking, ‘How do we as an organisation not burn out our leaders? How do we make this sustainable?’ Agility helps us move fast, but gee, there’s a price to pay. HRD: Where to next for HR as a profession? IP: Do the fundamentals well and then put culture as the centrepiece. I feel HR people need to move away from process-driven thinking and start working on the organisation to achieve cultural change to unlock the true potential of the organisation. Do the bread and butter well, but then put it in the cloud and start developing the culture. By doing that you’re delivering against the customer expectation but also unlocking true potential within the organisation. It’s exciting to see that, and I get passionate about it.
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DRUG AND ALCOHOL TESTING: HEAD TO HEAD
Q:
Views from the front line Do you think it’s time to reconsider how performance management is handled in business? Has your organisation scrapped once-yearly performance appraisals? If so, what has replaced them?
SANDRA WOOD
GINA O’REILLY
GREAT MANAGERS
NITRO
Managing director
COO
JOHN FRANCOIS
Senior director HR, Asia-Pacific and Japan MCAFEE
It is definitely time to reconsider, and the adjustment is a simple one – simple but not necessarily easy! A high-performing workplace requires what we at Great Managers call a good performance ‘front end’. This starts with managers setting very clear expectations of what success looks like, and then having regular quality conversations with employees about how things are going – what’s working well, and what’s not. Most employees come to work wanting to do a good job, and are thirsty for this feedback. The manager’s role is to enable employees to succeed. Many managers struggle with these ‘quality conversations’, and the necessary skills, including EI, must be learnt. A good performance ‘front end’ consists of providing regular informal feedback – every seven days or so, in fact! Yearly performance appraisals can still be effective, but only if they are a summary of these quality conversations combined with forward planning and development goals to keep team members engaged, performing and on track. 56
Instead of using performance review meetings to scrutinise past behaviour, managers take advantage of the yearly opportunity to explore future possibilities for each employee and discuss new avenues of growth together. It’s an opportunity for employees to talk about the future and where they want to be in our organisation. I like to view it almost as a celebration in many respects, discussing where employees envision themselves, whether that’s in a more advanced position or a new department. Each employee agrees to a 90-day contract detailing three to five specific objectives for the quarter. Each goal is pegged to a quantifiable outcome, which ranges from product sales to bug fixes to completion of the next step of a major project. The contracts are visible to everyone in the organisation, and supervisors have weekly one-on-one meetings to discuss progress and brainstorm solutions to any obstacles that may have arisen in the days prior. The 90-day contract is like the North Star guiding everyone to focus on what really matters.
I think performance management is like all facets of HR – it continues to evolve with leadership skills and competencies. Ideally, if all leaders in an organisation were appropriately skilled at having meaningful conversations and providing constructive feedback to employees, then a move away from the traditional performance management system would be warranted. Today, we have varying degrees of competence in our leadership ranks, and we would not get a consistent and fair process across functions, businesses and geographies evaluating the performance of employees. I believe we still need a performance management system in place which provides some level of consistency in ratings and process to guide managers and leaders. The system must be simple and clear so that it does what it is supposed to do: help leaders provide consistent and constructive feedback to allow people to succeed. Got an opinion that counts? Email hrd_editor@keymedia.com.au or join the debate at hcamag.com
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As one of the leading providers of relocation and As one of the leading providers of relocation and immigration services to more than 150 countries immigration services to more than 150 countries globally, SIRVA’s team delivers personalised services globally, SIRVA’s team delivers personalised services and advice to clients by drawing on the diverse skills andand advice to clients by drawing on the diverse skills background of its staff. and background of its staff. Relocating staff can be a significant commitment for companies as well as a tumultuous period for the families and individuals involved. Relocating staff can be a significant commitment for companies as SIRVA well provides a holistic to relocation by providinginvolved. diverse services as a tumultuous periodapproach for the families and individuals SIRVA to assist in easing the pressure on assignees and their families during provides a holistic approach to relocation by providing diverse services this transition. to assist in easing the pressure on assignees and their families during this transition.
IMMIGRATION CONSULTATION One of the initial services that SIRVA provides is visa and immigration IMMIGRATION CONSULTATION
SIRVA’s visa immigration has immigration experience in One consultation. of the initial services thatand SIRVA provides isteam visa and providing ongoing and long-termteam support clients through consultation. SIRVA’s short-term visa and immigration hastoexperience in merits assessments, prospect advice, visa applications, and ongoing providing ongoing short-term and long-term support to clients through visa compliance; for both inbound and outbound immigration. merits assessments, prospect advice, visa applications, and ongoing visa compliance; for both inbound and outbound immigration. Jannaha Schillaci, Senior Immigration Consultant for SIRVA, works as part of a team based in the Melbourne office, Ms Schillaci says, “I think Jannaha Schillaci,ofSenior Immigration Consultant for SIRVA, works as the diversity our team lends itself to the diversity of our service part offering.” of a teamThe based theimmigration Melbourne team office,builds Ms Schillaci says, “I thinkto visainand client relationships the diversity of clients our team lends the diversity of our service ensure that receive theitself best to possible support and advice prior offering.” The visa and immigration builds that clientSIRVA relationships to their relocation. The quality ofteam the service provides, to Ms ensure that clients the best possible support andall advice Schillaci says, isreceive due to “our training and where we’ve comeprior from, to their relocation. The quality of the that SIRVA provides, Ms we’ve all got accounting or legal or service small business backgrounds.” Schillaci says, is due to “our training and where we’ve all come from, we’ve all got accounting or legal or small business backgrounds.”
“We’re all helping people in quite a critical pointall inhelping their lives. We in will always try to “We’re people quite a critical adapt to make we can get try things point in their lives.sure We will always to done as quickly as possible.” adapt to make sure we can get things
done as quickly as possible.” 457 VISAS Specialising in employer sponsored visas (namely 457 visas), SIRVA
hard to minimise risk for its corporate and independent clients 457works VISAS
by employing strategies such as monitoring changes to government Specialising in employer sponsored visas (namely 457 visas), SIRVA legislation and whole company audits. Ms Schillaci says, “as a migration works hard to minimise risk for its corporate and independent clients agent we can’t guarantee success but we can certainly advise our by employing strategies such as monitoring changes to government clients on what the individuals’ prospects will be and guide them in legislation anddirection whole company Ms Schillaci says, “asthe a migration the right providingaudits. alternative solutions along way.” agent we can’t guarantee success but we can certainly advise our clients on what the individuals’ prospects will be and guide them in PERSONALISED TOUCH the right direction providing alternative solutions along the way.” Although a worldwide entity, SIRVA Immigration prides itself on their personalised service and aims to build long-term partnerships with PERSONALISED TOUCH clients in managing risk and compliance. India Allender, another of Although a worldwide entity, SIRVA Immigration pridesour itself on their SIRVA’s Senior Immigration Consultants, says “often position is, if personalised service and aims to build with we can answer your question over the long-term phone and partnerships there is that existing clients in managing risk and Allender, another of corporate relationship thencompliance. we’re happy India to do so we will not send you an invoice six minutes of advice.”says Ms Schillaci says,position “although SIRVA’s Senior after Immigration Consultants, “often our is, we if areanswer workingyour withquestion very largeover organisations also working on a very we can the phonewe’re and there is that existing personal level with then the visa applicants.” corporate relationship we’re happy to do so we will not send you an invoice after six minutes of advice.” Ms Schillaci says, “although we are working with very large organisations we’re also working on a very personal level with the visa applicants.”
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DIVERSITY DIVERSITY The diversity
in training, education and experience of SIRVA’s staff The diversity in training, and of SIRVA’s staff allows the immigration andeducation visa team to findexperience creative solutions to help allows the immigration and visa team to find creative solutions to help clients who may be in highly stressful situations. Julia Wardle, also one clients who may be in highly stressful situations. Julia also one of the Senior Immigration Consultants is empathetic to Wardle, the experience of theSIRVA’s Senior clients Immigration Consultants is empathetic to the experience that encounter, she says, “I’ve also relocated myself, that SIRVA’s encounter, shethe says, “I’ve also relocated myself, which meansclients at some stage I used services that SIRVA provides. which means at some stage I used the services that through.” SIRVA provides. So I totally understand what the individuals are going This personalised support andwhat the experience of its are staffgoing is what sets SIRVA So I totally understand the individuals through.” This apart as a leading relocation personalised support and thecompany. experience of its staff is what sets SIRVA apart as a leading relocation company. Ms Wardle says “we’re all helping people in quite a critical point in their lives. We knowallthat big businesses deadlines Ms Wardle saysalso “we’re helping people in have quitecertain a critical point in and certain bureaucratic they have to follow sodeadlines we will their lives. We also knowprocesses that bigthat businesses have certain always try tobureaucratic adapt to make sure wethat can get as quickly and certain processes theythings have done to follow so weaswill possible.” always try to adapt to make sure we can get things done as quickly as possible.” Ms Wardle says that the environment of SIRVA is supportive and she feels that this culture is filtered down to the clients. She says, “normally Ms Wardle says that the environment of SIRVA is supportive and she a visa applicant will have a lot of different questions that they can’t feels that this culture is filtered down to the clients. She says, “normally ask of their employer. What they’re going through is quite a daunting aprocess, visa applicant will have a lot of different questions that they can’t especially because the clients we’re relocating are coming ask of their employer. going through is quite daunting from overseas so theyWhat mightthey’re have so many different thingsa moving process, especially because thechanging clients we’re relocating are to coming house, moving the kids’ school, jobs and then having go from overseas so they might have soofmany through the bureaucratic legal process a visa different as well.” things moving house, moving the kids’ school, changing jobs and then having to go through CARE the bureaucratic legal process of a visa as well.” The focus for the immigration and visa team at SIRVA is predominantly
CARE to take care of the needs of the individuals, by making the process as
The focus the immigration andcompliance visa team atand SIRVA is predominantly simple as for possible while ensuring providing approval to takeapplications care of the to needs of theprocessing individuals, by making process ready minimise times for theirthe clients. Ms as Wardleassays, “everyone friendly and approachable and do seem to simple possible whileisensuring compliance and providing approval go above and beyond get things right for the client.” ready applications to to minimise processing times for their clients. Ms Wardle says, “everyone is friendly and approachable and do seem to The mainand aimbeyond of SIRVA’s visathings and immigration is to initiate the go above to get right for theteam client.” process of relocation for companies and their employees (whether theymain be current future),visa while reducing risk andteam providing guidancethe The aim oforSIRVA’s and immigration is to initiate and practical services to make the transition as smooth and stress free process of relocation for companies and their employees (whether as possible. they be current or future), while reducing risk and providing guidance and practical services to make the transition as smooth and stress free Author: Georgia Lejeune as possible. Author: Georgia Lejeune
About SIRVA SIRVA is a leading worldwide provider of corporate relocation
services SIRVA and moving solutions, providing more than 300,000 About
relocations per year to companies, government employees, SIRVA is a leadingconsumers. worldwide SIRVA provider of corporate relocation and individual operates in more than 40 countries with approximately 6,000 employees an services and moving solutions, providing more thanand 300,000 extensive network and other service providers in relocations per yearoftoagents companies, government employees, over individual 160 countries. and consumers. SIRVA operates in more than 40 countries with approximately 6,000 employees and an To find outnetwork how SIRVA Immigration can help yourproviders business in extensive of agents and other service contact on: over 160us countries.
To find out how SIRVA Immigration can help your business Email: visainbox@sirva.com.au contact Phone: us (03)on: 8696 3400 Email: visainbox@sirva.com.au Phone: (03) 8696 3400
© SIRVA 2015
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