human capital
HC issue 8.3
Teambuilder:
Profile:
Specsavers
Parsons Brinckerhoff
rising
stars
Building leadership capability
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Executive coaching: Make or break Peter Sheahan on leadership Narrowing the gap: HR in the public sector
editor’s letter issue 8.3
EDITORIAL Mind the (leadership) gap
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n the 1990s Prime Minister Paul Keating was a great proponent of leadership development but he quickly realised that many companies were not measuring how much they were spending on learning and development. He subsequently introduced the Training Guarantee Levy, which predictably was met with mixed responses from employers. In hindsight, Rosemary Howard, executive director and co-joint Professor, AGSM Executive Programs, says Keating was ahead of the game: “It actually got people thinking about how they should be measuring and assessing their leadership initiatives. It’s the old story – if you don’t measure it you don’t manage it. Unfortunately, I would suggest we’ve slipped back to under-investing in leadership.” As this month’s cover story reveals, the challenges facing leaders have never been more complicated or diverse. Far from smooth sailing post-GFC there are countless new hurdles to overcome. Are Australian businesses prepared? According to the 2008 IBM Global Human Capital Study, over 75% of the respondents identified building leadership talent as their current and most significant capabilities challenge. Yet with the downsizing, L&D budget cuts and day-to-day survival mentality that has been rampant over the past 18 months, many businesses will be faced with significant gaps in their succession plans and leadership development programs. As organisations move into recovery phase it would be short-sighted and ultimately damaging to neglect leadership development as part of broader talent management strategies. Perhaps its criticality is best articulated with this observation: “A good leader can make a success of a weak business plan, but a poor leader can ruin even the best plan.”
In the first person… “Leadership is not a nine-to-five job or a job you need to work particularly hard at during difficult economic times; it needs to be worked on all the time” – Sue Forrester, chief executive of the CEO Institute, Qld, on 2010’s leadership challenges (page 16)
“It should be considered that coaching is not a threat, it’s a promise” – Rob Balmer, managing director, Executive Central, on setting up coaching initiatives in business (page 34)
“If my team is in demand from external organisations, then we must be doing something right!” – Colin Brown, head of HR, Victorian Department of Justice, on shifting the perception of HR in the public service (page 44)
managing director chief operating officer editor journalist production editors contributors marketing coordinator traffic manager design manager designer photographer senior web developer it/is manager sales director
Mike Shipley George Walmsley Iain Hopkins Daniela Aroche Carolin Wun Moira Daniels Carroll & O’Dea Lawyers Chifley Business School The Next Step Chandler Macleod Group Anna Keane Stacey Rudd Jacqui Alexander Paul Mansfield Thilo Pulch Kevin Kim Colin Chan Justin Kennedy
Editorial enquiries
Iain Hopkins tel: +61 2 8437 4703 iain.hopkins@keymedia.com.au
Advertising enquiries Sophie Knight tel: +61 2 8437 4733 National Commercial Manager, HR Products sophie.knight@keymedia.com.au
subscriptions
tel: +61 2 8437 4731 • fax: +61 2 8437 4753 subscriptions@keymedia.com.au
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www.keymedia.com.au Key Media Pty Ltd, Regional head office Level 10, 1 Chandos St, St Leonards, NSW 2065, Australia tel: +61 2 8437 4700 fax: +61 2 9439 4599 Offices in Singapore, Hong Kong, Toronto www.hcamag.com Copyright is reserved throughout. No part of this publication can be reproduced in whole or part without the express permission of the editor. Contributions are invited, but copies of work should be kept as HC can accept no responsibility for loss.
“My passion remains in talent management but I appreciate the other pieces of HR because it’s all about human behaviour, team behaviour, and organisational behaviour. I’m fascinated by people and I enjoy all aspects of HR because of that” – Sylvie Vanasse, director of people, Parsons Brinckerhoff, on HR’s appeal (page 48)
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this issue INSIDE
Coaching: Make or break?
Cover story: Leadership in 2010
16
34
Far from being smooth sailing, business leaders will find that 2010 will present a mix of old and new challenges. Iain Hopkins investigates
44 Narrowing the gap
24 Sheahan on leadership
Human Capital profiles the HR operations of one state government department and discovers that the perceived ‘business knowledge’ gap between public and private sector HR operations is misconceived
The corporate landscape has changed dramatically over the past 18 months. Peter Sheahan provides four questions for leadership teams
Letters to the editor Do you have a burning HR or people management issue you would like to share with others? Would you like to share your thoughts on the challenges you’ve faced and how you’ve overcome them? Want to kick off some debate about your industry? If so, Human Capital would like to hear from you. Send through your comments to editor@hcamag.com.
Although coaching in one form or another has been around for over 50 years, recent criticism that it remains an unregulated ‘cottage industry’ has caused ripples of dissent. Human Capital investigates
regulars 4 In Step
9 Corporate culture
6 Legal
10 HR technology
8 Training & development
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instep HR Career Experts
Page 4
Who gets a bonus? Who wants one?
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n this month’s Instep, we step into the world of variable pay for HR professionals. We look at who gets a bonus in HR and who doesn’t from a gender perspective. We also explore HR professionals’ expectations in the area of variable pay and if these expectations are being met.
Total rewards
A total rewards approach is understood and employed by a large number of organisations, in a wide range of industries. There is nothing particularly new about this. A fundamental element of the total rewards approach is variable pay (such as bonuses, incentive pay, and commissions), which along with other benefits and tools, help employers link rewards to an employee’s measured performance. Whilst HR practitioners know the theory and apply this in their organisation, the question remains – how is this theory being applied in the HR function? “Who gets a bonus in HR?” and “Who wants one?” were two of the questions covered in a national survey conducted by The Next Step of almost 2,000 HR professionals from all levels and from all sectors across Australia. The distribution was even through levels and industries. The response from the senior market was strong with over 39.5% of respondents nominating themselves at the HRD, Group HRM or Senior HR Manager level. Of this group of senior respondents, females represented more than 50%.
So who does get a bonus in HR?
HR roles have as many opportunities to link performance with reward as any other role. The cop-out about not being sales generating, is just that – a cop-out! The survey found that 35.8% of HR professionals earn no bonus at all. This combined with the next band (0 to 10% bonus) gave the result that a whopping 60.4% of all HR professionals earn less than a 10% bonus. At the other end of the continuum, only 6.03% of all HR professionals said they earn over a 30% bonus. So therefore, there is obviously a shortfall of HR professionals earning a bonus.
Gender differences
Are there any differentiators in terms of bonus distribution from a gender perspective? One of the big differences between HR
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and other professions is that it is dominated by females. Two independent research projects conducted by The Next Step found that approximately 70% of people in HR are female, (this finding is supported by other studies and anecdotal evidence). Therefore, looking at a gender and bonus payment distribution is relevant. yy Almost half (49%) of all males in the survey indicated that they either earned no bonus or received less than 10%. This is compared to nearly two-thirds (64.3%) of females in HR who indicated that they receive no bonus or less than 10%. yy In the band earning 11–20% bonus, the figures even out between males and females – 23.7% of males to 20.8% of females. yy In the bands above 21% bonus, males do better than females by a factor of about 2 to 1. Earning a bonus of 21–50% was 23.5% of males versus only 11.6% of females. Clearly from the above results, males are more likely to earn a significant variable bonus payment compared to females in HR. The reasons could be explained by generalisations about the type of work that early career people do in HR. The early HR career market is dominated by females, and it would seem, therefore less likely to achieve a bonus. Nevertheless, it is still a concern that whilst males are fewer in number, they are more likely to earn a decent bonus.
Who would like a bonus?
When asked if they would like a bonus, the HR profession spoke with a very loud voice: yy Only 22.5% of females and 16.7% of males said that no bonus or less than 10% was OK by them. yy 41.2% of females and 37.1% of males reported that they should receive a bonus in the 11–20% band. This is a significant increase on the levels that actually do receive a bonus in this band. yy 31.2% of females and 39.2% of males think they should receive a bonus in the bands between 21% and 50%. This means that females that expect a bonus versus those who actually received a bonus in this band is tripled.
So what does all this mean?
At its most basic, there are many, many people in HR not earning the bonus they believe they should expect. There is also a large number of HR professionals who have no visible personal pay link between performance and reward. There must be a fundamental internal conflict for HR professionals created by the fact that they design and administer variable rewards programs yet, quite often, don’t participate in these programs. The discrepancy between variable reward payments for females versus males is just plain wrong and is a real concern for a profession that is responsible for championing diversity and pay equity. Craig Mason is a Director with The Next Step, a specialist consulting practice in the human resources market. For information call (02) 8256 2500 or email cmason@thenextstep.com.au website: www.thenextstep.com.au
Recent HR Market Moves supplied by The Next Step
Katherine Corrie joins VHA as Senior Organisational
Development Specialist. Katherine previously held a number of senior HR roles with Bovis Lend Lease, within Australia and abroad. Medibank Private has appointed Ilona Charles as the new Head of HR. Previously Ilona was with NAB as GM Executive Talent.
Alyson Heinze has joined Kodak as ANZ HR Director. Alyson was in generalist HR roles with Bristol-Myers Squibb Australia.
Duncan Thomas has been promoted within American Express.
Duncan will move to the US as Head of HR for Merchant Services in North & South America.
Keith Zoing has recently been appointed Remuneration &
Benefits Consultant with McKesson Asia Pacific. Previously Keith held a number of senior HR roles with Qantas.
Suncorp recently appointed Craig Pollington as HR Business Partner, Retail Distribution. Previously Craig was with Westpac in senior line & HR roles. Australian Hearing has recently appointed Timothy Fergusson as Lead HR Business Partner. Timothy’s most recent role was with Lloyds International as HR Business Partner – Capital Finance Australia.
Jennine Ross has accepted the role of GM, HR with Tenix
Solutions. Prior to this Jennine was HR Director with the KAZ Group and held a number of senior HR roles within Telstra.
Tania Moretto has joined REA Group as the L&D Manager,
Sales & Operations. Prior to this position, Tania was with GE Capital Finance as Operations Recruitment & Training Academy Leader.
Peter Field has recently been appointed ER Manager with
Andrea Drieschner has accepted the role of OD Manager,
Mirvac has recently appointed Kim Johnson as Director of Organisational Development. Prior to this appointment Kim was with Schering-Plough where she held an Asia Pacific Regional OD/L&D role.
Russell Kronenburg has commenced in his role as GM HR &
Armaguard. Peter has previously held senior roles with Sydney Water, Australia Discount Retail and Woolworths.
Collections with NAB. Andrea has gained her experience within organisations such as Service Stream and Commonwealth Bank. Safety with Jemena. Until recently Russell was with Pacific Brands as GM Organisational Capability and prior to that Coca-Cola Amatil.
By supplying Market Moves, The Next Step is not implying placement involvement in any way.
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Legal Experts
Page 06
“I have a senior employee who is regularly sick (due to colds, flu, etc). This person calls in sick approximately once a fortnight, sometimes for days at a time, and it’s hard to plan work around this person. He/ she is genuinely sick (displaying obvious signs of illness). The employee follows protocols, provides genuine medical certificates and abides by company policies, and while the employee is in the office, he/she performs ok. The problem is that the employee occupies a full-time position and he/she is not meeting the expectations of the role because he/she is only present around 80% of the time. How do I deal with this issue without breaching discriminations laws?”
Managing Chronic Sick Leave
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ll employers should have a well-defined policy on the taking of sick leave. Such a policy should include clear counselling and/or disciplinary guidelines to be followed in the event of non-compliance. Such a policy must not of course contravene the requirements of the National Employment Standards (NES) with respect to personal/carers leave. Employers also have to ensure that disciplinary action in relation to sick leave matters does not amount to a contravention of a range of laws that exist to protect employees with genuine illness.
Unlawful termination, discrimination and adverse action claims
In dealing with employees who take excessive and/or “suspicious” sick leave, an employer must be mindful of the consequences that they may be faced with if they terminate an employee for that reason. Under the Fair Work Act 2009 (Cth) (FW Act) an employee whose employment has been terminated on the ground of excessive use of sick leave may bring a claim alleging unfair dismissal or unlawful termination or adverse action. In addition to the provisions of the FW Act, state and federal anti-discrimination legislation applies to such circumstances. Such claims, of course, will be decided having regard to the particular circumstances of each case but the consequences of discriminating against an employee with a genuine illness are potentially very significant for an employer.
Temporary absence due to illness
The FW Act provides that an employer is in breach of the Act if an employee’s employment is terminated on account of the employee
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being temporarily absent from work due to a “prescribed kind of illness or injury”. However, it is not a prescribed kind of illness or injury if the illness or injury extends for more than three months or the total absences of the employee within a 12-month period have been more than three months and the employee is not on personal/ carers leave for the duration of the absence.
Be proactive to prevent a problem arising
Excessive sick leave needs to be dealt with on a systematic and regular basis; it should not, for example, be on the basis that something needs to be done about a particular employee whose continued absence comes to notice as a consequence of the disruption to the section in which the employee is working as a result of that person’s absence. Sick leave absences of all employees should be reviewed on at least a three-monthly basis. This is not a difficult task in these days of easily generated computer printouts. Where it comes to notice that a particular employee is considered to have taken excessive sick leave or a pattern is developing as to the days on which the absences are occurring then immediate action should be taken by that employee’s supervisor to discuss/ counsel and/or discipline the employee as the situation requires. If immediate action is not taken and the excessive use of sick leave continues then it could be justifiably concluded that the employer, by not taking such action, had in some sense condoned the absences. Another good initiative for an employer is to ensure that its employment contracts have a provision to allow the employer to direct an employee to a medical examination, where illness may be significantly affecting an employee’s contribution, or causing a risk to health and safety of that employee and/or other employees. Without specific contractual entitlement, it is often legally difficult for an employer to compel an employee to submit to a medical examination. So firstly, it is vitally important that employers have in place a well-defined policy for the taking of sick leave and the processes for dealing with cases of excessive use. Secondly, there needs to be a regular and systematic review of all employees’ sick leave so that action can be taken as soon as it becomes obvious that a particular employee is taking excessive sick leave. Employers should not wait until an employee’s sick leave record is “chronic” but should deal with it at the first signs of a problem developing. In view of the legislative hurdles to be jumped before an employer can legally terminate an employee on the grounds of excessive use of sick leave, it would be wise for an employer to seek advice before taking such action. All of the members of the Industrial and Employment Law team of Carroll and O’Dea are well experienced in providing such advice and would welcome any enquiries in this regard. Peter Punch Partner Head of Employment & IR Group Level 18, St James Centre 111 Elizabeth Street Sydney NSW 2000 Phone 02 9291 7100
www.codea.com.au
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Training & Development
Page 8 Professional Development Experts
THE CHANGING WORLD OF GRADUATE MANAGEMENT EDUCATION
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BAs are recognised globally as the premier qualification for professionals seeking to take the next step. The core topics of strong MBA programs – general management, finance, strategy, business law, people, risk – address the challenges that all managers and enterprises must deal with. The continuing value of the MBA has been sustained by adaptation. No two MBAs are exactly alike. Professionals can learn business and management through the prism of their expertise and immediate needs, for example, through MBAs specialising in finance, retailing, or engineering practice. Different delivery models allow professionals to learn intensively in classes, through executive MBA programs which put a premium on experience at a very high level, or by distance and online so that study can fit in with the demands of career and family. Adaptation and differentiation are set to continue. The hot buttons in contemporary business – climate change, sustainability, corporate governance, discontinuity, globalisation, and program management – must all be addressed by contemporary programs. Another trend is recognising quality learning in the workplace. An MBA must be conceptually rigorous, but the pursuit of academic excellence alone can distance the MBA experience from the craft of managing – or as Henry Mintzberg lampooned the syndrome in Managers Not MBAs (2003), turning out ‘Masters of Business Analysis’ rather than managers. To redress the balance, better programs give emphasis to practice alongside theory – for example, crediting in-house development programs or a work-based project. These often demand more of the learner than a graduate unit. The key is assessment, its standard and its appropriateness to the management task. A manager needs to be able to do the analysis to understand why change must be made and how, but the good manager doesn’t stop at the research paper, but delivers presentations to staff and boards, works through problems, and implements over time – there is a place for learning and assessing these skills.
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An allied change is delivering under licence content from industry. This is particularly valuable in specialised disciplines where a professional learned institution or corporation has developed leading edge intellectual property – well in advance of the academic world. For engineering managers for example, the leading disciplines in asset and project management can be proprietary, and they are the ones to follow. Another being offered by Vlerick Leuven Gent Management School in Europe is a modular Executive MBA (EMBA) – with a wider menu of smaller learning modules which can be packaged to company-specific requirements. Importantly, global and local regulations defining what constitutes an MBA are being clarified so as to strengthen standards while adapting to diverse demands. The EU, through the Bologna process, is requiring that masters programs in Europe include a minor thesis – Australian programs which are primarily by coursework, like Chifley’s, are providing the option for those students seeking European equivalence. The Australian Qualifications Framework Council, which sets the curriculum standards for all Australian education – school, vocational and university – will finalise a new overarching framework in 2010. The new framework is very likely to impact MBAs in two ways: yy Requiring that all awards at masters level take at least the equivalent of 18 months’ full-time study – abolishing the 12month fast-track masters yy Closing the regulatory gap between theory-based higher education and competency-based vocational education – making recognition of theory-rich workplace learning more accessible. But this change in management education is not just about MBAs. Vocational diplomas have been the predominant award in corporate executive education in Australia. As enterprises see the opportunity that convergence of vocational and theory-based learning provides, an increased demand for graduate certificates tailored to company needs is emerging in parallel. The path from a graduate certificate to an MBA is shorter than from a diploma, increasing its value as a retention tool. Specialist graduate certificates are proliferating too as professionals look to upgrade their skills in areas of more immediate demand in quicker time. And then there’s the development of much shorter learning experiences, enhanced by the new technologies of faster, richer communications. These are potentially revolutionary – but this story for another time… Contributed by Neil Edwards Neil is Chief Executive of Chifley Business School.
Phone 1300 CHIFLEY | 1300 244 353 Visit www.chifley.edu.au
Workforce Advisory & Management Page 09 Evolving Your Workforce
Labour Market Challenges in Australia post GFC
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s the Australian and global economies are now recovering we are observing that the share market and commodity prices have stabilised. With economic stabilisation economic forecasters, Federal government and many other interested analysts are expecting the labour market to recover from the impact sustained by the GFC. In this recovery however, it should be recognised that a number of factors will impact labour market growth and capacity as forecasters, business and government recognise that the Australian labour market has a limited labour market growth capacity (often referred to as Spare Capacity) for a number of compounding reasons: 1. The impact of the GFC did not create the levels of unemployment originally predicted. Many organisations recognised that the Australian labour market was already experiencing significant labour and talent shortages before the GFC and that this would only occur again post economic recovery. Many organisations therefore chose instead to encourage or make compulsory the use of annual leave, long service leave, leave without pay etc, and many organisations also reduced working hours (i.e. 5 days down to 3 or 4). Low inflation and dramatic slowdown of labour market movement (very few new jobs being advertised) all contributed to a labour market slowdown but not a dramatic rise in unemployment. For the most part, the greatest rise has been observed in labour market underemployment. 2. The Australian population has continued to experience a trending rise in median age with the country continuing to develop a rapidly ageing population. This has a significant impact risk on the labour market as was originally predicted by McKinsey and Co more than 10 years ago in the “War for Talent” study. This issue will present a major challenge from a wage inflation perspective due to basic 101 economic rule of ‘supply and demand’ as Australia returns to near full employment. 3. The changing demographic landscape within Australia and its labour market is also rapidly developing into a ‘hot’ political issue (2010 also being a national election year) on how the Federal government should best assist the economy to offset the
challenges brought about by these demographic and economic changes. One option is to increase Australia’s skilled migration intake, while other views hold that greater productivity can be realised through process and technology driven efficiency. This issue will continue to become a perilous issue for the government as the demographic shift is also likely to significantly affect tax revenues and government spending. With fewer people to replace those retiring there will be a significant reduction in income tax revenue (a major source of government funding) while the ageing population will most certainly place increasing expense and spending pressures on welfare (aged pensions etc) and health care costs. It remains uncertain which direction the government will take. 4. A further factor relates to the various national and global economic recovery and stimulus efforts that have resulted from the initial panic associated with the GFC. Economic forecasters and the Australian government Treasury are emphatic that these stimulus measures have successfully warded off the worst effects of the GFC (i.e. a 1930’s style economic depression) however the resulting impact of all this government spending is predicted to be a dramatic rise in inflationary pressure in the coming few years. Some economic forecasters predict that this inflation pressure could resemble inflation patterns more familiar with some African, Asian and South American economies rather than typical first world economic patterns. The primary issue with this challenge can be expected to be twofold; In a limited and reducing labour market inflation will be a further pressure on labour market demands for wage increases especially if the Australia Reserve Bank continues to drive monetary policy changes driving up interest rates. As interest rates rise and the cost of borrowing and servicing household debt (already very high in Australia by global standards) continues then further demands on wage increases can be expected. The resulting impact of inflation on share holder value will also likely create a challenging decision for many Company Boards on how best to protect shareholders by either trying to manage or limit wage costs or by passing forward those increasing costs to business customers in the form of higher prices. The combination of limited labour market spare capacity following the GFC, an ageing workforce and population, local and global inflationary pressures, all combine to create a compounding storm in the Australian labour market with significant and growing supply and demand challenges. This is predicted to place much greater pressure on effective labour force attraction and retention as well wage related pay demands and increases, which has been further evidenced by recent research sponsored by Chandler Macleod Group. www.chandlermacleod.com
Mike Evans
Partner and Manager of Consulting (Vic) Registered Psychologist (S) T: + 61 3 8629 1147 michael.evans@chandlermacleod.com
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issue 8.3
news
NEWS
Migration shakeup: MODL out, SOL in
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ebruary saw the federal government announce a revamp of the skills migration program which will see the Migration Occupations in Demand List (MODL) phased out and a shift from occupation-based employment to a focus on specialist skills. Under the plan, MODL will be replaced by mid-2010 with the new Skilled Occupations List (SOL), which will focus on high value professions and trades. The list will be reviewed on an annual basis, but Immigration Minister Senator Chris Evans said changes and updates will be minimal, thus removing the volatility of MODL, where occupations were added and removed regularly. The changes have been met with mixed reviews. Some industry sectors – such as education – will be hard hit as service providers currently providing courses catering to professions on the MODL will be made redundant. In addition, the tourism and hospitality sectors could face serious vocational labour shortages in 2010 as a result of the changes. Education and training provider Hostec International has called for clarity of the rule changes. According to Hostec, while abolishing MODL will make it harder for fraudulent educators to operate in Australia, the staggered SOL review will make it harder for international students to make informed decisions on vocational courses that the tourism and hospitality sectors rely on for skilled, workplace-ready graduates. “We have already seen undeniable indications of significant skills shortages across the tourism and hospitality sector. How long these shortages will last for will depend on how quickly the Australian government can clarify any changes to the SOL, and how effective they are in communicating the clear pathways to studying in Australia to international students and their agents,” said Hostec International managing director, Raman Nambiar.
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Working parents say new legislation is ‘not enough’
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n the wake of the new workplace Right to Request Flexibility legislation, recent study results have shown that work-life policies alone are not enough to improve working parents’ quality of life. Under the new legislation, employees have a right to request flexible working arrangements to assist them to care for their child. Yet research conducted by Parent Wellbeing and the University of Adelaide revealed that 55% of working parents surveyed were unaware of any work-life policies within their workplace. “The key finding is that work-life policies alone are not enough to achieve a positive and effective workplace,” said Jodie Benveniste, director of Parent Wellbeing. “The missing link
is organisational culture, including comprehensive wellbeing programs.” The results showed that the top five work-life policies that respondents desired were flexible hours, work from home, part-time work, wellbeing programs and hourly leave. “The work-life policy most desired by employees but least offered is wellbeing programs,” said Benveniste. “An effective wellbeing program helps organisations improve their flexible work initiatives and assists working parents to optimise their work and family lives.” The study also found that a positive work-life culture is strongly linked to employee job satisfaction, life satisfaction and, in turn, a more productive, profitable workplace.
Employees flying blind with social media
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ore than two-thirds of Australian employers don’t have a policy to guide their employees’ use of social media, according to a new Manpower white paper. The white paper is based on a survey of 34,000 employers in 35 countries, including over 2,000 Australian respondents, which gauged employer attitudes toward social media in the workplace. It found that most are yet to form an opinion: globally, 75% of employers have no formal social media policy, although Australia is slightly more advanced, at 67%. Of those organisations with formal social media policies in place, the majority said that the policy has been most effective in preventing productivity loss (63% globally, 76% in Australia) and protecting intellectual property/ proprietary information (33% globally,
37% in Australia). According to Lincoln Crawley, managing director, Manpower Australia and New Zealand, it’s time for business leaders and managers to consider how social media will affect their organisation. “Social media is here to stay, and the distinction between work use and personal use is increasingly blurry. Social media is redefining the way we work, so rather than trying to avoid it, businesses need to learn how to harness its power while managing its risks.” The white paper argues that the connective power of social media can enhance productivity, innovation, collaboration, reputation and employee engagement within organisations. “Most companies are only scratching the surface in understanding how these tools can be used in the workplace. So it’s important for us all to keep an open mind,” said Crawley.
issue 8.3
ask the experts
Need advice?
Ask the experts! We would all like to have experts on hand when we need information. This month, Ari Kopoulos from EmployeeConnect outlines some tips for utilising social media at work
Q
We are starting to see a larger number of Gen Zs and late Gen Ys entering our workplace bringing their own set of benefits and challenges. How can HR manage the impact that social networking has within this generation?
A
There won’t be that many of them, they’re incredibly smart, opinionated and have the patience of a loading webpage. We know them as teenagers, but very soon they will be our colleagues and will expect flexibility, lots of money and Facebook. What makes this pending generation so different is their affinity with technology and different communication styles. They learn quicker, are early adopters of new technology and, through technology, believe that everything is possible. Multi-tasking is like breathing. These kids have never known life without a computer, internet, mobile phone and social networking. And herein lies the issue: You need to develop strategies to engage, retain and motivate them, which means access to social networking. Social networking is not necessarily a bad thing. There are clear benefits of near perfect communication and access to global knowledge and creativity. As a business tool it allows professionals to stay current on events, trends and opportunities in ways traditional communication cannot. On a personal level, it can help build your brand, promoting you as an expert in your field and improving job prospects. In the same manner, it allows you to connect with future employees. However, if you give most young, and many older, people access to the internet, they will spend the next hour checking their personal e-mail, stalk Facebook profiles, and LinkedIn accounts. I’ve heard of stories where the company server crashes at a particular time each day,
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only to find out that it corresponds with a break and Facebook time. Not surprising, as Facebook is the second most visited site. Productivity and security concerns are the main reasons why many businesses take a prohibition type attitude and block these sites. But if you deny access, they will get around it using a proxy, mobile phone or simply leave for work for a company that has a much cooler attitude. So what can you do? Set the expectation on day one with a social networking policy that explicitly lays out what is and isn’t permissible, both on the company’s network and outside of it if they’re representing themselves as employees of the company. Begin by defining what is meant by social networking and, the company’s overall attitude towards it – ie, strictly personal or business. Your policy should also have a clear statement on representation. Comments and posts can impact on your brand, reputation and market share. Furthermore, comments on other companies or products can be seen as endorsement or defamatory that could create liability, and comments referencing clients should always be cleared with the client. Given the issues with productivity, your policy should include what is appropriate use with a clear statement that social networking activities should not interfere
with the employee’s responsibilities. Social networking sites have varying levels of security and as public sites, are vulnerable to security breaches. As such, your policy should make reference to your confidentiality and security policies with specific examples as they relate to social networking sites. Also make it clear that proprietary information is not to be discussed or referenced on such sites. Finally, by signing and agreeing to the terms of service they also agree to consequences for violation which could end up in termination. Social networking is here to stay and will only get more powerful. Although the next generation may prove to be a challenge in this regard, it is important to focus on the benefits they bring and recognise that as technology evolves, businesses also need to evolve, reflecting the needs of its employees and customers.
About the author Ari Kopoulos is national sales and marketing director for EmployeeConnect. For more information on EmployeeConnect, visit www. employeeconnect.com
issue 8.3
DRS - advertorial
Defence Reserves Support In his civilian employment, Major General Ian Flawith AO, CSC, is the Executive Director Reserve Support, Department of Defence. As part of his role he oversees Defence Reserves Support (DRS) which aims to maintain supportive working relationships between Defence Reservists and their civilian employers, and promotes the benefits of military service both for Reservists and their employers. Human Capital asks Major General Flawith about the benefits of Reserve service for local government employees and their workplaces. Q. Why are Defence Reservists such an important part of Australia’s military? A. Defence Reservists are a fundamental part of the Australian Defence Force (ADF) and play a key role in safeguarding Australia’s security. Reserves join the Navy, Army or Air Force as part-time members. They are volunteers who bring with them civilian skills and experience, including from their civilian employment, and who are given the opportunity to gain additional new skills and experience as part of their Reserve training and commitment. Q. What kind of on-the-job training does the ADF provide? A. Reservists gain capabilities and experience through formal Defence courses, on-going refresher training and day-to-day experience, and advance in the level of responsibility and leadership expected of their rank. In terms of on-the-job training, it is in the area of leadership that a Reservist will gain great benefit. Q. Is it possible to earn recognised qualifications while working for the military? A. In terms of formal courses, the three Services are Registered Training Organisations in their own right and comply with the Australian Quality Training Framework. Consequently, it is possible to earn recognised qualifications through completion of relevant training courses. Q. What types of skills do Reservists bring to civilian workplaces and how can these help improve a business’ bottom line?
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A. Reserve training includes the development of leadership, management and teamwork skills that are expected of supervisors, managers and executives. These skills can cost thousands of dollars to acquire yet Defence provides this training at no expense to the individual or their employer. Reservists also develop personal skills, including self-discipline, initiative, punctuality, respect, self-reliance and acceptance of responsibility. An often unrecognised benefit for both the Reservist and their employer is the mateship and professional contacts developed through Reserve service. Q. How do you help civilian employers of Reservists when their staff members are required for Defence service? A. DRS and the Services strongly encourage Reservists to discuss their Reserve service with their employer so that the employer can plan for the absence of their employee on Reserve service. For longer operational deployments the ADF will write to inform the employer and provide as much advance notice as possible. DRS maintain state offices that are available to assist and provide advice to Reservists and their employers. Q. Do employers have to release their staff for Defence service? A. The simple answer is yes. Under the provisions of the Defence Reserve Service (Protection) Act 2001, employers are required to release employees who are Defence Reservists to undertake Defence service. Further, it is an offence to discriminate against,
disadvantage or dismiss an employee or prospective employee for rendering Defence service. Within Defence, the Office of Reserve Service Protection (ORSP) exists to manage the provisions of the Act. ORSP investigates any complaints of perceived discrimination or disadvantage and, if necessary, provides a dispute resolution service including mediation. As a last resort, ORSP can initiate legal action. To help offset the cost to an employer of releasing their employee, for most categories of Defence service the Employer Support Payment (ESP) Scheme provides financial assistance to eligible employers, and there are certain qualifying criteria. Q. Do you arrange any activities to help employers understand what Reservists do in the Defence Force and the types of skills they gain and develop during Defence service? A. Yes, we conduct a program called ‘Employer Engagement’ that aims to enhance the availability of the Reserve by developing community and employer support. DRS conducts ‘Exercise Executive Stretch’, an activity that gives employers an insight into the type of training conducted in the ADF. This weekend activity is particularly popular with employers and management to assist in gaining a better understanding of the Reserves and the benefits that accrue for the employer. ‘Exercise Boss Lift’ takes employers to visit their employees deployed on major exercises or overseas operations to see first hand what the ADF does on both exercises and operations. Further information Reserve employees should obtain for their employers a copy of the DRS Employer Handbook which is available in Reserve units, depots or ships. Alternatively, visit www.defence.gov. au/reserves or phone 1800 803 485.
issue 8.3
Cover story
Far from being smooth sailing, business leaders will find that 2010 will present a mix of old and new challenges. Iain Hopkins investigates
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the
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mbiguity. Uncertainty. Mistrust. These are just three of the descriptive terms being used to sum up the major leadership challenges facing business leaders in 2010. Although one could argue that these challenges are not unique to 2010 – after all there is no on/off button in terms of the commercial and economic environment – the last 18 months have clearly taken their toll. Are leaders up to facing a new year? If so, what should they expect? Sue Forrester, chief executive of the CEO Institute, Queensland, cites author Stephen Covey, who likens business to a ‘permanent white water world’ where everyone paddles frantically with the belief that it will calm down soon and turn to plain sailing… but in fact it never does. “I think that metaphor is absolutely right. 2009 was a tough year. CEOs were challenged by internal and external forces – many had never seen the likes of a GFC before – but coming out of it this year there will arise just as many demanding
challenging issues. Leadership is not a nine-to-five job or a job you need to work particularly hard at during difficult economic times; it needs to be worked on all the time,” says Forrester.
New era, new challenges
Despite Australia’s relatively strong performance during the GFC, Rosemary Howard, executive director and co-joint professor, AGSM Executive Programs, says the world is still an uncertain place, so dealing with ambiguity and uncertainty will be top of the agenda for many executives. In addition, Australia will face particular challenges simply because it came through relatively unscathed. “A survey last September indicated that for 60% of Australian employers there
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issue 8.3
front had been very limited change or impact from the GFC. What that suggests is first off we’re the lucky country once again, but it also indicates we’ve had incremental changes to get through but we perhaps haven’t faced up to some of the longer term issues,” says Howard. There are some worrying clouds on the horizon. For example, in terms of productivity, Australia has slipped from the top half of the OECD to the bottom half. Australia also rates badly on collaboration and innovation – in fact we’re 27th out of 27 in the OECD. “If
we’re going to create the new industries, such as sustainable energy, and also create the new ways of working that will enable us to be successful moving forward, we’re going to have to get much more into that innovation space,” says Howard. “That has some systemic leadership issues around it – in other words, perhaps we’re still a bit old fashioned, a bit command and control, and not great at delegation.” www.hcamag.com
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Why are Australians so poor at innovation? Partly, Howard believes, because as Australia is a relatively small economy, it tends to inherit innovation from overseas. In addition, it can be tough to get new ideas funded with venture capital, and the many layers of government means great ideas can get lost in bureaucratic mazes. “We’re going to have to cut through that, which is easier said than done. There needs to be a shift in mindset. Take, for example, the online world. That’s both a strength and weakness for Australia. With broadband you can now export jobs very easily, so it’s easier to lose jobs overseas; but on the other hand it should also be easier to access global markets.” Also likely to keep CEOs awake at night is CSR and environmental sustainability. Although the politicians failed to reach a consensus at Copenhagen, Forrester says many CEOs are keen to continue the dialogue with government. “Our members are acutely aware that they cannot afford to have a ‘head in the sand’ approach to environmental sustainability. As business leaders, CEOs are seeking certainty – and this will come when the market is able to set a price for carbon. CEOs need certainty in being able to manage their operations and to set strategies to move forward after the GFC.” There are also workforce sustainability issues to contend with. In terms of demographics, while Australia currently has a ratio of 1:5 in terms of retirees/ employed workers, by 2050 this will slip down to 1:2.5.
“We must move our organisations towards sustainable performance in the long term. That doesn’t just mean the bottom line but also employee engagement and participation,” says Howard. The word sustainability, overused as it may be, is extremely important. Without sustainable work practices, it’s easy to slip into what the Americans call ‘toxic conditions’ at work. “There’s a correlation between organisations with that clock watching, lack of trust mentality and high levels of depression and suicide. Organisations have very serious responsibilities for the wellbeing of their employees. People come to work not just to earn a buck but to make a difference. How do we create an environment for that to occur?” Howard says. Howard adds that legislative changes around National Employment Standards and the right to request flexible work arrangements is a great way to encourage older workers to continue working – but it is not enough. “It’s about working with employees and customers to redefine our end-to-end process to make it work for everyone. Customers are voting with their feet in some areas, such as airline bookings. We’re quite happy to do it ourselves, so we’re actually outsourcing work to the customer and that gives them more control as well. We need to understand those shifts and how to utilise new technology to make that work,” she says. This ‘customer co-creation’ implies that organisations don’t create customer value, it’s the customers themselves: they tell the
“We must move our organisations towards sustainable performance in the long term. That doesn’t just mean the bottom line but also employee engagement and participation” – Rosemary Howard
Manager vs leader Successful organisations need both leaders and managers, but there are fundamental differences between those roles. While leaders influence, inspire, and drive people to a common goal, the role of a manager is to keep the day-to-day operations of an organisation running smoothly. Employee development must reflect these differences and provide development of both sets of skills. Taleo outlines the key differences: Managerial functions Plan and budget Coordinate, control and execute activities Organise and provide staff Work within existing structure
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Leadership skills Create vision and excitement Set a direction, motivate and inspire people to follow Align people Build new relationships and structure
Cover Story
organisation what they want and what they value. Similarly, many employees in large organisations – particularly women – have voted with their feet. “We need to lift participation rates for females, but that comes back to making the work-life balance better. Some sectors still have quite difficult working environments where people are counting their working time on different projects every 15 minutes. You can start to feel like a mouse in a cage after a while,” Howard says. Overshadowing everything is the issue of honesty and trust. Although much improved from the ‘cut to the bone’ recession of the early 1990s, many organisations failed to handle redundancies and cutbacks effectively. Employees have long memories, and in this age of social media, bad news travelled far and wide. “At the end of the day, consumers and customers can smell when they are not being told the truth, and employees in particular can smell when something is going on in their organisation. Unfortunately, there isn’t a high level of trust in the Australian workplace,” Howard says.
Rebuilding
Unfortunately, there is no ‘restore previous settings’ button for trust and engagement; once lost they are tough to regain. Alice Snell, vice president of research at Taleo, says that these issues shine the light once again on talent management practices. “When it comes to trust and engagement there is not one single activity or practice, but rather a multi-fold strategy that has the biggest impact,” she says. One of the drivers for employee engagement is communicating future opportunities. Taleo encourages organisations to ensure that not only do they look internally to promote and move employees around, but also that employees themselves can self-service and see those opportunities. “Talent management practices are not just a top-down set of processes, but it’s really about having the whole workforce involved in the kinds of things that will help them be more engaged and more productive as well,” says Snell.
Skills of the leader
Part of this will come down to the skill of the leaders. As Forrester points out, situational leadership requires a broad spectrum of skills to flex with the changing times. Top level communication skills, high IQ and EQ , acute self-awareness, and the ability to empathise with others are just some of those required. “As a leader you must have very high levels of self-awareness, IQ and EQ to know the environment you’re dealing with, and then adapt and provide suitable leadership for those situations. It’s a bit like change management – it depends on what situation you are facing, who your stakeholders are and what are the messages you need to be constantly delivering. It’s a big ask, and at the CEO Institute we say there’s no textbook for being a CEO or senior leader,” she says. Forrester cites one example of where many leaders go wrong: An engineer becomes CEO of a major mining company, yet that person continues to demonstrate the usual traits of an engineer: highly statistical, mathematical, and outcomeoriented. Of course, leadership skills can be developed, but smart CEOs will recognise their own weaknesses and attempt to plug the gaps by surrounding themselves with talented peers. “Leadership is always a team effort, especially in large organisations. As a CEO, don’t try to be everything. If that’s not your natural style, do your best to fill the gaps but make sure you surround yourself with others who can support you and complement your style. Make sure there’s a skills and behavioural matrix prepared at the executive level as well as at the management level,” she says.
issue 8.3
Since last year, do you have more or less trust in...
Senior management at non-U.S. companies
51%
Senior management at U.S. companies 76%
= MORE
= SAME
= LESS
Source: Harvard Business Review, June 2009
How prepared are you to fill leadership roles?
Preparation
Back to talent management
There is an old saying: when playing sport, don’t watch the scoreboard, watch the ball, and the scoreboard will take care of itself. In the game of business, many people during the GFC concentrated on the scoreboard and they now need to get back to watching the ball. That is, building the fundamental building blocks of any great business: its people. “We’ve seen that organisations that had significant layoffs
34.7% 32.6% 19.4% 9.7% 3.5%
neither prepared nor unprepared prepared unprepared extremely unprepared extremely prepared
Source: Institute for Corporate www.hcamag.com Productivity, i4cp
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had a knock-on effect of losing talent that they wanted to keep. That means we’ll start to see leadership gaps,” says Snell. The identification of leadership gaps is both an assessment of the individuals and the readiness of the organisation. To help fully determine leadership gaps, companies should: 1. Determine current and future leadership requirements. 2. Compare those requirements to the current leadership team.
3. Identify current leaders who may be at risk. 4. Identify succession plans for those at risk or planning to leave. 5. Look at the leadership development pipeline. 6. Identify gaps in skills and time required to fill those gaps. Taleo research in the UK indicates that employees have more respect for ‘homegrown’ leaders – ie, those who
The four ‘H’s of leadership In search of direction in 2010, CEO of specialist recruitment and HR services company Randstad (Asia Pacific), Deb Loveridge, looks to Dutch leadership expert Manfred Kets de Vries’ four ‘H’s of leadership. Hope Research by Harvard Business School shows that people want to see progress rather than receive recognition; they want to see they’re making a difference and get a sense that things are getting better. The good news is leaders don’t have to go too far to find hope in 2010. There is no doubt that the economy and general employment conditions are getting better so there is still plenty of reason for optimism and hope. Humanity This is best reflected in a company’s CSR. It’s about connecting with the community – whether through charity, demonstrating conscionable corporate governance, or using influence in a positive way. The corporate world is very powerful and its leaders need to recognise they can create positive outcomes for their employees outside of work, after all companies are comprised of people and we all have a desire to better the lives of those around us.
Humility Humility means not being a celebrity leader and remembering what it’s like to walk alongside your staff. If you sit in boardrooms all day, you’ll lose touch with your employees – the key is to never stray too far away from the shop floor. Some of the best-performing and more enduring companies have self-effacing leaders who are able to look in the mirror when things go wrong. They can take a good look at themselves, their decisions and their methods, analyse the situation, and look at how they can make a difference. Humour Never lose the ability to have a good laugh at yourself. Leaders who relax and enjoy being at work put their staff at ease. Given we spend so much time at work, we should enjoy what we’re doing. Laughter is particularly important for leaders because its effects cascade through the organisation. It’s well documented that a happy employee is a productive employee.
Deb Loveridge
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have moved up through the ranks of an organisation. Despite the huge number of candidates on the external market, Snell urges leaders to first look inwards for leadership potential. “Be clear on who your top performers are in the organisation and ensure they have a pathway to stay in the company. This is where leadership development comes in, coupled with good succession planning processes,” she says. Internal succession planning has taken significant blows in the past 18 months. Not only have L&D budgets been slashed – making it tough for employees to feel prepared to step up to management roles – but the GFC resulted in significant restructuring, downsizing and rightsizing. Formalised succession plans may have gone out the window, and even the desired leadership competencies may have changed. “Succession plans have been impacted dramatically and negatively on two fronts,” says Forrester. “Firstly, many CEOs had their eyes on the day-to-day operations and failed to consider succession planning for critical management roles. Secondly, it’s the Board’s role to ensure there’s effective succession planning for the CEO’s role. In the past 18 months, there have been countless CEOs leaving jobs quickly and there has been no one in the organisation ready to step up immediately. From the Board’s perspective that must be on every monthly agenda, even if it’s a conversation asking: What’s the quality of our succession pool? What development activities are being carried out this quarter? Are there any development issues or gaps? What would we do if…” Forrester adds that expensive formalised systems are not required: a robust conversation between the Board and the CEO or the CEO and the HRD is sufficient. “If there are gaps, what are you doing to bring people up to speed? The worst case scenario is when a CEO leaves unexpectedly, someone is elevated to the role quickly, and only then realising that they are a great technician but they’ve got huge gaps in people skills or communication skills,” she says. The 2009 CEO survey by Booz Allen indicates that Boards now appear to be
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‘road-testing’ potential leaders as chief operating officers or chief financial officers before giving them the wheel. Fifteen per cent of new insider CEOs were auditioned, meaning they joined the company they now lead within the past three years. When leadership positions cannot be filled from within the company and the company employs a strategy of creating a pipeline of future leaders, then recruitment should use the same measurements to test the existing competencies or future potential of candidates used to assess internal candidates. However, while the focus is quite rightly on CEO succession, Snell argues that organisations need to think laterally. Firstly, succession plans need to go much deeper into organisations, so not just c-level but critical positions. Additionally, these plans need to be combined with the career aspirations of current employees. One of the keys is visibility. “In your company, if you can see where you would like to go, you should be empowered enough to take the steps to get there. It no longer has to be a one-sided relationship with managers dictating where people can move,” she says.
Using technology
Employee self service sounds great, but the traditional Excel spreadsheets used in the past to keep abreast of qualifications, experience levels and aspirations of employees will not cut it. “The challenge is there’s so much information,” says Snell.
Instead, Snell talks about the fundamental core of a HR technology system being the talent profile, which starts with all the knowledge a candidate presents at recruitment stage. “As a candidate you provide a lot of information. The company will know about your experiences, skills, if you have certain certifications, your education. It’s all captured upfront, and then it gets lost. Most companies know more about their candidates than their existing employees,” says Snell. Far more useful is capturing that information and then adding to it during a person’s career with the company. Performance review information can be added. Then, as the person stays with the company and moves into different roles, information can be added to the profile. “Two or three years down the line when you find you need a project manager who is bilingual, instead of going out and sourcing a new hire, we can see whether there is someone in our workforce who would fit that. Perhaps in their current job those bilingual skills weren’t needed so it would have been lost. That’s an example of how that core information can be tapped and mined for so many different scenarios. “You can compare employees on succession plans, and the employee themselves can add their career aspirations, they can look for other opportunities, they can find a mentor to help them grow and move through the organisation. The technology makes this scaleable,” says Snell.
issue 8.3
“Leadership is not a nine-to-five job or a job you need to work particularly hard at during difficult economic times; it needs to be worked on all the time” – Sue Forrester
Leadership development checklist Steps 1 2 3 4 5 6 7
Actions to take Determine the best leadership style for your organisation Identify current and potential leaders within the company Identify leadership gaps Develop succession plans for critical roles Develop career planning goals for potential leaders Develop skills road map for future leaders Develop retention programs for current and future leaders
Source: Taleo Research
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Steps towards leadership development
Once recruitment processes have been honed to filter the right people into the organisation, gaps identified, and the skills and experience of existing employees have been assessed, formalised development plans can be put in place. Leadership development, like any L&D initiative, needs to have clear objectives in mind. At AGSM, Howard notes the motto is: start with the outcome in mind. This means that – logically – if an organisation looking to invest in people, it needs to be clear on what business outcomes are to be achieved. “What gap is there? You may need to lift the sales level or lift the speed of producing a new product – you must be very specific about what the tangible, measurable business outcome that you want to achieve. Then you ask what leadership or other capability development do I need in
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order to better enable that,” Howard says. Snell adds that there has been a resurgence of the apprentice model in grooming leadership. Coaching and mentoring has been gaining favour as an element of succession planning programs. A 2008 AMA study, Coaching: A Global Study of Successful Practices, surveyed more than 1,000 business leaders around the world and found that nearly 60% of North American companies use coaching for high potentials frequently or a great deal, and 42% use coaching of executives to the same extent. These percentages were higher in the international sample. The use of social media in mentoring programs is starting to be a popular way to support external mentoring programs. CEOs should not consider themselves above further development. “Great leaders know that to stay at the top of their game they need to be continually
learning – and at that stage in their career it’s most probably going to be experiential not academic,” says Forrester. “A regular forum, a safe confidential haven, at which peers provide feedback, advice, support and challenge your opinions and thoughts is gold for CEOs – which is why the CEO Institute experience is so valuable for our members,” she says.
Eye on the future
Management consultant Peter Drucker once said that leaders are not born, they are grown. Looking at the challenges facing leaders today, it’s clear that the development and retention of leaders as a talent management strategy will provide positive results to the organisation, not only in 2010 but beyond. “One of the things we learnt from 2009 was that 2010 did come, and 2011 will come,” says Snell. “The question is, which organisations will embrace the future?” HC
expert insight
issue 8.3
HR and risk mitigation What is the connection between culture, performance and risk? Human Capital talks to Rob Hughes, Director of Business Transformation at Grant Thornton Australia, about the key role HR plays in risk mitigation Human Capital: What do you believe are the key challenges and risks for organisations in 2010 and beyond? Rob Hughes: As organisations are recovering from the GFC, they are faced with a myriad of workforce issues such as skill shortage, generational differences, ageing population and Fair Work legislation to list a few. The key challenge is to build the right HR service model to deal with today, tomorrow, next year and beyond. HC: How can HR directors and managers help businesses mitigate risk? RH: HRDs recognise that they are managing workforce risk. Prior to the dip and even more now, HRDs have a great opportunity to play a vital role in the performance of organisations. Not so much in terms of talent development; it’s more about knowledge than talent, making sure they’ve got people with the appropriate skills and capacity. HRDs are becoming increasingly involved in workforce planning strategies and mitigating workforce risk. Their responsibility is becoming far more focused on ensuring the business has a workforce that can deliver from both a cultural and capacity perspective. If they can get a greater linkage with the organisation’s business objectives they will absolutely get a seat at the boardroom. HC: What is the connection between culture, performance and risk mitigation within the workforce? RH: In recent years we have had an increase in controls and regulations around financial governance, for example,
Sarbanes Oxley. Yet corporate failures have significantly increased. Risk extends beyond controls and processes. Whilst there is scope for further regulation, the reality is you’re dealing with people, because people make the culture. So you must have a culture that knows how to deliver and is aligned with the strategic intent of the organisation. We think it’s a great lead indicator to future performance. The pursuit of a ‘high performance’ organisation is nothing new, look at Six Sigma, but the emphasis has been on ‘exceptional performance’. Our focus on risk is to assess whether ‘Good’ organisations have the corporate culture to ‘live’ their strategy and have the culture to deliver an outcome beneficial to the business stakeholders. The HRD has the responsibility for managing this cultural risk. They can play a key role in shaping, and more importantly, alerting an organisation to a shift in culture.
HC: Is it possible to turn around the culture within an organisation? RH: Absolutely, you can transform a culture because it is a moving thing. While it can go bad, it can also go from bad to good. It’s not easy to transform, but it can be done, and it’s amazing what can be done in a short period of time. HC: How does Grant Thornton Australia partner with clients in this space, and how do you fit into the HR arena? RH: Our strength is Workforce Management & Planning. With HR, we transform the traditional HR function into a service model that links directly to business objectives and strategy. We focus on the day-to-day information pertaining to the workforce, making it more hard edge. Not only do we aim to get the rostering, scheduling, payment and workforce planning right, we also assess if there is a risk that the culture within the organisation is not aligned with the business objectives. Collectively, this has a direct impact on profit.
About Grant Thornton Australia Grant Thornton Australia Limited is a member firm of Grant Thornton International, one of the largest global advisory firms. Grant Thornton Australia provides a range of traditional advisory services such as audit & assurance, tax, recovery & reorganisation, and corporate finance services to large corporate organisations and privately held businesses. In Australia, Grant Thornton has expanded its service offering in recognition of the continually growing and complex workforce issues businesses are experiencing. These services include; workforce management, outsourced payroll, interim workforce, business risk, and consulting services. For further information on our Workforce Service offerings contact Paul Butler, Workforce Services, Service Leader on (03) 8663 6714, alternatively e-mail pbutler@grantthorntonvic.com.au. Grant Thornton Australia is sponsor of the HR Directors Forum at HR Summit Sydney, 28–29 April. For more information visit www.hrsummit.com.au www.hcamag.com
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guest contributor
The corporate landscape has changed dramatically over the past 18 months. Peter Sheahan provides four questions leadership teams should be asking in 2010
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fter the tumultuous rollercoaster ride that was 2009, the New Year has seen business confidence soaring. Sought-after talent that was previously happy to stay put is on the move and available again. This puts HR capturing the best human capital at the forefront of business strategy in 2010. So what are the four questions leadership teams should be asking to prepare their business for success?
1
Where will we find new value from current or existing business models in the next five years?
Prior to the GFC the focus was on new value through innovation. During the crisis it was about extracting more value (generally through cost cutting) from existing business models. And in 2010 and beyond I think it will be about both. Businesses and organisations should be constantly on the lookout for ways to create
new value. Consider Inditex, the Spanish fashion giant behind the Zara brand. Here is a company that completely reinvented fashion through supply chain efficiencies. Practising what it calls a ‘fast fashion’ system, Zara can design and distribute a fashion forward garment in 15 days. Equally significant is the number of styles and variations Zara retails every year. Three teams of designers for women’s, men’s and children’s lines generate more than 10,000 designs, in five to seven sizes, and five to six colours per garment. This means Zara’s supply chain management must smoothly handle around 300,000 new stock-keeping units (SKUs) each year. The final flip is that Zara produces each garment in very limited quantities. Most clothing companies try to milk the most popular styles and sell them in high volume, which inevitably creates lags in inventory supply and turnover, and at the end of most selling seasons triggers unprofitable discounting to move inventory that no longer excites customers. Now that’s finding new value from an existing business model! The real question is, who was the brains behind it? In other words, what sort of talent is capable of designing a supply chain with such precision and speed?
Sheahan on leadership 24
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guest contributor
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“People are not really your greatest asset. The right kind of people, who are highly engaged, are” – Peter Sheahan
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What kind of talent will 2 we need to exploit these new opportunities?
GE CEO Jeffrey Immelt worries that the company isn’t attracting enough young hunter-gatherers, because gas turbines are not as cool as iPods and search engines. “If we can attract the best 22-yearolds,” he has said, “then we can double, even triple in size. If not, then we are already too big.” GE’s ability to find and exploit new value depends on its ability to attract the right kind of talent. Now don’t get me wrong, that talent doesn’t need to be ‘young’, but there is no question that human capital is the source of more growth, greater innovation, more efficient processes and better business. To be frank, despite all the talk in the HR profession about talent, every week I meet leadership teams frustrated by their company’s inability to attract the people they need. We say we want to be partners to the ‘business’, yet operational managers still feel constrained by our processes and policies. We say we care about talent, and yet we are relying on recruitment companies with higher churn than a fast-food restaurant to establish the relationships and networks with the talent we so desperately seek. It is time for HR to stand up and not only help their business identify the kind of talent it needs, but to build the culture and brand which will attract and engage that talent.
What sort of culture 3 and reputation will attract and engage this kind of talent?
We make our decisions based on internal narratives we have about why certain products or employers will build our sense of self, only we use tangible things like benefits and salary to justify our emotional decisions. Our emotions are driven by stories. Your ability to attract and engage talent depends directly on the clarity of your story. This is where employer branding comes in. Again, HR is at the centre of the strategic agenda of the business. At the risk
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Peter Sheahan
of inciting another fad, let me just say this: our approach to employment branding in general has been to treat it as a recruitment advertising activity. This is selling short the art, and science, of branding itself. More importantly it is missing the most fundamental part of building a powerful brand. Starting with an understanding of the business model and how it is changing, we can make decisions about the talent and thinking we need, and then, and only then, can we go about constructing our aspirational employment brand, anchored in reality. People are not really your greatest asset. The right kind of people, who are highly engaged, are. Mind-blowing future success will require a new kind of thinker, or at the very least a new kind of thinking from the people we have. If you are to attract and engage this kind of innovative talent you will need to build a powerful employer brand, and then have your leaders deliver on the promise it implies. And there is the catch. Delivering on the promise will almost always require a new approach to leadership.
What do we need to 4 believe as leaders to create this culture?
There is no more important lever to pull for change than the assumptions of the leadership team. If you change assumption
you change practices and you change behaviour. When you have answered the first three questions you generally find that your business’ existing approach to talent, and even to customers, will need to change significantly if you are going to remain competitive. For so long we have built our businesses on controlling intellectual property and know-how and on controlling access and distribution. Not only that, but this notion of control has permeated the very way we work. This made sense in an industrial world, but we live in a world now where much economic value comes from ideas. And those ideas so very often come from collaboration between people. Most command and control approaches to workplace culture I have seen don’t inspire a whole lot of collaboration. In order to get control in the future we are going to have to give some of it up. This scares the life out of most executives. Look at the way so many businesses are responding to web 2.0 and social networking technologies. The point is not to have a debate here about control but rather to make it clear that HR in 2010 and beyond will need to be the ones coaching their seasoned executives through a process of transformation as the floor which has for so long been the foundation of their success gets pulled from under them. As more global competitors reinvent fast, good and cheap means in their industry, they will need HR’s help as they let go of what has made them successful to date and grab onto a new way of working, a new business model and a new approach to leading their people. It is to HR that we will need to turn. Are you ready for the job? HC
About the author Peter Sheahan is a leading keynote speaker and Australian entrepreneur. His new book is titled Making it Happen. For information visit www. petersheahan.com
guest contributor
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Executive education
MBAs on the world stage Whether for practical education, overseas experience, contacts or status, many business leaders are leaning towards MBAs with an international slant
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Executive education
I
t’s acknowledged that Australia has world class business schools, as evidenced by strong showings annually in the Economist Intelligent Unit’s rankings. For the 2010 list, it was Melbourne Business School that ranked the number one full-time MBA program in Asia-Pacific (17th on the world stage), beating out prestigious schools such as INSEAD (23rd) and Hong Kong University Science and Technology (30th). Monash University, MGSM and AGSM are also strong local contenders. “If you aim to be world class in terms of business offerings, we must have world class business schools. We still have some of that cultural cringe – people feel they must go to an overseas business school, and that’s not the case,” says Rosemary Howard, executive director and co-joint Professor, AGSM Executive Programs.
Global business
Regardless, many mid and senior level managers are now involved in international business and that brings with it new challenges, particularly with China and India as the two developing markets. Strategic partnerships and allegiances with overseas faculties is a growth area for all executive programs. AGSM, for example, has partnered with Cambridge to produce a new program for finance sector employees which looks at how to manage
risk and growth simultaneously. “That’s a case of us bringing a world class faculty to Australia, and this is happening more and more in Australian business schools,” Howard adds. Many MBA programs have also taken on international perspectives – a typical example being the University of Sydney, which went back to basics before launching its Global Executive MBA in 2009. It took three years of research and testing to produce the course, the germ of which started with feedback from
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we quickly established that when it comes to leadership development, the problems that leaders face are more holistic. They are business problems, not just marketing or finance problems.”
Holistic leadership
This holistic view of leadership presented the course organisers with a special problem. If discipline or function were no longer the organising principles of the course, what would be? The team developed an ‘opportunity lifecycle’ approach, which
“We still have some of that cultural cringe – people feel they must go to an overseas business school, and that’s not the case” – Rosemary Howard business executives, students and academics about what a ‘new era’ MBA should look like. “Some of the feedback we received indicated that although there are many MBAs, they tend to look the same,” says Professor Chris Styles, associate dean, executive education, faculty of economics and business, University of Sydney. “In addition, people said that traditional fulltime, two-year MBAs have been heavy on the analytical side and also the functional or disciplinary side, so you learn about marketing or finance or HR. However,
combines a ‘learn from doing’ approach with live projects built with and for the business world. The course structure is simple. In the early stages, participants complete preliminary online modules and commence work on their in-company project. The majority of the program then takes place in five 14-day residential blocks of faceto-face classes held approximately every four months over a period of 18 months. Participants undertake self-directed preparation prior to each module. The www.hcamag.com
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Executive education
need of renewal. “A lot of this is about change management. These people have been doing what they do for hundreds of years and it’s highly regulated. It’s not about coming up with a clever strategy and presenting it in Powerpoint charts, but rather understanding the context and environment and taking people through a change management process. We’re bringing that context into the learning experience rather than separating it. There has been criticism of some MBAs that have separated the technical learning part from the context in which they are applied,” Styles explains.
Overseas study
first two modules – the Foundations of Management, and Leadership – are conducted in Sydney. The other three modules are completed in various locations around the world. These last three modules present global business challenges from the real world. The first of these modules (Creating and Developing New Opportunities) is based in Bangalore. The second (Managing Growth) is conducted in Silicon Valley. The final module (Turning Around Mature Businesses) is conducted in Europe. There are other global executive MBAs that take students to other parts of the world, but Styles notes the key difference with the University of Sydney’s offering is the degree to which context is brought into learning. “For some of those other courses you might go to Shanghai and stay at the Hilton, you have a seminar room where you might do your finance class, then you get on a bus and see some factories and hear talks on doing business in China. “A step further is actually doing business in the location rather than learning about doing business,” Styles says. “In the three international modules we get students working on real life
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“It means that business leaders who succeed must possess an expanded view of economies and cultures” – Professor Chris Erickson consulting projects in that location.” Thus, the university has found organisations in Bangalore where the theme of business opportunity can be explored, and a group of three or four students conducts prep work before heading over to the location for two intensive weeks. Half that time on location involves work on the consulting project, and the other half is seminars and learning. Students then go back and present a seminar for the host organisation. In Europe, the university has worked with a number of companies in the wine industry, specifically in the Languedoc area of France, which is the biggest wine growing region in the world. Many businesses in the area are also in desperate
In terms of Australian students studying overseas, the US remains the most popular destination. The Economist ranking surveys students and assesses criteria such as salary increases post-study, career opportunities, personal development/ educational experience, and potential to network. Given these criteria, it’s not surprising that the two-year MBA programs, which continue to dominate in the US, traditionally fair better in these annual rankings. They ultimately offer more time for personal development and networking and, following the internship after the first year of the program, they also facilitate entry into a new industry or function and thus a career change. Ranking leader Iese is one of the few European schools with a two-year program. As Australia slowly emerges from the global financial crisis, the US is yet to show strong signs of recovery. However, one point that stands out is the global nature of business today. “It means that business leaders who succeed must possess an expanded view of economies and cultures,” says Professor Chris Erickson, faculty director at UCLA Anderson School of Management. To prepare tomorrow’s leaders with the skills and confidence to run multinational companies, UCLA Anderson and the National University of Singapore partnered to create a dual degree executive MBA program in 2004.
MGSM – advertorial
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Perfect prescription: MGSM MBA MGSM graduate Adam Wardell recalled the moment when he first began the process of deciding which business school to attend in 2006. “I still remember a mentor of mine saying ‘Your MBA will define your career’, so I took great care in researching the different aspects of schools with a strong reputation within Australia in the quest to ensure the best investment in my future and the best environment to learn,” he comments. Wardell believes that extra bit of research led to his subsequent decision to enrol at MGSM. The decision paid off, he says. He was employed as the National Hospital Business Consultant for Novartis Pharmaceuticals, Australia six months prior to graduation. Today, Wardell’s job takes him around the country and he has developed a network of close business relationships and connections with a large crosssection of the nation’s health care industry leaders. When he made the decision to enrol in MGSM’s Executive MBA program, Wardell, like many of his fellow students, already had a career. He was the Director of Pharmacy at Sydney’s St Vincent’s Private Hospital. While working in that management role he began looking to build even stronger foundations which would take him to the next phase of his career. An MBA seemed the next logical step, he says. It was the CEO of St Vincent’s, an MGSM alumnus, who gave Wardell guidance, encouragement and advice on his future career path. “He encouraged me to look at more generalist
management. I wanted to stay in health care and had a lot of interest in that area, so moving into industry was the next logical step. It allowed me to continue to use the skill set I already had – I could bring awareness of how the market works. Now I get to apply that knowledge to the market,” he says. As for the future, Wardell says he hopes to one day be running a local organisation. “Whether it’s for a multinational is yet to be seen but it would be something that’s quite niched. But for now, I’m enjoying what I’m doing with my current
company. I like what health care stands for and being part of a company that is enabling new therapeutic treatments to be found,” he says. If there is one skill that Wardell said the MGSM’s MBA program has given him, it’s the ability and confidence to be comfortable in talking to all kinds of people. “MGSM was a fantastic decision. It provided a wide range of experience in the student body, a thought-provoking academic staff and collaborative learning that spanned many industries,” he says. www.hcamag.com
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Executive education
Erickson has met with many international business professionals to promote the benefits of the program and acknowledges that making the right study decisions can be difficult. “In exploring different global programs, I would strongly encourage people who might be interested in pursuing an MBA to closely evaluate all elements, from the diversity of class participants, to the faculty teaching in the program and the courses and learning experiences that are offered to ensure that the program meets their personal and professional goals,” he says. The UCLA-NUS executive degree curriculum is targeted at senior working professionals focusing on Asian and North American issues and provides the breadth and depth of knowledge to lead organisations. This focus has attracted likeminded people and the knowledge they bring to the classroom is also a core part of the value proposition of the program. The international network that is created is immense. If you are more interested in how your counterpart in Brisbane dealt with a management problem than a peer in Delhi then this network may not be right for you. Participants are awarded two globally recognised MBA degrees – one from UCLA and one from NUS, which are the same MBA degrees as each university’s other MBA programs. Our graduates have found the status of two MBAs most beneficial when negotiating new roles and extending their careers.
“We’re looking for people who are well qualified managers who have the potential to be high level strategic leaders” – Professor Chris Styles
“We do acknowledge there is a slight premium in the cost of tuition to a single MBA degree in Australia but our participants and alumni think the return on investment and the experience and network gained makes the premium a wise investment,” Erickson adds. Not surprisingly, Global MBAs are priced at the upper end of the MBA spectrum. For University of Sydney’s Global Executive MBA there are two components: fees of $84,000; and the residential costs (accommodation, food) of $21,000. As comparisons, Melbourne Business School offers a similar course for
Making a choice Dr Grant Jones, senior lecturer in management at MGSM outlines the key factors to consider when choosing a faculty: The school’s profile and standing with employers The quality of the classroom experience as attested to by alumni The league tables by organisations such as the Financial Times and Economist intelligence unit, which are informed in part by surveys of the alumni The quality of the school’s links with industry Whether the school has its own institutionalised support structure or is simply a brand name of the university Finally, try one subject before you commit to a whole program
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$100,000, while overseas options range from $150,000 to $160,000. Although Styles expects people from all professional backgrounds to express an interest in the course, he admits it’s not for everyone. “There are terrific MBAs out there and they are for a specific person. We’re looking for people who are well qualified managers who have the potential to be high level strategic leaders,” he says. Alongside a minimum of 10 years’ work experience, the course is targeting students with “a threshold level of SKA – skills, knowledge and attributes”. Styles acknowledges the program is excellent for people who have been a functional specialist – a marketing director or HR director – who now want to step up to more general management. “We do cover off the core knowledge of each discipline but that’s not the big emphasis,” he says. Just like other MBA courses, students will either nominate themselves or HR directors and senior line managers will build this course into their overall leadership development program and identify people who may be suitable. Styles acknowledges that Sydney University’s Global Executive MBA – and other similar courses – provide a much needed shake-up to executive education offerings. “When people hear about another MBA there’s often a roll of the eyes. In some quarters it’s become very tired. But in all fairness, not all programs are the same – there are great programs around the world and in this country – but there’s this negative halo effect because there are so many of them now and they’ve became so broad. “I think everyone is aware it needs to move onto the next phase.” HC
A.S.K Learning – advertorial
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Driving business performance through your learning strategy In today’s business environment, information is growing exponentially, the pace of change is accelerating and technology continues to change and converge. Organisations that are successful in today’s environment are constantly learning and adapting. They are engaging their employees in the process, connecting business strategy to learning strategy, and creating longterm business value through their most valued asset – their people. Connecting business and learning strategies You might be asking how do you do this, and you would not be alone in doing so. Many of us work through our daily tasks of producing learning content, delivering learning programs or working with the business. It takes time to think through a learning strategy – it is hard work! It is not just about which instructor led training program you will deliver. It’s about understanding what you need to achieve, why you need to achieve it, who your audience is, what information you need to communicate, how you will communicate the message and when. The ‘how’ could include multiple modalities which require further thinking as to what is the best fit for your audience and your message! Learners and learning has changed! The new learning environment is also another challenge, where many of us are being asked to use Web 2.0 (3.0!) technologies in our ‘how’. Learners learn from one another, at any time of the day and from any location. A little bit of help would be great, wouldn’t it? At A.S.K Learning, we have a highly
qualified Performance Consulting team who have strong working backgrounds in Learning and Development across a range of industries. We work collaboratively with you as part of your extended team to help you and your business achieve its goals. Performance Consulting Our Performance Consulting team has been consulting to the world’s top multinational organisations for the past eight years from Singapore. Collaborating with companies such as Nokia, Cisco, Dell, HP, Symantec, Standard Chartered Bank, Credit Suisse and DHL has allowed our consultants to be at the front of the learning curve, understanding new trends and being able to share and apply best practices with clients. We are now bringing this service to Australia, so that you can leverage this global experience to help you exceed your goals. Our consultants specialise in: »» Learning strategies – designing, developing and launching learning strategies to drive or transform employee performance. »» Communication strategies – supporting learning and change management strategies, our consultants propose
innovative ways to communications, which always focus on the WIIFM (What’s in it for me?) and the profile of the audience. Gen Y is impacting on how we communicate with the business overall! »» Talent strategies – developing talent through learning pathways, impacting on retention, employee motivation and the attraction of talent. Driving real business results An example of what our consultants have achieved can be seen with Standard Chartered Bank globally. The readiness of frontline branch employees was raised from 10% to 96% ready on day 1, through a simulated, experiential induction program, aligned to the business goals. The different stakeholders were consulted when developing the framework, ensuring that the business was involved in the process. Microsoft SharePoint was leveraged as part of the solution in creating a community for the facilitators and program administrators. The solid framework that was developed is now being deployed across different job functions. At A.S.K Learning, we are passionate about learning and the opportunities to innovate in challenging times. We are interested in hearing your story – contact us for a further discussion today around your story and how we can help you drive real business results. A.S.K Learning provides instructor-led training, eLearning, learning & performance systems and consulting services. Offices in Sydney, Melbourne, Singapore, Beijing. Ph: (02) 9492 0000 or visit www.asklearning.com
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Executive coaching
make break? A
2009 white paper by talent and career advisors Right Management presented a mixed review of corporate coaching by claiming that while it generally receives positive feedback from individuals, there is no proven methodology for measuring its ROI or impact on business. According to the authors of the report, these factors are preventing it from moving beyond a ‘cottage industry’. “Moves are underway to establish a true profession of coaching, endorse a set of academic fundamentals and establish accreditation guidelines – but the industry is not there yet,” says Right Management’s regional general manager, Bridget Beattie. Indeed, one 10 year veteran of the industry, Rob Balmer, managing director of Executive Central, feels the industry is filled with people of very different backgrounds using different methodologies who call themselves the same thing: an executive coach. “Criticism about there being no proven or tested methodology for measuring ROI or even a tested methodology for doing the coaching could absolutely be levelled at some of the activities that are going on out there labelled as executive coaching. It’s frustrating that many people out there call themselves executive coaches and it’s easy to get tarred with the same brush,” he says.
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Although coaching in one form or another has been around for over 50 years, recent criticism that it remains an unregulated ‘cottage industry’ has caused ripples of dissent. Human Capital investigates Definition clarity
Part of the problem lies with a muddied definition of executive coaching. The term often gets bundled in with life coaching and other ‘self help’ methodologies, while the ‘experts’ can be anyone from sports and entertainment stars through to organisational psychologists and former executives. “I’m not saying these things don’t provide some benefits but there are some differences in what they are. Often these people are using very different methodologies and masquerading under this one title. I always try to look at things from a customer perspective. It’s incredibly
difficult for an organisation that might be looking to get executive coaching for the first time to understand what they should be looking for,” Balmer adds. Michelle McCartan of Vibrant Futures is herself a former HR manager, and can relate to the complexity of navigating the multidisciplinary coaching industry. However, as with the purchase of any product, she says it’s crucial to do relevant research to understand if the product will meet your specific requirements. “Once you are really clear on the need that you are trying to fill, don’t rely on the label or name but dig deeper … doing your homework is critical,” she says.
Executive coaching
McCartan adds that the issue is not black and white. In these days of skewed work-life balance it’s almost impossible to segregate work and personal lives into discrete pockets. “It’s very typical and beneficial for an executive coach to work with their clients on personal blockers to professional success, which can free up their energy and mind to deal with the task at hand and generate positive results,” she says. Life coaching is often looked down upon by the corporate world as being ‘new age’ or superfluous. Although the technical skills of a qualified life coach and executive coach may be similar, McCartan says it is the context in which they coach and
the academic and industrial background from which they come which may differ. “Typically it will be easier for someone who understands the world in which they are coaching to get up to speed quicker and navigate around it with greater ease and relevance and be able to add greater value to their client,” she notes.
What’s it worth?
There remain some fundamental stumbling blocks to successful implementation of executive coaching. Right Management found there was limited tracking of effectiveness either before or after coaching. Of those who do track it, the focus is on
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measuring leader satisfaction and the impact on behaviour; very few measure business outcomes. Balmer has also witnessed this. “It kind of drifts off into an individual discussion between the coach and the individual, and that may well be helping the individual but the problem is there’s an organisation paying the bill and also looking for outcomes that are supporting its needs. That often gets overlooked,” he says. Indeed, anecdotal evidence is overwhelmingly positive. “Our own experience in collecting leader feedback, client reviews and evaluations shows that all the stakeholders involved – the www.hcamag.com
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Executive coaching
individual, their manager and the organisation – believe the value of the coaching program is much greater than the investment,” says Beattie. “Of course the impact on an individual is important, but to really stack up, coaching needs to translate into business outcomes such as increasing market share, revenues and profits. We need to anchor coaching firmly in this context.” So what are the outcomes that can effectively measure ROI of coaching? Coaching evaluations are predominantly in the form of client and manager testimony, performance against objectives and preand post-360 degree feedback surveys. Apart from the ‘soft skills’, which of course benefit from coaching, Balmer feels that any executive being coached, especially those with P&L responsibilities (or at least influence over P&L), should witness direct financial impact from their executive coaching. “It has to be executive coaching that is focused on pragmatic businessoriented issues, not just behaviouraloriented issues,” he stresses. “In those instances, there is certainly an ability to track an impact on things like sales, profit and operating cost control.”
The ‘soft skills’
However, there is currently debate around whether the results of coaching can be measured in such a straightforward manner as these indexes would suggest, and of course, not every executive is responsible for a P&L. For example, Balmer notes that a head of IT or head of finance who operates in more supportive, operational areas of the business, may not find the hard financial measures – “but certainly the areas their businesses are responsible for can be measured”. Balmer adds that the financials are an output of a process; the inputs driving that process tend to be very people-centric: staff engagement and staff satisfaction, staff retention and turnover. “Other things, like ongoing 360 degree feedback, can actually provide more than one or two measures on the input, behaviours and activities of the leader that are impacting that business,” he says.
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gagement ch to engaging coaches. There Successful en widely in their approa
Organisations vary e coaching but there are roach on how to manag le is no one-size-fits-all app act of coaching. Michel how to maximise the imp some core themes for s: tures provides some tip McCartan of Vibrant Fu for measuring Agree on the best path ere wh on points ar ent cle fer Be dif effectiveness at Coaching strategy: s firm program. the ng to chi n coa atio the rel t throughou coaching sits in Be gy. strate OD/L&D and business on the Involvement: Get clear ensure the best to gy ate str s thi to e tru but ensure ies dar un bo y confidentialit ieved. or a business results are ach er that the coachee’s manag olved inv the t ain tha rem coaching sponsor Buy in: It is important s of is ge m sta s gra iou pro var the at t with reviews coachee feels tha ntiality fide ent con em let nag n’t ma ir Do s. the ces by the pro supported nt stages be eva rel can s at me prevent involvement team so that the outco ise xim and ’ ma l job wil the s thi ‘on as d of the process positively reinforce ching coa the rce nfo rei to e. the ability be sustainabl generate more results ‘on the job’ and e hir to e tim r you s. Selection: Take me sustainable outco context, person the right coach for the s che is highly coa ny . Ma Ongoing monitoring: It and outcomes involved coach and ory the uct t rod tha int ure beneficial to ens offer a complimentary t of the n ou tio eck lua Ch eva se. ke rpo rta pu de t coachee un session for tha basis. ual and tin als con denti coaching process on a their qualifications, cre w allo ack and db ms fee ble nt This will identify pro background, ask for clie her rat good ly A ear ch. de roa ma app be ir to the adjustments and understand of the process happy to discuss than waiting to the end coach will be only too when it is too late. these with you up front. ar coach as cle lly rea Business partner: See the Clarity of objectives: Be e them in the lud for inc ef bri and a business partner on what you see as the nk challenges Thi or es nt. me dat up age ess eng relevant busin specific coaching th bo ic to list view on relation to ensure they have a rea about the outcomes in ’s ion sat coachee is ir ani the org the context in which the individual’s and the e. anc bal e abl ctic operating. agenda to find a pra
Perhaps equally important is analysis of the performance measures of the coachee’s staff. “Ultimately, good leadership is about getting results with and through others. To get the true measure of ROI you should be getting the true results of those others. I don’t think that’s done enough in coaching – it’s done purely on what the individual’s measures are,” Balmer says. As McCartan points out, a onesize-fits-all approach to measuring the
impact of coaching and selecting the most appropriate will fail. It will also depend on factors such as the focus for the coaching, the outcomes required, the culture of the firm and the individuals involved (see box on successful engagement for further tips).
Further pitfalls
There are additional stumbling blocks. One major issue can be where coaching is used as a crutch to support poor
Executive coaching
leadership. Rather than dealing with the real issue, which may be that the leaders and executives are not having constructive conversations with employees and providing instructive feedback, a coach will be brought in to handle it instead. Almost as damaging, Balmer notes, is when the coach is appointed and the organisation checks out of the situation and is not involved in the process. “Our view is that’s the only way you can keep coaching aligned both with individual and organisational needs,” he says. There can also be an element of ‘passing the buck’ when it comes to executive coaching. It can be incorrectly labelled as a training & development or HR issue. Balmer feels this is a fundamental error. “HR does have a very important role to play in the sourcing and setting up of coaching but it’s not their job to be in charge of executive coaching. It’s executives who need to be actively involved.”
Best practice
Coaching was historically used in a punitive manner to help fix performance issues but today most coaching is about positively developing the capabilities of high potential performers. “It should be considered that coaching is not a threat, it’s a promise,” says Balmer. While coaching can still be used on the remedial front, the type of assignment used to improve performance is usually more specific and tends to have a shorter turnaround, “so you’re really looking to fix the consequences that might otherwise follow,” Balmer says. It is also being used to fast-track or assist high performers. “Increasingly coaching is linked in with broader assessment, talent management, change management and leadership development strategies so that it reinforces the firm’s overall strategies and doesn’t conflict or act as a standalone activity,” says McCartan. Indeed, coaching comes into its own when executing strategy or following through on the ‘great ideas’ that often come out of leadership meetings but are promptly forgotten about once the executive is back at his/her desk.
“There are millions spent on training, offsite meetings, facilitations, etc. However, after any intervention or exercise, if people go back and do what they’ve always done, you’re wasting your time and money. Ongoing coaching support to focus on how to embed it and deal with it when it doesn’t work is where coaching comes into its own. Focus on what you’re going to do rather than what your intent is,” says Balmer.
Who’s a good coach?
By general consensus, a good coach has the ability to build trust and solid rapport with the coachee. They must also have great emotional intelligence. Secondly, Balmer stresses they must have a good coaching process. “Coaches should follow a process so there is a direction to these conversations. You must also have appropriate material. So once the needs of the participant have been identified you must have good content. For example, if the person I’m dealing with has challenges around their own time and priority management – coping with everything that’s going on – you must provide them with content that will help them develop strategies.” A fourth criteria – credibility in the area in which the executive is working – is more contentious, as Balmer freely admits. “I’m not saying that only an engineer could be a coach to an engineer. My view is that it’s hard to be an executive coach if you’ve never been an executive. From the executive’s point of view, they get a lot of confidence when they can partner with someone who at least has experienced some of the things they are going through.”
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“Of course the impact on an individual is important, but to really stack up, coaching needs to translate into business outcomes such as increasing market share, revenues and profits” – Bridget Beattie Final tip
Thought must also be given to how the coach is introduced to the coachee and how the concept of ‘coaching’ is positioned. Balmer admits this can be crucial to the success or failure of coaching. It should be positioned along these lines: we believe in you; we want to invest in you; we see these great strengths; we see these things need developing. “It’s when they get thrown into a meeting and told, ‘we’d like you to talk to this person’… that’s when the shackles go up. If the coachee is not engaged they are unlikely to be open to it,” he concludes. HC
Call to action Executive Central has teamed up with Monash University and the University of NSW to conduct world-first research into how executives progress through the coaching relationship, what coaching interventions are effective, and the coach and coachee characteristics that would be strong predictors of success of the coaching experience. Any organisation currently utilising coaching, as well as some that aren’t (to provide a control group), are being called upon to take part. For more information e-mail info@executivecentral.com.au, ph: 1300 737 495 or visit: www.executivecentral.com.au
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Leadership architecture
Think great leaders are enough? Dan Hammond reveals why organisations need great leadership more than great leaders
S
enior leaders in global organisations tell us that the demands on them and their organisations have never been greater. They say it’s because: • Speed of execution is important to stay ahead of the competition. • Innovative solutions are mandatory as the environment and customer needs change. • Collaboration and the communication that enables it are critical to capitalise on the power and potential of complex matrix organisations. To meet these challenges, successful organisations will depend less on a few leaders at the top and more on leadership at every level to get things done. We propose that leadership is enabled by Organisational Leadership ArchitectureTM, which creates the conditions in which every individual can make a successful contribution to
Creating the
leadership
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achieving organisational outcomes. Our analysis indicates that leadership today requires two key elements. First, a requirement to ask the right questions; and secondly, to create the conditions for success. The three key questions which comprise the foundation stones of Organisational Leadership ArchitectureTM are: • What are we trying to achieve and why? • Where are we now? • W hat will we do to close the gap? Associated with each question are the critical conditions required for success. These are clarity, climate and competence. Clarity is about direction and approach; climate concerns practical tools, processes and culture; and competence is about equipping teams and individuals with the behaviour, attitude, knowledge and skills to do the job. Thus it is important to answer each of the fundamental questions in association with each condition: • What are we trying to achieve with clarity, climate and competence? • Where are we now with clarity, climate and competence? • W hat will we do to close the gap with clarity, climate and competence? This view changes the shape of how leadership is sometimes regarded: from the few to the many, from disconnected to holistic and from cumbersome to agile.
Leadership architecture
Lessons from the military: empowerment, not command and control, enables rapid response
“No plan survives first contact with the enemy” – Field Marshall von Moltke. An elite team of soldiers moves forward toward their objective under the cover of darkness. As they perform their final reconnaissance before attacking, they discover a different objective; one not mentioned in their orders or known to their leaders. They have a choice. They can complete the plan as ordered, or decide if this new objective is a better one and attack it instead. They cannot do both. They cannot ask for direction as any communication will betray their position. Make the right decision and they may save many lives, including their own. Get it wrong and the feedback will be immediate and permanent. They have little time to consider their options; speed of execution is critical. How do they decide? Military organisations have developed an effective and instinctive approach to the issue of rapid response. The basis of this is to understand the ‘higher intent’ of the broader organisation. In other words, every soldier needs to be really clear about what the organisation is trying to achieve, and why. In our example, the team has been told the overall objective, strategy
and plan for the wider organisation. They are in a position to decide whether the original objective or the new one best meets the higher intent. They have been told what their area of operation is and that they have the freedom to change the plan within understood set boundaries in order to better achieve the ‘higher intent’. They have complete ‘clarity’ of the overall objective and their role in achieving it. Contrary to popular opinion, military leadership is developed at all levels. Not
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proposes that the bedrock of an effective military leadership system is ‘collaboration’ underpinned by the values of reliability, versatility and resilience. There is a culture of empowerment that is critical to rapid response and speed of execution, both of which are essential to success and safety. This concept of values and behaviours that support the higher intent is instantly applicable for any organisation – describing ‘how’ an organisation goes about its business and providing the
There is a culture of empowerment that is critical to rapid response and speed of execution, both of which are essential to success and safety only are individuals at every level allowed to make decisions, they are required and trained to do so. The ‘climate’ is thus established within which individuals can make the best decision for themselves and the organisation. Of course, the climate is not just about processes and common language. It is also about culture. Dr Nick Jans of the Australian Defence College is an acknowledged expert in the field of military leadership and originator of the expression ‘command architecture’. He
people within it the behavioural guidelines required for success. So, our intrepid heroes understand the higher intent, they are empowered to make a choice and know how much latitude they have to change the plan. But, do they know how to properly analyse the situation to ensure that ‘B’ really is a better option than ‘A’, and then make a plan to successfully attack it? Do they really know where they are now, and what they will do next? Quite simply, yes. Military organisations have a process for both tasks and everyone is thoroughly rehearsed in their use.
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Leadership architecture
They are provided with tools and checklists, similar to those used by pilots, to enable rapid application under any circumstances. So everyone in the team has the clarity of what is to be achieved, a set of processes that they must use and the competence to carry out the tasks. Central to all this is the core principle that leaders and followers at every level see themselves as subordinate to the overall purpose and mission. This is clearly understood by all and provides a guide for decision making.
Lessons from business: communication and collaboration to ensure sustainability
“Leadership not Leaders is the key … it is the actions leaders take as a group to build the leadership within the organisation,
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not the personalities of the individual leaders that are critical” – Mt Eliza, 2002, Australia’s top 199 organisations. A business unit within a highly successful financial institution sets its objective to double profits in three years with a maximum 35% increase in staff. They achieved this goal in less than three years with a key focus on staff, risk and productivity. So what did they do and how did the actions of the senior leaders develop a legacy of success which sustained the business even during the GFC? In looking for the solution, the senior directors decided to take an organisational approach to developing leadership within their business unit which would build the capacity of the business beyond the boundaries of a few leaders, and which harnessed talent right the way to the frontline through collaboration. The first step was establishing clarity. This was developed around an inspiring
vision which determined not only what they were trying to achieve but, most importantly, why (or the purpose), and by doing so gave a greater sense of meaning and engagement to the staff. Experience shows us that many visions fail to deliver. Similarly, those who are meant to be motivated by that vision, are often not. So how did the senior directors create clarity of information and, critically, clarity of understanding? They communicated compelling key messages to their staff in a national road show with the aim of creating a workforce which was engaged and motivated to explore new ways to work together. This communication used energetic, authentic and ‘out-of-the-box’ methods to generate high levels of passion, understanding and genuine desire to make it happen. The communication was repeated in different ways, often soliciting feedback to ensure everyone understood. Often enthusiasm fades and the vision dims once everyone returns to the office. Not in this case, where the working climate was stimulated by a radical redecoration of the offices. The purpose, vision and values literally became a part of the working vista as a bright and stimulating environment became a daily reminder of the business’ direction. Investment was also made in back-office processes. Organisational and individual cultural and leadership style diagnostics were carried out for feedback of the business. This generated greater awareness, encouraged development and supported the cultural transformation by building accountability at every level of the division. There were rewards, too, where collaborative behaviours and outcomes which supported the business along its journey were regularly awarded to deserving individuals and teams. Senior directors sacrificed profit share to enable staff promotions, and financial rewards were given lower down in the ranks. The leaders were building and creating the leadership below.
Leadership architecture
The senior directors also led the way in terms of developing all levels within the organisation. In driving the ‘what do we need to do to close the gaps’ question, competence was developed at every level to innovate and collaborate as the business grew. With aligned leadership skills and competencies, common approaches to decision making and planning became systematised within the business. This developed a common language which encouraged delegation, enabled fast and adaptive actions, and built trust through the use of a rigorous approach.
Common threads
We have established that the three key leadership questions and the creation of clarity, climate and competence are paramount to success across the two different perspectives. Everyone is
which is challenging. Leaders at the lowest levels identified ‘defining organisational direction’ as their biggest challenge. This suggests that strategy is not being communicated in a meaningful way and that clarity is not shared at every level. This does not augur well for the implementation of a strategy. From both perspectives, shared purpose, vision, values and clear strategies act as the ‘light on the hill’. However, if the climate includes a common language of leadership and leaders are competent to use it, then there is a realistic chance of alignment around the direction at every level. For example, in our successful business, leaders relied on ‘common language’ and a culture of collaboration, as well as skilled communication to deliver messages that resulted in not only clarity but tight focus and alignment at every level.
With aligned leadership skills and competencies, common approaches to decision making and planning became systematised within the business equipped to use this architecture enabling leadership at every level, regardless of formal authority. In a broader organisational context, people in every location use the system to understand what needs to be done, why and how. It enables rapid decision-making, empowerment and the flexibility to succeed even when the situation changes. The language and leadership processes used are the same, thus avoiding ambiguity and miscommunication. This is critical in complex matrices where success depends on people operating remotely. How then does this apply to the challenges outlined by our senior leaders and how is this reflected in recent research?
Speed of execution
Our survey tells us that for senior leaders, “Setting the strategy is easy… executing is a greater challenge.” It seems that it’s not the ‘what’ of strategy but the ‘how’
Developing innovative solutions
Let’s assume that there is a common understanding that innovation is key to sustainable success. Clarity is not enough. Developing an enabling climate, through creating a common language or ‘wiring’, and a culture that encourages risk taking and learns from mistakes will enable all levels to innovatively adapt to changing needs and requirements. Paradoxically, innovation is enabled by common decision-making processes, systems and culture that provide the structure to enable innovation by enabling people from different countries, departments and functions to talk the same language. For example, musicians are by nature creative; pushing the boundaries for their art and the enjoyment of the audience is what they do. But they, too, work within a framework of the music. The culture is one of individual creativity and
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also teamwork to support the endeavour. Herein lies the paradox: working within a framework gives them complete freedom.
Communication and collaboration become critical to effective operation Do clarity and climate, in place and understood at every level, guarantee an effective operation? Of course not. We can be clear and motivated, equipped with the necessary tools and support, as well as having access to a common language of leadership, but there is no guarantee that we will use any of them unless we know how. All leaders must develop their competence in a way which is appropriate to their own level of the ‘Leadership Pipeline’. It is the competence of the leader that creates the clarity, climate and competence for those that follow.
Finally…
In business, it is the example set by senior leaders which dictates what other people will do. As Cisco Systems CEO John Chambers said: “The days of being vertically integrated and having everything within your control will never return. The entire leadership team, including me, had to invent a different way to operate. It was hard for me at first to learn to be collaborative.” (Harvard Business Review, November 2008) As leaders transition through the ‘Leadership Pipeline’, they must examine what behaviour must be embraced and what is left behind − the leadership architecture remains the same. Developing a leadership architecture to achieve performance is fast-becoming the number one priority of successful organisations. It is ‘core’ to the organisation’s function rather than an ‘elective’. HC
About the author Dan Hammond is managing consultant at LIW3. For more information visit www.liw3.com
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Recruitment
hat your w w o n k u Think yo g about n li e fe e r a employees ir level e h t d n a s r their caree eir current h t in n o ti c of satisfa urvey by s t s te la e h roles? T nting the u H – e n O Career rs – reveals te n u H ) n e (Hidd ights into s in g in is r p some sur et at the k r a m t n e m the employ 10 start of 20
b o j The ket r a m 0 1 0 IN 2 2009 vs 2010
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ow into its third year, Hunting the (Hidden) Hunters is a timely reminder of the changes that have taken place since 2008, when the first survey was conducted. “In mid-2008 when we started the survey it was also the start of the GFC. Then in January 2009 we were right in the middle of it. Now, in 2010, everyone thinks we’re coming out of it. But there were some slightly surprising results this year,” says Michael Harvey, CEO of CareerOne. The same methodology has been employed this year: an independent online survey conducted nationally with 1,000 people taking part. The results were then broken down into specific market segments (see box on opposite page).
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A key consideration when analysing the data from 2009 verses this year’s results is the economic environment in which both surveys were conducted. Last year interest rates were coming down, unemployment was starting to creep up, and government stimulus was starting to kick in. “It really was an environment of negativity. People were concerned about the future, and there was dissatisfaction with their roles – but there wasn’t too much financial worry yet as interest rates were coming down. If you had a job you were ok,” says Harvey. At the time, conventional wisdom would have said people are staying put because they were worried about the future, but the 2009 survey found there were actually more people actively looking for work than in 2008. “We had 19% actively looking and 63% open to an offer, which increased from 2008. We
found that surprising, but possibly those economic worries hadn’t hit yet, and it was a hangover from the really good times,” Harvey adds. As Australia emerges from the GFC, the situation has changed. Most companies have done their restructure, everyone is talking up the market and economy, most people are optimistic, and media reports indicate that up to 60-70% of people are actively looking for a job. One element that has changed is the impact on hip pockets. It was, says Harvey, a “very peculiar” recession. “During the recession, with two lots of government stimulus, with interest rates getting down so low, and Rudd’s tax cuts which hit mid-2008/09, people had more money in their pocket as long as they still had a job. Unemployment didn’t increase all that much. Now we have interest rates starting to climb again and people are anticipating increased interest rates,” he says. Given that context, CareerOne’s 2010 survey results are not so surprising. The
Recruitment
number of people actively looking has declined from 19% to 14%. At the other end of the spectrum the number of people happy in their roles has actually increased from 19% to 23%. “Both those figures have gone in slightly different directions to other reports out there,” says Harvey. “The group in the middle, the group who is open to talks and opportunities elsewhere, has stayed the same at around 63%.” Given the continued uncertainty over the economy, with future interest rate rises likely, Harvey believes most people have taken one of two options: firstly, stay put, keep some security; or secondly, start looking for a job with more money. “The problem with the second option is there hasn’t been a great increase in job numbers yet,” he notes. Harvey believes this caution rests not just with jobseekers but also employers. “The recruitment industry is talking it up, phones are ringing again, they are talking to clients about intentions to hire; but the fact is people aren’t putting their hands in their pockets. I think there is a lot of caution around, albeit with more optimism,” he says.
Push and pull
The results of CareerOne’s survey were divided into seven ‘segments’. Since last year, three segments in particular have seen movements. ‘Personal ambition’ dropped from 15% of those surveyed to 7%. “That’s a significant drop,” says Harvey. “Clearly the sectors that got hit hardest first probably had a lot of these people in it – finance, banking, consulting. They lost a lot of people out of those areas.” Secondly, ‘Supportive environment’, increased from 23% to 28%. “There are nervous people out there who lost a bit of confidence. There were also people who moved from that ‘personally ambitious’ into this segment,” Harvey says. Thirdly, and most interestingly, the ‘Contented’ segment increased from 9% to 12%. “That’s people who are saying, we’ve been through a lot, I’ve still got a job, and there still aren’t too many jobs out there, so I’ll stay put,” Harvey notes. The ‘triggers’ – what pushes people out of jobs and pulls
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organisations is starting to hit home. “People are not as happy in their work teams,” Harvey says. “There’s been change and restructure and merging of teams. John, who used to go with you for a quick beer on Friday nights, is no longer there.” Concern over pay and remuneration is also starting to come back into play as a pull factor. In 2008, it was a major motivator for people to be looking for a new job, and Harvey believes that was because there had been such a good run with people getting pay rises and bonuses. That stopped in 2009, and there was greater acceptance that many organisations were struggling. “There was a feeling that if my mates and colleagues weren’t getting pay rises, I shouldn’t expect one either. That will change in 2010 as the economy improves,” he says.
“There was a feeling that if my mates and colleagues weren’t getting pay rises, I shouldn’t expect one either” – Michael Harvey
2010 priorities
people into jobs – remain consistent for all segments, although some are more difficult to tempt into new jobs this year. As an example, for the ‘Recognise Me’ segment, the ability to be ‘tempted’ has fallen 22% in the last year, while the ‘Drifters’, ‘Flexibility’ and ‘Contented’ segments have seen ‘tempt’ scores drop by 5%. What are the key ‘pull factors’ (ie, what attracts employees to positions)? Working close to home is the most attractive job attribute relative to the others. In addition, changes to the team environment in many
So what’s in store for 2010? Unsurprisingly, Harvey says retention strategies will be the key. Although he is hesitant to suggest the “floodgates are open”, Harvey does acknowledge that there’s a large body of people who are susceptible to a tap on the shoulder – thus putting the emphasis back on what employers are doing to retain staff. “While job levels at the moment are back to November figures from last year, they haven’t really started increasing yet. However, get a 25–30% increase in job numbers in six months’ time, and there will be more choice out there. We know the skills shortages in many sectors never really went away. It may not happen this year, but the short to medium-term skills shortages will be back,” he concludes. HC
Segment descriptions: Segment Personal Ambition Recognise Me Rewarding Challenge Flexibility Contented Supportive Environment Drifters
Key need Success and career progression Fast track and reward Traditional and life balance Flexibility and locality Loyal and lifestyle Team and training Casual and lifestyle www.hcamag.com
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HR insight
Human Capital profiles the HR operations of one state government department and discovers that the perceived ‘business knowledge’ gap between public and private sector HR operations is misconceived
Narrowing i the t’s common in the commercial world to view HR in the public service as if it was still anchored in the Yes Minister style. And while that may be true in a number of areas of government, more and more public service heads are demanding commercial world-level outputs from their HR teams. A good case in point is the Victorian Department of Justice (DoJ). Six years ago they decided that they needed to make significant changes in terms of HR. The DoJ is a sprawling organisation of 6,500+ public servants, covering eight major portfolio groups, including consumer affairs, prisons and correctional services, the courts, gaming and racing authorities and legal policy as well as entities such as the Office of Public Prosecutions and the Public Advocate. Essentially, the DoJ can be seen as needing three basic skill sets to operate. The first is strategy development/policy making. The second is implementation of strategy and policy, and the third is leadership of people. Colin Brown was engaged to lead HR in 2004, and was given a mandate for change. Since joining the DoJ, Brown has led a significant transformation in the way HR services and HR solutions are delivered to the organisation. “Previously, the HR function was a reactive part of the organisation. It was focused on policy interpretation and, to be frank, little emphasis was placed on understanding
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the priorities of the DoJ as a business,” he says. Today it is quite different. HR is viewed as having a keen understanding of the strategic priorities not only from a corporate perspective but also from an individual business unit stance. HR is now a driver, not a back seat passenger. It’s been no easy task for Brown and his team to make the changes within HR itself, and at the same time influence the way DoJ leaders approach HR issues and make decisions which impact on people. Brown’s first action was to ensure he had a team comprising the right people with the right capabilities and make sure they were in the right HR roles. “I needed a team who were high performers and clearly understood the importance of delivering solutions,” he explains. Working with Brown are Caitlin Huffer and Peter Johnston. They are the HR business partners and their remit spreads across all of the DoJ. Graeme Baker heads payroll and the HR system, Kieron Nichols is head of L&D, and Natalie McIver leads the recruitment team. It is plainly obvious that HR is now seen as a key driver of significant change within the organisation, especially in regard to an increased focus on financial performance and delivering measurable outputs against the department’s priorities. Brown explains: “I have established a clear strategic direction coupled with a strong change management philosophy which is underpinned by a belief that we
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gap
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will constantly strive to be better at what we do.” Over the past two years the team has implemented a number of strategic projects which are providing the DoJ with a comprehensive HR program of work. These key projects have included: • A comprehensive talent, career and succession management system • A new online performance management system • A centralised client-focused recruitment process • The development of an organisation wide capability framework which is used for recruitment, promotions and L&D • A special focus on learning and development, particularly of ‘growable’ leaders of the future • An employee value proposition • HR diagnostics tools and HR metrics that align with business outputs • Organisational climate surveys 360° feedback for senior public servants • Development and implementation of the corporate values These programs of work were ‘championed’ under six key headings namely: Engage, Attract, Develop, Align, Retain and Review. Effectively, each part of the above initiatives are interdependent and interlinked – thus providing a completely new approach to the management of HR within the DoJ. Underpinning each of the above is a strong emphasis on supporting each initiative with quantifiable metrics, which has been a key part of our change management strategy, Brown maintains. However, he did not make the mistake of charging out and implementing these changes without first ‘testing the water’. Here’s how it was done: “All of the programs were generated as pilot projects in the first instance. They came out of the HR unit and not from senior management or the corporate executive. In order for them to be successful and to gain the backing of the corporate executive, we placed a high emphasis on gathering data and metrics and then presenting these as
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Colin Brown
Peter Johnston
irresistible arguments as to why the pilots should become embedded into the entire organisation. The success of this approach is that each of these pilot projects has now been strongly endorsed by senior management. We have effectively changed how HR operates and how it is perceived,” says Brown with obvious pride. A significant influence on how Brown has implemented his approach to managing a HR team has derived from his association with Professor John Boudreau from the Centre for Effective Organisations at the Marshall School of Business, University of Southern California. Boudreau and Pete Ramstad have co-authored many articles, research papers and more recently a book, Beyond HR. They believe HR has a pivotal role in organisations and that the focus of HR should be on increasing the success of the organisation by improving the decisions that depend on and/or impact people. Since first meeting Boudreau at a Wharton School Program in Washington DC in 2006, Brown has sought to put into practice many of his approaches to HR management which have proven to be successful within a private sector organisation. In fact, Boudreau has said of Brown that “it is great fun to be working with a ‘private sector’ transplant”. The association between the two culminated in June 2009 when Brown hosted an interactive presentation given by Boudreau
Julia Edgely
to around 50 HR directors from both the public and private sectors from across the country. Brown and Boudreau continue to work together as trail blazers at implanting private sector processes within a public sector environment. Further, as a member of Talkpoint, Brown is able to bounce ideas off a group of high level HR peers and gain their feedback. An example of such an approach involves the recent adoption by the organisation of the Talent, Career & Succession Planning program. Arising from work done by HR on the demographics of the department, it was clear that greater understanding of the impact of the ageing population/workforce and the war for talent was required. Because of this, HR believed that it was increasingly important for DoJ to be clear about its current and future needs in terms of critical roles and capabilities. Work was undertaken in two key areas of the organisation during 2007/08, which identified a scarcity of ready talent to fill critical roles within the organisation. This presented an unacceptable level of risk for the department and highlighted the necessity to identify and develop a talent pool. Guidelines for identifying roles that are considered critical to the success of the department were developed. These are based on the criteria that the role makes a significant impact on delivering outputs, achieving
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Caitlin Huffer
Graeme Baker Kieron Nichols
“If my team is in demand from external organisations, then we must be doing something right!” – Colin Brown milestones, and managing key stakeholder relationships. In addition to this, a number of tools were developed that business unit managers could use. Tools such as: • A critical role map whereby a role is assessed against capabilities from a leadership perspective using the Victorian Leadership Development Centre and DoJ Capability Framework, as well as the technical knowledge and skills required for the role • A template for assessing individuals with ‘growability’ within a business area based on higher levels of aspiration, engagement, achievement, capability and experience • A readiness rating template for ‘growable’ individuals who are believed to have what it takes to take on a critical role in the future based on the capabilities, technical knowledge and skills required for a particular type of critical role All of these tools are designed to align with the Performance Development process, 360° feedback, leadership development training and other diagnostics. Brown continues: “The development aspect of the process
was then strengthened by utilising the 70/20/10 model, which identifies that 70% of learning takes place on the job, 20% through coaching and mentoring and from the individual employee’s networks, and 10% through formal courses.” Brown is the first to admit that in regard to leadership development the organisation is still some way off the 70/20/10 target. He thinks that the ratio is more 50/25/25 at the moment; however, progress is being made. The above was achieved when there was limited financial and physical resources. The performance management system, talent and succession planning and centralised recruitment faced rigorous debate, though the inevitable pressure of what was happening in the commercial world combined with the Victorian government focus on embedding these same ideals in the public service meant that any opposition and doubts were ultimately minimised. So what does Brown believe is the key to the successes? He suggests that the key reasons for the transformations over the past five years have been based on a relationship approach
whereby HR strives not only to understand and meet the client’s needs but to also be the driver to achieving the strategic priorities of the various businesses within the department. “In doing so, I have implemented a consulting business model into a government setting. The reality of this is that HR has a close business relationship with its clients and is now regarded as a business partner rather than a provider of corporate services,” he adds. And as for measuring the successes, here are some outcomes since 2004: • The DoJ has seen an increase in the participation rate of staff in the Department’s Employee Attitude Survey from 52% in 2004 to 73% for the latest survey • Delivery of service to regional areas now regarded as a strength and not a weakness • Implementation of a centralised recruitment process that has cut the time to recruit and cut the cost of recruitment by 30% and has embedded best practice across the organisation • For the first time the DoJ has an understanding of who is ‘growable’ and rising talent for the future, and a succession system to ensure that high calibre people are retained • Robust metrics which measure the talent ‘health’ of the DoJ and allow comparisons with other organisations • A highly skilled and motivated team who are in demand from head hunters. This last measure is unusual, but Brown makes no apologies for using it. “If my team is in demand from external organisations, then we must be doing something right!” he says with a wry smile. “I always say that talented people have choices in their careers and if others think that those DoJ leaders have the right skills and are real performers then I accept we will see some of our good people being head hunted, either to bigger roles in the public services or in the commercial world. After all, what better legacy can an organisation be known for than to be a source of high calibre people?” HC www.hcamag.com
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Profile
Personal file Sylvie Vanasse Age: 49 Family: Married with two cats Favourite band: Coldplay and Brandi Carlile Favourite sports: Rollerblading. I used to love skating. I could rollerblade for 10km or more! Favourite movie or TV: Pride & Prejudice – the BBC series. Self-described: Planting seeds and watching them grow; developing people. Putting new things in place from scratch and seeing them being taken up. Hobbies: I like to draw, pastels, all different mediums
Photo: Thilo Pulch, www.pulchphotography.com
If not in HR: Maybe a full-time artist. I love it but I’m not very good!
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Profile
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Choose
adventure your own
While competitors were slashing their graduate recruitment programs, Parsons Brinckerhoff has pushed forward – and reaped significant benefits as a result. Iain Hopkins profiles Sylvie Vanasse
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hat does size have to do with it? Not much, judging by engineering firm Parsons Brinckerhoff’s HR team winning a national award for their graduate recruitment campaign – titled ‘Choose Your Own Adventure’. The Australian Association of Graduate Employers (AAGE) award put PB up against 15 other nominations from the likes of giants Ernst & Young, NAB and Telstra. The PB campaign evolved from recruitment workshops and feedback from engineering graduates, many of whom revealed that Lego had inspired their interest in engineering. This seed of an idea was combined with the concept behind a series of popular adventure books (Choose Your Own Adventure) to explain the career opportunities available at PB. In the notoriously talent-tight engineering field, where any advantage must be seized upon, the campaign was a hit with students at campus fairs. Following this campaign, PB’s director of people, Sylvie Vanasse, admits they were inundated with applications. “We worked hard at developing the marketing strategy for graduates, so it was nice recognition of that work,” she says. “Plus we recognised that we would be missing skills in a few years if we had no graduates this
year, so we kept it going and hope to move it forward even more in coming years.” Parsons Brinckerhoff’s recruitment efforts don’t stop with getting grads through the door. A program has been implemented that provides graduates with development opportunities on their journey from being graduate to emerging professional and on to technical professional. Known as EVOLVE, the first phase is Consulting 101. This involves a series of modules designed to help graduates to understand the role of a consultant at PB as well as enhance some of the personal skills required in the business. Subsequent phases of the program include selected Project Management, Business Development and introductory Leadership modules. EVOLVE is a blended learning experience, combining faceto-face and self-paced e-learning activities with on-the-job experience and self-reflection. Participants are supported and encouraged to achieve external recognition through relevant professional associations, for example Chartered Professional Engineer, Certified Environmental Practitioner or Certified Practicing Planner. www.hcamag.com
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Profile
“My passion remains in talent management but I appreciate the other pieces of HR because it’s all about human behaviour, team behaviour, and organisational behaviour. I’m fascinated by people and I enjoy all aspects of HR because of that” – Sylvie Vanasse From Canada to Australia
Given Vanasse’s background, this concentration on developing and nurturing talent is hardly surprising. “I came from a talent management pathway,” she explains. “Some people come from IR or from other business lines into HR but I’ve always been involved in and studied social sciences, human behaviour, and learning & development.” After completing a Masters in Educational Technology in Canada, Vanasse commenced an academic career, conducting research, becoming a research assistant, and then receiving a research grant to further her studies. Her focus area was how to utilise technology to promote learning. She worked with IBM in the US at their User Interface Institute on how people behave around computers, and how to help people learn different software and systems. “It was known as minimal manuals, so making things slightly easier for the end user. It was really the start of those ‘xxx for dummies’ books,” she says. Vanasse moved into the corporate world, first working in L&D in the Canadian railway corporation, and then other roles in OD and human performance. She moved to Australia with her husband 15 years ago and has since worked with Fairfax and IBM, where she learnt consulting in their human capital management group. She joined PB four years ago as talent director. Six months into her tenure she was promoted to head the HR team. “My passion remains in talent management but I appreciate the other pieces of HR because it’s all about human behaviour, team behaviour, and organisational behaviour. I’m fascinated by people and I enjoy all aspects of HR because of that,” she says.
Rapid growth
Four years ago Parsons Brinckerhoff employed 700 staff across Australia-Pacific and this has subsequently grown to 2,300. In Australia the company has worked on major infrastructure projects for more than 40 years – but this is dwarfed by PB worldwide, which employs 12,000 people and was established 120 years ago. In 2009, PB was acquired by Balfour Beatty, a London-based construction and engineering company. Vanasse believes this is a win-win scenario for both companies. “Basically we filled the gap in professional services for them. For us, it provides opportunities to continue to grow. Even though we tripled in size over four years, that was all organic growth. But you cannot keep the pace of hiring
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800–900 people each year,” she says. PB will retain its own logo and branding and will largely remain its own entity. “The biggest change has probably been becoming publicly listed. We were employee owned and now we are on the London stock exchange. That has meant changes to financial reporting and tracking but fortunately we already had all the metrics they asked us to report on,” says Vanasse. Vanasse’s current role entails HR responsibilities across Australia-Pacific, which includes Australia, New Zealand and Indonesia. She has 32 HR professionals and nine direct reports in her team.
In her own words… What do you consider to be your greatest career achievement so far? Taking this role at Parsons Brinckerhoff. Coming from talent management and being a consultant and all of a sudden having to deal with all HR issues – including grievances and IR – was tough. We rarely get any grievances but last year was a tough year. We had more insecure people, more stress, more uncertainty. To me that was an achievement, to come through that tough time with few redundancies. We reduced work weeks and the feedback we’ve received since then indicates that although it was hard at the time, most people are relieved that they have a job. Everyone is now back full-time. Also, building a team. I have the most marvellous team. You cannot do everything in HR by yourself, so you do rely heavily on your team – and I’m fortunate that their engagement and commitment is phenomenal. What has been the biggest challenge you have faced in your career? There are always challenges, but I think one of the key challenges of taking this role was taking it on without having a role model. I overcame that by joining professional networks and that was fantastic. I’m still in these networks. You must be able to discuss things. Where does HR go when you need HR? Who is there for me?
Leadership and succession planning
Alongside the aforementioned graduate recruitment program, Vanasse is proud of one HR initiative in particular. She recognised some time ago that the company’s leadership and succession plans needed refinement so she took steps to overhaul both. “We didn’t have a very good succession plan in place, and to me that’s a critical long-term strategy. When I addressed leadership, the first thing I looked at was what type of leaders we wanted and how would we develop them. The succession plan fits in well with that, and so far the retention rate of those taking part in the formal succession plan program has been 98%. That means over the last year we only lost three people from 55, which I’m very proud of,” she says. Vanasse believes the program has been successful for a number of reasons. Firstly, it is robust, with a number of assessments for potentials and current performers. Secondly, the program has support from the executive team, who work closely with high potentials. “High potentials are given a mentor or coach to work with, and every quarter they get the opportunity to report on their projects and have a discussion with the MD and three other directors. The projects steer away from the theoretical and are instead practical, on-the-job, business relevant projects,” she says. Tied in with the succession plan overhaul was a refinement of the performance management system. “It was very ‘tick the box’ and we’ve transformed it into an employee and a manager having a meaningful conversation with meaningful objectives emerging from that. We run it twice a year, and we link everything. So for high potentials, their project is part of the development part of their performance review. When we finish the strategic plan we cascade it down and people can actually see how they will contribute to the business by aligning their objectives to the team strategy,” Vanasse explains. She adds that it’s still challenging to get set in the right habits, and have the right conversations. However, for those who do it well, there are direct correlations to the results of culture surveys. “We’ve found that respondents who say they’ve been supported to develop themselves and have undertaken their performance reviews have a very constructive view of the culture. Those results are fed back to the manager and the correlation with retention is quite striking. It’s very powerful.”
2010 and beyond
Given the turmoil of the past 18 months, Vanasse’s HR strategy for 2010 is remarkably straightforward and refreshing. It’s a case of consolidating and bedding down. She’s also looking to tweak the EVP, “which is a bit wobbly”, and then take the company’s workforce planning to the next level. “We want to do be doing everything extremely well,” she says. “We put a lot of new programs in place – sometimes I think we did too much – and for a company it can be hard to absorb. You need to survey people, then brief them, then roll it out and monitor everything and get feedback. It takes time to do it properly but we’ll get there.” HC
issue 8.3
Teambuilder
“When HR is successful it’s a core business function and HR professionals are seen as commercial business people who just happen to be in HR at the moment” – Wendy Jones
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S pec
Teambuilder
issue 8.3
tac u lar
H R
res u lts
Look around your local shopping centre and the name Specsavers will invariably be spotted. The company’s dramatic growth has created unique pressure on HR, but this month’s teambuilder is well equipped to rise to the challenge
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ince January 2007 retail chain Specsavers has grown from a staff of less than five people to over 1,500 people at its head office in Port Melbourne and across its 210 stores Australia-wide. That growth has naturally required greater staff demands in all head office departments – including finance, legal, marketing, administration, customer service, the ophthalmic laboratory and warehouse – as well as optometrists and retail staff in the stores. To put it mildly, HR’s services have been in demand. “Meeting demand
for this level of growth is a huge task,” admits Specsavers’ Wendy Jones, head of recruitment, Australia and New Zealand. “The company has grown so incredibly fast that HR – like every department – is still in a process of evolution.” The Specsavers HR department not only manages staffing at head office, but it also puts a lot of energy into recruiting optometrists to take on new Specsavers franchises or to work as locums in existing franchises. “These are two very different types of recruitment so they are handled by different staff,” Jones adds. “Certainly
the skills shortage in the retail optics sector poses a challenge but there is no doubt that very high quality people are out there.” Adding to the complexity is the fact that Specsavers has a distinct type of person they are hoping to attract to become franchise owners. “We need optometrists who are adventurous, visionary and focused on offering the highest quality of care to customers while at the same time maintaining an entrepreneurial outlook and an enthusiasm for running a successful business. This sort of person will naturally be attracted to the challenges and freedom www.hcamag.com
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that running their own business will offer,” says Jones.
Up for the challenge
Jones proudly admits to being a “career recruiter”, having specifically embarked on a career in recruitment 19 years ago. She kicked off her career by running her own recruitment business for six years, recruiting recruiters within engineering, construction and mining and resources sectors through Australia, New Zealand and Asia-Pacific. Prior to joining Specsavers, Jones spent time assisting with the establishment and implementation of a rural and regional recruitment and HR consulting business in the northwest of Victoria. That project, Jones maintains, was the most daunting challenge she’s faced in her career. Not only was she recruiting for engineers – challenging in itself due to the intense skills shortage – but she also faced the unique hurdles of attracting candidates to work in remote areas. “It was certainly a role where you were not only trying to find hard to find skills but also very much being an ambassador for specific industry sectors, for the greater location and for the immediate community and the businesses that operated there,” she says. “Life as a recruitment professional is challenging to say the least, particularly in times of major skills shortages. However, it’s stimulating and exciting and the role offers great diversity: no person is the same, no position is the same, no team is the same, and no company is the same. So it enables you to constantly strive for creative and innovative means to add value to both the candidate and client that will enable them to realise their goals for the future.” Jones and her team of four recruitment consultants at Specsavers have far ranging HR responsibilities across Australia and New Zealand. She is responsible for the operational management along with formulating and implementing the strategic direction of recruitment initiatives, including managing the graduate program. Focus areas include talent attraction and retention strategy, labour mobility, employer branding and
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engagement strategy, lateral recruitment, and continuous personal and professional development schemes.
Impact of rapid growth
Often the first victim of rapid growth companies is the corporate culture. Fortuitously, Specsavers built its culture based on strong family values The company grew out of a small family business set up by Doug and Mary Perkins in 1984. Despite expanding into 10 countries and growing into a sizable operation, the company has retained that family culture. “Doug and Mary have both remained very involved in the business and their three children have also entered the company, so the original values of the company are as strong as ever,” says Jones. She adds that Doug Perkins has a desk in the main open-plan office and
Zealand, ensures that Specsavers can find, recruit and train the next generation of optical professionals. “The Academy ensures we’re being very proactive to combat the skills shortage ,” says Jones. “So whether it’s an optical assistant’s course for school leavers or continuing professional education for qualified optical dispensers and optometrists, or contact lens teaching, we offer something for everyone in terms of career development and training.” It’s a strategy that ties in nicely with the company’s overarching HR objective, which Jones adds can be described in one short sentence: ‘We want our people to be the best they can be’. A key part of this is selecting the right people in the first place, but equally important is the way Specsavers develops people. “We invest heavily in training people to support the pace of our growth and to provide high quality
“We like to develop people internally, because the Specsavers culture is strong and different from our competitors” – Wendy Jones he parks in the general car park just like everyone else. “This unpretentious and unhierarchical approach permeates through the whole business. Everyone here works very hard and is very passionate about what they do and I think a lot of that is because Doug works very hard and is very passionate – and his passion is infectious.” Central to the corporate culture is career development and opportunity for all employees. “Whether you’re developing within a store, moving from store to store or working in one of the support functions, there’s a huge amount of opportunity… We like to develop people internally, because the Specsavers culture is strong and different from our competitors.” In order to map out career paths for head office and store team members, Specsavers has created the Specsavers Training Academy in Port Melbourne. This Academy, together with satellites in each state of Australia and in New
professional service to all our customers. Finally, making sure everyone understands the vision and values of the company and then lives by them is a major priority for us,” she says. The company motto of ‘being the best you can be’ extends to Jones herself. She has a clear understanding of where HR currently fits in the larger corporate picture, and where it could potentially move to in the future. “When HR is successful it’s a core business function and HR professionals are seen as commercial business people who just happen to be in HR at the moment,” she says. “HR needs to find ways for the business to be better at what it does, whether that’s how teams are organised, finding the best talent or motivating people to be passionate about what they do. At Specsavers we like to think we do this quite well, but we also know there’s always room for improvement.” HC
5 minutes with…
the back page
issue 8.3
Compiled by James Adonis
Grant Kerswell, Coca-Cola Amatil Director human resources, Australia
What’s the greatest HR lesson you’ve learned so far? Develop simple solutions that the business can easily understand, use and implement. To most line managers, they care that it makes a difference for their business. What’s your favourite peoplemanagement tip? Lead a team person-by-person, accounting for their skills, background, experiences and aspirations. It’s only by engaging each individual that you engage the team. What career advice do you have for ambitious HR professionals? Ensure as you build your career you have a blend of line or commercial experience, and time in speciality HR roles as well as generalist HR roles. HR professionals need to utilise all these experiences as well as life
experiences to partner in delivering tailored practical people solutions.
Fast facts:
What’s the main challenge facing the HR industry right now? For us in the FMCG industry, the three biggest challenges are, firstly, diversity of talent and ensuring we have the right people with right skills. Secondly, with the amount of legislative and regulatory changes occurring, we need to ensure we have implemented these effectively and educated our business leaders on these. Finally, HR effectiveness and efficiency, ensuring we have the right blend of HR skills.
of working people are actively searching for a new job outside their industry or current specialty. Source:
How should HR professionals overcome that challenge? Have a true partnership with the business. This, with trust through strong relationships, will allow HR to deliver the best outcomes.
Can you believe it?
Quote of the month
Male employees named Andy call in sick more than any other, while women called Sarah take the crown amongst women. The UK poll by Viva Entertainment found the blokes most likely to skip work after Andy were Steve in second place, Paul in third, John in fourth, and Dave in fifth. Becky won the silver medal in the female category, then Anne in third, and Emma and Debbie took the fourth and fifth places respectively.
“I start with the premise that the function of leadership is to produce more leaders, not more followers” - Ralph Nader
72%
Chandler Macleod Group
1in 5
workers hate their colleagues and almost two-thirds regularly gossip about them behind their backs. A quarter of employees say they enjoy moaning about their colleagues at the pub after work, while a third admit to disliking their co-workers so much they wouldn’t even socialise with them outside of work. Source: OnePoll
67%
of Australian employers don’t have a formal policy in place to guide their employees’ use of social media. In comparison, Australia fares better than the rest of the world, where an average of 75% of companies don’t have such a policy. Source: Manpower
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