We Need To Talk About CFOs

December 12, 2018 by Avondale Business School

Apparently few others really understand what the Chief Financial Officer (CFO) thinks is important. The most recent survey by McKinsey and Company on CFO’s reveals a range of issues relating to CFOs (read it here). While the whole article deals with a number of observations from the survey relating to the CFO and their roles, one in particular highlights how important it is for the key leaders of the organisation and the CFO to have a conversation to be on the same page.

The following table lists the top 10 activities the CFO believes they have engaged in which adds financial value to the organisation. Next to that is the ranking given to the same activity by other leaders in organisations:

Activity

CFO Ranking

Other Leaders Ranking

Performance management (e.g., metrics, value management, incentives/targets)

1

8

Strategic leadership

1

4

Traditional finance roles (e.g., accounting, controlling, planning and analysis)

3

1

Organisational transformation (enterprise-wide or within finance organisation)

3

7

Finance capabilities (e.g., finance-organisation talent pipeline)

5

9

Speciality finance roles (e.g., treasury, audit, investor relations)

5

3

Cost and productivity management across organisation

7

2

Support for digital capabilities and advanced analytics

8

10

M&A (including post-merger integration)

9

5

Capital allocation (e.g., capital-expenditure allocation)

10

6

Pricing of products and/or services

10

11

 

It is interesting that so much of what the CFOs think is important other leaders place less importance on. The risk with this is that the CFOs will be spending time on activities important to them, but not necessarily important to the rest of the business, potentially causing tension and issues between the leadership team and business units. It is important that leaders within an organisation have the conversation to ensure everyone agrees with what is important, and remain focused on those.

And Avondale Business School (ABS) can help you achieve this, and indeed with any aspect of your business. Simply contact us a ABS@avondale.edu.au or call on 02 49802168.

Money Just Isn’t Enough

December 6, 2018 by Avondale Business School

“Just pay more to get the best”, has been a mantra in organisations for many years. However in more recent times the research is indicating that there are more important things to employees than money. In a recent article for McKinsey & Company, Jeffrey Pfeffer (read it here) notes two issues that contribute to employee engagement – job control and social support.

Job control refers to the amount of discretion employees have to determine what they do and how they do it. Studies have found that this has a major impact on employees’ physical health. The article notes a number of studies to support this, including one that found people who had a higher level of influence and task control in a reorganization process had lower levels of illness symptoms for 11 out of 12 health indicators, were absent less frequently, and experienced less depression. Pfeffer also reports that chaotic workplace environments also adversely affects people’s motivation, leaning and emotional state.

Social support in organisations also impact on employee health and well-being. Workplaces frequently create environments that are disincentives to developing social support, due to pitting people against one another in competitive assessments and promotional criteria. Whereas organisations that encourage people to care for one another enjoy higher employee wellbeing and satisfaction. And it can be as simple as fixing the language of the workplace through less titles and being more community focused.

Perhaps the best way to sum this article up is to allow Pfeffer himself to conclude:

“Giving people more control over their work life and providing them with social support fosters higher levels of physical and mental health. A culture of social support also reinforces for employees that they are valued, and thus helps in a company’s efforts to attract and retain people. Job control, meanwhile, has a positive impact on individual performance and is one of the most important predictors of job satisfaction and work motivation, frequently ranking as more important even than pay. Management practices that strengthen job control and social support are often overlooked but relatively straightforward—and they provide a payoff to employees and employers alike.”

The Avondale Business School can help your organisation develop employee well-being. To find out how, simply contact Warrick Long at Warrick.long@avondale.edu.au or 02 49802168.

When Being on the Same Page Is Bad For the Organization

November 28, 2018 by Avondale Business School

“All our employees are on the same page!” “We are united as a team!’ “As an organization we move forward as one!” Really? Are you sure everyone in your organization is on the same page, united as a team, and moving forward as one? It is more likely your employees hold different values and perspectives, are too reluctant to speak up against the prevailing view, and as a consequence are less committed to their tasks than you would like. These are the conclusions I drew from reading an excellent article from Maud Lindley, Jeffrey Schwartz and Malcolm Thompson entitles ‘When Cultural Value Leads to Groupthink, the Company Loses’ (read it here), found in a recent online edition of strategy+business.

Drawing on some recent Australian experience with values and perspectives in the public and corporate arena, the authors note that even company values like “courage” and “excellence” can negatively impact on people in their organization. So the key is to develop a workplace based on authenticity, which is described as creating “a context for dialogue in which the organization’s leaders and employees can talk openly and genuinely about the values of the enterprise, and why they agree or disagree with those values”. Without having such safe places for such discussions, hidden conflicts develop that can diminish people’s commitment and increase their cynicism. And it’s not about changing people’s minds, or getting them to al think the same way, it is about ensuring employees “feel that they can contribute freely and bring their whole selves to work”.

If you goal in the organization is to avoid conflict, then the authors note this to be a bad decision. They draw on the work of Patrick Lencioni who advocates conflict, and to avoid it is to put temporary comfort and the avoidance of discomfort ahead of the ultimate goal of the organization. Bringing painful issues to light and dealing with them constructively is the best course of action.

The article describes three capabilities effective leaders have that can help manage diverse perspective:

  1. Mental Agility – being able to recognize the existence of different perspectives and the reasons different people might hold them. These sorts of leaders consistently invite others to voice opinions, perspectives, or expertise that might challenge their own views.
  2. Cognitive Humility – that is, where leaders recognize their own unconscious associations and correct the errors of judgment that result. It involves bring a third-person perspective to their own experience.
  3. The Ability To Foster Psychological Safety – which involves creating contexts where everyone feel valued and heard – where people feel safe to contribute perspectives even if they differ dramatically from the organization’s prevailing values.

Thankfully the authors recognize that not every conversation will lead to a solution, and people may not necessarily understand another’s perspective any better, but it does mean people will “recognizer the workplace as a place with a true commitment to its employees: a place where people respect one another, even in disagreement, and are able to bring themselves openly to work. If you would like to see your leadership and organization become such a place, contact the Avondale Business School on abs@avondale.edu.au or 02 49802168 to find out how.

Tech at Work – Leaders Need to Rethink their Approach

November 21, 2018 by Avondale Business School

Technology for people at work is now considered a ‘complicated’ relationship. Such is the assertion in the latest pwc TechAtWork report (read it here). Based on their international survey of 12,000 people, pwc reported the following key observations:

  • Leaders say they-re choosing tech with their people in mind, but employees don’t agree.
  • People want digital skills, but aren’t being given the opportunity
  • Employees value the human touch at work, but also like a digital assist
  • Efficiency and status drive interest in advancing digital skills.

It is well worth the time to read the full article, and to fully appreciate what these points are really making. But based on them, pwc make four recommendations for leaders on how to get more buy-in and interest in tech from their people:

  1. You can’t separate technology from your people’s experience and what motivates them
  2. Understand what it’s like to do the job
  3. Rethink who needs to be in the room when making decisions
  4. Upskilling is not traditional training – change your mindset.

Leaders of organisations need to review these recommendations, and benchmark themselves against them. The Avondale Business School (ABS) can help you with your leadership, to find out how, contact Warrick Long at Warrick.long@avondale.edu.au or 02 49802168

Agile Leaders Do these Things

November 21, 2018 by Avondale Business School

There is no doubt the rapid technological and social change we live with no means organisations must become agile to survive, let alone thrive. Unfortunately our organisational systems have not kept pace with this change, ad unless they are able to become agile and that can evolve to the changing environment, they will fail. A recently publish paper by McKinsey&Company (link here) address what is meant by an agile company, and what is needed to be a leader of one. The characteristics of an agile organisation are:

  • Have a ‘north star’ embodied across the organisation
  • Work through a network of small, empowered teams
  • Use rapid decision and learning cycles
  • Have a dynamic people model that ignites passion
  • Use next-generation-enabling technology

The paper provides some guidance as to what is needed from leaders t lead an agile organisation. It’s important to note that to do so means changing self before trying to change the organisation. The 5 practices required of an agile leader are:

  1. Pause to move faster – create space for clear judgment and original thinking.
  2. Embrace your ignorance – listen – and think – from a place of not knowing
  3. Radically re-frame the questions – unblock your existing mental model
  4. Set direction, not destination – rather than a fixed goal journey with clear direction
  5. Test your solutions – and yourself

I will leave it with you to read the article in its entirety to get the full meaning of these tips, and it is well worth the time to do so, as the article also deals with changing teams and organisations. But don’t forget, it all starts with changing self. And if the Avondale Business School (ABS) can do anything to help you with your change process, just contact Warrick Long at Warrick.long@avondale.edu.au or 02 49802168.

Board Memberships: Can you Contribute?

November 18, 2018 by Avondale Business School

Here at the ABS several of our staff are engaged with the community by being on Boards and offering advice to particularly Not-For-Profit Boards on issues of governance, strategic planning and financial analysis. Currently all full-time staff at the ABS volunteer their time for community engagement via occupying board positions or as members of sub-committees as shown in the table.

Being on a Board is usually voluntary, but what it means to the business is an over-arching strategic perspective that senior executives do not get in the day to day running of the business. The Australian Institute of Company Directors has issued its Corporate Governance Framework to assist particularly Not-For-Profit Boards, (www.aicd.companydirectors.au) in recognising their duties in relation to various legislative requirements of directors such as the ACNC (Australian Charities and Not-for-Profit Commission) and ASIC (Australian Securities and Investments Commission).

Associate Professor Lisa Barnes has joined the Audit and Risk Committee for ACARA (Australian Curriculum Assessment and Reporting Authority) which is governed by the ACARA Act 2008 and the Public Governance & Performance Accountability Act 2013. At her first meeting they discussed the continued risks associated with the organisation and updated the current risk register in light the Boards risk appetite matrix. Members of the committee meet 4 times a year to support the Board in making sure the organisation is compliant with legislation, and that the organisation is continuing to assess its risks going forward particularly in relation to the information provided by the My School website (https://www.myschool.edu.au/) that enables Parents to seek information on schools.

A Trip down Memory Lane

November 18, 2018 by Avondale Business School

Being an Alumni of the University of Sydney, Assoc. Prof. Lisa Barnes was given the opportunity to walk the halls of her undergraduate days when she attended the 13th World Congress of Accounting Educators and Researchers, held at the new Ambercrombie Business School building, on 9-10 November, 2018. The conference was an initiative of the International Association for Accounting, Education and Research (www.IAAER.org).

The TRAC Model

The conference was attended by delegates from around the world and included symposiums as well as plenary sessions. A paper prepared from Warrick Long’s PhD entitled “Accounting Academic Workloads in the Higher Education Sector: Balancing Workload Creep to Avoid Depreciation” was presented. Delegates could relate to particularly the TRAC model presented, where it was demonstrated that Accounting Lecturers are undergoing a type of workload creep with the current changes to student cohorts and changes to the way in which accounting is taught in the higher education sector.

Erin Poulton, one of ABS’s sessional lecturers also presented a paper entitled “The Alzheimer’s approach to Financial Disclosure: the case of Australian Residential Aged Care Providers”. This paper was from Erin’s PhD and is timely in the fact that there has now been an announcement of a Royal Commission into Aged Care Quality and Safety. The Honourable Justice Joseph McGrath and Ms Lynelle Briggs AO have been appointed Commissioners. Justice McGrath is a judge of the Supreme Court of Western Australia and Ms Briggs is a former Australian Public Service Commissioner. The Royal Commission’s interim report is to be provided by 31 October 2019, and its final report no later than 30 April 2020.

Erin’s recommendations in relation to disclosure of Financial Statements by Residential Age Care providers, is that currently they are inconsistent and inadequate and recommends the use of the General Purpose Financial Reporting (GPFR) standards when preparing accounts. She also recommends an audit of these accounts to enable the entities to release financial information to stakeholders to help them assess their ability to be sustainable, and make sure they family members are well provided for in the facility.

The conference website links are as follows can be found here.

ABS Graduating Students Learn to “Do Lunch”

November 18, 2018 by Avondale Business School

ABS graduating students were treated to lunch in celebration of the last 3 years of work they have put in to achieve their Bachelor of Business undergraduate degree, see link here to degree information. Students will attend graduation in December 2018, after finishing sitting their final exams in the next 2 weeks.

Graduating students have a range of majors from Accounting, to Marketing and Human Resource Management. Some students have already secured employment at organisations such as Sanitarium (https://www.sanitarium.com.au/), & Adventist Schools Australia (https://www.adventist.edu.au/).

Taking the students out to lunch was a chance for students to reflect on their journey, and give some feedback to lecturers on ways to enhance the journey for future students. Students shared stories on previous lecturers, and their quirks and lecturers also shared their experiences as an undergraduates. It was a great way for students to finish their final semester, and shows the importance of the care and service that ABS staff show towards their students. Clearly small class sizes enhances the student-teacher relationship, making it one of trust and care, instilling confidence in the students for their future success upon graduation.

The graduation ceremony will be held on Sunday, 9th December, 2018. Before that, students also celebrate graduation with a student dinner, breakfast with Avondale Staff and finally lunch with the President on graduation day. The ABS expects approximately 15 students to graduate this year, with three students making the journey from our Melbourne offering on the day.

We wish all graduating students from ABS well in their future, and will take pleasure in adding them to our ever growing list of successful Alumni. We also take pride in introducing them to the necessary business skill of “doing lunch”, where so many important negotiations in business take place.

ABS Students Ranked in Top 7 Globally

November 18, 2018 by Avondale Business School

ABS students in the final year unit ‘Strategic Responses in Business’ competed all semester in a globally run computer simulation, and ranked in the top 7 worldwide in most of the success measures!

In this unit, aiming to give the students a simulated business experience, the students managed a computer sensor company over an 8 year (fictional) period. For each year the students were required to make over 160 decisions involving marketing, financing, human resources, production, and R&D. Throughout the semester there were assessments based on competitor analysis, preparing minutes of meetings and compiling company reports based on their results.

The final assessment in the last week of semester involved the students holding an Annual General Meeting for their shareholders (Staff invited from throughout the College), in which they had to report on their companies’ operations and answer questions from their shareholders.

Following the completion of their AGM, their lecturer Warrick Long revealed to those who attended that of the success measures used by the simulation, this group of students achieved a ranking in the top 7 places world-wide in four of the seven success measures, beating 587 other teams in universities from around the world. This was an outstanding achievement from this group, involving Sarah Rosenberg, Andrew Bradley, Kody Dobson and Enzo Bocchino, and they should be justifiably very proud of their achievement. Well done.

Effective Leaders Do This

November 18, 2018 by Avondale Business School

So what is it that effective leaders do again? Deborah Ancona and Henrik Bresman in an article in INSEAD Knowledge (click here to read) outline the five key capabilities their research over decades has shown. Below is a brief description of each one, but I recommend you read the full article and challenge yourself on these areas. But don’t be too discouraged if you begin to feel inadequate, the research indicates it is truly rare to see a leader exhibit more than two or three of these.

  1. Sensemaking
    A leader who is constantly looking for more information, and who can then turn that into a “cohesive framework that helps others understand what the next move should be” exhibits this. I know many leaders with a thirst for knowledge, but very few of these are able to then integrate it effectively into their organisations.
  2. Relating
    “The glue that brings people together”. These leaders are able to listen, truly understand, and then rally support – in that order.
  3. Visioning
    This capability entails providing a compelling image of what could be, “linking vision to the organisations core values and mission, imparting optimism in the process”.
  4. Inventing
    “Keeping the trains running” summarises this capability, by “devising ways to bring a vision to life, which may involve reorganizing the way work is done, identifying key performance indicators, and measuring progress.”
  5. Building Credibility
    This is the key capability, which involves “gaining respect from others by keeping commitments and operating with a strong sense of purpose”. That is, they walk the talk and their actions match their words.

Remember, it’s not about being strong in every capability, but instead knowing your strengths and weaknesses, so as to find the right people to build and complete leadership team. And Avondale Business School (ABS) can help you archive this. To find out how, contact Warrick Long on 02 49802168 or Warrick.long@avondale.edu.au