Archive for the ‘Culture’ Category

We Need To Talk About CFOs

Wednesday, December 12, 2018

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.

When Being on the Same Page Is Bad For the Organization

Wednesday, November 28, 2018

“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.

Trust Me, It’s Important

Friday, October 19, 2018

Trust is an undervalued resource in organisations. Most organisations take it for granted, and don’t have an intentional program to develop and nurture it. However, the business advantages of fostering a culture of trust are immense. In a recent article in Governance Directions (read it here), authors Vinay Goswami and Erick Fibich note the following about how trust enhances what employees do:

  • They put their best foot forward
  • They work efficiently together
  • Work towards a common goal
  • Think outside the box
  • Support each other’s back
  • Communicate with transparency, openness and honesty

Conversely, when trust is absent, employees will jockey for positions, hold back information and play it safe. They also tend to become more withdraw and disengaged, with confidence among the team eroding, as does commitment to the organisation.

Essentially, as the authors note, trust builds the bridge between the business need for results, and the human need for connection.

Interestingly, the article makes the strong point that “rebuilding trust takes far more effort, time and resources than it does to initially build and maintain it in the first place.” Which begs the question, why don’t organisations invest more into building a culture of trust?

The authors propose four area in which to build and maintain trust, and the short time it takes to read further about these is time well spent, but in short point form, these are:

  1. Understand the need to build trust with the team
  2. Understand the theories of trust and apply what is right for the environment
  3. Use a framework to structure you approaches to maintain trust
  4. Deploy feedback mechanisms to repair/sustain trust

Taken for granted, trust in your organisation can soon disappear, leaving a disgruntled, disengaged and uncommitted workforce. However, investing time and resources in building and maintaining trust can see your organisation succeed. And the Avondale Business School is here to help you with your success. Simply contact Warrick Long at Warrick.long@avondale.edu.au to find out how.

Employees Need More Respect

Thursday, October 4, 2018

Employees worldwide rank respect as the most important leadership behaviour, yet employees are reporting more disrespectful and uncivil behaviour each year – these are the comments from Kristie Rogers, in her article ‘Do Your Employees Feel Respected’ in HBR Online (read it here). It appears that leaders are failing to understand what it is that employees need to feel respected, and their attempts to address it are falling way short.

The article examines two forms of workplace respect, Owed Respect and Earned Respect, which is very informative and contains great advice. But the real value in this article are the tips for closing the gap between toxic and respectful workplaces. The full article is deserving of being read, but the summary of those seven tips are:

  1. Establish a baseline of owed respect – every employee should feel that their dignity is recognised and respected.
  2. Know how to convey respect in your particular workplace – use active listening, and value diverse backgrounds and ideas. Other examples include leaders delegating tasks, remaining open to advice, and giving employees freedom to pursue creative ideas.
  3. Recognize that that respect has ripple effects – leadership behaviours are often mimicked throughout an organisation, and just as incivility can spiral, so too can respect.
  4. Customize the amount of earned respect you convey – praise from an immediate manager, attention from a leader, and opportunities to head a project can have more impact on motivation then do monetary incentives.
  5. Think of respect as infinite – it can be given to one employee without shortchanging others.
  6. See respect as a time saver, not a time water – neglecting respect can be far more costly than attending to it.
  7. Know when efforts to convey respect can backfire – employees see honestly as one of the most valuable expressions of respect, insincere compliments, however well-intentioned, are likely to be counterproductive.

Respect is something that the new generation of workers are particular about, so leaders that understand that and tune in will be the ones who lead most successfully. And Avondale Business School can help you be a successful leader, simply contact Warrick Long on 02 49802168 or Warrick.long@avondale.edu.au

Leaders Should Take The Blame?

Sunday, September 9, 2018

Corporate culture is very topical at the moment, as we see unprecedented numbers of organisations under scrutiny for inappropriate corporate behaviours. It was hoped that the introduction of corporate reforms (Sarbanes-Oxley, CLERP 9, Etc.) would see a significant reduction in such issues, but has that really been the case?

More importantly, who is responsible for these events. Craig Smith, in a recent article entitled The Critical Consequences of Culture (read it here) provides three case studies of recent failures of corporate culture, being Wells Fargo, Volkswagen, and Uber. In the case of the first two entities, the failures resulted from pressures in either sales targets (Wells Fargo) or product to market deadlines (Volkswagen). In both cases the organisations were fined very heavily, and the people who “did the wrong things” were punished, usually by being fired. The difference with Uber, is that it was the senior corporate executives who paid the price, unlike the first two. Yet when things go well, it is the senior executive team who take the credit (and often the multi-million dollar bonuses).

And that is the nub of Smiths article – too frequently it is the workers struggling to meet unrealistic targets set by the senior leadership that pay the ultimate price. Yet who sets the culture of the organisation? Senior leadership. Smith makes the point that “while individuals must bear responsibility for their actions, the body corporate can also have some measure of responsibility, not least as a result of the goals set by senior management and the culture in which employees operate’.

The challenge for leaders is to think bigger picture to see what the real culture of the organisation is as a consequence of their actions, and whether they are prepared to personally take responsibility for the resultant culture of their decisions. As you consider your organisation and culture, Avondale Business School (ABS) may be able to help to be the ethical company to want to be. Call or email Warrick Long on 02 4980 2168 or Warrick.long@avondale.edu.au to find out how we can help.

It’s All Just A Matter Of Trust

Wednesday, July 25, 2018

If public trust is the not-for-profit (NFP) sectors most valuable asset, then why are directors and leaders of NFPs not doing more to safeguard it? The Australian Charities and Not-for-profits Commission’s 2017 Australian Charities Report (find it here) reports that trust in charities amoungst Australians has declined from 37% in 2013 to just 24% in 2017. Such a decline in the value of any other form of asset would have seen the directors of organisations demanding answers and taking urgent action to correct it.

A recent article by Lucas Ryan for the Australian Institute of Company Directors (AICD) entitled ‘Trust in not-for-profits’ (read it here) looks at this issue of trust and raises a number of very important points for leaders of charities and within the NFP sector to consider. Some of the highlights in this article include:

  • The AICD indicates there is little evidence of NFP directors addressing trust
  • While directors recognise the primacy of culture as the most significant issue relevant to trust, very few directors receive reports on culture, and most don’t have it as an item on their agenda.
  • The ACNC Report identifies belief in an organisations mission and transparency about the use of resources as key influencers of individual trust.
  • 45% of people in the ACNC study did not trust charities that paid salespeople to raise funds on their behalf.
  • Fewer Australians are trusting charities to apply their donations to a charitable purpose and to be ethical and honest in their fundraising.

These are really worrying trends for NFPs and charities, and the AICD identify the top 3 factors most critical to building trust:

  • Communicating and engaging openly with stakeholders;
  • Transparency of business practices and decision-making; and
  • Understanding the issues that matter to stakeholders.

This means directors and leaders of NFPs really do need to ensure they are actively engaging in discussion trust, and ensuring there are strong governance practices in place to guard this valuable organisational asset.

What are you doing to guard and enhance the public trust in your organisation? The Avondale Business School team can assist you in ensuring your governance program is maximizing the success of your organisation. You can contact us at abs@avondale.edu.au

The Upside of Addressing the Downside of Technology

Wednesday, July 18, 2018

Digital and mobile technologies give – but they also take away. Leaders of organisations need to play an active role in designing workplaces that encourage the adoption of healthy technology habits. Such is the thrust of a recent paper entitle ‘Positive Technology’ (read it here) by Deloitte.

This paper alerts leaders to the down-side of technology, warning about the potential perils of workplace digital technology. Some of the key dangers identified include:

  • Constant streams of messages resulting in a deteriorating of the individual’s ability to adequately process information;
  • The ease of creating virtual meetings making it too easy to include more people, and thus create opportunities for days of endless meetings; and
  • The unhealthy use of workplace technology which has seen increasing instances of poor sleep, anxiety and depression amoung employees; and

A very positive aspect of this report is the inclusion of suggestions for employers to address these issues. A few examples of these include:

  • Using available data of employee usage patterns to help individuals better understand and regulate their use of technology;
  • Incorporating ‘nudge’ strategies into workflow processes and applications to help break technology addiction;
  • Ensuring that the organisations leaders openly display healthy and balanced technology habits.

The article is an important contribution to current discussions on the role of technology in the workplace, where the speed of technology adoption and change is outpacing effective workplace practices and culture. By being reminded of this issue, we are now in a position to choose to care for our employees more than we care about technology.

You can contact the Avondale Business School if you would like more information on how we can help you with this, or any other business issue. ABS@avondale.edu.au

The Importance of Urgency

Wednesday, July 11, 2018

How do you become and maintain leadership in your industry when your industry is changing so constantly? McKinsey&Company report that the average large firm reorganizes every two to three years, and the average reorganization takes more than 18 months to implement! How can an organisation focus on strategy when reorganization seems to dominate?

In their article entitled ‘Organising for the age of Urgency’ (click here to read), Aaron De Smet and Chris Gagnon of McKinsey&Company report that companies still need to change, but argue there is another way than to enter the endless cycle of reorganisations. They identify that companies that are successful adopt more radical approaches, and become more responsive, more flexible, and shift decision-making to the front-line, (or “edge”). Based on their observations, they have developed an organisational outline of what the most successful organisations have adopted, and shown in the following diagram:

The key areas identified is that urgency must become the single biggest imperative for the company. The default for organisations is to fall behind competitors, and to succeed, companies must move qui8ckly. Jeff Bezos of Amazon asserts that companies need to adopt high-velocity thinking, using 70% of the information they wish they had to make decisions. It is also important to use emergent strategy and leadership, which the authors compare to improvisational jazz, where all the players improvise and are empowered to adapt. Successful companies also try new things, accept failure, learn from that, and try again.

Agility is the second component of the model, which means being willing and able to shift quickly to reshape the business. This includes creating a flatter organisation and moving away from title/rank having total control. Decisions are instead made in real-time by those that are in the moment at the front-line.

Capability is the third element, and includes creating a workforce who are able to adapt and integrate with new technology. It also embraces and continual learning, which includes learning being personalized for employees so they can act more urgently and improve effectiveness. The leadership model is also transformed by being less about control and more about influence, decreasing the need for many positions of formal authority.

The last of the model components is identity. Successful organisations need to have stable processes, tasks and roles. This includes having a simple but consistent series of process across the entire organisation. It is also important to have a purpose that inspires employees, one which leaders model. Employees thrive where they are part of an organisation that creates real value.

Creating an organisation that embraces urgency, coupled with agility, capability and identity does away with the need for constant reorganization and reactive strategies. Instead, as noted I the article, “you’ve got an organisation that can play fast and long”. A highly recommended read for people who really want their organisation to succeed.

Open Offices and Closed Minds?

Wednesday, June 27, 2018

It is hard to remain objective on issues when all our technology is geared towards filtering the information we receive so that it reinforces our existing views. I became very aware of this when a recent article on the issues associated with open office plans came across my feeds. I eagerly read the article and felt a sense of satisfaction that it supported my own personal view that open office plans do not deliver on all that they promise. My introverted self felt comforted that I wasn’t an outlier in an extroverted world.

However, given that so many organisations are moving towards open plan offices, and that the financial investment is too big for them to not have considered the risk of getting it wrong, I felt I needed to consider the (uncomfortable) option that open office plans may actually work.

The advantages of open offices are typically noted as:

  • Encouraging spontaneous epiphanies amongst colleagues
  • Enhanced collaboration
  • Greater flexibility
  • More engaged and productive workforce

There are also challenges, as identified in a number of research studies about employee dissatisfaction with open office plans:

  • Noise and other distractions reduce productivity
  • Lack of personal space
  • Decreased team cohesion and satisfaction
  • Increased levels of sick leave

My search yielded a number of articles supporting the open office design, usually with the caveat that the organisation needs to be very strategic in how it is implemented, designed and the culture that grows from it. Other articles were tentative in their support, noting that it worked in limited circumstances, for example, for connected team projects. Other articles were clearly not supportive.

Interestingly, a number of articles noted that the decisions to move to open office designs were frequently made by leaders who retained private offices and were not aware of the issues and impacts of them.

So in the interests of fair play, listed below are a series of references to articles that discuss open office designs, some supportive and some not. Embedded in the articles are links to various research projects and reports that explore the consequences of open offices. But as for me, the idea of working in the midst of a crowd of extroverts causes me to break out in a cold sweat.

https://hbr.org/2018/01/sgc-research-when-moving-to-an-open-office-plan-pay-attention-to-how-your-employees-feel

https://www.newyorker.com/business/currency/the-open-office-trap

https://theconversation.com/open-plan-offices-can-actually-work-under-certain-conditions-89452

https://www.archdaily.com/884192/why-open-plan-offices-dont-work-and-some-alternatives-that-do

https://www.entrepreneur.com/article/313034

https://www.oxfordeconomics.com/when-the-walls-come-down

By: Warrick Long, Lecturer, Avondale Business School

Avondale Business School collaborates with Business

Monday, May 15, 2017

Business and College collaboration is a wonderful way to enhance student learning. A recent excursion organised by the Avondale Business School to Sydney saw students visit 3 business to get insights into risk management, marketing, human resources and accounting.

The first business to open its doors was the Mascot Air Base facility. Manager of Airline safety lead them into the emergency procedures training facility which demonstrated the approach to risk management, in particular in relation to the evacuation of passengers in the event of an emergency. Students were privileged to be shown the various different aeroplane doors used to deploy passengers, rafts and survival kits. They were also shown the pool used for ocean training, in both the dark and in the rain.

Students were then put into the emergency procedure training simulator, where they experienced a crash landing in which the cabin lights turned off and the cabin filled with smoke. Students followed the orders of the cabin staff in relation to “evacuate, evacuate” and were led safely out of the simulator. Some students also were given life vests to deploy, and shown the various safety features such as the water activated light. Students had a better appreciation for flight crew and risk management procedures, after this confronting experience.

Students then headed out to Allianz stadium, for a tour of the facility. Students were taken down the ramp into the stadium, and the logistics of running the stadium that is shared by three different codes of sport (NRL, Rugby Union and Football) was explained. The marketing of the stadium signs, the sponsorship of the different codes and general keeping of the grounds were explained. Students asked questions such as who are the sponsors and what are the benefits of sponsorship from a marketing perspective.

Student then headed into the Sydney Roosters facility where they were led into the boardroom for an “Apprentice” style session (yes Mark Bouris is on the Board of the Sydney Roosters), by the Chief Financial Controller Mr Manuel Vlandis. Students were presented with financial information about the club and the challenges of running a rugby leagues club from a financial perspective. Questions were asked of the salary cap, costs of injured players, and how the model works in relation to revenue streams such as memberships, gate takings and sponsorship. The CFO was happy to answer the questions, and speak of his relationship with the Board and the new strategic plan they are currently developing.

Students then headed next door to the NSW Waratahs headquarters. There the player development manager Lachie McBain explained the complexities of running a rugby club, including issues such as preparing players for life after sport. He talked about the initiatives the club has in place for players such as further education and financial planning. He discussed the available careers in a rugby association, and his role in relation to his employer being RUPA (Rugby Union Players Association), formed to prepare players for life after sport. The club facilities were shown to the students, including the training areas, technology viewing areas and player lounge. Students asked questions in relation to membership numbers, revenue from Foxtel, sponsorship and player wages.

Feedback from the day included the following:

“It gave us insights into jobs where we do not see what happens behind the scenes”

“It was awesome to see business applied in a sporting context”

Avondale Business School will continue working with these businesses in the future, turning textbook learning into the reality of business. As the late Wallaby and Lawyer Ross Turnbull stated “There is nothing that I learnt in SPORT that doesn’t apply to BUSINESS, or LIFE” (2014). This excursion came from research done previously into the education of current sports people for their career after sport, a paper to be presented at the Global Conference on Education and Research (GLOCER 2017), which will be held during May 22-25, 2017 at the University of South Florida Sarasota-Manatee campus in Sarasota, Florida.