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How HR is powering Adobe’s global expansion


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NO HR TEAM IS AN ISLAND Until recently, HR teams have been criticised for operating in a siloed world with only limited transactional interactions with other departments. Fortunately, this has changed. With HRDs now entrenched as critical business advisors, it’s mission-critical for information and knowledge about the business to be high on HR’s agenda. And if no HR team should be an island, the same applies to organisations themselves: the wider forces of the national and global economy must be considered. As revealed at a recent economic forum by one of Australia’s big four banks, many of the challenges facing Australia’s economy will have significant impact on HR. Sceptics may be surprised to learn that Australia is faring reasonably well. Interest rates remain at record lows, inflation is in check and consumer confidence is increasing. The battered manufacturing and retail sectors may also get reprieves by way of niche production areas like 3D printing emerging in the former, and online shopping finally coming of age for the latter. While the Aussie economy is closely aligned to China, which is navigating its own hurdles, the US economy is rebounding and will play a larger role than it has done in recent years to shape global markets. Locally, the much-trumpeted ‘end’ of the mining boom is a misnomer; the boom is simply moving from an investment phase to a production phase – meaning income will start to flow from these investments. However, it’s true the key economic driver will shift from mining to housing & construction. As mining companies move into their new phase with less demand on people-resources, more workers will become available for other industries – an encouraging development for those organisations still struggling with talent shortages. To compete with emerging Asian economies, Australia will need to become more competitive. Productivity will be firmly in the spotlight. Each and every industry present at the forum confirmed that productivity has become a key focus. From negotiating EBAs to undertaking talent audits and using technology more effectively, the onus will be on HR to ensure their workforce can do more with less.

Editor, HRD


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How HR is powering Adobe’s global expansion


COPY & FEATURES EDITOR Iain Hopkins JOURNALIST Janie Smith PRODUCTION EDITORS Roslyn Meredith, Moira Daniels, Sarah Friggieri



CORPORATE CHIEF EXECUTIVE OFFICER Mike Shipley CHIEF OPERATING OFFICER George Walmsley MANAGING DIRECTOR Justin Kennedy CHIEF INFORMATION OFFICER Colin Chan HUMAN RESOURCES MANAGER Julia Bookallil Editorial enquiries Iain Hopkins tel: +61 2 8437 4703 Advertising enquiries James Francis tel: +61 2 8437 4766 Steven McDonald tel: +61 2 8437 4757 Gareth Scott tel: +61 2 8437 4784 Subscriptions tel: +61 2 8005 6674 • fax: +61 2 8437 4753 Key Media Key Media Pty Ltd, regional head office, Level 10, 1–9 Chandos St, St Leonards, NSW 2065, Australia tel: +61 2 8437 4700 • fax: +61 2 9439 4599 Offices in Auckland, Toronto, Denver, Manila

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Cover: HR in a creative media mecca Adobe’s senior vice president, Donna Morris, talks about business growth, employee perks, social media and ditching performance reviews

16 What’s next? Making your mark as a non-executive director You’re already an experienced HR director or CHRO, so what’s next? Leveraging your skills and experience to secure a seat at the non-executive director table isn’t always easy, but as our experts share, the key to success lies in proving your strategic worth

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The micro-roles of C-suite executives Sarah Megginson discovers how a little self-knowledge can give you the edge in executive team politics


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Profile: No challenge too big Having the role of sage counsellor of the CEO is the Holy Grail for HR directors. HRD talks to Brian Benari, MD and CEO of Challenge Limited, and Angela Murphy, executive general manager – human resources, about the secrets behind a successful CEO/HR partnership



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Leadership: More than just emotional intelligence Neil M. Ashkanasvy outlines the importance of emotions while guiding decision-making towards achieving personal goals and creating a healthy workplace culture

From good to great: Reinventing HR at Kimberly-Clark Kimberly-Clark’s CHRO Liz Gottung took centre stage in the company’s recent transformation, driving a massive change initiative that resulted in a rise in stock prices and a turnaround in employee sentiment. HRD finds out how the company did it

An elusive quest: Using employee bodies to bolster engagement Despite the widespread beliefs of many business leaders, unions can play a productive role in employee communications. Professor Russell Lansbury looks at how representative bodies can enhance employee engagement


REGULARS 04 | Insight: The evolving role of the CHRO 10 | Infographic: C-suite selection and succession planning

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The role of the CHRO is embarking on a radical journey of transformation and, according to a new report outlined in the latest Deloitte Review, the profession is borrowing elements from CFOs in this evolution Now that we’re entering an era in which firms are competing on knowledge and intangible assets, access to and management of critical talent is of strategic importance to enable successful corporate growth, notes Deloitte Review’s report





2010 60%

Tangible assets

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85% Intangible assets

entitled Disrupting the CHRO: Following in the CFO’s Footsteps. But just how this transformation to a more strategic, growth-focused leader can happen depends on how the CHRO of the future reacts to the four following themes. These themes, according to the report’s authors, Cathy Benko, Trish Gorman and Alexa Rose Steinberg, will define HR leadership: • Recalibrating the CHRO role • Embracing open talent models • Going long on analytics • Curating the talent experience The report cites Lauren Doliva, managing partner of Heidrick & Struggles’ global HR Officer Practice, who says the CHRO role must be reinvented, with the focus shifting from steward and operator activities to strategist and catalyst ‘faces’. “There are no longer ‘best practices’ in human resources,” Doliva says. “Instead, the CHRO must be an executive who, like top CEOs, can envision and


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shape the talent strategy and architecture to align with transformational business objectives. “In a marketplace where talent is scarce, boards are taking note of the opportunities for getting the talent agenda right – along with the risks of being left behind.” One way to gauge both the current and future trajectory of an organisation’s talent platform is to evaluate HR’s project/program portfolio: How well does each directly align with the strategy of the business? The portfolio of investments will yield the organisation’s future currency.

One way to gauge both the current and future trajectory of an organisation’s talent platform is to evaluate HR’s project/program portfolio: How well does each directly align with the strategy of the business? The portfolio of investments will yield the organisation’s future currency The report’s authors give the example of a CHRO new to her technology company who did just this when she asked her leadership team to answer the following question: What strategic purpose and collective set of outcomes do we expect this portfolio to deliver for the business? When the answers she heard were inconsistent, a two-day session was arranged to thrash it out, and the result was a talent agenda that was strategic, actionable and measurable. While the leaders still run their own shops


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day to day, they now do so with a strategic mindset, a consistent view and a set of supporting guideposts with little room for veering off course, while at the same time infusing an esprit de corps within HR that is permeating the entire business. Another trend highlighted in a recent Harvard Business Review (HBR) article indicates that companies are increasingly filling the CHRO role with leaders from functions on the business side, such as operations, marketing or corporate law. The HBR authors reason: “If companies continue to award top HR jobs to non-HR executives, the CHROs of the future will be more likely to have an understanding of commercial models, as well as experience with change management and finding pragmatic solutions to complex issues.” A great example of this playing out would be Melanie Foley, EVP and chief HR and administration officer at Liberty Mutual Insurance Group. Foley grew up on the business side and, before becoming CHRO, held the role of EVP, general manager of the personal markets distribution organisation.

CHROS IN 2014 Today, CHROs can: yy create and execute operational HR processes and policies yy demonstrate HR technical and functional expertise yy work with admin functions and support top management team yy be responsive to hiring needs and build talent pipeline yy evaluate employee performance yy develop competitive compensation and benefits offerings yy develop, communicate and implement policies yy ensure process control yy execute change processes

CRITICAL SKILL SETS CHROs must be able to: yy ensure effective operational HR delivery yy align organisational talent capabilities with overall business strategy yy work with line management, leadership and board; advocate for employees at the executive table yy interpret talent trends – social, regulatory, demographic, economic – and translate into opportunities yy build a rewarding environment; improve employee engagement yy implement aligned end-to-end global talent management architecture yy design and implement competitive, compliant and market-sensitive variable compensation schemes globally yy drive organisational change initiatives yy provide strategic, innovative problem-solving yy be steward of organisational culture and values

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Foley states that her proven track record enhanced the credibility of the HR function, opened doors and gave a platform to HR professionals to advance the function in a more strategic direction.



It is well documented that the traditional model of nine-to-five job holders clocking in to assigned office workspaces is waning. John Hagel and John Seely Brown have been tracking what they call the ‘Big Shift’ in the global business environment as a result of digital technology. One set of changes they describe is the rise of creative talent, its growing role as a source of value, and its increasing mobility – and more aggression and creativity is needed by companies to pursue this talent, be it inside or outside the firm. With more variety in the offerings in the talent marketplace, there are more options to structure employment arrangements and different types of attendant risks. The CHRO should rethink investments in talent in terms of their placement, expected future benefits and duration. Redefining work, jobs and competition for ideas and designs is part of the CHRO’s new challenge and will emphasise composition of ‘off-balance-sheet’ talent networks, the report says. This will involve new collaborations among CHROs, business unit leaders, functional leaders and procurement. CEOs expect that the CHRO will be able to articulate how a company will navigate this dynamic talent market and find the most reliable path to growth.

Traditionally, the report says, HR has relied more on qualitative strengths and shied away from quantitative analytical tools. The authors cite Beth Axelrod, former investment banker and strategy consultant, who says the investment priorities of future CHROs will need to include fact-based predictive insights. It can be easy to get distracted with the overwhelming availability of data, so the more effective way to apply analytics to targets is to work backwards from desired outcomes rather than data mining in the hope of unearthing some unexpected gem of insight, says Cisco’s organisational effectiveness leader, Matt Tabor. When one firm wanted to double its sales force, it assumed its existing employee base would be the deepest talent pool for successful sales recruits. However, after tracking both internal and external candidates through the hiring process and their subsequent success, it turned out that while existing employees were more likely to make it through the sales hiring process, they were less likely to succeed as salespeople. Based on this insight, the company changed its hiring process by finding ways to evaluate candidates based on potential for future success in sales rather than past success in other parts of the organisation. Similarly, some HR teams are using predictive models to identify precisely where interventions should be targeted, down to the level of a particular person at a particular time, thereby getting greater impact from their limited resources.

CEOs expect that the CHRO will be able to articulate how a company will navigate this dynamic talent market and find the most reliable path to growth

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As one CEO put it: “CHROs need a plan for attracting the right talent, not some generic concept of top talent to fuel growth and competitive advantage.”

CURATION Today’s CHRO is the curator of enormous potential intangible and tangible value, say authors Benko, Gorman and Steinberg. A company’s professionals can, and often already are, serving as its ambassadors – walking and talking and texting and tweeting expressions of the company’s brand on its behalf. But it works both ways. Providing employees with a sense of purpose and contribution to the greater good is becoming a necessary requirement


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The path to today’s CFO was not linear – and, left to its own devices, the transformation of the CHRO could also proceed in a haphazard way. But while the CFO role was reinvented over the course of some decades, the CHRO will not be afforded the same runway

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for attracting and retaining desirable candidates, and will require CHROs to collaborate with leaders from marketing, community relations, corporate responsibility, philanthropy initiatives and the like. Engaged workers tend to be more resilient and more open to learning from setbacks; they’re also more likely to share their positive (or negative) professional experiences with others. And with many large companies pushing to have 50% of their new hires come from referrals, it’s today’s workers who will help define tomorrow’s workforce, they say.

A LEAF FROM THE CFO HANDBOOK One only needs to compare the changing role of the CHRO to that of the CFO, which has completely transformed from that of bean counter in the back room to a strategist involved in helping the CEO and business heads find new opportunities and assess their strategic and financial merits and risks. The same strategic mindset is required to excel at the CHRO role today, and some adjustment to this shift will be needed from other members of the executive team. The path to today’s CFO was not linear – and, left to its own devices, the transformation of the CHRO could also proceed in a haphazard way. But while the CFO role was reinvented over the course of some decades, the CHRO will not be afforded the same runway. The rapid pace of change in talent markets and technology as well as social norms and mechanisms demands a more timely, systemic and strategic response. Inevitably, not all incumbent HR executives are likely to make the change. Another trend the authors highlight indicates that this is already happening, with the growing tendency for firms to look outside for a fresh understanding of talent. From 2008 to 2011, only 34–38% of newly appointed CHROs came up from inside. Similarly, the average tenure of CHROs has declined over the past 10 years. But with the global economy poised for a growth cycle with both cash reserves and CEO confidence trending upward, the authors believe the CHROs who can draw from analogy, see the necessity and apply ingenuity, while also surmounting the disruption of the role, may well see their internal effectiveness, external market value and overall stature climb.


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With only 14% of CEOs confident that their current succession plans are adequately preparing their businesses for tomorrow’s challenges, HRD has collected some fast facts about the current state of leadership pipelines HOW TO CHOOSE A LEADER


» Have we seen them in challenging roles, and how did they go? Have they been stretched and shown the potential to adapt and grow? » Do they have some war stories to share (successes and failures)? » Are they learning agile and do they embrace change? » Are they collaborative or charismatic, highly intelligent, or really decisive? Source: Kellie Egan, HR director of Atlassian, HR Summit 2014

»“We have a standing executive committee composed of one board member from audit, the head of HR, and senior staff. Their job is to meet quarterly and talk about succession, supported with the performance reviews of all senior executives and information on what each is doing to move forward in the organisation.” » “In some companies it’s board led, in others it’s management led. The role of HR is not clear.” » “Our board is involved but only in an advisory capacity.” » “The board plays an arms-length, distant advisory role. Their role is to review and approve the plan. Eighty per cent of the time, they approve the plan as is; 20% of the time they request more data.” » “The CEO drives the process, with board awareness and support.” » “The CEO might consult HR, depending on the quality of the HR leader, who they are, and how much respect the CEO has for them.” » “HR is more than just in the loop. They play an active role in the ongoing development of senior executives and the review process.” » “HR really manages the process, keeping track of lists, dates, milestones, and inserting their point of view.” » “HR is really not a factor. They aren’t a strategic player in the companies I am involved with. They are more tactical.” Source: Board members and executives quoted in the Institute of Executive Development 2014 report on senior executive succession planning and talent development, Stanford University

“Most company directors greatly underestimate the difficulty, time, and cost associated with CEO and C-suite succession planning” Scott Saslow, founder and CEO of the Institute of Executive Development, 2014 10 | APRIL 2014

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We typically look for successors up to 3 levels below




CEO C-suite/executive suite Multi-department and multifunctional leaders


Department and function senior managers


Department and function managers

5 of current leaders were pre-identified in a succession plan

of high-potentials leave the leadership pipeline before they reach succession plans

General workforce Source: Kellie Egan, HR director of Atlassian, HR Summit 2014



of those who find themselves promoted to leadership do so in newly created positions

of organisations would change the members of their leadership team if given the opportunity

“Succession planning is not as simple as recruiting someone to fill a gap or having a career conversation with a high-potential about the next big move ... we need to plan today for the unknowns of the business two years from now and beyond” Kellie Egan, HR director, Australia & APAC – Atlassian

13% of leadership positions were eliminated in the past year

75% of people identified as potential successors do not perceive significant opportunity for career progression

Source: CEB Corporate Leadership Council Succession Management Survey, 2013


CEO turnover may trigger a new board leadership structure. According to The Conference Board’s annual analysis of S&P 500 CEO turnover, over a third of departing CEOs retained the role of chairman of the board for at least a period of time, while less than 20% of new CEOs immediately assumed the chairman role.


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Strategic talent needs


Executive compensation


Retention of top talent







Source: CEB Corporate Leadership Council Succession Management Survey, 2013

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HR IN A CREATIVE MEDIA MECCA Donna Morris, Adobe’s senior vice president of people resources, talks to Jillian Gregorie about business growth, employee perks, social media, and ditching performance reviews

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Many companies vie for a spot among Fortune’s ‘Best 100 Companies to Work For’ every year. Adobe Systems, the San Jose-based software giant, has made the list not just once or twice but a total of 14 times since 1995. Moreover, the firm that developed such distinctive products as the Portable Document Format (PDF), Photoshop, and Flash Player is routinely honoured with similar titles in countries spanning the globe. Donna Morris, Adobe’s senior vice president of people resources, insists she’s more proud of the work environment underlying such a distinction than of the title itself. “Clearly we are flattered and it’s always a great sign of recognition to be viewed externally, but the most important indicator from our perspective is establishing an environment that really allows everybody to do their very best,” Morris says. “Being on those lists is an outcome of creating an environment where people feel that they can be successful.” Although Morris has helped to establish and maintain this environment by instituting a variety of groundbreaking programs and initiatives, she insists that her satisfied employees are the result of an overarching company philosophy grounded in four fundamental principles (see box).

ADOBE CORE VALUES »» Genuine: Sincere, trustworthy and reliable »» Exceptional: Committed to creating exceptional experiences that delight our employees and customers »» Innovative: Highly creative and eager to connect new ideas with business realities »» Involved: Inclusive, open, and actively engaged with our customers, partners, employees, and the communities we serve

“I think each company, based on their respective strategy and business initiative, has to determine what values are core to their business – in simplest terms, what behaviours are critical to the success of that business. “And then I think the function known as HR, or in our case we call it people resources, is responsible for building initiatives, consulting, and helping to drive the business to really provide the environment that fosters those behaviours.”


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“Here at Adobe, when we do an acquisition, it’s fundamental that we’re able to keep the people” In Adobe’s case, this means creating a culture in which growth is encouraged, and employees feel that they have plenty of opportunities to stay with the company and advance into more challenging positions. Morris describes this as “ultimately one of the most important benefits of working here at Adobe”. But there are other notable perks provided to her firm’s employees as well, many of which promote a healthy life outside of the office walls. Morris details a number of the benefits granted to those working at Adobe, including the company’s matching of charitable donations, an employee stock purchase plan, winter and summer breaks for their North American staff, educational reimbursements up to US$10,000, and fitness subsidies. In addition, Morris says today’s workforce is “very interested in taking a broader view of the world” and that many of these programs, particularly those involving community service, “strengthen employees’ understanding of the communities in which they operate, and also, frankly, some of the customers who we serve”. One opportunity in particular that she finds valuable is Adobe Youth Voices. Through this outreach initiative, employees go into underserved communities around the globe and teach young people how to use Adobe’s creative products to express their personal narratives. Morris says the stories range from those on pollution to domestic violence, and everything in between. Not only does this provide employees with a unique way to volunteer, but it also puts into practice the core value ‘be involved’. While a combination of these factors has gained Adobe worldwide attention for their satisfied employees, there’s one tenet that Morris stresses most: looking forward. “I think the important thing is to never stay stagnant and to always evolve and reevaluate your practices and make sure that they’re reflective of the

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workforce that you have today, but most important, the workforce that you need for the future.”


EMPLOYEE PERKS AT ADOBE »» Transportation and storage »» Electric vehicle charging stations »» Oil change and car detailing services on site »» Shuttle service »» Guaranteed ride home service »» Bike cage »» Bike share program »» Bike repair on site »» Kayak storage »» Food, health and fitness »» Fitness centre and classes »» Bread delivery »» Free dinners for workers after 6.30pm »» Farmers market on site »» Community-supported agriculture program »» Massage services on site »» Mail services »» Dry cleaning drop-off and pick-up »» Game room »» Discounted tickets

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One of the most radical changes Morris has brought to Adobe occurred in 2012 when she announced that the company was abolishing its long-standing performance reviews. It started with an impromptu remark she made to an Indian reporter that revealed her growing discontent with the yearly review system. Looking back, Morris reflects on these performance rankings as a nuisance that hurt employee morale and yielded limited results. “What we don’t want is an approach that is a rearview mirror of how people are performing, almost like the dreaded dental visit.” She noted in Forbes that not only did the annual review leave many employees feeling defeated, but it also meant that she frequently witnessed increased productivity right before the review period, as opposed to workers feeling motivated year-round. “We really felt that ratings and rankings were not the way to underscore the importance of talent in the organisation, and instead we wanted to manage our business such that people always knew what was expected of them, that employees always had the opportunity to receive feedback or provide feedback, and that they were in an environment that could allow them to grow. So we ditched everything that had to do with traditional performance reviews: the forms, the ranking, the rating, the annual calibration of talent. Instead, we adopted something that’s more agile, just like the business is more agile today.” In place of these rankings, Morris has instituted an ongoing manager-employee dialogue called ‘Check In’. As part of this process, supervisors and their staff work together to set goals, and then employees are given consistent, up-to-date feedback regarding their progress. As Morris puts it, with the Check In system employees “… are not waiting for that one time of year where they might find out some secret about their ranking or their performance”. Morris says voluntary turnover has fallen, while involuntary attrition has risen, and many employees credit the new system as a much-needed improvement in transparency. Morris also points to the adoption of Check In as an example of how HR executives can influence other board executives to implement new ideas and reforms. When pitching a new undertaking,

“We ditched everything that had to do with traditional performance reviews: the forms, the ranking, the rating, the annual calibration of talent. Instead, we adopted something that’s more agile, just like the business is more agile today” Donna Morris, Adobe

she says it’s critical that HR managers emphasise what the proposal will mean for the business’s bigpicture goals. “I think it’s important to sell the business proposition. What I have found to be successful is not really talking about a people program or an HR initiative, but rather, trying to frame what kind of a business problem you’re trying to solve and then outlining the benefits of taking a different direction.” In this instance, she pointed out that performance reviews consumed 80,000 hours of company time, and that this was a “very onerous performance management approach”. In addition, the outdated, once-a-year model was out of sync with the fluid, ever-changing nature of the tech industry. So, Morris says, “I framed up basically the idea of abolishing the performance review by helping other leaders to be aware – almost come to a conclusion themselves – that the time that they were investing in performance reviews could be better spent in supporting the transformation of their business.”


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MAKING ACQUISITIONS ABOUT PEOPLE In addition to revitalising the performance review process, Morris also successfully oversaw the acquisition of such major tech firms as Macromedia, Omniture, and Sun Microsystems. In regard to all three, she notes that she took great strides to ensure that Adobe incorporated the successful part of each firm into their own company, from customs and practices to the key talent themselves. “I believe one of the core success criteria of any acquisition is making sure that you understand what has made that company successful.” To do that, Morris advises listening to that company’s employees and allowing them to shine where they’ve proven capable. She points out that many of the best practices that prove advantageous “… only get brought along by the employees”. As a senior business leader at Adobe, Morris understood the importance of continuing Macromedia’s annual MAX conference, as well as Omniture’s marketing summit, which expanded from 1,000 participants in 2009 to 7,000 in 2014. In upholding these successful endeavours, she says, “it exemplifies the importance of really understanding what’s core to companies that you’re acquiring and seeing how you adapt your company or evolve your company to integrate some of the strengths of the company you’re acquiring”. Morris recognises there’s a distinction between actual business integration and acquiring a firm just for pride or profit’s sake. “Some companies acquire other companies to build market share and frankly to take over customers. People are not always the core reason they do acquisition. Here at Adobe, it’s fundamental that we’re able to keep the people – the majority of employees. If we’re not able and/or we don’t believe that we’ll have success in bringing those employees and having them part of Adobe, then it’s unlikely the deal will move through.”

A SOCIAL BUSINESS Finally, one last way that Morris embraces modern methods of HR management is her celebration of social networks as a tool for talent acquisition and engagement. While many HR executives are wary of using popular websites to reach prospective employees, Morris sees limitless potential in attracting and communicating with a vast, involved audience. “The reality is all of us are socially interacting in our personal lives, and I believe the lines are blurred


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between your work life and your personal life. It’s more of an integration of the two,” Morris says. She mentions that Adobe Life, a blog that highlights the work culture at Adobe, has more than 173,000 visitors and its own hashtag (#adobelife) on Twitter. Moreover, she boasts that Adobe’s various social channels – Twitter, Facebook, Pinterest, etc – have over 17 million followers. She has found these channels to be particularly useful in reaching out to employees, “particularly prospective employees and millenials”. Morris tells a story about how she once provided her contact information to a room full of people after an important meeting, and included her phone number, email address, Twitter handle, and LinkedIn details. After the meeting concluded, several of the attendees contacted her, but only through Twitter and LinkedIn. Nobody called or emailed. She realised then the power of digital media for business communications. “So I think social needs to be something that we embrace to really ensure that we’re tapping the full potential of all employees that work for us today or might work for us in the future.”

ADOBE’S RECENT BUSINESS ACQUISITIONS »» Neolane, 2013 »» Behance, 2012 »» Efficient Frontier, 2012 »» Day Software, 2010 »» Omniture, Inc, 2009 »» Macromedia, Inc, 2005

CHALLENGES AT ADOBE While Morris has a long track record of bold, innovative, well-executed HR strategy, she does run into challenges. First, she says she tries to stay aware of when her company is becoming stagnant. “As you become successful as a company, one thing you have to be cognizant of is that you don’t end up with complacency. People feeling like ‘hey, you’re successful enough, you don’t need any more success’ can be very dangerous to an organisation.” Secondly, when Morris started in this role, Adobe had 5,000 employees. It’s now comprised of about 12,000. She does concern herself with “looking at how we scale the business”. As Adobe spreads in both number and location of employees, Morris constantly reassesses her processes and mechanisms to make sure they still work, given its larger magnitude. More than anything else, though, Morris says she won’t ever stop trying new things, even at the risk of failure. “What I will say is: you have to take risks and you have to realise you’re going to fail sometimes. It’s OK to fail; you just want to fail fast enough that you’re able to correct yourself and move on.”

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WHAT’S NEXT? Making your mark as a non-executive director

You’re already an experienced HR director or CHRO, so what’s next? Whether you’re pitching yourself as a future CEO, or you’re content to continue meeting new challenges in HR, sitting on a board as a non-executive director will serve you well. Leveraging your skills and experience to secure a place at the table isn’t always easy, but as our experts share, the key to success lies in proving your strategic worth 16 | APRIL 2014

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It seems like the freelance opportunity of a lifetime. As a non-executive director (NED), you’re employed to come into a company one day a month to offer strategic, specific and objective advice – and for this single appointment in your monthly calendar you’re paid handsomely. But the generous fees paid to NEDs reflect much more than the time spent sitting at a boardroom table each month. The fees also take into consideration an individual’s duties and responsibilities before and after the meeting takes place, not to mention their years – if not decades – of industry experience and business acumen. “Being a good NED requires an ability to see the big picture and understand the business of the organisation, which can often be hard for those coming from specialist backgrounds,” explains Anne De Salis, an NED since 1996. “I find the role exciting, demanding and very satisfying, not least because of the importance of marrying capabilities and culture to the strategy a business is trying to pursue.” Currently an NED of ME Bank Pty Ltd and Funds SA, a large public sector super fund with $20bn in funds under management, De Salis draws on her many years of experience in senior executive, HR and leadership roles in both the public and private sectors for her board appointments. “I became a board director long before I left corporate life, and I found this early experience invaluable in knowing what was expected and required,” she says.

“As a director, you need to be comfortable with delegating the running of the business to others, yet be able to see any signs of stress – often buried deep in the board papers – and provide guidance on how things should change for the better.  The position comes with quite onerous responsibilities and can be messed up by the brightest of people.” For those HR directors and CHROs who have their sights firmly set on a prized board position, De Salis recommends you broaden your experience by taking on different leadership roles, whether in a corporate or not-for-profit environment. Your challenge is then to put together the case that you will add value to the board, says Ruth Medd, executive chair, Women on Boards. “To do this, you need to get into the mindset of a recruiter or a chairman who is looking for new directors, and work out how to communicate ‘this is how I can strategically add value to your board’,” Medd advises. “You’ve got to stop thinking about it from the position of ‘this is what I’ve got to offer’, and start saying ‘this is what you need and this is how I can do it for you’. It’s about putting forward a business case, because you need to demonstrate how you’re going to add value. You do this by defining your proposition.”

TOP 5 CORE CHARACTERISTICS OF AN EXCEPTIONAL NED 1. Strong, but not domineering 2. Strategic 3. Able to dive into details 4. Engaged 5. Team-oriented, while also preserving independence

HOW TO NEGOTIATE YOUR WAY ON TO A BOARD The prospects for HR professionals on boards “is increasing”, Medd says. “It’s not yet a common


Non-executive chairperson (2012)

Top 100 average



Top 100 median



ASX 101–200 average



ASX 101–200 median



Source: Remuneration for S&P/ASX 200 Non-Executive Directors 2012, Australian Council of Superannuation Investors


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Qantas shells out between $2.5m and $2.75m annually in remuneration to NEDs, including the chairman.

Origin Energy offers a $196,000 base fee to its NED board members.

Telstra shares $3.5m in board fees between the chairman and its NEDs.

thing, but I’m hopeful that that might become the case in the future.” Meanwhile, the stats regarding women on boards are in, and they’re still not pretty. Despite improvements in female board representation among the largest companies listed on the ASX in recent years, women continue to hold less than 20% of Top 100 board seats, and make up less than one sixth of all individuals serving as Top 100 company directors. Highly skilled HR practitioners could help buck this trend. “There are quite a few women at the top in HR – a lot of highly skilled women go through the HR route – so this is an area that could encourage women to move into the boardroom with their skills,” says Kerry Brown, professor of HRM in the School of Management at Curtin University. Regardless of gender, using your HR expertise to negotiate your way into a non-executive directorship is a clever strategy, Brown says, although there are steps you can take to improve your chances. “I would encourage people to do a company director’s course, as there are registers for people

NON-EXECUTIVE DIRECTOR ROLES AND RESPONSIBILITIES »» Formulation and oversight of the strategic direction »» Recruitment and performance evaluation of the CEO »» Provision of support and counsel to senior management »» Review, approval and monitoring of the business plan and annual budget »» Contribution to board and organisational policies »» Compliance with laws and regulatory statutes for the business »» Monitoring of risk exposure »» Involvement with a board subcommittee »» Identification of skills required by future board candidates Source: Cultivating Greatness in the Boardroom: What Makes
an Exceptional Non-Executive Director in Australasia? report by the Korn/Ferry Institute

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Rio Tinto pays a base fee of £85,000/A$126,000, in addition to allowances for attending meetings involving medium- or long-distance air travel.

upon graduating that list available and upcoming board appointments,” Brown explains. “It’s expensive, so it would be beneficial if you could get that study supported by your organisation. It’s an investment of about $8,000 for a two-week course – but it means that you are job-ready for a board role.” Listing the competencies that are important in order to be an effective NED, De Salis suggests that strategic thinking while outside your comfort zone will serve you well. “Good judgment and the ability to trust people is also key,” she says. To really stand out from the crowd, you must be prepared to develop the behavioural characteristics that will make you highly effective in the boardroom, adds Lynne Nixon, project leader and senior client partner at the Korn Ferry Institute. “NEDs with a high-level strategic view, who also know when to dive into the details, are particularly valuable to the board. Top NEDs focus quickly on what’s important, connect the dots and draw appropriate conclusions,” Nixon says. “The role is increasingly demanding and the best NEDs must be exceptionally focused and dedicated … Outstanding NEDs take this one step further as they are passionate about the business, which means they are prepared, involved and want to know more.”

LEARN MORE To find out how to become an effective non-executive director, join Ruth Medd, executive chair, Women on Boards; Lynn Nixon, senior client partner, Korn Ferry; and Annabel Dolphin, director, Miles Dolphin Consulting Group, for a panel discussion at the Executive Leadership Forum. The forum will be held on 18–19 June in Sydney. Visit for further information.


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As we look ahead into the next century, leaders will be those who empower others


Join Australia’s finest HR leaders as they discuss C-Suite survival, strategic influence and leadership Speakers include: Brian Benari, Managing Director and Chief Executive Officer, Challenger Limited Vaughn Paul, HR Director, Optus Dharma Chandran, Chief HR & Corporate Services Officer, Leighton Holdings Limited Sally Kincaid, CHRO, QBE Australia Angela Murphy, Executive General Manager, HR Challenger Limited Chris Lokum, CHRO, BP Australia Rob Phipps, Chief People Officer - South Pacific, Yum! Restaurants International (KFC, Pizza Hut, Taco Bell) Janette Coulton, Deputy Director Human Resources, Raytheon Australia


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THE MICRO-ROLES OF C-SUITE EXECUTIVES Self-knowledge can give you an advantage in executive team politics. Critiquing the inner workings of your team – to identify which micro-roles you occupy and where you fit in – can not only help you effectively negotiate the politics, but also give you the edge as you plan your next career move. Sarah Megginson reports Leveraging your personal strengths and downplaying your weaknesses is nothing new: leaders have long used this strategy to negotiate their way into an executive team and ensure their career trajectory is on the up and up. But to build your power base at an executive level and truly make an impact in the C-suite, you need to identify which of these often undefinable microroles you play within your team – now and, just as importantly, in the future. For instance, within your department, do you tend to be one of the last to leave a project, taking just one more glance to ensure it’s perfectly polished and error-free? (If you answered yes, you’re a ‘completer finisher’; see boxout, p21). Or are you the type to consistently gather and file away important information to report back to the team – a typical ‘resource gatherer’? For many executives, the path towards achieving

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these personal insights has been through various forms of psychometric testing. One such methodology is Whole Brain Thinking, developed off the back of the Herrmann Brain Dominance Instrument, which measures thinking preferences. “Thinking preferences have an impact on virtually everything we do, so understanding your preferences gives you perspective on both your own thinking and the people you deal with every day,” says Michael Morgan, CEO, Herrmann International Asia. Other behavioural and thought measurement tools include Myers-Briggs, the Belbin Team Theory and the Big 5 Dimensions of Personality (OCEAN), which all fall under the collective banner of ‘emotional intelligence’. While that phrase may be modern, the tests themselves are decades old. “These tests have been around since the 1930s,” explains Professor Robert Spillane, professor in


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BELBIN TEAM ROLES Belbin Team Roles, developed by management theorist Dr R.M. Belbin, are used to identify people’s behavioural strengths and weaknesses in the workplace, by providing a framework to show clusters of behaviour. Where do you fit?

»» PLANTS: Highly creative and good at solving problems in unconventional ways, they are so-called because one such individual is ‘planted’ in each team. »» MONITOR EVALUATORS: Critical and methodical, they can provide a logical eye, make impartial judgments and weigh up the team’s options in a dispassionate way. »» RESOURCE INVESTIGATORS: Provide inside knowledge on the opposition and make sure that the team’s idea will carry to the world outside the team. »» COORDINATORS: Focus on the team’s objectives, draw out team members and delegate work appropriately. »» IMPLEMENTERS: Plan a practical, workable strategy, and then carry it out as efficiently as possible. »» COMPLETER FINISHERS: These are ideal quality control experts. They are most effectively used at the end of a task, to polish and scrutinise the work for errors. »» TEAM WORKERS: Help the team to gel, using their versatility to identify the work required and complete it on behalf of the team. »» SPECIALISTS: As the name suggests, they can focus narrowly on their subject of expertise, providing the team with access to specialist knowledge. »» SHAPERS: Provide the necessary drive to ensure that the team keeps moving and does not lose focus or momentum. Management at the Macquarie Graduate School of Management. “They were originally called ‘people sorters’, and earlier versions were used to try and identify people who were perhaps union sympathisers, before they started becoming more popular in the mainstream.”

HOLDING UP A MIRROR TO HR HR directors and organisational leaders have long used these tests and measurement methodologies when managing employees. “We have used these sorts of tools – mainly Myers-Briggs and the Margerison/McCann Team


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Management Systems – and we’ve found them to be very useful in working with teams across the organisation, including in senior-level teams,” explains David Ward, director HR at the University of NSW. “They raise good awareness of team dynamics and have been used with success in, for example, putting together project teams, and making sure that there is a mix of creators and innovators alongside organisers and producers.” But is it worthwhile shining the light squarely on HR? Having an awareness of where other people are on the wheel or scale can provide a good anchoring point; however, it can only be of benefit if you know where you also fit on the scale. “It may assist you in understanding why you might or might not be working together well, and what sort of person needs to be thrown into the mix to produce better results,” Ward says. From a self-awareness perspective, behavioural assessment offers a great opportunity for HR leaders to learn more about themselves and how they respond and act in different situations, confirms Michael Evans, GM of consulting products and services, Chandler Macleod. “For leaders, a critical part of effective leadership is knowing how and in what way they impact on those around them. Irrespective of the leadership theories one may subscribe to, the reality is, very few leaders lose or fail in their role through a lack of technical knowledge or intellectual horsepower,” he explains. “Time and again when leaders fail or succeed, it has more to do with their behaviour, the way they engage and motivate others, their relationship with other leaders and their board, as well as how they cope with pressure and stress.” More insight and knowledge about natural behavioural strengths and weaknesses is “a great asset”, Evans says, and failing to pursue this level of self-awareness means HR directors “leave an enormous part of personal performance to luck and chance”. “Studies in neuropsychology make it clear that all the best behavioural intentions in the world can be brought undone by stress and the impact of personal style derailers – and the best-known way to combat these is to learn to recognise their early signs, to take appropriate and effective action,” he says. “As a leader, you can’t mitigate your natural limitations if you’re not aware of them.”

6 qualities of an exceptional leader »» Vision »» Integrity »» Commitment »» Empathy »» Self-actualisation »» Enjoyment

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“While I’ve worked with many capable leaders, I would classify only a handful as being truly outstanding” John Davis, Rentokil Initial

PSYCHOMETRIC TESTING – IS IT WORTH IT? Whether you believe in psychometric testing or not, it’s clear that these tests have some value, even if that value is hard to quantify. “They’re a measure of style, rather than a measure of performance,” argues Professor Spillane. “For example, if we tested the top 20 tennis players in the world, we might be more likely to predict who would throw a temper tantrum. But we wouldn’t be able to predict who is going to win. They don’t predict performance.” He believes that these tests tend to reinforce stereotypes – for example, that the extroverted salesperson is likely to be more successful than their introverted counterpart – when in reality there is “no evidence at all” to support such statements. “There’s a perception that leaders should have no anxiety, for instance – but studies have shown that some of Australia’s most successful entrepreneurs have high levels of anxiety,” he says. “You could call it ‘creative energy’.” Spillane is also cautious about the ability to “fake” responses rather than answering authentically, in order to cultivate the type of result desired. “You can fake tests for many different reasons, such as to present yourself in a way you think is favourable to your workplace or to yourself,” Spillane says. “This is not to deny that some people who do these tests don’t learn something about themselves; they often do. But many go away thinking they have a particular personality – when in actual fact there is

FAMOUS FACES On the Myers-Briggs scale: »US » president Barack Obama is an ENFJ: Influential and authentic, ENFJ personality types “may act as catalysts for individual and group growth ... and provide inspiring leadership”, says the Myers & Briggs Foundation. »Former » US president John F. Kennedy was an INTJ: Known for their originality, strong drive and ‘big picture’ viewpoint, INTJs are organised, independent high performers.

»Former » Apple CEO Steve Jobs was an ENTJ: It’s perhaps no surprise that this prolific technology innovator falls into this category. ENTJs are practical, matter-of-fact and decisive, and like to focus on reaching an outcome as efficiently as possible.

Evaluate your personality type at

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no such thing inside you called ‘a personality’, so that’s not the case.” Spillane adds that 50% of people will get a different psychometric result if they take the exact same test a second time five weeks after the first; this number increases as time goes on, with 70% recording a different result after two months. “This is why I say that measuring personality is not like measuring your weight or height. It’s not measuring any ‘thing’ as such; it’s measuring highly strategic responses.” How should these tests be approached, then? Firstly, it should be understood that individuals can gain some genuine and valuable personal insights from them. “There are distinct advantages associated with diagnostic models that identify certain personality types, behavioural styles or leadership styles. They can be very insightful, because they help you understand diversity in a team sense, which can also help you identify areas for development,” says Professor Richard Hall, associate dean, management education, University of Sydney Business School. But, just as importantly, you need to acknowledge the uniqueness and diversity you bring to the table, Hall says, rather than trying to fit yourself and your strengths into a predetermined box. “They can have disadvantages in that they can tend to suggest that there is one ‘best model’ of leadership and management – and I think we need to hold that open to question,” Hall explains. “There is no doubt that there are a bunch of qualifications and skills that people need to have, in order move into senior roles and progress in their career. But regardless of who you are and who you come out as, in terms of a shaper or influencer [under Belbin Team Theories], leaders and senior managers and executives clearly need to be, at some level, really good at people and process.” This is because no matter how far you move up the food chain, there are parts of any role that are always going to be operational, process issues, and parts that are all about people, motivation and recognising their diversity. “Effective leaders need to be able to balance both; that is always the case,” he says. Spillane adds: “Brains don’t make decisions or make choices – people do. People are a biological composition, always interacting in an environment dominated by rules, roles and rewards. That will often explain behaviour far better than a personality test.”


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Having the role of sage counsellor of the CEO is the holy grail for HR directors. How do you go beyond your HR expert label and become viewed by the CEO as a critical partner in making the organisation’s most important decisions? HRD talks to Brian Benari, MD and CEO of Challenger Limited, and Angela Murphy, executive general manager, HR, of Challenger Limited, about the secrets behind a successful CEO/HR partnership 24 | APRIL 2014

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When Brian Benari joined financial services firm Challenger 11 years ago, he established the company’s Mortgage Management division. But it wasn’t long before his skills saw him elevated. In 2008, he became CFO and COO, and three years later he was named CEO. Now he works with Angela Murphy, his executive GM, HR, to manage a workforce of 520, a practice he describes as “very human intensive”. As a CEO, there are three things Benari looks for from HR: 1) Executing the basics. “People forget that at the end of the day they need to get the basics right,” Benari says. 2) Knowing what matters. Before anything else comes commercial viability: it’s the first question Benari poses when HR suggests an idea. “As soon as you start getting away from the basics and talking about other valueadds, it has to have a commercial basis for it,” he says. “[Does] what HR is championing make sense from a commercial perspective? Does it further the interest of the company? [Is it] good for shareholders? [Is it the] right allocation of resources?” 3) Insight and challenge. “I look to the HRD as being a trusted adviser,” says Benari. HR at Challenger needs to have an ear to the ground and a good understanding of team dynamics, as well as the capacity to offer feedback around how the organisation runs.

These are the things that Murphy has focused on since coming on board at Challenger – she joined about two years ago, the week before Benari was appointed to CEO. She says there were key lessons she learnt about being in a new HR position. “The important thing to ask when you come on board,” Murphy says, is to “watch and listen for, organisationally, what is different about the place, and what matters – what are the drivers?” It’s not only about listening with every interaction, but about directly asking, especially when you are new, she says. Challenger is a public company, which influences the way that decisions are made within the firm. Murphy has focused on HR measurement and reporting. “[I have to] demonstrate the things from a people perspective that are making a difference, and how they are tracking.” Murphy and Benari use a pyramid-like structure to disseminate information to staff. The top 10% of people are on the executive management team, and those members guide the solutions to key challenges and opportunities. Together, they set the direction of the organisation – a structure that is somewhat wider than at most companies for good reason: “Fifty people thinking about this is better than eight people,” says Benari. And as far as upwards feedback goes, Benari gets an understanding of how the organisation is functioning by having informal lunches with employee groups. “It’s all about getting to the coalface and meeting the people,” he says. “You

“I look to the HRD as being a trusted adviser” Brian Benari, Challenger Limited

CHALLENGER’S EMPLOYMENT BRAND Challenger’s employment brand, ‘Challenge what is possible’, is supported by four brand pillars: COLLABORATE – We value each other

CHALLENGE – We challenge ourselves

We are driven to succeed and we value and respect each other. Our open and collaborative work environment encourages employees to interact across the company. We want individuals to feel valued and included.

We value intellectual inquisitiveness, rigorous analysis and the delivery of results. We set ambitious challenges and we meet them. We have a strong entrepreneurial spirit and a unique organisational trait of intellectual enquiry. This results in intensive evaluation of ideas, individual growth and superior outcomes.

GROW – We offer opportunities We provide individual development through broad and deep roles and exposure to leaders. Due to our size and structure we have the opportunity to be involved in a wide range of activities and situations which develop broad knowledge, skills and experience. This positions you for success in your career within or outside Challenger.


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ACHIEVE – You can make an impact Our vision is bold and we welcome individual creativity and initiative to achieve it. At Challenger we have the ability to change things. We seek better ways of doing things to continually deliver smarter solutions. In this environment your ideas can quickly become achievements.

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THE CHALLENGER PRINCIPLES Challenger has five principles that are integral to their culture and linked to everything they do:


learn a huge amount. Sure, there is bound to be some intimidation – you can sit there, it’s amazing... People will start chatting, and it loosens up. It’s discussing what’s common to them, and people do open up.” Another way the company gets feedback is through focus groups. Murphy brought in an external group to talk about the company’s employment brand and what employees expected from the working environment at Challenger. That feedback allowed them to articulate Challenger’s employment brand promise: ‘Challenge what is possible’. In a highly competitive industry another big challenge is to let employees know that their work-life balance matters. Benari is careful to set an example in his own life by making sure employees see that he doesn’t overwork – and he’s clear to enunciate that, in his own life, family comes first. It’s those priorities that position Challenger to compete against the big banks for talent. There’s also one more trump card Benari gets to play. “How do you retain people for 10 years, when you are an organisation of 520 people versus 50,000? You retain them by giving them maximum exposure across the organisation,” says Benari. He advocates the business exposure and breadth of experience that you can achieve in an organisation of Challenger’s size, and the career benefits that provides.

Commercial ownership

Working together

It’s about being authentic and being accountable for what you say and do

It’s about achieving the best for you, the business and the client

It’s about true collaboration and embracing diversity


It’s about being responsible for how and what you do

Creative customer solutions

It’s about superior customer service and providing innovative solutions to clients

Brian Benari and Angela Murphy will be speaking on building strategic partnerships with the CEO, CFO and the board at the Executive Leadership Forum in Sydney on Thursday 19 June 2014. executive-leadership-forum

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Workforce 2020:

are you ready?

In the year 2020, there will be more millenials in the workforce than any other generation. We are already seeing the major impact this generational shift is having on Australian businesses as technology rapidly changes the way we work.

Future Knowledge is enhancing the capability of many leading Australian organisations. Our clients are already making changes to accommodate the workforce of the future. Will you join them?

Are you prepared for this workforce transformation?

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WINNING HEARTS & MINDS HR directors today need to be able to win the hearts and minds of their followers to drive large-scale change throughout their organisations. John Hilton looks into the evolution of change management practice

Think HR directors are regularly pulling off successful change management strategies? Think again. In fact, research indicates a whopping 70% of all change management efforts fail. The author of Leading Change: Why Change Management efforts fail, John Kotter, attributes this to change being treated as simply an event. Instead, Kotter argues change must be approached as a process that must be adhered to via carefully ordered stages.

THE COST OF FAILURE Daniel Lock, principal of Daniel Lock Consulting, agrees with Kotter that too often change is something that top leadership is underprepared for. “What top leaders do is they underestimate the amount of effort required to effect change,” he adds. Top leadership are always thinking about the future, whether it’s the next quarter, the next year, the next two years and so on, says Lock. Therefore, they are a lot further along the change journey, mentally and emotionally, than their people and they often get frustrated when their team struggles to follow suit.

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If an organisation is serious about bringing everybody on board and achieving its goals, the HR division taking on change management is not an option; it’s a necessity, argues Christina Dean, managing director of change management consultancy, Uniforte. Additionally, HR directors should not ignore the risks. According to Uniforte, the cost of failing to execute proper change strategies not only has an adverse effect on morale, but the bottom line as well. They say lack of appropriate change management can mean projects budgeted at $1m with predicted benefits of $5m can result in overall losses of $15m.

skills, knowledge and behaviours that develop the organisation’s capability and capacity to change, so the organisation can maintain and enhance its relevance and sustainability into the future,” she says. It’s particularly important for the leader to have the skills necessary to get everybody aligned and on message, says Lock. “That’s a really important point because everybody is going to be looking at the leader for the type of behaviour they should be modelling. That person is going to be setting the scene for the values through the kind of incentives and measurements they put in place and the kind of people they hire to support this change.”



More than ever, HR directors are expected to lead and manage the preparation of a workforce to achieve its goal to change, says Dean. This is a natural fit because HR is responsible for the management of people and taking action to facilitate their achievement of goals. “This means that the HR division would need

The amount of influence an HR director has on change management is varied and constantly evolving, says Dean. In order to obtain the necessary skills to have maximum impact, HR leadership must be willing to extend beyond the traditional boundaries of the role. What this requires is learning across disciplines


acknowledge the need to change their talent strategies - though less than a third have acted on their plans 17th Annual Global CEO Survey, PwC, 2014

BEST PRACTICE CHANGE MANAGEMENT David Guazzarotto, CEO of Future Knowledge, shares his tips for being a proactive HR director and managing future changes effectively

Take the lead Change is fundamentally a people issue and, therefore, it simply must be led and supported by the HR function. The best HR leaders know this instinctively and work closely with senior executives to ensure their business strategies and transformational initiatives can be executed successfully. Whether change is brought about through external factors – and handled reactively – or it is invoked as a strategic initiative, proactively, HR directors must stand front and centre to lead the program as an internal champion. To do this effectively, HR directors need to understand what is driving the change. Is this a strategic decision, or is it being imposed upon the organisation due to a structural change? Knowing how to link change to the strategic direction of the organisation will add value and minimise employee resistance.


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Prepare to be flexible Once the program has been set in motion by the change agent – usually the CEO or equivalent C-Level management - HR is typically brought in to manage the details. It’s up to HR directors to get creative and identify the appropriate tactics to build the capability of the organisation, all while remaining measurable. In the dynamic world we operate in, finding the right elements that will work for your organisational culture will vary depending on the workplace. This can involve elements such as communications strategies and training and learning programs to support employees through the change. Having the early buy-in of influential stakeholders is key to executing these programs.

Keep the end in mind Paramount to change management success is the ability to implement a program that is both realistic and measurable. HR is best positioned to communicate the strategic goals of the change, identify any gaps or training needs, and assess the impact of this change on various areas of the business throughout the program. We need to challenge the HR function to step up to the plate and take the lead role in business transformation. By working closely with key stakeholders and maintaining strategic direction, HR will be instrumental in building organisational capability through employee engagement to support the specific change.

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CASE STUDY: SBS HRD talks to Melinda Tunbridge, HR director of SBS, about the changes the public broadcaster has undergone, and how they successfully addressed them HRD: How significant is the role of the HR director in change management? Melinda Tunbridge: One of the essential skills for any HR practitioner to master is the successful management of change. An HR leader, business partner or specialist may be called upon to play a part in change management – it all depends on what the ‘change’ is. The change could be owned or led by the HR director, i.e. HR transformation, in which case taking full responsibility for the planning and implementation of the project is vital. More and more, my role as HR director in a change project is one of educator/advisor – bringing specialist knowledge and expertise to help the organisation understand more about the structure and process of successfully managing change through appropriate design, communication and implementation. The HR director’s greatest value can be in the quiet insistence and resilience that sufficient time is spent on laying the foundations for change and then the consciousness of people’s expectations. One role in change not to be overlooked is that of a participant, a change that may affect me personally. In this role any HR practitioner can use their knowledge of change to set their expectations of the process, troubleshoot problems and understand and manage their own and others’ reactions to events. Achieving mastery involves first understanding the architecture of successful change: having a clear picture of all the elements necessary for a sound process, built on a solid foundation. HR practitioners can add huge value in change situations by guiding the organisation to pay attention to the important aspects, even when it is unpopular and may seem unnecessary to those eager for swift action. HRD: How do you go about communicating change internally? MT: We have a change management framework. It’s expandable and contractible depending on the change – we are big fans of simple structures but have found managing and holding people accountable against a structure useful. A lack of understanding or knowledge about an impending change is one of the biggest causes of resistance and negativity. Clear communication of facts as they become known is the ideal. Open communication about why decisions or facts cannot yet be released and an honest statement about when they might know, and what people can do in the meantime, is better than nothing. HR has a role to play in making sure implementers understand the importance of communication in engaging people, stabilising the environment, reinforcing the messages and preparing for the future. HR can help clarify messages and ensure that people understand the multiple channels available

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and the many forms communication can take: informal chats at the coffee machine; one-to-one and team meetings; formal briefings; town halls; emails; newsletters; intranet; podcasts and many more. HR can also use its many touch points with employees to play its own part in the communication process and can ensure that others are equipped to do the same – especially if you have a complex environment of shift works, geographical considerations and so on. In a communication void the rumour mill takes over, usually with damaging results, and HR practitioners can use their knowledge, skills and opportunities to minimise the chances of this happening. HRD: What do you credit your successful change management strategies at SBS to? MT: yy Strong sense of purpose driven by our Charter – we know why we are here. yy Strong executive leadership presence (MD and directors) – includes Communic8 (our “town hall meetings”). yy Using our change management framework to ensure our employees have a clear understanding of why – “the Elevator Pitch”. yy Treating people with respect and giving those affected “quality time”, one on one where necessary – don’t over rely on broadcast comms, e.g. town hall. yy Making the decision making process transparent – outline the process and then deliver. When you don’t have an answer tell staff when you will. yy Manage as much for those who are staying with the organisation as for those who are going – don’t get lost in processes, e.g. redundancies. yy Wherever possible have people participate in inventing their own future – gain new skills, pilot stuff, work out implementation plans, have a forum to talk about what’s working and what’s not. yy Celebrating milestones. HRD: Where do you see the role of HR directors in change management going in the future? MT: Evolving to say the least. I think of change management a little like managing culture. It’s often seen as an HR responsibility when in reality it’s a business responsibility and the organisation needs to come to terms with their evolving accountability in the change management space. Of course, HR have a role to guide, support, coach and mentor along the way – ideally, the management of change will eventually become business as usual so that it is no longer a focus area, it’s an expectation within a broad portfolio of credible skills and attributes. In this world, the HR director’s focus becomes less about change management within their own worlds and more about the role as change educators/advisors.


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HR TAKEAWAYS: ESSENTIAL STEPS TO COMMUNICATE CHANGE Daniel Lock offers the following steps for HR directors to best communicate change management strategies and stay on the right track:


Enlist the support and involvement of key people Ensure there is a coalition of key stakeholders involved and that their contributions are valued. The strategic direction and the benefits of the change must be clearly articulated so that everybody is in alignment. Craft a good plan Don’t go into such a huge amount of detail that people will struggle to be persuaded by it. The plan must clearly define roles and responsibilities. Get key people who will affected by the plan to be involved in crafting it. Make sure the sections of the plan are small and achievable. Support the plan with consistent behaviours No matter what the change is, it’s important that all levels of staff are seen to be “walking the talk”. For example, if you are going to be putting in a system where people can raise issues of concern without being identified, you need to honour that 100% in terms of confidentiality.

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such as management, project management, psychology, neuroscience, communication, L&D, consultation and change leadership. We can expect to see more and more HR leaders embracing these areas, says Dean. “Having said that, it wasn’t until 2012 that change management competencies made their way onto the Australian Human Resource Management list of competencies for educators who want their courses to be accredited by that body,” she adds. But if history has taught change management leadership anything, it’s that change solutions centred around technology alone do not drive productivity. From the 1900s through to the 1970s there was a huge boom in productivity for the world generally. However, from the 1970s to the 1990s there was flat productivity growth for the western world, despite huge investments in IT, says Lock. “What really happened with technology investments between the 70s and 90s was that the world hadn’t really worked out how to use the new technology effectively,” says Lock. “What organisations have to do to take full advantage of productivity is have their people make the most of technology. This includes subdividing processes and roles, making them


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Develop “enabling structures” Think through what the enabling structures are and the enabling tools that people will need to adopt change. It seems obvious, but it’s often forgotten. This could be through face to face or online training. Celebrate milestones Celebrate the fact that progress has been made to help create momentum. This generates motivation, stakeholder interest and projects confidence that you can achieve the longer term vision. Just make sure you don’t confuse milestones with a premature victory. Communicate relentlessly This could be the most important step. Think about politicians in elections. They will repeat their messages ad nauseam because they know this is essential to getting their points across to the public. Ongoing communication will help overcome resistance and also allows employees a say in the process. Use a variety of forms such as emails, physical handouts, daily briefings, business meetings and so on. Make sure all messages are aligned, clear and repetitive.



more specialised to take advantage of the division of labour.”

PUTTING OUT FIRES HR leaders need to take more initiative in coordinating change across the whole organisation, otherwise there could be single projects creating spot fires everywhere, which HR is usually called upon to douse, says Dean. “Dousing fires might be effective in building large HRM resources, but it’s not a very proactive way of helping the organisation save money and be efficient. Far better for them to build change management resources so they can help the organisation reach its goals.”

CHANGE LEADERS OF TOMORROW Change management has become such a significant discipline that many universities are now offering specific diplomas in change management that apply a multidisciplinary approach to the study of change leadership. Dean says courses can now be developed which manage change at the entry level of an organisation, and Uniforte is working with high education entities to help develop those next levels, because by 2015 there will be many suppliers of the Dip of OCM across Australia.

PREPARE FOR RESTRUCTURES More than 80% of CEOs are planning or making changes to their organisational structure over the next year 17th Annual Global CEO Survey, PwC, 2014

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Emotions are vital to decision-making, but giving insuďŹƒcient thought to decisions can lead to disastrous results. Neal M. Ashkanasy explains how to recognise the importance of emotions while guiding decision-making towards achieving your goals and creating a healthy workplace culture

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5 LEVELS OF LEADERSHIP ORGANISATIONAL LEVEL How leaders can contribute to healthy and productive organisations. GROUP LEVEL How leaders manage emotions in groups and teams. INTERPERSONAL LEVEL How leaders communicate emotional states to their subordinates. INDIVIDUAL LEVEL Some leaders are better at experiencing, using and managing emotions than others. MOMENTARY LEVEL How leaders can contribute to their employees’ feelings and performance, moment by moment, throughout the day.

Human beings are emotional. There is no getting around it. While we try desperately to appear so cool and rational, and often pretend we achieve this state, the sad fact is that we will inevitably fail. As Nobel laureate Daniel Kahneman explains in his book Thinking, Fast and Slow, even decisions ostensibly taken at the highest levels of government and finance are inevitably coloured by the emotional states of leaders. Moreover, many of these decisions are based on so-called spur-of-the-moment intuitions, and more often than not lead us into trouble. It is little wonder we live in such a chaotic world. On top of this, people cannot live full and effective lives without their emotions. Neuropsychologist Antonio Damasio has studied how people with brain damage think and behave. In one of his studies, Damasio discusses a patient named Elliot, who had suffered damage to the ventromedial frontal lobe of his brain caused by a tumour and subsequent surgery. Elliot had been living a successful life before the tumour, and his IQ was in the 97th percentile. Following the surgery, however, two things changed in Elliot’s life. First, he became incapable of experiencing any emotions; he became a Spock-like pure rational man. Second, Elliot’s life began to fall apart; he lost his job and his family. Despite his high intelligence, Elliot would take more than 30 minutes to make an appointment and it would take a whole afternoon to decide where to go for lunch. In other words, without being able to experience emotions, Elliot became incapable of


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5 4 3 2 1 making decisions. In subsequent research, Damasio and his colleagues showed convincingly that, far from inhibiting and distorting our decision-making capacity, emotions are an essential ingredient of our ability to make decisions affecting every aspect of our life. For leaders, whose role it is to facilitate organisations and their members to achieve their important goals, this poses a problem. People’s emotions play an integral role in facilitating our decision-making, but such decisions are often taken with insufficient thought – often leading to disastrous results.

ACHIEVING YOUR GOALS It would seem, therefore, that a core responsibility of leaders is to manage this process; in other words, to recognise the innate importance of emotions, but to guide decision-making so that important goals are achieved. How then do they do this? My solution is based in work I am undertaking with Professor Ronald H. Humphrey, where we set out a theory of leadership based in five ‘levels’. The five levels are: yy Momentaryy level: How leaders can contribute to their employees’ feelings and performance, moment by moment, throughout the day. yy Individualy level: Some leaders are better at experiencing, using and managing emotions than others. yy Interpersonaly level: How leaders communicate emotional states to their subordinates.

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yy Group level: How leaders manage emotions in groups and teams. yy Organisational level: How leaders can contribute to healthy and productive organisations. Sitting at the bottom level of our model of leadership is the idea that employees, like people everywhere, are innately emotional – every second of their being. Everything we experience in the workplace, especially the hassles and uplifts of daily work life, results in some kind of emotional reaction. These are sometimes positive (joy at being rewarded for good performance) and sometimes negative (experiencing anger when a colleague fails to deliver). Research has shown that these emotional reactions determine how we think and behave at work. Moreover, it’s not just the big things – it’s the little things that recur over and over again that really make a difference. For instance, an employee who is constantly hassled by their boss will become disenchanted and lose the motivation to work productively. The implication here is that leaders need to understand that everything they do and say is likely to have an emotional effect on their organisation’s productivity, not to mention the wellbeing of employees. In this case, while recognising that positive emotions are not always appropriate, a leader’s generally more positive emotional demeanour is likely to have beneficial effects.


Neal M. Ashkanasy, PhD, is professor of management at the UQ Business School at the University of Queensland. He is a fellow of the Academy for the Social Sciences in the UK and Australia, the Association for Psychological Science, and the Society for Industrial and Organizational Psychology. He is also a life fellow of the Australia and New Zealand Academy of Management.

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At the next level is the idea of emotional intelligence. Introduced to the world at large in 1995 by NY Times columnist Daniel Goleman in his best-selling book Emotional intelligence: Why it can matter more than IQ, emotional intelligence quickly became very popular among business leaders. However, it has also been described as ‘just another management fad’. There is some truth to this insofar as Goleman and other popular authors tended to make extravagant claims that emotional intelligence is some sort of magical ingredient of a successful life. In fact, emotional intelligence was defined by psychologists Jack Mayer and Peter Salovey as simply a set of personal abilities relating to how people perceive, use, understand and manage their emotions. Some people are good at it, while others are not so good. Thus, emotionally intelligent leaders have the ability to sense the emotions of their employees. They understand this information and

An employee who is constantly hassled by their boss will become disenchanted and lose the motivation to work productively can use it to manage both their own emotions and the emotions of their employees. Relating this back to the first level of the model, emotionally intelligent leaders have the ability to help their employees towards positive emotional responses that lead to productivity and individual wellbeing. The good news here is that, like intellectual abilities, while there is a genetic component to emotional intelligence, there is also strong evidence it can be improved through training.

EMOTIONAL LABOUR The third level of the model concerns the way emotions are communicated. The core concept here is emotional labour. First proposed by sociologist Arlie Hochschild in 1980, emotional labour involves the notion that employees can be remunerated for displaying appropriate emotions in their interactions with clients and customers. For example, a flight attendant is expected to maintain a positive demeanour irrespective of how he or she is feeling. Hochschild pointed out that this can be done in one of two ways – an employee can employ ‘surface acting’, where they will try to feign the emotion, or he/she can use ‘deep acting’, where they will try to imagine being in the emotion, rather like ‘method acting’ used by actors. Research has demonstrated that deep acting is not only more effective than surface acting, but also involves less effort. In fact, employees who engage in too much surface acting tend to become emotionally drained and are prone to suffer from burnout. More recently, together with Ronald Humphrey, I proposed that good leaders can manage the emotional states of their employees using emotional labour, and especially deep acting. An effective


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leader will use his or her emotional intelligence ability to know the appropriate emotional expression to display to subordinates and then use deep acting to do so. Such a leader will thus be able to display the right emotions needed to facilitate employee productivity and wellbeing.

EMOTIONAL CONTAGION The next level of the model involves the role of leaders as facilitators of group or team performance. Here, the underlying mechanism is emotional contagion, a process whereby employees ‘catch’ the emotional state of their leader. This idea was first proposed by psychologist Elaine Hatfield and her colleagues, and involves unconscious mimicking of the emotional expressions of others. More recently, emotional contagion has found support in the discovery of mirror neurons, whereby the brain detects other people’s emotional states and automatically responds with a matching emotional state. In fact, researchers have demonstrated that emotional contagion has a powerful effect on group and team members’ emotional states. Thus, emotionally intelligent leaders who are aware of their subordinate’s emotional states, and display the appropriate emotional expression using deep acting, are able to affect the emotional state of their team members in a positive way.

EMOTIONAL CLIMATE At the top level of the model is the idea of an organisation’s emotional climate. Sociologist Joseph de Rivera describes this as something that “can be palpably sensed – as when one enters a party or a city and feels an attitude of gaiety or depression, openness or fear”. Clearly, however, this can go either way. Some organisations are characterised by a climate of fear and are unhealthy places to work. Other organisations whose leaders are emotionally intelligent and appropriately transmit positive emotional cues to their employees become ‘healthy organisations’. This is the real power of positive emotional leadership – to manage emotions across the five levels, culminating in a positive workplace climate. Together with my colleagues Catherine Daus and Charmine Härtel, this is something I have been advocating for some time. It is possible to develop healthy organisations, where members can broaden and build ideas, and are able to thrive and prosper.

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During Kimberly-Clark’s transformation, CHRO Liz Gottung took centre stage in driving a massive change initiative that resulted in a rise in stock price and turnaround in employee sentiment. HRD finds out how the company did it

What do you do when your organisation is losing market share and staff turnover is so low you’re hanging on to dead weight? That’s where global manufacturer Kimberly-Clark was 10 years ago, just a few years after featuring in Jim Collins’ Good to Great as an example of how a successful company operates. “We were great at one point, then we went down to good,” Kimberly-Clark CHRO Liz Gottung says. “Then we slid to mediocre.” Gottung initially turned down the role of CHRO – twice. Leading an organisation whose HR was strictly transactional and stuck in the past held no appeal. However, when the CEO told her he had a different vision for HR, she agreed to take on the task. It wasn’t an easy transition, and it got off to a bumpy start when the first attempt at a global business plan – essentially a patchwork of ideas from leaders around the world – failed to make any substantial changes. “We were having trouble with our innovation pipeline; we weren’t paying enough attention to our brands, and even though we talked about people being our greatest asset, we didn’t act like it, and it didn’t feel like it if you were in the company,” Gottung says. “We were very North Americancentric, specifically Wisconsin-centric. We called ourselves a global company but, really, we were a North American company that had locations in other parts of the world.”

IDENTIFYING EXCEPTIONAL LEADERS Kimberly-Clark had incredibly long tenure rates,

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was family-oriented and had a ‘team culture’, which meant that if your boss and teammates liked you, you would be supported and, in some cases, protected. “We had a very hard time giving tough feedback and were obsessed with consensus,” Gottung says. “It was a very risk-averse culture that took a long time to make decisions, and when we made a decision, it usually didn’t stick.” The company’s performance review process varied regionally and by function – and the results were suspiciously good. Less than half of one per cent of employees were marked as ‘unacceptable’ or ‘needs improvement’. That number was unlikely in any organisation, so for a company that was facing serious business failures, the figure was highly suspect. Out of the 100 global leaders, 78 received ‘exceptional’ ratings. “We looked at ourselves and said: ‘Could the reason for these business results be the people in this room? Could it be the people at this table?’ At that point, we did an external assessment of our leaders,” Gottung says. Although it’s standard practice for many organisations, Kimberly-Clark had never done an external assessment of its executives before, and many were not supportive of the move; some threatened to quit. However, with the company in crisis, the CEO was open to the idea. An outside consulting company determined that of the 100 leaders, just five were exceptional. Gottung and the other executives decided to take ownership of that result and acknowledge that, for change to happen, it could not be something “the top told the middle to do to the bottom”. In the past eight years, Kimberly-Clark has seen about 65% turnover of those top company leaders, with 35 new executives being brought in from outside the company. That’s 35 more than were hired externally in the 25 years prior.

BUILDING INTERNAL CREDIBILITY In 2008, the company implemented a new global business plan – this time, HR had a seat at the table and a hand in the planning. HR didn’t even have the credibility of being able to pay people correctly, so it was an uphill battle to try to get traction for HR strategy and innovation. Gradually, Gottung got her message through and, as people talked about growth and innovation, she was able to bring it back to recruitment, retention and talent strategy. When the sales team talked about hiring 300 people to boost sales in China, Gottung HCAMAG.COM

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brought it back to the company’s high staff turnover rate in China, where there was a struggle to hire while competing against more recognisable brands such as Coca-Cola and McDonald’s. “Finally, the conversation about talent and people started to resonate with the business folks who were creating these massively aggressive business plans for market-share growth, brand-equity growth, revenue growth, profit growth, geographic expansion,” she says. “It was a small light bulb. It wasn’t a revelation, but that small light bulb gave us a little corner in which to creep in and say: ‘Maybe we should have a people strategy attached to this [business] strategy’.” Gottung learnt early to stay away from HR terms like ‘human capital strategy’. When talking to other business functions, she focused on tying the HR approach to the business objectives.


60,000 employees

Operates in countries


US$21bn in global annual sales

Five billion-dollar

brands, including Kleenex and Huggies

STRATEGY FROM SCRATCH Gottung and her team brought in a strategist from outside the HR function to lead the project and started talking to leaders from around the globe. In total, they talked to more than 400 people from around the world, across functions. They aimed to talk to top talent, despite not having a talent identification strategy at the time. The feedback showed remarkable similarities in the problems people were facing across the board, in spite of a feeling among respondents that their issues were unique to their functions or regions. Kimberly-Clark did a gap analysis and looked for areas where the company could have the biggest impact in the shortest time period. It also brought in a strategy consultant from the corporate strategy team who knew nothing about HR but knew how to put together a problem statement, do root cause problem-solving, create strategy, and then help improve structure and change management. Best practices were introduced from top companies around the world, and Gottung’s team also adapted regional programs to be used globally. By engaging regional leaders in the process, the team helped achieve buy-in globally rather than create resistance by insisting that North American policies be used everywhere.

EXECUTIVE BUY-IN “The key thing we did with this process – which I encourage you to do as well – is for every key aspect, get a senior leader involved. I don’t mean on the

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“The key thing we did with this process – which I encourage you to do as well – is for every key aspect, get a senior leader involved” Liz Gottung, Kimberly-Clark

steering committee; I mean on the design team. [Get] a senior leader or a senior thought leader,” Gottung tells HR leaders. “For example, to redesign performance management, our CFO was on the design team. To recreate our compensation system, we took the guy that was most conflicted and most upset about our compensation system and asked him to be on the design team.” Gottung also focused on getting away from HR words when talking to current and potential employees. Instead of talking about ‘talent acquisitions’ and ‘onboarding’, Kimberly-Clark calls it simply ‘welcome’. ‘Career development’ and ‘learning and development’ became ‘dream’ and ‘grow’. The other steps in its People Philosophy are ‘win’, ‘celebrate’, ‘live well’ and ‘give back’.

TOUGH DECISIONS “We were reinventing the plane while we were flying it. We didn’t have a lot of time because I knew the organisation would run out of energy for this if we took too long,” Gottung says. Her team introduced a new set of desired behaviours for the company and a new performance management system that was part of the infrastructure. People hated the new performance management program because they didn’t want to have the tough conversations. They didn’t want to have to rate anyone as ‘needs improvement’ or put together a performance improvement plan, but Gottung’s team persevered. The next challenge was building the HR team and strategy to support the big new ideas. “I did not have the structure, the budget, the skill

set or the organisational credibility to pull it off. The wrong people were in the wrong place with the wrong skills. I didn’t use the word ‘transformation’ until last year. It was more like taking a bomb, dropping it, and taking out the whole thing,” she says. Some tough decisions had to be made in HR. Of Gottung’s 10 direct reports, nine were new in the previous four years, and all 10 came from outside the company. “It’s really sad, but what happened in the good-togreat years is that the CEO diminished HR to the point where almost anyone who was any good left the function and got into a different function, like I did, or left the company,” Gottung says. “We had to build from almost nothing and bring in a lot of people from the outside which, of course, demoralises all the people who are working with you. We’ve turned that around a lot now.” A consumer marketing expert was brought into HR to build an employer brand – a brand that is now considered one of the best in the world – by approaching the issue as a marketing problem. Gottung and her team developed brand promises, key messages and recruiting materials that look and feel the same all over the world. They also partnered closely with IT to improve the software and technology supporting HR’s core competencies.

NOT BUYING IT When the plan was introduced to the executives, they already had significant buy-in because each leader had been involved in at least one of the work streams. Unfortunately for Gottung and her team, their new plan faced a whole new challenge when the economy

TOP TIPS FOR TRANSFORMATION Know the business Transformation must serve specific business outcomes. If you focus on developing a world-class HR strategy without aligning to the business, the end result won’t meet company needs. Cut the HR jargon ‘Talent acquisition’, ‘human capital’, ‘career pathing’ – Gottung cut the HR jargon from the strategy to reflect the fact that it was about business outcomes, not HR outcomes. Make tough decisions “I did not make my tough people-decisions early enough,” Gottung says. “I was very emotionally connected to my team. It was very difficult, but you’ve got to do it fast. We have to take our own medicine.”

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Get execs involved Having executives on design teams meant that, when the full plan was rolled out, every exec felt a sense of ownership for at least part of the program. Look for an outside perspective Sometimes the best talent for a role is from outside the HR department. Gottung brought in experts from corporate strategy, IT and other departments to help develop a new HR strategy. Put your best talent onto the project “If you don’t put your absolute best folks on this stuff, you’ll be sorry,” Gottung says. Your team leaders might not appreciate your ‘borrowing’ their top performers, but the improved business results will win them over.


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crashed in 2008. No one was looking to put more money into HR when there was a company-wide cash generation initiative underway. The leadership team balked at the price tag of US$24m a year. “They asked me: ‘What could you do for 18, for 12, for eight [million]?’” Gottung says. “The best thing I did was I said: ‘If you give me 10, I can do this and no more. We cannot and will not do more’. We always overpromise and underdeliver – at least I did.” Gottung got a three-year budget commitment. At the end of that time period, the executives said they wanted even more.

SEEING THE RESULTS Gottung jokes that she could have retired happily after the CEO, and at a forum last year, credited the people strategy as one of the top three reasons for the company’s record stock price. It comes back to her focus on the company’s end goals rather than on HR as an independent function. “We’re setting a bar for our competitors in the business and HR. Our HR employees are in high


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“We were reinventing the plane while we were flying it. We didn’t have a lot of time because I knew the organisation would run out of energy for this if we took too long” Liz Gottung, Kimberly-Clark demand in other companies, and HR is a destination function. We get applications from engineering, IT, finance,” she says. “But it’s not about world-class HR; it’s about the business. I didn’t take the job to reinvent HR – I took the job because I thought I could potentially have an impact on the business.”

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L&D in the digital age

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The difference between a mediocre training program and an outstanding one can have vast implications for productivity, succession planning and engagement. John Hilton looks at innovative methods HR can use to train their people What makes an excellent organisation? The usual suspects might come to mind, such as one that’s profitable, innovative, ethical and flexible. But for Huggy Rao, professor of organisational behaviour & HR at the Stanford Graduate School of Business, it’s simply a place where people do the right thing – even when somebody is not watching over their shoulder. That’s exactly what Rao and Bob Sutton argue in their book Scaling up Excellence. So how can organisations inspire this kind of self-motivation, commitment and performance? A good place to start is for HR to work with top leadership to foster an environment in which employees are being ‘stretched’, says Rao. This involves helping employees learn by challenging them with tough projects. “I think you have to give people real experiences where they are going to lead projects or be involved in projects where there is a non-trivial chance of failure,” says Rao. “At the same time you want to give them opportunities where they are not ready for opportunities, because nobody is ever ready. And to my mind, that is the most important thing an organisation can do.” The beauty of this is that once they progress through a few projects, employees can become teachers to their less experienced counterparts and, in turn, learn even more, says Rao. This is because, in order to be an effective teacher, they have to be ready for any problematic questions and dilemmas.

WHY FIRING THE BOSS WORKS It’s often overlooked, but managers or team leaders themselves should be learning, developing and performing, just like their subordinates do, says Rao. Take Twitter, for instance. One initiative of that company involves people working in a team for a


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few months. After the projects are complete, every member has the chance to leave their team and join a new one. “The boss in charge of the team says: ‘I better make sure they are engaged and that I am doing well because I don’t want to lose them to somebody else’,” says Rao. “So that process disciplines bosses to pay more attention to their subordinates, but the other thing it quickly reveals are the poorly performing bosses. Essentially what the organisation is doing is giving subordinates the opportunity to, if you will, fire their bosses.” Rao also believes that if a subordinate is not performing in a particular role, the organisation

WHAT CAN HR LEARN FROM PLAYING GAMES? Dr Jason Fox, a motivation strategy and design expert, claims that focusing employees on the chance to progress is the key to unlocking their potential. In his book The Game Changer, he argues that the power of games (whether they be video games, board games or sport games) can help increase motivation and productivity in the workplace. This is because games offer a clear sense of progress which correlates to the highest levels of motivation at work, he says. Additionally, when people play games, they do so with an immense amount of strategy, planning, focus and engagement – something that many employees struggle with in their work environment. Moreover, Fox argues that the ideal work culture to foster is one that’s collaborative and forward-thinking, as opposed to one that’s simply competitive and based on individual performance. “This would then nest elements of fierce competition, and yet the boundaries would be clear – people aren’t competing against each other but against themselves, or their team’s previous performance. This then taps into our sense of mastery – a powerful driver of intrinsic motivation,” he says. “Innovation thrives in collaborative cultures, where the focus is on what’s good for the team, group or company.”

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“Managers ... have actually forgotten how to have conversations with their employees. They hide behind technology” Huggy Rao, Stanford Graduate School of Business

HR TAKEAWAYS: INNOVATIVE MOTIVATIONAL TIPS Dr Fox gives his tips for better motivation and progress to encourage in the workplace Develop and maintain good rituals around progress. These sacred routines are what keep you on track.

Tackle projects in sprints. Work cannot be infinite, and we work better in bursts of productivity rather than long marathons with no pause. Calibrate challenges. If you’re avoiding a task, chances are it’s so challenging that it’s making you anxious. Take this opportunity to recalibrate your approach by somehow reducing the challenge (or the friction between you and the challenge). Compress challenge. Some tasks are so mundane and boring that they don’t get done. In this instance, compress the amount of time allocated to them and set yourself a challenge of completing these tasks within a given timeframe. Remove the friction. Between where anyone is and where we want them to be, there is a whole heap of friction – things that get in the way. Wherever possible, we need to reduce complexity and make activities conducive to progress easier to engage in. If in doubt, bring it back to progress. It’s the key element that sustains motivation. If motivation is lagging, step back and find the sense of progress in the bigger picture, and then zoom in and work up a simple list of actions for the day.

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should consider reassigning them to another manager. This means they have an opportunity to create a fresh start and reboot, which can make all the difference.

SHUNNING TECHNOLOGY If there is one thing employees crave – particularly Generation Y – it’s feedback. However, Rao sees little benefit for the development of employees or the organisation in just telling them that their performance has been poor. Instead, conversations should be about how the organisation and HR can help make the employee better at what they do. Ironically, increasingly advanced technology is actually moving us backwards in this sense, he argues. “To my mind, the problem with managers these days is that they have actually forgotten how to have conversations with their employees. They hide behind technology. They hide behind forms,” Rao adds. “When you go to them and ask how you are doing, they will tell you to wait until the appraisal and they will talk about it then.” Rao cites Adobe as a company at the forefront of feedback. This came about because they realised they were wasting 80,000 manager hours filling forms. These days, Adobe offers feedback in real time by having regular face-to-face conversations with their staff.

BUREAUCRACY BUSTING For Rao, the real challenge for HR is how to help take execution worries off the mind of the boss, who plays a significant part in the progression of employees. “That’s really the role HR will have to play and where they fall short a bit,” he adds. HR can be of particular help in motivating the taskforce, because something that really gets employees demotivated is bureaucracy, says Rao. One way they can do this is by organising a game of bureaucracy busting, where the person who can eliminate the most unnecessary rule gets $50. “That’s so much more fun and engaging than showing up to a meeting and figuring out what to cut. What you have to do is give your boss tools to make sure people are engaged, and I think that is where HR can make a big difference.”


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Friday 5th September, 2014 Doltone House, Darling Island

Winning this award was a great honour, as well as providing recognition for the hard work and passion the team at AMP Horizons puts in on a daily basis. The HR awards evening was a real highlight for the team – a chance to be proud of our achievements and celebrate. Having this high-profile industry award has increased the visibility of our business both internally amongst our AMP colleagues and externally within the financial services industry - both of which contribute to our credibility as a world-leading provider of professional development opportunities.

amp horizons (Michael Corcoran)

Winner: Best Learning and Development Strategy – HR Awards 2013

~ AMP Horizons Best Learning and Development Strategy

Presented by Joydeep Hor, Managing Principal, People & Culture Strategies

Nominations Now open online AWARDS SPONSORS


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Despite the widespread beliefs of many business leaders, unions can potentially play a productive role in employee communications. Professor Russell Lansbury looks at how representative bodies can enhance employee engagement Management literature has traditionally focused on largely top-down communication, with representative bodies often left out in the cold. However, studies of employee involvement and participation schemes indicate that if employees and their representative bodies, such as unions, are to play a key role in facilitating change, they require not only to be better informed through communication, but also to be provided with the opportunities to exercise greater influence in decisions that affect their work. Research undertaken in the UK indicates that employees are more likely to trust managers and their policies if there is support and involvement of an independent union. There are some significant differences between countries in terms of the legal requirements for organisations to communicate with their workers and to provide them with opportunities to influence decision-making. In the European Union, for example, there are specific provisions about the rights of employees and unions to be informed and consulted about certain workplace issues. By contrast, Anglo-Saxon countries with a common law tradition tend to place less emphasis on statutory provisions and leave it to the discretion of employers as to how much they will share information and consult with their employees.

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Using employee bodies to bolster engagement


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Research undertaken in the UK indicates that employees are more likely to trust managers and their policies if there is support and involvement of an independent union JOINT CONSULTATIVE COMMITTEES, UNIONS AND COUNCILS In Australia, indirect forms of participation typically occur where employees are represented by their coworkers or union representatives in formal bodies, such as joint consultative committees or works councils. Direct forms of participation occur when employees are personally involved in activities within the enterprise, such as problem-solving teams. The latter is more informal than the former and has become more prevalent in organisations in English-speaking countries – particularly in North America – during the past two decades.


ANCA is a privately owned Australian company The company employs 850 people, 75% of whom are based in Australia. The majority of ANCA’s workers are tradespeople, technicians and engineers 10% of annual sales are invested in R&D The majority of ANCA’s tradespeople are members of the AMWU, which negotiates the enterprise bargaining agreement on their behalf. Both management and union delegates at ANCA emphasise the role that communication and employee engagement plays in the company’s success. According to senior AMWU delegate Noel Mitchell, who has been with the company for more than 20 years, many ideas from the floor filter back up to the engineers, meaning designs can be redeveloped and then tested again, resulting in significant savings. “Our emphasis is to evolve a design to get the right outcome,” he says. While the main location of ANCA’s operations is in Australia, it has recently completed a new technology centre in Germany. According to CEO Grant Anderson, “hierarchical or top-down styles [cannot be applied] in the world today... Lean manufacturing means team-based organisations working together for an outcome”. Pat Boland, one of the joint founders and owners of ANCA, also emphasises that for the company to succeed in overseas markets, it must be regarded as equal to or better than the local manufacturers, especially in highly sophisticated markets such as the US and Germany.

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One of the most well-known examples of indirect forms of participation is the German ‘dual’ system of employee representation, where unions negotiate wages at the industry or sectoral level while works councils deal with non-wage matters involving working conditions at the workplace or enterprise level. Under the German system of co-determination, employers are obliged to provide employees and their unions with a range of information concerning the enterprise, and to consult with them on various workplace matters. Employers stress the importance of direct communication with employees as a means of increasing their understanding and commitment to the organisation’s goals. In order for initiatives such as quality circles, total quality management and Six Sigma to be effective, management has to communicate more information to employees and provide more opportunities for involvement in decision-making. Although this does not challenge managerial prerogatives or authority to introduce changes, employees who gain more information about strategic decisions may start to question the directions taken by management, particularly if such information reveals deficiencies in the organisation.

EMPLOYEE ENGAGEMENT AND HIGH-PERFORMANCE WORK SYSTEMS The term ‘employee engagement’ has become increasingly popular in management and policy fields. In the UK, the Blair Labour government commissioned the MacLeod Report to inquire how business performance and innovation could be improved in the British industry. The report focused on employee engagement, which it defined as a “workplace approach designed to ensure that employees are committed to their organisation’s goals and values, motivated to contribute to their organisation’s success and are able, at the same time, to enhance their own sense of wellbeing”. The report amassed a great deal of evidence which showed that employee engagement produced substantial competitive advantages and ROI to those organisations practising it. A key ingredient was “an effective and empowered employee voice [whereby] employees’ views are sought out, they are listened to and see that their opinions count and make a difference”. An employee’s involvement with and commitment to work is a key factor in employee retention. The


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key enablers or drivers of employee engagement identified by MacLeod and Clarke included: • effective internal employee communications • regular feedback and dialogue with superiors • clarity of job expectations • the quality of working relationships with others • opportunities for career advancement Prominent British academic David Guest has questioned whether employee engagement will turn out to be “just another passing management fad”. Guest raises concerns about the lack of evidence to demonstrate a clear link between employee engagement and improved organisational performance, as well as the absence of a coherent set of practices to enhance employee engagement. However, Guest argues that if work engagement enhances the wellbeing of employees, it could generate a benevolent spiral that results in improved organisational performance.


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CASE STUDY: HELLA AUSTRALIA Hella Australia is a privately owned German company Number of employees: 350 Hella has operated in Australia for more than 60 years and has produced high-end lighting products for the automotive sector as well as the mining and maritime industries. The decline and closure of automotive assembly plants in Australia will provide a major problem for Hella, but it has established a centre of excellence in lighting for the mining industry and hopes to diversify its production in the future and expand its exports to Asia. The GFC was a catalyst for Hella Australia’s management and workforce to collaborate on creating a more diversified business in Australia. Most of its production employees belong to one of two main unions. According to union delegate Ian Davis, “we have an excellent forum to raise issues with management every three weeks. It is an open and transparent [process] and we share the same goals to keep this company competitive” (AMWU 2013:4). Each quarter, CEO Olavi Rantala, from Finland, meets with groups of 30 employees at a time to discuss performance and profitability information. According to general manager Markus Spindler, “our aim is to involve our wider workforce from a very early stage of development, through design and development, so that we can get feedback”.

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Concerns have been raised about the lack of evidence to demonstrate a clear link between employee engagement and improved organisational performance A related concept, which has been prevalent in the organisational literature for at least a decade, is high-performance work systems (HPWS), or highinvolvement work systems. These terms are generally applied interchangeably to organisations in which there is greater flexibility, cooperation between employees and management, and employee involvement in decision-making. Interest in these types of work systems emerged with the success of Japanese companies in the manufacturing industry which utilised techniques such as quality circles, just-in-time inventories and flexible, teambased production. A key element of these work systems was communication between management and employees in order to increase employee involvement in task-related decision-making and the upgrading of employees’ skills in order to undertake these responsibilities. An emphasis on high-performance and highinvolvement work systems emerged with the advent of advanced technology, which required more sophisticated skills among the workforce and greater autonomy in decision-making. Although these systems originated in the manufacturing sector, they spread to the service sector, as workers in all industries needed to exercise higher levels of skill


A high-performance work system (HPWS) is a combination of HR practices, work structures and processes that maximises employee knowledge, skill, commitment and flexibility. and judgment, and to be more innovative. Professional service firms, banks, hospitals and educational institutions all require more engaged and skilled personnel than ever before. Effective systems of communication are critical for such organisations to function. There are some examples of cooperative relationships between employers, employees and their unions within Australia where effective employee communications and engagement can be found. Two such cases are an Australian-owned machine tool manufacturer and a German-owned multinational lighting company, both of which have achieved long-standing success with their products (see case study box-outs).

EMPLOYEE COMMUNICATION AND ENTERPRISE BARGAINING Under the Fair Work Act (sections 186 and 205), parties are required to include consultation and dispute-resolution clauses in enterprise bargaining agreements. All modern awards contain consultation provisions in relation to the introduction of major changes in the workplace. The Fair Work Act requires consultation provisions (either the model clause or a customised one) to be included in all enterprise bargaining agreements. In 2013, section 145A was introduced through the Fair Work Amendment Act, and provides that modern awards


37.3% Individual agreement (registered and unregistered)





Collective agreement (federally registered)


Collective agreement (state registered)*

Collective agreement (unregistered)*

* The May 2012 ABS EEH Survey does not break up state-registered and unregistered collective agreements. Data includes all non-managerial employees. Source: Trends in Federal Enterprise Bargaining, December quarter, 2013 – Department of Employment

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STRATEGIES FOR EFFECTIVE COMMUNICATIONS AND EMPLOYEE ENGAGEMENT The imperative moment for improving communications strategies within organisations often occurs during an economic downturn or crisis, when pressure builds on top management to arrest the decline in profits and prevent an exodus of highly valued employees. A number of strategies have been found to be effective in improving communications in order to maintain or create better employment relations, as follows: Undertake an audit of communications within the organisation This can enable an organisation to ascertain which practices are working and those that are not. A variety of methods can be useful, including interviews or surveys of employees, focus groups and workplace observation. On the basis of these findings, the organisation can reassess its strategies, activities and programs. Create a well-designed and confidential system for employees to convey their concerns and suggestions to management The kind of system best suited to an organisation depends on its internal culture and previous history with different approaches. Examples include face-to-face and group meetings, employee

must also include terms requiring employees to consult with their employees about a change to their roster or ordinary hours of work. There are also various other consultation and employee engagement requirements imposed by the Fair Work Act, whether or not an award or enterprise bargaining agreement applies, as in relation to requests for flexible work arrangements. There are also statutory requirements imposed by State and Federal legislation in relation to occupational health and safety. A major employer association in the private sector is the Australian Mines and Metals Association (AMMA). Although AMMA is on the record as advocating direct engagement between employers and their employees, in 2007 it issued a joint report with the Australian government’s Workplace Authority – entitled Workplace Improvement Through Employee Engagement – which noted that “improved business interests can also be created by promoting the mutual interests of union members and the company” and added that “a


As of 31 December 2013 there were 23,236 EBAs in Australia, covering 2.6 million employees. More than one third of all non-managerial employees in the Australian labour market are covered by federal enterprise agreements.


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surveys, blogs and social media. The main purpose is to provide employees with an authentic means by which they can express their opinions and feel that their voice is being heard. Establish guidelines for an effective employee suggestion program Suggestion schemes, which merely become outlets for complaints, are rarely effective. Guidelines are necessary to indicate which topics are open for suggestions. Typically these will include issues such as methods for improving productivity, processes and cost savings. It should be clear how suggestions will be evaluated, what actions will be taken and how rewards will be allocated, if this is applicable. Provide opportunities for employees to interact with the leadership team It has been demonstrated that when employees have the opportunity to meet and raise issues directly with organisational leaders, they will be more engaged and committed to the organisation and work harder to achieve organisational goals. Direct communication between the leaders and employees of an organisation contributes strongly to positive employment relations.

business model [can be] based on union and management cooperation [which] recognises a role for the union in communication, consultation, dispute resolution and in the design of key people systems”. However, if enterprise bargaining agreements are to promote genuine communication and employee involvement, they need to ensure that employee engagement and participation is integrated into normal operational activities within organisations. Management needs to involve all levels of employees, including union delegates, in the discussion and implementation of changes in order to gain their full cooperation and engagement. Communication is often regarded as part of the public relations function of an enterprise rather than an integral part of employment relations and effective organisational management. Evidence from a number of countries shows that improving communications between management and employees can provide greater opportunities for employee participation as well as improve worker engagement. In turn, this will create more productive workplaces and facilitate positive employment relations. While this remains an elusive quest, at organisations where there are high levels of communication and participation, positive outcomes are reflected in strong employee engagement and high staff-retention rates.

Russell Lansbury is emeritus professor of industrial relations at the University of Sydney Business School. This article is an edited version of an invited paper prepared for the Fair Work Commission’s Workplace Relations Education Series. Information in relation to the series is available on the Fair Work Commission website at

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In an extract from his latest book, Extreme Productivity: Boost Your Results, Reduce Your Hours, Robert C. Pozen explains the secrets of goal setting, and getting your priorities right Many executives are whirlwinds of activity, racing from meeting to meeting or crisis to crisis without giving much thought to the rationale for their hectic schedules. Many of those professionals like the feeling of doing something; they are not comfortable reflecting on their priorities. Their typical approach can be described as ‘Ready, fire, aim!’ Others get bogged down in schedules dictated by their companies or spend most of their time responding to ‘urgent’ requests. As a result, those energetic, ambitious people spend too little time on activities that support their highest goals. Despite their talent, they often report a serious mismatch between their work priorities and time allocations. No matter what your career aspirations are, you should begin by thinking carefully about why you are engaging in any activity and what you expect to get out of it. I will walk you through an exercise to establish your highest-ranking goals and determine whether your actual schedule is consistent with this ranking. This process has six steps: • Write down everything you are doing, or planning to do, in order to achieve your professional goals. • Organise the items by time horizon: career aims, yearly objectives, and weekly targets. • Rank your objectives by their relative importance, taking into account what the world needs as well as what you want. • Rank your targets by their relative importance, both those serving your objectives and those assigned to you. • Estimate how you actually spend your time, and compare that with your prioritised set of objectives and targets. • Understand and address the reasons for mismatches between your goals and time allocations.

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TIME CATEGORIES EXPLAINED WRITE EVERYTHING DOWN On one or two sheets of paper, write down everything you are required to do in your professional life. This includes all those routine tasks in your job description that you have to do on a daily or weekly basis, such as filing reports or reviewing documents. It also includes any longer-term projects assigned to you. But don’t stop there; if you spend all your time responding to crises and tasks assigned by others, you can only tread water. To get ahead, you also need to think about what you want to do. These may be long-term goals, such as advancing your career. Or they could be short-term goals, such as developing a new skill or meeting more people in your industry. On the same sheet of paper as your assigned tasks, add these aspirations for your work. Don’t worry about separating tasks and goals; just jot them all down. We’ll organise them in step two. To illustrate, I’ve completed this exercise from the perspective of the manager of one retail outlet of a consumer electronics chain. I’ll call him ‘Joshua’. The list below contains 13 tasks Joshua must do, or wants to do, at work. I’ll use Joshua’s example to illustrate the concept of setting your priorities.


e sales st  Hire mor % profits by 15 se day’  Increa ity history un m om ate in ‘c n ai  Particip ch at ive a top execut  Become po ex ch te perience  Attend a stomer ex pleasant cu a e at re ss C bo  port for kly sales re  Write wee er terior design  Hire an in dustry in il ta re ople in  Meet pe managers area store  Meet with ier offices tegy  Get fanc keting stra a local mar op el ev for D s  standard rformance  Refine pe sales staff

ORGANISE BY TIME HORIZON The next step is to divide your list into three time categories: career aims (five-plus years), objectives (three to 24 months), and targets (one week or less). Some goals won’t fall neatly into one category; consider each on a case-by-case basis. If it’s a relatively quick and simple goal, assign it to the shorter time period. If it’s long and requires many cumbersome steps, make it part of the longer time period.


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Career aims: These are long-term goals over at least five years. For example, a young law school graduate might have a career aim of becoming the general counsel of a company or a partner in a large firm – or perhaps even both. Objectives: These are the goals for your professional life over the next three months to two years. They typically require many intermediate steps. Objectives could include completing a systems project, doubling the sales of a product, or developing a new organisational structure. Targets: These are ‘action steps’ that should guide your work on a weekly or daily basis. For example, your targets could involve writing a short report, resolving a client’s problem, or finishing one part of a larger project.

Next, make sure each of your objectives has one or two associated targets. If any objective lacks a target, think hard about the next actionable step you can take to advance that objective, and then add it to your list of targets. For example, if one of your objectives is to double the sales of a product, a target for the next week might be meeting with a large vendor to make a sales pitch. If an objective is to publish a research paper by the end of next year, a target may be to start writing a grant request to get it funded. Here is Joshua’s list of career aims, objectives, and targets:

AIMS • Become a top executive at chain


• Increase profits by 15% • Create a pleasant customer experience • Meet people in retail industry • Get fancier offices

TARGETS • • • • • • • •

Hire more sales staff Meet with area store managers Participate in ‘community history day’ Attend a tech expo Write weekly sales report for boss Hire an interior designer Develop a local marketing strategy Refine performance standards for sales staff

Once you have sorted your goals into these three categories, put your career aims aside. Planning your career as a whole is a complicated process, which I explore at length in my book. For now, focus on the medium-term and short-term goals – your objectives and targets. These will determine how you should be spending time on a daily basis.

Robert C. Pozen is a senior lecturer at Harvard Business School and a senior fellow at the Brookings Institution. He graduated summa cum laude from Harvard College and holds a law degree from Yale, where he also obtained a doctorate for a book on state enterprises in Africa.

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The industry’s thought leaders and leading practitioners gathered in Sydney to attend the premier event on the HR calendar

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Over 1,000 delegates gathered at Sydney’s Luna Park for the 12th annual HR Summit. The Summit has become the premier HR event in Australia. This year, guests enjoyed informative and entertaining sessions in the main conference and the dedicated Directors’ Forum, and gathered to network and chat about all things HR with the wide range of HR vendors on the free expo floor.


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Highlights included talks from IKEA, Google, PepsiCo, the Fair Work Ombudsman, and champion Olympian Stephen Bradbury. Another highlight for one lucky delegate, Salote Cakacaka, was the $10,000 cash prize. Salote took out the prize for her response to the question, ‘what do you love most about HR?’.

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THE INTERNATIONAL EVENT THAT’S LOCAL SPEAKERS: Damir Kucan Executive General Manager HR Crown Perth

Bruce McCowan Head of Human Resources Western Power

Kiersten Gregg General Manager HR Rio Tinto

Darian Ferguson Director Human Resources WA Police

Bruce Ross-Adams Executive General Manager HR St Ives Group

Solvita Bleiere Human Capital Manager, Nexia Perth

Sandie Beaumont HR Manager, Anchor Foods

Joseph Carrello National HR Consulting and EAP Services Manager, Orsgroup

Christine Thompson GM People Services Department of Fisheries,WA

Julie Harrison Partner – Human Capital Deloitte

Kathryn Dent Director People and Culture Strategies

Margaret McLeod HR Manager The Perth Mint

TOPIC HIGHLIGHTS: • The art and science of managing change • How to inspire great leadership in others • Partnering with the CEO • Workplace bullying: the new landscape • Mastering your own leadership presence


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Human Resources Director 12.04  
Human Resources Director 12.04  

The magazine for people who manage people.