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HCAMAG.COM ISSUE 12.10

GENERATION SPOTTING & GROOMING THE LEADERS OF TOMORROW TOP TIPS • CLARIFYING CORPORATE VISION

• FOSTERING CREATIVE CONFLICT

• AVOIDING BURNOUT

E U S S I P I H S R E D A E THE L of the best

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EDITOR’S LETTER / HUMAN RESOURCES DIRECTOR

CHALLENGE OR OPPORTUNITY?

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HCAMAG.COM ISSUE 12.10

I hear it time and time again. The number one challenge facing HR professionals today is ensuring their organisation has a pipeline of potential leadership talent. It’s also on the radar of CEOs. In this issue, Jack Percy of Accenture names this as his top peoplerelated challenge. So what’s going on? Have companies simply taken their eye off the ball and not invested enough into leadership development? Have the leadership ranks been cut too deeply due to economic hardship? Or are we not employing the right people to start with? In all likelihood, it’s a combination of all these factors, and more.

Who would want to be a leader today? The megatrends are almost too daunting to consider. As highlighted in a recent Hay Group report, leaders of tomorrow will need to grapple with: Globalisation 2.0 – whereby rapid urbanisation and a burgeoning middle class in emerging markets are opening up new commercial opportunities for Western firms. However, this is also creating new competitors with extensive and ambitious workforces, money to invest and large domestic markets to sustain overseas expansion.

GENERATION SPOTTING & GROOMING THE LEADERS OF TOMORROW TOP TIPS • CLARIFYING CORPORATE VISION

Iain Hopkins, editor, HRD

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COPY & FEATURES EDITOR Iain Hopkins JOURNALISTS Janie Smith, Jill Gregorie PRODUCTION EDITORS Roslyn Meredith, Moira Daniels

ART & PRODUCTION DESIGNER Marla Morelos, Loiza Caguiat DESIGN MANAGER Daniel Williams TRAFFIC MANAGER Maria Katsiotis

SALES & MARKETING MARKETING EXECUTIVE Alex Carr COMMUNICATIONS EXECUTIVE Lisa Narroway BUSINESS DEVELOPMENT MANAGERS James Francis, Steven McDonald, Gareth Scott

CORPORATE CHIEF EXECUTIVE OFFICER Mike Shipley CHIEF OPERATING OFFICER George Walmsley MANAGING DIRECTOR Justin Kennedy CHIEF INFORMATION OFFICER Colin Chan

Who would want to be a leader today? The megatrends are almost too daunting to consider Individualisation and value pluralism: changing values, expectations and motivations mean that customers and employees demand a more individual approach. They expect systems to flex to meet their needs and are happy to switch between brands or employers that don’t adapt.

Demographic change: the working population is changing rapidly. Increased life expectancy means people can work for longer, changing traditional career paths. Smart young talent is coming into the employment market and pushing the boundaries of organisational structures.

And that’s before we get started on technological convergence, the booming digital era and a renewed focus on triple bottom line reporting….but where some might see these as challenges, others will see opportunity.

It’ll be up to HR to ensure the right people are capitalising on these opportunities as they groom the next generation of leader.

• FOSTERING CREATIVE CONFLICT

ISSUE DERSHIP THE LEAthe best of the best

HUMAN RESOURCES MANAGER Julia Bookallil Editorial enquiries Iain Hopkins tel: +61 2 8437 4703 iain.hopkins@keymedia.com.au Advertising enquiries James Francis tel: +61 2 8437 4766 james.francis@keymedia.com.au Steven McDonald tel: +61 2 8437 4757 steven.mcdonald@keymedia.com.au Gareth Scott tel: +61 2 8437 4745 gareth.scott@keymedia.com.au Subscriptions tel: +61 2 8011 4992 • fax: +61 2 8437 4753 subscriptions@keymedia.com.au Key Media keymedia.com.au 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 hcamag.com

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CONTENTS / HUMAN RESOURCES DIRECTOR

16

One-on-one: CEOs on HR HRD sits down with two of Australia’s leading business leaders – Pip Marlow of Microsoft and Jack Percy of Accenture – to talk about how HR can continue to add value in a complicated business world

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Don’t stop (thinking about tomorrow) A spate of white papers suggest that Australian organisations are woefully unprepared to meet the leadership challenges of the future. How can a strategic rather than tactical approach to leadership development be implemented?

32

The diplomatic leader: How to agree to disagree There’s a myth that disagreements are negative and are to be avoided at all costs. However, as Alexandra Tselios explains, if you avoid them entirely, you may never achieve truly effective business outcomes

36

Burning the candle at both ends With great leadership comes great stress, but there are ways to prevent stress from turning into burnout. Dr Adam Fraser outlines a seven-step guide to sustaining high performance without letting your health suffer

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46 International HR profile: Southwest Airlines The aviation industry is one characterised by employee burnout, high turnover, and recession-fuelled layoffs. Southwest Airlines, however, is out to prove that a ‘people first’ business culture can be all it takes to prevent this operational jet lag. Jill Gregorie reports

REGULARS 04 | In brief: News 06 | News analysis: Interim managers 56 | Last word: Competency frameworks

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OCTOBER 2014 / THINGS YOU SHOULD KNOW

WORKPLACE LAW

MARCH 2009 APRIL 2009

Retrenchment Mr Barker’s employment ends and CBA pays him a $182k exit package.

2010

Legal action starts Mr Barker is unable to find alternative employment. He sues the bank, claiming he lost the chance to be redeployed because CBA breached its own policies and failed to consult with him properly between redundancy and retrenchment.

SEPTEMBER 2012

The decision effectively overrules numerous findings in lower courts and tribunals, many of which asserted that the mutual duty of trust and confidence did apply in Australia and could be breached if an employer failed to follow or abide by its own policies and procedures.

In light of the decision, key issues to be considered by the legal and business communities include: • whether this decision is too legally ‘technical’ and not in keeping with modern social expectations • whether businesses should be free to depart from or breach their organisational policies as they see fit, without risk of contractual damages being awarded to affected employees • how the impact of this decision will affect businesses that have already adopted the concept of mutual trust as a key foundation stone for high performance • whether the decision now leaves employees even more exposed to the whims of employers who act unethically, particularly employees who are paid a ‘high income’ and are not covered by modern awards

Redundancy CBA tells Mr Barker his role as an executive at the bank is no longer needed.

Barker wins!

In a decision that shocks the legal community, the Federal Court awards Mr Barker $317k in damages.

This is the first time an Australian Court has awarded damages for an employer’s “breach of trust and confidence”.

AUGUST 2013

On 10 September, the High Court of Australia (HCA) handed down its much-anticipated decision in Commonwealth Bank of Australia v Barker.

The outcome represents a major landmark in employment relations, with the HCA confirming that: • unlike in the UK, employment contracts in Australia do not impose a general duty of “trust and confidence” upon employers; • it is not “necessary” for employment contracts to require employers to refrain from conduct that is likely to destroy or seriously damage the relationship of confidence and trust with employees; however, • the decision is not a complete ‘get out of jail free’ card for employers, who do still have a (less extensive) duty of “good faith” towards employees.

HOW IT HAPPENED Barker’s case against the Commonwealth Bank:

CBA loses first appeal The Full Bench of the Federal Court dismisses CBA’s appeal against the decision. It gives slightly different reasons, but still agrees there was a breach of trust and confidence and allows the damages order to stand.

SEPTEMBER 2014

THE BARKER DECISION

EMPLOYEE BENEFITS

High Court decides further CBA appeal After hearing CBA’s further appeal in April, the High Court’s decision in September finally settles the outcome.

NEW ERA BENEFITS The following benefits were among the more innovative on offer from employers surveyed in Mercer’s Australian Benefits Review:

Sustainable commute benefit: $10 for employees who arrive at work any way other than by solo commute, reducing demand for car parks, decreasing the environmental footprint and boosting the health of employees if they get to work by walking or cycling

Additional annual leave granted if all annual leave is used up each year, reducing leave liability on the balance sheet and the charge to the P&L

Summer days: allowing employees to finish earlier on a Friday during summer, increasing morale and goodwill as the company extends their weekend

Doona day: providing employees with an extra day off for personal replenishment and mental health

Flexible workplace: unrestricted working from home where employees are trusted to decide on their most appropriate place to work depending on their work schedule, while also considering their personal needs

Source: FCB Group – fcbgroup.com.au

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TECHNOLOGY

EMPLOYMENT

ANZ ORGS LAG ON CLOUD INVESTMENT

ABS STATS AT A GLANCE

ANZ organisations are less sophisticated than their APAC counterparts when it comes to adopting and providing training in cloud solutions. Currently, 50% of ANZ decision-makers cite investment in some form of cloud solutions, compared to an APAC average of 54%. However, almost half (46%) of ANZ decision-makers have not invested in training to support cloud solutions, compared to an APAC average of 19%.

September’s ABS labour statistics have shown a significant increase in jobs in Australia. Key stats included:

121,000

Top 3 perceived benefits of cloud solutions mobility and improved access

27%

reduced costs

17%

up-to-date software and systems

15%

new jobs created in August unemployment rate dropped from 6.4% to

6.1%

106,700

Top 3 perceived challenges of cloud solutions data security

35%

lack of skilled employees

15%

data privacy

13%

part-time jobs created

80%

of Australian workers believe temporary work is the best path to securing a permanent position* *Randstad Workmonitor report

Source: Leverage the Power of Big Data & the Cloud, Skillsoft

RECRUITMENT

MULTINATIONAL CHALLENGES: FAIR AND EQUITABLE RECRUITMENT PROCESSES Two billion people worldwide claim to speak English, and 85% of multinationals use English as their language of business. Other key findings of research conducted with C-suite and HR directors of multinational companies in Brazil, China, Germany, Indonesia, Mexico and the UK revealed the following:

72%

feel there is currently no fair/common standard of English assessment.

Chinese respondents are most likely to think this and find difficulty in administrating because of it

70%

are currently assessing an employee’s proficiency in English

83%

agree that a standardised measure of English proficiency would be useful in the recruitment process

80%

agree that individuals who are able to speak good English are more likely to succeed in their business, and 90% agree that it benefits their business if employees speak English

Source: LinkedIn research for Pearson, May 2014

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NEWS ANALYSIS / INTERIM MANAGERS

THE ULTIMATE STOP-GAP SOLUTION?

Interim management is a form of contracting that fills a company’s need for senior executives or senior project resources for a flexible period of time. Yet despite the benefits, a new report suggests Australian employers have not embraced the concept While Australia’s workforce has become more flexible – with part-time and contract work becoming well entrenched in many companies – it seems this level of flexibility has not been embraced at the top level of business.

According to a report by 1st Executive,* Australia has one of the lowest take-up rates of interim executive management as a percentage of total workforce population in the English-speaking world.

Born in the Netherlands in the 1970s out of the need to navigate restrictive labour policies and avoid hefty financial penalties for dismissing

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executives, the concept of the interim manager has since spread around the world. In Spain, for example, recruitment of interim managers into the workforce increased by 68% in 2011, and by 2013 the first interim management association was organised to support those following this new career path.

Australia is lagging behind the rest of the world.

This is surprising for a number of reasons, not least of which is that market conditions suggest opportunities for interim executives should be flourishing.

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“We’ve got the opportunity to be flexible, particularly at that senior level, and we’ve got insurance and tax regimes that don’t penalise someone for working independently at that level. In fact, for someone in that over-55 age group, the transition-to-retirement opportuni­ ties presented by interim roles are substantial,” says Andrew Thoseby, owner/director of 1st Executive.

However, Thoseby says one significant issue remains: once people get into senior roles in Australia they become quite entrenched in those roles through a combination of short- and longterm incentives and more aggressive funding into superannuation. This can make them resistant to moving from job to job. “Globally, from the age of 45 up, CEO turnover in major corporates happens every five to seven years.

However, Australia has a lot of family businesses where that doesn’t happen so much. So that C-suite tends to stay put.”

It’s also apparent that there is some hesitation from Australian employers to embrace the concept.

BENEFITS TO EMPLOYERS Interim managers could go by an alternative title: situational leaders. Usually there’s a scenario in the workplace that needs focused attention, which is when interims flourish.

Although an interim manager might on occasion be required as a ‘stop-gap’ to fill a role while someone is on long-service leave, or to fill a role until a replacement is found, it’s usually project management, change management, crisis management or new-strategy initiatives that really benefit from interim input.

“I think we’re missing an opportunity, because those sorts of projects often detract from the primary focus of an executive team. If you brought a specialist resource in to do a technology implementation or to restructure a sales force or to reinvigorate a brand with a new communication strategy, those are the sorts of projects that interims do really well,” says Thoseby.

These interim roles are typically fixed-term contracts of three to 12 months. The key criteria employers should look to include in fixed-term contracts are defined deliverables at the end of that period. For instance, it could be the delivery of a new sales strategy, or a specific increase in production within a manufacturing business.

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Q: IN WHAT SITUATION WOULD YOU EXPECT A HIGHLY EXPERIENCED INTERIM MANAGER TO BE OF VALUE? Change management

88% Project management

80% Restructure

68% Crisis management

67% Implementation

62% Strategy development

59% Gap management

54% Succession

34%

INTERIMS AROUND THE WORLD*

Belgium 5.6%

Canada 0.4%

US 0.4%

UK 3%

Australia 0.1% *Interim managers as a % total of workforce

Source: OECD

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NEWS ANALYSIS / INTERIM MANAGERS

WHO’S A GOOD INTERIM LEADER? Interim executives are often overqualified for their roles. They have typically completed a similar project or task several times over, they know how to do it, and they enjoy doing it.

In contrast, existing executive teams often have to learn as they go.

INTERIM MANAGER SNAPSHOT They are typically 40–60 years old (80%) or 50–59 years old (50%) 40% have previously held positions in upper management 60% have previously worked as a CEO or COO

Interim leaders need to not only be adaptable and flexible enough to work in different work environments, but they must also be good with people – and, critically, apolitical.

“They have no interest in getting involved in the political machinations in an organisation because their reputation is based on their last assignment, so they want to leave a good result behind,” Thoseby says. “They don’t care about the consequences to themselves in terms of what they say about the business. They will tell the truth unerringly – they have nothing to lose.”

ROI The ROI of interim roles is poorly understood by most Australian companies. Thoseby says typically other executives will see this resource as being

HIGH-PROFILE INTERIM MANAGERS FROM BUSINESS, POLITICS AND SPORT Steve Jobs – returning and interim CEO of Apple (September 1997–July 2000). Afterwards he became permanent CEO once again President Gerald Ford (on Nixon’s resignation) – president of the United States, August 1974–January 1977 Guus Hiddink – Chelsea FC, February–May 2009 (Australian World Cup team manager, 2006)

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expensive on an hourly rate – and certainly they are dearer than full-time executives – but interim managers still cost less than the major consulting firms charge on a day-rate basis. Again, Thoseby says having clearly defined deliverables is the key.

“They are focused on delivering an outcome. So if the organisation has evaluated the outcome and understands the financial benefits, this is a resource that will deliver faster than an internal team generally would, because they’re focused. That’s what they’re there to do.”

1st Executive suggests that while retainers may often be higher than a full-time executive salary during the period of interim engagement, the ROI will often be between $5 and $20 for every dollar invested. The example below uses a mid-level executive position as a comparison ($150,000 salary).

HYPOTHETICAL ROI OF INTERIMS Issue

Cost

Why?

$150,000

Total employment costs will typically be two thirds of operating expenses or one third of gross profit. Employees should produce at least three times their employment costs to break even. The calculated cost of a four-month recruitment delay is an annual salary. While this may not be felt immediately, it will occur.

Speed of delivery (results)

$450,000– $200,000,000

It’s dependent on the nature of the project, but there is typically a very short familiarisation process for interim managers, who are accustomed to delivering results quickly. They don’t get involved in politics and are focused on the outcomes they are contracted to deliver.

Value of impartial advice

$50,000

With no long-term career aspirations at your organisation, they tell it how it is, not what you believe you want to hear.

Value of an overqualified executive

$50,000

Interims have seen the issues and dealt with them before. Understanding how to act is something they already have in their toolkit.

Four-month delay in finding a new permanent employee

Cost-benefit analysis Assume a four-month contract at a net client cost of $1,500 per day Management consulting comparison

$120,000

At the costs above, and without costing in impartiality and overqualification, the ROI on interims is between four and 18 times the cost, with no ongoing employment obligations or associated risks.

$240,000

At an equivalent level, and with the likelihood that recommendations would be produced that still needed to be acted on, a day rate of $3,000 per day is mid-market – double the cost.

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HUMAN RESOURCES DIRECTOR

Even with charge-out rates of $800 to $3,500 per day for a senior executive, when the true cost of employment (salary, recruitment, bonus, annual leave, payroll tax, motor vehicle and more) are considered, interim managers are a viable alternative, especially as their engagement is also contractually results-based.

For those who have had first-hand experience with interim managers, their experience is generally positive and they report delivery against set objectives. One ANZ Bank senior executive noted: “The financial cost [of hiring an interim manager] is worth every cent. An interim manager can often get you ahead of your competition, and when you get ahead of your competition, you can save your company millions.”

POTENTIAL DOWNSIDES While interim executives sound solid on paper, Thoseby says there can be a danger of failure if the organisation itself is not ready for the change it has attempted to embark on and doesn’t have the

appetite for it. In those instances, a good interim executive will recognise this and will raise the level of dissatisfaction with their current state. Thoseby adds that there can sometimes be some disruption within an existing team if their roles or responsibilities are being threatened.

THE ROAD AHEAD Currently, there are no operating interim management associations in Australia. Those who pursue a career in interim management must rely on HR or executive search companies to match them with the presently limited number of opportunities. Thoseby believes the way forward is simple: raising employer education and awareness.

“It’s so prevalent in places like the Netherlands and Belgium,” he says. “The growth in the UK came out of the recession of the early 1990s, and that’s resulted in quite a high proportion of the executive workforce being interim. The conditions are right in Australia for this to flourish, but we simply need more assignments for these experienced people to take on.”

*An Examination of Australian Business’ Perceptions of Interim Management in the Workforce and How it can Thrive in the Future – 1st Executive, 2014

PETER BERRY HCAMAG.COM

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PROFILE / HR AT MERCER

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HUMAN RESOURCES DIRECTOR

20ANDYEARS COUNTING As a globally recognised consultancy in the talent, health, retirement and investments fields, it stands to reason that Mercer practices what it preaches. Iain Hopkins chats to Michele Glover about HR transformation, diversity and innovation There’s nothing like a ‘then and now’ comparison to drive home the point that, although sometimes we think change is slow and imperceptible, when we look back the current landscape has altered dramatically from what it once was.

As a case in point, when Michele Glover, Mercer’s HR leader, Pacific, had her first child she had to effectively build a business case and present it to her manager to demonstrate that she could in fact take 10 weeks off work and still be an effective contributor as a part-time employee. This wasn’t unusual – the same conversations would have occurred in just about every organisation at that time. Fast-forward a decade and Glover says up to 16% of the Mercer workforce are part-time employees, and it works.

“People don’t have to prepare business cases; it’s just part of how we do business today and how we’ll create the organisation of the future,” she says.

“It won’t always be about ongoing, permanent roles. We have the opportunity to work flexibility and we have the tools to do that, and sometimes the projects we work on lend themselves to a part-time workforce.”

FROM CONSULTANT TO HR PROFESSIONAL Glover has been with Mercer for 20 years. She commenced her tenure at a consultancy called Cullen

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Egan Dell, which was subsequently acquired by another company, which was then acquired by Mercer. Rather than feeling like the proverbial minnow swallowed by the whale, the acquisition

BUILDING FEMALE LEADERS Glover concedes that Mercer “has work to do” on gender diversity, especially in senior ranks. However, headway is being made. A multipronged approach is being taken: 1. Specific targets have been set to improve gender diversity in the senior leadership team and also for promoting more female leaders throughout all levels.

2. The company has established a Women at Mercer business resource group.

This group identifies ways to improve, strengthen and build Mercer’s female leadership pipeline. The group identifies potential barriers to progression and suggests how these can be addressed. “It’s about ensuring our female colleagues see that we are creating a culture and environment where they can thrive and put up their hand and say, ‘I’d like to progress and this is where I’d like to progress to’, rather than heads down, hoping that somebody else will tap them on the shoulder,” says Glover.

3. A sponsorship program has been implemented. A sponsor provides more than just coaching and guidance; they have skin in the game. “For the sponsor it’s about saying, ‘I will find the opportunity or create the opportunity; I will advocate for this colleague’. And they are being judged on their sponsorship – you wouldn’t sponsor someone for moving through to senior levels unless you had confidence in that colleague’s capability,” says Glover.

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PROFILE / HR AT MERCER

ENCOURAGING BRIGHT IDEAS Mercer recently held its inaugural Innovation Month, a concept designed to develop innovation habits and tools within the business.

Online and in-person participation was “overwhelming”, says Glover. More than 200 ideas were submitted to an online ‘Idea Exchange’ – a new tool developed especially for Innovation Month – as well as thousands of comments, votes and ‘likes’ throughout the month.

Themes were established. For example, during weeks three and four, ‘questioning’ and ‘networking’ encouraged employees to question everything Mercer does (or does not do) and to spend time with colleagues they don’t ordinarily work with.

‘Why Day’ during week three had colleagues brainstorming questions on Post-it notes – the result was a balance of fun, insightful and logical questions that are now being worked through by Mercer’s Pacific Innovation Committee.

The brains behind Innovation Month were Mercer’s emerging leaders group, called Rising Professionals. Twelve easy-to-implement and high-impact ideas have been endorsed by the Pacific Market Leadership Team, and the Innovation Committee will continue to progress the ideas, ensuring regular communication about progress to employees.

presented a fresh set of opportunities to Glover.

Her early roles at the company were in the talent consulting business. Her clients were CEOs and boards, who she helped establish reward structures and incentive design. She concentrated her efforts on relationship management, meeting clients’ needs, and getting repeat business. Glover also had sales targets to meet, which gave her a unique perspective on what makes business tick. At the end of her 13 years in the consulting business she was managing a large P&L and leading a team of consultants across Melbourne and Adelaide.

Seven years ago, Glover switched to the ‘other side’ and joined Mercer’s own HR department in order to establish the Asia-Pacific Centre of Expertise for rewards and benefits.

“That was a fabulous opportunity,” says Glover.

“I’d never worked across Asia before and I was exposed to the challenges of designing reward structures for attracting and retaining talent in many emerging markets – such as India and China – as well as more established markets such as Singapore.”

Three years ago Glover moved to her current role. She’s now HR leader, Pacific, which includes Australia and New Zealand. The Mercer Pacific region employs 1,500 people, including an HR team of around 20 colleagues, across eight offices.

As head of the function, Glover is also on the

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Pacific Market Leadership Team. “When I’m on that team I’m not just there as an HR leader; I’m there as a business leader. I work with the business leadership team solving business issues and ensuring our growth plans and strategic plan are being met.”

To add a new dimension to her work, Glover was appointed an executive director when she joined the Mercer board in January 2014.

HR TRANSFORMATION Mercer’s parent company, Marsh & McLennan, is currently driving an overhaul of the HR function within the business. In the Pacific region, Mercer and its sister organisation, Marsh, will be aligning and transforming how HR services its 3,000 employees across both entities.

“It’s about shifting the focus away from transactional support to ensuring we can be strategic business advisers,” Glover says. “A key driver is shifting from being individual experts to forming an exceptional HR team across the operating company.”

Although the transformation initiative is only in the early stages, the company has defined organisational needs and identified where changes can be made. For example, there is an opportunity to have shared services teams across the two operating companies. This will mean offshoring some of Mercer’s support transactions like payroll and contract generation.

The nature of global initiatives means that sometimes local priorities get lost in the mix, yet Glover says this is not the case with Mercer’s change program.

“I know that in other markets we won’t necessarily be offshoring payroll activities, but we will be here. Mercer Pacific already has 400 colleagues offshore in India who support the range of activities we do as a firm for our clients.

We’re used to the notion of offshoring admin or transactional activities.”

Glover adds that it has been critical to engage HR staff in the change initiative via ‘work streams’.

“The teams in talent acquisition, HR shared services, total rewards, and the business partners have had a dedicated work stream, which has included HR colleagues across most of Mercer Marsh. They’ve been involved in the decisionmaking process. They’ve also been involved in benchmarking and talking to other organisations

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HUMAN RESOURCES DIRECTOR

that have gone down the same pathway,” she says.

Glover hopes the change experience can be a valuable development opportunity for members of her team. She emphasises that this project is as much about a partnership with the business as it is about understanding the implications for the HR team itself.

“Some of our colleagues have been through HR transformations in other organisations, but some have not. We’re yet to see fully how the new-look organisation will work, but it is a learning opportunity for everyone.”

BOOMERANGS AND LONG TENURES Some 12% of Mercer’s employees are ‘boomerangs’: they have left the company and come back into the fold. Close to 16% of Mercer employees have worked at the company for more than 10 years, and 10% for more than 20 years. Earlier this year one employee celebrated 50 years at the company.

That’s a pretty good sign the company is doing a lot of things right, says Glover.

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“A key driver is shifting from being individual experts to forming an exceptional HR team across the operating company” Michele Glover “I may have been at Mercer for 20 years but I’ve had a number of different opportunities and careers: a career in consulting, a career with an Asia-Pacific focus, a career as an HR leader, and now an opportunity as a board member,” she says.

“It’s exciting. I think it’s a culture that appreciates hard work and effort, but I get to take away a lot from Mercer. Without hesitation and most binding of all has been the opportunity to work with great colleagues, known for their expertise, their passion and their dedication.”

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LEADERSHIP / ACCENTURE’S JACK PERCY

ONE ON ONE:

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HUMAN RESOURCES DIRECTOR

SPECIAL REPORT:

LEADERSHIP

Jack Percy has worked at Accenture for over 30 years. Now, as chairman and managing director of Accenture Australia and New Zealand, he talks to Iain Hopkins about the importance of creative tension, cutting through the ‘white noise’, and how HR can add value in a complex business world HR Director: As your win in the Australian HR Awards demonstrates, clearly you place a high priority on the ‘people matters’ in your business. What are you most proud of?

Jack Percy: I place a very high level of importance on HR matters. We have a whole range of programs, but some of the ones that I’m most proud of include our ‘Accent on Parents’, which comprises a range of programs within that umbrella. It includes initiatives like ‘bring your kids to work day’, so your kids can come and see where you disappear to every day, and the environment you work in. We provide a lot of support in the run-up to parenthood through the parental leave period and then getting people back into the business after that. If we allowed the natural drain of parenthood to take its course, that could be quite damaging for us, so we do all we can to keep parents engaged with work.

We put a lot of effort into keeping in touch with people while they’re on parental leave and bringing them back in a way that they’re comfortable with afterwards.

HRD: Obviously you’ve built up a good rapport with your HR director, Siobhan Gallacher. What do you believe is the secret to building a good relationship with any executive?

JP: My overall philosophy is probably best described as using the creative tension that comes from independence and collaboration. I like to find out what constitutes success for each of the people who work for me, and work with them to make sure that matches up with the definition of organisational success.

But I’m not hugely directive in terms of how they go about executing particular responsibilities.

I very much like people to come up with their own ideas while providing air cover, so there’s a sense of security but they’re not constrained. Then we balance that with collaboration so we don’t end up having fiefdoms and silos.

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HRD: You mention creative tension. Most CEOs don’t like being surrounded by ‘yes’ men or women. How do you encourage enough dissention but not too much?

JP: I don’t need to do anything to encourage dissention; it’s always going to happen! We have a very active sense of sharing ideas, and by doing so we come up with better answers. Every two weeks the leadership team holds a meeting. In those meetings anything goes, and by that I mean if you have a dissenting point of view it’s best to put it on the table.

So it’s very much a sense of there can be dissent but then solidarity. In that room we can disagree with each other, we can argue, we can come up with a solution that resolves the issue and decide what to do next; but outside that room we’re all singing from the same hymn sheet.

HRD: What do you expect your HRD to be delivering on?

JP: First and foremost it’s on the human capital and diversity strategy, which we’ve put a lot of work into. This underpins our business strategy.

Then it’s tidy management of all the ‘operational stuff’ you have to do. We have nearly 4,000 employees, so there are all sorts of different employment arrangements. There’s no shortage of ‘operational stuff’ that must be covered.

Thirdly, it’s keeping an eye out for precedents that might be being set on individual decisions which, when you look at the individual decision it seems to make sense, but actually it might be opening up a can of worms. It’s keeping an eye on the bigger picture.

So that’s the HR view of the world, but actually we’re running a business, not an HR department.

Having a keen understanding of what the business strategy is, and making sure the HR function is configured to support that business strategy, is very important.

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25/09/2014 5:05:59 AM

LEADERSHIP / ACCENTURE’S JACK PERCY

Jack on ... collaboration “Collaboration has been my mantra as a leader for many years. It does not always happen organically, as people get absorbed in the reality of deadlines, targets and performance metrics, coupled with client demands. It’s critical to engineer and institutionalise regular opportunities to collaborate, virtually or in person; traditionally via meetings or online channels; or through creative channels such as ‘speed dating’ – 360 conversations among 38 managing directors in 2.5 hours – as well as experiential simulations to breed discussion.”

Finally, sometimes you follow the process and you come up with an answer. It’s not necessarily the right answer. It’s flipping that and saying, ‘we got to this point but actually that’s not the right answer for the individual, so let’s do something different’. It’s having a sense of humanity in the process.

HRD: Do you expect your HRD to bring something different to the table that you might not expect from your other executives?

For example, business acumen with a healthy dose of humanity?

JP: If we’re going off the rails on that humanity front, I would expect HR to bring us back. But the reality is, all the leadership roles are supervising and running pretty large teams, so if they themselves don’t have a pretty good understanding of how to manage and motivate people and do the right things, then we’re not going to have much of a business anyway. The whole of our business is a people business, so anyone who gets to the top of it understands what you can and can’t do. So while I’d expect the HRD to keep us honest on that front, it’s actually not usually a hard job to do it well.

HRD: What do you view as the number one HR-related issue that you are currently facing at Accenture?

JP: Number one is continuing to develop and grow 18 | OCTOBER 2014

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the next generation of leaders. This has long been an important tenet of the organisation. I’ve been here since 1983, nearly 31 years, so there’s a long tradition of bringing people through and giving them support and training to be successful.

But more than that, we’ve identified the next group of leaders and we’ve instituted what we call a Leadership Excellence Program, which is focused entirely on the soft side of leadership skills. We’re doing that in conjunction with the Melbourne Business School, and it has received fantastic feedback.

Generation next

The Leadership Excellence Program (LEP) program is a nine-month program for 50 high-potential senior managers and junior managing directors, consisting of three modules (two to three days each) and four small group coaching sessions.

Its themes are leading for change, partnering for performance, and adapting for the future. The program’s duration and format are intentionally designed to allow time for participants to absorb and test their learnings, and then have a group coaching session to explore how those learnings are being applied and what additional support may be required.

The LEP learning outcomes address five of Accenture’s nine leadership competencies:  leadership authenticity  executive presence  operating and leading globally  leading organisational change  client relationship building and development

HRD: We often hear about the complexity of running a business today. How do you cut through the ‘white noise’ and hone in on what’s important?

JP: I agree that business seems to be getting more and more complicated. For me, the trick is to boil things down to very simple but not simplistic metrics and messages. You can look at a P&L and it’s incredibly complicated, but there will always be two or three things that are important, and those are the elements I focus on.

It’s similar with overall messaging about objectives. Individuals will have specific objectives set by their immediate manager, but in my role the focus on a few simple messages helps to cut through.

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25/09/2014 5:06:09 AM

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25/09/2014 5:06:10 AM

LEADERSHIP / MICROSOFT’S PIP MARLOW

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One on one:

Microsoft’s PIP MARLOW After climbing the corporate ladder at Microsoft for over a decade, including a lengthy stint in Seattle, Pip Marlow was appointed managing director of Australian operations in 2011. Her passionate belief that work is “a thing you do, not a place you go” has been making waves ever since – in the best possible way

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“I’m committed to creating a workplace where our people can do innovative work, have an impact and still create a diverse workplace,” Pip Marlow explains, when asked to describe what leadership in 2014 means. As a result, flexible arrangements such as working remotely are not only permitted but wholly encouraged at Microsoft.

“We trust our employees and we have a good governance model, and we lead based on outputs, not inputs, so we can create a culture that thrives on trust and empowerment,” Marlow says.

It’s a philosophy that her 900-strong workforce has taken to with gusto, to the point where it’s actually saved the company money in clawed-back rental costs. They recently released two floors of Microsoft’s Sydney office space, such was the take-up of employees working off-site.

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OCTOBER 2014 | 21

25/09/2014 5:00:22 AM

LEADERSHIP / MICROSOFT’S PIP MARLOW

IF IT’S GOOD ENOUGH FOR THE BOSS...

“We lead based on outputs, not inputs, so we can create a culture that thrives on trust and empowerment” Pip Marlow

THE GENERATIONAL BALANCING ACT

Pip Marlow shares her thoughts on leading an intergenerational workforce: 1. Know who you’re talking to “We’ve got four of five generations working side by side these days, which means we need to be very thoughtful about creating an inclusive environment,” Marlow says. “Some people in the workforce have only known what it’s like to be connected; others, including myself, remember what it was like before, having to unplug the home phone to then plug in a 10kg laptop, just to connect to the internet!”

2. Cater your communication accordingly Certain generations have more experience or a greater preference for different types of technology, so you’ll get the best results if you can cater your communication to each particular subset.

“Technology can be a great enabler to reaching and engaging more employees, more frequently, which is why we take a multichannel approach – we communicate via Twitter, in writing, in person and via memos – to make sure people are consuming messages in different ways.”

3. Acknowledge that your staff have a personal life, too More often than not, it’s intertwined with work, but by acknowledging that your employees have personal goals as well, you’re more likely to “drive a more diverse workforce”, Marlow says. Allowing someone an afternoon off to attend their child’s sports day or working early/late to accommodate a personal situation are just a couple of ways to demonstrate this.

“The idea of work-life balance isn’t just for those with children,” Marlow adds. “We all need a layer of diversity in our life to re-energise and keep us all going.”

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Marlow’s intent on disrupting the traditional way of working doesn’t stop there: she has also done away with her prestigious corner office, and in fact doesn’t have her own cubicle, or even a desk to plug into each morning.

“Initially, I was girl in a bubble and everybody came to me, but my world had a very narrow radius because, under that model, everyone came into my office and my view was very compartmentalised,” she explains.

“Now, I’m more accessible and my sense of morale, of various issues, is much more tuned in.

You’re far more connected and accessible when you bring down those walls, as it changes the communication. All of our senior management is the same – nobody has their own office. We are all in. Everyone has their own locker, although I haven’t been to mine for months.”

As well as creating more opportunities for open dialogue between different levels of employees, Marlow says this way of working allows her to stay laser-focused and to direct her energy and attention to the day’s most pressing concerns.

“Because I don’t have a desk, I make sure I’m situated best for the day’s activity. If I’m having a day of one-on-ones with my direct reports, who are all around the country, I might grab a seat in a conference room. If I’ve got meetings, I might head directly towards our meeting rooms. Or I might grab a desk in a certain area on a certain floor and use that space,” she says.

“I love the vibrancy; I love hearing the different accents and bumping into new employees. You never know who you’re going to sit next to, or what conversations you’re going to overhear where you can offer some input or learn new information.”

FLEXIBILITY HAS ITS REWARDS This less traditional leadership style has paid dividends in the form of “very high” employee engagement scores, Marlow adds, which she believes is a reflection of their attitude towards creating a diverse and multifaceted workplace.

“You don’t usually see the managing director walking through the office without it striking fear into the heart of employees,” she laughs.

“Someone asked me recently if I got a new job and it came with a corner suite office, what would I do? And I said that on my first day I’d be moving out of that office! And I would never go back.”

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25/09/2014 5:00:28 AM

HUMAN RESOURCES DIRECTOR

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OCTOBER 2014 | 23

25/09/2014 5:00:34 AM

LEADERSHIP / EXECUTIVE EDUCATION

Moving with the times From MBAs to specialist master’s degrees, business schools are becoming more creative in how they connect with students

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In a world of non-stop change, it might appear from an external perspective that the world of executive education – and particularly wellestablished exec ed mainstays such as the MBA – is stuck in a time warp.

Daniel Musson, CEO of the Australian Institute of Management, hit the nail on the head when he was quoted in September’s BOSS Magazine: “Education is one of the last bastions where the product has been the major focus, not the consumer”.

However, appearances can be deceiving. While certainly not yet at the cutting edge of change, business and management schools are moving with the times. Professor Charles Areni, pro dean, MGSM, couches Musson’s comment in a slightly different but still insightful way: “Universities in general and business schools in particular have been internally focused for too long. In marketing, we talk about organisations having marketing

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25/09/2014 4:40:13 PM

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myopia. It means the organisation is too internally focused on what it makes and how to improve it in increments, rather than being externally focused on what the consumer is trying to get.”

There are countless examples of regimented thinking in business schools, almost an ‘if it ain’t broke … ’ mentality. And yet, if the system isn’t ‘broken’, changes are certainly required. Many business schools still operate according to semesters; they still deliver lectures, still have exams, and still require students to come to a classroom.

“If the goal of the student is to fast-track their career or make a horizontal move into another industry, none of those traditional ways of doing things are relevant,” says Areni.

Business schools are finally waking up to this and are paying closer attention to how they can meet the demands of students.

COURSE DELIVERY: THE POINT OF DIFFERENCE Some elements of education cannot be changed.

They can be tweaked and tinkered with, but the fundamentals must remain in place. Such is the case with the MBA. It remains a generalist degree, which aims to provide students with a broad background in business. However, if course content remains similar no matter where an MBA is pursued (typically comprising financial management, marketing, human resources, etc.), there can be vast differences in delivery.

Areni provides an example. “You can have students do presentations in a class. That’s OK. Or you can have them do presentations at a big hotel downtown and invite the media because students are competing for a prize of $25,000, provided by a client’s sponsorship of a living case study. That’s a point of differentiation right there. Consistent feedback from MBA students is that, going into these events, they are scared to death and uncomfortable, but they’ve been moved out of their comfort zone. They’ll remember that more than any exam question.”

In 2014, delivery also means partnerships with the corporate world. Less and less of what happens in terms of formal learning is in the classroom; more of it is being done on the site of a corporate client or several corporate clients. “Even when there are face-to-face meetings between the academic and the students, it’s no longer in the context of just a

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lecture,” says Areni. “For example, when I meet with my students they tend to be divided into teams of five who are working for an actual client company. I’m advising them as if I were the head of a consulting team.”

Curtin Graduate School of Business (CGSB) also prides itself on its links with the corporate world through teaching and research, for example the $10m Bankwest Centre established within the Curtin business school. The CGSB also has an impressive Industry Advisory Board, chaired by a former senior vice president of Woodside. In addition, an alumni chapter helps the graduate school establish stronger linkages with the corporate sector. Finally, the MBA relies on instructors from the business world to deliver some of its courses.

The shift from theory to practice

How are business schools typically embracing experiential learning by using their corporate connections?

1.The easiest way to tie theory to practice is to take a core unit, say marketing, and either be working for a company where students can perform some work function in the context of a structured marketing plan, or the lecturer will provide the student with an organisation that has made overtures to the business school. In other words, we have this marketing problem; can you assign a marketing student team? Essentially the students compete to do a project for a company.

2.The next level is the living case study. This will likely involve developing solutions to a problem that is unfolding right now. The students in the class are immersed in that problem – spending up to two work days per week at the company interacting with company staff.

3.Finally, the internship, which is becoming standard not only for business degrees but for all university degrees. This has developed due to corporates saying, increasingly, that they will not provide permanent roles before they have the opportunity to ‘test drive’ an applicant.

Professor Milé Terziovski, dean of the CGSB, adds that students need to be actively involved in the learning process. While this will vary among lecturers and across subjects – as certain subjects lend themselves to these processes more easily – theory still has a place.

“The key is to get students working on real problems or discussing real issues while also providing a basis for theory,” he says.

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LEADERSHIP / EXECUTIVE EDUCATION

At Curtin, students can work on actual business problems/challenges as part of their two-unit capstone subject. This enables students to apply concepts, principles, tools and methods on a workintegrated learning project.

FLEXIBILITY IS KING Master’s degrees in 2014 are all about flexible study options. The opportunity cost of studying full-time, and giving up work to do so, is becoming less and less tenable. Hence part-time study is a growth area for Australian business schools.

MGSM offers quarters rather than semesters, the idea being to provide students with more ‘entry points’ throughout the year.

“Semesters basically provide students with two cracks a year. We give students four cracks a year. In fact, we have weekend units that are delivered over the course of three weekends, so in effect there are

at least two to three of those over a quarter. We’re giving people 13 starting points in a year to do a unit,” Areni says.

Online learning is also being embraced. Typically, for an MBA the first four units might be able to be studied online, says Areni, and the rest must be done face-to-face.

“It’s a nice way of coming up with a completely different delivery mode that allows us maximum convenience,” he adds.

OTHER OPTIONS In markets like the US and, to a lesser extent, Europe and Australia, the MBA degree is considered to be in the ‘maturity phase’ of its life cycle. Demand is flat, if not decreasing. The real growth is in markets like South America and Asia. In Australia, Areni says, demand from international students is slightly up, while domestic demand is flat or slightly up.

STUDENT CASE STUDY: REAPING THE REWARDS OF POSTGRADUATE STUDY

The Swinburne University of Technology Hawthorn campus

While working as an HR data and reporting analyst in local government, Lee Bethune began her postgraduate study with a graduate certificate and continued through to the Master of Commerce (Human Resource Management) degree at Swinburne University of Technology.

“I’ve managed to successfully juggle my work and studies, thanks to the support of my employer and the flexibility of studying part-time with Swinburne,” Bethune says.

Bethune delved into the HR industry five years ago, having

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spent over a decade working in the tourism industry.

“I was attracted to the people side of HR, but it’s the data crunching I love. My role involves analysing HR systems data to assist managers in making sound decisions for the organisation.

I’ve always been a facts and figures girl so it’s a perfect fit,” she says.

With a Bachelor of Arts and Recreation already behind her, Bethune says it was difficult to make the switch to HR without having an HR qualification.

“When applying for roles I found I was constantly compared to applicants who had an HR degree. After landing my current role, I discovered my workplace had a study policy in place which gave me the perfect chance to formalise my skills. Returning to study not only benefits me personally but also my workplace as I’m able to apply what I’m learning directly to my role.”

Swinburne has created a whole new world of networking for Bethune, who says she enjoys studying with like-minded professionals she’s able to learn from.

“It’s interesting to hear about the HR structures and procedures that are in place in other students’ workplaces. The course has opened my eyes in regard to different HR functions and best practice, and I’ve also found there to be a good industry mix to learn from in terms of both students and teachers.

“Heading back to university has so far been challenging, interesting and motivating. I would definitely recommend the experience to anyone who has contemplated further study.

I should have signed up years ago!”

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Intrinsic and extrinsic drivers

Broadly, student motivations can be divided into intrinsic and extrinsic. Extrinsic is about career; intrinsic is about skill set – usually a desire to develop leadership and people management skills, or simply for the challenge of learning something new.

Extrinsic motivations are driven by three scenarios: 1. Someone knows what career they want; they like where they currently are but want to accelerate their path to the C-suite.

2.Someone wants to make a horizontal move.

They’re thinking of a career change. “They’ve been doing something for a while but now they see that the career opportunities and their own passion is elsewhere. So further education is a way of making a horizontal move,” says Areni.

3.Someone has specialist skills, is great at what they do, and is soon managing a business. “They’re not a medical practitioner but a GM of a medical centre.

They’re no longer designing apps; they’re running an IT firm. Nobody showed them how to do that.”

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In mature markets like the US, growth is in specialist master’s degrees. A specific example is a master’s in applied quantitative finance.

Specialist master’s degrees are not new but have gained traction in the local market. One example popular with currently practising HR professionals and those looking to make a horizontal move into HR is the Master of Commerce (Human Resource Management) offered by Swinburne University. It seeks to provide for the ongoing development of HR practitioners in the areas of organisation behaviour, business strategy and entrepreneurial thinking (see student case study, p26).

Units such as Managing People Across Cultures recognise the range of international, national, regional and corporate cultures that are represented in Australian society. This unit explores and critically analyses the cultural issues that may be faced by HR managers, and how they can be managed, all of which is critical to informing and grooming the HR business leaders of tomorrow.

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25/09/2014 4:40:30 PM

LEADERSHIP / EMERGING LEADERS

DON’T STOP (thinking about tomorrow) A spate of white papers have suggested that Australian organisations are woefully unprepared to meet the leadership challenges of the future. How can a strategic rather than tactical approach to leadership development be implemented?

Sometimes it takes a burning platform for people to notice and take action on a problem. Right now, the burning platform is identifying and grooming the next generation of leaders in business. Yet despite the urgency of this issue, action is still not being taken – and if it is, it’s being taken in a tactical, piecemeal manner.

A number of global talent management surveys have recently highlighted that barren leadership pipelines, and the lack of skills the next generation of potential leaders holds, are a significant concern for the majority of CEOs. For example, Hudson’s research into emerging leaders from multinationals across Australia highlighted that, compared to existing C-Suite executives, emerging leaders would benefit from further developing their capacity and confidence to make decisions, embrace change, and motivate and persuade others.

While the dearth of suitable talent is global, it’s particularly pronounced in the Asia-Pacific.

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Q

Which of the following is the single most pressing talent management challenge facing your organisation?

Global

Americas

Europe

AsiaPacific

Lack of skilled talent for key positions

28%

29%

22%

36%

Shortage of talent at all levels

20%

16%

24%

21%

Less than optimal employee engagement

15%

15%

16%

13%

Too few highpotential leaders in the organisation

14%

19%

10%

12%

Loss of top talent to other organisations

10%

7%

15%

8%

Lagging productivity

9%

7%

12%

9%

Other

4%

7%

1%

1%

Source: Talent Management: Accelerating Business Performance, Right Management

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Are organisations prepared to meet these challenges? It seems not. According to Right Management, just 13% of organisations feel they have a satisfactory talent pipeline, and only 21% of APAC respondents believe they have a fully implemented workforce strategy.

SETTING THE CONTEXT What’s happening? In recent years, organisations have had to become agile and move quickly to meet changing market needs. While there’s nothing wrong with that – in fact it’s vital to business success – it means that horizons have shrunk. “We are responding to the short-term rather than the longterm. Rather than doing good strategic planning, we tend to rely on day-to-day tactics,” confirms Rosemarie Dentesano, regional leader and talent management principal at Right Management.

She adds that while many companies undertake workforce planning, very few tackle strategic workforce planning. This latter approach mirrors the business plan and will look at three horizons: short-, mid- and long-term – up to 10 years down the track.

In terms of talent management, it involves looking at elements such as talent pipelines, the career proposition presented to existing and new employees, the performance management system and whether that will deliver on the desired strategic outcomes, and also the way work is organised and structured.

To push horizons beyond the next quarter or the next year, Right Management advocates developing a strategic framework. Dentesano recommends organisations take a ‘consulting 101’ approach: where are we now, where do we want to get to, what are the gaps and what are the levers that need to be pulled to get from the current state to the future state?

From there, two different perspectives should be taken. The first is the organisational perspective.

This involves answering questions such as: What culture do we want? What sorts of leaders do we want? What people strategies will help to drive the outcomes we’re looking for? How do we structure the organisation to enable work to be done?

Then there’s the individual piece. What are the core competencies and capabilities needed to deliver on the business outcome we’re looking for, and have we got those?

From there, development plans need to be put in place. “Look at your technical skills, your leadership skills; put in place what it is you need to do around

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structure, people systems, and then drive the culture you want to build,” Dentesano says.

Execution is just as critical as the planning.

Consider the resources you’ll need to execute on a plan. “Tackle one element at a time – organisations get indigestion when they try to do too much at once. Pick one thing and do it really well, then move to the next; build some momentum.”

Finally, have a baseline, a starting point, and measure the impact your initiative is having on delivering the strategy.

BUILD OR BUY?

Q

Generally speaking, how do you fill critical openings in your organisation?

Global

Americas

Europe

AsiaPacific

We rely on a combination of internal talent development and external hiring

73%

76%

71%

72%

We routinely look externally before filling critical roles in our organisation

14%

11%

17%

12%

We have an ample leadership pipeline that will cover most of our needs

13%

13%

12%

16%

Source: Talent Management: Accelerating Business Performance, Right Management

It’s a sad reality that leadership development is frequently viewed as a discretionary spend. At a time when organisations are under immense pressure to increase shareholder value, many have not invested in leadership development.

Organisations are also frequently failing to outline career paths for employees. “It’s about redefining the concept of a career and looking at the lattice as opposed to the ladder, especially when structures are flatter. There are still opportunities, but sometimes these need to be made clear to employees,” says Dentesano.

Organisations have been right-sized, merged and taken over, so the concept of ‘build’ or ‘buy’ needs to be clarified. Will people be developed internally in the organisation, or will talent be ‘bought’ externally?

FAST TRACK TO THE TOP In terms of developing the next generation, it’s important to note the difference between building

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LEADERSHIP / EMERGING LEADERS

“Tackle one element at a time – organisations get indigestion when they try to do too much at once” Rosemarie Dentesano foundational leadership skills and ensuring leaders are delivering against what the organisation wants them to deliver. “Organisations sometimes fail to articulate what it is their leaders are accountable for,” says Dentesano. “Something to be wary of is promoting the best technical person into a leadership role. Leadership has a separate other set of skills and capabilities over and above the technical expertise.”

It’s also critical to acknowledge that different people have different pathways. A typical approach is to have different strategies for executives, for mid- and junior-level leaders, and a separate track for high-potential leaders.

A high performer should not be mistaken for a high potential. A commonly used measure of potential is performance; however, Hudson’s research shows that only 29% of high performers are high potential. Many organisations also rely on manager ratings and nominations to identify potential; however, this often results in employees being selected on the basis of similarities to their manager and the networks they build.

Hudson’s worldwide research and experience has also identified five fundamental intrinsic factors that determine growth potential: 1. Managing complexity and change (how well you handle increasingly complex issues) 2. Mental efficiency (how effectively, efficiently and selectively you learn) 3. Personal drive (how strong your drive to achieve is) 4. People leadership (how clearly you set a direction and get people on board) 5. Relational and cultural sensitivity (how skilled you are at determining what is important to others and addressing that in interactions) Formally allocating a high-potential label is considered to be tricky: there are a number of potential advantages and disadvantages to consider.

An important advantage is that the label can form part of the strategy aimed at retaining this target group, and could encourage high potentials to

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remain with the company for longer, even if a headhunter contacts them and they are offered a job in which they can earn more immediately.

Hudson believes the real question is not: Should we inform employees about their potential? It is: How shall we inform them about their potential?

“We advise companies to set a time constrain on the label. High potentials need to become aware that their label is not a ‘wild card’ but an acknowledgement of their potential at a certain moment in time,” says Dr Crissa Sumner, Hudson’s regional assessment solutions manager, Asia-Pacific.

PULLING IT TOGETHER: THE DEVELOPMENT STRATEGY

Q

How would you describe your organisation’s approach to investing in and developing talent?

Global

Americas

Europe

AsiaPacific

We seek to develop the skills of every employee

37%

34%

42%

32%

We seek at least to offer development opportunities to all interested employees

37%

33%

38%

44%

We seek to identify key contributors and target them for development efforts

24%

30%

18%

23%

1%

1%

1%

0%

Investment is limited or none

Source: Talent Management: Accelerating Business Performance, Right Management

Developing a pipeline of ‘ready now’ leaders is a pressing business challenge. Right Management recommends a targeted approach to development that builds capabilities in a variety of ways across all leadership levels. Continue to offer broadbased programs to all employees to foster career develop­ment and higher levels of engagement, but focus specific programs and coaching on the development of key talent. Job rotations and job shadowing can also be effective in exposing upcoming leaders to new skills and experiences.

A straightforward approach is Hudson’s ‘3 E’s framework’, which promotes a best-practice approach underpinned by: yy70% Experience (such as project roles and secondments, on the job) yy20% Exposure (such as mentoring) yy10% Education (such as traditional training programs and readings)

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CASE STUDY: FITNESS FIRST HRD talks to Mark Bowering, L&D certification manager, Fitness First, about how his company is grooming the next generation of leaders HR Director: Can you outline your New Future Leader Program?

Mark Bowering: The New Fitness First Future Leader [FL] Program is a 12-week blended learning leadership develop­ ment program, built with the objective of providing a clear internal development pathway from head of department to club manager, therefore increasing the internal talent pool and quality of future club managers.

The program provides a robust selection, recognition and development process that has been built with the input of key stakeholders – HR, SMT, OPs teams and CMs – and closely links with our Talent Management and Succession Planning Framework.

The program encourages successful applicants – 16 FLs from four regions across Australia – to grow their knowledge, skills and behaviours in line with their current role as well as to develop their core competencies towards becoming a club manager. The expectation is that they leave the program ready to start as a club manager.

HRD: How will the course be delivered?

MB: The program is delivered through the use of a blendeddelivery methodology, which includes a three-day classroom leadership academy, on-the-job mentoring and coaching, completion of case studies, and an assessment linked to our strategic vision and success of a club manager. We provide the future leaders with a series of tools and resources to assist with completion of the program, consisting of workbooks, online resources and our people. Our people support is varied and consists of subject-matter experts, managers and senior leaders. We also strongly encourage future leaders to build relationships with best-practice companies from within and outside the industry.

The future leader team is built around shared learning, hence we have set up internal communication and social networking channels to support completion of the program.

HRD: How have you identified who might be suitable to go through the program?

MB: The selection program for the future leader program is built around our ‘Winning Ways’ [values], allowing individuals the

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opportunity to self-nominate, after assessing their suitability against a clear set of FL selection criteria. Once the individual feels that they have met the required criteria, they complete an online future leader application process, which must be reviewed and signed off by their club and state manager and then submitted to a central Future Leader Panel (which consists of senior leaders in the business).

The window for applications was one month, giving employees plenty of time (and support if needed) to complete the required submission. Once signed off and submitted by the future leader (with approval from the state and club manager), the centralised Future Leader Panel reviewed the applications, comparing them to the current national Talent Management and Succession framework, based on performance and potential and closely linked to our performance review system and values.

HRD: How will you assess the success of the program?

MB: The success of any leadership program is ultimately whether it has met the objectives that have been set as part of its development and its positive ROI/ROE. To measure this we will be using in the main part the Kirkpatrick learning evaluation model [see below]. This will not only give us anecdotal feedback but numerical data benchmarked against our current club manager cohort.

Reaction

Evaluation of learning

Behaviour

yyFeedback and attendance sheets from the program

yyFL assessment day scores; prior interview score versus interview and presentation scores at end

yyPerformance standards assessment before, during and post-program

yyFeedback and evaluation sheets from facilitators

yyPerformance standards, assessed by self and state manager (start and end of program) yyContinued assessment through KPIs on completion of FL program

yy360 documented feedback from the mentors and state manager yyHR metrics post-program – staff attrition; dealing with HR matters in club yyPerformance first – continued evaluation of behaviours, compared to control group (non-FL CCMs)

Business results yyKPI measurements versus non-future leader managers (control group) yyKey business measurables: 1. Sales performance 2. MIP scores 3. Member attrition 4. Net member movement 5. Controllable costs 6. Revenue 7. Cost vs revenue 8. Employment costs 9. EEP scores yyFuture leader scorecard – highlight performance in states yyCCM retention levels and length of service

OCTOBER 2014 | 31

25/09/2014 5:01:15 PM

LEADERSHIP / CREATIVE CONFLICT

THE DIPLOMATIC LEADER:

HOW TO AGREE TO DISAGREE

There’s a myth that disagreements are negative and are to be avoided at all costs. However, as business consultant Alexandra Tselios explains, if you avoid them entirely, you may never achieve truly effective business outcomes “If everyone is thinking alike, then somebody isn’t thinking” – General George S. Patton One of the biggest misconceptions in society today is that a disagreement has a negative connotation.

Quite simply, a healthy team in a company moving forward is going to face disagreements. It is the only way conversations will be effective, outcomes can be achieved and targets can be met.

Beware a leader who avoids conflict, or any sort of disagreement, because the most effective leaders are those who can agree to disagree diplomatically.

Leadership communication skills 101 suggests that a productive conversation has the ability to compare perspectives and make a decision. But what happens if a conversation becomes emotional or, worse, an all-out argument? The key is to have the ability to separate yourself and look at the situation from a holistic point of view. How has this conversation derailed? What are all participants

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trying to achieve? Part of leading effectively is having the ability to identify strengths in others that you lack, and navigate social nuances.

One particular type of person senior managers often surround themselves with is the ‘Yes Man’.

This person consistently pats their manager on the back, never questions decisions, and generally flees when their CEO faces a huge legal dispute or failure.

While these Yes Men can be fantastic motivators when the chips are down, their inability to provide an alternative opinion is ultimately their downfall.

A business is built on its employees, and every staff member is selected for their specialist skill set and experience. A diplomatic leader is one who considers a variety of perspectives and analyses this information when making their final decision.

Understanding how the delivery of information can impact on those around you is crucial to ensuring that a disagreement doesn’t result in a negative blow to productivity.

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Sometimes you cannot influence office politics, and people will not always get along, but how that affects a discussion is up to the diplomatic leader.

The crux of disagreeing effectively is ensuring that all participants in a discussion feel as though they have been understood and validated, even if their suggestions aren’t adopted in the resolution.

More often than not, disagreements occur because someone can see something that you can’t

THE ART OF DISAGREEING There is a fine art to disagreeing with employees without seeming combative or stubborn, and all too often managers get caught up in the fact that ‘they know the business better’ or ‘they’ve been in the business longer’. With differing opinions, there must come detachment. Don’t make it about being right or wrong, but have the overall goal of finding the best outcome for the business.

Before engaging in any disagreement, whether between colleagues, companies or the competition, it is essential to leave your ego at the door and identify why a disagreement is occurring. Sometimes it is

THE 6 STYLES OF LEADERSHIP Directive – A coercive style that demands compliance and can contaminate everyone’s mood and drive talent away.

To be used sparingly – in a crisis or to kick-start an urgent turnaround.

Visionary – Inspires and is able to explain how and why people’s efforts contribute to the ‘vision’. Moves people towards shared outcomes through empathy and clarity.

Affiliative – Creates harmony that boosts morale and solves conflict. A useful style for healing rifts in a team or for motivating during stressful times.

Participative – Superb listener, team worker, collaborator and influencer.

Values people’s input and gets commitment through participation.

Pacesetting – Strong drive to achieve through their own efforts; has high personal standards and initiative. Can be impatient and prone to micromanaging and leading only by example.

Coaching – Listens and helps people identify their own strengths and weaknesses. Encourages, delegates and improves performance by building their people’s long-term capabilities.

Source: Hay Group

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simply a clash of personalities, but more often than not, it’s because someone can see something that you can’t. This colleague or client may be providing you with a fresh perspective that you would not otherwise have considered.

NEGOTIATE AND COMPROMISE Negotiation skills and a willingness to compromise are key to being a diplomatic leader, and the best managers are able to negotiate in such a way that they receive the outcomes they desire, without the other parties realising they’ve compromised on their original position.

The right way to disagree with others is only possible after you have listened to all perspectives while considering the impact on whatever decision is finally made. Whether you agree or not isn’t the point; the point is what resolution is best for the company, the team and the clients. Until you respect the opinions of others, they are unlikely to respect yours, but once a culture of discussion and appreciation is fostered, it will be far easier to make a decision that will be adhered to by even your strongest opponents.

This is why it is important to have a healthy balance of personality types on your team who are capable of both encouraging and challenging.

One of the strongest qualities of a good leader is their ability to say no without causing tension or loss of employee morale. Use each disagreement as an opportunity for greater understanding. If a staff member offers a suggestion that isn’t in line with company procedure or standards, take the time to brainstorm together the reasons it won’t work, and what an alternative could be, instead of belittling or disregarding the individual.

The core of a diplomatic leader comes down to respecting and valuing the strengths of those around them. This has nothing to do with personality differences or clashes, and everything to do with the ability to listen, respond and validate. Conflict can be a productive and important part of analysing data and reaching decisions.

Alexandra Tselios is a business consultant and publisher of The Big Smoke.

Alexandra has a diverse background in corporate, public and creative fields and is an expert business consultant. Visit thebigsmoke.com.au.

OCTOBER 2014 | 33

25/09/2014 4:44:12 PM

LEADERSHIP / CORPORATE VISION

CRYSTAL CLEAR:

Why corporate vision matters Far too many CEOs and senior leaders are not achieving the fundamental goal of having their plans understood, and yet most agree that it’s essential for the success of the business. Ty Wiggins and Wayne Condon explain

The inability to communicate an organisation’s strategy and vision for the future continues to challenge many Australian CEOs and senior business leaders.

If the CEO can’t succinctly articulate the business strategy in terms that are clear and positive, how can line managers and staff be expected to commit with enthusiasm and dedication to the realisation of the company’s long-term goals and aspirations?

Melbourne University’s Centre of Workplace Leadership recently released the results of a survey of 2,000 employed Australians and found that 75% of them agreed that there needs to be better management and leadership in the workplace.

This sentiment was consistent across age groups, industries and gender breakdowns.

Although there appeared to be a skills gap, the Centre emphasised that the business environment has changed dramatically in the last 10 years and that has brought on challenges of managing people, managing change and the environment.

Interestingly, although the majority of people were dissatisfied with management, the same

34 | OCTOBER 2014

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proportion (75%) believed they had the skills and capabilities to be good leaders.

FINDING A COMMON LANGUAGE One of the challenges to address is the absence within organisations of a common language around strategy. There is often common language in terms of clients, processes and culture but rarely in terms of strategy. CEOs sprout the mission, vision, strategy, competitive advantage, strategic objectives, etc., without first defining these terms for their organisation. It is not uncommon for these regularly used terms to have different meanings among organisations.

So, what are the key terms that CEOs should be able to articulate at any given point in time? The diagram opposite is a hierarchy of company statements that CEOs must be able to articulate and ‘sell’ into their organisations and to external shareholders.

A business that is clear about these statements will find that their employees are better equipped to make day-to-day decisions in line with strategy

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MISSION Why we exist

VALUES What we believe in and how we will behave

STRATEGY What our competitive game plan will be

BALANCED SCORECARD How we will monitor and implement that plan

THE BASIC ELEMENTS OF A STRATEGY STATEMENT OBJECTIVE = Ends SCOPE = Domain ADVANTAGE = Means

and thus are working to move the business forward.

Organisations that aren’t tend to report high levels of frustration moving to apathy among their staff.

Research has shown that in many organisations the majority of employees are unaware and lack understanding about the vision and strategy of the business they work within. Kaplan and Norton found that “95% of employees are unaware of or do not understand the organisation’s strategy”.

A recent study in Australia asked employees from 20 major companies to pick their strategy from a choice of six options. Considering that they had a 17% chance of choosing their company’s strategy due to sheer luck, the results at 29.3% were very alarming. These were significant companies with large market shares and clear competitors.

THE GREAT TEST FOR CEOS In these challenging economic times the greatest test of a CEO’s leadership and management skills is the ability to bridge the gap between strategy, vision and results. Bridging this gap and then aligning the organisation to the strategic direction are ultimately the key factors that determine the CEO’s success or failure.

Time is another critical factor that CEOs must contend with as the dynamic, highly competitive commercial environment requires that they rapidly build rapport, management confidence and expertise to deliver on the business vision and strategy.

If a change in strategy or direction is required due to internal or external forces, then CEOs must be positioned to assess and decide the change quickly, then communicate it to the organisation

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with clarity around new priorities. Sixty-four per cent of executives report that they have too many conflicting priorities, and this works like a handbrake on the business.

Vision and mission are important – they need to be clear and relevant – but the true differentiation for a company is the strategy statement. What’s the plan and what sets this company apart? Regrettably, too often executives assume that the fiscal business direction described in voluminous documentation will ensure corporate and competitive success.

CEOs then go on to lament that ‘their’ vision and strategy should be clearly understood and that the problem lies with the business units failing to understand the direction and objectives.

A well-understood statement of strategy aligns behaviour and creates a guiding light for performance; and when the plan is clear, then the decision-making by teams and areas within the company is so much easier and effective.

The result is grinding non-productivity at best, chaos at worst: no different to 10,000 smart people working hard and making what they think are the right decisions for the company – but with the net result of confusion. Imagine this: engineers in the R&D department are creating a product with ‘must have’ features for which (as the marketing group could have told them) customers will not pay; or the sales force is selling customers on quick turnaround times and customised offerings even though the manufacturing group has just invested in equipment designed for long production runs; and so on.

ACHIEVING CLARITY A well-prepared, relevant, clearly delivered and, most importantly, well-understood statement of strategy aligns behaviour within the business. It allows everyone in the organisation to make individual choices that reinforce one another, rendering those 10,000 employees exponentially more effective.

Therein lies the problem and the dilemma for CEOs. Without clear understanding and articulation of the business strategy it is impossible to achieve the results the CEO and organisation are capable of delivering across financial and cultural measures.

The best and most effective CEOs are the ones that understand and appreciate that their role is to get every employee to identify with and focus their efforts on the attainment of the individual and collective business goal.

Founded by principals Wayne Condon and Ty Wiggins in January 2012, Converge Consulting assists businesses with closing the strategy- toperformance gap, innovative business model design, and effective leadership development. Visit convergeconsulting. com.au.

OCTOBER 2014 | 35

25/09/2014 4:45:32 PM

LEADERSHIP / PSYCHOLOGICAL WELLBEING

Burning the candle at both ends

With great leadership comes great stress, but there are ways to prevent stress from turning into burnout.

Dr Adam Fraser outlines a seven-step guide to sustaining high performance without letting your health suffer 36 | OCTOBER 2014

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The rock star anthem is “It’s better to burn out than fade away”. Sounds extreme but sadly it seems that the average corporate employee is trying to emulate them. Ask people how they are and you will generally get one of two answers: “Busy” or “Tired”. The pace of life is outrageous; most people I talk to say they feel like they are handcuffed to a roller coaster that is stuck on repeat. I was coaching a CEO, and when I asked her how she would describe her life, she said, “I feel like the hamster is dead but the wheel is still spinning!”

We are jamming more and more into our alreadycrammed lives. An executive recently confessed to me that she gets her eight-year-old to read her four-year-old a story while she sits on the bed and answers emails on her phone. She has outsourced story time.

The fallout of all this haste is that many people have lost the ability to slow down and recharge. As a result, the burnout rates in business are rapidly climbing. So why is it such an epidemic?

There are two big problems in the way we handle burnout: • Putting it off – Many times in my conversations with people who are burnt out, I will ask, “What are you going to do about that?” Their reply is, “Well, I have a holiday in three months. I will keep pushing until that date and then I’ll relax!”

You can’t put off addressing burnout.

• Waiting for things to slow down – I have lost count of the number of times I’ve heard the phrase “I will look after myself/relax when things quiet down”. With margins being constantly squeezed and the rise of leaner organisations, that ship has well and truly sailed.

Don’t expect workloads to lessen; it’s simply not in our business DNA.

WHAT TO DO? What is a practical solution? For this we have to turn

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An executive recently confessed to me that she gets her eight-year-old to read her four-year-old a story while she sits on the bed and answers emails on her phone to the world of elite sport. When I worked with Olympic athletes, burnout was a frequent and very real challenge. Often you hear in the media that athletes get sick just before or at the Olympics.

Why? Because they are always on the verge of overtraining or undertraining.

If you overtrain an athlete you simply push them too hard for too long. Their immune system starts to decline, they get sick, and their performance plummets. Obviously this is a significant problem and one we put a lot of resources into solving. What doesn’t work is pushing an athlete until they show signs of burnout and then giving them long periods off to recover. In contrast, our solution was to give them small, regular, consistent bursts of recovery.

This involved a shift in mindset. Instead of thinking about how to help them recover when they were feeling burnt out, we looked at how they recovered each day, each week and each month. Recovery became something they did perpetually rather than something they resorted to when exhausted.

Techniques such as meditation, relaxation, and improved quality of sleep were daily rituals that stopped burnout in its tracks.

HOW WE APPLY THIS TO THE BUSINESS WORLD When I transitioned into working with corporations I found that people talked about trying to address burnout, but they wore exhaustion as a badge of honour. People would literally compete with each

AVERAGE AUSTRALIAN WEEKLY WORKING HOURS

‹ 37.5 hours – 11% 37.5–40 hours – 56% 40–45 hours – 18% 45–50 hours – 11% 50 hours or more – 4% Source: Michael Page Salary & Employment Forecast, 2014/15

OCTOBER 2014 | 37

25/09/2014 4:51:34 PM

LEADERSHIP / PSYCHOLOGICAL WELLBEING

other to be the hardest worker, the most tired, and the one closest to complete physical and mental breakdown. Over the last 10 years I have run countless programs with corporate executives to prevent burnout. Here are the critical components that have kept people free from burnout: Step 1: Decide if you are serious about avoiding burnout Notice if you are using burnout as a status symbol.

Does exhaustion define you as a person? Unless you are stressed and exhausted do you feel guilty and think that you are a slacker not pulling your weight?

Step 2: Develop the capacity to say no Your organisation and leaders will always try to get more and more out of you. Don’t expect them to manage your burnout. It sounds cynical, but it’s just the way the world works. You have to be responsible for this. Develop the capacity to have some boundaries, and ways to say no.

Step 3: Do something that relaxes you each day Like shutting down your computer, the brain needs

the capacity to turn off and recover. Not only does this let the mind and body recover, but it also builds our capability to put the brakes on when we need it.

Often people reflect on their holidays by saying, “It took me a week to unwind. I had a couple of good days and then started to worry about coming back to work”. We have lost the ability to go slow, and in some instances going slow seems to be punishment.

The actor Will Ferrell put it best: “Before you marry a person you should first make them use a computer with slow internet to find out who they really are!”

Doing something that relaxes you each day, even if it is just for five or 10 minutes, builds up that muscle. Meditation, listening to a relaxation tape, yoga, and deep breathing while stretching before bed are all great ways to recharge your mind and body each day. Oh, watching TV doesn’t count.

Step 4: Each week do something that gives you a shot of vitality This is taking the daily relaxation principle and turning it up to 11. We all have things in our life that fuel our soul, whether it is socialising with friends, going out for breakfast, walking on the beach, doing

A WORLD OF OVERWORKERS According to the OECD Better Life Index, Mexicans work more hours per year than any other OECD country, clocking up 2,250 hours annually. That’s 474 hours more than the OECD average of 1,776.

Here’s how the rest of the world shapes up:

MEXICO

US

2,250 hours worked per person per year 29% of the population work “very long” hours

1,787 hours worked annually 11% of employees work “very long” hours

UK 1,625 hours per person per year 12% of employees work “very long” hours

AUSTRALIA 1,693 hours spent at work per year, 83 hours less than the OECD average 14% of workers put in what is classified as “very long” hours (compared to the OECD average of 9%)

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TURKEY 1,855 hours worked annually 46% of the population work “very long” hours – the highest rate in the OECD

CANADA 1,702 hours per person per year 4% of the population work “very long” hours

FRANCE 1,476 hours per person per year (300 hours less than the OECD average) 9% of employees work “very long” hours

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yoga, or being out in nature. It is something that not only relaxes you but also juices you.

Step 5: Each month have a day with no responsibilities Our lives are so scheduled that there is always something to do. Psychologists report that children are experiencing anxiety in trying to keep up with a vast array of extracurricular activities. When was the last time you had a day when you woke up with nothing to do and no responsibilities? Days like this are restorative and freeing. Each month schedule a day that is responsibility-free. Our research shows that a day like this is ideally spent by yourself. Busy couples with kids can get around this by taking turns with their partner and having the other person look after the kids.

Step 6: Every quarter take a long weekend Four times a year take a day off either side of the

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weekend and have a mini break, whether you go somewhere or simply stay at home. These regular mini holidays are great sanity breaks.

Step 7: Have an off season All sports people factor in an off season when they give their body and mind a complete break. No one can keep going all year. Australians have amassed a concerning amount of holiday leave.

Don’t become one of those people who never take a holiday. Aim to wipe out your annual leave each year.

DO IT TODAY There you go: a seven-step process to eradicate burnout from your life. I have used this process with many executives and found that, no matter their external stress, it helps them dramatically reduce their chances of burnout. Go forth and recover.

Dr Adam Fraser is a human performance researcher and consultant who studies how organisations adopt a high-performance culture to thrive in this challenging and evolving business landscape. Phone +612 9564 5763 or visit dradamfraser.com.

OCTOBER 2014 | 39

25/09/2014 4:51:59 PM

CORPORATE WELLBEING / ADVERTORIAL

Healthy mind, healthy body HRD talks to Kristina Dalgleish, director of Health@Work, about how employers can ensure their employees remain fit and healthy HR Director: What’s involved in an ‘executive health check’?

Kristina Dalgleish: An executive health check represents an in-depth, confidential, individual health assessment. These checks cover all the key components required to offer a full overview of an executive’s health and lifestyle status.

Recommendations for health and lifestyle profile improvements are offered and referrals to specialists given where required.

This assists in ensuring intervention and response to any critical warning signs whilst educating executives about their health and wellbeing to mitigate future risks.

Once booked, the executive will have a nurse take blood for a full pathology – it will be a fasting blood test. Then generally within a week they will have a three-hour session starting with an exercise physiologist for a full ECG fitness test, including flexibility, core strength and a nutrition and lifestyle questionnaire. Then a GP will assess all test results and conduct other tests such as blood pressure, full body skin analysis, lung function, optical and – depending on gender – a few other relevant tests. Once this is completed the executive receives a full report with health and lifestyle recommendations.

HRD: What is the purpose of such a check? Is it to identify potential problems or to develop tailored programs to improve health?

KD: There are multiple reasons to undertake an annual executive health check. The main purpose is to proactively assess both physical and lifestyle aspects of their health and if any changes have occurred within the 12-month period.

An individual plan can be tailored to address any issues or concerns. This can involve exercise programs, nutritionists, dietary advice, organisational psych sessions and even mindful meditation techniques.

HRD: If a problem is identified, what’s the next step?

KD: Of course it all depends on the budget allocated to such programs; however, in saying that, many companies now see how invaluable these programs can be as preventative health insurance.

Say we identified weight, high blood pressure and cholesterol, which all usually go hand in hand. The first steps would be a one-on-one with our health coach, discussing how they got there, what impedes them in being within a healthy weight range, etc. Then they would undertake a consultation from our nutritionist to advise on dietary

requirements, and also a personal trainer session for exercise requirements. Finally, the health coach with the other experts will develop a personalised plan, including goal setting, training sessions, a food shopping expedition, motivational sessions – really anything that is identified as a hurdle, or obstacle in getting them back to ideal health.

HRD: How about mental wellbeing?

KD: This is such an area of demand. We have highly experienced organisational psychologists who have developed a wide variety of programs and support tools to cover most companies’ requirements, from senior executives through to employees.

We are very conscious of the importance of having programs that cover all demographics and can reach companies in their entirety.

As a result of this, Health@Work has a wide range of services and initiatives, from one-hour awareness seminars to full-day workshops, online mental health profiling tools, engaging four-week personal challenges, awareness packs and mindfulness training. We tailor programs to suit each workplace environment, its demographics, logistics and budgets, educating on both stress management and resilience.

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25/09/2014 4:31:58 PM

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25/09/2014 4:19:59 4:32:03PM PM 25/09/2014

BEST PRACTICE / RECOGNITION

6

steps to building a culture of recognition

From as little as $100-150 per employee per year, employers can build recognition programs that deliver tangible business results through more engaged and productive workers. Here are six tips to do it well Brought to you by Dreaming big is almost a pre-requisite for business success. Without dreaming big, it’s unlikely Steve Jobs and his Apple team would have revolutionised the way we listen to music (thanks to MP3s delivered via the iPod), and it’s just as unlikely that Sir Richard Branson would have evolved from record label owner to being the face of global behemoth Virgin.

Yet dreaming big falls down when there are no practical solutions in place to achieve smaller goals.

Recognition of the small achievements along the way, and breaking the strategy down to goals that mean something to every day workers, is an effective way to build sustained high performance.

“You couldn’t solely point to a reward & recognition strategy and say it equates to an engaged workforce as there are multiple elements involved in the EVP – but recognition is a key part of that EVP,” says Mark Robinson, executive general manager EMEA & APAC, Power2Motivate.

There are several foundational building blocks that must be covered when rolling out an effective recognition strategy.

1

Identify values and desired outcomes Be clear on the desired outcome from a recognition program. Usually, this will be about encouraging desired behaviours – specifically, repetition of desired behaviours that support company values. It’s common sense that if someone does something good, whatever it is, and they get rewarded, they are likely to repeat that behaviour or action.

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HUMAN RESOURCES DIRECTOR

“Turning values into recognisable and repeatable behaviours is the ultimate outcome of a recognition program,” says Robinson.

Hence, from nomination to reward, each step of the recognition process should be built around demonstrating company values.

2

Avoid putting dollar values on recognition Robinson recommends separating the recognition strategy from remuneration. “We don’t want people to view recognition as remuneration,” he explains. “Remuneration is being paid for doing your job. Recognition is for going above and beyond. We find small and often works.”

However, instead of saying ‘that is worthy of $150’, which some people might feel short-changed by (‘I thought I would be worth more than that!’), Power2Motivate favours a points-based system.

Employees build enough points to then pick a tangible reward that is meaningful to them.

3

Provide a choice of rewards Offering movie tickets or a $50 Myer voucher is great – but it will only motivate some people.

“You pigeon hole them – you as an organisation are dictating what will motivate the employee,” says Robinson.

Instead, offer something for everyone.

Power2Motivate offers 35,000 different items.

From practical items like a juicer, a blender or an iPad, through to charitable donations or experiences, Robinson says it’s important to offer a wide range of rewards that tap into all possible motivational drivers of employees.

It’s worth noting that physical items that people use every day also have ‘trophy value’. That is, every time the person uses the item, they think of the organisation and what they’ve done to deserve it.

“You’ve ordered a new iPad from the fully customised, branded recognition program that ANZ Bank has implemented. It’s then delivered to you at your office. In your mind, that gift is associated with work. I was recently talking to someone who was given a record player from IBM 25 years ago, and he still tells the story of when IBM gave him that record player,” Robinson says.

4

The technology exists – use it!

Peer-to-peer social recognition has now become de-rigueur. Ensuring recognition is

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THE MAGIC OF METRICS Measuring and reporting on the ROI of your program links recognition to business goals and lays the foundations for increased engagement and high performance. Utilisation of big data has swept into the HR space, and recognition programs are no different.

Insights from a recognition program can include: »» identification of top performers »» indications of how well company values are embedded »» how effectively departments interact »» how effectively performance is being managed

easily shared amongst employees takes recognition to the next level. Best practice for this strategy includes intranet updates, regular emails, announcements in staff meetings and a recognition platform that collectively stores all program data.

The benefit of making recognition public and sharable is seeing company values and recognition embedded into the daily lives of employees.

Recognition should also be instant, or as close to the event as possible. Finally, technology can help to automate the process, saving you time and money.

5

Don’t forget to refresh your program Recognition programs tend to be launched in a blaze of excitement, only to fizzle out a short time later. Robinson recommends employers review their program every 2-3 years. “You probably won’t be refreshing or changing your values but you might refresh the branding of the program, to give it a fresh new look,” he says. “A key to the success of recognition programs is good communication, so if you’ve changed it up, tell people about it.”

6

Don’t panic – it doesn’t cost a lot Budget control is critical to the success of a recognition strategy; a lack of budget insight is a sign of an antiquated program. Allocating budgets gives oversight and allows ROI to be calculated in a clearer way. According to World at Work, the average recognition spend is 2%+ of payroll; this is the benchmark for top performing companies.

“We recommend $100-150 per employee per year. It’s not a lot – and remember, virtual e-cards and virtual high-fives cost nothing,” Robinson concludes.

Power2Motivate is the truly global solution for employee recognition and reward. Working closely with you to customise, implement and manage your program, Power2Motivate will help improve employee engagement and performance in your business.

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EXPERT INSIGHT / NOVATED LEASING

THE ROAD TO NOW HRD chats to Duncan Ward, head of novated client relationships at sgfleet, about the enduring popularity of novated leasing, typical cost savings, and whether corporate fleets are still popular HR Director: What is a novated lease and, secondly, how does it work?

Duncan Ward: It’s an opportunity for employees to access a tax concession and additional savings in purchase discounts and running costs on a vehicle used for private purposes.

It works on the basis that an employee of an organisation that allows salary packaging can apply pre-tax salary to fund a percentage of their private vehicle, all managed by a specialist company such as sgfleet. All the set-up and car management is outsourced, with the employer only required to approve eligibility and deduct/remit salary each pay.

Savings vary based on salary and vehicle but may easily exceed $5,000 per annum.

HRD: What are the typical savings achieved through a novated lease?

DW: Customers average from between $2,000 and

Did you know?

There is no absolute formula on which category of employee benefits most from novated leasing, as the variables in salary, type of car and annual running costs create significant combinations. As a rule of thumb, those earning between $50,000 and $80,000 make the greater percentage of salary savings, while higher-salary earners save more in absolute terms.

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$6,000 per annum based on varying factors. This is based on over 25,000 active sgfleet leases. An overall average would exceed $3,000 in income tax alone. In addition to the tax savings, by entering into a novated lease you are ordinarily eligible for a significant discount on the vehicle purchase price of the car, which can range from 5% to 20%. Further, you are automatically enrolled into a maintenance program which offers up to 15% to 25% corporate discount on the labour and parts cost of repairs, tyres and servicing. This is in addition to a pre-authorisation service which ensures only necessary and approved work is commenced.

HRD: Aren’t novated leases for people on high salaries, driving expensive cars, or travelling long distances?

DW: Novated leasing offers savings for staff on a variety of salary levels. It’s true that employees on higher salaries get a bigger tax offset, but over

60% of people novating vehicles are on a salary of under $85,000. The savings for those on moderate salaries are very important as they supplement total remuneration benefit to those that need it most.

In regard to travel distances, progressive tax reform in 2010 means that FBT rates do not vary on distance travelled, and FBT is one simple flat rate.

This has had the effect of making packaging for drivers travelling under 15,000km per annum far more attractive. Thankfully, the days of having an obligation to meet distance targets or risk owing hefty FBT amounts ceased for new vehicle contracts after May 10, 2010.

HRD: Are corporate fleets still popular, or has novated leasing taken over to a large degree?

DW: sgfleet manages a broad corporate fleet base of over 60,000 vehicles. Our experience is that corporate fleets are still very popular where vehicles are required for work purposes such as travelling long distances to visit clients or to carry tools or supplies. In the case of benefit vehicles, where an employee is offered a company vehicle in lieu of salary, there has been a gradual reduction. The reason for this is that when an employee leaves employment the structure of a novated lease ensures the vehicle and future obligations are with the employee. Under a corporate offering, these cars are left with an employer and are required to be reallocated (which can prove difficult) or terminated ahead of time (which can be costly).

The other advantage of a novated lease is that the care of the vehicle is with the employee, and any mistreatment hits their pocket in a reduced sale price at lease end, not their employer’s.

That said, many firms still offer senior staff company vehicles to demonstrate a point of difference and simplicity, often important to a senior executive or expat.

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HUMAN RESOURCES DIRECTOR

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INTERNATIONAL PROFILE / SOUTHWEST

Winging it

The aviation industry is one characterised by employee burnout, high turnover, and recession-fuelled layoffs. Southwest Airlines, however, is out to prove that a ‘people first’ business culture can be all it takes to prevent this operational jet lag.

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Gary Kelly, CEO of Southwest Airlines, a company recently named one of Fortune magazine’s top 10 ‘World’s Most Admired Companies’, has shown up to work wearing thick, black eyeliner, beaded hair extensions, colourful head garb, loose-fitting nautical wear, and a sword.

It’s Halloween, and he’s dressed as Jack Sparrow from Pirates of the Caribbean.

As part of the airline’s ‘FUN-LUVing Culture’, employees can suggest fancy-dress ideas for senior managers, including the CEO. In the past, Kelly has arrived at corporate headquarters dressed as Frankenstein, Toy Story’s Woody, Dorothy from

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HUMAN RESOURCES DIRECTOR

The Wizard of Oz, and Gene Simmons of the rock band KISS. This lighthearted tradition is just one highlight of Southwest’s ‘people first’ mission. As founder Herb Kelleher often says, “The intangibles of spirit, in our view, are more important than the tangibles of things”. This would be an easy mantra for an executive of a luxury brand to espouse, but Southwest’s business model hinges on its identity as a budget carrier with low-cost fares.

This makes its human capital management all the more remarkable. Although the industry is in turmoil and many US airlines are struggling to remain viable, since its inception in 1967 Southwest Airlines has never ceased to remain a global icon for unrivalled corporate culture and employee satisfaction.

Julie Weber, the airline’s vice president of people, is responsible for ensuring these stellar practices are sustained.

EXPERIENCE ISN’T EVERYTHING While the flagging US economy makes it tempting for companies to seek out job candidates with extensive skills and experience already in place, Southwest approaches recruiting differently. For the airline, a positive outlook and customeroriented mindset are the top priorities when finding new employees.

“We know that happy employees make for happy customers, so we hire for attitude,” says Weber.

“As the saying here goes, ‘We hire for attitude and train for skill’.”

In order to evaluate whether potential workers will be able to uphold the ‘Living the Southwest Way’ principles, HR centres its interviews on three dimensions: spirit, heart, and a fun-loving attitude.

To accomplish this, recruiters ask behavioural questions such as ‘Describe a time you went above and beyond to serve a customer’ and ‘Why are you interested in Southwest Airlines, and what about this particular job appeals to you?’

“We have two main focuses: first, hiring people who feel that this job is a calling; and second, working to get out of their way. We hire good

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people, and get out of their way,” says Weber.

This hands-off approach can easily be seen in the unorthodox and jovial way that pilots and flight attendants go about their jobs. In June, a YouTube video featuring a Southwest flight attendant’s comedic safety speech went viral, attracting more than two million viewers. In the video he makes passengers laugh with remarks such as “And that seatbelt needs to be low and tight across your hips just like the hot pink speedo I’m going to be wearing when I finally get the three of us to a hotel hot tub tonight”, and “For those of you travelling with children, why?”

“Other than regulatory rules, we give employees the latitude to make situations light for the customer,” Weber says. “As long as they’re leaning towards the customer, the company will support the employee.”

FOR THE FUN OF IT Throughout its history, Southwest has received so many requests from corporate and public sector organisations to share its world-renowned people strategies that it now hosts an annual gathering called ‘Culture in a Nutshell’. During the two-day

Fun at work Company-sponsored activities to keep it light yyPajama Day yyRocking chair sessions – before employees retire, they share stories of their time at Southwest yyChilli ‘cook-off’ held every year at an amusement park yyAnnual ‘Spirit Party’ held in a different Southwest destination city every September yySending T-shirts and cards to new employees after acquiring a regional airline yyBirthday, wedding, and special cards for every employee yy‘Gate games’ for customers waiting at a station in a flight delay, such as trivia or offering gift cards to whoever can produce a sock with a hole in it the fastest yyManagers spend one day per quarter in another department, learning tasks such as loading a plane yyOffice decorating contests

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INTERNATIONAL PROFILE / SOUTHWEST

“We hire for attitude and train for skill” Julie Weber

Halloween is a particularly festive time, with HQ’s business departments competing for ‘best skit’ and ‘best video’ awards, and employees at Southwest’s airport stations engaged in a ‘best decorated gate’ contest.

“No matter where you are, we really work to bring out the fun,” says Weber.

CULTURE AS STRATEGY event, employers converge at the company’s Texas headquarters to attend formal presentations, tour its facilities, and learn how the people department conducts its day-to-day affairs.

These executives quickly discover that humanistic values lie at the core of Southwest’s culture. This starts from the point when every single new hire is flown to Dallas for ‘Freedom, LUV, and You’ (FLY) training, wherein the company’s people principles are explained in detail, and it continues through to the airline’s ‘no layoff’ policy.

“We have a culture services team dedicated to enhancing our culture, focusing on it, and ensuring that we are doing things to keep it fun and celebrating our successes,” says Weber.

These celebrations take many forms, ranging from the CEO commending exemplary employees during his weekly ‘News Line’ broadcast, to local and corporate-wide culture committees hosting 4th of July hot dog cookouts and Easter egg hunts.

A portrait of Southwest Airlines’ ‘Family Members’ yyHired 1,521 out of 100,682 applicants in 2013 yy2,830 Southwest employees have spouses who are also Southwest employees, which makes 1,415 married couples yy83% of workers belong to a union yyIn 2013, Southwest employed nearly 45,000 people – 19,003 in-flight, 2,689 in tech operations and maintenance, 15,464 in customer and ground services, and 7,675 in management and administration yy580,000 hours spent on safety and security last year yy0.34 customer complaints per 100,000 passengers – the lowest of all major US airlines yyThe airline was the topic of Harvard University’s first case study on integrated reporting, due to its triple bottom line thinking, which focuses on performance, people, and the planet Source: 2013 Southwest Airlines One Report

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While many corporate traditionalists consider fun, satisfaction-driven activities to be frivolous, Southwest’s endeavours actually generate a substantial business impact for the company.

Southwest was the only major US airline to make a profit following the industry upheaval brought about by 11 September; in fact, the company has been profitable for 41 consecutive years. In addition, the company has never dismissed or furloughed an employee or cut salaries due to budgetary concerns, not even at the height of the global recession.

“One of the things that I love about Southwest is even when times are economically challenging, such as in 2009 when so many organisations were laying people off, we didn’t. Those are not the areas we cut,” Weber says.

Instead, Southwest offered voluntary early retirement programs and slashed costs in other areas – parties and festivities excluded.

“We’re a pretty scrappy group. We’re the no-frills airline, so we know how to do things costeffectively,” says Weber. “It may mean we have to swap out one venue for a different one, but it doesn’t mean we’re going to cancel anything. We just get more creative.”

THE SMALL THINGS DO MATTER While the airline does put tremendous effort into keeping things cheerful and enjoyable, it also has people practices in place for more serious affairs.

Weber is particularly proud of a division that sends gifts and care packages to employees in need, whether they’re sick, experiencing misfortune, or have recently lost a member of their family.

“I joined Southwest in 2006 and my grandmother passed away in 2007. I was absolutely floored that the biggest and most beautiful flower arrangement delivered to the funeral home came from Southwest Airlines,” says Weber.

“Just about every employee that you meet will have a story like that. It’s pretty incredible.”

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HUMAN RESOURCES DIRECTOR

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WINNERS REVEALED Australia’s leading HR professionals gathered under one roof on 5 September to celebrate the best and brightest in the industry.

Twenty awards were handed out, following a lengthy evaluation process from an independent panel of judges. The black-tie event, hosted by popular television personality Julia Morris, applauded the efforts of HR departments across Australia. See who won over the following pages Remesys HR Hall of Fame

Korn Ferry HR Director of the Year Lucinda Gemmell, HR director, Diageo

Lucinda Gemmell with Steve Johnston, Korn Ferry

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Where to next for HR? “I see HR as being far more strategic than it has been before. The closer the relationships you have at executive level and at board level, the easier it is to impact on the true strategy of the business, not just what HR thinks it should be doing.”

Michaela Healey, group executive people communications + governance, National Australia Bank Limited Where to next for HR? “The demands on HR are going to increase enormously so it’s important that we’re able to adapt, respond rapidly to opportunities and change, but Michaela Healey with Natalie Feller, Remesys most importantly that we listen.

It’s also important we remain strategic but also commercial.”

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25/09/2014 5:11:40 PM

HUMAN RESOURCES DIRECTOR

HR Team of the Year

Company Restructure HR Champion (CEO) Jack Percy, CEO, Accenture Australia

The QBE Insurance team (Sally Kincaid, back, second from right, with Joydeep Hor of People + Culture Strategies, far right)

QBE Insurance Australia Limited

How does it feel to win?

Sally Kincaid: “I’m extremely proud. When you think about all the things that HR does for an organisation, be it working on strategy or ensuring processes work properly, it comes down to the team that you have. Every day my team contributes excellent customer service to our business.”

Holding Redlich HR Manager of the Year

Tanya Perry-Iranzadi of Company Restructure with Jack Percy

Frazer Jones HR Rising Star of the Year Simone Cook, HR manager, Bankstown City Council Where to next for HR?

Simone Cook with Stephen Trew, Holding Redlich

“The role is changing from a transactional role to a transformational role.

Influencing is becoming more important, so there’s less doing and more of that networking and relating and influencing people in the business.”

Future Knowledge

Best Change Management Strategy

Matthew Francis, HR consultant, RSPCA Qld What advice would you have for anyone looking to enter the profession?

“The key is to find a mentor who can teach you what HR really is, not just what you read in a text book. Someone who can show you how valuable HR can be when it’s executed properly.”

Matthew Francis (middle) with Ciaran Foley (L)

and Narelle Kinsman (R) of Frazer Jones

Power2Motivate Best Employee Value Proposition

Merck, Sharp & Dohme What do you think got you over the line?

Barry Singer: “We had a significant change event – after 50 years of operation a division of Merck, Sharp & Dohme was going to cease to exist – so that’s as significant as it gets. It was about getting everyone on board, on this journey, and Barry Singer and Val Lacey of Merck, Sharp & everybody realising that in order to get to the end state it required Dohme with David Guazzarotto of Future Knowledge everybody’s contribution, not just select people.”

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How does it feel to win?

“I’m delighted and gratified.

Being very much a peopledriven business, we place a high importance on HR-related matters. Being recognised in this way is a fantastic recognition not just for myself but the whole HR team who do a fantastic job.”

Australian Red Cross Blood Service How does it feel to win?

Michele Gellatly: “Fantastic – it’s been a lot of hard work rewarded. We’ve had a great night and I feel this is a great acknowledgement of the whole team.”

Michele Gellatly and Karin Cook of Australian Red Cross Blood Service with Mark Robinson of Power2Motivate

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Reward Gateway

Best Health and Wellbeing Strategy

Tracy Mellor of Reward Gateway with Andrew Houston and Kiran Minocha of Johnson & Johnson

HRD Magazine | Best HR Industry

Innovation and Corporate Creativity

Johnson & Johnson

Suncorp

What do you think the judges saw in your award submission?

Andrew Houston: “Hopefully it was an overall commitment to all employees within the group, across psychological and physical wellbeing, so it’s a real group effort and team effort at Johnson & Johnson. We hope to reach every employee, so hopefully that’s what shone for us.”

How does it feel to win?

Callan McDonnell: “It’s a great feeling. A lot of work goes into the end product that people get to experience and there’s a lot of people involved in making everything we do come to life, so we’re very proud.”

Oracle Best HR Strategic Plan

Iain Hopkins of HR Director Magazine with Tanya Hookham and Callan McDonnell of Suncorp

The Forum Corporation Best Learning and Development Strategy Brisbane Airport Corporation

Belinda O’Connor and Jane Dionysius of BAC with John Hansen of Oracle

Why do you think the judges chose BAC? Jane Dionysius: “It’s not just running an airport, we have three commercial businesses as well.

So our HR services are very broad and we’re also going through a major capital expansion over the next five years. HR planning is a mammoth task.”

CareersMultiList Best Recruitment Strategy

Fitness First

Mark Bowering and Sarah Sammut of Fitness First with Colin Williams of Forum

Solterbeck

Best Reward and Recognition Strategy Schweppes Australia

Campbell Arnott’s How does it feel to win?

Kellie Tomney: “Really fantastic. I’m just thrilled to be recognised. We’ve put so much hard work into it and Campbell Arnott’s is an amazing company, so to be here with the team is excellent.”

Kellie Tomney and Natasha Collopy of Campbell Arnott’s with John Cooksey of CareersMultiList

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What do you think the judges saw in your submission?

Mark Bowering: “We’ve spent a lot of time looking at how we can educate and develop our teams at a distance. We’ve also taken into consideration what they want as well as what we want. We’ve combined them both ends of the spectrum and provided some fantastic L&D over the last 12 months.”

Roli Shrivastava and Srini Srinivasam of Schweppes Australia with Sue Jackson of Solterbeck

Have you put something special in place to win this award?

Srini Srinivasam: “It’s been two and a half years of hard work to firstly get the concept of recognition agreed at leadership levels, and then to put in place a program, in partnership with Solterbeck.

To see the results come through within 18 months is a great effort.”

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HUMAN RESOURCES DIRECTOR

EmployeeConnect Best Use of Technology

Fragomen Diversity | Best Workplace Diversity and Inclusion Strategy

Commonwealth Bank of Australia

Andrew Culleton and Anna Ottavio of CBA with Iain Beard of EmployeeConnect

How does it feel to win?

Andrew Culleton: “Incredibly humbling; I think in HR when you’re talking about an area that is often underinvested in, which is technology, winning an award is fantastic because technology is going to enable HR to add more value in the future.

Winning this award is great for us and our employees, who use this app every day.”

Best HR Marketing and Communications Strategy

Deloitte How does it feel to win?

Alec Bashinsky: “It’s extremely gratifying because I know the work we’ve done not just over the last 12 months but over the last four or five years. Whether it’s our inspiring women strategy, or the work we’ve done in cultural diversity or LGBTI, we’ve really put a lot of work into educating Alec Bashinsky and Tina McCreery of Deloitte our people and more importantly ensuring we have an inclusive with John O’Brien of Fragomen environment.”

Employer of Choice (<1000)

Telstra Why do you think the judges chose you?

Brie Mason: “I think it’s about the journey that Telstra has been on and understanding that we had a challenge.

A lot of people know Telstra, it’s a big brand with high brand awareness, but that wasn’t translating to our Jasmina Mitrevski and Brie Mason of Telstra employment brand.”

with Kim Seeling Smith of Ignite Global

Accumulate Employer of Choice (>1000)

Alec Bashinsky and Tanyth Lloyd of Deloitte with Russell Flint of Accumulate

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Heritage Bank How does this award help you with your employment brand?

Bob Hogarth: “It’s going to be of great assistance. We have a people first culture, and we really mean that. To be recognised now as an employer of choice can only help our employment brand in the marketplace.”

Bob Hogarth and Heather Timbs of Heritage Bank with Jim Grant of Dattner Grant

Verify | Employer of Choice

(Public Sector and NFP)

Deloitte

QSuper

How does it feel to win?

Alec Bashinsky: “I’m thrilled.

This has been a real team effort and I’m just so honoured that Deloitte has been recognised in two important categories this year.”

What does QSuper do so well?

Paul Landy: “We have really great alignment between the people who work for Qsuper and our culture and values.

People feel very connected to the core values of the organisation and that’s why I believe we’re successful.”

Paul Landy and Leesa Fee of QSuper with Tom Quilty of Verify

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HUMAN RESOURCES DIRECTOR

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LAST WORD / COMPETENCY FRAMEWORKS

THE LAST WORD

Have competency frameworks run their course?

Competency frameworks are now widely used. But as Gary Taylor points out, there is barely any methodology behind the process

Gary Taylor is an HR director who has worked for Australian, South African and British multinationals on two continents, including in the Middle East. He is registered as a Master HR Practitioner with the South African Board for People Practice, and served as the vice president of the Institute of People Management.

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We have had enough time to evaluate the success of competency frameworks to reflect soberly on whether this was the revolution in HR that it promised to be, or whether it was yet another fad that has now run its course.

A telltale concern about competency frame­works is the very different interpretations by employers of what even constitutes a competency, let alone the differing applications of the methodology: • Employer definitions of what is a competency range from “attitudes or values” to “observable behaviours” • Some employers say competency profiles can be imported from other organisations, while others believe they are workplace-specific • Some insist a single competency framework must be integrated into all HR systems holistically, while others use the framework just for development, etc.

Can we all be right if competency frameworks are human science in action? If we are recruiting, developing and rewarding people according to a flawed (or at least fickle) methodology, what are the consequences?

HOW ARE COMPETENCIES USED? A survey by the UK’s CIPD (Chartered Institute of Personnel and Development) revealed a wide range of reasons why employers use competency frameworks: Underpins performance reviews/appraisals Greater employee effectiveness Greater organisational effectiveness More effective training needs analysis More effective career development

56% 46% 44% 36% 36%

The most common competencies identified were communications skills, people management, team skills, customer service skills, leadership/decisionmaking, problem-solving, and technical skills.

When I did my own research into one sector, five employers in the same sector (which would presumably employ similar people with similar competencies for similar jobs) differed significantly in terms of what their HR people defined as core competencies. It is also fascinating that the competencies they selected as essential to the job differed between employers. And then we bench­ mark our salaries against our competitors for similar jobs! Maybe internal consistency is all that matters, but that can hardly be best practice.

This leaves me with an uneasy feeling that either just a few employers have got competency frame­ works right, or these frameworks can be whatever you want them to be, and applied as you see fit. Either way, we don’t seem to have a genuine ‘methodology’.

UNCERTAINTY REIGNS What resources have we invested in competency administration? One large employer has documented over 26,000 technical competencies alone but has all but abandoned use of their 19 core competencies.

I wonder what employers in retrospect think the real ROI is, when the reality is that it doesn’t really matter what you define as a competency, or what your competencies are, or to which HR subdiscipline you apply them.

There remains a great deal of logic in competency philosophy, and perhaps it is still around because nothing better has come along. We do, however, need to beware the temptation to focus on ‘inputs’ rather than ‘outputs’. Shareholders want results in hard outputs, not pleasant behaviours measured against a fairly arbitrarily chosen checklist.

Let’s keep workin’ the problem.

Gary Taylor HCAMAG.COM

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