THE ‘ALPINE VIEW’ Ditching outmoded business structures
HUMAN RESOURCES DIRECTOR
LIFE BEYOND HR How Allen Wiseman used his skills to ‘give back’
HCAMAG.COM ISSUE 14.6
THE LEADERSHIP ISSUE Insights from Grant Thornton, BMW, AECOM, QSuper, DDI, Nous Group
10/06/2016 10:03:08 AM
9/06/2016 1:32:33 PM
EDITORIAL www.hcamag.com JUNE 2O16 EDITORIAL
SALES & MARKETING
Editor Iain Hopkins
Marketing & Communications Manager Lisa Narroway
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ART & PRODUCTION Design Manager Daniel Williams Designer Marla Morelos Traffic Coordinator Lou Gonzales
Business Development Managers James Francis Steven McDonald Dale Ashworth
CORPORATE Chief Executive Officer Mike Shipley Chief Operating Officer George Walmsley Managing Director Justin Kennedy Chief Information Officer Colin Chan Human Resources Manager Julia Bookallil
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PERFECT CANDIDATES FOR THE TOP JOB? DO HR professionals make good CEOs? It’s the question we ask in our Head to Head Q&A this issue. The consensus from our participants – and it’s backed up by research from the likes of Dave Ulrich – is that CHROs can move to the top position, and in fact of all the executive roles, the CHRO shares most of the traits of the CEO. There are of course quite a few precedents. Anne Mulcahy was named CEO of Xerox in 2001 and more recently Mary Barra became CEO of GM, both of whom had held VP roles in HR. Closer to home, Ann Sherry managed the people and customer side of Westpac’s merger with the Bank of Melbourne before getting the HR community excited by being appointed as Bank of Melbourne’s CEO. She later became CEO of Westpac New Zealand and then CEO of Carnival Australia in 2007. Another example is one of our interviewees in this issue – Greg Keith, CEO of Grant
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CHROs can move to the top position, and in fact of all the executive roles, the CHRO shares most of the traits of the CEO Thornton Australia. He led his firm’s people and culture function when he was first made partner in the early 1990s. A quick glance at some of the skill requirements for a successful CEO shows they must have ability to trust, ability to listen, ability to sense, ability to observe, and ability to collaborate. The modern-day HR professional thinks and operates this way. CEOs must also of course have business nous – which these days more and more HR professionals also have. Today’s HR professional is collaborative, strategic and understands not only the world of HR but the business needs of their organisation. They can be instrumental in helping to create the link between business strategy and talent development. They are in the somewhat unique position of operating across all business functions. And with the majority of financial resources spent on talent, who better to lead an organisation than someone who has led the HR organisation? Iain Hopkins, editor
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UPFRONT 01 Editorial
NOT DONE YET
Allen Wiseman shares his ‘retirement’ story with Iain Hopkins – and suggests how all HR professionals can ‘give back’
HRD’s annual leadership issue presents interviews with leading CEOs and insights from thought leaders on building trust as a leader, succession planning, and grooming the next generation of leaders PEOPLE
SAP’s Brigette McInnis-Day reveals how her company is embracing diversity
06 News analysis
Employers are repeatedly being penalised for underpayment of interns. What are the legal ins and outs?
08 Upfront: L&D
Think distance and time are barriers to learning? Think again
10 Upfront: Rewards/benefits
End of the financial year is the perfect time for team bonding – just don’t take the clichéd route
14 Head to head FEATURES
WHY PUBLIC HUMILIATION FEELS SO GOOD
Schadenfreude might offer short-term satisfaction, but it can have long-term ramifications for employees
Do HR professionals make good CEOs?
54 Career path
The global head of HR at JF Hillebrand Group, Norbert Modla, shares his road to now
56 Other life
Rachel Sutton, people director at Sage Australia, finds her love of ‘tramping’ also allows her to practise mindfulness
21ST CENTURY RECRUITMENT
David Reynolds outlines the latest recruitment trends and how HR stands to benefit from making data-led decisions about tomorrow’s workforce
04 The data
THE LEADERSHIP ISSUE
The precedent has been set: senior HR leaders are prime candidates for the CEO role
HCAMAG.COM CHECK IT OUT ONLINE
10/06/2016 3:10:43 PM
10/06/2016 10:04:20 AM
A new study reveals the growing prevalence of ‘outsider’ CEO hires, disappointing figures on female CEO hires, and why the ‘global CEO’ might be a myth IT’S OFTEN one of the most vexing challenges facing boards: CEO turnover. With the stakes so high, it’s little wonder why. Research by the Adelante Group shows CEO tenure is less than five years on the ASX 200; 30–40% of CEOs fail in their first three years; and it can take 10 years to recover from a poor CEO selection. This research also shows that, in 2013, 68% of ASX 200 CEO appointments were internal candidates, below the global average of 76%. However, external candidates have twice the
percentage of companies during 2012–15 making a deliberate choice to hire an ‘outsider’ CEO, up from 14% in 2004–07
failure rate, shorter tenures, and deliver just half the shareholder returns of internal candidates. Achieving gender diversity remains elusive. According to PwC, the number of incoming female CEOs in Australia remains low despite tripling since 2013 – from one to three. However, the Australian female CEO representation of 8.3% of incoming hires still beats the global average of 5.2%. Here are some key findings from PwC’s 2015 CEO Success Study of the 2,500 largest companies in the world.
percentage of CEO turnover at the 2,500 largest companies in the world, an increase from 14.3% in 2014
number of women (2.8%) among the 359 incoming CEOs at the world’s 2,500 largest companies in 2015 – the lowest share since 2011
HIRING OUTSIDER CEOS (GLOBAL TRENDS 2004–15) Western European companies in general are hiring outsiders more reactively than proactively. Western European companies hire almost double the share of outsider CEOs compared with companies in the US/Canada. Additionally, outsider CEOs in Western Europe are significantly more likely to be appointed to low-performing companies and more likely to be forced out. Global (%)
COMPANY PERFORMANCE AND CEO TURNOVER
INSIDE OR OUT?
Low-performing companies are more likely to hire outsider CEOs than high-performing companies, except in forced turnovers. Interestingly, the longer the tenure of the former CEO, the less likely an outsider CEO is to be hired.
More outsider CEOs now join a company via planned successions, showing that hiring an outsider is more of a deliberate choice than a necessity. Industries experiencing the most disruption have brought in higher-than-average shares of outsider CEOs. These industries include telecommunications (38% incoming outsider CEOs from 2012 to 2015), utilities (32%), healthcare (29%), and energy (28%).
40 35 30 25
15 10 5 0
percentage of incoming CEOs who had international work experience (down from 45% in 2012)
US/Canada: Outsider CEO hiring (%)
Forced and planned turnovers (%)
Forced turnovers (%)
Planned turnovers (%)
Outsider CEOs were more likely to be hired if the: • Company was low-performing • Chairman did not have CEO experience in the same company • Former CEO was also an outsider Outsider CEOs were less likely to be hired if the: • Chairman was hiring their first CEO at the company • Former CEO had a long tenure • Company was large
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Western Europe – Outsider CEO hiring (%)
Japan – Outsider CEO hiring (%)
China – Outsider CEO hiring (%) Brazil, Russia, India – Outsider CEO hiring (%)
Other mature^ – Outsider CEO hiring (%)
Other emerging* – Outsider CEO hiring (%)
2012-15 *Egypt, Kazakhstan, Mexico, Nigeria, South Africa, Turkey, Vietnam ^Argentina, Australia, Bahrain, Chile, Czech Republic, Hong Kong, Hungary, New Zealand, Poland, Korea
CEOS BY GENDER (2004-15) Over the last 12 years, US/Canada-based organisations have hired the largest share of women CEOs. In 2015, the share of incoming women CEOs fell to 2.8% globally, the lowest since 2011.
Insider CEOs 68%
Western European companies are most likely to hire a foreign CEO, with 30% of incoming CEOs having a different nationality than company headquarters (16% in US/Canada and 17% globally) US/Canadian CEOs were most likely to have an MBA (41%). Japan had the lowest percentage (3%). Globally the figure is 30%
Women CEOs are more often hired from outside the company than men CEOs are. Men
The median age for incoming CEOs globally was 53, with CEOs in Japan being the oldest (median of 60)
Chinese CEOs are the least likely to have had international work experience (97%) – globally the figure of CEOs who have had international experience is 28%
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WHEN IS AN INTERN AN EMPLOYEE? Several recent court rulings have demonstrated that the law provides safeguards to balance the desire of young workers to gain practical experience with the need to prevent the exploitation of young workers IN EARLY June, a Sydney-based media company was fined $272,850 for allegedly disguising employees as unpaid interns, following an investigation and legal action by the Fair Work Ombudsman. The ruling was made in the Federal Court by Judge Tom Altobelli against AIMG BQ Pty Ltd, a company with links to the Ostar International Media Group that owns Chinese-language websites and publications for Australia’s Chinese community. AIMG BQ admitted to underpaying two event coordinators between October 2013 and June 2014 to the amount of $18,767. One was a 24-year-old from China who spoke limited English, who worked 180 hours for no pay over the course of four months, carrying out duties including administration, cleaning, editing and event organisation. She was with the company as part of a so-called internship while studying at UTS. The court found it unlawful for the internship to be unpaid as the intern was carrying out productive tasks that were not related to her
studies for a master’s in event management. After completing the internship, she was paid $50 per day ($6.56 per hour), a staggering $8,387 below the legal rate. Judge Altobelli said a serious message was being sent to the company to prevent other businesses from benefiting from
Interns and the Fair Work Act According to Emma Pritchard, executive counsel at Harmers Workplace Lawyers, employers need to understand the legal position relating to internships to ensure they are not exposing themselves to orders for underpayment and penalties.
“There is no statutory definition of ‘employee’. The status of the intern must be determined according to common law” Emma Pritchard employment relationships disguised as unpaid internships. In welcoming the decision, Fair Work Ombudsman Natalie James said, “We don’t want to stifle genuine learning opportunities that help young people get a foot in the door, but we also don’t want to see young people being treated unfairly through unlawful unpaid work schemes.”
“The Fair Work Act 2009 does not expressly address the issue of interns,” Pritchard says. “Under the Act, it is a question of whether the intern is an employee working under a contract of employment, or whether the employee falls within an exception created by the Act. “If the intern is determined to be an employee, that worker will have entitlements
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REMAINING COMPLIANT In order for employers to avoid exposing themselves to court orders, Emma Pritchard suggests the following: • Careful attention should be given to any unpaid work experience to ensure that they are providing legitimate opportunities that fall within the definition of “vocational placement” in the Act. • Merely classifying individuals as trainees or interns does not necessarily negate the employer’s obligation to pay minimum wages and treat employees in accordance with the Act and relevant industrial instruments. • In determining whether an intern is an employee, consideration needs to be given to whether the worker is an employee under common law and whether the requirements of Section 12 of the Act are met. • An employer who incorrectly classifies an intern as a non-employee is liable to pay the intern back pay, as well as pay a range of civil penalties. arising under the Act and industrial instruments, including modern awards and enterprise agreements. These entitlements include a minimum wage.” Prichard adds that the key issue for determination is whether an employment contract exists between the employer and the ‘intern’. “There is no statutory definition of ‘employee’. The status of the intern must be determined according to common law. Under common law, the worker will be regarded as an employee if they satisfy the ‘multi-factorial test’ that has been developed by the courts,” she says.
The ‘vocational placement’ exception Irrespective of whether an employment relationship exists, Pritchard says that if an internship meets the definition of “vocational placement” under the Act, the intern will be excluded from the definition of “employee” for the purposes of the Act. Section 12 of the Act defines “vocational placement” as comprising three elements:
the work is undertaken with an employer for which the worker is not entitled to any remuneration; the work is undertaken as a requirement of an education or training course; and the work is authorised under a law or an administrative arrangement of the Commonwealth, or a state or territory. Pritchard cites Fair Work Ombudsman v Crocmedia Pty Ltd, a 2015 case that illustrates how the courts deal with the misclassification and underpayment of interns. “In this case, it was found that Crocmedia erred in classifying two university students as ‘trainees’ for the period following three weeks of work experience, and the company breached the Act by failing to pay the award wage and to provide payslips.” Crocmedia was ordered to pay penalties for failing to pay minimum wages ($12,000), casual loadings ($9,000), wages in full ($2,000) and payslips ($1,000) – and while the order for penalties was relatively small, Pritchard says this decision sent a message to employers that courts would not tolerate the exploitation of unpaid interns
in circumstances where they should be properly classified as employees.
Government-sponsored employment programs Pritchard also references the Federal Budget 2016, which includes a proposal to implement the ‘Youth Jobs Path’ program. Under this program, which is expected to be implemented by April 2017, jobseekers will participate in a 12-week work placement, for which they will receive $200 a week in addition to their other Centrelink entitlements. Pritchard anticipates that Youth Jobs Path interns will be excluded from the meaning of ‘employee’ for the purposes of the Act by express legislative provision to ensure that employers are not liable for wage and entitlement contraventions by participating in the program. She advises employers who seek to take advantage of these kinds of government-sponsored employment programs to take care to ensure their internships fall squarely within the relevant exemption.
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L&D UPDATE NEWS BRIEFS Luxury Escapes trains interns aged over 60
It’s tough to imagine a better internship than the one that Dennis and Jenny McCarthy from South Melbourne have been offered. Dennis, 72, and his 64-year-old wife Jenny will be the new interns at online travel company Luxury Escapes. The pair was selected from a pool of more than 5,000 applicants. The internship includes two days of training at the head office in Sydney, where they will learn the ins and outs of blogging, vlogging, social media and marketing. They will then spend 10 days travelling in Bali where they will get to review two resorts for the online company.
Innovative game makes construction safer
Imagine being able to navigate life-threatening scenarios by virtually walking through 3D building sites using a computer or oculus rift headset. Employees can access this virtual reality training right now to learn safety skills for the construction industry. Designed by Sidney Newton and Russell Lowe at UNSW Built Environment, the Situation Engine is the first software of its kind to be developed by construction safety experts. This achievement has not gone unnoticed as it has been awarded a Premier Innovation in Education and Training award by the UK-based Chartered Institute of Building.
Ford embraces mindfulness training
Ford Australia has launched a mindfulness program to help employees declutter their minds of daily distractions as the company pushes an aggressive new innovation agenda at its local and global facilities. A further 100 Ford managers will join the 82 who have already completed
the first phase of the program, with the possibility of offering it to all employees in the future. Ford engineer turned psychologist Phillip Chen Yi Mei launched the company’s first mindfulness training locally in early 2015, and participation in the program has jumped by 125% following a successful phase-one pilot program.
Federal initiative allows employers to ‘try before you buy’
The federal government has committed $840.3m over four years to its Youth Employment Package, with the bulk of the funding ($751.7m) going towards the three-stage Youth Jobs PaTH (Prepare, Trial, Hire) program, which aims to provide employment opportunities for the country’s 120,000 vulnerable young people under the age of 25. Companies will receive a cash bonus of $1,000 to take an intern for between four and 12 weeks, during which the intern will for work for 15 to 25 hours per week. Companies offering employment opportunities can receive between $6,500 and $10,000 to help with the cost of paying the employees.
Apprentice/trainee numbers drop
Australia’s workforce has 8,600 fewer people starting apprenticeships and traineeships than last year, prompting alarm among the business community over a growing national skills shortage. The number of people commencing an apprenticeship or traineeship in September 2015 compared to the same time in 2014 has dropped 19.3%, according to the National Centre for Vocational Education Research. Peter Strong, CEO of the Council of Small Business of Australia, said the results demonstrated a crisis within the skilled training sector. “Unfortunately, it’s becoming far too expensive for employers to take on apprenticeships,” he said.
VIRTUAL CLASSROOMS A REALITY FOR SUNCORP BANK Think distance and time are barriers to learning? Think again There’s one L&D initiative that Suncorp Bank is particularly excited about introducing: virtual classrooms. The idea came about because Suncorp employees are geographically dispersed across Australia and New Zealand. Face-to-face classroom learning is therefore not always possible or desirable. In a flexible virtual classroom, participants use their phones, headsets and webcams to interact with a facilitator and fellow learners. These sessions are generally around 60 to 90 minutes long and are designed to be interactive and engaging. Suncorp’s willingness to embrace new technology is exceptional, says Ed Cooley, EGM, talent and planning, at Suncorp Bank. “Mobile phones and tablets enable us to provide learning that fits into people’s everyday lives,” he tells HRD. “No longer are you locked to your desk or the classroom; you can be participating in learning while you’re on the bus or at home. It’s about giving more flexibility to our people to learn in ways that best work for them.” Cooley adds that Suncorp offers a mix of learning options, such as workshops, e-learning, webinars and conferences, along with on-the-job development. “We take a blended learning approach to designing develop ment options,” he says, “combining formal learning, some coaching, and some on-the-job learning.”
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There are two key lessons Cooley has learnt during his time as an L&D professional. The first is that you should never assume you know what a learner needs. “It’s far better to immerse yourself in their role, to get a better understanding of their business and customers, and then develop a learning solution that meets their needs and actual working environment,” says Cooley. “It is so powerful to spend a day in the business – to get to know more of our employees and our customers and to understand what development will help our
“No longer are you locked to your desk or the classroom; you can be participating in learning while you’re on the bus or at home” employees to provide more value for our customers.” The second lesson is that it’s crucial to really understand the businesses strategy. This means looking at where the company is now and where it intends to be in one, three or five years’ time. “This helps us create the right development opportunities so our employees are best placed to deliver value for our customers, now and in the future,” adds Cooley. “We actively encourage people to develop by continually seeking feedback, to make use of our many development courses, and to look for other short- or long-term development opportunities within Suncorp. “The development opportunities are limitless.”
Tim Fisher Learning and development manager YOUI
Fast fact According to Right Management, 88% of Australian employees believe they are responsible for their own career development; however, only 26% feel confident to have a conversation about their career with their manager.
WHY L&D IS A CULTURE, NOT JUST A DEPARTMENT What does the leadership development program look like at Youi? Leadership development is part of the fabric of our business. Youi has an internal promotion philosophy, so ensuring future leaders are identified and given world-class leadership training is fundamental to the ongoing growth of the business. Leadership training at Youi has four tiers consisting of two bridging programs for aspiring leaders at different levels, an online training program for existing leaders, and an MBA standard program for our senior leaders. Is Youi’s training more about face-to-face learning or e-learning? Both. Face-to-face training is preferred when inducting staff for internal moves and for the majority of the leadership training. E-learning is utilised when rolling out changes in our fast-paced and ever-changing environment and for periodic product knowledge checks and annual compliance modules. Our online training site YouiVersity houses all of our department Standard Operating Procedures and other useful information. The site is available for all staff and is a community environment where each department works with L&D to ensure content is up to date and easy to consume. What are the greatest challenges you are facing in L&D? L&D is a culture, not just a department. The challenge for us is to provide a broad range of learning opportunities, content and mediums that can accommodate the vast array of learning styles, making it easier for people to embrace our learning culture. What do you find are the most interesting aspects of L&D? I find it fascinating how dialogue and written language can create cultural change in an organic way. I have had the privilege of watching consecutive cohorts of employees attend the leadership programs, and have noticed how a conversation that took place in a previous year has obviously gained traction in the business and informed the views of the current group. An aspiring leader took great pride in describing their approach to coaching in a session I facilitated. It was almost verbatim from a session that their leader had been in the year before. Ensuring these conversations positively impact culture is a responsibility I enjoy. What are some key L&D lessons you have learned? The more L&D facilitates (rather than teaches), the more successful we have been. Human beings have a tremendous capacity to learn and develop, and it is our job to facilitate that process. Technology has increased the number of platforms at our disposal, but the fundamental job we do is to enable people to be as awesome as they can be. In my mind, that makes L&D incredibly rewarding and important.
10/06/2016 12:26:14 PM
EOFY – THE TIME FOR TEAM BONDING EOFY is the perfect time to recognise your team’s hard work – but how can you avoid clichéd team bonding?
With the end of the financial y ear ( EOFY) approaching, employers are looking to reward their employees for their hard work. “Given the importance of this period for varied reasons, businesses are looking at different ways they can have their staff working at their optimum, working cohesively as a team and acknowledged for their contribution over the past year,” says Dwain Richardson, managing director of Corporate Challenge Events. Richardson says there are two ‘stand-out’ objectives for companies seeking team-building activities during this EOFY period.
“One key objective for many companies is to invigorate their team in advance of a peak business period over EOFY. They want their team performing at a high level to drive last-minute sales and results, to think creatively and strategically, and to focus on finalising the financials for the year. “A second objective is to reward their team for its results and contribution over the past financial year. Their staff have worked hard over the past 12 months to reach certain targets, so team building is a fun way of acknowledging and rewarding staff for their collective contribution.”
Co-working gets the vote
A survey conducted by JLL and the ideas community TEDxSydney has revealed that the ability to co-work with other businesses is seen as the most important factor in the design of the future workplace. Participants also wanted a workplace that enhanced wellbeing. They preferred ‘eco campuses’ where people worked, lived and played. Ideas floated included taking advantage of online and virtual learning to allow schoolchildren to learn at their parents’ place of work, and using virtual reality to incorporate the natural environment and sensory sounds and scents and fragrances.
However, HR professionals may face a challenge: a 2011 survey by RedBalloon for Corporate found that more than 50% of employees reacted negatively when told of an upcoming team-building event. When asked to provide insights into the problems with traditional team-building exercises, survey participants cited: ‘Badly organised or facilitated’, ‘No clear purpose or intent behind the
“One key objective for many companies is to invigorate their team in advance of a peak business period over EOFY” event’, ‘Cliché format’, ‘Not during work hours’ and ‘Managers not participating’. Richardson says the key is flexibility and tapping into something different. In terms of flexibility, team-building activities can be designed for short timeframes, such as 30 minutes, or a full day if required. Richardson also suggests that a popular and impactful way of using a team-building event to reward and acknowledge staff over the EOFY period is by “giving back to the community”. “If a company has its own charity or community organisation that it supports or wishes to support, a team-building event can be designed to provide an outcome for that charity,” he says.
The key to happiness?
New research from Adobe has found that technology holds the key to happiness in the office. According to the survey of over 1,000 US office workers, 81% believe technology is the most important factor in keeping them happy at work, more so than access to food and beverages (72%), a beautiful office design (61%) and on-site amenities (56%). The study also found that 81% of workers say technology helps them connect with their colleagues. They also believe technology helps with efficiency (85%), work-life balance (70%), and making the work day better/easier (74%).
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Jeremy Salter Employee solutions lead GRASS ROOTS
Fast fact The trend towards a ‘gig economy’ has begun. In a gig economy, temporary positions are common and organisations contract with independent workers for short-term engagements. A study by Intuit has predicted that, by 2020, 40% of American workers will be independent contractors.
INTERGENERATIONAL BENEFITS How are the changing age demographics of the workforce impacting on employee benefits offerings? Benefit offerings are struggling to keep up. One size no longer fits all. Workplace generations need and expect tailored benefits packages. Intergenerational differences in how benefits are valued need to be understood. Baby boomers perhaps represent the last generation to enjoy good pensions. New generations are entering the workforce needing and wanting to look for benefits elsewhere.
What do you believe Gen Z (those following on from the millennials) will expect in terms of employee benefits? I believe Gen Z will look beyond traditional compensatory work benefits. They will increasingly look to derive benefit from work itself. Purpose, flexibility, balance, health, progression and recognition represent expectations that are changing the nature of work itself. These are exciting times. The gig economy [see Fast Fact, left] has arrived, led by employees more willing to co-mingle work and life. To meet new expectations organisations are having to reconsider how work is done. These changes are benefiting all, creating new ways of working that allow older generations to remain in the workforce longer.
Do you see any emerging benefits trends? Health and wellbeing is an important trend that is being reflected in the work we are doing with organisations,
Wedding bailout starts new benefits trend
Full-time employees in the e-commerce firm Boxed will receive US$20,000 towards their wedding expenses. Talking to Inc., Chieh Huang, the company’s CEO and co-founder, told the story of one worker who was struggling to cover his mother’s medical expenses and save up to marry his fiancée. Huang agreed to pay for the wedding after the worker broke down at his workstation. A formal wedding request program has been implemented and Huang predicts that 10% of the company’s 125 employees will eventually use the benefit.
both in Australia and elsewhere around the world. Elsewhere, one of our fastest-growing services is Cycle to Work, a Grass Roots business that makes it easy for employees to salary sacrifice the cost of purchasing bicycles to cycle to work. To date we have helped over 606,000 people get out of their cars and into the saddle for a healthier commute to work. In Australia we are seeing changes in the way organisations invest in rewards. An increased use of wearable health and activity trackers is generating some interesting debate around data privacy. Our reward communications are increasingly promoting healthier lifestyles as much as particular products. We are also noticing increased interest in other drivers of wellbeing. Our employee social recognition programs are often discussed as part of broader employee and organisational health strategies. We believe health-related benefits will remain a significant and growing trend that will expand beyond current health-related products and services into healthier ways of working.
How has technology changed how employees access the benefits on offer? Perhaps the most significant change is an increased awareness of the benefits available. Organisations can now talk to employees about the right benefit, at the right time, in the right way. Technology has increased the ways employees interact with benefits. They now have more choice and control over how their benefit dollars are spent.
UK employer offers groundbreaking LGBTI benefit
Lloyds Banking Group will soon give its staff access to private gender reassignment surgery. By broadening its staff health insurance scheme, the bank will provide greater choice and quicker access to treatment for employees diagnosed with gender dysphoria – the condition of experiencing distress at the sex or gender assigned at birth. Initially, the firm expects 20 staff members to make use of this extended coverage, which will be provided via Bupa to any permanent employee in the UK who is subscribed to the company’s healthcare scheme.
More employees seek super advice
Research suggests that 72% of people who switch super funds seek advice before doing so, with 19% of those seeking advice from their employer, and by extension the financial adviser for that workplace super plan. IOOF head of employer super Stephen Black said a growing number of investors are looking for a range of quality managed funds, and the ability to tailor super investments to suit their personal circumstances. With financial stress being one of the biggest inhibitors in the workplace, he added that workplace super advice was a logical value-add for employers. www.hcamag.com
10/06/2016 12:28:55 PM
GLOBAL HR PROFILE
A ROLE MODEL FOR DIVERSITY The leader of SAP’s largest organisational unit, Brigette McInnis-Day, chats with Miklos Bolza about her efforts to tackle workplace diversity for both women and the differently abled WHEN IT comes to pushing boundaries in HR, few go as far as Brigette McInnis-Day, the EVP of human resources at SAP in the US. Heading up the company’s largest organisational unit, she has been instrumental in bringing forward key strategies on the cutting edge of recruitment and development while concurrently managing a global workforce. In her 20 years in the industry, McInnis-Day has worked in all types of firms, from start-ups to large global organisations. At SAP, she moved up the career ladder by seizing every opportunity, no matter how difficult. This attitude led to exciting new challenges – including taking on a new role while eight and a half months pregnant in a country where she didn’t speak the language. “I made the move to Germany with two small children,” McInnis-Day says. “Although it was challenging, it was extremely rewarding, not only on a professional level but also for my own personal development.”
Growing women leaders
“In the corporate world, we need to work to remove the stigma of the word ‘disability’. We should work to create an environment where disabilities are viewed not as a negative description but instead as a trait”
The gender gap in leadership is one issue that McInnis-Day is passionate about, and she seeks to tackle it through a multi-year approach. “At SAP, we are committed to having women in 25% of all managerial positions by 2017 and are tracking very well against this target,” she says. To bring more women into senior positions, SAP’s
succession planning ensures potential leaders can be promoted from within. Executive sponsorship is a proven way to ensure women receive the right support. SAP has also implemented the Leadership Excellence Acceleration Program (LEAP) to target high-potential women. By helping participants build brand visibility and political savvy, the program has achieved a 35% promotion rate in 18 months. But McInnis-Day isn’t resting on her laurels. “We have made tremendous strides toward bridging the gender gap, but we still have work to do. We cannot be complacent.” This means that staff at all levels must be willing to make the necessary changes, she adds. “Welcoming gender diversity into the workplace is a shared responsibility for everyone.”
Welcoming autistic talent
SAP also tackles diversity in the workplace by actively recruiting differently abled employees. This issue was deemed so important that SAP’s chief diversity and inclusion officer, Anka Wittenberg, made disability one of the key pillars of the firm’s people strategy. SAP’s main cornerstone of this objective is the Autism at Work program, which was established four years ago. The company’s goal is to have 1% of its workforce made up of people with autism spectrum disorder (ASD) by 2020 – consistent with the
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percentage of people with ASD in the general population. When the program launched, Wittenberg commented: “They are employed not in spite of the fact that they are disabled but because of the strengths they bring by being autistic. People with autism excel in any repetitive task that requires a lot of attention, as well as in roles in communications, compliance, project management – and HR.” McInnis-Day says the program helped to increase the pride of SAP’s current employees and also attracted more people to the firm. SAP works with local recruitment companies and governments to help make its workplace ASD-friendly, to break down bias within the workforce and offer staff benefits tailored to those with ASD. The firm is also working with wider stakeholders and customers in the hope that they will follow this lead. “In the corporate world, we need to work to remove the stigma of the word ‘disability’,” McInnis-Day says. “We should work to create an environment where disabilities are viewed not as a negative description but instead as a trait. When someone says, ‘I have a disability’, we should interpret that to simply mean that individual works differently than we do.” When bringing the differently abled into the workforce, it is critical to do so for the right reasons, she adds. “We know that individuals with disabilities are underrepresented in the workplace, but why is it important to ensure they are included? We should not want to include them just to meet compliance standards.”
Juggling a global workforce
Name: Brigette McInnis-Day Company: SAP Title: Executive vice president, human resources
“One of the biggest challenges is that you can’t grow people fast enough,” McInnis-Day says in reference to her global responsibilities. “We have 22 tier-three leaders growing benchmarks for the company and solving these sorts of key issues.” One of SAP’s primary aims is to attract and retain employees through a robust rewards package. “We’ve set up a plan to prevent staff from being poached by our competitors,” she says. “To do this, we revamped our rewards package in less than a year.” Technology is also essential in managing a global workforce. After two and a half years in the role, McInnisDay can now identify every fast-tracker and quickly fill talent gaps through high-tech solutions such as the SuccessFactors platform. “For instance, if we need roles in India, we can look at the prerequisites and choose those who are most suitable. It’s much easier to cultivate our workforce.”
Years in the industry: 20 Awards received by SAP: »»Top 10, Best Multinational Workplaces in Asia 2016 »»Top 5, Best Companies to Work For in Singapore 2015 »»Top 3, Best IT Multinationals to Work at in Korea 2015 »»Employer of Choice for Gender Equality, Australia 2015
10/06/2016 10:06:36 AM
HEAD TO HEAD
GOT AN OPINION THAT COUNTS? Email email@example.com
Do HR professionals make good CEOs? Can HR directors make the leap to the top? Should they?
General manager – people & culture Beca Absolutely – CHROs can make the leap to the CEO role and should back themselves to step up and be recognised for their business acumen and commercial expertise. Like all C-suite members, CHROs are integrated into the business with a strong understanding of the commercial landscape and market conditions affecting the success of an organisation. Setting strategy, direction and analysing market trends to develop profitable business solutions are already critical elements of the CHRO role. Most importantly, however, the CHRO knows how to inspire, motivate and engage with employees to enable the achievement of the company’s vision and objectives, which provides them with an advantage over other C-suite members for the CEO role.
Senior director HR eBay Australia & APAC Senior leaders need to be able to manage constant ambiguity, the relentless performance-driven expectations and the balance between thoughtful and thoughtless risk-taking. Creating a culture that allows these dynamics to co-exist often jointly falls to both the CEO and CHRO. Understanding how their organisation works, the elements of success required, and how things formally and informally get done is essential to senior leaders. An ability to see between these lines, understand the rites and rituals that exist in an organisation and the nature of the styles and personalities needed to succeed makes CHROs perfectly placed to step into the top job, but only on the assumption that the CHRO knows how the business does what it does and why.
Dorothy Lazovik President Authentic Leaders Edge
Of course HR professionals can make good CEOs. Anne Mulcahy was named CEO of Xerox in 2001 and, more recently, Mary Barra became CEO of GM; both held VP roles in HR. As a personal brand strategist and transformational leadership trainer, I work with organisations that have HR professionals, without the celebrity status, who have also successfully transitioned into a CEO role. The key in making this possible is for an HR professional to have business experience and expertise outside of HR. This isn’t exclusive to HR professionals; this would hold true for any leader in an organisation who is looking to become a CEO. It is critical for a leader to gain experience in different areas of the business to be able to make decisions regarding the business on a broader scale.
DOES HR HAVE WHAT IT TAKES? The key focus for CHROs is higher-level leadership abilities and strategy implementation skills. But how well equipped are CHROs to step into the CEO role? To investigate the CHRO role within the C-suite, HR researchers Ellie Filler and Dave Ulrich studied C-suite candidates across 14 aspects of leadership, grouped into three categories: leadership style, or how executives behave and want to be perceived in group settings; thinking style, or how they approach situations in private; and emotional competency, or how they deal with such things as ambiguity, pressure and risk-taking. Their conclusion: Except for the COO, the executive whose traits were most similar to those of the CEO was the CHRO.
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Brought to you by
PROBATIONARY PERIODS IN THE SPOTLIGHT Lisa Burrell outlines the risks and opportunities presented by probationary periods THE COST of ‘getting it wrong’ in the recruitment and selection stages include direct costs such as placement fees, through to broader workplace impacts on staff motivation and morale. Not every hire is right, every time. No business or manager ever seeks to employ anyone other than the right person; however, when it does happen, steps may ultimately need to be taken to end the employment – and ideally integrate any learnings from the process.
The risks are of course not limited to dismissal and associated claims. It is important, however, that decision-makers in your business are sufficiently aware of the risks arising from discrimination, WorkCover and the general protections (“adverse action”) coverage of the Fair Work Act. We continue to see lodgement of adverse action claims where claimants are excluded by the minimum qualifying periods. Outside of claims, there are the costs of replacement, which can include recruitment time and agency fees, role coverage, overtime, client impacts, personal staff opinions (there are many situations in which the individual has formed connections with at least one colleague), and workload for the existing team can also present a turnover risk.
The probationary period is essentially a nominated trial period for both parties to assess the suitability of the employment relationship
The probationary period is essentially a nominated trial period for both parties to assess the suitability of the employment relationship. While they are different concepts, the concept of probationary periods has been somewhat superseded for a number of employee groups following the introduction of the Fair Work Act, with a minimum ‘qualifying period’ of six or 12 months’ employment (depending on the size of the business) required in order to lodge an unfair dismissal claim. In practice, many employers have amended their terminology in employment offers to reflect this language and associated timeframe.
The opportunities and mitigations There are opportunities to minimise the risk and impact, on both the individual and the organisation. While there is no obligation to redeploy someone who is simply not performing, there are instances where this can be done successfully – this can occur if the
performance deficit is technical rather than behavioural or attitudinal. Feedback and documentation outlining the reasons for termination are also not obligatory during this period, but can be instrumental in helping the employee better understand and accept the decision. This can also act as a protection for your business if faced with a claim citing that circumstances other than performance were the reasons for dismissal. Communication and the manner in which the individual leaves should be closely managed to minimise disruption. This period can act as an opportunity to enforce the value that the current employee group delivers, and a desire to protect and support that in the longer term. We are seeing some innovative practices around the reviews of failed initiatives or outcomes within workplaces more generally. We see analysis of the hiring managers’ ‘hindsight’ views and interviews, and reviews of the performance gaps compared against hiring information. While exit interviews are frequently conducted, these other aspects are usually informal and limited. Valuable insights gained can be used in future selection activities, which might include further exploration or explanation of key aspects of the role, tightening up reference checking, and incorporation of practical assessments and scenarios.
The take-out While the end of a probationary period can be difficult, this mechanism is in place for a reason. Employees are also trialling their new workplace, and while everyone hopes a new working relationship will be successful, both parties can ultimately take learnings from cases where it doesn’t work out. Lisa Burrell is the general manager of workplace relations at the Victorian Chamber of Commerce and Industry. The Victorian Chamber is Victoria’s most influential employer group, servicing over 15,000 Victorian businesses per annum. An independent, non-government body, the Victorian Chamber was founded in 1851 by the business community to represent business.
10/06/2016 10:07:23 AM
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THE LEADERSHIP ISSUE
AUSTRALIAN COMPANIES face a looming leadership gap, with research suggesting that almost half of them are operating without a leadership strategy in place. Hudson surveyed over 100 HR leaders and found that while 92% agree that leadership is important/very important to business success, only 54% have a clearly articulated leadership strategy in place. Encouragingly, however, of those without a plan, 53% plan to create one in the next six months. Leadership is clearly a key focus area, and rightly so: the ability to foster innovation, handle change effectively, move the dial on diversity, create winning cultures, move with agility, and produce top business results all rest on the shoulders of the leaders. Over the following pages, HRD provides insights, advice and exclusive interviews with CEOs, HR directors and business consultants on how to close that gap.
20 GRANT THORNTON
Grant Thornton’s CEO, Greg Keith, talks about his path from HR, and why he’s using HR to disrupt his industry
22 BMW GROUP ASIA
Axel Pannes, managing director at BMW Group Asia, talks about his close ties with HR and provides his tips for a successful HR/CEO relationship
AECOM’s CEO Lara Poloni and HR director Helen Fraser talk to HRD about closing the gender pay gap and coping with a VUCA world
28 EMERGING LEADERS
Penelope Cottrill of Nous Group outlines how to fuel emerging leaders to power business agility
30 SUCCESSION PLANNING Mark Busine of DDI outlines why Australia is at an economic inflexion point, and why leadership succession remains a critical challenge
32 QSUPER QSuper’s chief of people and transformation, Paul Landy, outlines how his company has embraced transformational leadership – and how others can follow
34 TRUST Do your employees trust you? Does your team? Peter Mills provides his tips for building manager and leader capability through the lens of honesty, integrity and respect for others
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THE LEADERSHIP ISSUE
DISRUPTION VIA HR Grant Thornton CEO Greg Keith has put people at the heart of the firm’s operations. He chats to Iain Hopkins about why he’s opted to disrupt his industry via its HR offerings GRANT THORNTON CEO Greg Keith knows a thing or two about HR – in the mid-1990s he was his firm’s staff partner and later became the national head of HR. He still gets a kick out of seeing the work he did in that role bearing fruit all these years later. “I’ve always enjoyed seeing people come through the system and seeing people develop and grow,” he says. “I’ve got a number of partners that I literally recruited out on campus, and you can’t help but remain closely linked to those people.” It also naturally means that the people component features prominently in all the decisions Keith and his leadership team make. Keith says there is “no separation” between the people strategy and the business strategy. The people experience makes up one of the firm’s four ‘planks’ within its 2020 vision. “Our view is that the client experience is the end game and the people experience is the beginning game, so we have to find people with the right background, the right fit, so they are motivated and provide our clients with the right experience,” Keith says. Today, Keith works with his head of people and culture on a fairly simple formula: leadership + culture = performance. “Rather than us focusing solely on the financial KPIs, our strategy is to focus on developing really strong leaders and making
sure we have a culture that underpins that leadership. Then we believe the outcome, the performance, will be the result of that,” he says. This people element, along with a broader corporate responsibility element, is engrained in the firm’s leadership development programs. For example, instead of attending a traditional partners’ conference, 131 partners and board members went to Cambodia
Keeping pace with client demands Keith says a key challenge for his firm is adapting to the “different economies” presently at play in Australia, where each state has a different appetite for growth. “Our vision is to be the growth adviser for mid-sized business. We’re listening to our clients and moving away from being solely a compliance accounting firm, and being advisers with a focus on client growth.”
“Our view is that the client experience is the end game and the people experience is the beginning game” in 2015 to build houses for HIV-affected families. And the future leaders program, which includes managers and associate directors, travelled to Central Australia to be involved with an Indigenous group called Red Dust to put on a mini ‘Olympics’ for kids who hadn’t had any experience with healthy lifestyles and sport. “It’s giving our people the opportunity to engage with others differently, to work together collegiately while working towards real outcomes that have a social responsibility element to them. It’s not just writing a cheque and giving money to someone,” Keith says.
This means offering new services to help clients grow. One example is the development of an Asia-Pacific group within the firm to match clients who wish to expand into this region. An IT consulting group is being developed to help clients facing digital disruption, and a leadership development and culture team is helping clients align their strategy to their culture, and vice versa.
Disruption via HR Over the past 12 months Grant Thornton has opted to disrupt the market in an unexpected way: through its people and culture policies.
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WHAT’S YOUR TOP TIP FOR WORKING WELL WITH HR? “It’s important the people and culture function is embedded into the firm, and that the people and culture team understand the development needs of the people at a technical, cultural and leadership level, and ensure that the priorities of the firm include the people aspects. We look to ensure our strategy team has both a client voice and a people voice so we don’t become too insular”
Three new policies, all with the theme of workplace flexibility at their core, have taken the challenge to competitors. ‘GT Flex-appeal’ is all about flexible working arrangements. Employees are encouraged to talk to management about what’s important to them in their life, whether it’s a desire to travel, or sporting commitments, or family commitments. The firm works with each employee to design a working life that suits them, as much as it suits Grant Thornton and its clients. The firm has also shaken up long-service leave. Those who have been with the firm for at least two years are granted an extra week’s leave per year through early access to their long-service leave. Keith expects the benefits will outweigh the costs as they
return to work fresher and more engaged. With average staff tenure at Grant Thornton being between four and five years, Keith acknowledges that the majority of staff do not access long-service leave at all under current legislation. “This will give them the ability to access it after two years and allow them to connect with our organisation in a different way,” he says. “We intentionally wanted to disrupt the market, to give our people an experience they can’t receive anywhere else.” Most groundbreaking of all is the introduction of a market-leading provision for paid parental leave. The firm had been offering the market average of 12 weeks, but from 1 May this increased to 20 weeks. From the same date in 2017 this will expand to 26 weeks.
“We’ve taken the opportunity to take a market-leading and disruptive stance on this,” Keith says. “What’s really interesting is the interest shown by male employees at the firm. Those who are expectant fathers are seeing 20 or 26 weeks as an opportunity to effectively take a career break to become the primary carer.” While he doesn’t want the issue of paid parental leave to become a “gender issue”, the firm is making progress in other areas to improve gender disparity. By 2020 the firm expects to have 35% of partner roles filled by women. “We’re currently sitting at 11%, and with the current goal of promotions to partner we’re expecting that to be at 14–15% this year, so we’re on target, but we have work to do,” Keith says.
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THE LEADERSHIP ISSUE
BMW GROUP ASIA
LEADERSHIP WITH A PERSONAL TOUCH One of the automotive industry’s leadership veterans, Axel Pannes, managing director at BMW Group Asia, talks to Miklos Bolza about his approach to staff development HRD: Tell us a little about your background – what led you to your current role? Axel Pannes: I studied business administration at Mannheim University and Haas Business School in Berkeley. I graduated, worked for three years as an automotive consultant, and was asked to join BMW Group, where I was an in-house consultant focusing on brand management for another three years. At the time, BMW sold the Rover Group and was left with three brands: Mini, BMW and Rolls Royce. The question was whether we should integrate or separate these brands. Once that project was completed, I ended up with Rolls Royce and worked in the UK for two years on brand and product strategies and two more years on the bespoke business. We created some very interesting cars and had some very influential customers from around the world. I then returned to Munich and performed roles in retail development, customer relationship management and CKD production for seven years. Finally, I was asked to move to Singapore as managing director of BMW Group Asia. I’m now in charge of 13 markets, including Sri Lanka, most ASEAN countries, except Thailand and Malaysia, and a few island nations, like Guam, New Caledonia, Tahiti and French Polynesia.
HRD: What does your current role entail? What are your responsibilities? AP: The major role of the Singapore office is overseeing sales and marketing for our 13 markets. We also have a number of corporate functions in charge of the whole Asian region. For example, we have a treasury centre which collects money from our NSCs and retail partners and provides financial support at the wholesale and retail level. We also have a huge IT team responsible for wholesale and retail systems, from China to Australia. I’m involved in all these functions because I’m the head of the Singapore office. Regarding HR, I oversee around 180 people in Singapore. For me, there is always a focus on HR and the development of young people. As a company, BMW offers a lot of opportunities. It’s quite usual for employees to seek new challenges within
the company every three or four years. Because of our international presence, staff can discover different roles in their own cities or move around the world. I also like to be involved in personal coaching – advising employees about the right development plans. I’ll give you an example. I did a lunch with one employee yesterday for two and a half hours. She wondered whether she should move to a different role abroad and what that would mean for her personally. In the end, it’s always the employee’s decision, but I can add my advice about what to think about before making a major decision.
HRD: How do you manage your team at BMW Group Asia? What techniques do you use? AP: The HR team is under my CFO, Clarence
AXEL PANNES’ THREE HR TIPS FOR A BETTER RELATIONSHIP WITH YOUR CEO
Approach HR in proactive manner, shifting the function from an administrative role to one that acts as an independent consultant for all employees.
Create and constantly update your succession plan – a shortlist with at least three people for each senior position – to make quick decisions when someone leaves.
Develop an induction plan ahead of time, which is tailored for senior executives who may be coming into and moving within the company.
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“An HR manager should have direct contact with all employees to gain honest feedback on what’s going on. This includes personal topics because these will always affect performance” important to have a succession plan. As I said, staff in BMW are encouraged to find new roles frequently. With a succession plan, you can make quick decisions when someone leaves and avoid huge gaps in the organisation.
Chua, who has performed that role in other markets before. Technically the HR department doesn’t report directly to me, but we have regular meetings with the teams as I like to be involved in these matters. Hwee Min Tan, our HR manager, comes into the office at least once a week to discuss all HR topics for a few hours. The focus in Singapore is regional sales. I have directors of sales, marketing, retail development and customer relationships, the Mini business, and the motorcycle and aftersales business. These directors take care of all HR topics within their teams, with support from our HR team. We also have regular standardised approaches for employee evaluation. This is done yearly and is quite an intense two-month process. Six months later, I hold a development discussion with my employees. I ask them
where they want to be in three to five years and what’s required personally and technically to get them there.
HRD: What do you expect from your HR team at BMW? Are there any specific qualities the head of HR should have? AP: I’m lucky as our HR manager is very experienced in all the necessary standard instruments and legislation. This is the basics. More importantly, an HR manager should have direct contact with all employees to gain honest feedback on what’s going on. This includes personal topics because these will always affect performance. If staff are open, you can react to these situations. That’s always good. I encourage HR to talk as much as possible to all employees. Finally, it is also
HRD: What’s the biggest people challenge at BMW Group Asia? AP: As BMW is a very attractive brand, it brings in a lot of talent. This makes our staff very attractive for other employers as well, so we always face other companies targeting our employees. They’re well trained, working for a well-known brand, and our global image is very good. It’s difficult to keep every employee. Competitors mainly target technicians and not office staff, however, because we are a leading company in technology and the automotive industry. If we train our people on electric cars or carbon fibre structures, they become very attractive to others. And you can’t always battle over salary because some employees get a huge salary increase when approached by other companies. You can’t match that because then the costs will run through the roof.
10/06/2016 10:09:27 AM
THE LEADERSHIP ISSUE
A PERFECT PARTNERSHIP It’s not unusual to hear of an HR director becoming the ‘trusted adviser’ to the CEO. Such is the case at engineering firm AECOM. Iain Hopkins chats to CEO Lara Poloni and HR director Helen Fraser “THE PEOPLE strategy needs to respond to the business strategy. Some of that is shortterm, and very much in the here and now, the day-to-day performance of the company – but the HR function and people strategy absolutely has a strategic element to it as the business grows.” So says Lara Poloni, CEO of engineering firm AECOM Australia/New Zealand. AECOM is listed on the Fortune 500 as one of America’s largest companies, and its employees – including engineers, planners, scientists and management professionals – now serve clients in more than 150 countries around the world. It’s significant that the people within AECOM form one of three ‘enablers of success’ for the firm, with the other two being clients and general business excellence. “Obviously the priority changes at any point in time, but people are critical to our success every day. That’s our biggest priority really because without great people we can’t achieve many of our operational and strategic objectives,” Poloni tells HRD. It stands to reason that Poloni has an extremely close working relationship with her HR director, Helen Fraser. The two talk almost every day, and Poloni calls Fraser a “trusted adviser”. When asked what she expects Fraser to deliver, Poloni says she has two expectations. Firstly, that the day-to-
day systemic elements of HR are taken care of. And secondly, that HR contributes to the strategic direction of the firm. “The more significant part of our dayto-day conversation covers concerns about the future, concerns about any change the business is going through and how we’re responding to that. We need to reflect
More than just HR With that level of CEO support, it’s no surprise to hear that Fraser is called on to provide insight and input into matters that traditionally would not have been within HR’s mandate. “I’m involved in all those conversations around our three enablers – people, clients and business excellence,” Fraser says. “If we’re looking at
“We have a vision for where we want the business to go, so I rely on Helen’s advice and her team to help us achieve a lot of those business objectives, and provide clarity and an action plan” Lara Poloni internally and externally and take on best practice locally and globally. We need to look at the market and undertake benchmarking. That takes time, but I think it’s a very important part of Helen’s role,” Poloni says. “I’d say the role is more business adviser than anything. We have a vision for where we want the business to go, so I rely on Helen’s advice and her team to help us achieve a lot of those business objectives, and provide clarity and an action plan.”
clients, for example, it’s how HR can create a client-driven culture. HR has to be key to that because a big part of change management is about changing people’s behaviour.” Fraser stresses that HR is involved in business issues, not just people-related issues. “It’s about any sort of change occurring in the business. It’s about business performance and it’s about how we’re delivering on projects as a business. It’s often not about recruitment or recognition
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Lara Poloni, CEO, AECOM
or reward, which might be traditional HR discussions.” She adds that Poloni doesn’t need to hear daily updates about the operational elements of running an HR function. While these are important, Poloni just needs to know it’s working well and efficiently.
Future challenges Poloni doesn’t hesitate when she’s asked about the biggest business challenge facing AECOM. “It’s market volatility,” she says. “We’ve accepted that’s the new norm in terms of the business cycle. We have the benefit of having a very diverse business that can withstand ongoing volatility. One part will be up when the other part might not be, but I’ve been impressed with the resilience of the HR function. They
continue to bring to the table ideas about how we can be even more agile as an organisation – whether that’s more contingent workers or the ease with which we can move people to where the work is.” Fraser adds that while AECOM has always had contingent workers, it’s never been to the extent it does now. “We’ve gotten better at setting expectations around what a particular role is. It may be that we have to engage someone short-term for their services rather than full-time employment.” An agile workforce also requires a change in culture. With staff no longer all in the office working Monday to Friday, Fraser says HR’s role is about teaching managers how to manage people on their outputs, not necessarily on their inputs. “It’s not where or
WHAT’S YOUR TOP TIP FOR WORKING WELL WITH HR? Lara Poloni: “Helen and I speak every day. The headline in terms of what we talk about is how we can truly make AECOM the best possible place to work. That’s really what frames a lot of our day-to-day conversations – the employee experience. Trust is fundamental. Often I’ll have an idea, or another member of the executive will have an idea about a certain direction, and I rely on Helen’s advice on the best way to achieve that. She always offers an honest appraisal about whether or not that should be a priority. If I felt I couldn’t have that trusted adviser relationship with Helen, I don’t think we’d achieve much at all.”
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THE LEADERSHIP ISSUE
AECOM WHAT’S YOUR TOP TIP FOR WORKING WELL WITH YOUR CEO? Helen Fraser: “Something that’s really specific to HR is confidentiality – and trust is critical to that confidentiality. Lara and I must be able to have those conversations and know it’s not going any further. It’s also a lot of two-way communication. In many ways Lara is a client of mine, and just like any client relationship it requires listening to what she’s facing and then developing solutions to help resolve any issues.”
Helen Fraser, HR director, AECOM
when they work – it’s more about what are they delivering to the client. That’s where we want to be moving to with our assessment and management of people.” AECOM has also embraced inclusive leadership training in order to get leaders to think more broadly about how work must be done. ”We’re so used to seeing our team members sitting at a desk in front of the manager. But our offices are moving to a much more agile working environment with a lot more flexibility for the place and time of work,” Fraser says.
Taking action on gender inequality AECOM faces one other daunting challenge: closing the gender pay gap. Driven by Poloni’s passion, the firm has already made significant inroads to improve the situation. As an ambassador for the Workplace Gender Equality Agency’s ‘In Your Hands’ program, which is about encouraging business leaders to recognise pay equity as a key business
imperative, Poloni and her HR team set about undertaking a comprehensive gender pay analysis – a first in the engineering and construction sector. “Not surprisingly we found we’ve got a gender pay gap,” says Fraser. “The difference is now we have a much better understanding of where it is, and that’s helped us target some of our actions.” Doing more than just talk, AECOM has indeed taken action. Last year, 5% of additional salary budget was put aside to target women who were not being paid competitively in the market. The firm also assessed how to handle out-of-cycle increases. “Throughout the year when we’re negotiating an increase with someone, we want to make sure we’re thinking broadly about whether we’re paying the person competitively,” Fraser says. “We’re also looking at gender pay at the point of hire – because that’s the point where you have the opportunity to address what might be 10 years of inequity in pay.”
A 2016 gender pay analysis has just been completed and AECOM has seen a reduction in the gender pay gap. For some levels of seniority Fraser says this has been quite a large reduction; in other roles it’s been less significant. “We still have plenty of work to do,” Fraser says. “On one hand it’s been a big challenge. On the other hand, you can talk about it as much as you want, but unless you’re prepared to put some money up to actually address the gap we’re not going to change it. We’ve been very transparent with our people, and they’ve been very positive and very pleased to see we’ve taken this on in such a committed way.” Poloni has been pleasantly surprised at how well this action has been received by the wider business community. It has even strengthened some of AECOM’s client relationships. “We’ve had clients say ‘this is fantastic; can you come into our organisation and tell us how you started your journey, how you created the culture from the top down, what the challenges have been, and what lessons were learned’. It’s had an amazingly galvanising impact,” she says. If ever there’s been a case for leaders making change for the better, this is it – and Fraser acknowledges it has only been possible due to her CEO’s passion for change. “We wouldn’t be doing this if we didn’t have a CEO who genuinely believed we could make change. It’s not just the pay area; it’s as much about female participation in leadership. It’s a whole range of changes we’re embarking on. But if we didn’t have Lara pushing this, we could easily just be talking about it.”
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THE LEADERSHIP ISSUE
FUELLING EMERGING LEADERS TO POWER BUSINESS AGILITY The demand for great leadership outstrips supply. Yet development investment is increasingly scrutinised, particularly for emerging leaders. But what if investing in emerging leaders is a strategy for lifting business agility and performance? Penelope Cottrill reports DEMAND FOR leadership is increasing, and not just at the top. Disruption and accelerated change is the new norm in business, and leaders must contend with unprecedented change occurring at an unprecedented pace. At the same time, cost pressures mean there is less enthusiasm to commit time and investment to leadership development, particularly for emerging leaders who are often seen as a less urgent priority. We know that agile businesses are ones that respond faster and more confidently to changing market conditions. We also know that ‘distributed leadership’ and workforce empowerment foster greater business agility. This means there is a new, compelling reason to invest in emerging leaders. In this environment of rapid change and financial constraints, organisations must create a stronger, more diverse leadership profile by empowering emerging leaders. Two trends show how emerging leaders can be developed ‘on the job’ to increase business agility: 1. From learning programs to learning organisations 2. Development as strategy acceleration
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From learning programs to learning organisations In the minds of many, leadership development means a traditional learning program where leaders come together outside of their regular work to build self-awareness, networks and capability. These programs typically involve lengthy diagnostic and design processes, followed by staged delivery to a large number of cohorts over time. However, this programmatic approach is being challenged by: • the difficulty of maintaining program currency and relevance in an increasingly fast-moving environment • increasing reluctance to take people away from their regular work to focus on development Development today means providing people with opportunities to learn from their work, rather than needing to be taken away from it.1 The idea of the learning organisation – an organisation that facilitates the ongoing learning of its members and continuously transforms itself – has been influential since the publication of Peter Senge’s The Fifth Discipline in 1990. The rationale for the learning organisation is perhaps more compelling now than ever. And that is: In situations of rapid change, only those that are flexible, adaptive and productive can sustain their competitive performance. So how can we help emerging leaders learn on the job? Two examples are food for thought: Leader-led learning The concept of leader as teacher is not new, but we are seeing it manifested in some new and interesting ways. • Role-modelled from the top: Imagine the CEO of a major global business addressing its top 200 leaders and, in an impromptu session, explicitly teaching and demonstrating to these leaders how he/she expects them to communicate with their people. We’ve seen it happen, and observed its impact. • Centrally designed, locally delivered by leaders: Technology now makes it possible to consistently deliver blended-
learning programs to emerging leaders across different geographies. These programs blend rich educational content online and on demand; directed inquiry processes like observation, practice and reflection; and leader-led conversations in which leaders facilitate learning rather than ‘teach’. Do-it-yourself transformation Herminia Ibarra2 discovered that emerging leaders could progress by creating their own opportunities within their ‘day jobs’ to experiment with leadership. Her idea is that you practise your way into leadership, rather than think your way into it – thus affecting your own personal transformation. Organisations can support emerging leaders to effect their own DIY transformation by encouraging them to: • prioritise activities that attune them to the environment beyond their team and organisation • seize opportunities to work on projects outside their areas of expertise. This allows them to expand the range of people in their network and the professional contribution they make • experiment, particularly in terms of the ways they connect and engage with people Some businesses are systematising this kind of development. One leading power management company identified the main development experiences required to shape emerging leaders and linked these with situations likely to deliver the relevant lessons. Aspiring leaders are now encouraged to plan their on-the-job experiences with these in mind, allowing them to work on their leadership while working on the business.3
Action learning through business projects is not a new idea. But state-of-the-art leadership development is increasingly occurring within the context of ongoing work initiatives.1 For example, one leading Australian business applied teams of its leaders to each of its strategic priorities, as an action-learning experience. Teams were given clearly defined outcomes and timeframes to work towards. They were also equipped with micro, targeted development sessions to fuel their success, including immersive interactions with cuttingedge technology researchers. Another strategy-enhancing initiative we are experimenting with at Nous Group is mini-secondments for our emerging leaders. We are creating these in partnership with organisations, which we can both contribute to and learn from. This allows us to strengthen our strategic capabilities at high speed by broadening our people’s perspectives and building relationships with partners and clients. So far, this has been a productive experiment. We are seeing increased engagement from our emerging leaders, and fast return on investment. Initiatives like this are powerful because they make learning a part of the main game, rather than a sideshow. Moving towards a learning organisation and implementing these new development techniques can improve business agility, accelerate strategic initiatives, and build new capabilities just when they are needed. In this dynamic, fast-moving digital world the business case for investing in distributed leadership and the next generation of leaders has never been more compelling.
Gina Hernez-Broome, Richard L. Hughes, Center for Creative Leadership: Leadership Development:
Past, Present and Future, www.ccl.org/leadership/pdf/research/cclLeadershipDevelopment.pdf 2
Development as strategy acceleration To equip emerging leaders for success in their environment, it’s important to develop them in that environment and expose them to relevant emerging challenges. Developing leaders in context by focusing on strategic priorities can accelerate strategy execution as well as develop leaders.
Explored most fully in “Act Like a Leader, Think Like a Leader”, 2015
Cynthia D. McCauley, Morgan W. McCall, Jr, Using Experience to Shape Leadership Talent: How Organizations
Shape On-the-Job Development, 2014 (Co-published by the Society of Industrial and Organizational Psychology and sponsored by the Center for Creative Leadership)
Penelope Cottrill is principal, Nous Group
10/06/2016 10:12:39 AM
THE LEADERSHIP ISSUE
AUSTRALIA’S LEADERSHIP SUCCESSION CHALLENGE With Australia at an economic inflexion point, Mark Busine outlines the shifting paradigms that are shaping leadership development WHILE THE fundamental skills and requirements of leadership will remain relevant into the future, the business context, particularly in Australia, continues to change dramatically. Leaders over the next 10 to 15 years will face an environment considerably different to the one they entered and in which they honed their skills. The world as we know it, the workplace and the ‘worker’ will all change dramatically. Successful leaders will embrace these changes and recognise the adjustments (sometimes subtle) they must make to their own leadership style and approach. Preparing leaders for this future must be a priority of all organisations. Leadership
only 45% of leaders rated the quality of their organisation’s leadership development as high to very high, and while 66% of organisations had introduced high-potential programs, a staggering 74% of respondents rated their programs as not very effective. The impact? According to DDI’s Global Leadership Forecast, in 2014/15 just 40% of leaders rated the overall quality of leadership in their organisation as high; and according to PWC’s Strategy&, the cost to Australian shareholders of unplanned and erratic turnover at the chief executive level was in the vicinity of $8bn in 2015. So while there has been some positive
According to DDI’s Global Leadership Forecast, in 2014/15 just 40% of leaders rated the overall quality of leadership in their organisations as high development and succession management must be systematic and comprehensive to ensure that talent has the required capability, experience, knowledge and self-understanding to deliver business outcomes. This issue will not remain static, nor will it go away. Despite evidence that the investment in leadership development and succession management has increased, the question is whether it has done so at a pace consistent with the changing business environment. The overwhelming view is no. According to DDI’s Global Leadership Forecast 2014/2015,
progress on the development and succession front, it is time to confront the reality that things need to change. In the spirit of change, three key enablers will underpin a more effective approach to succession and leadership development moving forward. Context: Leadership cannot be defined by a single set of attributes or situations. Nor will an organisation’s set of conditions and priorities necessitate the same approach to leadership development and succession. Don’t treat leadership development
or succession as a ‘one size fits all’. Know your context and build your approach accordingly. Insight: Too often we operate on longheld views and assumptions about organisations and leadership. As a field we need to constantly question our beliefs and assumptions. Don’t assume that what we have done in the past will necessarily be right for the future. The key is to use data and insight to guide more effective decisions and actions. Energy: In our attempts to bring structure, order and discipline to development and succession, we have effectively drained the energy out of many activities. As a result, the users of our systems have passively or actively rejected them. Energy in an organisation is a tricky thing. It’s often hard to define, but we know when it exists and, more importantly, when it doesn’t. The key: Unpack existing leadership development and succession systems and processes and rebuild them with people at the centre. Australia is at an inflexion point. Our future economic and social prosperity will depend on our collective capacity to adjust to a life after mining, and underpinning this is our ability to identify, prepare and select the leaders who can leverage the opportunities of this new world. Mark Busine is managing director, Australia, Development Dimensions International (DDI). DDI is a leading global HR consultancy, specialising in transforming leadership through assessment and development.
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10/06/2016 10:13:01 8/06/2016 8:23:25 AMAM
THE LEADERSHIP ISSUE
LEADERSHIP VISION As QSuper emerges from a series of functional reviews that have resulted in changes to its organisational structure, Paul Landy, the company’s chief of people and transformation, chats to Victoria Bruce about the power of transformational leadership HRD: How would you define transformational leadership and why is it so effective? Paul Landy: I read the book Systems Leadership: Creating Positive Organisations by Dr Ian McDonald, Dr Catherine Burke and Karl Stewart. I have encouraged many others in my HR team and executive team to do the same. The book describes how people come together to achieve a productive purpose, and how to design organisational systems to allow for this. Transformational leadership to me is about enabling people to achieve a purpose. The book helps you recognise that people have a need to be creative and to belong; this is a fundamental part of human nature in and out of the workplace. Transformational leaders create positive organisations where they set high expectations for people to achieve; they walk the walk and demonstrate to their people that they can achieve great things and get satisfaction from their work. They are instrumental in guiding and motivating them to do this. The book helped me map out how to create systems within the organisation that allows this transformation. Transformational leadership is so effective because it relies on people to pave the way and achieve their own success: ‘True leaders don’t create followers, they create more leaders’.
BECOMING A TRANSFORMATIONAL LEADER Bernard M. Bass’s ideas can be summarised in the following steps. A transformational leader will: create an inspiring vision of the future motivate people to buy into and deliver the vision manage delivery of the vision build ever-stronger, trust-based relationships with their people HRD: What do you see as the relationship between transformational leadership and HR? PL: They come hand in hand. HR facilitates the creation and set-up of systems in the organisation that allow transformational leadership to take place. Similarly, transformational leadership enables the creation of effective systems that influence how an organisation is designed. The leadership book I mentioned strips away the complexity that can sometimes be apparent when thinking about this question, and focuses on achieving a common purpose through productive relationships based on core human values/behaviours.
HRD: What are your top tips for HR directors who want to use leadership development programs to inspire positive change in their organisations? PL: Successful leadership development programs need to be driven and owned by the business. HR can facilitate the process, but the content, design and learning approach needs to reflect the voice of the business and be clearly aligned to the strategy of the business to be most effective. Leaders often forgo their own development due to work commitments or lack of time, so it’s key to make the content relevant and ensure practical application to help them in their day-to-day roles, as well as prepare them for the future. Here at QSuper, an organisational capability audit considered current versus future capability, and this was key to the effective design and engagement of our leadership team, coupled with a launch of programs using the expertise from our marketing and internal comms professionals.
HRD: Would you agree that when HR is not clearly established as a mutually supportive partner with others in the transformation, organisations struggle? PL: Of course – that is true of any support function within a business trying to enact change and transformational leadership.
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WHAT IS A TRANSFORMATIONAL LEADER? James MacGregor Burns introduced the concept of transformational leadership in his 1978 book, Leadership. He defined transformational leadership as a process in which “leaders and their followers raise one another to higher levels of morality and motivation”. Bernard M. Bass later developed the concept of transformational leadership further. According to his 1985 book, Leadership and Performance Beyond Expectations, this type of leader: • is a model of integrity and fairness • sets clear goals • has high expectations • encourages others • provides support and recognition • stirs the emotions of people • encourages people to look beyond their self-interest • inspires people to reach for the improbable
“HR facilitates the creation and set-up of systems in the organisation that allow transformational leadership to take place” Paul Landy HR teams need to spend time working with leaders in the business to better understand their individual operations and drivers. You need to listen broadly and take time to understand the playing field at all levels – understanding the connectivity points across the business and the big levers to pull will result in not only great results for an organisation but also for its people. If you can show the business that you are approaching transformation from both an employee and a company perspective, they are much more likely to support your transformation piece.
10/06/2016 11:57:29 AM
THE LEADERSHIP ISSUE
ALL ABOUT TRUST Do your employees trust you? Does your team? Peter Mills provides his tips to build manager and leader capability through the lens of honesty, integrity and respect for others IN THE words of Elliott Jaques, “Trust in the workplace is defined as the ability to rely upon others to be truthful, to do as they say and to follow established rules, procedures and custom and practice”. It is a simple but clear definition that applies specifically to the workplace. Trust is built through positive interactions over time. It is something that can take years to build but can be lost in an instant. Failure to build trust not only impacts on performance but can also result in team members inappropriately seeking protection from others, such as other managers, HR staff and unions, thus creating third parties to the manager-employee relationship. This further undermines trust and compromises working relationships. Trust and strong manager-employee working relationships are built through the interaction of effective organisational design, systems of work and the use of effective and consistent managerial leadership practices. All manager actions are viewed by team members through the lens of trust and fairness: ‘Can I trust you? Can I trust that I will be safe in this workplace?’ This continuously occurs at both a conscious and unconscious level. Even the treatment of others is part of perceived trust: ‘Are people in this workplace treated fairly?’ To lead in a trust-inducing manner, managers need to continually demonstrate
honesty, integrity and respect for others. These behaviours are essential ingredients for building trust, the trust required to build strong manager-employee working relationships. However, they are not sufficient. Creating trust also requires an absence of negative behaviours. If a manager demonstrates extremes of behaviour, such as aggression or drug and alcohol dependency, these behaviours will overshadow the manager’s good work and reduce their
making the decisions. This is not good for the manager or team members. Team members need to be able to respect the decisions managers make. If they cannot trust the decisions, inappropriate behaviours develop.
All manager actions are viewed by team members through the lens of trust and fairness effectiveness in the role. Trust will be diminished and working relationships will be impacted on negatively. However, building trust in the workplace is more than this. To build trust managers must:
1. Demonstrate capability in their role Competence builds trust. Where managers do not have the individual capability to do their role, they may unconsciously give away their leadership to others in their team, who then become the de facto leaders. In some cases, team members or other managers steal the manager’s leadership. Team members start questioning who is the leader and who is
This isn’t the fault of the individual. It is a natural reaction to an environment in which people want to do good work but are not able to. Demonstrated capability goes beyond the technical and programming aspects of the role. Managers must have the skills to manage people effectively and handle day-today issues, such as addressing unacceptable performance or dealing with an employee complaint in a trust-inducing manner.
2. Ensure workplace conditions enable productive work Part of the role of a manager is to build and lead an effective team, so that each
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victimisation will arise. This undermines trust. Furthermore, if a manager personally fails to demonstrate use of a system, this action is in effect ‘approving’ non-compliance for team members. For example, if a policy prohibits employees from sharing computer passwords but the manager shares their own password, this undermines both the system and the manager. It reduces trust.
5. Continually engage their team
member is fully committed to, and capable of, moving in the direction set. This is achieved by effectively delivering the performance management sequence of work. This sequence starts with effective role design, followed by selection for the role, then induction of the individual into the role. It continues with day-to-day work in which managers assign and assess tasks, reward and recognise team members and develop them in the role.
Role Develop Reward Assess
Select Induct Assign
The performance management sequence
Each part of the sequence aims to have roles filled with capable people, and is an opportunity to apply leadership and build trust. Trust in the organisation and trust in the manager.
3. Provide a safe place to work Besides any moral or legal obligation to do so, managers cannot build the trust required for strong manager-employee working relationships, or expect productive work in an unsafe work environment. This includes providing not only a safe physical environment but also an environment free from bullying and harassment.
4. Consistently and fairly apply systems of work Consistent application of systems of work builds trust. Every time a manager fails to apply a consequence for breaches of a policy or process, the manager automatically creates new, wider boundaries for their team members’ work performance. If the manager applies consequences to some team members and not to others, questions of favouritism or
All employees want to be part of their team’s and their organisation’s success; however, to do so they must personally be engaged in the organisation. Keep team members informed on what is happening in the business unit by providing them with opportunities to be involved in the decision-making process. This must be a genuine two-way process that does not merely take into account the input of team members but deliberately involves and engages them as a means of building trust and participation and ensuring an optimum outcome. This does not mean it is a democracy, in which decisions are reached by a consensus or vote. It means that team members are encouraged to have an input and are heard. However, as the manager is accountable for the output of the team, they make the final decision. It is only when all leadership actions are effectively delivered that the trust required for strong manager-employee working relationships can develop. Peter Mills has over 30 years of experience in HR management in a range of industries, including engineering, manufacturing, investment, petroleum and IT. He has led hundreds of team members in their leadership journey and believes it is time to get back to basics. His new book is Leading People: The 10 Things Successful Managers Know and Do (GOKO Publishing, rrp $24.99). He is also director of The Leadership Framework – theleadershipframework. com.au.
10/06/2016 10:13:52 AM
DON’T MISS THE DIGITAL TRAIN As businesses struggle to keep up with digitalisation, what can HR do to ensure their organisation remains relevant? HRD sat down with Professor Miller to discover how HR can “get out of ” its current predicament.
HRD: As a starting point, what does digitalisation mean for HR?
‘RETAILERS SCRAMBLE to provide a consistent omni-channel experience to always-connected customers’; ‘Banks awaken to the prospect of disintermediation by peerto-peer lending platforms’; ‘Utility companies attempt to reimagine their business for the connected home’. Behind the headlines lies digitalisation – a rapid shift characterised by the diffusion and assimilation of digital technologies in every aspect of our lives. Digitalisation is changing the way business is being conducted: entry barriers go down, customers and employees feel empowered, old ways of generating and capturing value crumble and new ones are discovered.
And this all has obvious – and major – repercussions for HR. “As we develop digital solutions and innovative ways of meeting customer needs, we can do it with fewer and fewer people. That’s a problem. That’s a major crisis … for HR,” says Paddy Miller, professor of managing people in organisations at IESE and an authority on leading innovation in global organisations. However, most HR professionals have been slow to respond – if they’ve responded at all. “It’s like the boiling frog syndrome. You know, HR hasn’t noticed that the water’s boiling yet. But it is, so how do you get out of that?” Miller says.
Paddy Miller: Many of the traditional functions in business will be digitalised, and many of the labour-intensive functions we were doing before will not need so many people. So the HR function is becoming critical in terms of where it’s creating value in organisations. That’s a question for most functions at the moment. It’s not only HR; it goes right across the board. But HR – the traditional HR function – is under a lot of pressure. However, HR is not in the conversation. If you look at the main players – whether they’re the CEO, the chief marketing officer, the chief information officer – you never see HR on the list. Why is HR not involved in this discussion? It’s a people issue and the HR people are being left out of the discussion. I don’t think it’s a technology issue; it goes way beyond technology.
HRD: What would you recommend that HR should do to involve themselves in this conversation? PM: To develop a digital mindset, you have to think about digital leadership: how do you train and develop leaders who can drive the digital strategy? Secondly, how do we develop digital disciples? How do you get people on board? How do we get their hearts
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and minds behind the transformation of business? That’s part of the conversation HR should be taking part in. People are not spending enough time thinking through the implications – the HR implications – of the process of digitalisation. I think you need to reinvent yourself a little bit as an HR person. You have to go back to the drawing board and say, ‘‘There are a lot of loose concepts here”. We lack process; we lack training to get people on board. HR people should be providing all of that – and they’re not at the moment.
HRD: So HR should not wait to be asked by others to join the conversation? PM: Exactly. In fact, in some organisations that we’ve been working with, HR tends to be somewhat of a hindrance or an impediment. It’s slowing down the process. Then there are others who are working hard to get employees on board. One example is DBS – Development Bank of Singapore. In terms of developing a digital strategy and then creating a culture that invents a digital mindset, DBS is way ahead of the curve compared to most global organisations in that sector. I think some of the professionals involved there have worked out you can’t do this as a project and have the project team working on it. What you have to do is incorporate in the process – and they have – lots of processes and initiatives running in parallel to bring on board management across the board.
HRD: Can you provide other examples? PM: Another example is Uber transforming the taxi industry. Or an older example is Amazon and the impact that had on the local bookshop, because people opted to buy online or buy digital books for their Kindles. And here’s the problem. If you’re the HR manager of a big bookshop, what is your responsibility? Is it just to recruit and train people to be in the bookshop even though you’re going out of business? Or have you got to be in the conversation to say, “How do we survive? How do we survive this? How do we
morph our business into being a completely different business?” Or look at supermarkets. For supermarkets in advanced countries, something like 50% of business is moving online. Established bricks and mortar supermarkets like Walmart are in a fight to the death. And think about that traditional experience. You get the same old stuff walking down the same old aisle; you put it in the same old basket, and stand in that long queue. Companies like Red
those people still, but perhaps not so many as a traditional store. So HR will naturally be saying, “Am I going to be in the business of laying off people?” But that’s only one view, and it’s a negative one, of this transformation. What you’ve got to do is help management to say, “How do we get into that space? How do we digitalise our business so that we will not be overtaken by Red Foods? What is our strategic response?” The thing is, we’ve got to change our
“People are not spending enough time thinking through the implications – the HR implications – of the process of digitalisation. I think you need to reinvent yourself a little bit as an HR person” Paddy Miller Foods in Singapore have changed this. It’s basically an online service that brings your groceries to your front door. It’s booming. They take it further, too. Typically, when you get home you’ve then got to prepare your meal. Red Foods will say, “We’ve noticed you like spaghetti bolognaise. We’ll send you a package in your next order of spaghetti bolognaise with the recipe on how to make spaghetti bolognaise”. But if you work in a traditional super market, you’ve got to help the management refocus their strategy on what’s happening to you and I as customers. We don’t want to stand in that queue any more. This is the responsibility of HR as much as it is the responsibility of the marketing professionals or the CEO.
HRD: This also has obvious repercussions for the number of people employed. In the Red Foods example, a supermarket has checkout staff, warehouse workers, drivers… PM: This is a very typical HR perception and it’s valid. Red Foods would have some of
thinking. And we’ve got to change the thinking of the people in our business to have a different kind of business model. This is about creating digital disciples; training people to understand this new paradigm. We already have a lot of digital natives who are living off their mobiles, living in a digitalised world. Are they going to be standing at the till for the rest of their lives? No way. HR must be providing training to move the business somewhere else.
KEY TAKEAWAYS To start talking about this kind of digital transformation, Miller suggests HR tackle two key areas: Produce digital leadership by recruiting, training and developing people to drive the digital strategies within the organisation. Create digital disciples in the rest of the workforce and ensure that everyone has their hearts and minds behind the transformation.
10/06/2016 10:15:11 AM
AN ESSENTIAL ADDITION TO THE BENEFITS SUITE As the old saying goes, there are two certainties in life: death and taxes. In reality, there should be a third: insurance. HRD looks at why employers should consider adding income protection insurance to their benefits suite
LOOKING FOR a scary statistic? How about this? The average Australian has just 2.5 weeks’ savings in their accounts at any one time. Beyond those 2.5 weeks, the future looks bleak. Despite the scary stats, Australians remain stubbornly underinsured, and one of the most important forms of insurance, income protection insurance, is almost wilfully neglected.
Moderate uptake Income protection insurance offers exactly what it says on the box – a policy that pays benefits should the insured be unable to continue to earn their ordinary income. In reality, it protects not just an individual but those financially dependent on them. In this volatile post-GFC world, where the number of people who have been out of work for between six months and two years has grown by more than 40% over the past five years, this is worth a second look. But research shows its uptake remains moderate at best. Just 16% of Australia’s working population currently has a median level of income protection insurance. “It’s concerning that the average couple, based on both parents aged 40 with children, would need 10 times their current
annual salary in insurance to cover their debts and maintain their current living standards if they were struck down ill or injured and were unable to work,” says Chris Kassis of Windsor Income Protection.
ments and through retail offerings,” he says. “The benefits can range from less than $500 a month up to 110% of their average weekly benefit.” He adds that income protection insurance is more prevalent in the enterprise bargaining
“In simple terms, outlaying a small cost in employee benefits like income protection, compared to the costs of rehiring, training and developing new employees, speaks for itself Chris Kassis Employer involvement Accident and health insurance provides one of the most effective forms of coverage for any organisation in the event of unexpected death, injury or illness. Kassis notes that within each industry an organisation may be able to purchase income protection to cover up to 100% of income to provide an affordable level of financial protection if an employee were unable to work due to ill health or an accident. “Some individuals have income protection within their superannuation, workplace agree
agreement (EBA) process as an offset to receiving a pay rise – but there’s still a long way to go. “In the corporate space the offer for income protection as an employee benefit should have greater penetration, and this needs to be addressed by both employers and the insurance market. I believe the corporate world will soon need to take a leaf from the EBA space to include income protection within employee packages.” Kassis says the ROI makes perfect sense. “In simple terms, outlaying a small cost in
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employee benefits like income protection, compared to the costs of rehiring, training and developing new employees, speaks for itself.” For employees questioning whether this is a worthwhile investment, and employers wondering if they should add it to their suite of benefits, the critical question to ask is this: ‘How long could you survive on your savings, if through an accident or injury your income was $0?’ “It’s an important question and it’s probably asked by fewer people than it should be,” says Kassis. “There are no doubt psychological barriers to answering this question as most people believe that nothing will happen to them in the workplace, or they fail to confront their fears.” Kassis says Australians across the board are underinsured. “We believe there are affordable options through multiple superannuation funds, but finding the right insurance comes back to informed professional advice.” One of Windsor Income Protection’s client testimonials sums up the assistance that only income protection insurance can provide: “I’m the only income who was earning a wage in my household before I lost my role due to an injury, and my income protection income keeps a roof over my head.”
Making a choice For HR professionals or benefits specialists looking to offer income protection insurance, there are key indicators to look out for when choosing a product, including: 1. Product innovation 2. Benefit capability 3. Ease of claims process Windsor Income Protection uses a consultative approach to produce the best outcomes for employers. Innovations have come through multiple forms, including: • coverage for all insured persons – no occupations or employment categories excluded, including part-time and casual workers
QUESTIONS TO ASK Considering taking out income protection insurance yourself? Here are some essential questions to ask your insurer: What am I covered for? What are the exclusions? What are the limitations? Can you explain what a ‘waiting period’ is? What does ‘benefit period’ mean? Am I better off having an agreed-value product or an indemnity-style arrangement or product? Alternatively, do I have enough coverage through my superannuation fund or industry fund, and is that an adequate amount of insurance? • ease of fulfilment – removal of the requirements for medical underwriting • benefit levels above industry standard: »»up to 100% of salary plus a superannuation benefit »»up to $100k per month maximum benefit »»flexible periods – waiting periods as short as 14 days; benefit periods of one to five years’ loyalty benefits, based on years of cover
Other options Income protection is merely the top of the insurance iceberg. Other popular employer offerings are private health insurance and travel insurance. “The area of employee/member engagement and employee/member benefits again is a space in which the employers can definitely improve on to provide further benefits not just limited to the above and income protection,” says Kassis. Identity theft insurance is another product slowly introducing itself in Australia. Kassis warns that no one is immune to identity fraud. It’s the fastest-growing whitecollar crime. “Falling victim to this not only tarnishes your good name but could potentially ruin your credit, compromise your financial and medical history, and drain your assets. Once the damage is done, the road back to restoring what was yours can both be timeconsuming and expensive,” he says. Windsor Income Protection has developed a product that covers individuals for: »» Cost of replacing documents »» Travelling expenses »» Loss of income »» Childcare/elderly care »» Fraudulent withdrawals »» Legal costs
Windsor Income Protection is an Australian owned and based underwriting agency that targets the group income protection market sector. What do we do? Windsor Income Protection is an underwriting agency on behalf of Lloyd’s, specialising in income protection insurance. At Windsor Income Protection we ensure coverage for all insured persons – no occupations or employment categories excluded, including part-time and casual workers. Our products are backed by Lloyd’s, the world’s leading specialist insurance market doing business in more than 200 countries with some of the world’s largest companies. This allows us to utilise the global expertise in providing a competitive, tailored and sustainable offer to your clients, in multiple regions if required. Members or employees are an organisation’s greatest asset, yet no matter how conscientiously you protect this asset accidents still happen. Windsor Income Protection is a specialist in Group Disability Insurance; we aim to help you achieve a balance of protecting your organisation from unforeseen risk and looking after your members’ or employees’ wellbeing. Accident & Health products are one of the most effective forms of coverage for any organisation in the event of unexpected death, injury or illness. At Windsor Income Protection we focus on developing products and services that protect members’ or employees’ present and future financial needs. To find out more and to get an obligation-free quote on your portfolio, visit www.windsorip.com.au or call 1300 547 966. Contact Aaron Stokeld, general manager sales and operations. M: 0400 666 710 E: firstname.lastname@example.org
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INCENTIVES & RECOGNITION
ARE YOU REWARDING THE RIGHT BEHAVIOURS? Hitting a sales target is one thing; killing people to hit that target is quite another. HRD looks at how rewarding the right kinds of behaviour can build a culture of collective achievement WE ALL know that offering perks and financial incentives for high achievement can motivate employees, build a culture of healthy competition between peers and boost productivity – but is there a downside to this approach? Matthew Beard, moral philosopher, says there is. “It only takes one person who feels entitled to their bonus – to winning – to undermine the moral authority of an entire organisation,” he told HC Online. He suggested that a salesperson who commits fraud, deceives a client or ignores industry safeguards may be driven to do so by incentives offered for exemplary performance. “Although these might seem appealing to both employees and employers, they can have some unanticipated, harmful side effects.” Where winning is due to performance, not luck, winners develop a sense of entitlement that justifies acting dishonestly later on, he said. “Incentives build a culture of competition,” Beard said, citing research from Ben-Gurion University and the University of Jerusalem. “People who win competitions based on their own skill can develop a sense of entitlement: they start to believe they deserved to win even when they didn’t. They might bend or break
the rules to assure themselves victory, all because they won a competition in the past.”
The end does not justify the means Of course, this does not apply to everyone, or all corporate incentive and recognition plans.
has short-term commercial imperatives, but the cultural leaders recognise that a more holistic, longer-term view of their workforce and business is required. They seek to create an underlying culture in which expectations are aligned and understood, and one in which
“Some organisations allow the wrong behaviours to be encouraged, particularly where the underlying message becomes ‘thanks for turning up and doing the job you’re employed to do’ ” Alan Heyward Alan Heyward, executive manager at Accumulate, says rewarding outcomes is still OK, but not at the expense of building a strong underlying culture that makes sustained success – for individuals, teams and the organisation – far more likely. Most progressive organisations left the concept of ‘the end justifies the means’ behind long ago, Heyward says. “Every organisation
employees feel engaged, empowered and inspired, and have a clear sense of purpose. “Some organisations allow the wrong behaviours to be encouraged, particularly where the underlying message becomes ‘thanks for turning up and doing the job you’re employed to do’.” This approach can lead to a culture in which people don’t feel empowered or don’t
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YOU REACHED YOUR TARGET – BUT HOW DID YOU DO IT?
understand why they are recognising others; it becomes more of a compliance task or a distraction, and can lead to a more negative sentiment, as the program ‘isn’t as advertised’. An effective way to avoid this scenario, or re-educate your workforce if it does occur, is to use key influencers or advocates to endorse and role-model desired behaviours. Alternatively, non-monetary incentives like the opportunity to work on a passion project, greater autonomy in decision-making, or simple recognition of achievement are cultural inputs that aren’t dependent on an employee’s particular work over a given time. This builds a culture of collective achievement because there is less emphasis on competitive schemes that pit employees against each other. “If managed correctly, your workforce can become empowered to learn from each other what constitutes outstanding behaviour that creates a vibrant, sustainable culture driving powerful, positive behavioural change,” says Heyward.
What’s your motivation? An effective EVP should strike the right balance in driving both extrinsic and intrinsic motivation.
Remuneration and financial bonuses and incentives are of course ever-present, but frequent recognition, non-cash rewards, benefits/perks (lifestyle offers, merchandise discounts, etc), work-life balance, community and environmental focus, health and wellbeing/corporate wellness activities, are increasingly important. Frequent recognition of achievement is a critical motivator, and at a very basic level costs nothing. Greater autonomy or empowerment, the opportunity to work on a ‘passion project’, and having greater purpose are all things that “get the majority of people out of bed in the morning”, Heyward says. “And they all tie in strongly to the idea of carefully fostering and leveraging the inherent strength of workplace communities to collaborate and connect employees with geographically disparate, motivated and likeminded colleagues.”
A culture of recognition How does one create the ripple effect of ‘collective achievement’ referred to by Beard? Building a culture of recognition, or a ‘culture of collective achievement’, is about ensuring that everyone in the organisation has a common understanding
Alan Heyward says it’s “extremely important” to measure the underlying behaviours in any incentive or recognition program. “In a salesfocused program, whether or not the organisation has hit its commercial program-related target will often be heavily reliant on whether the desired behaviours have been consistently demonstrated,” he says. For example, did the contact centre agent log the call correctly? Was the opportunity entered correctly in the CRM system? Was the customer followed up in a timely manner? Were internal stakeholders engaged and advised at the right time? Did the customer feedback survey reveal a positive experience? Recognition programs are a slightly more challenging proposition to assess. At a basic level, there are quantitative metrics (number and frequency of nominations received and submitted, redemptions, etc) and qualitative measures (eg nomination quality, social posts within the program, etc). However, Heyward says the opportunity exists to provide far deeper insights into the impact of a recognition program, by gaining access to a range of other rich data sources such as engagement survey results; pulse check results; retention and absentee data; customer NPS data, sales data, to name a few. “Once you have the ability to establish causal relationships between these data sources, then the impact of your recognition program becomes far more measurable,” he says. of business purpose and objectives, and cultural expectations. “It’s about each employee feeling empowered to make decisions, challenge accepted thinking and having the ability to shape the environment around them, which is where the all-important ‘ripple effect’ kicks in,” says Heyward. “And it’s ultimately about employees feeling they’re part of a strong community or communities, based on both professional goals and personal interests.” Accumulate: Employee Loyalty Specialists Talk to us about how we can help you create a more vibrant, sustainable workplace culture to inspire positive behavioural change. accumulate.com.au
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NOT DONE YET Easing into comfortable retirement was never an option for Allen Wiseman. He shares his story with Iain Hopkins – and suggests that all HR professionals can ‘give back’ in some way, regardless of where they are on their career paths THE END of one’s professional career is usually a time to take stock, reflect on successes and failures, and plan the rest of one’s life. And while it’s true that Allen Wiseman has done plenty of reflecting in recent years, his subsequent activities may come as a surprise to some. Instead of easing into retirement, Wiseman has switched gears completely.
Road to now To understand Wiseman’s latest venture – volunteering his professional services in a Third World country – it’s insightful to look at his journey to now. Wiseman joined Kimberly-Clark in 1980 as a factory personnel officer responsible for recruitment, health and safety, workers’ compensation, and employee relations. He spent the next 20 years moving up through the manufacturing and supply chain side of the business as the company built four new sites. His roles were primarily assisting with these start-ups or being the site HR manager. In 1999 he was appointed to head up HR for Australia and New Zealand, and then a couple of years later his role expanded to cover South Asia, an additional seven countries. Storm clouds started forming in 2007 when a new South Asia president initiated a return to a previous operating structure
of considering Asia as one region. This pre-empted the changes that followed in 2011. A significant restructure resulted in job losses – including Wiseman’s job. “The restructure of the company was something I knew about as I worked on it with the regional president. So I knew that my role would be removed, but when I was told that I would be retrenched it still came as a shock,” Wiseman recalls. “Fortunately I had over a year’s notice to get used to the idea.”
of going through an experience he had counselled other managers about over the years: the transition out of the company into retirement or into another organisation. “I never realised how hard it can be,” he says. “You wonder if your exit was purely a result of the restructure or whether there were other agendas at play. After you’ve left you wonder what is happening and you become a spectator of the business and the people. You lose that sense of belonging. It took a long time for me
“It took a long time for me to realise that the job wasn’t that important and the company continues without you. You are just one of the pieces of human flotsam that washes in and out of the place” While Wiseman concedes his head was in “turmoil”, he took pride in staying focused on his work. “One of the best compliments I got was when I told my team I was leaving and one of them said that it was a complete surprise because in the prior 12 months I had not given a hint that I was losing my job,” he says. He also had the unfortunate opportunity
to realise that the job wasn’t that important and the company continues without you. You are just one of the pieces of human flotsam that washes in and out of the place.” Thinking he would transition to retirement, Wiseman moved into a part-time HR role at the Macquarie Graduate School of Management, which he describes as “a disaster
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Allen Wiseman on the ground with his team in Cambodia
fortunate, and her attitude started me thinking that I needed to do something other than sit on the couch and get taken by old age.”
Overseas management volunteering
for both me and them”. Help came from an unexpected quarter: a recruitment consultant (James McConochie of Hemisphere HR) who recommended him for a role at Kellogg’s. Although it was a more junior role than he was used to, he was willing and eager to take it. “I was so lucky to be offered the role with Kellogg’s,” says Wiseman. “I am eternally grateful to James and Michelle Phipps, the then HR director at Kellogg’s. When I left Kimberly-Clark I was told by an executive search consultant that at age 59 I had no chance to get another senior HR role. He told me that his clients did not want anyone over 50. While this is discriminatory I preferred him being ‘straight’ with me rather than subjecting me to a recruitment and selection charade and then rejecting me on some invented reason.” After three enjoyable years, Wiseman ‘retired’ in October 2014 “because I didn’t want to shave every morning!”
Retirement beckons – or does it? Like many of his contemporaries, Wiseman
pondered a leisurely retirement of golf courses and cruise ships. Yet there was a nagging sense that professionally he wasn’t quite done yet. With his 35 years of accumulated business and HR knowledge, was there something else he could do? Wiseman’s attention turned to the not-forprofit sector – but he had some trepidations. “I think some people consider the not-forprofit sector as a way back into the workforce when other avenues are no longer realistic,” he says. “Perhaps they no longer want to work for an organisation that is driven by profit, and they want to ‘give back’. My desire to volunteer with an NGO was probably more selfish than some altruistic desire to give back.” His interest in volunteering was kindled by his mother and his youngest daughter. “My mother started volunteering late in life – reading at the local school, secretary of the tennis club, and then helping residents in the aged care facility where my dad had been admitted. My daughter is a very kind and caring soul who readily helps the less
Wiseman was keen to utilise his business nous in some way. While he undertook a little volunteering locally, his awareness of overseas ‘management’ volunteering came from a newspaper article passed to him by his mother. He registered with Australian Business Volunteers and Scope Global, but after federal government funding was cut back he searched further afield and applied for an assignment in Cambodia through a UK organisation, Voluntary Services Overseas (VSO). The assignment was to draft an HR development policy for the Ministry of Agriculture. “While I was engaged by VSO, my assignment was funded by the European Union,” he recalls. “I was provided with an assistant to help with interpreting in meetings and translating documents. Reaching a clear understanding and agreement on the assignment and key deliverables was imperative but also quite difficult. Once I thought I knew what was wanted, writing the policy was quite straightforward.” NGOs working in this space try to match the right job to the right candidate as there is a cost and a risk involved in sending someone overseas for up to two years. Wiseman adds
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that finding good-quality candidates can be challenging as it doesn’t suit everyone. “Climbing the career ladder, paying off the mortgage, and educating the kids are probably higher priorities than going to a Third World country to volunteer. That said, I did meet a volunteer in Cambodia who, along with his wife and three boys, was there for two years.” After drafting the policy, Wiseman ran two workshops with employees to table the policy and get their input and recommendations. He quickly found there wasn’t a high level of understanding of HR in general, and even less knowledge about the specific processes of human resources development. He also found the phrase ‘lost in translation’ very apt. “I learnt that I had to sit with my assistant and be prepared to change English words
he achieved, Wiseman says his Cambodian experience, which lasted six months, was an important reminder of how good most Aussies have it. “I always knew we had a wonderful country and our working conditions are great. By comparison, one third of the 15 million people who live in Cambodia are below the poverty line and live on about US$1.50 per day. Despite this they are very kind and caring and don’t resent us for our wealth and lifestyle. I think we can learn a lot from the teachings of Buddhism.”
Why HR pros are perfect volunteers More than anything, Wiseman is keen to encourage other HR professionals – perhaps looking to transition to retirement like he
“Climbing the career ladder, paying off the mortgage, and educating the kids are probably higher priorities than going to a Third World country to volunteer” that don’t readily translate into Khmer. For example, I used the word ‘onboarding’ and in Khmer this would relate to transport – like boarding a train,” he recalls. Still, Wiseman achieved most of what he set out to do. While there are still a few processes to go before the policy is signed by the Minister, these are somewhat administrative steps. Wiseman is “cautiously optimistic” that the policy will actually be adopted. “Of course, this is just the first step. I have also drafted an operational plan that will require all the key stakeholders to commit to a range of activities that will bring about the changes necessary to deliver on a range of strategies,” he adds. Delivering on the plan will require strong leadership, commitment, HR expertise, and resources – all of which are in short supply in the Royal Cambodian Government.
All things in perspective Regardless of the professional satisfaction
was, or perhaps just starting out in their careers – to consider volunteering their professional services. “In Cambodia I met a lot of volunteers. Many of them were in the prime of their careers but had elected to put everything on hold to help others. I think this is a huge sacrifice in terms of career and financial security. On the other hand, I was there at the back end of my career when my future was secure, so I wasn’t making any huge sacrifice,” he reflects. He believes there are endless possibilities for HR professionals to give back either locally or overseas. “Besides the demand for technical skills in all vocations and the need for trainers to impart skills and knowledge, all projects have to be managed, including the changes that invariably accompany a project. Generally, HR professionals are skilled in these areas, are culturally aware, and have the qualities needed for success,” Wiseman says.
OBSERVATIONS FROM A LIFE IN HR “Technology has made it very easy for people to apply for jobs these days, and as a consequence a lot of candidates use a scattergun approach and apply for anything that sounds remotely similar to what they have done in the past. The converse is that technology has made it very easy for companies to reject candidates. I don’t have a high regard for organisations that state that they will only contact those candidates they wish to shortlist. Everyone who applied is a potential consumer of that organisation’s product or service and deserves a response.” “Job title inflation is rife in Australia. Once you could only have ‘director’ in your title if you were a genuine company director. Today, people who once were HR consultants or business partners are now managers, managers are now directors, and directors are now vice presidents. LinkedIn profiles are embellished by titles and time served; hopefully résumés are still factual!” “Google the word ‘leadership’ and you get 738 million hits. Most HR leaders will lay claim to an achievement in leadership development and leadership assessment, but despite the focus on these programs in Australia we still don’t seem to be able to get it right. You don’t need to look any further than the reported leadership styles of our political parties for evidence.”
Furthermore, he believes that such projects are mutually beneficial. “For volunteers it’s a great life experience and a way to challenge yourself where everything is new and different, and where what worked for you in Australia may not work in the country in which you are volunteering. You need to be resilient and adaptable, and have a good sense of humour.” Find out more Australian Business Volunteers – abv.org.au Scope Global – scopeglobal.com Volunteer Services Overseas – vsointernational.org Australian Volunteers for International Development (AVID) – australianvolunteers.com
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WHY PUBLIC HUMILIATION FEELS SO GOOD Why do we take pleasure in seeing others feel bad? Walden University’s Barbara Benoliel outlines schadenfreude in the workplace and how HR can minimise its impact SCHADENFREUDE – loosely translated as taking covert pleasure in the discomfort of others – is a complex concept. It is the kind of feeling you get when you see, for example, your manager’s nephew, who recently made VP, not appear at a very important meeting with a key client because he overslept. It is a feeling of just desserts combined with the discomfort of seeing another human being shown up for their human weakness in public.
which has brought our secret pleasure into the public domain and lowered the bar on the idea of what civility is in our society and the workplace. What we used to keep to ourselves, gloating privately, we now share via Twitter. This can’t be good for morale. While there has been a philosophical interest in the idea of taking pleasure in the distress of others, only recently has the study of the feeling been done scientifically.
Applied in the workplace, schadenfreude is a short-term means of providing employees an emotional lift Barbara Benoliel , Walden University Schadenfreude differs from irony or empathy in that it is a visceral feeling of pleasure in observing someone else’s debasement in public. Over the past few hundred years – in fact up until recently – public humiliation or public shaming was considered uncivil, and our secret emotional pleasure response to seeing someone in a compromising position was in fact just that – secret. Then reality TV came along and made public humiliation a form of entertainment,
Some have equated the feeling to a sign of being evil; others have said it is a signal of a corrupt society. More recent research seems to confirm it is only human nature.
Embarrassment as entertainment There is a history of setting others up for a fall in entertainment, going back almost to the start of TV. The first Candid Camera show in the late 1940s set up hidden cameras to catch unsuspecting individuals in compromising
situations, which were then revealed to them, and we observed their response and embarrassment, and felt the uncomfortable – yet somehow satisfying – squirming sensation in observing others in that kind of distress. The additional emotional value of schadenfreude is the overwhelming sense of safety and survival it provides: you have personally escaped. It reaffirms our sense of identity and community. Schadenfreude specifically centred in the workplace as part of entertainment is a more recent phenomenon. One of the best examples of the practice is The Apprentice TV series, in which viewers can watch an individual be publicly fired for some judgment of their poor performance. Applied in the workplace, schadenfreude is a short-term means of providing employees with an emotional lift: if I can’t get a pay rise, a rise in self-esteem in a positive comparative analysis to my
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SCHADENFREUDE AT WORK How does schadenfreude flourish in the workplace? There are many ways managers can both consciously and unconsciously contribute to it: xCalling x out employees’ errors in front of others xAllowing x gossip that is undermining someone to go unchecked in the company ‘grapevine’ xHaving x ‘in groups’ and ‘out groups’ in the workplace xPositioning x closer to some employees than others xCompetitive x evaluations where selected employees are ‘chopped’ or, alternatively, rewarded for performance that demonstrates competitive advantage to others in the company xProviding x employees with public performance appraisals xMaking x a big show of performance ‘stars’ who take advantage of others or are less cooperative in their work to reach that elevated status xMaking x employees compete for limited resources, so some are winners while others watch
diminished co-workers will substitute. The schadenfreude effect is universal in the workplace, as it deals with status and workplace justice – power and positioning that exist in every organisation. But workplace environments where there is a highly competitive internal culture are more susceptible to higher levels of schadenfreude, and as a result employees may experience higher levels of anxiety and stress related to their feelings about internal operations than to the competition in the market itself. All of these are examples of environments that invite employees to differentiate and identify others as worthy of potential public shaming. Some actually view schadenfreude as a means of distributive justice that serves a perverse, quasi-beneficial purpose of bringing employees together – for example, hard-working employees joining together to share their satisfaction when a co-worker
who they feel is not worthy of a promotion is getting ‘what they deserve’ when they subsequently fail publicly. Schadenfreude can allow employees to bond by sharing their experience of relief and pleasure, but it should also be a concern when it makes employees worried about their own safety.
’Distributive justice’ It is important to keep in mind that the emotional relief and positive value of schadenfreude is shortlived and quickly replaced with a sense of narrow escape, personal discomfort and underlying fear. Think about how you internally squirm in the presence of someone being publicly humiliated. The need to escape from the discomfort in the environment can trigger a sense of helplessness and distress in the long term. Organisations looking to minimise the negative effects of schadenfreude should pay
attention to their internal distributive justice: • Ensure promotions are for legitimate and transparent reasons • Provide rewards that are justified, clearly defined and attainable by all who meet the criteria • Ensure there is shared support and recognition for contributions by employees working towards the same goal For the sake of the long-term health and wellbeing of employees, schadenfreude doesn’t belong at the table, and is best kept on our list of secret human vices – or at least limited to late-night TV.
Barbara Benoliel is the academic program coordinator at Walden University’s Barbara Solomon School of Social Work and Human Services. Her research interests include human and social services, criminal justice, and health services. Benoliel is also a professional mediator and president of the company Preferred Solutions Conflict Resolution, where she specialises in conflict management systems and alternative dispute resolution in organisations.
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THE HELICOPTER VIEW While most experts will acknowledge that too many businesses operate with outmoded linear and hierarchical business structures, Patrick Hollingworth suggests an alternative: alpine style IN 2011, one of North America’s leading private business schools, Babson College, predicted that, by 2021, 40% of existing Fortune 500 companies would no longer exist. Also in 2011, global strategy and innovation company Innosight noted the average lifespan of an S&P 500 company had decreased from 67 years in the 1920s to 15 years today, and predicted that, at the current churn rate, 75% of companies on the S&P 500 would be replaced by 2027. And it’s not just big American companies that some are predicting will become extinct. On a 2014 business trip to Silicon Valley, David Thodey, former CEO of Telstra Australia, spoke of industry insiders telling him bluntly that his business model was ‘dead’.
The root of the problem The root of the problem is that most of today’s organisations use an outdated structure, designed to operate in the old world, where status quo was the norm. Structured in a hierarchical fashion and fit for a linear world, organisations have been designed
to be robust and resilient to change, but not adaptable to change. They are designed to strictly control people from the top down, to acquire and rely on physical assets and profit from scarcity, with the bottom line being king, irrespective of how it is reached. But as we now know, not only is technology in the new world order changing exponentially, but so too are many other elements of life, including the way people live and work. This means our organisations are in desperate need of an understanding of that change, and an ability to keep abreast with the pace and shock of the new.
Organisational origins The traditional hierarchical and linear organisational structure has its origins in the North American railroad boom of the 1850s, when large-scale coordination was required to integrate many different regional railroads into a single national transportation system. This required massive levels of coordination and standardising of procedures and technology to the extent that administrative forces were proved to be of greater strength and cost-efficiency than market forces, thus making the organisation the primary means of achieving productivity and economic growth. This means that today’s traditional organisations are still using a structural design that is more than 150 years old. Not only are most of today’s organisations structured linearly, but their leaders think and strategise linearly, too. This tendency to operate linearly means that most work towards fixed targets and goals and outcomes. This is a problem because a reliance upon prescriptive and linear strategies and plans makes leadership teams prone to ‘goalodicy’, where goals and objectives become such an obsession that they lead to poor decisions and outcomes (and ironically, the goals and objectives not being achieved).
Goalodicy In his very clever book, The Antidote, journalist Oliver Burkeman illustrates how goalodicy can occur by describing a study of
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New York taxi drivers who were so focused on their goals they were effectively blinded by them. In NYC, it was a widely held belief that cabs were more difficult to catch on rainy days than when the weather was fine. The cause of this was commonly attributed to all the cabs being busy because on rainy days more people caught cabs to avoid getting wet. What the study found, however, was something different. The actual cause was that taxi drivers had a daily income target, and due to the increased number of fares from the increase in patronage on rainy days, the cab drivers reached their daily targets sooner than usual and went home early. They were ignoring the opportunity to make considerably more than their daily targets. Fixed strategies and plans have a tendency to do that: working towards fixed expectations
has increased at a steady rate by a factor of six, whereas organisational complexity, in response to this, has increased by a factor of 35. In other words, many leaders have completely overreacted and in an increasingly complex environment have fooled themselves into thinking that their organisations should become more complicated and layered too. But we all know what happens to overly layered and bureaucratic organisations – they become mired in their own complexity, getting bogged down and waylaid.
The solution The solution is to reconsider our obsession with linearity and centralised, hierarchical organisational leadership. To do this, we need to look outside of the traditional business environment to an
Today’s traditional organisations are still using a structural design that is more than 150 years old makes you blind (to both opportunities and dangers).
Linearity Linear thinking and strategy also lead to an organisational emphasis on clarity, measurement and accountability as key metrics and drivers of performance. While this worked in the old world, in today’s new world of ever-increasing business complexity, these metrics only serve to encourage and compound business failure. The default response of most organisations to problems associated with increased complexity is to focus even harder on clarity, measurement and accountability, and to create further, and more complicated, structures, systems and processes. In other words, they do more of what has been done in the past, and when that doesn’t work, they do even more of the same thing. Since 1955, business complexity (as measured by the number of requirements companies are required by legislation to fulfil)
approach practised by a relatively small subset of highly skilled mountaineers called alpinists, who move quickly through the mountain environment, carrying as little equipment as possible – only the bare essentials are needed for their climb. The approach is called ‘alpine style’, although colloquially it’s known by its practitioners as ‘light and fast’.
Alpine style By restricting their reliance upon equipment, two things happen for alpinists: firstly, they are much lighter, and therefore faster and more able to respond to sudden change. Secondly, the alpinist is extremely self-reliant: rather than depending upon infrastructure to assist them in reaching their goals, alpinists only have themselves, and an absolute minimum of equipment, to rely on. Rather than a hierarchical, linear structure, alpinist teams operate as networks, and assemble and disassemble as the conditions necessitate. They don’t need to wait around for decisions
LOCKED IN THE PAST Nokia, Kodak, Blockbuster … the list of business failures is long and, unfortunately, distinguished. And while there can be many contributing factors to a company going out of business, one commonality is that they often become stuck in the modes of thinking and working that brought them their initial success. When business conditions change, their once-winning formulas instead bring failure. BLINDERS STRATEGIC FRAMES The set of assumptions that determine how managers view the business PROCESSES ROUTINES The way things are done RELATIONSHIPS SHACKLES The ties to employees, customers, suppliers, distributors and shareholders VALUES DOGMAS The set of shared beliefs that determine corporate culture to be made at higher levels of the hierarchy: they have the autonomy to make decisions themselves, and then act. It is this capacity for autonomy and selfreliance, rather than reliance upon hierarchy and infrastructure, that gives them true agility and innovativeness. Businesses are all struggling these days with decreased barriers to market entry, and disruptors that seemingly spring up overnight. The only way to counter this is to let go of our obsession with linearity and hierarchy and adopt the alpine style approach. Patrick Hollingworth consults to organisations globally and is an accomplished mountaineer, having climbed multiple 8,000m peaks unguided, including Mount Everest. He’s experienced the very best of alpine style, and the very worst of expedition style. He is the author of the recently released book, The Light and Fast Organisation: A New Way of Dealing with Uncertainty. Find out more by visiting patrickhollingworth.com.
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21ST CENTURY RECRUITMENT Digital innovation is transforming how many business operations function, and recruitment is no exception. David Reynolds outlines the latest trends and how HR stands to benefit from making data-led decisions about tomorrow’s workforce GONE ARE the days when recruiting a new hire was based on a gut feeling. Today, as more and more innovative processes become integrated into the recruitment process, HR professionals are now able to make data-led decisions when it comes to new staff. Not only are these innovations ensuring companies make the right hire from the start, but research is showcasing increases in staff retention and performance. Some of the most successful innovations include digital interviewing, tailored psycho metric assessment, situational interviewing and in-depth benchmarking, including the use of ‘heat maps’ to rank all shortlisted candidates.
Digital interviewing in practice The Queensland Department of Transport and Main Roads’ COO Jennifer Grace recently introduced digital interviewing when hiring the new deputy director-general for TransLink. Prior to this, the group followed traditional methods in all of its recruitment processes. “The new way provides an opportunity for genuine panel engagement and participation,” Grace says. “There is now a science that has taken us into the 21st century and is well overdue in the recruitment industry. “It’s digital, online and agile. It provides more information to make the right decision. The digital interviewing process gives us, as
an employer, a genuine opportunity to look at all shortlisted candidates. It provides more of a level playing field and provides candidates with another opportunity to sell themselves.” Employers are quickly embracing the new technology as it provides them with
review the shortlisted candidates prior to attending the panel interviews. “They came to the interviews more informed, and this provided them with more objectivity,” Grace says. “All of the panel members reported back that it was easier for them to form a more
“The digital interviewing process gives us, as an employer, a genuine opportunity to look at all shortlisted candidates. It provides more of a level playing field and provides candidates with another opportunity to sell themselves” Jennifer Grace another lens through which they can assess candidates, and through the involvement of each panel member it encourages a more robust and intimate involvement. Furthermore, it creates a greater level of accountability and decision-making. While it does put increased pressure on candidates, it also assists in identifying exceptional candidates and provides the opportunity for them to sell themselves. Grace says the online approach gave panel members an opportunity to independently
in-depth view of the appropriateness of each candidate. “They had not been exposed previously to the notes and reports that had been incorporated in the shortlisting documentation. All of this combined gave a lot more meaning to the process.” On the other side of the coin, Grace says the new approach improved their employer brand for prospective candidates. “The new approach provides a better focus on candidate care,” she notes. “We now
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see the benefit, as far as our employer brand is concerned, that we are progressive and more engaged with candidates. “The new process ensured every candidate was given due consideration and we were able to obtain a complete and deeper understanding of the candidates. There was the opportunity to see candidates live, and this provided us with assurance of certain capabilities that we were seeking, particularly their presentation skills, and their ability to respond under pressure.” Candidates have the opportunity to show another side of their personality and demonstrate their ability to respond under pressure, but also to articulate their value proposition and succinctly respond to questions that would directly relate to the role and their past successes. Building Queensland group director of governance and business support Colin Royce recently used the process to engage 17 new staff members in one bulk recruitment drive. “[Digital interviewing] also means that you aren’t wasting as much of the candidate’s time,” Royce says. “The process is much quicker, and because of that they are not sitting around waiting for an answer for a longer period of time. We did notice it flushed out the higherquality candidates earlier in the process and a final pool of candidates that were suitable to each role, rather than having to sift through them at panel interview.”
Managing expectations However, according to Grace the feedback from candidates can be mixed and HR professionals need to manage expectations. “Candidates felt challenged by the process; however, it was viewed as most engaging,” she says. “It allowed them to personally present themselves rather than just be represented by a piece of paper. The process lifted the bar, which is a good thing and allowed internal candidates to be benchmarked against external candidates. “We also had more information to provide objective feedback to candidates, and so it would not be just one person’s view.” To assist in facilitating the bulk campaign
and making it more streamlined, Royce’s team ran a comprehensive campaign that included online campaigns, enhanced internal systems, digital interviewing and online reference checking. Royce says the renewed process improved the visibility of candidates and also sped up the whole process. “The use of digital interviewing meant that it was a lot less labour-intensive for us, and it also provided us with an earlier view of the candidates rather than just a CV,” he says. “To my knowledge, most of the feedback was very positive. The video was definitely a new innovation for most of them. It wasn’t universally liked, because it did put pressure on the candidates, but it was good from our perspective. “Being a somewhat stressful event [the bulk campaign], it showed us how each candidate handled the unexpected, in addition to the quality of their actual answers. “It also allowed more people in the panel recruitment process to view the candidates earlier, and in their own time. Diary management was a lot easier as a result.”
Heat maps Digital interviewing isn’t the only innovation Royce claims has assisted his recruitment process. The team at Building Queensland, with their partner Davidson Executive, have also fine-tuned their position descriptions and implemented ‘heat maps’. Heat maps are a graphical presentation of where candidates fit in a quadrant in relation to each other and in terms of the employer’s ratings as well as best practice ratings. “We put a lot of effort into developing detailed and specific position descriptions that accurately described both the role, and also the key deliverables expected over a 12-month period,” Royce says. “Candidates were able to read these and self-select earlier if they didn’t feel that they had the skill sets to match the role. It enabled stronger interview questions because we had spent the time developing the key criteria. “It certainly added a scientific basis to the recruitment process. It is a more detailed
KEY TIPS FOR PREPARING QUESTIONS FOR A DIGITAL INTERVIEW The questions are not meant to trick applicants; rather they give them an opportunity to present their credentials. The questions should be directly aligned to KPIs of the role. Review the job description and ensure the questions relate directly to candidates’ experiences and how they complement the role, organisation and sector. Rate the candidates’ performance in the interview independently to ensure an independent assessment is made. Use the heat map to identify top performers and the preferences of panel members. Use the digital interviews to tailor final employer interviews to each individual and probe into areas of concern. process than the way it used to be, that’s for sure. It also added transparency around individual panel members’ thinking of each candidate, and allowed us to develop a heat map on the preferred candidates for panel interview.”
Embrace the new era Digital interviewing is only one small part of the innovative changes that are being made to the recruitment process. Innovation drives the elimination of unnecessary steps from the recruitment process, reduces its timeframe, and enables better buy-in from employer stakeholders. It also brings to life the candidate experience as well as providing a platform for more collaboration and interaction between candidates and employers.
David Reynolds is the group manager of Davidson Executive.
10/06/2016 10:25:15 AM
BRAIN-FRIENDLY PERFORMANCE MANAGEMENT Caroline Palmstedt suggests it’s time to view performance management through a different lens by shifting towards a non-rated performance framework IS YOUR performance management framework supporting your business with the talent competencies required for business success? Is your performance and potential matrix model optimal for driving talent development and succession planning? Is a faster-moving business environment requiring new innovations and the addition of new products or services in order to drive customer value? If the answers to the above are ‘no’, ‘no’ and ‘yes’, it might be time to look at your performance management with a different lens.
Post-dated performance management Organisations with well-established processes for performance management commonly use a rated ‘performance and potential’ framework to enable talent to reach its full potential. Yet some organisations are moving away from performance appraisals based on ratings and are instead adopting a more holistic performance management approach with frequent development conversations that build on forward-thinking discussions. There are several implications that stem from current frameworks of performance management – and these implications can
negatively impact on talent development. Firstly, the commonly used ‘9 Box Model’ involves viewing the previous year’s average performance rather than taking a ‘feedforward’ approach. Secondly, talent potential is rated in a matrix model to navigate the investments of developing talent for future roles. Thirdly, organisations and their leaders
Conducting calibration reviews is helpful for managing a fair and consistent performance assessment, yet it is far from satisfactory in offering objective and validated assessment across the entire talent board. The wellestablished ‘9 Box Model’ performance management process could in fact potentially create a U-turn for talent within your
The anticipation of the annual talent review can be more damaging to performance and retention than the actual feedback must spend a significant amount of time managing the performance review processes.
organisation as it moves in one end and out the other.
The 9 Box U-Turn
Talent assessment in the emerging markets
The ‘9 Box Model’ is commonly used to assess and identify the high performers and future leaders for critical roles. The fact that it is retro-focused, while business priorities may have changed, means this approach is often ineffective. Further, the reliability of ‘9 Box Model’ assessment criteria by leaders assessing their talent is practically impossible to validate.
How can talent development accelerate, in particular in emerging markets where identifying talent with the right competencies and experiences is critical to continuous business growth? Take, for instance, the Asian market, where talent turnover is among the highest in the world and the demands of continuous
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performance and engagement as a result of an inefficient culture?
Perceptions of performance management The anticipation of the annual talent review can be more damaging to performance and retention than the actual feedback; then factor in the impact of the outcome of rated performance management. Typically, following the talent review, leaders have conversations with their talent to guide and provide feedback on overall performance and development in regard to the last year’s performance and development needs. Whether the talent perceives this conversation in a constructive and open-minded way depends on a number of factors. HR practitioners and business leaders can draw on neuroscience to understand the human brain and its sensitivity to ratings and feedback.
business growth require a more accurate and timely talent development process. There are two specific talent competencies that stand out in the Asian market in particular: innovation and creativity. HR practitioners should consider how well the established performance management frameworks assess these competencies, and whether a redesigned performance management framework might be more effective. In Asia, the global challenge of building a resilient, competitive and differentiated work culture to attract and retain the desired talent is an enduring task, due to three region-specific factors. Organisations in Asia are typically: Entering more new and culturally diverse markets Evolving and undergoing frequent organisational change as a driver for business growth Enduring higher employee turnover and faster workforces than other regions According to a 2015 study by Corporate Executive Board, only 10% of Asia-based organisations have an effective culture as a result of the above factors. What are the hidden costs of work efficiency and productivity or low
Brain-friendly performance management What’s the alternative? There are gains to be made for business leaders and HR practitioners who draw from neuroscience and the knowledge of what creates a highly motivated and innovative workforce. Here are some ideas to encourage brain-friendly performance and talent management: Minimise threat responses by asking employees for their feedback on their performance – before you offer insightful feedback for development. Provide autonomy to the employee. Let them decide where, when and how the performance review feedback should be provided. Address the fairness factor – even when fairness cannot be achieved. Acknowledge the need to deliver results as much as you acknowledge L&D opportunities. Build strong social connections with your talent by maximising openness and a commitment to act on feedback. The brain benefits from experiencing social relatedness with a higher sense of trust as a result.
BRAIN RESPONSES TO PERFORMANCE REVIEW FEEDBACK Feedback triggers threat response. The human brain is programmed to evaluate every piece of information as either a threat or reward. Subconsciously the brain is evaluating threat or reward up to five times per second, making the performance review feedback conversation a minefield for potential threat responses. Threat response impacts on perception. In a threat response we typically encounter selective listening and our cognitive capabilities are limited. In other words, we may not understand the feedback and interpretations may be limited. Our ability to receive and act on feedback constructively is lowered and we may become defensive. Fairness is paramount to the brain. Perceptions of fairness significantly impact on brain performance. In a state of perceived unfair treatment the brain responds with threat traits. Talent who perceive unfair performance ratings potentially respond with a threat response, negatively impacting on engagement and motivation. Brain prioritises survival. The brains of all human beings are programmed for survival. They have a fundamental developed mechanism to detect errors in the environment and react to these with a fight or flight response. A well-conducted performance review feedback conversation is crucial to keep talent in a ‘safe’ survival mode; it should avoid triggering threat. responses at all costs. There are gains to be made in revamping performance management by addressing the development and career path needs of employees. This can be achieved by deploying a framework of real-time development and performance conversations – all of which can impact on business results.
Caroline Palmstedt is Monsanto’s talent management lead, Asia Pacific.
10/06/2016 10:25:41 AM
OWNING THE CHANGE
Currently global head of HR at JF Hillebrand Group, Norbert Modla has worked his way up from management consulting through a number of HR roles in a career spanning Europe and Asia
A FIRST STEP ON THE LADDER
1997 GRADUATION At Corvinus University of Budapest, Modla graduated with a degree in economics and business. He also gained his first practical leadership experience as national president for Hungary at global student organisation AIESEC.
PRACTICAL EXPERIENCE AND AN MBA As part of his MBA, Modla undertook consulting work for firms such as Marakon, and for the London Business School, conducting projects locally as well as in India and China, where he gained his first taste of working in Asia. “After working for seven years, it was time for me to go back to school and see how my experience really compared to the thought leaders of the world.”
MASTER OF CHANGE In January 2005, Modla was asked to move to Hungary where he became HR director at Philip Morris. Here, he drew on his consulting experience in bringing the company through major transformations within its supply chain, business models and manufacturing.
BUILDING A GLOBAL HR ORGANISATION Modla joined the Singapore office of logistics company JF Hillebrand Group in April 2014 with the goal of taking its local country-based HR teams and forming a completely global HR function from the ground up. “My mission was to start up a global HR organisation reporting directly to the CEO. I found that to be a unique opportunity to actually start building this from a blank piece of paper. It was an interesting mission that was very exciting to lead.”
Starting off as a management consultant at customer experience experts TMI, Modla worked his way up the ranks, eventually becoming managing director in Budapest. During this time, the main client focus was on business transformation as Central Europe prepared to become part of the EU and the global economy.
“This was also my first actual managerial experience of running a business. I found myself at a reasonably early age being in charge, generating P&L and so on. It was a good learning opportunity” 2004
A MOVE INTO HR After graduating with his MBA, Modla was offered a job as manager of HR for the CEEMA region at Philip Morris’s global operations centre in Switzerland. “When they offered me the job, they said to me, ‘You’ve been in consulting so much. Can you actually do it?’ That resonated with me as a challenge to work in a large company and own the change from inside.”
LEADERSHIP WITHIN AN ASIAN ORGANISATION Transferring to Hong Kong was a major career step for Modla as he was appointed regional director of talent management and organisational development at Philip Morris, overseeing 14 Asian countries. After four years in Hong Kong, he was then asked to move to Thailand as director of HR and commercial organisation development. “Thailand was a very unique business for the company as there were a lot of special projects. I was also in charge of organisational development besides HR, which made it very interesting.”
10/06/2016 10:26:21 AM
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GETTING AWAY FROM IT ALL Rachel Sutton, people director at Sage Australia, finds her love of ‘tramping’ also allows her to practise mindfulness BUSHWALKING, OR tramping, is a national pasttime in New Zealand – and it’s a passion Rachel Sutton has brought with her to Australia. “I grew up exploring New Zealand on foot,” she says. “Moving to Sydney has introduced a few additional creatures that live in the bush to be aware of, but the Australian bush has a unique beauty that I’m enjoying exploring.” Sutton has ‘tramped’ in 13 countries around the world and estimates she walks 1,300km annually. She finds it provides a great opportunity to explore less populated areas around the city. “A thirty-minute walk from a busy road can take you to secluded, serene waterholes or dramatic escarpments and rivers that seem a world away from the rush of the fast-paced city,” she says. Her health and fitness are the obvious beneficiaries of this activity, including the meditative time that ‘being away from it all’ allows. “Practising mindfulness and being present in the moment, away from distractions, means I can still the thoughts that come with a demanding, busy job, and consciously relax to ease away the stress of the work week,” she says. “Taking time away from the office and the busy city also allows for a fresh perspective and helps to bring another aspect to a work situation, creating a fresh way of looking at a problem or issue.”
Estimated number of walks each year
Longest walk – in an active volcanic area of New Zealand called the Tongariro Crossing
Number of shoes worn out each year
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