Resilient Porters seizes its opportunity

By Lachlan Colquhoun

 

If only he could know it, Charles Porter would be delighted that a sixth generation of his family is now working in the hardware stores which bear his name in Mackay.

Porter’s business was born of necessity and then opportunity. He arrived in the North Queensland town in the early 1880s to build a hotel and found there were virtually no building products available.

So he transported what he needed from Europe, Brisbane and Sydney by boat, and once the hotel was built he stayed behind and founded the Porter’s hardware supply business.

135 years later, Porters Hardware and Building Supplies is a fixture in Mackay but despite its longevity and strong local roots, it hasn’t always been easy for the business to thrive.

 

A BOOMING SECTOR

In fact, as Managing Director Gavan Porter (Senior) Corporate member of IML ANZ puts it, the business is only now coming out of a “perfect storm” of a volatile boom and bust cycle which severely tested its resilience.

“We’ve been through two World Wars, the Great Depression and credit squeezes, but the past four years we had a big contraction with the resource sector downturn. It was brutal,” says Gavan (Senior).

“Most of the contractions have historically been 12 to 18 months. This one went on for four years.”

However, back in the early 2000s Mackay was growing rapidly as a service centre for the resources industry. Multinational companies set up business in the city for the first time and the population increased sharply.

It created a building boom that was good news for the Porter business, where trade comprises 80% of turnover, including the company’s manufacturing divisions, which fabricate aluminium and glass products as well as roof trusses and wall frames.

The boom in Mackay also attracted the attention of bigger national hardware players. Woolworths’ failed Masters chain opened up a store, and market leader Bunnings added a second Mackay store in response.

Porters were also not the only independent operator. They had for decades been in competition with another Mackay family, the Woodmans, who had allied themselves with the Mitre 10 buying and marketing group and had a strong retail and trade presence.

“We went from one ‘big box’ store operated by Bunnings to three in total including Masters, and Woodmans had the advantage of being part of Mitre 10 with their resources,” says Gavan Porter (Junior) CMgr AFIML, who is the company’s CFO.

“There might have been room for everyone during this extraordinary growth period, but then the downturn hit.”

 

SURVIVING THE DOWNTURN

As the economy ground to a halt, the mines made employment cuts and 9,000 jobs were lost across the resources sector supply chain.

With people now leaving Mackay to find work elsewhere, new home building approvals slumped by 90%.

“This was all very new to us, because Mackay had always been a steady growth sugar and coal town,” says Gavan (Senior).

“But after all that growth, the market collapsed, and Mackay collapsed with it. It went off a cliff.”

For the first time, Porters was forced to downsize and initiate staff redundancies; a difficult process for a company where the family ethos often extended to employees.

Out of the downturn, however, an opportunity presented itself.

 

ENDING THE FAMILY FEUD

“With our external advisors we created a strategic plan in 2015 and one of the parts of that was the option of regional consolidation,” says Gavan (Junior).

“In the downturn it was clear that there were too many players in the market and the only way to survive was consolidation.”

A conversation was “struck up” with the Woodman family about a “way forward” for both family businesses, and an amicable deal was made for the Woodmans to exit the hardware supply market in Mackay and sell their retail stores to the Porters.

“It was great for two such staunch independent competitors, who had been competing in the same market against each other for decades, to come to an agreement,” says Gavan (Senior).

“It was clear that the market was very tough and there had to be an exit of one of us and they agreed to exit.”

The deal worked for both companies, and families.

The Woodmans kept other manufacturing businesses in Mackay such as aluminium and glass fabrication, roofing, and roof truss and wall frame manufacturing, where they still compete with the Porters.

That deal gave the Porters a network of stores that spanned not only Mackay and its surrounds but also extended to the Whitsunday region.

The acquisition gave Porters more stores and removed a longstanding competitor, but also introduced them to a new, and powerful, partner in the Mitre 10 group. A new licensing agreement was reached, and the company now trades as Porter’s Mitre 10.

“Mitre 10 was also a good move for us,” says Gavan (Senior). “They are a strong buying group and we needed to buy better to compete against bigger players.”

 

STRIKING UP A GOOD PARTNERSHIP

Just as timing played a role in the severity of the downturn, so it worked in the Porter’s favour in terms of Mitre 10’s own competitive position.

With the demise of Masters, Woolworths also put its wholesale hardware distribution business up for sale, and it was purchased by Mitre 10.

The move transformed the national market and made Mitre 10 Australia’s second biggest player in the hardware sector next to Bunnings.

Such was the timing that Porters went from being an independent player in an overcrowded market to being a strong second placed rival to Bunnings, with the advantage of being able to leverage Mitre 10’s brand name, buying power and marketing.

“They are the strongest partner you can have if you are an independent owner,” says Gavan (Senior). “We have always been strong in trade, but Mitre 10 is a powerhouse brand which has helped us continue to reach a retail target audience.

“And going forward we are able to use some of their benchmarking capabilities to understand where we are compared with our peers, and we’ve already been out to have a look at some of the bigger stores in the group, and this is something they encourage.”

Eight months after the deal, the acquisition is still being bedded down just as the market conditions are showing signs of improvement.

To prepare for the expansion, the Porters created an implementation plan across eight different areas of the business, from facilities management to IT and HR. Focus groups of employees, the number of which has increased by 25% to 250 across the group, were held to review and reset the firm’s culture.

The result has been the definition of five key criteria which will be ingredients of the culture moving forward: focusing on performance delivery, being driven by customer outcomes, valuing relationships, keeping everyone safe, and having fun at work. “We’ve got a way to go but we believe we are on the right track,” says Gavan (Senior).

“We’ve broadened our base, increased our trade and retail presence, and expanded our geographic footprint.

“As the economy improves we believe this will give us a solid platform.”

 

BUSINESS WITH A FAMILY FLAVOUR

The resilience of the Porter’s business, says Gavan Porter (Senior), has come from the company’s financial and management discipline which has helped it adapt to change.

A key to this has been to adopt many public company structures and processes into the way things are done, including the longstanding addition of independent directors onto the company board.

“It was my father who initiated this when he was running the company,” says Gavan (Senior).

“He understood that it had to be about the business, and not the family, and for that we needed that outside and independent perspective.”

Gavan (Senior) has been a member of the Australian Institute of Company Directors for many years, and many AICD practices are implemented at board level to create a structure and a discipline.

The company has a relationship with a firm of advisors, with extensive experience in larger family businesses, who played a significant role in creating the strategic plan which identified the consolidation opportunity and led to the Woodman’s acquisition.

“We have all the structures of a listed public company, but with a family flavour,” says Gavan (Senior).

The Porters joined the Institute of Managers and Leaders Australia and New Zealand in 1956, as they sought to keep up with changes and trends to incorporate into their business.

Gavan (Junior) has been on the local IML ANZ committee for the past five years and has pursued a qualification as a Chartered Manager. “Leadership and management is very important to me, and we have such a large staff now that I find it invaluable to share current ideas and thinking,” he says.

Four ways to protect your company from insider attacks

By Elizabeth Ticehurst

 

Security is a huge company expense. Guards patrol buildings, virus protection software is installed, laptops encrypted and mobile phones tracked. Yet a hard truth can be forgotten – employees may pose the greatest risk for companies. Protecting intellectual property and confidential information requires safeguards from misuse and theft by the very people who need to access these to complete their work.

 

A VERY REAL RISK

A recent case highlights the extent of damage insiders can inflict. It concerned two senior employees who worked for Lifeplan, a provider of investment products including funeral bonds and pre-paid funeral plans. The employees accessed confidential business and financial documents and used them to prepare a business concept plan, which they presented to Foresters, a direct competitor. They then copied a confidential database containing hundreds of funeral directors’ contact details, contracts, marketing and administration documents, and began approaching funeral directors to solicit business for Foresters while still employed by Lifeplan.

After the two joined Foresters, their funeral products business increased gross income by more than $22 million in two years. In the same period, Lifeplan’s business took a severe downturn and experienced losses of more than $20 million. Lifeplan took legal action against the two employees as well as Foresters, claiming they had breached their fiduciary duties as senior employees, and that they had breached Corporations Law provisions prohibiting the misuse of confidential information. Foresters was alleged to have “knowingly assisted” in those breaches. The case was appealed all the way to the High Court, which ordered that Foresters must pay the total value of its funeral products business (then worth more than $14 million) to Lifeplan.

 

KEEP YOUR BUSINESS SAFE

This case is not an isolated example. Clearly, an absence of oversight and a clear opportunity can prove a temptation too great to ignore for some employees. What then, can an employer do to protect themselves?

  • Written agreements. The first step, from a legal point of view, is to ensure that employees have signed a formal written employment contract with contractual obligations to protect confidential information. Surprisingly, it is not unusual even today to find senior employees who have no written employment contract! Small businesses or family-run companies often rely on a verbal agreement or a single sheet of paper to set out the terms of an employment contract. It is important to remember that while a properly prepared contract seems expensive, it can save a lot of money and legal difficulties in the long term.
  • Strong policies. Next, implement policies to control the primary ways confidential information is accessed and used. In most organisations, information is held electronically and employees access information through the company’s intranet, email and telecommunications systems. It is important therefore, to have a company devices policy covering IT and telecommunications systems and to provide compliance training. For example, the policy can state that certain information must not be downloaded on mobile storage devices such as flash drives. Policies should also alert employees that the company has the right to view all of their activity using company devices and systems.
  • Electronic monitoring. From a practical point of view, some degree of electronic monitoring will be required to enforce the company’s policy. For some organisations, such as banks, continuous monitoring is required, while other companies with limited resources will only need this periodically. Best practice is to direct monitoring to the times of greatest risk, such as when an employee is under notice and will shortly leave the company. Suspicious activity such as printing abnormally large volumes of documents, downloading information onto flash drives, or emails from a work account to a private one, should also trigger employee monitoring.
  • Legal action. Finally, even if the damage is discovered after the employee has left, all is not lost. Legal action can be taken to recover or stop a former employee from using confidential information, or to stop their new employer from taking advantage of it. However, as with most legal problems, prevention is better than cure.

Elizabeth Ticehurst is Special Counsel – Employment at KPMG

Digital innovation primer: Part four – AI and robots are here

By Craig Baty FIML

 

In this fourth of five articles on digital transformation for non-technical leaders, we’ll look at AI and robots. In last week’s article we saw how pervasive the Internet of Things has become, now let’s look at how AI and robots impact today’s workplace and world.

 

A higher intelligence?

 

Artificial Intelligence is the application of computing power to problems previously solvable only by human thought, if at all. It comes in many forms. Key technologies and applications include:

 

  • Advanced analytics: the proliferation of Big Data has led to the creation of massive data sets that can be effectively analysed only with AI tools. AI can spot complex patterns in the data visible to humans. AI’s usefulness as an analytics tool is especially relevant in the use of predictive analytics and decision automation.
  • Natural language processing (NLP) and speech recognition. NLP involves the interaction between computers and unstructured speech and text. The technology involves massive processing power and complex algorithms and is used in such applications as speech recognition and machine translation.
  • Cognitive processing: Otherwise known as semantic computing, refers to digital processing that attempts to mimic the operation of the human brain. It is especially suited to the analysis of large unstructured datasets and has been shown to be more effective than humans in the diagnosis of many diseases.
  • Robotic process automation (RPA): RPA has grown out of Business Process Automation (BPA), and refers to the use of AI techniques to automate workflow and business processes. A good example is the use of NLP to scan incoming emails and undertake the appropriate action, such as generating an invoice or flagging a complaint.
  • Machine learning: The use of AI techniques to help computers make decisions based on previous events. Like many AI techniques, machine learning involves a combination of raw computing power and logic-based models to simulate the human learning process.
  • Chatbots and virtual assistants: Chatbots are robotic processes that simulate human conversation. They are often used for automated online help functions. The technology is also used for so-called ‘virtual assistants’, which uses AI to interact with humans to provide information that helps them undertake specific tasks.

 

Brain and body: AI and robots

 

AI is software, while robotics is hardware. Robots are machines, usually but not always driven by AI-based software. Their first widespread use was in production line manufacturing, where they could be programmed to perform repetitive tasks. As AI becomes more sophisticated and robotics technology evolves, robots are increasingly performing more complex functions, from domestic tasks to education and training to mimicking human performance and behaviour.

Any application that involves AI being applied to the physical world is essentially robotics. This includes autonomous vehicle and aerial and seaborne drones. These also cross into the Internet of Things (IoT). It is common that these evolving applications typically draw on a range of technologies.

Although we are many many decades away from AI being able to completely replicate human decision making and behaviour (and opinion is divided as to whether this will ever happen), AI is not going away and will increasingly permeate all aspects of daily life. To remain ahead of the curve, leaders need to understand the potential for using AI to augment their capabilities and should begin the process by working with their teams to identify potential applications, then develop these ideas into proofs-of-concept (POC).

 

Digital transformation – why you should care

 

Join us in Sydney where Craig will present an informative and insightful TEL Talk: Digital Transformation – Why should I care? This brief primer on Digital Transformation will address:

 

  • What is Digital Transformation and why is it important for today’s leader?
  • What are the key technologies and processes to be aware of?
  • How have these technologies been used to create truly transformative business outcomes?
  • As a leader, how can you prepare yourself for an increasingly digitalised future?

Craig Baty is Principal and Founder of Technology & Management Services (TMS), which specialises in research-based data-driven thought leadership and consulting for ICT strategy, outsourcing, vendor management, go-to-market execution, and market and competitive intelligence. TMS also consults on cross-cultural communications and managing virtual teams across multiple geographies. He previously held C-level leadership roles with global telecommunications provider BT (British Telecom), Japanese ICT & technology giant Fujitsu and ICT research and advisory firm Gartner. Craig currently serves as NSW Vice Chair of the Australian Computer Society (ACS) and on the NSW Council of the Australian Information Industry Association (AIIA).

Digital innovation primer: Part three – The Internet of Things (IoT)

By Craig Baty FIML

 

In this third of five articles on digital transformation for non-technical managers, we’ll look at the Internet of Things. After introducing workplace innovation in last week’s blog, we look at how the Internet has become all-encompassing, enabled the internet of things (IOT) and become even more vital for all leaders to understand and leverage.

 

From Internet to Internet of Things (IoT)

 

The Internet was first developed as a way of connecting computers to each other. With the rapid growth of digital technology almost anything can now be connected to the Internet – hence the term ‘the Internet of Things’ (IoT).

 

There is a multiplicity of ‘things’ that can be connected to the Internet. It is not only devices. By definition, anything with an IP (Internet Protocol) address can be connected. Wireless technologies such as WiFi, Bluetooth and 4G and 5G telephony mean that devices and sensors do not need to be physically connected – indeed, with IoT, remote connectivity is the norm.

 

The key to IoT is the ‘embedding’ of Internet connectivity into virtually any kind of physical device, which means they can be controlled and monitored over the Internet. They can also act as monitors – or sensors – for other devices and applications. This opens almost infinite possibilities and expands the scope of the Internet and what it can be used for.

 

Putting the IoT to work

 

The IoT can be best understood using examples in different environments, as introduced in this non-exhaustive list of IOT applications:

  • Medical and health: IoT is the key technology for e-health, enabling remote diagnostics and monitoring, inside hospitals and in the community. Monitoring patients’ clinical condition and behaviour is a key aspect of effective healthcare.
  • Buildings and dwellings: The so-called ‘smart home’ is a primary example of IoT technology. Virtually all domestic appliances can be IoT enabled, allowing them to be remotely controlled or activated according to external conditions. At the commercial level, building management systems do the same thing on an industrial scale.
  • Energy and environment: The so-called ‘smart grid’ uses IoT technology to monitor and control the efficient distribution of energy. Smart sensors can be used to monitor all aspects of the environment and are increasingly being used for such applications as earthquake and tsunami prediction, warning and mitigation and wind-farm optimisation.
  • Transport: A high-profile application of IoT technology to transportation is the rise of the Autonomous Vehicle (AV), otherwise known as driverless cars. More important than the technology and the vehicle itself are the monitoring and control mechanisms that enable it to move safely and efficiently around the transport network. IoT technology is also important and controls transportation systems such as trains and aircraft.
  • Manufacturing: Automation has long been part of the manufacturing process. The IoT takes this to a new level, enabling vastly improved process automation, much of it based on big data and the sophisticated analysis of it. Digital twinning using IoT enables factory management to effectively replicate their factory on-screen or use virtual reality/augmented reality (VR/AR) to monitor, manage and maximise factory floor operations from a remote location.
  • Agriculture: The IoT has made possible such applications as driverless tractors and automated irrigation systems. However, its primary application of agriculture is in monitoring the environment to enable the right decisions to be made about the most efficient farming practices.
  • Smart cities: The term means different things to different people, but what they all have in common is the widespread deployment of IoT enabled applications including traffic and parking management, public space lighting, infrastructure monitoring, disaster recovery facilitation, and the like.

 

IoT has now moved beyond its earlier limited industrial applications and now permeates most aspects of society. As IoT can be embedded in almost anything, people are becoming very inventive. However just because your front door mat, your toothbrush and your mower could all be connected, it doesn’t mean that they should be. Leaders need to resist the desire of their employees and management to connect absolutely everything, and work with their teams to develop ideas for IoT use that can enhance corporate operations, improve safety, and create a competitive advantage.

 

In next week’s blog we will introduce Artificial Intelligence, robots and their impact.

 

Digital transformation – why you should care

 

Join us in Sydney where Craig will present an informative and insightful TEL Talk: Digital Transformation – Why should I care? This brief primer on Digital Transformation will address:

  • What is Digital Transformation and why is it important for today’s leader?
  • What are the key technologies and processes to be aware of?
  • How have these technologies been used to create truly transformative business outcomes?
  • As a leader, how can you prepare yourself for an increasingly digitalised future?

Craig Baty is Principal and Founder of Technology & Management Services (TMS), which specialises in research-based data-driven thought leadership and consulting for ICT strategy, outsourcing, vendor management, go-to-market execution, and market and competitive intelligence. TMS also consults on cross-cultural communications and managing virtual teams across multiple geographies. He previously held C-level leadership roles with global telecommunications provider BT (British Telecom), Japanese ICT & technology giant Fujitsu and ICT research and advisory firm Gartner. Craig currently serves as NSW Vice Chair of the Australian Computer Society (ACS) and on the NSW Council of the Australian Information Industry Association (AIIA).

Digital innovation primer: Part two – Workplace innovation

By Craig Baty FIML

 

In this second of five articles about digital transformation for non-technical leaders, we’ll look at workplace innovation. After learning what digital transformation is in last week’s blog, what should leaders understand about how technology shapes the modern workplace?

 

Defining today’s workplace    

 

Digital technology has transformed the workplace, as it has so much else. The very concept of the workplace has evolved. For an increasing number of people, it is no longer a physical location. Rather, it describes the wider virtual environment enabled by such technology as smartphones, mobile broadband, virtual and augmented reality, collaboration tools and a range of other workplace productivity technologies.

 

It is now more than 40 years since digital technology transformed the back offices of large organisations. It is just over 30 years since the PC revolution swept through the front office and brought personal productivity tools such as word processors and spreadsheets to all information workers. Twenty years ago the Internet became a common business tool and the Apple iPhone ushered in the smart phone revolution around 10 years ago.

 

Each of these waves of technology transformed the workplace. We are now experiencing another revolution, driven by new technologies such as Artificial Intelligence and the cloud-based delivery of personal and workplace productivity tools.

 

Technological backbone of the modern workplace

 

There are many names for the rapidly changing use of technology and related enabling policies at work including Workplace Innovation, Workstyle Innovation, Smart Workplace and others. Many technologies work together to make it happen. These include:

  • Collaboration tools: software that helps individuals in the workplace to work together on projects by sharing applications and data. Collaboration is not a new idea, but Cloud and artificial intelligence have enabled new ways of working together. At the same time, existing personal productivity tools such as Microsoft Office migrated to the Cloud and brought a new dimension to collaboration.
  • Social media: this is a consumer technology increasingly being used for workplace productivity. Sophisticated analysis tools, many of them driven by AI techniques, are leveraging social networks as important business tools.
  • Workflow and content management: another existing workplace application that has been revolutionised by new technology.
  • Mobility: smartphones, mobile broadband and mobile apps have enabled individuals to work anytime and anywhere.
  • Unified communications: the bringing together of different media – voice, data, image, video – into one integrated corporate communication system.

 

Not everybody is an information worker. New technologies are also transforming workplaces in areas as diverse as manufacturing, transport, energy, utilities and mining. Many of these applications, such as virtual and augmented reality, use a combination of technologies based on AI, the Internet of Things and other innovations. Individuals, the workplace, and the enterprise have never been more connected. Leaders should continue to work with their HR/HCM teams to identify any blockages to productivity and employee satisfaction, safety and engagement and with their ICT teams to co-create appropriate policies and procure the technology to enable them.

 

In next week’s blog, we will cover the Internet of Things (IoT).

 

Digital transformation – why you should care

 

Join us in Sydney where Craig will present an informative and insightful TEL Talk: Digital Transformation – Why should I care? This brief primer on Digital Transformation will address:

  • What is Digital Transformation and why is it important for today’s leader?
  • What are the key technologies and processes to be aware of?
  • How have these technologies been used to create truly transformative business outcomes?
  • As a leader, how can you prepare yourself for an increasingly digitalised future?

Craig Baty is Principal and Founder of Technology & Management Services (TMS), which specialises in research-based data-driven thought leadership and consulting for ICT strategy, outsourcing, vendor management, go-to-market execution, and market and competitive intelligence. TMS also consults on cross-cultural communications and managing virtual teams across multiple geographies. He previously held C-level leadership roles with global telecommunications provider BT (British Telecom), Japanese ICT & technology giant Fujitsu and ICT research and advisory firm Gartner. Craig currently serves as NSW Vice Chair of the Australian Computer Society (ACS) and on the NSW Council of the Australian Information Industry Association (AIIA).

Digital innovation primer: Part one – Digital transformation (DX)

By Craig Baty FIML

 

In this first of five articles, we’ll look at digital transformation (DX) in general and introduce the key technologies and concepts to be aware of. DX is important for non-technical leaders to have some level of understanding about, so as to effectively manage and use it to their advantage.

 

What is digital transformation?

Digital technology, in all its forms, is transforming business and society. Virtually every area of human activity is being profoundly altered. The most successful people and organisations are those embracing this transformation to build new products and services based on innovative business models enabled by the many technologies that comprise the trend.

The famous Austrian economist Joseph Schumpeter, regarded as the father of the study of innovation, described it as ‘creative destruction’. That is what is happening now, all around us. The old ways of doing things are being destroyed. In their stead are rising new ideas, new techniques and whole new industries. In our increasingly digital economy that process is called Digital Transformation (DX).

 

What’s driving this revolution?

There are many enabling technologies driving this revolution. Foremost amongst them is the Internet, which has allowed levels of communication, connectivity and information sharing unimaginable a few short years ago. It has given rise to the Cloud, to the Internet of Things (IOT), and to new ways of delivering and sharing software and services. In a few short decades, it has grown from a limited low bandwidth network connecting just a few computers to a universal high-speed matrix covering the whole planet.

Another key driver is the range of technologies known collectively as Artificial Intelligence (AI), which are enabling new ways of working, new ways of analysing data, and new ways of using existing technology. Massive advances in computing power have made possible AI technologies like machine learning, robotic process automation (RPA) and predictive data analytics. These techniques enable us to make sense of the vast amounts of information (often called ‘Big Data’) generated by the new technologies of the era of Digital Transformation.

 

Digital transformation impacts all aspects of leadership

Massive changes are happening all around us. In the workplace, mobile technologies increasingly mean that for the first time in history we are location independent. We are connected any time and anywhere. Smart phones have transformed many people’s lives and have been the most quickly adopted technology in human history. They have also enabled many new applications and new ways of working, driving a whole range of initiatives and technologies, often referred to as Workplace Innovation, to improve employee productivity and engagement.

At the enterprise level, corporate data and corporate applications have also become untethered from the physical world. Large scale corporate wide applications (Enterprise Applications/Enterprise Resource Planning (ERP)), services and even infrastructure are now delivered by the Internet. The separation of the digital world from the physical world is blurring, with robotics transforming manufacturing, drones being used for an increasing number of applications and autonomous vehicles becoming a reality.

Governments at every level are delivering their services digitally and are opening government data to third parties to help them develop new information-based services. Electronic identity management has become commonplace.

These changes are revolutionary. But they are not without cost. New technologies mean new opportunities, bad as well as good. In a totally connected world, Cybersecurity has become a major issue. It encompasses a range of technologies designed to protect computers and networks from unwelcome intrusion and to ensure their continued reliability.

Digital Transformation is sweeping the world. Its effects are significant, at every level of business and society. Leaders in all spheres of human endeavour will be impacted and need to become aware of the essential concepts and implications to maximise opportunities for innovation and managing in this rapidly evolving environment.

In the rest of this five-part blog series, we will cover each of the key DX technologies introduced above. Next week we will introduce Workplace Innovation and related technologies.

 

Digital transformation – why you should care

Join us in Sydney where Craig will present an informative and insightful TEL Talk: Digital Transformation – Why should I care? This brief primer on Digital Transformation will address:

  • What is Digital Transformation and why is it important for today’s leader?
  • What are the key technologies and processes to be aware of?
  • How have these technologies been used to create truly transformative business outcomes?
  • As a leader, how can you prepare yourself for an increasingly digitalised future?

Craig Baty is Principal and Founder of Technology & Management Services (TMS), which specialises in research-based data-driven thought leadership and consulting for ICT strategy, outsourcing, vendor management, go-to-market execution, and market and competitive intelligence. TMS also consults on cross-cultural communications and managing virtual teams across multiple geographies. He previously held C-level leadership roles with global telecommunications provider BT (British Telecom), Japanese ICT & technology giant Fujitsu and ICT research and advisory firm Gartner. Craig currently serves as NSW Vice Chair of the Australian Computer Society (ACS) and on the NSW Council of the Australian Information Industry Association (AIIA).

Could Appreciative Inquiry Be Your Next Solution?

Who would’ve thought that you could solve inefficiencies and problems by not looking at the inefficiencies or problems? It is an unusual concept, but Appreciative Inquiry (AI) takes problem solving in an innovative direction. According to this problem solving technique, paying attention to the problems will only amplify them; whereas, focusing on the positives will elicit the best solution. In addition to this, AI has been proven to produce other significant benefits for organisations, such as: enhancing collaboration, encouraging creativity, empowering individuals and avoiding stereotypical solutions. So, how can your organisation solve problems using AI?

There are four steps to undertaking a successful AI process, these are: Discover, Dream, Design and Deliver. When organisations want to undergo an AI process, they are encouraged to invite a group of stakeholders along to a planning workshop that works through these four phases.

Discover

The Discover phase of an AI process seeks to understand the current situation. This is one of the hardest phases for people to get their heads around as our minds naturally shift towards the current situational issues. However, instead of looking at the current issues, the Discover phase requires us to appreciate the best of what is and what has been. To discover this, participants are asked a series of questions that get them thinking about some of the key strengths of a current situation. Examples of questions that are commonly used during this phase are:

  • What do you like most about…?
  • What makes this memorable…?
  • Why do you like…?
  • What would make you choose this over something else…?

By responding to these questions, common themes and words start to appear. These are the themes that the rest of the AI process seeks to capitalise on…

Dream

The second phase of an AI process is the Dream phase. The Dream phase encourages imagination and creativity from participants by allowing them to brainstorm an ideal situation. When crafting an ideal situation in their minds, participants are encouraged to think about what it involves, what it looks like and what strengths it capitalises on. To make the most out of this phase, it is usually conducted individually at first before ideas are shared and strengthened in a group.

Design

The third phase of the AI process is when participants start to translate radical ideas into reasonable solutions. As a group, participants take bits and pieces from the dream phase to design an ideal solution. Practicality questions are answered during this phase when proposing what resources, skills, training, money, knowledge and commitment is required to translate the dream into reality.

Deliver

The final phase is the Deliver phase. This phase is where participants commit to the solution and set out a plan to achieve it. Typically, this stage involves the formulation of a proposal plan or implementation timeline.

And that’s it! A small workshop with four steps that could lead to innovative solutions for your organisation. Could AI be the solution to your next organisational problem?

KNOWING WHAT WE DON’T KNOW – AT LEAST SOME OF IT

In my consulting work one of the areas that perplexed managers raise with me is a variation of the following: “I know there are parts of the business where we could equip everyone better but I’m not sure how to get a grip on these areas. Our management team has been tossing around little straws in the wind that are telling us that we should be doing better but we’re not getting much traction. The general mood across the business doesn’t seem to be as positive as it used to be.

“There’s really nothing we can measure that’s helping here, except our overall performance measures aren’t kicking along as well as I’d expect.”

This is a ‘soft’ management facet of the business. So I question along the following lines:

“What are you hearing from your people?” “Have you done staff satisfaction feedback work?” “Any 360° surveys at various responsibility levels?” “A customer health check?” “How much formal coaching and less formal mentoring are in place?” “In practice, do your people readily bring up new ideas – whether valuable or not?” “Do you and your team regularly review whether you demonstrate the values of the business?” “Do your staff adhere to these values?”

Often it seems that the areas with which managers are struggling to be better in touch are intangibles: facets of culture, processes (not technical processes) and structure.

“So what have you and your management team done in the last little while, to get in touch with these three important elements in the working of your business?”

Sometimes, I hear comments such as, “We did a staff satisfaction survey earlier this year but honestly, I don’t completely trust it. Every time we do this survey, the responses we get don’t line up with what we experience day-to-day with our staff. Survey results are bitterly disappointing, for instance only 23% are satisfied whereas day-to-day interactions in practice show the reverse; the great majority show as positive, enthusiastic, willing when we call on them.”

So at this point, frequently-asked question back to me is disarmingly simple, “How do I find out more about what’s really going on in these areas?”

A business can deploy tools to evaluate culture. Well-informed people can gain insights into structural effectiveness by reviewing and revising the org chart. Again, there are consultants with insights who can review and advise on management and relational processes. However, how often do we hear from the people working at all levels in the business, that the structural effectiveness or process remapping exercise seems to have been sold well to the CEO and board – after all, these advisers often have an international name and a substantial fee attached – but missed a lot of the point?

Untapped Sources of Insight

The people working in a business know a lot about how it is travelling and how the innards are functioning. If carefully and respectfully asked, they contribute a lot to understanding what can beneficially be done to get things working better. The staff collectively don’t know it all but they work in the business and are familiar with the innards.

There’s some interesting work being done to examine within which business model a business operates and to test correlation between the business model and its performance data. ¹

The advantage of a business model approach is that it enables clustering of intangibles and drawing valuable granulated guides to action from considering them together and in a business model context. Rather than numerous studies of culture, effectiveness, communication, and delegation; all of necessity performed in an uncoordinated manner, a well-structured business models approach examines such facets of the business in a coordinated manner which generates insights for improvement in specific elements of operation.

There are various categorizations of business models; here are overviews of three business models which I use.

Isolation Model

People work in silos, isolated from each other and customers. Hierarchical, authoritarian structure. Production orientation, rather than the customer’s requirements. Vendor outlook.

Cooperation Model

People consult each other and the customer but with lesser focus on customer requirements. A loosely-defined ‘family’ in a largely isolation-type structure. Service outlook.

High Engagement Model

The business functions as a whole, organically, energized; it embraces flexibility and complexity. Shared authority within a performance framework. Discovery and full engagement with (‘line of sight to’) the customer. Performance outlook.

There’s a set of characteristics associated with each of these Models.

Typically, most businesses operate differently between Models in most of these characteristics, for instance being stronger in client engagement (tending towards the High Engagement Model) and less strong in optimizing opportunity for talented staff (tending towards the Isolation Model). As well, typically most businesses also vary their application of any one characteristic depending on circumstances – for instance having a bigger appetite for business risk when competition is strong and the order book is short.

An Example of Insights Gained

Here is a summary of points revealed in a recent business models study, from the overview section of the report to the client.

We recommend attention to several facets of the business, designed to transition from a passive and reactive leadership and management style to an informed one. This will require leadership, effort and change on your part; your senior people tell me they are ready for such improvement. Here are some specific things to do.

  1. Examine your desires and options as owner/director, settle a strategy to optimise your exit from the firm, develop and implement a plan to better prepare the firm for transition. Expand this into a full strategic plan.
  2. Approach strategy as a dynamic. Engage your team in regular broad reviews, environmental scans and futures discussions; evolve strategies, goals and action plans as the environment and events change.
  3. Develop a pattern or performance reports to keep you and your senior people in touch with key operations and deliverables of the firm. Don’t report for reporting’s sake; identify those specific functions where value will be added in an active and positive management system, explore this with your senior team. There will be some trial and error in this; we have some information about performance reports and templates which we can discuss with you.
  4. Set up a framework of accountability, authority and responsibility; in a firm of your size, this doesn’t need to be heavily-structured or overly-formal. Your senior people recognize the need for this and are ready to take on more responsibility. This will be an important plank in your transition.
  5. Make a capability and capacity review of your senior team and use this to inform the framework of responsibility and authority. Engage with your senior staff on their personal growth and development, in the context of a new management model. Let them work with you to design delegation models and resource flexibility processes.
  6. Devolve client engagement; you can no longer be the anchor. Train your staff in the three levels model and active High Engagement Client Relationship Management.
  7. The firm as a whole isn’t risk-averse but its approach is based on informal and intuitive elements. Develop a risk model and engage your senior staff in this.
  8. Engage your seniors about their aspirations and intentions, develop a feeling for their interest in a potential buy-out. If this progresses, engage a third-party business adviser to develop the concept with the individuals and possibly collectively.

¹           Frederic Laloux. Reinventing Organizations: a Guide to Creating Organizations    Inspired by the Next Stage of Human Consciousness, apra, 2014.

About the Author

Ian Mathieson – Managing Director, MATHIESON MANAGEMENT PTY LTD

Drawing on his experience and learning as consultant, business owner and manager, Ian Mathieson has developed, helped by other experienced professionals, the Data+Scorecard® Instrument.

 

 

Data+Scorecard®: The complete package solution to create a highly engaged organisation

The Data+Scorecard® Instrument identifies areas in your business that you can focus on to effectively manage the shift towards the High Engagement Model, which supports longer-term performance and sustainability. This simple yet powerful three-step analysis and recommendation package gives you valuable insights to drive positive change in your business.

Find out more here.

Mrs Mac’s recipe for retention Test

And why IML’s National Salary Survey is a key ingredient

Founded in the 1950s, Mrs Mac’s has grown from being a humble bakery to become a household name – now producing over 100 million pies, sausage rolls and other pastry products each year. While the quality of Mrs Mac’s product hasn’t changed over the years, the business itself definitely has. Today, Mrs Mac’s has a team of over 300 working across Australia and New Zealand – a far cry from the small family-run shop it once was. What’s impressive about this evolution is that so many of Mrs Mac’s people have stayed loyal throughout the process – a testament to the strength and consistency of the company’s culture.

 

Mrs Mac’s has been using and contributing to IML’s National Salary Survey for many years now, so we took the opportunity to chat to them about the survey – and the role it plays in their retention strategy. Here’s what Mrs Mac’s HR Manager, Toni Gray, had to say.

 

As Mrs Mac’s HR Manager, you’re responsible for all things HR – quite a broad job! What aspects do you find most challenging?

“At this point in time, I think staff engagement. We know that a number of factors feed into this – there’s pay, but then there’s also the general feel and culture of the business, and the way in which it evolves. As we seek to do things smarter, we make changes that we feel will add value or enhance the employee experience – but when you have a workforce with great retention and tenure, they’re sometimes not as used to change so we have to manage that effectively.”

 

Your average staff tenure is around seven years, and your pastry chef John Miller has been with the company for over 40 years. How do you explain this great retention?

“At Mrs Mac’s we’ve always worked hard to maintain an open culture with family values, and make it a great workplace for everyone – whether they’re working in the office or the factory. People are here for many hours each week, and we want those hours to be enjoyable. To achieve this, we run staff events once or twice a month that are accessible to everyone – from ‘bring your kids to work’ days, to talks from super or healthcare providers, to pizza lunches. Our products are freely available in our staff kitchens.

 

At Mrs Mac’s we promote a culture where people are allowed to learn from their mistakes, rather than getting in trouble for them. People are encouraged to ask questions, and have a bit of fun! We also like to give our people the chance to weigh in on decisions we make, so we run polls and surveys a few times a year. To keep people connected, we have a bi-monthly newsletter that includes things like a staff spotlight, recognising people and teams who are doing a great job. Our annual employee engagement survey also gives people a good opportunity to provide feedback – and we’re always conscious to report back to employees on how this has been actioned. There’s no point asking if people feel that their feedback has gone into a vacuum.”

 

What role has the National Salary Survey played in your retention strategy? What inspires you to keep using it?

“Mrs Mac’s was using the NSS even before I came on board – but I’ve always seen the value in these resources. I particularly like the NSS because we contributed to the survey, so I know our pay structure has been taken into account. We use the NSS as a key part of our annual review process to make adjustments to salaries, ensuring that we’re market competitive but also internally aligned. If there have been job changes we use it to see what a job is worth; if we’re recruiting for a new position, we use it to determine what someone will be paid. We’ve also used the NSS to make sure there are no discrepancies in salaries, giving our Management team and Board the peace of mind that we’re an equal opportunity employer.

I find that the survey also helps during conversations with employees who may be requesting a raise. Salary is someone’s livelihood and linked to their self-worth – so employees really need to feel like they’ve been listened to, and given an answer that has a credible basis. With the NSS, I feel confidence in the recommendations I make. Compared to other surveys, it’s also a cost-effective solution (plus it’s updated twice a year), so we can afford to access reliable salary information that’s always current. The fact the Staff Retention Report comes as part of the package is an added bonus; it’s always interesting to see how we stack up and whether there’s anything we can learn.

 

My job is really about getting the balance between what the company needs, and what our people need. At the end of the day, we can’t be a great brand without great people. From the Board to Senior Management down to everyone on the floor, we really do have a great culture and a great team – one I’m proud to support and be part of.”

 

Curious to see what else the NSS can tell you? Why not order your copy now, or download a free sample.