5 Ways To Improve Your Cash Flow

By Toby Smith

 

As a successful manager, you’re well aware that the survival of any business – regardless of size and profitability levels – ultimately depends on cash flow. Most businesses that end up in liquidation reach that point because they run out of cash.

This article outlines a number of measures you can implement to achieve sustainable cash flow improvements. Even if cash flow isn’t a major concern for your business, following these steps can help you to free up capital to invest in infrastructure improvements or growth opportunities.

 

1 – Regular financial reviews

Having detailed and up-to-date knowledge of your financial performance is critical. If financial management isn’t your strength, engage a strong finance team to advise you, and ensure they maintain a steady focus on cash flow and profitability rather than growth rate.

Your schedule should include a monthly analysis of your financial statements, looking not just at your current financial status, especially your free cash flow, but also at past performance (your trends and trajectory, particularly your profitability ratios and return on capital employed (ROCE)) and at forecasts for the immediate and longer-term future.

Regularly drill down and examine the financial performance of each of your product or service lines and sales channels, as well as your stock levels, debtors and assets.

This information will help you to make informed strategic decisions about your operations and enable you to identify potential issues in time to take corrective action to protect your cash flow. For example:

  • Organising short-term finance to cover working capital shortages
  • Matching the timing of expenditure to income if you have fluctuating income (by delaying discretionary purchases or negotiating with creditors)
  • Adjusting your stock policy if you’re tying up cash in excess inventory (be wary, for example, of buying extra stock to take advantage of vendor discounts or rebates, as savings can quickly be lost to storage costs)
  • Tightening up your credit terms or collection policies if too much cash is tied up in bad debts, and imposing purchase restrictions until debts are cleared, or even ending relationships with clients that have a poor payment record.

 

2 – Regular strategic reviews

Unfortunately, for many businesses, a strategic plan is something that’s created once then either forgotten or followed rigidly without review. As a result, precious cash gets tied up in obsolete stock, irrelevant marketing campaigns, bad debts and unnecessary assets.

To stay competitive and keep your cash flowing freely you need to regularly re-examine every aspect of your business to make sure that your:

  • Product lines or services still meet your customers’ needs
  • Sales channels are aligned with your customers’ preferences
  • Marketing initiatives are successfully attracting new customers
  • Technology and equipment are appropriate for your needs (it can be tricky to find the balance between staying efficiently up-to-date and not wasting cash on unnecessary upgrades).

Being willing to change direction and redefine your strategy – including making tough decisions on the future of product lines, sales channels, marketing strategies and assets that are draining your cash flow – is critical to long-term success.

 

3 – Cautious growth

One of the main reasons companies run out of cash is that they grow too fast.

The risk is that in order to meet the demands of new customers or clients, you’ll have to invest heavily in infrastructure, materials or labour. That up-front investment can wipe out your working capital reserves and leave you dangerously exposed until you receive the funds from the extra sales.

If you don’t have the cash to meet your financial obligations in the meantime, your business may not survive to reap the benefits of that sales growth.

Focus instead on steady, cautious growth that won’t exhaust your cash reserves or stretch your resources to the point where your service levels (and reputation) will suffer. And be very wary of funding growth with borrowings, especially when interest rates are rising.

 

4 – Prudent borrowing

Loan repayments can be a major drain on your cash reserves, and unless you’ve locked in fixed interest rates you’re always at risk from rate increases that can play havoc with your forecasts and quickly deplete your cash reserves.

The most important measure you can take to minimise your cost of borrowing is to make sure the term of your loans match your business needs:

  • Never use short-term facilities like an overdraft or credit card to finance the purchase of long-term assets. Not only will you pay higher interest rates and charges, you also run the serious risk of having the facility withdrawn before the asset is paid off – leaving you with an instant cash flow crisis.
  • Avoid using long-term funding to boost your working capital. Many long-term loans have penalties for early repayment, which can you leave you locked into paying for finance you no longer need. Instead, opt for at-call finance to smooth out fluctuations in your cash flow, so that you’ll only pay interest on funds when you need to draw on the facility.

Shop around for business finance, especially if you need a fast cash injection – the ‘fintech’ alternative loan market is booming in Australia, offering a competitive source of funding for businesses of all sizes. Be aware, though, that alternative lenders aren’t regulated in the same way that Australian banks are, and some may seek to impose restrictive loan conditions in order to reduce their risk.

 

5 – Putting your cash to work

While most cash flow improvement measures focus on finding ways to increase cash reserves, it’s actually possible to have too much cash, earning negligible interest and leaving you with poor ROCE.

If you do happen to have large cash reserves – more than you need to meet your working capital needs, fund your loan obligations and cover an extended downturn in sales – you may want to consider reinvesting those funds in your business.

One way you can use excess funds to improve cash flow is to repay loans (if you can do so without incurring penalties) since the interest you earn on your savings will never match the amount you’re paying on your borrowings.

How to choose a leadership coach

Written by Phil Crenigan FIML, Executive coach and the Managing Director of Executive Turning Point.

 

Leadership coaching is big business. while it can have a positive influence on your career, much of the benefit comes down to finding the coach who is right for you.

JUST LIKE LIFE, our careers do not run in straight lines. A leadership coach can at least help to keep you on the right path, so long as you do your research and find the right one.
Recent studies have confirmed that engaging the right external leadership coach has a profound and measurable effect on positive engagement. It can also unlock potential and increase performance in two main ways – developmental coaching and coaching to resolve a problem or potential risk. In the latter case, I would argue that every coaching experience is a positive one, provided the organisation or individual will acknowledge that a problem or risk exists.

 

DEVELOPMENTAL COACHING
A leadership coach can help you to develop greater emotional intelligence. They can also help improve your skills and knowledge and provide frameworks for work/life balance, which is essential for good leadership. At an interpersonal level, a coach can support a leader in a new role and help teams set the bar for inspiring behaviour.At an organisational level, they can support the succession planning process by helping people realise their potential.

They can also fast-track the development of those with high potential and assist those who are leading transformational change or who have to influence a board. One of the most rewarding aspects of my work is acting as the team coach to build high performance. The ability to inspire others is a critical trait of successful leaders, but knowing how to build high performance is not always easily understood.

 

COACHING TO RESOLVE PROBLEMS OR RISKS
A leadership coach can help prevent career derailment and reduce stress levels or other emotional factors that might be interfering with performance. They can assist the coachee to address career-limiting behaviours and to avoid cultural misalignment in new roles. Where talent retention is an issue for an organisation, the engagement of a leadership coach can make a significant difference to the employment brand. A skilled leadership coach will be effective at reducing conflict between team members and closing gaps in the leadership skills that may be required in transformational change.
An experienced external leadership coach is usually preferred over internal coaches, given they tend to have less bias, focus on the right issues and require commitment and application of just-in-time learning. As personal development is often a casualty of time-poor executives, the engagement of an external leadership coach is both efficient and effective as there is a specific focus on outcomes.

 

CHOOSING A LEADERSHIP COACH
When it comes to selecting the right coach for you or your organisation, you must understand what you want to achieve from the process. As with many professions, there are outstanding coaches out there. However, as Leo D’Angelo Fisher described in his 2013 Australian Financial Review article ‘Time for Executive Coaching to come out of the shadows’, it seems there are more executive coaches out there than Elvis impersonators. D’Angelo Fisher wrote: “Coaching is one of the most heavily spun sections of the consulting fraternity.

I have met many scores of coaches over the years; they have ranged from impressive trusted advisors and confidantes of substance to opportunistic spivs, flakes and carpetbaggers.” This simple checklist can help you choose the right coach.

 

 

1. START WITH THE ISSUE
What is the purpose of coaching and what is the desired outcome? What does success look like? How might you measure the outcome? Ensure you have secured support from your boss whatever level you are.

2. IDENTIFY A SHORTLIST OF COACHES
Ensure they have the experience to address your issues and avoid having a coach imposed upon you.

3. DO YOUR OWN DUE DILIGENCE 
What do you see when you Google a potential coach’s names? Do they have strong recommendations from former clients on LinkedIn?

4. SEEK EXAMPLES FROM YOUR CANDIDATES
Ask them to show how they have addressed a particular issue in the past and understand the process they will adopt. Be clear on what style of coach you want and assess whether they are the right fit in your initial discussions.

5. ASK TO SPEAK TO THEIR CLIENTS
Find out what it is like to be coached by this person.

 

The relationship you develop with your leadership coach will be one of deep trust and respect, so it is worth being rigorous in the selection process so you get the most out of it.

Sharing their vision is the way that leaders create the future

Written by Charles Horvath MIML, Professional Mentor and Decision-Making Facilitator

 

As a business mentor, I am passionate about succeeding.

We know and understand the principles for sound management and for succeeding. The rebranding of the Australian Institute of Management to Institute of Managers and Leaders (IML) is an excellent example of a successful undertaking. The right thinking took place at the right time and with the right execution, IML and its members are on the path to a successful future.

 

The August 2017 issue of Institute’s magazine, Leadership Matters, gave a very good description of Chief Executive, David Pich, went about the process of rebranding IML.

 

However, the fundamental reason for the success of the rebranding was only touched on coincidentally. The fundamental reason for the success of the rebranding was that someone had a vision of what IML would look like in the future. They shared that vision and a sufficient number of people bought into that vision for it to prevail.

 

A cursory review of management and leadership writings indicates that many characteristics are ascribed to successful managers and leaders, such as good planning, ability to communicate, selecting the right people to fill roles, to name a few. The one characteristic that is mentioned only in passing is that of a vision.

 

The foremost characteristic of a leader is to have a vision that captures the imagination. Nelson Mandela had a compelling vision. He shared it. People bought into it. South Africa is now free of apartheid.

 

Whilst a person becomes a leader for a number of reasons, the most important reason is having a vision and sharing it. David Pich is an excellent example of an effective leader. He had a vision for the Institute that was clear, compelling, comprehensive, soundly reasoned, supported by research and well presented to the target audience whose support was a key factor in the rebranding. People bought into it and the transformation to the IML took place.

 

The Institute is now a body of professional managers and leaders. This is great for its Members because they now have a new and an exciting credential with which to present themselves. However, at a bigger picture level, I would like to consider how our society as Australians will be affected by our newly qualified professionals.

 

The reason for focusing on vision as an important attribute of leaders is because leaders create the future. They do this by having a vision and sharing it with others. Leaders know how to bring the future into existence. So the question is, as a leader, “What is your vision for yourself, for others, and who are you sharing your vision with?”

 

Given that functioning with vision is an endemic and intrinsic part of our nature, we function with is subconsciously. My purpose in having broached the topic is to make conscious use if it.

 

Charles Horvath, B.Bus. (ACC.); FCPA; MIML.

Professional Mentor and Decision-Making Facilitator

Leadership In Crisis

Written by Sebastian Salicru 

Organisations are known to invest heavily in leadership development. But in a rapidly changing world, are the traditional approaches paying off? 

THE PROBLEM: 

In a world of complexity, turbulence, high-velocity and continuous change, the context for leadership, as we know it, has been turned upside down. Recently, we have witnessed what I call the ‘three Ds’ of leadership – distrust, doubt and dissent. These are the outcomes when leaders fail to respond effectively to the changing context in which they must lead and the expectations of their stakeholders. Distrust and lack of engagement flag the need for leaders to rethink how to exercise leadership and engage their followers. Traditional leadership approaches no longer hold water. The briefest glance at the television news or daily newspaper paints a vivid picture of the global and local leadership crisis, with escalating trends and all-pervasive images to dismay even the most casual viewer. I would contend that data, facts and figures say far more than even a thousand words. Credible research at the forefront of contemporary thinking tells us that current investments in leadership may not be paying off:

  • Only 13 per cent of employees worldwide are engaged at work (Gallup)
  • 81 per cent of CEOs rate leadership development programs as less than highly effective (PwC 2015, Annual Global CEO Survey)
  • Of 7500 business and HR leaders in over 100 countries, 55 per cent judge the return on investment (ROI) of their current leadership development as fair to very poor, and less than 20 per cent are confident they have the leaders they need to deliver on strategic priorities (Korn Ferry, 2015 Global and Regional Real World Leadership Report).
  • Of 2200 global HR leaders, 86 per cent believe their organisation’s future depends on the effectiveness of their leadership pipelines, but only 13 per cent are confident in their succession plans, with 54 per cent reporting damage to their businesses due to talent shortages (Deloitte’s 2015 Global Human Capital Trends: Leading in the new world of work)
  • Only 6 per cent of executives feel ‘very ready’ to meet their leadership needs in 2016 (Deloitte’s 2016 Global Human Capital Trends. The new organization)
  • 86 per cent of the 1500 world’s foremost global experts believe that the world is currently experiencing a leadership crisis (World Economic Forum. Outlook on the Global Agenda 2015)
  • Only 7 per cent of organisations feel they have a ‘Best in Class’ leadership development program (Harvard Business School Publishing. 2016 State of leadership development survey).

Meanwhile, in Australia, research conducted in 2016 by the Centre for Workplace Leadership, University of Melbourne revealed 75 per cent of employees needed better managers and leaders. Gallup estimates the cost of the resulting lack of engagement is $54.8 billion a year. This precarious state of affairs exists despite the fact that organisations invest heavily in preparing their leaders. The 2016 Harvard Business Review article ‘Why leadership training fails – and what to do about it’, describes this growing multibillion dollar leadership development industry as failing to deliver results and asserts that corporations have become victims of “the great training robbery”. You don’t have to be a rocket scientist to know that urgent change is required.

 

“This precarious state of affairs exists despite the fact that organisations invest heavily in preparing their leaders.”

 

My research identifies that the following practices will create adaptive leaders and high-performing organisations and deliver leadership results:

  1. Painting a clear picture
    Keep it clear and simple – this encourages people to adapt to change and act. In times of uncertainty, people want to know: what’s the story? Effective leaders are adept at painting a clear picture through storytelling and can help others to interpret and respond positively to change.
  2. Build leadership capability
    Traditional leadership approaches mistake management, authority and power with leadership, which involves exercising influence, whether you are in a position of power and authority or not. Traditional approaches to leadership development are individual-centred only. They confuse ‘leader’ development with ‘leadership’ development. Leadership development historically has focused on enhancing the knowledge, skills and abilities of those holding senior managerial positions only. This focus needs to expand to improve the leadership capacity of the whole organisation, and to develop and improve the relationships and collaboration that knit all units, departments, and networks together.
  3. Move beyond competencies
    Competency models emerged in the 1970s as a way of codifying the required behaviour for particular leadership positions. They drew on past successes by identifying relevant and effective behaviour as opposed to examining mindsets needed for the future. A more holistic and integrated approach to leadership development is required that addresses the many (less visible) mental, emotional, and psychological processes that often determine behaviour. The solution is moving towards using ‘adaptive’ or ‘meta-competencies’ – the sets of knowledge, skills and aptitudes that underpin or allow for the development of other competencies, especially those that people will need in the unpredictable future. Meta-competencies enable learning, adapting, anticipating and creating change. Both self-leadership (personal mastery) and leadership development require going beyond competencies, though they are grounded in competence and skills. Developing character is the key to effective leadership and, given that leadership is a relationship between people, leadership effectiveness is related to everyone’s efforts to create positive relationships in the organisation. Kevin Cashman, CEO at Korn Ferry, explains that “competencies get us to the doorway of leadership, but character gets us through the doorway of leadership. Managers tend to control resources to get results, but leaders exert character to build a sustainable future.”
  4. Focus on creative thinking and innovation
    Modern organisations need to innovate continuously to ensure their long-term survival and success. Leadership is the precursor of all innovation. Strategically, leaders establish work environments that are conducive to creative thinking and innovation, which in turn leads to a competitive advantage.
  5. Conduct impact evaluations
    Evaluation is an important component of the leadership development process itself with three main benefits: extending the reflective dimension of the program by inviting participants to consider the value of the experience and how they apply it; gathering valuable suggestions for improvements to the programs; and fostering employee engagement and loyalty.

THE SOLUTION: 

Collective leadership involves all employees and means that everyone is responsible for the team or organisation’s success and not just for their individual role. This means leadership is distributed, rather than being centred on a few individuals in formal positions of authority. The broad distribution of responsibilities is naturally more inclusive, as it involves all participants, which makes collective leadership more effective than individual leadership.

This approach to leadership offers each individual voice in the organisation. This, in turn, empowers people, who then feel more valued, trusted and heard. In this way, everyone’s interaction and effort at every level drives performance and shapes the culture of the organisation.

Collective leadership is relational rather than hierarchical. It enables everyone to be active in leadership roles as it flattens workplace structures. Giving people more responsibility also means allowing them to be more accountable, take risks, make mistakes and learn from them. This can allow individuals to be more accountable and empowered, making them more committed, engaged, creative and innovative. In this context, leaders become mentors, supporting each other to achieve an organisation’s collective goals and outcomes.

Years of traditional leadership have resulted in systems that value hierarchy, status, authority and control. The move to collective leadership requires change not only at a leadership and cultural level, but also at an individual level. The challenge in shifting to collective leadership is that people are not used to having a voice. Instead, they are used to a dependency created by the pervasive ‘leader–follower’ paradigm. Dependence on a leader does have some clear implications, even though influential leadership can wean followers off their dependence. First, it implies that the followers or subordinates have limited ability to make decisions and get work done without guidance or permission. This results in hesitation, employees who feel vulnerable and threatened by change, and substandard decision making, which produces less than desirable results and decreased productivity. Psychologically, this means the subordinates’ self-esteem and motivation depends on receiving recognition and approval from their leader.

As William James (1842–1910), a philosopher considered one of the fathers of psychology, said: “The deepest principle of human nature is the craving to be appreciated”. Leadership dependency creates this craving and keeps individuals in a cycle of looking for recognition from places beyond their control. This often leads to dissatisfaction, powerlessness and anxiety.

Second, it means that for leadership to succeed, the followers must idolise their leaders, often as authority figures, attribute to them unrealistic qualities and create unrealistic expectations of them. In turn, leaders on pedestals can be pressured by the need to always be correct and can become overly defensive to criticism.

“Collective leadership means each individual has a voice in the organisation.”

Finally, dependence stifles followers’ creativity and kills any chance of them offering innovations. Traditional leadership patterns rely on control, obedience and conformity. Followers who dare not depart from their leader’s ideas are not engaged in their own creative processes.

Empowerment, on the other hand, is about providing others with autonomy and independence. This occurs when people feel valued for their experience, potential and contribution. Empowered individuals are motivated, believe in their ability to perform successfully and are also more creative. Collective leadership allows individuals to develop their own abilities and independent thinking skills, which builds collective social identification and self-efficacy – a shared belief in the ability to accomplish tasks and achieve common goals. This in turn fosters team creative thinking and innovation, which creates an environment rich with job satisfaction and improved results.

Clearly, collective leadership is a relational, fluid and evolving approach where multiple (if not all) employees or individuals assume leadership roles in a group or organisation in response to specific situations, settings or contexts. It means everyone takes responsibility for the success of the organisation as a whole. With everyone taking responsibility for the organisation’s success, power needs to be distributed to where the right capabilities, expertise and passion exist.

Collective leadership, therefore, requires networking and collaboration across organisational boundaries. It draws on a firm’s social capital and builds on the knowledge, skills and abilities of all employees. It requires individuals to engage in high levels of communication and to work openly and interdependently to share ideas and have a joint vision and common goals.

When done successfully, collective leadership benefits everyone, allows for more innovation, allows organisations to adapt to change quickly, and delivers outstanding performance and results.

 

Getting To Know You

By Jane Caro, Author, Journalist and Broadcaster

Are you quick to judge? You may be projecting your own shortcoming on to others. Try a dose of self-awareness.

I THINK IT was US comedian Sarah Silverman who pointed it out first: President Donald Trump’s tweets criticising others for failings and wrong-doings are not actually accusations but confessions. So often, whatever he claimed others were doing, it turned out he was doing himself. There are many other examples of this kind of behaviour.
I now automatically expect that those who froth at the mouth about immorality, adultery, lust and what they call the ‘abomination’ of homosexuality, will sooner or later be caught in flagrante delicto with a mistress, a young man in a public convenience, a prostitute, a cache of child pornography on their computer or all four.

 

I have often wondered about those who claim climate scientists have concocted a sophisticated international conspiracy about global warming for personal gain. I don’t know if they are aware what your average climate scientist earns, but it’s highly unlikely their academic salaries are enough of an incentive for that level of risk and intrigue. If you want to know where the financial incentives are concentrated in the battle over climate change, I suggest you look to the climate deniers themselves, those who fund them and the billions tied up in the fossil fuel industry. The motives they ascribe to scientists are much more likely to apply to them.

 

We seem to be in the midst of an epidemic of psychological projection. This is the theory that people protect themselves from their own unconscious and unwanted impulses and desires by denying they have them while projecting them onto others. Irrationally hating people who look different from you may indicate you have deeply buried feelings of inadequacy and inferiority.
Being hostile to women may indicate an unacknowledged fear of your own softer side.

Jane Caro will be emceeing at the 2018 International Women’s Day Great Debate in Melbourne, where 6 high-profile Australians will share powerful leadership insights on the iconic female slogan ‘The Future Is Female’. Book your seat now

 

Perhaps the cure for all this psychological projection is self-awareness. To be self-aware means we cannot deny our own unwanted and unacknowledged impulses and desires because they no longer remain stuffed into the darkest corners of our subconscious. Left to gather dust, the unexplored parts of ourselves can cause a great deal of harm. Those are the parts of us that destroy families, careers, friendships and lives, without anyone really understanding why.

 

Unfortunately, no flesh and blood human is completely self-aware; there are always things about ourselves we are blind to. However, that does not mean we cannot strive to be as self-aware as possible. Indeed, if you find yourself having dark suspicions about someone else’s motivations based on little or no evidence, or take an instant but visceral dislike to someone, those can be red flags about something you are denying in yourself.

 

If, for example, you think most people are untrustworthy and only out for themselves, look carefully at your own motives and behaviour. If you are jealous of your partner and spy on them seeking evidence of infidelity, look to your own desires and untrustworthiness. If you find someone irritating or pushy, examine yourself, especially if the person you feel such animosity towards is well-liked by others.

 

The self-aware person will have all the usual failings but they will look to themselves first when things go pear-shaped rather than automatically assuming that if they feel bad or behave badly, it must always be someone else’s fault. Self-aware people own their own emotions, both positive and negative. They own their own weaknesses, failures and vulnerabilities. They face up to their own mistakes and take responsibility for them. They accept that the only person they can change is themselves.

 

In fact, the more self-aware you become the more grown-up you become. Plenty of human beings, which is both their tragedy and ours, never make it past adolescence in terms of emotional maturity. This includes a great many of our leaders. I can think of two right now who are clearly cases of arrested development and are huffing and puffing at each other while their fingers are hovering over nuclear hot buttons.

 

Frankly, the need for more emotional self-awareness among those who lead has never been more urgent, but if the only person you can change is yourself, I guess we better all start there, whoever we are.

 

JANE CARO RUNS HER OWN COMMUNICATIONS CONSULTANCY. SHE WORKED IN THE ADVERTISING INDUSTRY FOR 30 YEARS AND IS NOW AN AUTHOR, JOURNALIST, LECTURER AND MEDIA COMMENTATOR.

A League Of His Own

Football Federation Victoria’s Chief Executive Maxwell Gratton has a passionate approach to leadership. It gives him more than a sporting chance of success.

WHEN MAXWELL GRATTON, at the time CEO of Basketball ACT, accepted the job of chief executive of Football Federation Victoria (FFV) late last year, it was a return to home turf for the former FFV’s operations manager who was responsible for special projects and discipline.

Gratton may have left basketball administration behind him, but he exited on a high note. His two-year stint as CEO resulted in the organisation posting the first surplus in its history. Basketball ACT’s chair David Leaney attributed the turnaround to Gratton, telling the Canberra Times:

“We’ve had two years with Max and if you think where the organisation was – with a deficit budget and all sorts of issues – he’s really been the man on the ground to steer us through some tough issues.”

Gratton was named ACT leader of the year, in the not-for-profit category, at the Institute’s Leadership Excellence Awards last year. Recently, the Institute’s chief executive David Pich FIML, together with Gratton, explored the myths and realities of sports administration.

DAVID PICH: When you took up the CEO role at FFV it was hardly uncharted territory for you. Prior to your CEO role at Basketball ACT you were with FFV for seven years. What has changed since you’ve been gone?

MAXWELL GRATTON: When I left the FFV, it was recovering after some challenging financial times. It was in a really different place to where we are now, where our strategy is to add value to our stakeholders, which is our clubs. Contact with the local club is how most players, referees, and volunteers interact with the sport. Equipping and empowering our clubs is going to be the base from which the game can further grow and develop. The strength of the federation is very much underpinned by the strength of our clubs.

DP: I always think that people who work in sports are passionate about their jobs, but that’s probably not accurate because you can be passionate about other things as well. Do you feel you have to be passionate about the sport itself?

MG: I couldn’t agree with you more. I think if you’re not passionate about something, you’re never going to reach peak performance. But you don’t necessarily need to know the complete intricacies of that sport to be able to derive some passion from it. One thing that enabled me to really fire up the passion [for basketball] was a lot of the synergies that I saw between basketball and football. They’re both global sports with real breadth and depth of diversity, as they are played by both genders as well as people of all abilities. Sport can be inclusive, help develop friendships, be character building and good for your health. It can build people, places and communities, and that is the real passion in sport.

DP: When you arrived at Basketball ACT it was in deficit. How did you manage to turn the business around financially?

MG: At the time of my arrival at Basketball ACT, it was experiencing an [overall] $700,000 loss against a turnover of $3 million. That’s when you know you’re in a pretty difficult situation. Hard decisions had to be made but in the end I think my legacy was leaving the organisation with its biggest capital works [program] in 20 years. This included the delivery of four outdoor, 3-on-3 courts, which was especially valuable with 3-on-3 [where three people play on each team using one hoop] just being announced as an Olympic discipline from 2020. Basketball ACT now has the best FIBA [the International Basketball Federation] standard, purpose-built facility for 3-on-3 in the country. To achieve this, I have to acknowledge that I’m very thankful and appreciative of the support and leadership of the president, David Leaney. I consider him one of my mentors and he’s still a close friend today. Early on I remember having a coffee with him and telling him, ‘look, the organisation is in a pretty tough position at the moment, so I’m going to make some hard decisions and I need your support. It might even cost me my position down the track, but I will do what is right for the organisation’. And he gave me that support. He and the board fully backed the tough decisions that needed to be made. I also ensured that I had good people around me, because as I’ve also been told that it’s hard to soar like an eagle when you’re surrounded by turkeys. I’m very thankful for my number two, Dan Jackson. It’s important to have people who are strong enough to give you an honest opinion and not just tell you what you want to hear.

DP: I can’t talk to an administrator in the world game of football without mentioning ethical leadership, as the scandals at FIFA spring to mind. I wonder whether you might give us your views on some of the ethical challenges that the top echelon of football has experienced in recent years.

MG: For me, ethical leadership is about being authentic, transparent and fair. Good governance also is very important within sports administration, which is predominately conducted in a not-for-profit space. As a sports administrator, I’m really a custodian of the game for the players, referees and other key stakeholders. So ensuring that there are proper processes and procedures in place and that due diligence is followed is critically important.

DP: You’ve been reported as being Australia’s first openly gay sports CEO. And earlier this year, you made headlines for taking your partner, Chris, to an awards night. And I think you were quoted as saying that hopefully it sets an example for LGBT [lesbian, gay, bisexual and transgender] advancement within sports, and that a lot of people from that community shy away from sport because it’s perceived to be, or is actually, homophobic. What’s your view on the progress that sport, in general, is making to be more diverse and accepting?

MG: I thought it was very important to further discussions about LGBTIQ [lesbian, gay, bisexual, transgender, intersex and queer] celebration within sports administration. LGBTIQ issues have advanced in many industries and within the community. Sport is one of the last bastions where there is still a level of resistance. I think diversity should be celebrated, and that’s where I’d like to make an impact. I hope it sets an example for the future by just starting the discussion. Hopefully this inspires others to also lead in their own way. I’m told with LGBTIQ issues first there is resistance, then there is acceptance, then there is celebration. I think we’re sort of moving past resistance towards acceptance. But I don’t think that’s good enough, because acceptance, in many respects, could be a branch of tolerance. Because in business culture, whatever becomes the norm is whatever you tolerate, so that’s the lowest form of acceptance in many respects. For example when you accept your friends, you don’t tolerate them, you celebrate them. There is evidence that just by having celebratory and diverse workplaces, you can foster more creativity and encourage more innovation. It can also reduce issues like absenteeism. And there are economic benefits that flow on from having a diverse workplace.

DP: Coming out is a major issue for professional players, because it’s essentially a private issue that plays out in the public domain. I think that one of the most difficult places to come out would be in front of thousands of people in a sporting stadium. But I can’t help but think that society has changed so much, that we’re very, very close to that point when this conversation doesn’t need to be had at all.

MG: I would hope so. But from a Premier League perspective, I think Europe and the UK is still a bit more advanced than in Australia where we’re still debating about whether we should have marriage equality or not. It disappoints me that we’re still discussing this. Hopefully, we shall resolve that issue pretty soon. But I do agree with you. I think progress is being made, but there’s still some way to go.

Time Management Is Dead…

Written by Christine Petersen FIML, Managing Director at Time Technology

 

It has served us well and it is now time to let it RIP…  

 

Peter Drucker a futurist and management guru wrote in the 80’s about the 21st century workplace saying –

“The single greatest challenge facing managers will be to raise the productivity of knowledge and service workers.   This challenge will ultimately determine the competitive performance of companies.”

 

A good definition of productivity is –

Producing valuable results through the conservation of time, energy and effort!

So what is the difference between time management and productivity?

 

Time management will focus on task and time – how much work can we squeeze into the time we have available and in an environment where there is too much work and not enough time, it is just not possible to achieve more; the work just keeps coming.    The balance between being proactive and reactive is now well and truly weighted towards reactiveness.

 

Productivity will focus on results and outcomes creating a dynamic workflow that is constantly being prioritised between existing work and new work, making sharp decisions about the investment of time and accepting that priorities will constantly change.    Simply put working smarter.

 

Companies are looking for ways to do more with less, which from a business perspective is a good aspiration; automation, process improvement, improving the client experience and so on.    Yet from a work execution perspective it’s somewhat of a disaster as it really means we need to work harder and we all know where that ends.

 

I’m a great advocate of Doing Less Work to Achieve Better Results.   By no means is this a new concept, it has been growing popularity over the last 2 years as the work continues to increase.  In reality, we are left with 3 choices, reduce the amount of work we do, increase the hours we work or throw more resources at it.

 

As we head into 2018 here are some suggestions to do less work –

 

  • Be clear about the difference between being effective and Effectiveness is tied to results and outcomes, where will I invest my time to achieve the best results.   Learn to let go of the non-value work

 

  • Slowdown in order to speed up. Have a dynamic plan by being strategic about the most important work – release the urgent work habit, most of us now believe that everything is urgent

 

  • Use technology effectively. There is an abundance of technology available to help us work effectively, yet so often poor usability limits the productivity gains that can be achieved

 

  • Respect time. We work in highly disruptive work environments, don’t just succumb, look for ways within the team to reduce interruptions and maximise focus to produce results.  It is well documented that the recovery time from an interruption is now 10 – 12 minutes.  How many times a day do we ask ourselves ‘now where am I?”

 

  • Don’t always default to e-mail. Good communication is when we are understood.  If a communication is complex or we are coaching, use face to face; this can be via Skype for Business, Facetime or actually in person.   If clarification is required or building rapport, pick up the phone, email is not a building rapport tool.

 

  • Have good e-mail protocol. Team e-mail accounts for around 45% of total e-mail communication.  Have a best practice strategy within the team.   Only Cc team members when it is of value to them.   How can we reduce the e-mail traffic within the team?   Be creative.

 

  • Most important of all is thinking time. In an ever-changing work environment where ‘disruption’ is more commonplace, we need thinking time and not just doing  How many times have we said to our children ‘you need to think about what you are doing’.

 

  • Embrace change, in a world driven by change, resisting change has little value. No doubt change can be uncomfortable and it is very easy to slip back to old habits.  Now is the time to feel comfortable with being uncomfortable.  Adopt an apply, test and correct and try again attitude.

We live in very interesting times which finds most of us on the same journey, sit back and enjoy the ride.


For more on time management and business agility – check out our webinar packages and recorded webinars here

Making Staff Retention Your Priority

 

 

Staff retention should be an organisational priority at all times. Recruiting new employees with the right skills set and cultural fit can be timely and costly, and with often serious competition for strong talent.

 

Smart organisations work hard to effectively manage, develop and retain internal talent. The 2017 Staff Retention Report investigates current market trends in relation to staff retention and considers a range of strategies that can help reduce voluntary staff turnover and ultimately retain an effective and productive pool of in-house talent. In particular, the report looks at salary and its role in retaining top staff.

 

The IMF expects Australian economic growth to increase only modestly to 2.2% by 2018, down from the original estimate of 3%. Economic growth in Australia has been dragged down somewhat by declining resource-sector investment, while bad weather slowed housing investments and mining exports for first half of 2017 and Cyclone Debbie, which hit Queensland in late March, temporarily disrupted coal transportation.

 

This has been compounded by global political upheaval, including Brexit, the 2016 American election and, closer to home, high turnover of political leaders in Australian federal politics (six prime ministers in eight years).

 

Slow economic growth generally engenders slow salary growth. Wage growth has been steadily decreasing in Australia, dropping consistently each year from 4.1% in 2012 to 2.8% in 2017. What’s more, salary growth has not been keeping in line with inflation.

However, slow economic growth is only a part of the picture. Australia is experiencing a delayed effect from a global trend of weak salary growth. In the past, the mining boom largely shielded Australia from this trend. The rise of the “gig economy” where workers are employed as private contractors (including Uber, and food delivery services such as Deliveroo), and the growth of part-time roles also contribute to weak wage growth. In fact, wage growth might never recover to pre-Global Financial Crisis levels as the structure of the labour market has since significantly changed.

 

Additionally, there’s evidence to suggest Australians are becoming more risk averse and are choosing not to bargain for higher wages for fear of unemployment. Underemployment has increased and as a result more part-time workers are willing to take on greater numbers of hours rather than asking for a pay increase.

 

Remuneration plays a very important part in employees’ decisions to stay or leave workplaces and it may be the only factor for some. Market data from the National Salary Survey suggests that there are several HR strategies and approaches that can be considered to help organisations to achieve below market average resignation rates. Organisations could positively impact their turnover rates with policies such as increasing the entire salary package, providing a fully flexible salary package, adding more superannuation and rewarding overtime work with options that fit their needs.  Also having a supportive development culture will help to keep staff engaged and challenged enough to keep them from looking elsewhere.

 

The Staff Retention Report is part of the National Salary Survey package.  The 2017 National Salary Survey October Update is now available (use promo code PL20 to receive a special 20% discount).

 

 

 

 

When it comes to inclusion, the questions matter!

 

My partner – Eileen – recently decided to return to the world of work after spending time as the CEO, COO and CFO of Pich Inc. Whilst this crucial leadership role involved all those critical managerial skills (setting strategy, defining culture, making decisions, leading two young daughters, etc etc) it was sadly very poorly paid (in fact, the salary reduced to ‘absolutely nothing’ after the initial 12-weeks of minimum wage maternity pay!).

Dipping a toe back into the job market is undoubtedly a daunting experience for the vast majority of parents or primary carers who have spent a decent period doing the parenting and primary carer thing. It’s fair to say that Eileen was more than a little nervous and apprehensive. In her favour, she had a strong CV which included experience in Australia and Germany, a degree in marketing communications and a personal skill set that was actually honed at home with the kids. If she could manage and lead our two monkeys successfully, the workplace would be an absolute breeze!

“The CEO asked Eileen, ‘I see you have two kids, how do you think you will juggle your home life with this role?'”

She soon spotted a role on seek.com.au (other job search websites are availableed) and sent off her CV and a nicely-crafted covering letter. And waited. She scored an interview with the manager. The interview went well. She was invited to spend an afternoon with an employee doing a similar role. The road trip went well. She was asked to complete a written ‘sales and marketing assignment’ (oddly relating to selling toothpaste – the role was nothing to do with selling toothpaste!). She did pretty well. The local manager said he wanted her to ‘meet’ the company’s CEO in Sydney on a Skype call. Eileen was over the moon. Her first application and she was scheduled to chat to the CEO – score!!

And then this happened.

The CEO asked Eileen, “I see you have two kids, how do you think you will juggle your home life with this role?”

Let me state for the record that since Eileen and I have had our kids – Pearl and Olive – I have had three jobs. I have never (in the more than 8 interviews that were involved in getting these roles) been asked how I will ‘cope’ with balancing my home life and my work life. In fact, the only time my family has been brought up has been at the end of the interview in the part that might best be described as ‘general chit chat and small talk’. My family life, hobbies, passions and what I get up to in my spare time have never formed any part of a serious interview question.

And nor should they. Ever. Not for me, not for Eileen and not in any interview for any role.

“All too often questions are asked in interviews that have no place in interviews.”

Unfortunately, all too often the opposite occurs. All too often questions are asked in interviews that have no place in interviews. Robert Half, the global recruitment company, published a list of ‘example questions and statements’ that should never be asked or made during an interview.

This list (below), whilst not intending to be comprehensive, offers a reasonable starting point.

Age:
 “How old are you?”
Disability/impairment (physical and mental): “How many sick days did you take last year?”
Family/carer’s responsibilities: “Are you the carer for your elderly family members?”
Marital or relationship status: “Are you married?”
Parental status: “Do you have children?”
Political beliefs and activities: “Are you a Liberal voter?”
Pregnancy: “Do you plan on becoming pregnant anytime soon?”
Race: “What’s your nationality?”
Religious beliefs and activities: “Are you Christian?”
Gender (including sexual harassment): “Females rarely succeed in this industry.”
Sexual orientation: “Are you gay?”
Union or employer-association membership: “Are you a member of the union?”
roberhalf.com.au/blog (January 2015)

An alternate approach to the whole ‘what should I or shouldn’t I say in an interview’ approach, is what might be described as ‘the nuclear option’ in progressive selection processes; inclusive recruitment.

“Eliminating bias – unconscious as well as conscious – is critical for a robust recruitment process.”

Inclusive recruitment – often called Blind Recruitment – comes in a variety of forms. In the purest sense, it involves removing all references to potential ‘discrimination triggers’ at the very beginning of the selection process. This would include deleting references to age, marital status, gender and sexuality from the CV prior to it being scrutinized. In some cases, references to educational institutions and addresses are also removed.

The intent of implementing inclusive recruitment is to eliminate bias – both conscious and unconscious.  Numerous studies have shown that, whether we like it or not, we all have unconscious biases that cloud our judgements. When selecting the best person for a role, clouded judgement does us and the organisation no favours. For example, if we went to a certain school or were born in a certain place, it’s understandable that we would feel a certain ‘affinity’ to a candidate if we know in advance that they also went to that school, or were born in our hometown. Whilst this is completely natural (commonality makes people feel comfortable) it doesn’t help the interview process at all. We are after all looking to hire the best person for the role.

Eliminating bias – unconscious as well as conscious – is critical for a robust recruitment process.

Back over at Eileen’s ‘first recruitment process since having the monkeys’ (as we now call it!) – she didn’t get the role. The CEO emailed her and told her she wasn’t ‘salesy enough’. That’s fair enough I guess. But ‘that question’ lingers. Was it really that? Or was it ‘something else’.

“Conscious bias, unconscious bias and asking silly questions at interview is, sadly, extremely common. And even more worryingly, it’s often gender blind!”

And here’s the thing, the CEO who asked ‘that question’, well, she is female!

Conscious bias, unconscious bias and asking silly questions at interview is, sadly, extremely common. And even more worryingly, it’s often gender blind!

7 Top tips for leaders wanting to ‘do recruitment right’

  1. Ensure a thorough job analysis and job description is developed at the beginning of the process.
  2. Establish a clear set of selection criteria based directly from the job description. Know what and who you are looking for.
  3. Interviews should be an objective information gathering process. The focus should be on:
  • Skills and knowledge
  • Work history and professional experience
  • Education and training
  • Personal attributes and behaviour
  1. A set list of interview questions should be asked of all candidates in order to gather consistent information on every individual.
  2. Even if you are part of a smaller organisation, always have a colleague with you in the process to ensure you have more than one opinion and interpretation of the selection data.
  3. It is important to make the selection decision as soon as possible after the recruitment and selection process has been completed. Do not allow the process to drag out as the best candidates may accept another role.
  4. Keep in mind the culture of your organisation and whether the personal attributes and behaviours of the individual will fit within that culture.

 

By David Pich FIML
Chief Executive

Institute of Managers and Leaders

Weinstein, power, me and you

 

The ever-evolving and increasing allegations involving Harvey Weinstein, the Oscar-winning Hollywood based movie producer, make for incredibly distressing reading. Even more distressing is the sheer number of female friends of mine who have taken to social media to post #metoo and indicate that they have also been the victim of sexual harassment, or worse.

Of course, my personal distress at all of this is a million miles from the point. My distress is nothing compared to what Weinstein’s accusers have been through. Or indeed the millions of women who are finally feeling able to say, ‘enough is enough’.

And it’s true. Enough is enough.

It’s quite obvious to me – as I’m sure it is to everyone who is following the Weinstein story – that at its heart this is a leadership issue. Let me be very, very clear here and say this; if the allegations surrounding Weinstein are true, then a number of very serious criminal offences have been committed, and the full force of the law across numerous jurisdictions should be brought to bear on the matter and on Harvey Weinstein. But beyond the question of legality in this case (and I am keen that these are not downplayed in any way – sexual assault is a criminal offence), what is also at play here is a question of leadership power. And crucially, the abuse of that power.

“In any relationship at work between a leader and his or her staff, the fact that the leader has power means that there is always going to be a significant question mark over the question of consent.”

Let’s call a spade a spade and get this out of the way; leaders have power. We can deny this as much as we like, and we can argue that ‘power’ has no place or part in modern leadership. We can talk about open-plan offices and the leader simply being ‘one of the team’. We can point to numerous culture initiatives that have served to cloud or mask the traditional power – and outdated power dynamic – that existed in workplaces of old. But the truth remains – a leader still has considerable power.

It’s how we choose to use that power that is absolutely key.

In a previous role, I worked for a well-known children’s charity. In many ways, it was a dream job. I led the marketing and fundraising team and I absolutely loved it. I went home each day with that rare sense of having ‘made a difference’. After five years in the role, I discovered that the CEO was sleeping with a number of the staff members. I want to be crystal clear about this. There was no suggestion that any of this was being done without the consent of all parties ‘involved’. None at all. And, to be even more clear, consent is absolutely key. Consent matters. I want to ensure that this is fully understood in this story.

The thing is, I think that for a leader, consent is the absolute baseline. A leader’s bar for this type of behaviour absolutely must be set at ‘consent’ at the very, very least. But in fact, I believe that as leaders our bar must be set higher. Much, much higher. And it must be set higher because, like it or not, we have power in the workplace and this power clouds everything else. Including consent.

In any relationship at work between a leader and his or her staff, the fact that the leader has power means that there is always going to be a significant question mark over the question of consent. As leaders, it is our responsibility to recognise this and acknowledge it. It is also our responsibility to act on it. By ignoring it we risk doing incredible damage to the people in our organisations or to the organisation itself. And in all likelihood, to both.

“Often, ‘trade-offs’ are made for what is considered to be high performance, withstanding poor behaviour. Poor behaviour is poor performance.”

So, what do I mean by ‘act on it’?

I believe that leaders must disclose all relationships at work. They must be fully disclosed to the most appropriate person (HR, their own manager, the Board) and they must be disclosed in an appropriate and timely way. Just as leaders are expected to disclose ‘conflicts of interest’ (at IML the leadership team discloses conflicts on a quarterly basis), so we should be expected to disclose ‘personal relationships’ inside the workplace. For me, this is absolutely essential.

In addition to ‘leadership disclosure’, Allison Keogh – an expert in leadership, culture and change and Director of Expansion Consulting – recommends that the following steps should be taken within the workplace to act as an appropriate ‘check and balance’ to the power that the leader has;

  1. Know your current situation. Many organisations have a ‘blind spot’ in this area, thinking it is not relevant or occurring in their organisation. Confidential staff surveys routinely focus on ‘engagement’, ‘wellbeing’ and ‘diversity’, but rarely overtly ask questions about harassment, bullying, intimidation or poor behaviour. Leaders and HR should survey people on the extent of issues, the level of reporting and satisfaction with the handling of complaints.
  2. Build it into your values, strategy and goals. Values and culture statements need to specifically focus on equality, respect and inclusion and crucially detail what they mean. But they are not enough. Nor are policies. You need to have a strategy and specific goals that you are accountable to, talk about, measure and review on a regular basis.
  3. Create the environment for transparency and disclosure. Share the values, strategy and goals with all staff and your steadfast commitment to them. Reward and celebrate people who are promoting and defending the values. Agree on a philosophy of dealing with complaints in a way that you would if it were to be made public. For example, if you wouldn’t want it to be publicly known that you have protected a perpetrator, then don’t protect them.
  4. Establish shared responsibility and power. Keep absolute or implied power in check. Establish a coalition of champions at all levels of the organisation, with structures and processes that give them power to safely escalate complaints. Ensure that there is more than one avenue for complaints, with measures to protect people from repercussions for reporting.
  5. Embed accountability within processes.  Often, ‘trade-offs’ are made for what is considered to be high performance, withstanding poor behaviour. Poor behaviour is poor performance. Include behavioural expectations in recruitment and selection, induction and performance review processes and give them sufficient weight. For anyone in a position of power and influence, build in confidential 360 feedback with targeted behavioural questions.

In my own case – back at my dream job at the children’s charity – I made the difficult decision to talk to the CEO about his behaviour. Unfortunately, this fell on deaf ears. Undeterred, I approached the Chair of the Board. I met him for breakfast to tell him what was ‘going on’. And the outcome?

The Chair of the Board asked me to leave the organisation that same afternoon.

(Apparently, the CEO was performing well and getting results. The CEO’s relationships with staff members were his own business, not mine or the Board’s, and my position in the organisation was now untenable).

“We remain such a long way from leaders acknowledging the power they have and taking responsibility for using this power ethically and appropriately.”

Unfortunately, that’s what we’re up against. And this is one reason (I stress, one reason) why I find the Weinstein story and the #metoo campaign so distressing; we remain such a long way from leaders acknowledging the power they have and taking responsibility for using this power ethically and appropriately.

It’s high time that this changed. And change must start with us – the leaders. We must set that bar much higher than it is currently set. And we must do this immediately.

 

By David Pich FIML, Chief Executive

Institute of Managers and Leaders

With thanks to Allison Keogh (allison@expansion.com.au)