Creating the right culture for your workplace

All workplaces have a culture – sometimes more than one – that colours employees’ interactions and behaviour, as well as what is considered appropriate or acceptable conduct. The abstract, nebulous nature of culture often means organisations write it off as outside of their control. Nonetheless, the right culture is a crucial to a business’s success.

Brian Chesky, CEO of Airbnb, when asked about the importance of workplace culture in business replied:

“The stronger the culture, the less corporate process a company needs. When the culture is strong, you can trust everyone to do the right thing. People can be independent and autonomous. They can be entrepreneurial…Ever notice how families or tribes don’t require much process? That is because there is such a strong trust and culture that it supersedes any process. In organisations (or even in a society) where culture is weak, you need an abundance of heavy, precise rules and processes.”

A workplace’s culture is the product of each individual, their communication with one another, and the organisation and environment in which they work. No two cultures will be exactly the same, and what is a desirable culture for one workplace may not work for another. Below are some ideas for developing the culture you want for your workplace, whatever that may be.

Hire the right people

At the heart of a workplace’s culture are its people, which means creating the right culture for your workplace must inform your hiring practices. There will be many talented people with the education, experience and skills to match a role, but that won’t make them a good fit for the culture of the broader organisation. During the hiring process be explicit: ask prospective employees to describe the type of culture they have come from and what type of workplace culture they are hoping to move into. Include questions about their broader motivations, passions and values. This will enable you to make hiring choices that will actively contribute to the culture you want to create.

Create the right space

The physical environment that your employees work in will also inform the culture that develops. Substantial structural decisions such as whether the office is open plan and which departments are close to each other play a part, as do smaller decisions such as decor and seating arrangements. Also relevant to the environment’s impact on a workplace’s culture is how the space is used day-to-day: meeting locations and where lunch is eaten for example can all play a part in determining a workplace culture.

Have a clear vision

An organisation’s vision is the foundation of its culture. Although vision is determined at the top of an organisation, it lays the groundwork for determining the type of culture that will develop within the workplace. It will play a role in who applies for jobs within your organisation, who stays for the long-term, and how each employee will understand their role. So make sure that vision is clear, precise and accessible. Ensure every employee knows it, and lets it inform every action they take at work.

Measure it

Culture may seem an impossible concept to measure or quantify, and there will certainly be limits on how it can be presented in a spreadsheet. But with the right metrics and feedback loops, even something as intangible as culture can be measured. Having established the culture you want to facilitate, identify how this might manifest amongst the individual employees. Create surveys that directly address workplace culture and regularly collate the results. Even if you can’t put it into a graph, you will have some empirical data on the type of culture within your workplace.

Recognition and Reward

If you can measure it, you can reward it. Often workplaces will have a mismatch between what is desired behaviour and what is actually rewarded. Make sure you are providing clear and consistent indicators of the type of culture you want to foster and then reward those who follow suit by recognising and celebrating behaviour that creates the desired culture. Furthermore, ensure that instances where behaviour and interactions undermine a positive workplace culture are dealt with promptly.

Lastly, remember that a positive workplace culture needs to be reinforced from the top. As always, leadership is crucial in establishing the type of workplace that you want, so set the example who want to see mirrored by your employees. And never underestimate the value of a strong and positive workplace culture. As Chesky says, “If you break the culture, you break the machine that creates your products.”

 

 

Encouraging diversity in your workplace

Many organisations now recognise that a diverse workplace is not only something to aim for on equity grounds, it is also strength that enriches and expands the skill sets and understanding of an organisation. A workplace that values diversity can increase employee job satisfaction, in turn reducing staff turnover, as well as harness perspectives and insights it might not otherwise consider – a crucial step to understanding different customers and markets. At a time when Australia is facing a skills shortage and an ageing population, workplace diversity is more important than ever.

However, actually ensuring people of diverse backgrounds are hired in your organisation and are then made to feel welcome is something that many workplaces struggle with. Here are five steps you can take to encourage workplace diversity.

 

  1. Ensure your HR team recognises the importance of diversity

    There is no point espousing the importance of a diverse workplace if the people responsible for hiring are not on board. An HR team needs to do more than pay lip service to the value of diversity – it needs to truly appreciate that a homogenous workplace is one that is missing out on crucial perspectives and skills. Ensure your HR team has done rigorous diversity training, and, critically, ensure your HR team itself is diverse.

  2. Invest in diversity training

    There will be limitations to what an organisation can learn through in-house measures. Organise for an external body to run diversity training for your workplace and ensure that all employees attend – even (maybe, especially) senior staff. Get feedback on what the workplace thought of the training – have debriefs with staff members who may have specific concerns or questions. These will not be trainings that you can organise as a one-off occasion. They will need to be ongoing, firstly to cater to new employees and secondly because diversity is not a static or fixed issue – it is constantly changing and being re-assessed as Australia’s wider diversity changes. What’s more, if the aim of the training is to educate the workplace, a commitment to reinforcing the lessons is important.

  1. Implement diversity-friendly policies

    Providing alternative working arrangements, such as a compressed work week, job-sharing, part-time roles and modified start and end times to the working day will make your workplace more accessible to those with children and caring responsibilities. Accommodating cultural and religious holidays will make your workplace more welcoming to employees from culturally and linguistically diverse backgrounds, as will permitting diversity-friendly clothing choices in the office. Lastly, but most importantly, make sure that your wages are fair and equal – not only within your organisation but across the workforce more broadly.

  1. Mentoring

    While facilitating diversity in junior and middle management positions is often very achievable, ensuring that diversity reaches the senior levels of an organisation will often involve further steps. Mentoring is one way to encourage diversity in executive positions. Match underrepresented employees with senior members of staff and encourage membership with relevant external professional organisations to support diversity in your workplace.

  1. Recognise your own limitations

    Any individual will have a limited experience of the world and will subsequently have limited perspectives on a given issue. Acknowledge that there may not always be an objective way of seeing something and if someone else in your office has a different perspective, stop talking and listen. Everyone has unconscious biases. Don’t be defensive if you are called out on them – acknowledge it is okay to be wrong and treat it as a learning experience.

The Proactive Approach To Retention

Kate Jones outlines how a multi-pronged approach to managing staff can reap significant dividends in terms of staff retention.

Put your workers first, your customers second and your shareholders third, says Richard Branson, and the rest will take care of itself.

Prioritising staff ahead of customers bucks the “customer comes first” mantra corporations have held dear for decades. Yet a gradual power shift has seen employee well-being, remuneration and physical health become more vital than ever before.

Research shows better staff retention is better for business. Fostering a workforce of happy and engaged employees lifts productivity levels and drives business growth.

What’s more, an effective retention strategy saves companies time and money. It also means organisations avoid the expenses involved in engaging recruitment firms and the time spent interviewing and training new staff.

A high turnover of employees can place pressure on workers forced to pick up the slack, resulting in a drop in staff morale. It can also expose businesses to a loss of corporate intelligence, which can leave them vulnerable in a competitive marketplace.

Why are employees leaving?

IML has identified the chief reasons for taking on another job role.

New challenge – 81.9%
Limited career advancement opportunities – 56.5%
Insufficient financial reward – 44.4%
Conflict with Staff/Manager – 29.6%
Logistically difficult – 21.8%
Lack of development/training -18.5%
Lack of recognition – 16.7%
Feeling unsupported/overworked – 12.0%
Insufficient non-financial reward – 8.8%
Underutilised – 8.8%
Lack of flexible start-finish times – 4.6%
Unrealistic goals being set – 4.2%
Lack of flexible working arrangements – 3.2%
Other – 11.1%

Source: 2016 National Salary Survey

 

Retention Strategies

 

The latest research into staff retention reveals the smartest strategies are multi-pronged, proactive and sustained.

The 2016 Staff Retention Report by the the Institute of Managers and Leaders shows 54.6% of Australian organisations are concerned about how to keep their employees, compared to 48.8% the previous year. However, an increased focus on ways to improve engagement of in-house talent may be responsible for a falling resignation rate.

Since 2012, resignations have fallen by 13.4% to 10.3%.

To reduce resignation rates businesses used a range of methods including exit interviews, reviewing or updating staff remuneration and conducting job satisfaction surveys.

Local Government Association Queensland (LGAQ) HR manager, Angie Gibson says job satisfaction surveys have helped her keep a pulse on employee engagement. For the past three years the LGAQ has recorded job satisfaction scores of 93%, 85% and 92%.

“If you look after your staff, they will look after you and that’s reflected in our survey, and I’m really proud of that,” Gibson says.

The LGAQ uses various methods to ensure staff retention and chief among them is a program called Well At Work. The program is steered by an eight-person Wellness Committee, which assesses the effectiveness of current practices. The program has been recognised by the Queensland Government’s Happier. Healthier. Workplaces initiative and with an Australian Human Resources Institute award.

Gibson says it includes everything from pedometer challenges to family social days.

“We look after emotional, physical, mental, social and occupational areas of an employee,” she explains. “Some people think its all airy-fairy, but its very physical, emotional, social – all those sort of things. We really support people.”

A new 12-program will be launched at the LGAQ this month to check and encourage employee health and promote inclusion through social activities.

“We’ll do things like ergonomic assessments, healthy heart checks in May, flu vaccinations, our social day at Simpson Falls, Mount Coot-tha, on a weekend so all families can get together,” Gibson says.

“We’ll do a Walk to Work day and have a breakfast here, we’ll have end-of-year functions, a Melbourne Cup function, mental health days. There’s something every month and every second Wednesday is Wellness Wednesday where we have massages and meditation in our rooms.”

In addition to the wellness program, the organisation also has a reward and recognition scheme that acknowledges outstanding work in the form of a presentation and a gift voucher.

As all-encompassing as these initiatives are, they mean little without measurement and assessment. Throughout the year, Gibson conducts job satisfaction surveys that quiz staff on everything from healthy eating at work to the issue of bonuses.

Gibson also performs a thorough remuneration check to ensure they are not falling behind industry rates.

“I do a remuneration benchmarking report every year, so I use the National Salary Survey which is one of my main things for the corporate side of the business,” she says.

“I look through all the State Government public sector wages and federal and always request reviews from the larger agencies like our Hays, Robert Walters and I research particular jobs on Seek. And every three or four years I’ll go out to a specialist company like Mercer who survey say the top six roles in the organisation to make sure their work value’s there, to make sure we’re not getting too far behind the ball.”

 

The Pay Factor

So what’s more important – pay or job satisfaction?

The  2016 National Salary Survey shows the top three reasons for employees taking on another job role are: seeking a new challenge at 81.9%, limited career advancement opportunities at 56.5% and insufficient financial reward at 44.4%.

Charles Go, Research Product Manager at IML, says remuneration should be a top priority for those developing retention strategies.

“No matter how cool your office is, how many benefits they have or how supported they feel at work, at the end of the day, people still need to pay their bills, save for holidays and afford to live the lives they want,” he says.

“At the very least, review and benchmark your employees’ salaries on a yearly basis and provide increases that are in line with inflation.”

Sales staff traditionally receives salary bonuses, but Go says it’s now becoming common for support, technical and finance staff to receive bonuses. He recommends clearly defining expectations, checking performance to make sure that they are on track and ensuring the bonuses are based on the company’s overall targets so the company doesn’t pay them if it is not making any money.

“Go one step further by encouraging and supporting them to reach those stretch targets to get their bonus,” he says.

“You’ll be surprised at the increased level of engagement when people truly feel like they are closer and closer to the finish line.”

Not every company can offer cash incentives or raises. Instead, they should consider giving better benefits, says Go.

“It could translate to long run savings for the employee,” he says.

“For example, if a staff member can work from home one day a week that will save them $100 a week on day care expenses, which will be about $4,800 a year.”

 

Other Benefits

 

Flexible benefits can have a surprising affect. Organisations offering time in lieu to reimburse overtime had resignation rates of just 9.8% compared to 10.9% for those who didn’t compensate staff for extra hours worked.

Additional super contributions also make a difference. Organisations that made extra super contributions had a lower than average resignation rate at 9.5% compared to 10.5%.

Developing a supportive learning environment is key to keeping workers challenged. More than 18% of employees report resigning because of a lack of professional development and training.

Research shows personal interviews are the most effective way of evaluating training, followed by pre and post training surveys and training feedback forms.

Building an effective staff retention plan is about more than just meeting an employee’s needs. It’s about surpassing them.

In today’s disruptive market, staff retention strategies need to take a holistic approach to give employees the support they need to do their job well. A continual, proactive strategy creates a happier, more engaged workforce and safeguards organisations against the eroding effects of continual resignations.

Visit  National Salary Survey and find out how we can help your organisation to attract and retain top talent.

Thumbs Up: One company pays working mothers an extra $10,000 a year

Thumbs up for good leadership go to two STEM-industry employers who have implemented gender-inclusive policies to support working mothers.

Thumbs down goes to two businesses exploiting migrant workers and another guilty of maintaining an unsafe workplace.

THUMBS UP: QIMR BERGHOFER

This Queensland medical research institute is trying to retain and boost its number of women scientists by paying those with at least one child below high school age an extra $10,000 a year. It also has a breastfeeding room and reserved places at a nearby childcare centre. Women currently fill 36 per cent of QIMR Berghofer’s scientific leadership roles.

THUMBS UP: AMAZON

The online retailing colossus Amazon is ditching its ‘stack-ranking’ system – a review process where staff were pitted against each other instead of being rated against their own job requirements. (The lowest ranked employees used to be ‘let go’ in an effort to retain a highly productive workforce.)

THUMBS UP: SAP ASIA-PACIFIC-JAPAN

The enterprise software giant is encouraging women who have had a career break to get back into work by offering flexible part-time and full-time project work. SAP told HC Online the Back-To-Work program is a chance to draw on the experience of an “untapped pool of talent”.

THUMBS DOWN: BIJAL GIRISH SHETH

Queensland businessman Bijal Girish Sheth is in hot water with the Fair Work Ombudsman (FWO) for underpaying four migrant workers at his Brisclean business, and saying they were contractors when they should have been employees. He copped the highest ever penalty secured by the FWO against an individual ($126,540) and has been ordered to backpay the workers nearly $60,000.

THUMBS DOWN: COVINO FARMS

ABC’s Four Corners uncovered gross underpayment of 100 migrant workers by Covino Farms, which supplies major supermarkets and fast food chains. Covino has subsequently ended its agreement with the labour hire businesses that provided the workers. State government grants of $1.5 million have been suspended until Covino makes good on its promise to provide 60 local full-time jobs.

THUMBS DOWN: RESOURCE RECOVERY SOLUTIONS

The Perth waste recycling company was fined $85,000 after pleading guilty to failing to maintain a safe working environment. In 2013, a labour hire worker died when the roof of a picking station collapsed under 709kg of rubbish – more than five times the Safe Working Load. The rubbish had fallen from two overhead conveyor belts above the picking station.

 

How drones can save lives, money and the environment

Dr Catherine Ball says drones suffer from a bad reputation. “People think a drone is a little toy or something that delivers a bomb,” she says. “You’ll hear about people flying them illegally and crashing into things, or using them to take photos of their cheating spouses and stuff like that. And that’s what bothers me. This technology is so powerful, so egalitarian, so capable of doing so much good.”

A world leader in drone research, UK-born Ball has delivered a number of firsts by using these unmanned flying machines in environmental and infrastructure surveying. Her drones have monitored bushfires, coral reefs, turtle activity and even pest species, and gathered a range of data to assist in effective ecological and engineering processes.

She explains that it’s not so much drones but rather the data they collect that interests her. “I don’t really geek out on the next big, shiny, hybrid things,” she says with a laugh. “What I love is the idea that something is able to get you information or deliver something that you’ve not been able to do before.

“This technology is so powerful, so egalitarian, so capable of doing so much good.”

“Drones are a great way of translating patterns in nature and enabling us to see them from the place that we would never get to, because it’s either too expensive or the satellites aren’t good enough with resolution, or it’s just far offshore, or it’s just far inland, or it’s just too dangerous to go there. We can go there now and that’s what excites me.”

Ball is currently exploring how drones can be used in humanitarian work, such as delivering blood to remote locations in Africa, assisting people in the aftermath of a cyclone and sending food supplies into conflict zones. She cites the bombing of a UN aid convoy that was delivering food to a rebel-held area near Aleppo in Syria, and adds: “I sit here so frustrated because I know we have the technology already and these people do not need to die.

“You can deliver food using unmanned helicopters that can carry two tonnes. To me, it’s an absolute no-brainer and I’m still shocked that we take so long to actually have that pathway from a realisation that technology can do something, to actually allowing it to do it.”

“It’s just scaremongering to say the robots are coming to take our jobs.”

Ball has a PhD in spatial ecology and is keen to see more women in science and technology fields. She works with groups such as She Flies to promote gender equality in science, technology, engineering, the arts and maths (STEAM) careers. And as managing director of the Elemental Strategy consultancy in Brisbane, she helps clients develop both innovative business strategies and the skills needed to deliver them.

In 2015, she was named Telstra National Business Woman of the Year for her groundbreaking work using drones for marine fauna surveys. The data they collected was used to create 3D-walkthroughs of remote islands, so scientists could assess turtle rookeries without leaving the office.

For Ball, technology is not a threat but a tool. She believes drones will make our working lives more efficient, rather than take jobs away.

“Our agricultural economy is set to increase exponentially over the next 10 years,” she points out. “These technologies are going to enable us to work much more efficiently and look for pests and weeds and manage our crops much more effectively. It’s just scaremongering to say the robots are coming to take our jobs. The robots are coming to make things more effective and more safe, which means we can do more.”

How to resolve a workplace bullying claim

Claims of workplace bullying are a disturbingly familiar story. An employee has a performance problem and their manager decides to do something to fix it. The manager gives the employee some critical feedback, which the recipient feels is unwarranted. The employee makes a careless mistake and the manager berates them in the lunch room. Finally, the manager decides to put the employee on a performance improvement plan, only for the employee to take an extended absence on sick leave, and bring a bullying complaint against the manager.

Resolving a bullying complaint inevitably involves strong emotions on both sides. The employee making a complaint may genuinely feel they have been unfairly targeted, while the person complained against commonly reacts with shock and disbelief.

In 2014, for the first time, Australian workers were given a legal avenue to address workplace bullying while it was going on. Before that, they could claim compensation for mental stress caused by bullying, but only after the damage was done.

Changes made to the Fair Work Act mean workers can apply for a “stop bullying order” against an organisation, an individual, or a group of individuals. If an application is successful, the Fair Work Commission can make any order it considers appropriate to protect a worker from the risk of further bullying, short of requiring payment of money or imposing a financial penalty. These amendments provided, for the first time, a legal definition of bullying as “repeated unreasonable behaviour”. Importantly, the definition specifically excludes “reasonable management action carried out in a reasonable manner”.

Despite initial fears the changes would spark an avalanche of applications for “stop bullying orders”, in the 2015-2016 financial year the Fair Work Commission received just 734 applications. Less than 8 per cent of these proceeded to a decision being issued by the Commission, and a “stop bullying order” was issued by the Commission in only seven cases.

The Commission appears to take a pragmatic approach in determining if bullying has occurred. In the recent case of Edwards v E&S Trading Co, Rebecka Edwards, a sales consultant at the E&S kitchen and bathroom store in Moorabbin, claimed she’d been bullied due to incidents that included:

  • a colleague accusing her of spilling coffee beans in the kitchen and yelling at her to clean it up
  • other employees arguing in the company’s reception area in front of customers
  • rumours among other staff that Edwards had “egged” a colleague’s car
  • allegations that a colleague was “stealing” Edwards’ sales
  • management ignoring her complaints, thereby perpetuating these behaviours.

As is often seen in bullying matters, the complainant was also subject to performance management, and had received a final warning for her own conduct.

The Commission accepted that Edwards was anxious and distressed and genuinely believed she’d been bullied. They also noted that the E&S managers could have handled the performance management process in a better way.

But in light of how the evidence from other witnesses sharply contrasted with Edwards’ own, the Commission decided it could not objectively conclude Edwards’ colleagues had “repeatedly behaved unreasonably” and bullied her. The performance management process, although not perfect, was deemed “reasonable management action”.

In another 2016 case, Western Australian truck driver Bevan Gillies claimed he was the victim of a sustained campaign of bullying and intimidation by his depot manager at HPS Transport, including:

  •  giving the driver a warning letter after he refused to complete an afternoon run
  • singling out the driver for failing to complete and sign the employer’s uniform policy
  • giving the driver a warning when he turned up four hours late to work [his start time was 3am], and subsequently standing him down with no pay.

However, the Commission considered that all these incidents were consequences that flowed on from Gillies’ own actions, and that the manager had taken reasonable actions in a reasonable manner. Importantly, it concluded that as the depot manager no longer had any direct dealing with Gillies, there was no risk of him being further bullied, so the “stop bullying order” application was dismissed.

4 TIPS TO MINIMISE THE DAMAGE CAUSED BY WORKPLACE BULLYING CLAIMS

  1. Be prepared, but not panicked, about bullying complaints
  2. Have a policy that outlines expectations of employee behaviour in the workplace
  3. Investigate any bullying allegations that are raised, and take action if necessary
  4. Be especially careful to follow due process when dealing with performance management.

Elizabeth Ticehurst is Special Counsel – Employment at KPMG.

How to use buy-in to build strong and productive teams

Welcome to the age of buy-in. Any company serious about keeping pace with a market that’s evolving faster than ever must create an environment where ideas can truly thrive. They must let go of slow and cumbersome models of leadership born in the industrial age. Managers must loosen the reins and ask people to think for themselves, generate ideas and find ways of bringing them to life, without waiting for someone higher up to tell them what to do.

This means exiting the world of leading by decree (top-down managing) and entering the world of ‘win me’ (using a collaborative approach), where people collaborate across teams and influence without authority.

Aside from its strategic importance, the emphasis on generating buy-in is something employees expect. Companies are asking more than ever of their people: more of their creative genius, more hours, more ownership, more initiative, more flexibility, more tolerance of ambiguity, change and chaos. In return, employees in this creative economy need and expect more – and that doesn’t just mean money. It means more autonomy and more freedom.

People who give more expect to have a voice. They expect to be heard and to be able to shape decisions about their work. They expect leaders to earn their support, not take it as a given. We want to work in organisations that match our own values; we want to be part of, and to initiate, company projects and initiatives.

We’re seeing a generation of people who are making decisions about where to work based on how their personal values map to company values.

David Noël, who heads internal communications at audio sharing service SoundCloud, sums it up perfectly: “We’re seeing a generation of people who are making decisions about where to work based on how their personal values map to company values. Today, more than twice as many employees are motivated by work passion than career ambition.”

It’s one thing to talk about the importance of getting people’s buy-in; it’s another to achieve it. In my own work, I regularly come across managers who are struggling to let go and give their team members the space to experiment, create and even (gasp!) fail. Often, these practices are at odds with the diet of management on which they themselves have been raised. It makes them feel uncomfortable. It seems chaotic and risky. At the same time, managers still need to manage, so how do they do that without managing by decree?

Some teams also struggle to embrace the degree of autonomy and entrepreneurship that is offered to them. Suddenly faced with a multitude of people they need to work with, and without a clear instruction manual from management, their mindset and skills are put to the test.

This is where teams and organisations can easily fall over: by failing to create a culture where people are able to influence and lead others, even when they’re not in a position of authority, and by failing to equip them with the skills to do so.

Well, there’s a new kind of power in town. It’s the power that comes to those who are able to cut through all of these challenges by engaging others and building buy-in. This is a skill that comes more naturally to some than others, but the good news is: it can be learned.

The gentle art of buy-in

To master the gentle art of buy-in you need a blend of the right skills, attributes and mindset. I use the term ‘gentle art’ because it requires patience, empathy and careful thinking. You need to know when to yield control in order to maintain it. You need a healthy dose of emotional intelligence. You need to be willing to go slow in order to go fast.

But even the best ideas in the world can languish in the hands of someone who doesn’t know how to engage and influence others – or worse, someone who simply puts people off.

Equally, buy-in shouldn’t equate to paralysis. Many of us have worked in a team or a company where there was so much consultation and committee-style decision-making that nothing ever happened. If that’s the case, your relationship with the idea of building buy-in might be a tad strained.

You need to know when buy-in is a function of gentle persuasion and dialogue, and when it’s a function of getting your train moving and asking others to jump on board.

The culture you’ve grown up in has a big part to play in whether you relate more to the ‘decree’ or ‘win me’ approach. For example, certain countries operate to a very formal, hierarchical norm, while others have a far more informal, egalitarian norm. Cultural norms can also come from your family upbringing, or your previous workplaces. All will shape your assumptions about the roles of authority and autonomy in the workplace.

Jim Collins: What the best leaders have in common

Jim Collins, leadership expert and author of the bestselling book Good to Great, is surprised by the findings of his latest research into what makes great companies successful, a topic he has studied for 25 years.

“To me it’s the most delightful bit of new research that we’ve done,” he says, joie de vivre crackling down the line from Boulder Colorado. That Collins and his long-time collaborator Morten Hansen found that luck does not distinguish the winners from the “others” was a huge surprise for him. “Our most successful leaders credit luck as helping them along the way. But luck itself doesn’t distinguish, it’s what you do with it. The big swing variable is return on luck. When luck hits you, whether it’s good or bad, it’s how the best leaders recognise it and are able to pivot on it in such a way that they get more out of that luck than anyone else would.”

CLIMBING MOUNTAINS

Collins is now “puzzling on this delicious idea” and wants to know the “alchemy of the ability to get a higher return on luck”. He’s also getting ready to head to this country for a series of presentations in Sydney and Melbourne and the long-time climber also wants “to test his hands on some Australian rock”. He sees close parallels with the approach he brings to his research and the vertiginous world of rock climbing – where he has scaled frankly scary edifices such as the 914-metre south face of El Capitan in Yosemite Valley. The trick is to approach each challenge as if for the very first time. He declares: “I love to be a beginner and be pushed to expand my capabilities. The research journey has never been about finding what we expected to find. It was being open-minded and childlike about what the data would show.

The research journey has never been about finding what we expected to find

“In rock climbing I like picking the kind of climbs I’m not good at. I’ve been climbing for over 40 years, but every year or two I identify my two or three deficiencies as a climber. If I just did the sorts of climbing that suits me well, well that’s relatively dull.” Recently he’s been practising “off-widths”, a type of hold that’s apparently horrifying for a climber. “It’s a crack that is a really bad size – not big enough to get inside of, but it’s not small enough to wedge your hand in – it’s an in-between space. You feel like a victim of drowning when you try to climb up one of these spaces,” he adds quite gleefully.

To be able to lay down the foundations of mastering this hold Collins will have to go back to climbing basics. “There’s so much pressure, especially in the world that I walk, to always be an expert and I kind of like being a beginner and I hope I have that until the day I die.”

A GOOD LEADER ASKS QUESTIONS

Collins reads widely outside the business discipline and takes courses in esoteric subjects and believes managers can benefit from letting the outside in. “If you are a manager why not understand the history of China or biochemistry, you have the joy of learning which never ends.” Another tip a former Stanford professor gave him is to “rather than try and be interesting, be interested in others”. “It was a life-changing moment, you never know who you might be sitting next to at a dinner party or on an aeroplane, discover their passion or their inner life or specialist field.

“One of the things we learned way back in Good to Great was that these great leaders had a somewhat Socratic style. They were humble enough to know that they may not have the answers, but what they were really good at was asking the questions,” says Collins, who also rates detachment as a quality of a great leader.

“I think people confuse empowerment with detachment. The best executives that I’ve studied really know the details of what their people are doing. That doesn’t mean they are directing them but they are hyper aware because they are really curious. That doesn’t mean they jump in and are micro managers, it means they are micro aware.” He cites a former student’s experience of being a product manager at Microsoft in the early 1990s. He told Collins that when he was putting the packaging information on Windows 95 together, the person most interested in the process was Bill Gates. “In the early 1990s Microsoft was already a juggernaut and he was really engaged in this particular detail. He wasn’t telling, he was asking. If he could do that while running Microsoft then we could all do that,” he says.

 

PASSION AND DETERMINATION

Celebrity CEOs is another hot button issue for Collins. He’s adamant that his research shows no correlation between personality and leadership. “People confuse charisma and leadership. Being charismatic or not is as relevant as having blonde hair or brown hair. It’s about whether you are fundamentally ambitious for the company and willing to make the hard decisions. You have an incredible passion and determination for an organisation’s long-term role in the world. And it’s about your ability to get people to do what must be done rather than it being about you.”

But then what about the late and mercurial Steve Jobs, who was considered the messiah by Apple fanatics worldwide? “Steve Jobs was dedicated to doing everything he could to make Apple an enduringly great company. If he was a genius with 1000 helpers how do you explain Tim Cook or the designers or software writers? He is someone whose great successes were pretty boring – it was about getting the right people in to build the systems and organise them into an incredible culture. He was focused on building a great company that would last beyond him. And towards the end he was racing against the clock to do that.”

Collins believes that middle managers in not-so-great-companies can even make a difference with this attitude. He says take a leaf out of the military and focus on your “unit and troops”. “If you make it a pocket of greatness you are more likely to die of indigestion of too much opportunity for responsibility, than starvation for too little. Even if you don’t, fundamentally you owe it to your people to create a great place to work, if you manage six or 20 people, it doesn’t matter.”

JIM COLLINS’ LEADERSHIP GLOSSARY

Level 5 Leaders:

Level 5 is about really relentless extreme ambition but it’s channelled outside yourself. That’s the essence of level 5 – it’s ambition channelled into something that’s bigger and more enduring than you are – that often shows up in more self-effacing people but it doesn’t have to.

The bus:

To illustrate how people-smart leaders work, Collins uses the analogy of the bus driver. He says most assume that these “bus drivers” start the journey by announcing to the passengers where they are going, by setting a new direction or articulating a fresh corporate vision. Not so. Great leaders start not from “where” but with “who”. “They start by getting the right people on the bus, the wrong people off the bus and the right people in the right seats. And they stick with that discipline – first the people, then the direction – no matter how dire the circumstances.”

Hedgehogs:

“What being a hedgehog means is that you are doing something so distinctive and with sheer excellence that if your company disappeared it would leave a hole that could not be easily filled by any other institution. In an uncertain global business environment being a hedgehog is even more important not less. Push yourself to the next big thing rather than worrying about what others might do. You still need to be hyper vigilant about outside market forces and changing consumer tastes, but to truly be a great hedgehog, you are not asking ‘what’s the next big thing’, you are asking ‘what’s the next big thing we are going to do?’”

Gender diversity means nothing without inclusion

Having a quota for women and minorities isn’t inclusion if you treat them as outsiders.

By Jane Caro
Jane Caro is an advocate of inclusion.

Many years ago I appeared on a TV panel show. There were usually four men and a chick on the panel – sometimes me, sometimes someone else. We used to joke among ourselves about rotating in the mandatory “chick’s spot”. I’d brought up the lack of female panellists with the producers on occasion and, one day, for the first time, I was sharing the desk with two men (plus the male host) and another woman. The producers had paid attention!

But I noticed as we sat waiting for filming to start, the three men had a very blokey conversation about footy. Me and my fellow female panellist sat silently as they talked over our heads. Did we feel included? No, we did not.

There used to be an annual advertising awards event dedicated to the year’s best newspaper ads. It was run over a weekend as part of a conference, and I was a regular on the panel. It was a lot of fun, mostly, but there was always tension between the women delegates and the men. Women were often the butt of the jokes. It was always made clear to me that we were there on sufferance, rather than our merits, even if we sometimes won awards. I noticed the same barely disguised aggression towards the few openly gay men in the industry, too.

The last year I ever attended, one of the very few female creative directors in the advertising business (there remain almost none) made a very moving speech about her day and how hard it would be to fit in having children with her incredibly demanding job. She was acknowledging that unlike her male counterparts, she had to choose between career and family.

With some honourable exceptions, the male delegates reacted to her speech with hostility. Having children was “a lifestyle choice” and entirely a woman’s problem, we were told. The fact that many of the men holding this view were frantically trying to bed as many pretty young creatives as possible, while they had a wife at home minding the kids, escaped them. For self-declared smart men, they missed a lot.

“Being included and feeling included are two quite separate things.”

I liked her speech but, as the mother of two, I wanted to let some of the young women delegates know that it was possible to combine a successful career in advertising and a family. I got up and said so, citing my own career and those of a few of the other women in the room.

I was cut short. “I don’t think we would say you’d had a successful career, Jane,” opined one of the men on the panel – a man, I might add, with far less of a track record than me. (Oh, for the towering confidence of a mediocre white man.)

After 35 successful (by any measure) years in my industry, did I feel included? No, I did not.

Being included and feeling included are two quite separate things. I suspect that’s why the majority of new businesses are started by women. Sooner or later we get the message we are not wanted.

Inclusion is not about grudgingly allowing a few chicks and/or Indigenous/Muslim/Asian/LGBTQI/people of colour a seat on the panel, the management committee or the board. It’s not about driving numbers, although that matters. You cannot feel included if you are not actually wanted.

Inclusion matters because those of us who are outsiders (basically anyone who isn’t white, male, Christian, under 60 and, probably, with a private school education) have different views of the world. That richness of diverse views and experiences matters. We’ve all heard the stats on how diversity in management increases a business’s profitability and even share prices.

Indeed, one of the reasons I won awards in advertising creative was because my gender and feminism gave me a different way of looking at things. I saw the world in a way the majority of blokes didn’t see it. My perspective wasn’t better or worse – it was different.

We need difference. It makes life more fun and interesting and it makes businesses better at their business. We just need to make a little effort to make the different feel, well, less different.

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. Follow her on Twitter: @janecaro.

The Conversation: A Measure Of Love

Fitness Industry high flyer Elaine Jobson says setting a strategy means finding a vision that ignites your entire team and rallies them to your case. But first, take the time to listen

 

Elaine Jobson FAIM is a fitness industry veteran who, over the past 23 years, has worked for a number of large fitness brands in executive positions. Her roles have taken her all over the globe, including Asia, Europe, South Africa and now Australia.

She has teamed with entrepreneurs including Mike Balfour OBE, founder of the Fitness First gym chain, Virgin boss Sir Richard Branson and Brendon Levenson, owner of Jetts 24 Hour Fitness Gyms, where she is now chief executive officer.

Jobson is passionate about building successful companies through great cultures, and her work as chief operating officer at Virgin Active South Africa helped create a base that transformed the organisation. (It topped Deloitte’s “Best Company to Work For” survey for Southern Africa in 2012.) She sat down with AIM chief executive David Pich to talk about the importance of strategy in business, and love.

 

DAVID PICH:  This issue’s theme is around setting strategy, which amongst managers and leaders is quite often viewed as a very scary word.

 

elaine jobson:   I don’t find strategy scary, I find it really exciting. But I suspect that people find it scary because – unless you spend the time clarifying and being very purposeful in knowing where you’re going – it’s almost impossible to set strategy.

Business is so frenetic today that leaders don’t often get the time to come up with their endgame so they can build a meaningful strategy. It takes a couple of years for a true strategy to even be implemented. And then it takes time for the results to be realised.

You see this during the merry-go-round that happens when chief execs and managing directors are appointed every couple of years. As you know, business is not patient, investors aren’t patient and private equity is not patient.

I think sometimes people just run out of runway before they’ve even had a chance to implement their strategy. I think that’s the association of feeling scared about setting a strategy – you’re thinking, “Is it quick enough? Am I going to get results quickly enough?”

 

DP:   You’ve taken a number of jobs where you’ve gone in as the leader. What’s your approach to setting strategy?

 

ej:   I have a pretty systematic approach. The first thing I do, before I even think about setting strategy, is actually look at what the challenges are, where are the opportunities, where do we need to be useful and what do we need to actually fix in the business? When you decide that, you know what you need to get you there.

One of the things I learned from Mike Balfour, the founder of Fitness First, was to spend plenty of time understanding the problem before rushing to find the solution. Once you do that, the solutions become quite easy and really exciting. I think you can rally a team behind that solution once they understand that it’s actually going fix the issue. So the strategy for me kicks in at that point.

It starts with a lofty goal – some people call it purpose, some will call it the mission or the vision. But you have to go out to your teams and rally them behind a cause. And that cause has got to be big enough to get the energy going. If it’s about conquering markets, then that needs to be translated to the people, and then they need to be given the battle plan.

I’ve never given a six-month strategy or even a 12-month strategy. I actually give at least a three-year one. I’ll tell the team: “This is where we’re going be in three years’ time.” And I will give them an outline of what that’s going to look like and I’ll get them really excited about the last bit of the strategy. I tell them it’s not going be the most glamorous and sexy bits first, but be patient, we’ll get there.

And that’s exactly what we’ve done with Jetts. We are now in year three of a three-year strategy. And we’ve had some amazing gains and we really rebuilt the business over that three years. But every one of my team knew what the end goal was from three years ago.

 

DP:   What is the strategy or, more correctly, what was the strategy three years ago?

 

ej:   The problem was that Jetts has been a fast-growth company. Being a value-for-money, 24/7 gym, it had a great value proposition early on in that journey. But it started being squeezed by competitors who were offering pretty much the same thing. So we figured out that was the problem – how do we rebuild our value proposition for the customer in this more competitive market?

We knew we had to build a competitive defence based on more than price. We knew that what we’d become quite good at was culture. We knew that we had good people and the right kind of people. And we thought that from a brand perspective, we had some real credibility in the market.

So we decided they were going to be our linchpins. We knew that if we could attract the best talent and give our members a great service experience that would create another value proposition at what’s perceived to be the “value end” of the market, where that expectation of great service wasn’t there with the customer.

We also decided that we wanted to be “Australia’s something”, because we were the first 24/7 brand in Australia. We’re an Australian company and all our competitors are American, so we wanted to reclaim the Australian piece.

We actually anchored this around the vision of being “Australia’s most loved gym”, and that was what our team fell in love with. They didn’t want to be the biggest, the most profitable – they wanted to be Australia’s most loved. They got out of bed in the morning thinking, “Actually, I want my club to be the most loved in my area.”

DP:   How did you get to that vision and those words? One of the things that I find really interesting about strategy is it starts with a vision.

 

ej:  We knew we needed something really appealing, emotional, and that wasn’t monetary because our people in our gyms are passionate – they don’t care about money. So we actually went and hung out with them. We videoed a lot of our teams and a lot of the members. We actually went out and asked members, “Why come here? What do you like about being here?”

And this ‘love’ word just kept hitting us in the face. And then we said, well you know, maybe that’s the thing. Maybe love actually features because it’s a bit like a relationship when a member joins. You know, they join, they’re all excited and they’ve got these great ambitions of getting the body they want. And then they go on this journey with us and, obviously, it’s quite intimate.

Then we thought, “Well, Australia’s most loved,” because we also felt that was humble. It’s easy for companies to say, “We’re going be the biggest and the best or world class,” and all of that. But we thought that’s a little bit egotistical.

 

DP:  Being the most loved is about what someone thinks of you, not what you think of yourself.

 

ej:   Exactly, but we didn’t know how to make it measurable. So this whole “How do you measure love?” became a thing. Now we have four key metrics that measure what we call love. They range from net promoter score [how willing customers are to recommend a company’s products or services to others] to average length of stay, to yield, but we always put it back to “If somebody loves you, they stay.” And so if they stay then we obviously get more profit. It marries the emotional and logical quite nicely.

 

DP:  How far into the strategy setting process did the vision come? Did you continue with setting the strategy before you’d come up with the vision?

 

ej:   It had come upfront and centre. Yeah, we had to do it because I could never rally the energy that the strategy needed if I didn’t have a compelling vision. It had to be something that literally got thousands of people out of bed in the morning. If it couldn’t do that, it wasn’t good enough. It’s got to resonate in the minds of the people in the front line. And I think that’s a mistake in businesses that, you know, you’ll see five pages of what our vision is but it is meaningless to those in the front line.

 

DP:  So you have to get the buy-in of the people on your side of the fence before you sell that outside?

 

ej:  Yes, that’s right. We needed buy-in from everybody: our personal trainers, our club teams, and our business owners – because a lot of our clubs are franchise owned.

 

DP:  And that’s because vision is almost meaningless to the customers if the people on the inside are not selling it.

 

ej:   Well, that’s another interesting thing. I’ve been under pressure to also sell the strategy to customers because our teams get really excited about what we’ve achieved, especially over the last three years. But I won’t let it go to our customers, because until I’m absolutely confident that every customer feels that we are the most loved, it’s belittled, it’s not real in their mind.

 

DP:  So let me just get this straight because this is really interesting – your vision at the moment is a ‘secret’ vision. But it’s only a secret externally. Everybody internally knows that. Do you think that has something to do with your vision having the word ‘love’ in it? Because there’s something that could turn people off with that word, isn’t there?

 

ej:   And that’s why we need to have that metric in place; we’re being measured by everybody else who’s around us. That’s why things like net promoter score are really important, because it’s industry-based, we don’t just do ourselves. So we know where all our competitors sit in terms of how happy their customers are.

 

DP:  And where do you sit?

 

ej:   Well, we’re top.

 

DP:  Of course, when we’re talking about strategy, we have to bring culture into the mix. That statement, “Culture eats strategy for breakfast”, is still in the annals of management history. So is it true your culture can make your strategy fail?

 

ej:  Yes, it can. We’ve all probably seen it at some level in our own careers. You know, the boss arrives one day with an amazing idea or an amazing execution plan. But if everybody thinks he’s a bit of a prat, it’s not going anywhere. I always think of it as passing a ball and having your team run with your ball. You pass it in a way that they want to receive it. And if you don’t have the right culture, they won’t take the ball, they won’t run with it. They’ll actually actively do things to stop it when you’re not looking. Culture is whatever happens when you’re not there.

 

DP:  Identifying the problem is quite easy, but what if you have to change the team of people? How do you go about that?

 

ej:  I find that whenever I arrive in a company and a change of leadership has happened because I’m arriving, that the people are not stupid. They know what the problems are and often have most of the answers. They just haven’t got the authority. So I spend a lot of time with them actually just listening because, eventually, they will tell me what the issues are and they’re usually right.

 

DP:  So you’re the new boss. You have a board or an owner or a bunch of venture capitalists who want their return on investment. How long have you got for the rubber to hit the road?

 

ej:  Well, it depends on the size of the problem. The first thing I do is negotiate that space. Sometimes when you’re making change, things get worse before they get better. And I think an executive that goes into a job and doesn’t have that hard conversation with the person that’s hiring them is setting themselves up to fail

When I went into the Virgin company [in South Africa], I had to remove 40 per cent of the workforce because, from a cultural point of view, they were never going to change. And if I hadn’t managed that expectation with the board, that might have been a very sad story.

I also look for two or three low-hanging fruit that I can just throw to the board as performance improvements that, you know, perhaps they’ve not thought about. And they get confidence [in you]. So you have to do that to get the slower, longer burn of the sustainable change that you can make over time. Because when you get that, that’s when you get that beautiful world of, “this is not going to disappear overnight. This is not just a smoke-and-mirrors improvement.”

 

DP:  Do you revisit your three-year strategy each year?

 

ej:   It’s probably more accurate to say I set a three-year vision and I have themes. So I’ll launch the themes, “This is the first theme, the second, and the third. And if we do this one, then we’ll move on to the next.” So they always know that there are three bits to go through and that’s what is going to get us there. But we’ll have, obviously, the measurements and the milestones in between.

 

DP:  You’ve just had a big change in the business, with the company being sold [for $100 million to Quadrant Private Equity]. How exciting is this sort of strategic change?

 

ej:   Jetts is Australian home-grown, being owned by its founder Brendon Levenson for the last 10 years, and going from nothing to more than 200 clubs. But it got to a point where it’s a mature business in Australia and we had to make a decision about what’s next.

For me, businesses never stand still. You grow or you decline and you have to decide which one you are going to be. So we decided that there’s a lot of things we still want to do, and international markets was our ambition. We wanted to dip our toe in the water and try out Jetts overseas. The first company that knocked on our door was Quadrant and they ended up buying us, so we didn’t even go out to market.

It’s exciting because we’ve done all our homework and we’ve got a really rock-solid foundation. We’re going international now and, you know, we’re ready for it! I just have to make sure that, obviously, nothing goes off strategy here.

So the question is… are we going be the world’s most loved gym? Not only Australia’s? It’s going to be taking on the world.

 

DP:  That’s right. You have to keep the present situation in mind while thinking of the future. How do you do that as a leader? It just sounds incredibly complex.

 

ej:   It is complicated, because if you haven’t spent that time building up a team that can take on the baton from you, you’re screwed. I had to bang the drum of vision and strategy for the last three years, but I’ve banged it lighter over the last year because others are banging it. It doesn’t need me to do that anymore. It will keep going. But I will have to spin the plate every now and again, so I have to make sure I still give it enough attention and profile that it doesn’t lose its momentum. But equally, now I’ve got to go and get some momentum behind the other [international] strategy as well, and then tie them all in together. The vision should be a shared vision.