Organisational Change Management Volume 2

Potential Challenges at Ingredient 7

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(Consolidating Performance Improvements)

(NB Challenges are not necessarily in order of importance and includes some suggestions on how to handle the challenges)

. Trying to change the organisational culture as the first step in the transition process

. Not realising that culture is continually evolving; it is not static or preservable. What you preserve are your values; these should drive your organisation. Also, new staff will add to the culture by bringing their experiences, viewpoints, perspectives, talents, etc.

. Not understanding the 5 main functions of culture (Marcella Bremer, 2012), ie

i) it provides collective security or reduces collective insecurity, ie "it's the way we do things around here and what we believe in"or "this is how things are"

ii) it determines social hierarchy, ie it gives people a position; it determines the leaders and is a stabilising factor

iii) it provides continuity, ie members share common language, values, beliefs, behaviours and standards; we copy them and encourage others to adopt them. At the behavioural level it is passing on "the way we do things around here"

iv) it provides a shared identity and familiarity, ie provides a sense of belonging and being appreciated which is a very basic human need

v) it provides a vision of the future, ie it gives a purpose; makes our behaviour meaningful

. Declaring victory too soon, ie won a battle but not the war. Some idealistic change initiators can declare change victory too early, and change resistors see a premature victory celebration as an opportunity to stop the change and revert to traditional ways ie resistance waits to reassert itself

. Current procedures that are based on historical reasons only, ie a crisis 10 years ago led to a procedure that is not applicable now

. Not realising that 5 to 10 years can be needed for changes to sink deeply into an organisation's culture; until then the changes are fragile and subject to regression

. Not using short-term wins as a way to attack bigger problems, ie systems and structures that are not consistent with the change purpose

. Not rooting the new behaviour in the social norms and shared values of the organisation.


" ideas do not travel easily, and it is hard for them to take hold..."

Howard Gardner, 2006

. Not explicitly demonstrating that changes have helped to improve performance

. "Supernova burn-out", ie senior executives burn-out owing to stress and related matters. This can result in reduction in the average lifespan of a CEO, and puts increasing pressure on succession planning

. Technologically and financially-orientated people sometimes find the topics of social norms and values too soft for their tastes. Yet the people issues form the basis for the "social architecture"of the organisation

. Supporters of the change move on and leave a vacuum

. Not realising that change is holistic, and is not piecemeal, ie all organisations are made up of interdependent parts. The degree of internal interdependence depends on the organisation (amount of inter-connectiveness between groups and individuals) and the degree of competition

. Not removing the Type 4 managers, ie who perform on the numbers but their behaviour does not support the values of the organisation

Anyone who doesn't buy into the prevailing culture needs to be removed otherwise

"...failure to do so can cause cancer from within..." the organisation
Greg Milne as quoted by Ann Hyland, 2016

Ten cultural commandments (Brett Blundy)

1.  Can-do attitude (inspire and achieve by your attitudes and actions like commitment, hard work, perseverance, leading, acknowledging, etc; quick decision-making; creating theatre, entertainment and excitement around the brand)

2.  Customer satisfaction and perfect service (focus exclusively on the customer)

NB "...The more successful we can make the customer, the more successful we'll become......if we don't look after our customer somebody else will..."
Brett Blundy as quoted by Ann Hyland, 2016

You need to be innovative, exciting and relevant to your customers

3.  Respect (staff are part of a team; be a positive role model in your behaviours, etc; always be available for staff)

4. Continuous Improvement (strive for excellence and never be satisfied even if it means changing things; aim to over-achieve; learn while earning; maintain high standards as the norm; read widely)

5. Communicate, Communicate, Communicate (communicate continuously in all directions and ways possible, especially around the vision of where you want the business to be; listen as well as talking)

6. Costs are the Enemy (continuously find ways to reduce expenses, cut wastage/shrinkage; improve productivity; be disciplined; contain costs)

7.  Accountability (commit; take ownership; be responsible for your words, actions and results)

8.  Teamwork (succeed through efforts of teams, not individual performance)

9.  Trust (act in a manner that instils trust; it costs nothing to be a good person)

10. +1 (do it now; do everything with a sense of urgency; speed to market is important)

Stakeholders who have "skin in the game" , ie money invested, will have a better attitude than somebody who is just a paid employee (Anne Hyland, 2016),

. Not realizing that the behaviour of senior management impacts on others. For example, staff will decide what is important by observing where the senior executives spend their time and money.

. Not realizing that the external environment can impact on senior management performance. For example, the global financial crisis (starting in 2008) has resulted in some organisations reverting to a command-and-control approach rather than continuing to nurture people, as the organisations grapple with short-term financial pressures and survival.

. The Board not recognising their correct role, ie performance and conformance. Many directors need to learn the difference between directing and managing. Furthermore, problems can arise when Boards focus too much on micro-managing, short-term compliance and results (quarterly financials), and less on developing long-term sustainability.

. Not using behavioural or situational type questioning techniques in screening candidates as part of the selection process in succession planning

. Not understanding the "founder's dilemma"in an entrepreneurial organisation. As an entrepreneurial organisation is successful and grows, the management skills and resources (mostly finance) required for the organisation to remain successful are usually found outside the organisation. It can be hard for the founding senior executive to be willing to let go as he/she has a strong emotional attachment to what he/she has developed. Sometimes the founder can be found an alternative role within the organisation.

. Inadequate succession planning, ie not ensuring the next generation of management reflects the new approach. Need to reshape the basis for promotion to fit the changed context; this is most important for Board and senior management to understand and act on. Unfortunately, as Jeffrey Cohn et al (2009) found, most organisations usually promote staff to replicate rather than innovate. This means that to be promoted staff need to mirror the incumbent senior manager's behaviour, etc. This is called "clone syndrome", ie select staff to fit a mould and conform. Furthermore, executives tend to mould their approach on behaviours of their previous bosses and predecessors. This means that leadership traits tend to be reborn in each generation. Executives should have the confidence to be themselves and select others to fill any gaps in their expertise.

.Not realising that succession planning is a process, not an event. It is a process that continues over the years in planning and implementing, ie identifying potential candidates, their strengths and weaknesses and developing appropriate career paths, including job rotations so that they gain the relevant experience
It is more than just an issue for the senior management team; it should be about succession of critical jobs in the corporation
Be careful of similarity bias, ie promoting people who are like us
Some staff feel threatened by succession planning as it suggests they are replaceable. When people feel that they are replaceable, they are more resistant to developing succession plans
Decision to promote from within, or bring in somebody from outside, depends upon
 - skills required and skills available within, and outside, the organisation
- how well the organisation is doing
- if a change agent is needed
- the future direction of the organisation
In general, unless the organisation is in trouble and/or needs to change, it is better to promote someone internally

Need to be careful of employing star performers from outside. These star performers, especially if male, are generally dependent upon a network of people around them in the business culture and the organisation's processes. In a new organisation, the star performers do not have the network available that made them successful elsewhere and/or processes they are familiar with
The importance of diversity - it gives a great return on investment. It is important for innovation as diversity brings "out-of-the-box" perspectives and better access to markets/customers, etc

Much innovation comes from gut feeling, ie it is hard to prove something that hasn't happened already

Diversity is a key driver of innovation

Innovation does lead to better performance. On the other hand, there is very little radical innovation, ie creating products and services that go beyond what is expected by the existing customer.

Incremental improvement is not innovation. For example, in banking the use of contactless payment, ie improving customer interaction, is not innovation but an incremental improvement.  We should be aiming for life-changing, societal-changing, transformative developments in technology that may have ancillary benefits

(sources: Patrick Durkin, 2016c; Nora Scheinkestel, 2016)

. Not including succession planning in the senior executives' performance criteria and remuneration packages. This means selecting and/or promoting, people need to keep in mind attitude, aptitude and fit to organisation's 'new' culture. To encourage executives to do this, some organisations have introduced "good leavers treatment", ie to ensure that the executives are focussed on long-term outlook (including succession planning) by linking and locking in some of their incentives to future fortunes of the organisation. This will ensure that whatever strategic direction they set, they will share in the accountability. One example of this is

"...Senior executive's unvested equity incentives to stay in force after they have retired, rather than being fully forfeited or fully paid out when they go. (Unvested means awards that are not currently able to be exercised and thus cashed in). The executive can only cash in the awards if the company hits its performance hurdles at a later date..."

Annabel Hepworth, 2008

Furthermore, this is designed to stop the senior executives getting the organisations to peak when they are departing and leaving a lot of challenges and problems for the next generation of executives. In other words,

" want the chief executive to develop and manage your business's interests having regard to a period beyond their stewardship and to hold a significant portion of their reward for their period of leadership at risk, beyond the period of leadership..."

Annabel Hepworth, 2008

. Not employing enough "clever"people

"...highly talented individuals with potential to create disproportionate amounts of value from the resources that the organisation makes available to them..."

Rob Goffee, 2008

Characteristics of clever people are

- skills not easily replicated

- their knowledge is tacit

- smart enough to be in the right place at the right time and know it

- they are not necessarily hierarchical aspirants but are often organisational-savvy

- they are sources of creativity in the organisation

- are well-connected to networks of other clever people

On the other hand, it is best to select staff on performance rather than talent. One of the best examples of selecting staff based on talent only, rather than performance is Enron. With the support of top-tier consultancy firm (McKinsey), Enron was encouraged to select the smartest people - irrespective of their experience and performance. Its dramatic collapse was caused by many issues, but pivotal was the selection and promotion of the "brightest"irrespective of performance.

Don't under-estimate the people who are graduates from the "school of hard knocks" or "university of real world. Too often we pay much too much attention to academic qualifications rather than performance. Bill Gates (Microsoft), Steven Jobs (Apple), Larry Ellison (Oracle), Mark Zuckerberg (Facebook), Adam Pisoni (Yammer), Elon Musk (PayPal & Tesla Motors), Josiah Humphrey and Mark McDonald (co- founders of Appster - app development and strategy firm) were all either school or university drop-outs.

. Not understanding the sequence for selecting the most suitable person

i) select a few (around 6) traits that are pre-requisites for success in the position, eg technical proficiency, engaging personality, reliability, etc.

ii) each trait should be independent

iii) develop a few factual questions around each trait that are able to be assessed reliably

iv) use a scale rank, ie 1 to 5 to rank the answer to each question

v) collect information on one trait at a time, scoring each before you move onto the next one. Do not skip around

vi) to evaluate each candidate, add up the scores

vii) select the candidate whose score is the highest

NB Keep personal judgments out of the selection process

. Don't under-estimate the people who are graduates from the "school of hard knocks" or "university of real world. Too often we pay much too much attention to academic qualifications rather than performance. Bill Gates (Microsoft), Steven Jobs (Apple), Larry Ellison (Oracle), Mark Zuckerberg (Facebook), etc were all university "dropouts".

. Not understanding the importance of empathy. Empathy is not sympathy. Sympathy refers to way you feel about someone else's misfortune, whereas empathy shows that you understand how the person feels. This means that you can see the world from another person's point of view, ie put yourself in the shoes of others. This involves 2 dimensions, ie cognitive and emotional:

"...cognitive dimension ‐ understanding the task that other people must perform - and emotional dimension ‐ acknowledging the humanity of others by knowing your stakeholders as people and recognizing and validating their emotional experiences......This is known as a shared state. By sharing someone's experience, you establish the common ground essential to build rapport and achieve things effectively with other people. It's the emotional glue that creates personal connections, establishes trust and relationship loyalty, and builds emotional capital......the second dimension of empathy is more emotive. It involves treating people as human beings by validating their engage in this dimension of put you self in the other persons place by asking questions such as, 'what are this person's skills, knowledge, an area of expertise?, or to his nominal and actual roles in the organisations?, what are her foremost job-related worries? or what are her most important worries off the job. In other words, take time to consider other relationships in the person's business life, and, when relevant, his or her personal life. This can help you understand the pressures, prospects and risks he or she faces and the goals he or she is trying to achieve..."

Martyn Newman, 2007

Furthermore, empathy is a constructive way to handle resistance.


" the psychological level people have two essential needs: to be understood and to be admired; however, the most fundamental need is to be understood. In other words, if you can communicate that you understand another person's experience you will build a valuable connection and he or she will work well for you, buy from you..."

Martyn Newman, 2007

When people are on the same wavelength emotionally, this is sometimes preferred to as "synchronous vibration"


. Need to understand the importance of emotions in change. For example, jealousy
" is a potent means of the assertion of individual rights and the encouragement of corporation and equitable treatment..."
Peter Tooley as quoted by Diane Johnson, 2015


It is different to envy, ie


"...envy concerns what you would like to have but don't possess, whereas jealousy concerns what you have and and do not wish to lose..."

Peter Van Sommers as quoted by Diane Johnson, 2015
Also, jealousy is more often associated with violence
It is an integral part of normal human behaviour arising from an individual's fear of being excluded; fear of exclusion can prompt us to devise forms of cooperation and growth. People who are excluded from groups more and act upon it is. Jealousy is believed to be an innate survival mechanism and can arise from the fundamental disappointment linked with the realisation that life is unfair


. Not appreciating that here is a difference between why people leave a job and why they apply for a new job. The reasons for leaving a job including difficult co-workers, lack of opportunity and recognition, etc. Yet these factors are not assessed when looking for a job. Furthermore, while pay is often given as the major factor for staff leaving, it is usually more about

- mis-alignment of personal and organisational values and/or

- lack of career path and/or

- lack of adequate feedback

Some additional reasons people leave are

- communication clashes with bosses or colleagues

- unrealistic expectations by employer

- work encroaching on personal time

- held back from promotion

- boring work

- guilt trips (working through illness or clashing with family commitments)

- undervalued

- poor pay

The reasons people change jobs include financial considerations: this is important if the staff member has commitments that require a bigger package. Other considerations are

- work/life balance (this is becoming more important. But it means different things to different people; it is not always about part-time work but about having time off to do other things of interest.

For managers, the work/life balance implications include

"...ways to grow the business while, at the same time, creating an environment that offers shorter hours, more flexible hours, compressed working weeks, time off to do other things, working from home, working closer to home, their opportunities for advancement and continuous learning.......Part-time work should no longer be discriminated against as ' career suicide"or 'mummy track' and these options should be available equally to men and women, parents and childless people..."

Convergence International Report as quoted by Fiona Smith, 2008b

Staff are more productive when they work from home. On the other hand, they are more collaborative and innovative when they work together, ie have a meaningful interaction.

- career development

- changes in personal circumstances

- workplace relationships

"...All money attracts attention, it won't make them sign on, or stay, if the conditions aren't right..."

Hudson Report as quoted by Fiona Smith, 2008b

. Not appreciating that you should focus on spending most of your time doing what you like to do, what you do best and what adds value. Unless this happens, there is a disconnect and performance cannot be optimised. A good fit increases job satisfaction, reduces stress, improves attendance and performance.

. Not realizing that what characterizes mind changing under ordinary circumstances occurs largely beneath the surface. Unless one has keen memory or a well-documented diary, one would be surprised to discover that one ever held a different point of view.

"...Moreover, when one's changes in mind occur.....changes that have simultaneously occurred in the minds of millions of one's fellow citizens, they are unlikely to be noticed at all - they blend into the gradually evolving conventional wisdom,,,"

Howard Gardner, 2006

. Not understanding the paradox of changing minds. During youth, the mind changes relatively easily. Remember: at around 10 years old, peer group pressure replaces adults as having the greatest impact on youth. On the other hand, the mind is a surprisingly conservative mechanism, with theories, concepts, stories, skills, etc being formed early, becoming entrenched and may resist specific change

" is more difficult to change the mind when perspectives are held strongly, and publicly, and by individuals of rigid temperament. It is easy to change minds when individuals find themselves in new environments, surrounded by fears of different persuasion......for when individuals undergo shattering experiences (for example, a severe accident, a divorce, or an unexpected death) or encounter luminous personalities......the opportunities for backsliding are patent..... it's easy to talk of changing mind in general than to effect enduring changes in any particular mind..."

Howard Gardner, 2006

There are 6 different arenas in which mind changing can take place. It is like an inverted pyramid

"... large-scale changes involving the diverse population of a region or an entire nation

large-scale changes involving a more uniform or homogeneous group

changes brought about through works of art or science

changes within formal instructional settings

intimate forms of mind changing

changing one's own mind..."

Howard Gardner, 2006

Examples of the first arena include the pervasive influence of exceptional political leaders, such as President Kennedy, Nelson Mandela, etc; the second arena includes organisations, corporations, clubs, etc; examples of the third arena include the influence of Karl Marx, Albert Einstein, Charles Darwin, the Beatles, etc; the fourth arena includes schools, etc,; the fifth arena includes the family, friends, work mates, etc; the six arena is usually linked with an external agent or factor.

. Not realising that mind changes can occur indirectly through scientific discovery, scholarly breakthroughs and artistic creations. Generally the indirect leaders operate outside the political sphere. Consider the impact, for example, of Albert Einstein in physics, Charles Darwin in biology, etc in the scientific arena; artists, such as Pablo Picasso, etc; writers such as, William Shakespeare, philosophers such as Karl Marx, etc, have all had major impacts on changing people's minds. In many cases, their names became known and ideas spread without public awareness of the identity of the creators.

Howard Gardner (2006) has suggested that artistic masters change our minds in 3 ways, ie

i) they expand our knowledge of what is possible in artistic medium by developing new skills in a medium that ask the audiences to develop a complementary ensemble of perceptual skills

ii) by employing new methods

iii) the artists help the audience understand and define the spirit of an era

. Sometime matters of faith or strong fundamentalism views will restrict people from changing their mind.

"...all of the efforts within the fundamentalist community are directed towards shoring up the current belief system and rejecting alternative notions..."

Howard Gardner, 2006


"...A monolithic framework does not create a critical mind. Where there is only one self-evident truth, nothing ever gets challenged and no sparks of creativity getting it generated?..."

David Hartman as quoted by Howard Gardner, 2006

For example, scientists with strong fundamental religious beliefs found it hard to accept Darwin ideas on evolution. Other examples include

"...skepticism greeted Copernicus's heliocentric views of the universe, Einstein's theory of relativity, Heisenberg's quantum mechanics, Freud's theory on the unconscious, and Wegener's Continental drift, amongst others..."

Howard Gardner, 2006

Furthermore, it is suggested that people

"...trained in the old ways of thinking, would have to abandon deeply ingrained and dearly held notions. The new paradigm is most likely to be embraced by individuals who are just beginning to work in a particular domain.......the young turks' lack of vested interest in the old perspective, they are more likely to be flexible, and, indeed (particularly if they are later-born)......they may gain a certain pleasure in seeing the old dogmas overthrown and in having the opportunity to pursue a fresh approach......for a youthful or iconoclastic segment of the population, then, the very resistance to an idea in general can incline members of that segment to accept the idea more readily..."

Howard Gardner, 2006

. Not realising the importance of oscillating between periods of relative free exploration and carefully cultivated disciplines and skill

. Not realising that the competencies and skills that are important for success at one level in an organisation are not necessarily the skills needed at another level. This is most obvious at 3 management levels

- first managerial post (where working as a team is important in functional departments)

- first general management role (where an understanding of all the functions in an organisation is required).

- most senior executive role (understanding of the "big picture"and the range of stakeholders' interests)

Thus the need for training and mentoring, coaching, etc

. Not realising that most managers are not prepared to handle change as their experience is based upon

"...finely honed operational skills in managing quality programs, process improvement teams, and cost-control efforts......many managers who are intensely focused on delivering ever improving results often are the worst at developing next-generation management bench strength. It takes extraordinary discipline and vision on the part of senior executives to balance the tension between the putting fully qualified employees to drive results now versus giving learning opportunities to high-potential employees who need more development..."

Clayton Christensen et al, 2003

In change, the problems are very different from those in well-established organisations. In fact, failure and bouncing back from failure are critical experiences in developing the necessary skills to handle a new business.

"...The school-of-experience theory, however, says that potential should not be measured by attributes, but rather by the ability to acquire the attributes and skills needed for future situations......the ability to learn what needs to be learned experiences......focusing on ability to learn, it is possible to avoid assuming that the infinite list of competencies important for today are those that will be required in the future. Performance appraisal......focus on learning-orientated measures such as 'seeks opportunities to learn,' seeks and uses feedback,' 'asks the right questions,' 'looks at things from new perspectives,' and 'learns from mistakes'......the quest is to determine whether an employee is willing to learn new skills..."

Clayton Christensen et al, 2003

Not appreciating the difference between managers who focus on the big picture (bird's eye view) or detail (worm's eye view). This is sometimes referred to as the zoom framework (zooming in, zooming out) (Rosabeth Moss Kanter, 2011).

i) Zooming in

It focuses on details, especially operational matters; looks for immediate benefits, quick fixes and tends to make decisions with a reliance on their personal networks (somebody they know rather than relying on outside expertise), favour "turf protection"with an obsession with self, can personalize issues, get more grounded in situational realities, etc

It is less interested in wider perspective/big picture issues; analysis (including exploring for underlining causes, alternatives or long-term solutions); planning (strategic, succession, etc); policies, etc. Generally policies and systems are based on internal politics with organisational activities based on favours, ie 'do it for me". Change is often resisted as it disturbs the social equilibrium.

"...decisions are based on who you are and whom you know, not on broader goals..."

Rosabeth Moss Kanter, 2011

ii) Zooming out

It is big-picture decision-making; events are seen as part of general patterns; things are put into context and the focus on principles. Less focus is on details and the short-term; can miss emerging threats, opportunities and novel situations by over-generalising, etc.

Need a balance of "zooming in"and "zooming out", ie zoom in to see the specific problem and zoom out to look for similar situations, root causes, principles, policies, etc relevant to the current situation.

It is claimed that women are better at zooming in than men, eg relationship building, collaboration, teamwork, etc; men are better at zooming out, eg visioning. This is based on the different traditional roles performed by men and women, ie women as the carers.

. Underestimating the importance of former employees - whether retirees or those who have left and joined another organisation - having positive feelings about the organisation. They are valuable resource that can offer great value to the organisations, such as the retirees becoming mentors and/or providing back up expertise based on their experience with the organisation, etc. Ex-employees who have joined other organisations, can provide a referral network, resulting in the new organisation becoming a client and/or referring their clients to your organisation. Furthermore, at a later stage they may return to be employed by your organisation. It is important to keep communications open with former employees, whether social or work-related, so that they still feel part of the organisation. Ways to do this include starting an alumni that meets regularly and/or has a newsletter to keep people informed of what is happening in the organisation and with ex-employees, etc.

. Not realising the importance of helping staff prepare for career and life changes ‐ organisations should establish continual learning resources so that staff can develop knowledge, skills and interests that serve their personal and professional development needs (more than just their performance in a current position).

. Not realizing the importance of the 5 minds to handle the future (disciplined, synthesizing, creating, respectful and ethical), ie

"...a disciplined person should embody the ways of thinking and acting that distinguish a chosen discipline(s) and no just spew forth a lot of heterogeneous knowledge about the subject. A synthesizer should put ideas together in a way that is cogent and replicable, and not merely offer a convenient or cute package. A creating mind should be original and appropriate - sheer novelty or eccentricity or instant celebrity does not suffice. A respectful mind should transcend the intolerance, displaying active interest in and affection for those who look different, including those of low status. An ethical mind must comport itself in ways that support the broader profession and the wider society - even, or especially, when those actions go against one's narrow self-interest..."

Howard Gardner, 2006a

- There is an increasing interest in ethical questions that were previously ignored. More people want to engage, ie work and live, with things that are meaningful. At the same time, there is increasing evidence that many major institutions have betrayed their purpose and encouraged unthinkable customs and practices, like conflict of interests. When senior management of these organisations are questioned about these activities, most answer with "everyone does it like that" and/or "it's always been done that way"
In 2016 Australian government regulators were saying to Boards, especially in the financial industry, to think about their culture, ie by answering questions about what the organisation stands for, its your purpose, values, principles, etc. Organisations also need to check that is there alignment between what the organisation says it stands for and what it is, ie  does it "walk the talk" (do its deeds back up the its words?) eg
- how much of what organisations says about itself is true?
- why are there gaps between what it says and what it does?
- what can be done to close the gaps? (Joanne Gray, 2016)
This involves 2 steps
i) to check the consistency of an organisation's purpose, values, principles, etc  - this involves talking to key stakeholders like customers, staff, investors, regulators, suppliers, etc.
NB There is a risk in mis-perception (see cognitive biases) or hypocrisy by the organisation in how it sees itself
ii) conduct an independent forensic examination of systems, policies, strategies, day-to-day practices like product design, remuneration systems, recruitment procedures, promotion systems, induction processes, financial accounting methods, what is reportable or non-reportable, etc.. Another way to look at this is what would a disinterested person who encountered their systems, policies and structure reasonably infer from this experience?

. Successful people don't blame circumstances, ie

Some "...people always blaming their circumstances for what they are. I don't believe in circumstances. The people who get on in this world are the people who get up and look for the circumstances they want..."

George Bernard Shaw as quoted by Martin Newman, 2007

Furthermore, Australian research (Terrance Fitzsimmons, 2012) shows that successful people have similar backgrounds, ie usually skills learnt in childhood from

- suffering or witnessing some dramatic or traumatic event in childhood that has interrupted family life like a major health issue in the family, family suicide, etc

- professional parents (usually father with stay-at-home mother) and/or from a small business family in which memberslearnt to juggle or balance work, family and community priorities, which gave them an inate understanding of business

- leader in a sporting group when young, (eg captain of a sports team), ie helped develop strategies, goals, leadership and teamwork which all help later in the workplace

- women tended to have their children when young, ie 18 to 23 years old. They were later able to handle long and inflexible working hours and business demands as their children are older and more independent. Plus options like relatives to look after children.

The above help developed resilience and self-confidence.

. For successful women

"...are super women......super intelligent, gifted, born into small business families, they were challenged as children, and overcoming their challenges gave them confidence. They have supportive husbands, they had mentors..."

Terrance Fitzsimmons, 2012

. Not understanding and utilizing the demographic changes, such as ageing population and low population growth in Australia. With the declining number of young people starting work for the first time, there is a need to retain potential retirees. In Australia

"...In the next four years, 17 percent of the workforce will be older than 55 and that proportion will continue to grow..."

Fiona Smith, 2008a

In addition, there is increasing employment demand, ie

"...18% in the construction industry, 13% in the accommodation, cafe and restaurant industry and 12 % in the wholesale industry..."

Fiona Smith, 2008a

Therefore we need to redefine what work looks like, ie

"...the stigma around part-time work not equating a career or a promotion, or part-time workers not being valued as full-time workers has to change, and employers are going to have to create more part-time roles as career roles......these include flexible work options such as part-time work, consultancy and working from home, as well as extended leave for around the world trips, to spend time with family or attend seminars on financial planning. Retirees are also lured back as mentors..."

Fiona Smith, 2008a

. Need to build a corporate community. According to Goffee (2008), this involves the building of sociability and solidarity. Sociability involves increasing social interaction, reducing formality, limiting hierarchical differences, recruiting compatible people, helping those who are in trouble, encouraging the sharing of ideas, emotions and interests. Solidarity involves developing competitor awareness, creating a sense of urgency, giving commitment to objectives, targets, goals, etc, stimulating the will to win, setting demanding standards, focussing on performance, moving people around and celebrating success.

. Not understanding that there is a poor linkage between good corporate behaviour (via socially responsible corporate policies or community projects)and good financial results (Joshua Margolis et al, 2008). On the other hand, if there is a public misdeed, there is significant negative impact.

. Not realising that the best learning occurs in an environment that encourages interaction, collaboration and is participant-driven.

. Not realizing that well-trained and well-treated staff provide superior performance. This is particularly strong in the knowledge economy where people capital, expressed as intellectual property, etc, is regarded as the difference between the net tangible assets at fair market value and the market capitalization of the organisations. For firms, like Microsoft and Google, people capital is the dominant element of their value. This means looking beyond the financial accounting practices to such factors as systems of recruitment, workforce planning, strength of the internal labour market, leadership development across an organisation, money spent on training as a proportion of net profit or net payroll, performance management systems, career development pathways, occupational health and safety issues, staff turnover, employee engagement, etc. These are additional to environmental, social and governance responsibilities,

. Not realizing that you have to get beyond the thinking that involves analytsis and decisions which are numeric and logic-based to a broader level where there is the ability to shape and mould entirely new experiences, cultures, business models and systems, ie thinking creatively.

. Organisations in the private sector can learn from the not-for-profit sector (The Economist, 2010b). Some examples

- they can learn how to motivate staff from the not-for-profit sector. The private sector tends to focus on financial rewards which does not guarantee success as evidence by the GFC. While in contrast, the not-for-profit sector depends on volunteers (unpaid staff) and generally does not pay staff well; however, its staff and volunteers have a personal commitment to a clear and distinctive purpose.

- staff in the not-for-profit sector are passionate about a cause and they want to come to work.

- the management structure in the not-for-profit sector is relatively flat with staff and volunteers helping each other when necessary

- staff in the not-for-profit sector are given real responsibility

- the successful not-for-profits have good marketing prowess as they have to persuade people to part with money for goods or services that are used by others and they need to convince people that they are getting value for money

- encourage people to have fun at work

- build long-term relationships based on frequent contact including repeatedly saying thank-you and continual communication updates through newsletters. This is different from the one-off transactional approach to customers which is common in the business world.

- many not-for-profits stay in contact on a long-term basis with past stakeholders including past staff, volunteers, clients, etc. The business world would benefit from cultivating their networks of past stakeholders, including staff and customers.

. Be prepared to heighten the following 4 habits so that you are able to extract more value from your experiences.

i) a learning mindset (looking for opportunities, not shortfalls)

ii) the ability to seek diversity of experience (instead of falling back on stereotypes)

iii) reflective techniques (evaluate, plan, question and coach)

iii) retention skills (it is more than memory) (source: Catherine Fox, 2011)

. Need to understand there is a difference between skill and knowledge and how to build skills. Knowledge is a subset and contributes to building a skill. For example, a journalist might have developed great knowledge about a professional sport s/he watches and reports on but lacked the skills needed to play in the game successfully. The 70 ‐ 20 ‐ 10 approach reflects how to build work skills, ie

- 70% on-the-job experience

- 20% mentoring/executive coaching

- 10% formal training from attending courses

Usually on-the-job experience and mentoring are provided by the industry while formal learning is delivered outside the industry, ie education sector. Linked with this is the importance of feedback

(source: Steve Vamos, 2012)

Organisations can learn form sporting teams. For example the objectives and strategies of a successful AFL football club (Geelong, ie "Cats")

i. Win premierships

- high quality player recruitment

- an extensive and challenging development pathway

- a holistic player development program

- effective player list management

ii. Grow our commercial profit in popularity

- maintain a customer service action rating of above 80% each year from our sponsors and members

- deliver and constantly evaluate our strategic brand marketing plan

iii. Provide genuine benefits to the camps' community

iv. Infrastructure development

v. Have great people and a unified culture

vi. Deliver ongoing and enhanced profitability each year

vii. Operate a well structured corporate governance structure

viii. Provide environmentally responsible facilities and effective information technology and communication structure

(source: Tony Walker, 2014)

. Not understanding that very few CEOs have a HR background. This means that most CEOs have a technical, facts, figures, etc focus rather than people focus.

. Need to understand that most decision-makers who are expecting to have their decisions scrutinised with hindsight (and malpractice litigation) are driven to bureaucratic solutions and are extremely reluctant to take risks. They are overcautious in their procedures, ie

"...hindsight and outcome bias generally foster risk aversion..."

Daniel Kahneman 2012

Focusing on routine functions of the brain

"...makes us see the world as more tidy, simple, predictable, and coherent than it really is. The illusion that one has understood the past feeds to further the illusion that one can predict and control the future. They reduce the anxiety that we would experience if we allowed ourselves to fully acknowledge the uncertainties of existence. We all have a need for the reassuring message that actions have appropriate consequences, and that success will reward wisdom and courage..."

Daniel Kahneman 2012

There is a high correlation (0.30) between a successful firm and the quality of its senior management. Yet follow-up studies on firms studied in management books like "Built to Last"(Jim Collins & Jerry Porras) and "in Search of Excellence"(Tom Peters & Robert H. Waterman) have shown initial performance differences between the different firms disappeared over time, ie regression to the mean.

"...The stories of how businesses rise and fall strike a chord with readers by offering what the human mind needs: a simple message of triumph and failure that identifies clear causes and ignores the inevitability of regression..."

Daniel Kahneman 2012

Need to be aware of possibilities of fraud

With claims that corporate fraud is on the increase, eg one study (the Economist, 2014b) found that 70% of companies studied were impacted by fraud in 2013, compared with 61% in 2012. One telltale sign of corporate fraud is people with flamboyant personalities, ie larger-than-life personalities. As 3 times as many frauds are discovered by tip-offs than by any other method, whistleblowers need to be encouraged by being provided with legal protection and financial incentives. Furthermore, firms with fraud hotlines, which staff can call anonymously, suffer smaller losses from fraud and cut by 7 months the exposure gap between the start of an illicit scheme and its discovery.

. Change challenges current culture. It requires "unlearning" and "relearning" which can be very painful & slow

. Three parts to culture

i) behaviours, ie action, words, relationships, etc

ii) symbols, ie physical environment, recognition, concepts, etc

iii) systems, ie reporting, performance management, etc

. Need to be careful of a culture whose main focus is on performance‐driven elements, like rewarding

- on sales including cross selling

- short-term gains

- neglecting some stakeholders, eg focus on shareholders at expense of customers, staff, etc.

· Need to realise that social media has changed the power balance between the board/senior management and other stakeholders, like shareholders and investors like institutional investors, super funds, etc. They are adopting a much more critical approach to decisions made by boards/senior managers.

· Previously boards/senior management could make decisions as significant as splitting up a company, accepting or rejecting a takeover bid/merger, granting senior management pay rises, etc with minimal fuss with minimal interference from outside stakeholders

· Some examples of the change in the power balance include

- lawsuits against major Australian banks over credit card late fees

- Australian companies like Treasury Wines, Newcrest Mining, WorleyParsons, etc have been subject of to legal claims over the way they disclose write-downs or profit downgrades

- Westfield had to battle to achieve agreement with influential shareholders such as superannuation funds about its recent splitting of the company into two

· On the other hand, it can have disastrous and often unfair impact on an individual/company. The online backlash can be blown out of all proportions, misconstrued, vicious and unfair. Some Australian examples include the online negative reaction to

- Gerry Harvey's comments on the need for online purchases to be subject to GST like retail stores

- Bernie Brookes's misconstrued comments about the National Disability Scheme's potentially negative impact on disposable income available for retail sector. (source: Michael Smith, 2014b)

  • Having too many objective and key result indicators to measure, It is better to have a few key ones like 1 objective with 3 measurable key results every quarter


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