By Joan Lurie >>

WHEN there is conflict, dissonance or underperformance in an organisation, we assume that there is a problem with the person, be it their values, their personality, style, competence or ‘bias’.

This may at times be true to some degree, however, if we jump paradigms and understand behaviour from a systemic lens, then we start to understand our presenting problems in a different way, and our solutions and interventions to address these become quite different.

Our current understanding of behaviour in organisations is largely based on a psychological or interpersonal framework.

In a systemic lens it is assumed that problematic behaviour and underperformance lies in the system or context rather than the individuals alone. 

By ‘system’ I don’t mean the technical systems and processes of our organisations, the most widely accepted meaning currently. The ‘system’ is the complex web and patterns of interrelating between the members or parts of the organisation and the roles that they play.

When looking through a systemic lense at problems facing an organisation, we can create very different outcomes and results both for people, as well as for our organisations’ culture and ability to perform and thrive. This can be explained through an example of a client I have worked with recently.

THE ‘PROBLEMATIC’ COO

Joe works for an Australian division of a successful global multinational company. He is technically very competent as well as being a great leader.

He had come up through the ranks of the company over years of dedicated service, and was extremely well respected by his team and peers. He was flagged as high potential talent. So much so that when his manager, the CEO of the Australian business and director of the Asia Pacific (APAC) region, was stretched to the limit doing both roles, he decided to appoint a COO to help him run the Australian Strategic Business Unit and Joe was the obvious candidate.

The HR machine swung into gear and the new organisation structure was designed. The COO job was created and all of the Australian executives who once reported to the CEO, would now report to the COO.

A few of the Australian executive team, in functional roles, would also continue to report to the CEO, but in Joe’s APAC director role, those employees would essentially have two managers, and work with each of them depending on which context they were serving, just like in any matrix organisation.

It was anticipated that some of the decision making between the CEO and the COO may be tricky, so decision rights, for the two of them, were documented to provide clarity on which decisions would be made by whom – largely the CEO would make the strategic decisions and the COO the operational ones.

This new structure would be a good solution to ‘fix’ the overstretched CEO ‘challenge’, and help better manage the Australian business, which was underperforming and under pressure.

It was an exciting step up for Joe too, the next edge in his career and recognition well deserved. Joe was appointed, and the communications rolled out.

WHEN OUR SOLUTIONS BECOME OUR PROBLEMS

Quickly, ’noise’ started to surface in the organisation. The high-potential COO was struggling to lead the executive team. Murmurings were emerging everywhere.

What was wrong with Joe? Was he the wrong appointment? Had they misjudged his capability? Was he not up to the ‘bigger’ job?

He was even starting to doubt himself a little.

Joe started working with a business coach, where they stepped up onto the ‘balcony’ to observe and ‘map’ the system he was in, to understand what was going on. From this perspective, a ‘whole’ new picture started to emerge.

The ‘problem’ didn’t reside with Joe alone, but in the complex, messy, ambiguous system that had been created with the restructure. Of course, it had not been designed intentionally to set up the COO and system for failure, just the opposite. However, what was missed was the complexity and systemic, or relational, reset required between all the roles in the executive team.

Only one job had been added and formally changed, but all the roles of the executive and how they related to the COO and CEO, had to be reframed and repatterned to enable the new structure to work.

A new systemic contract and ‘rules of engagement’ had to be agreed and lived by the whole team. This was not just a simple ‘technical’ fix.

ALL BEHAVIOUR IS INTERRELATED

So, what did Joe and his coach observe from the ‘balcony’?

1. The COO was technically no longer a peer to the rest of the Australian executive team, he was now their manager, but he was struggling to step out of the peer role, as were his new direct reports, who in the main were choosing to remain his peer as well; their pattern of relating remained the same even though officially the reporting line had changed.
2. Some of the executives that Joe was now managing were actually still his ‘peers’. So, they were both his peers (in the region) and direct reports (in Australia) which made it trickier, as they didn’t always know from which role they were engaging with each other.
3. The CEO was co-creating this pattern as he wasn’t entirely ready or prepared to stop being their manager and he continued to engage with the whole executive from the old role when he chose to. Behind the scenes, when Australian executives didn’t get the decision they wanted, or got one they disagreed with from the COO, they would triangulate the decision with the CEO, and often get it overturned.
4. The CEO at times would attend the Australian executive meetings, but there were no ‘rules’ about when he would attend and in what role, so these became really messy, with both the CEO and COO leading the meeting and tripping over each other.
5. Whilst the demarcation of decision rights had been documented between the CEO and COO, as strategic versus operational, the CEO would at times in Australian executive meetings, ‘publicly’ challenge and sometimes change operational decisions the COO had made, because these were ‘strategic’ decisions in his mind, or if he had a different opinion.

And so, the ‘system’ artfully said yes and no at the same time.

Reporting lines had changed, the restructure had happened, but the ‘system’ remained the same. The executive still ‘reported’ to the CEO.

Everyone was complicit in maintaining the old system of relating between the roles. The CEO and most of the executive team were as much part of the problem as the COO.

Unless they all stepped into a different role, in relation to the COO and allowed him to manage, the system would be stuck here in this ‘noise’, and the COO would probably become a casualty.

They were caught between these two ‘contexts’ one explicit and one implicit. The problem seemed personal and individual, with Joe, but really the system was the problem and had to be repatterned. In this newly created context Joe couldn’t shine, or do his job, no matter how competent he was. This was starting to impact business performance too and would only get worse!

A new pair of systemic glasses

Once this became visible to Joe, and he was wearing this new ‘pair of systemic glasses’, he knew exactly what to do. He needed to step into his leadership role, stop being a peer to his new team, and establish new ‘rules of engagement’ with the CEO for navigating the messy and ambiguous context they were both in.

A new way of making sense of our leadership and change challenges

We have a multi-billion-dollar leadership development and change industry mostly based on interpersonal, psychological and technical assumptions.

Human and Technical Capital, the ‘fill and fix’ model is how I describe it.

The research tells us that in the main we only get a 20 percent return on this investment, and yet we continue to use the same thinking, approaches and methods.

What if we were able to bring more of this systemic paradigm, thinking and methodology to our organisational change and leadership development models? Develop Systemic Capital?

Perhaps, the time has come to reframe our dominant assumptions and develop a new map for leadership and change in our organisations? Would we not get a better return on investment (ROI)?

In this case, the individual coaching initiative for the COO led him and his executive team to apply this lens and methodology to the wider business performance challenge they faced, which resulted in the business moving into organic growth for the first time in almost two decades.

https://orgonomix.com.au/

About the author

Joan Lurie is the director of Orgonomix, one of Australia’s leaders in systemic change, organisational strategy and leadership development. She is also the creator of ‘Orgonomics’    – a proprietary systemic methodology, designed to help top-tier leaders fundamentally transform their businesses and thrive in the ‘gig economy’. Working with the CEOs of some of the country’s largest businesses, Orgonomix works to uncover and implement ground-breaking systemic changes, reframes roles and perspectives, and re-patterns organisations for new ways of operating to achieve higher order functioning and performance.

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THE NEW Temporary Skill Shortage (TSS) visa is turning out to be not overly different – in effect, but with a few key enhancements – to the 457 visa it replaced.

The 457 visa was replaced with the TSS (Subclass 482) visa on March 18, 2018 and a range of ‘enhancements’ were designed in, including the Global Talent Scheme pilot program. 

“Despite the media attention around the introduction of the TSS visa, it is relatively similar to the previous 457 visa and remains the preferred option for Australian businesses seeking to fill skilled positions which cannot be filled by Australians,” Mullins Lawyers senior associate Corina Chen said.

“The operation of the TSS visa supports Australian businesses in addressing genuine skill shortages, whilst safeguarding the Australian workforce and prioritising the employment of Australian workers.”

Key aspects of the TSS visa program include its targeted occupation lists, which are designed to better align with the Australian labour market, said Ms Chen, who is Mullins Lawyers’ migration law expert.

Also introduced in the visa conditions are minimum salary thresholds and mandatory Labour Market Testing requirements “to ensure that overseas workers are protected, and are not engaged to undercut Australian workers” according to Ms Chen.

Another key reform is the reconsideration of work experience and character requirements for visa applicants.

“With the introduction of the TSS visa, the Global Talent Scheme (GTS) pilot was also launched to provide Australia with easier access to the world’s talent,” Ms Chen said.

“The GTS allows Australian employers to access highly-skilled overseas workers for specialised positions, where there are no suitable Australians to fill the vacancies. 

“It is designed to be supportive of innovative and start-up businesses, aiming to facilitate growth, skills transfer and job creation as well as provide the cutting-edge skills that Australia needs to compete globally.” 

Ms Chen said the GTS niche pilot scheme can be accessed under the TSS visa program and runs for 12 months from July 1, 2018.

“The framework of the GTS protects Australian workers as any positions filled must provide opportunities for Australians, including the creation of new jobs for Australians and the transfer of skills and knowledge to Australian workers,” she said.

“If an Australian business has a vacant skilled position which cannot be filled by the Australian workforce, then the TSS visa program would be appropriate to consider.”

www.mullinslawyers.com.au

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MOVES by the Federal Government to reduce financial reporting and audit requirements for businesses have been welcomed by accountancy and audit experts – but businesses are being warned that costs associated with poor corporate governance may outweigh any reduction in compliance costs.

Pitcher Partners Brisbane partner, Dan Colwell said while there would be some relief for businesses, most major mid-market privates may still need to have an audit undertaken. Recently the Federal Government announced it would reduce the reporting burden for small and medium enterprises (SMEs) by raising the current financial reporting thresholds. 

“For many businesses with bank finance, the banks will still require audited accounts on an annual basis,” Mr Colwell said.

Mr Colwell also said businesses that were foreign-owned, or part of a large group, may also have an audit and reporting requirement for consolidated group reporting purposes.

Where the real advantage will come, Mr Colwell said, was that many private businesses will no longer need to lodge their audited accounts with ASIC.

“Lodgement has always been a commercially sensitive issue for private businesses, especially when it is presumed that competitors in the market are not complying with the law, putting the compliant company at a commercial disadvantage,” Mr Colwell said.

“ASIC has been quick to regulate companies that comply with their annual lodgement obligations, but slow to penalise those that don’t — although that’s changing thanks to improved data matching between regulators,” he said. 

Mr Colwell said the increased privacy of the new regime would be welcomed and this is something businesses have wanted for some time.

He urged SMEs to consider their options in continuing to get an assessment of their governance and strategic position, if not from audits then from other forms of independent assurance.

Currently, proprietary companies are considered to be ‘large’, for the purposes of ASIC reporting requirements, if they meet two of three thresholds for a given financial year: $25 million or more in consolidated revenue; $12.5 million or more in consolidated gross assets; or 50 or more employees.

The Federal Government now says it will effectively double all three measures of the requirements, which will allow around 2,200 firms to be excused from their current ASIC financial reporting and audit requirements.

The new thresholds mean firms will be considered ‘large’ if they meet two of the following three requirements: $50 million or more in consolidated revenue; $25 million or more in consolidated gross assets; or 100 or more employees.

Mr Colwell said while the move would cut compliance costs — estimated by the government at $81.3 million annually or an average cost of $36,950 per company — there would still be audits required for many businesses.

Companies that fall between the former and new thresholds will still be required to keep written financial records and may be required to prepare or audit financial reports if directed by ASIC —  or by five percent or more of their shareholders. 

Those with borrowing facilities, or looking to sell or exit as part of business succession planning, may also be required to continue being audited – but will be spared the requirement to lodge.

www.pitcherpartners.com.au

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By Alan Moore >>

AMIDST the daily social feeds, news stories and business conversations I observe, one aspect of business is masterfully concealed. Cognizant it is a side of business that’s not so ‘grammable’, but the reality is that each quarter more than 1,800 businesses in Australia become insolvent.

Very few people are willing to admit business hardship and standing on the brink of failure – and it’s this very admission that can enable a business to turn around.

Every day we see start-ups and ventures that quickly rise to success, founders on the speaking circuit and rounds of cash injected into businesses through hopeful investors. But there comes a time where every organisation will face its tipping point that will question the very future of that venture. 

More entrepreneurs could be speaking about this – it’s a natural evolution for any business. Through admission and successful management, owners can win back employees, guide learning and enable the business to ride this cycle.

Every business will face its edge on the brink of failure. It’s those that prepare, and the business response that determines who comes out of it. Rather than ignore the situation or hide it from employees, its critical to face the brutal facts – it’s time to transform.

What we are seeing is blind-sighted failings. Entrepreneurs who have turned their brilliant idea to a lucrative commercial venture, expanded rapidly or monopolised a market position – ill-prepared or inadequately skilled within the larger-scaled enterprise, they are taken by surprise when the success bubble bursts.

Silo thinking is another barrier to corporate evolution; this is where individuals and teams undertake their tasks without question or interaction because ‘that’s how we have always done it’.

Enabling a culture of innovative thinking is critical to sustained success.

Strategy, ‘no strategy’ or ‘one strategy’ can also bring down a once successful operation. Contingency strategies are crucial to prepare the organisation for times like the loss of core clients, new competitive market entrants and products. This prevents ‘panic’ in the organisation and supports a quick recovery.

HINDSIGHT IS NO SIGHT

Toys R Us is an example of a business that became too comfortable in its success that it didn’t prepare for changing consumer preferences and market shifts.

Relying on its exclusive distribution with Amazon, the organisation hadn’t set themselves up for ecommerce and from 2004 the market became more accessible for players who swept in on their market share.

Borders Bookshop – set up by two passionate brothers who were avid readers – didn’t prepare for technological shifts and the entry of e-books. The Borders juggernaut had just under 20,000 employees when it went into administration in 2011.

As a business owner, I can vouch as an authentic authority, as not only do I work with business CEOs directly facing this, BUT my own business experienced the brink of failure.

The signals every business (and investor) should carefully observe are not just the financial focus of the business. If there is an obsession on growth forecasts and cash injections rather than putting your customers, employees and services at the centre of your business model and decisions, then you may set your business up for a volatile future.

Second, a business with a Teflon strategy – where nothing sticks and decisions are made on a whim – is another red flag.

A simple example is observing a competitor undertaking a marketing initiative and then adopting a copycat approach with a short-term focus, with ‘gut reaction’ only and no data driven decision-making.

Third, a review of employee and customer engagement and retention will always act as a good indicator on the confidence in your organisation.

If these are all trending downwards then this is a valid indicator to act now.

TAKE KEY STEPS

In transforming your business the key steps are to:

1. 1.       Build a transformation plan – making sure that you have built in contingencies, so that it is flexible to be able to navigate and foresee both internal/external market conditions.
2. 2.       Communicate – this is key. Take your team on the journey, giving them confidence on the business rationale and how it affects the organisation, creating an acceptance to change.
3. 3.       Centre decisions on data – always make sure that decisions are driven by data rather than reactions.
4. 4.       Set out critical success factors based on leveraging key performance indicators (KPIs) – these KPIs should be aligned to each business unit – giving your team an insight, deliverable and ownership into the overall transformation outcomes.
5. 5.       Assess the current organisation capabilities – consider People, Process and Technology to ensure that the transformation outcomes are sustainable.
6. 6.       Build the future organisation – plan for skills, roles, structure and capability.
7. 7.       Make decisions – difficult decisions will always be necessary in any transformation, make and execute these in a humble and considered way.
8. 8.       Build the transformed organisation – ensure this is undertaken with sustainability at its heart.

GIVE IT TIME

Transformation takes time. For us, we commenced the journey two years ago.

We went from an entrepreneurial award-winning organisation that was completely dependent on two core clients, with siloed product offerings, that forced us to build an aggressive transformation plan that was focused on delivering a fundamental change in our business paradigm, product offering and customer base, a revived business culture with international expansion, creating partnerships with our clients, implementing a bold risk-based model that centred on our client’s success and adopting a diversity and flexibility within our international teams.

Today we have transformed to operate within a global customer base and workforce, have opened in London and the Middle East and now taking our Australian business product around the world.

Our transformation will not stop, we have ensured that we have a culture embedded across all our operations to ensure that we sustain our competitive position and have the flexibility in our strategy and operating plans to ‘take action’ not ‘reaction’.

No business is immune to change.

If you can survive a fail, then you set your business and employees up towards a more resilient future.

www.randemgroup.com

About the author:

Digital expert Alan Moore is the international business transformation leader and director of Randem, an Australian-founded international B2B and B2C digital and e-commerce transformation organisation. With more than 20 years experience, Mr Moore has carved his expertise in the rising need for organisations to embed a strategic holistic technological platform that delivers operational excellence, strategic customer marketing, sales and relationships.

Mr Moore has been at the forefront of large-scale digital transformation programs for many prominent locally-owned and international brands. His expertise encompasses diverse sectors including financial services, telecommunications, IT, media, retail, pharmaceutical, lifestyle and food and beverage. From building a business solution and strategy from scratch, to supporting organisations in their transition to ecommerce or international markets, Mr Moore is the catalyst for corporate change with a very innovative, integrated and dynamic style.

Alan Moore works directly with business CEOs and leadership teams around the globe to reinvent their business models to deliver customer focused, efficient and profitable business structures. Prior to his consulting work, Mr Moore held a number of strategic change positions with companies including Accenture and Deutche Telkom Group.

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