Fear, anxiety constricts firms – Uni Syd research

AMBITIOUS corporate incentive schemes and performance goals can cause anxious employees to lie about results – and this has a negative impact on productivity, according to University of Sydney Business School research.

Professor of accounting, Wai Fong Chua used the example of the Finnish multinational, Nokia, which suffered financially because of the fear that it generated amongst middle and senior managers.

“Shared fear was so strong amongst Nokia’s middle managers that they withheld important information about the viability of its technology from senior managers,” Prof. Chua said. “The company suffered significant losses as a result and was forced to exit the smartphone market.”

Prof. Chua’s own research relating to the Australian subsidiary of a global computer company has confirmed the need to better understand ‘affective technologies’. These she described as processes, information systems, and performance/financial goals that “have an emotional impact and economic consequences”..

“Take, for example, a billion dollar revenue target that is to be achieved within 18 months,” Prof Chua said. “This tends to produce an affective outcome. Graphic Stock image purchased by Screamer Media Pty Ltd.

“It could be anxiety, it could be fear, it could be excitement, it could be all of these things and that, in turn, affects the way people work in an organisation.

“I believe there is considerable fear and anxiety in today’s corporations, especially those experiencing financial challenges. When corporate distress is not well handled it can have quite adverse consequences.”

Explaining her interest in ‘affective technologies’, Prof. Chua said financial managers today played a key role in designing performance management systems.

“We’re fundamentally interested in ensuring that the systems we design and the goals that are set enable people to develop their potential and achieve to the best of their ability,” Prof. Chua said.

“Stretch goals can motivate staff.  But, when tied to incentive schemes that operate in unsupportive corporate cultures, this can prompt fraud.”

For example, she said, investigations were continuing into the incentive schemes at the Wells Fargo bank in the United States, where about 5000 employees were thought to have created fictitious customers in order to meet or exceed their performance goals.

While researching affective technologies, Prof. Chua has also looked specifically at innovative start-ups and the relationship between entrepreneurs and investors.

“When passionate entrepreneurs, who are really keen on developing their product, turn to venture capitalists, the focus of their project may change in an unwelcome manner,” she said. “Investors are generally interested in earning a quick rate of return and their shorter-term focus may differ significantly from the passion of entrepreneurs.”

Prof. Chua said companies “need to be aware of levels of anxiety and fear and enable folks to discuss processes and goals without being so afraid that they fabricate an answer”. 

“Organisations are emotional arenas, not just economic entities,” she said.



AIM survey: workplace culture shock

THE Australian Institute of Management 2016 National Salary Survey has revealed a culture shock: two thirds of Australian businesses are losing employees due to a lack of workplace culture.

With the rising cost of employing new people – it costs on average $26,410 to recruit a new employee, almost half the average national salary – the AIM survey found 54.6 percent of businesses had concerns over staff retention. 

Almost two thirds (63.7%) of businesses pinpointed organisational culture as their biggest human resources (HR) problem and 58 percent of businesses indicated learning and development of staff was also a HR issue.

The survey also found 66.8 percent of Australian employees left a current job to start a similar role at another organisation.

AIM chief executive officer, David Pich said the cost of staff recruitment was a threat to business operational costs.

“Retaining staff is no easy feat,” Mr Pich said. “Employees can become restless in roles that have limited career advancements or where they don’t enjoy their time at work.

“Combine that with a volatile property and rental market and the pressure to contribute more to their superannuation fund, it’s no wonder staff are becoming disillusioned and feel the need to move jobs as a perceived guarantee to a salary increase. People are investing less into their future, because they need to spend more now.”

 Mr Pich encouraged business leaders to reassess their current pay model and suggested creating a positive and inspiring workplace culture to decrease staff turnover and retain human resource.

“People don’t leave companies; they leave leaders,” Mr Pich said.

“Great managers and leaders make decisions that impact people’s lives and that impact can be felt well beyond the workplace. We spend about a third of our working-age lives doing just that – working. So it is vital our experiences in the workplace are positive as they impact on our overall well-being and on society as a whole.

“At AIM, we’re constantly encouraging our members to invest in building a positive workplace culture, by having open streams of conversation and offering training and professional development support.”

The AIM National Salary Survey, now in its 52nd year, is based on the responses of more than 500 organisations across Australia, covering more than 25,000 employees and 270 job roles.


  • Four in five Australians (81.9%) leave their current role in search of new challenges.
  • More than half (56.5%) leave because of limited career advancement opportunities.
  • It costs on average $26,410 to recruit a new employee.
  • National salary growth has decreased from 4.1% in 2012 to 3.0% in 2016.
  • The industries with the biggest decreases in salary growth are construction, retail, finance, manufacturing (metal/auto) and professional services.
  • One in three (34.5%) Australian businesses are making superannuation contributions above the standard.
  • The biggest human resource issue for business is organisational culture, at 63.7%.



Productivity research: ban social media, websites in workplaces

A NEW Bankwest survey of 500 small-to-medium enterprises (SMEs) has discovered clear tactics in boosting productivity include banning staff from accessing social media and content streaming websites in the work environment.

While some SMEs are actually boosting spending on productivity by more than 70 percent, as well as the online media bans, most Australian businesses appear to be taking seriously ‘the task of making the boat go faster’ according to Bankwest executive general manager of business banking, Sinead Taylor. 

The 2016 Bankwest Business Productivity Report outlines how more than half of 500 Australian SMEs surveyed recently are blocking, or intending to block, employee access to social media sites and websites that stream entertainment or provide gaming, gambling and dating services.

Based on a survey of more than 500 senior SME managers across Australia, the report revealed that in a bid to improve productivity 54.6 percent of the country’s SMEs are controlling, or have plans to restrict access to Facebook, Twitter, YouTube, eBay and other websites.

More than half of SMEs surveyed, as part of the Future of Business Series of reports, are imposing the measures on all staff but nearly a quarter exclude management from the restrictions.

Ms Taylor, said productivity could be reduced significantly if employees were distracted by activity on certain websites, and that could potentially lead to errors and impact adversely on customer service.

“These days, many sites require active engagement – much more so than in the past when people simply surfed the net,” Ms Taylor said. “However, in introducing restrictions you need to ensure they don’t backfire by sending a signal that you don’t trust your people.”

The approach is most marked in the construction sector. Businesses here are most likely (70 percent) to block or intend to block these websites, claiming they distract workers from their paid roles.


Other tactics to drive productivity include allowing flexible working hours, investing in new IT, providing education and training, allowing staff to work remotely, and providing fruit or meals in the office.

A third of SMBs plan to re-arrange seating in the office, provide gym access or subsidise gym memberships.

“Sometimes simple changes like re-arranging seating in the office can enhance the way staff work together to get things done,” Ms Taylor said. “That has certainly been our experience at Bankwest.” 

Three-quarters of SMEs are embracing at least one emerging technology to improve business productivity.

One in four view predictive analytics and 3D printing as important for future productivity gains and a fifth believe robotics will drive productivity.

“Medium-sized businesses are more likely than small businesses to place importance on emerging technologies,” Ms Taylor said. “Construction businesses are most likely to see predictive analytics as the way of the future and manufacturing businesses are most likely to view robotics or 3D printing as key.”


The report found the average amount businesses will invest in enhancing their productivity is set to top $660,000 in the next 12 months – a 70.7 percent increase from the average of about $387,000 SMBs claim to have dedicated to productivity last year.

The additional spend is driven largely by medium-sized businesses, which, on average, plan to spend more than $1 million on productivity initiatives over the next year (up 75.5 percent). Meanwhile, small businesses intend to lift their average spend by 21.5 percent to almost $103,000 in the next year (up from almost $85,000).

The forecast productivity spend is highest for accommodation and food services businesses, at nearly $2 million, a 114.6 percent jump from almost $900,000 last year.

This despite the Bankwest Economy and Finance Report, published last August, revealing this sector was most bearish about the future. Around two in five anticipated worsening business conditions and lacked confidence in their prospects.

“The increasing productivity spend in this sector may suggest these businesses are taking proactive steps to ensure they prevail despite the challenging conditions,” Ms Taylor said.


 SME productivity tactics: Allowing flexible working hours (44.4 percent); investing in new IT (38.8%); providing productivity education and training (37.1%); allowing staff to work remotely (33.5%); providing fruit and/or meals in the office (31.1%); re-arranging seating in the office (33.1%); and, providing access to a gym or subsidising gym memberships (32.7%).

 SMEs intend to spend their productivity investment in areas including technology upgrades, better facilities, staff incentives for productivity improvements, staff training and education programs, and engaging external consultants.

 SMEs are increasing their productivity spend for “business growth” (45.2%), ‘meeting customer demand’ (41.6%) and ‘lower operating costs’ (39.8%).


Keeping compliant with workplace relations changes

RECOMMENDATIONS from the Productivity Commission’s review of the Workplace Relations Framework will need to be taken into account by most business managers over the next year.

While the review has not produced wholesale changes so far, there are a number of recommendations that employers should be aware of, according to workforce specialists WFS Australia – a ‘workforce software’ development group. 

WFS Australia strategy director for Asia-Pacific and Australia-New Zealand, James Kissell, said the Productivity Commission’s recommendations were aimed at balancing the needs of businesses and their workers in the key areas for penalty rates, unfair dismissal and labour awards flexibility.


The Productivity Commission has recommended reducing Sunday penalty rates in line with Saturday rates to embrace the seven-day economy. Businesses may need to re-evaluate the way they roster staff, ensuring they get the right mix of workers on the weekends based on their hourly rates, experience and abilities, preference for working hours, and whether they need to have time off.

“Some workers may want more hours to make up for the reduced penalty rates, while others may be unwilling to work on Sundays if they aren’t getting those higher rates,” Mr Kissell said. “An automated workforce management system makes it easy to get a clear view of each person’s situation and managers can make rostering decisions accordingly.”


The commission has recommended changes that will make it harder to bring unfair dismissal claims, which can be a drain on company time and resources. Mr Kissell said often employees argue they were dismissed or demoted because they exercised a workplace right.

“Using an automated workforce management system means businesses have a clear audit trail and proof of how employees have been treated,” he said.

“It also means that businesses are less likely to make mistakes, for example, when ensuring staff have adequate time off and are rostered fairly.”


The Productivity Commission reported some awards may be changed, while individual flexibility arrangements were likely to be encouraged in future. Businesses may be required to update their processes to comply.

Mr Kissell said this could be as simple as a change in hourly rates, or it may involve changes to things like rest times and the minimum amount of time between shifts.

“Managing these changes can be complex without an automated system,” he said. “Employers that have such a system would only need to update the relevant parameters and their employees will automatically begin receiving the benefits of their new award.
“Ultimately, if companies communicate clearly with staff and are transparent about their efforts to accommodate everyone’s needs, they are more likely to have an engaged and loyal workforce.

“Implementing a workforce management solution can help simplify and streamline this process.”



Allegis predicts ‘robo-deputies’

ARTIFICIAL intelligence (AI) is set to assume the mantle of ‘deputy CEO’ in businesses of all shapes and sizes – globally – in the near future according to the largest privately owned human capital company in the world, Allegis Partners.

The prediction was made at a recent event in Sydney to mark the rebrand of Australian human capital business Talent Partners to Allegis Partners, following the 2015 acquisition of the business. 

The rebrand event’s audience attracted many Australian board and C-suite candidates and clients, along with NSW Treasurer and Industrial Relations Minister Gladys Berejeklian, whose own speech highlighted the importance of the human resources sector in helping to create the workforce of the future.

Allegis Partners shared its insights on the future of the leadership landscape in Australia, in particular its view that Australian CEOs could soon have access to ‘a new deputy’ that will transform the C-suite’s ability to lead.

On the immediacy of a ‘robotic deputy CEO’, Allegis managing director Feargal Owens said, “This is not science fiction, it is a reality of business today. AI has moved upwards from the factory floor and most businesses now have the data streams that make it possible for many management decisions to be automated, resulting in much better decision-making in organisations and in turn better commercial outcomes.

“We just need to become comfortable with autonomous decision making,” Mr Owens said.

“We’ve actually christened the deputy ‘ROBIN’, which stands for robotic intelligence and it will be the CEO’s closest ally and greatest source of business insights. It’s likely ROBIN will prompt a re-think about what true leadership is. 

“Decisions also need to be made about the organisational structure. The advent of artificial intelligence means new roles will need to be created to cascade the learnings that ROBIN will produce throughout the business,” he said.

According to Allegis Partners and an analysis of global trends in artificial intelligence, the C-suite will see its roles evolving and new areas of responsibility assigned. Allegis Partners reports highlight a number of management positions it is already seeing ‘metamorphosise’ in the US and Japan that will spread to Australia.

Chief Diversity and Inclusion Officer: Diversity roles will take takes on a whole new meaning with the integration of robots and augmented intelligence into the workforce and in leadership teams where roles are supplemented by machines.  Looking after the human interest will necessitate a designated management role as businesses look to balance AI with the interests of employees.

Chief Intelligence Officer: As businesses are automated, either through hardware in the form of robotics, or software, through machine learning and artificial intelligence, the need to manage, regulate and ensure growth will require a dedicated overseer.

Chief Ethics Officer: Measuring the ethical impact of integrating artificial intelligence will be a vital piece of business strategy alongside ensuring that any work completed is ethically sound. Overseeing a company’s ESG risks may form part of this role.

Chief Data Officer: The chief data officer already has a seat at the table in many US businesses and this will soon be the case in Australia.  Businesses are investing billions in projects that will, at least initially, require human oversight. IBM, for example has invested US$1 billion in its Watson project, an initiative to develop a language-fluent computer with the ability to analyse vast quantities of data.   

Mr Owens said businesses “can ready themselves for this brave new world”.

“There needs to be a change of mindset so that robotics and AI is not just associated with automating routine and procedural tasks,” he said.

“Given the benefits robotic intelligence will deliver, every business needs to be thinking now about the changes that will need to be made to operations to incorporate artificial intelligence.

“Businesses need to start immediately if they want to take full advantage of the potential for ROBIN to transform their operations. Companies that do this will benefit from a first mover advantage and have access to better analytics on which to base business decisions. Few if any chief executive can afford to ignore this opportunity.”

Allegis Group is a US$10 billion business and the largest privately owned human capital company in the world. It is making Sydney its regional headquarters, giving its clients and candidates access to global insights and expertise to position local businesses for tomorrow’s competitive environment.

NSW Treasurer Gladys Berejeklian said of the move, “It is always exciting when a huge global player decides to call Sydney its home. We take this as tick in confidence in Sydney as a global centre for human resource excellence.

“Companies like Allegis will be world leaders in jobs for the future, they are already, because a lot of people studying at high school and university will be applying for jobs in 10 or 20 years time that aren’t even around yet and I think that is a promising prospect for the future.”



Why not buy your ideas a drink?

MARCUS CROWE believes we are going about funding business ideas the wrong way. The co-founder of 10,000 HOURS, a new kind of professional services firm designed to help adults learn and improve their professional fitness, thinks business decisions like these are more like decisions about our love lives – you need to take them out for drinks.

Here is how he explains it …

By Marcus Crowe

RETURNING from a night out, you have just met the perfect match. You can already picture them as your partner, but you need to discover how compatible they are with you, so what do you do?

Starting with the basics, you want to know their name, age and address. From there you move onto family history, medical history, previous relationships, addictions, dreams and aspirations. If they pass, you might request the last three years of income tax returns, current bank account balances, and recent pay slips – after all, you need to know if they are financially robust. You want to know projected cash flows and the anticipated personal balance sheet of the would-be applicant well into the future.

Armed with all this you screen the applicants. Literally. On a screen. You sit inside in your climate controlled room, and scroll through the applications. Finally, you choose someone, followed by a wedding invitation for them to accept.

Ridiculous right? You can’t choose a life partner like that. Way too theoretical. Way too hypothetical. Way too much guesswork.

Then why do we allocate our commercial funding for ideas in much the same way?

We debate the theoretical merits of ideas in an office on screens and whiteboards. We craft gorgeous looking cash-flow forecasts using perishable (or perished) assumptions about the commercial landscape. We copy and paste the formula across into those future columns and check the result in the bottom right hand box. Provided it clears our required rate of return, we then allocate the capital and begin spending.

It is risk management through analysis. 

With our love life, the only way to manage risk with the wrong person is to experiment. So, we go for drinks.

Drinks are a $50 experiment to find out if the idea may work. We invest this small amount of capital followed by an hour or two of our time, to start learning the merits of this idea. No harm done, 50 bucks expensed to learn that this idea is not for me. 

On the other hand, if the drink experiment goes well, we invest more capital. We might go for dinner. A larger experiment to further learn the quality of this idea. This same behaviour is now called for in our boardrooms, workshops and brainstorms. 

Stop debating ideas with theory and opinion, instead take them for drinks. Spend $50 or $100 hundred dollars, followed by an hour or two of your time to experiment.

Try the idea with one customer tomorrow

  • Share the idea with a hand-drawn mock-up of the concept
  • Build a low-resolution quick and dirty proto-type
  • Listen and pay attention to their reactions, questions, confusions, and delights
  • Make notes, ask them questions and then do it again
  • Maybe another round of drinks for the same idea
  • Maybe a different idea all together

If all goes smoothly, you may want to invest three hundred dollars with a few hours of time to see what happens. 

Take away what went wrong and what went well so you can re-adjust the idea. Through this cannot-know-in-advance emergent process, the good ideas will shine through.

The end result may appear differently, but the changes will have been implemented from action and reaction in the real world, not a management opinion on a whiteboard inside an office.

Finally, when the idea is in great shape, and you have had plenty of nights out together, you will be ready for a long term relationship in a serious way. 

Major capital expenditure, big commitments and much more fanfare and ceremony. 

When you retell the story of your successful idea, you will recall fondly the first round of drinks you shared where you felt that flush from the twinkle in their promising eye.

The best $50 you ever spent.



Board shiftless: how do you create change faster?


ONE of the biggest challenges for business leaders today is bringing through company change quickly enough to capitalise on it. A common complaint is that company boards often resist change that seems imperative to the operational side of the business.

Shirlaws Group coach Jo-Anne Bowyer believes that while conflict and resistance to change are factors in many boardrooms, the solution is in focusing not on the board members themselves but on behaviours, relationships and outcomes at board level and company-wide. 

Ms Bowyer said many companies she had worked with over the years suffered similar blockages at board level.

“We have this one really difficult board member who drags his feet on everything and demands more and more information before committing … We need to move faster to capitalise on the opportunities before us! … This is a common complaint we hear when we start working with clients,” Ms Bowyer said.

“Without a context for understanding the behaviour of others, we are left with judgement about another’s personality – she’s difficult; he’s an egomaniac; or even their intent – he’s undermining me; she doesn’t care,” she said, describing conversations she has had with business leaders.

“Letting go of this judgement starts with deepening individual and team awareness. Awareness allows respect for everyone’s different styles and what each person can bring to the table.”

Ms Bowyer said Shirlaws had developed a range of strategies to help business leaders understand what was going on and to re-point the business for progress.

“Instead of focussing on underlying personality traits, we need to focus on behaviours, relationships and outcomes,” Ms Bowyer said.

“Compass Indicators (an online survey platform) help people understand their own – and other people’s – behaviours. Understanding why people behaved as they did and how they’re likely to behave going forward provides a bridge between the past and the future.”

Ms Bowyer said in the case she illustrated of the ‘recalcitrant’ board member, she realised that this individual had a ‘thinking’ communication style and probably also worked with a ‘low risk profile’.

“The resultant behavior involves requests for more information and delayed decision-making,” Ms Bowyer said. “This profile combination need not be a roadblock, especially if you understand how to influence and ‘on-board’ them to gain alignment in a way that works for them and meets their needs… and yours.”

Ms Bowyer said two of the most insightful and useful indicators for fast decision-making are ‘risk’ and what Shirlaws calls ‘ThinkFeelKnow’ (TFK). She said the business risk appetite was a major guide for behaviour.

“The Risk indicator empowers you, your team and your business to make faster, better and more aligned strategic choices that enable your management team to outperform the competition,” she said.

“The TFK indicator describes how your natural communication style relates to other people, which enables you to communicate with everyone more effectively.” Understanding these styles and motivators allows the business leader to shape their own communication with particular board members or executives.

“Let’s face it, if you want to be influential and effect lasting change – without force or compromising your relationships – it’s up to you to adapt.”

Jo-Anne Bowyer is a business coach who relishes the opportunity to partner entrepreneurs and business leaders to realise their commercial and cultural vision; combining Shirlaws IP with techniques and skills built over 16 years in corporate and SME environments. The focus of her career has been marketing strategy development and implementation with nine years pure marketing experience that also included Customer Segmentation, Brand Strategy, Product Launches, Events, Sponsorships, Direct Marketing and Digital. This includes two years of international marketing experience with Toyota, working on the Formula 1 Racing Project (Tokyo base).


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