Contemporary Issues for Organisational Survival

1. Contemporary Issues for Organisational Survival CPA Public Sector Accountants Group (Vic) Presented by Wendy Lundgaard, Director February 2007

2. Overview • Global trends • Success Differentiators • Contextual issues for Public Sector • Contemporary Workforce issues • Predications and Probabilities.

3. Globally, what some of the best are doing: • They are focusing on single industries, not diversifying • They are positioning as a major, niche or ultra-niche for dominance (→ master of own destiny) • They are pursuing unique intellectual property(directly or as a franchisee) or monopoly/oligopoly licenses (banking, media, gaming) • They are outsourcing non-core activities and functions. • They are jettisoning passive (“hard”) assets, which only provide “rental” returns. (Phil Ruthven, 2004)

4. continued • They are creating virtual corporations & strategic alliances • They are planning from the outside-in not the inside-out • They are emulating world best practice for their industry and, where possible, aggressively globalising their businesses. • They are developing unique organisational cultures. • They are leading first and managing second. (Phil Ruthven, 2004)

5. Key Themes • IP (workforce capability + knowledge) • Unique cultures (effective leadership & behaviours) • Outside-In planning (fusion of market intelligence and customer needs) • Best practice (goals + performance) • Leading first (ideas + innovation).

6. Not Assets Not Brand Not Reputation Change responsiveness Innovation Capability Productivity Quality of deliverables. Success Differentiator

7. Success differentiator Success differentiator is largely driven by the ’people’ factor.

8. Contextual issues for Public Sector • Stakeholder expectations changing • Altered funding models • Mums and Dads as indirect shareholders • People issues: talent, attraction, retention.

9. Stakeholder Expectations Balancing increased expectations with finite resourcing A J Citizen has ‘crisis of confidence’ in authority (ie church, state/govt, politicians, authority figures) Better informed about rights via increased education Older, more experienced general public, alert to ‘spin’.

10. Altered funding models: infrastructure • Est. $900B required in next 20yrs to retain high growth economy • Political pressure to deliver projects within election cycles, surplus budgets • Superannuation funds at $1Trillion (2006), Infrastructure: attractive & stable asset class • Public Private Partnerships (PPP’s) to increase = on time, to budget • Infrastructure current focus. Future? (P Ruthven Nov 2006)

11. Change brings challenges • Macro issues: • Global skills shortage • Ageing pop, health, male partic↓2.4% per decade • Strong growth expected to continue (China etc) • Pressure on infrastructure and services. • Micro issues: (at organisation level) • No room for complacency, no ‘silver bullet’ • Exposes leadership & strategy deficiencies • Adaptability and change responsiveness • Scenario planning & effective Workforce Planning.

12. Survival Essentials: Workforce Planning Align STRATEGY With business plan, strategy & goals Current & future demand for resources/ capabilities/locations Assess skills DEMAND INT: Turnover, age profile, talent EXT: labour market trends Assess current SUPPLY Prioritise Shortfalls Identify GAPS Implement HR Strategy (Attract, Retain, Develop). Implement Close Gaps, IMPLEMENT Establish performance indicators, metrics(S.Melbourne,HR Monthly Oct 06) REVIEW

13. Workforce Planning: HR Strategy

14. HR Strategy: Employee Engagement • Typical profile: • Engaged(30%), • the Not Engaged(54%) and • the Actively Disengaged(16%) • Engaged ‘self directed’ - responsible & accountable • Rest ‘other directed’ - compliant or rebellious • Can no longer afford to sift & sack • Rehabilitation: manager effort and care of individual: focus on employee needs of respect, trust, confidence. (K. Ayers, 2006)

15. HR Strategy: Employee Alignment • Beyond commitment and engagement • Knowing what to do, how to do it, how it ‘fits’ with organisations. goals, & feel supported by manager • Effort and performance of ALL parts are united mission / goals • Externally marketed messages reflect the reality for employees • Strong Alignment before ‘change’. (J.Garriock, Aust. Financial Review Feb 2007)

16. Performance & Productivity • How clear are employees on the strategy / mission? • Are employees goals clearly linked to business objectives? Are rewards appropriately valued? • How is productivity measured? Ratio’s, metrics, value for $’s

17. HR Strategy: Workplace Flexibility Issues: Increasing workforce participation through creative & flexible forms of working.

18. HR Strategy: Age Management Issues: mature age worker health & productivity, retirement transitions,quality part-time, mentors.

19. HR Strategy: Attraction & Retention • Sellers Market- Long term global skills shortage • Unemployment at 4.8% (Full Emplyt @ 5%) • No growth capacity within unemployment sector • Aust & NZ Recruitment industry = $16B pa • Solutions: Retain current, 55+y.o. and mothers • Other Solutions: skills migration, internal promotion ( = > development), use of temps & contractors

20. HR Strategy: Growing Capability • “Empires of the Future will be Empires of the Mind” (Churchill,1943) • Battle for brainpower - people + their skills • Secondments and overseas assignments • Project ownership • Coaching, mentoring →promotion.

21. People As Asset or Overhead?

22. Survival depends on integrated strategy

23. For more visit: win-winws.com.au Presenter: Wendy Lundgaard, Director February 2007