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Tag Archives: CTC

The Terminology of Life at the Top

08 Friday Jul 2016

Posted by Burning Manager in Uncategorized

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BOM, Brexit, Bureau of Metereology, Business Insider Australia, CDOs, CEO, CTC, GFC, global financial crisis, Gonski, Kevin 07, Lafarge, Malcolm Turnbull, Pauline Hanson, PM, Prime Minister, S&P, Standard and Poors, The Construction Training Centre

Kevin 07

My Name’s Phil and I’m Here to Help!

 

I’ve been a CEO over 20 years and this week I passed the milestone of 10 years as CEO of the Construction Training Centre. According to Business Insider Australia the average tenure of a CEO is 9.7 years so I’ve managed, just, to scrape over that particular hurdle.

They rather unhelpfully, from my perspective, think the optimal lifespan of a CEO is a mere 4.8 years. Gulp! That’s to suggest I’ve outstayed my welcome by some 5.2 years. They cite three main reasons why CEO’s generally move on being burn out or loss of enthusiasm for the job, external changes in the market where skill set requirements change and when Board’s decide enough is enough. And I get all of that. It’s hard to maintain drive once you emerge from a purple patch. For many the inexorable torrent of KPI achievement gets to the point when alternatives look rosier. Quite often CEO’s transition to not for profits tired by the singularity of the commercial world. Others, and I’d like to think I’m one of them, aim to expand the outcome metric such that there are a range of measures by which one can evaluate their own performance and therefore continue to grow and thrive.

I call these pivots. In the brave new Australian business world, without the ballast of our resources sector in overdrive, we have to look elsewhere to drive economic growth to generate the prosperity that we have become so accustomed to. As a country we need to pivot. This was one of the messages of the Coalition’s not so successful election campaign in the Federal election. At the time of writing, almost a week on, we are still not definitively clear as to who will govern the country. If you think the lifespan of a company CEO is short, spare a thought for the CEO of our country; the Prime Minister.

Over the last five years we have had something like five Prime Ministers. There are all sorts of performance metrics to determine whether a Prime Minster is successful but it appears to me we only look at a few when making this judgment. The first is the country’s financial performance which in a globalised world is not really in the full control of the government anyway. In CEO terms this is the state of the balance sheet and importantly, in the short-time horizon thinking that besets both Boards and voters, the profit and loss. For Prime Ministers there is the other key measure which is the opinion poll measuring the most nebulous of characteristics – popularity? Be warned. Popularity can easily beget populism.

Rednecks

With the rise of Trump, Lafarge, Xenophon, Hanson et al serious political commentators and writers are warning of the danger of the tide of populism that is entering the world of politics. Populism can mean many things to many people. To some it’s having their local representative totally aligned to their own views and in these cases they regard their politician as ‘on the money’ and ‘in touch’. One of the worst criticisms that can be levelled against a politician is that he or she is out of touch. Populism though for me is a kind of giddy political surfing where the incumbent politician rides a number of waves hoping always to catch the best ride to take them safely to the beach. The only grasp you get of their underpinning values, beliefs and thought processes is the particular fad (wave) of the day.

So how should we measure a politician’s success? One logical way is to define what the criteria for success is from the outset. If we carry the hypothesis forward that the PM is the CEO of the country then we might just be able to use the essential success factors of a CEO as a guide. Getting an overall consensus of what makes a successful CEO is no easy feat but there is a consensus of sorts that suggest the CEO only needs to do three things:

  • Set the overall vision and strategy and communicates this to all stakeholders;
  • Get the best skilled people together to make the vision a reality; and
  • Make sure there’s enough cash in the bank.

Applying this to our recent election then….

The message from Malcolm Turnbull was one of jobs and growth. The rhetoric of this was repeated in a mantra-like fashion but what wasn’t clear to many, I would suggest, is what this means to the individual in the street. Underpinning all of this is this vague concept of innovation. Innovation as a buzz word caught on quicker than a Medicare text alert. As an aside I put myself in Turnbull’s shoes when the Medicare ‘text’ scare emerged. He never really properly neutralised this attack. I would have issued a Coalition Bureau of Meteorology (BOM) storm warning text the morning of the polling saying something like. ‘BOM Beware- dangerous tropical cyclone Hanson on the horizon’. So on the count of clear message Turnbull, the supposed great communicator, was found wanting.

Getting the best skilled people to make the vision a reality comes down to how we educate and train our people to confront what’s coming. The challenges are many and while, yes, it’s an exciting time to be an Australian I think it’s also a scary time for a young school leaver or graduate (from Uni or TAFE) to firstly choose a career path that has some degree of protection from automation and secondly to be able to ply your ‘trade’ in a meaningful job in your field of study. This to me was the missing opportunity in the campaign. Labor focused on education only with respect to Gonski which I’m still convinced very few Australians (me being one of them) understand the detail of, or rationale behind. We need to radically address education and training across all spectrums of pre-school, primary, secondary, VET and tertiary if we want to compete globally. This is an even better legacy to leave behind than a huge surplus which we partly squandered on school halls. Perhaps our surplus in the Rudd years would have better spent on soft education structures than physical ones.

FannieFreddieCartoon-thumb-510x337

The final measure is cash in the bank. We have had a shot across the bows this week from Standard and Poors who have put us on credit watch suggesting that our much treasured AAA credit rating is in jeopardy if we don’t start addressing our growing deficit. For me this is a simplistic view and I have complete disdain for these rating agencies. We should always remember that they gave AAA credit ratings to bundled collateralised debt obligations (CDOs) that in reality were of junk bond value. And we all know where that led…that’s right the GFC.

Final

As I reflect back on my ten years I have achieved consistently across the three key success criteria. For me though that is no real measure of success. Those three are a given that any CEO is expected to achieve and therefore I don’t think you can really judge your time with any sense of pride if those has been your sole outcome. For a PM one key measure surely must be the degree of community cohesion. This is important right now with elements in the Senate with an agenda likely to cause social division. As a CEO this translates into how well the team is gelling to get results. Perhaps the most important test is how well are those for whom you have stewardship faring. For a PM that is how content and cohesive is the community. For the CEO this translates to the degree of well-being expressed by the work team. Our recent staff survey would suggest that we are in pretty good shape. For me the whole-hearted employee is what we should strive for. Achieve this and you just know your customers will be taken care of. All Turnbull needs to do now, on the eve of his first term as an elected PM, is get his team to work as one, sharpen his message, get it out there, bring us back to surplus and make us all happier and content with the way things are. Good luck with all that. With 20 years under my belt, and to quote a fellow Queenslander, my name’s Phil and I’m here to help!

Changing Culture to Small is Beautiful

08 Friday Apr 2016

Posted by Burning Manager in Uncategorized

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absolutely positively Wellington, ASIC, Construction Training Centre, CTC, culture, Greg Medcraft, Lonely Planet, over-boarding, Queensland, small is beautiful, Wellington

CroppedImage1136515-Mount-Victoria-view-WellingtonNZ-Photo-Capture-Studios-Copy

 

In Australia we do appear obsessed with size. Big is beautiful. We celebrate tall people, we talk about which State is biggest. We celebrate the big hits between big men in the State of Origin and we often hear people say how many times the UK could fit within Australia; sometimes said with an earnestness as though it was a likely proposition. It’s a cultural thing. Depending on what your yardstick is for measurement, we are in fact a very large country as land mass goes. By population we are of medium size at around 23 million. Pakistan for example has 183 million, Indonesia 254 million and Saudi Arabia 30 million. All bigger – the relevance of which will hopefully be apparent later.

I’ve just got back from a week in New Zealand. It was quite enlightening. Way down there close to the Arctic it’s got no right to be as successful, culturally and ethnically diverse and modern as it is. Of course I’m extrapolating my experience from a trip to Wellington, the wind beaten capital of the shaky isles as they are known because of the prevalence of earthquakes. But I’m probably OK in doing so. What characterises kiwis (aside from their penchant for gathering on the Gold Coast) is their get up and go attitude. They call it the ‘number eight fencing wire attitude’ which is an oblique reference to their ability to fashion pretty much anything from anything. Sitting in a trendy coffee shop on Cuba Mall I mused that what stands out with the kiwis is they are really good at marketing.

I noted that Wellington uses the three word strapline ‘absolutely positively Wellington’ to promote itself. Furthermore, though, it has embraced its lack of stature. It’s only New Zealand’s third largest city and can never compete with the sprawling metropolis that is Auckland. Auckland is big and wants to play in the big league. Wellington embraces its diminutive size and markets this. It’s not something we really understand in Queensland where I live. We’re bigger than Texas and proud of it. As we know when size is an issue you are constantly comparing sizes and celebrating when you are bigger. No-one brings a measuring tape out to prove assertions made about being smaller.

CroppedImage1136515-Cruise-ships-in-port

In 2011 Lonely Planet named it the 4th best city in the world to visit. They described it as ‘This little capital…’ and so the embrace of its slight stature cleverly started. It was subsequently voted the best small capital in the world. Small sounds ‘cool’ as in groovy, welcoming, warm and of a human scale. The opposite end of the spectrum – best big city in the world – just sounds cold, alienating and exhausting.  Walking on the trendy waterfront I noticed the cruise ship terminal proudly describing itself as the ‘Best Little Cruise Ship Terminal in the World.’ Wow that’s clever. To combat that you pretty much have to say ‘our’s is smaller.’ To be fair it was small. Pointing to its obvious lack of stature takes away any implied criticism about size and gets the cruise line passengers to think about the building in another way.

And that’s where my ‘aha’ moment kicked-in. Here at the Construction Training Centre (CTC) we have at times been fixated on size. I admit to having Googled other training centres in construction in Australia to determine whether we are bigger. At 12.2 hectares we are just not that big and in the past we have tried to ‘big-up’ our reasonably modest estate. That made me think about the possibility of inverting that and describing our self as a small Precinct; or as one of our Team commented when I floated the idea – niche. To say we are the best construction training Precinct in Australia sounds like bragging. To say we are the best small niche training centre in Australia feels like our bragging is tempered with some humility. It’s much more authentic. We do want to be the best we just don’t need to be the biggest. This mindset is now percolating through our Team. It will be interesting to see where it takes us. It’s about amending our culture to embrace the true nature of what we are in terms of what we do, why we do it and our geographic and spatial realities. Once again it’s about being authentic doing the things we are good at well and not trying to be what we are not. After all culture is best described as ‘the way we do things around here.’

Medcraft-Greg-main

Discussions around culture are very timely at the moment in Australia especially in the corporate sector and specifically banking. ASIC Chair Greg Medcraft suggested that Directors be held responsible and accountable for the culture of their banks. There’s an expression in management, popularised by JFK that ‘success has many fathers but failure is an orphan’. We do see Directors taking credit for success but when the remuneration policies agreed by them create a culture of greedy risk-taking they appear somewhat dumbfounded and admit to not knowing. In fact I’d like to challenge the basic premise that Directors actually do set culture. The setting of culture like setting of strategy is the Holy Grail in management. It’s like being good in bed and a good judge of character. Very few admit to short-comings in either area! So to suggest that in fact Directors don’t set the tone or culture is a bit of a come down for those at the very top of our Corporate world. I actually think Directors should monitor culture but not set it. Let’s be honest, when we look at Corporate Australia we are in pretty rarefied air. Hard at times to come down to Base Camp as you traverse from lofty peak to lofty peak.

I manage a small investment portfolio at work (there was a day when I described it as ‘substantial’!) and as a result pay pretty close attention to who are setting strategy for the companies we invest in. I’m disappointed time and again to find what I call ‘over-boarding’ where Chairs and Directors of our large ASX listed companies have a number of Boards that they concurrently serve on. They are nearly always listed in the Director profiles and appear to be something of a badge of honour. I read such lists with concern. If a Director has more than two Boards (and the majority do) then I do not believe they are capable of exercising the roles they are required to play under the Corporations Act 2011 and the ASX Governance Rules to any satisfactory level – certainly not to mine. It expands the boundary of common sense that these very busy individuals can set the tone and culture of an organisation when they spend so little time in it. ASX Governance Rules recommend independent Directors and therefore they are unlikely to have much skin in the game. No skin no passion; no passion begets flitting in and out. Duties elsewhere dictate this anyway.

Culture embodies the overall collective of the way people think, their behaviours and their commitment. To get a successful culture you must embrace the whole and just not think about the head. If Banks are to get their culture right Directors need to be able to read the cultural temperature gauge but not set the ambient temperature level. When it’s not right the CEO and Executive Team should be held to account. If Directors can’t read and amend culture through their Executive team, then it’s time the Directors stand aside.

Culture of course has another meaning. It is about the understanding of the world in which we live and the wonderful diversity this brings to the workplace especially in a country such as ours where we celebrate our cultural diversity. This week we were approached by one of our Tenant’s staff for access to the First Aid/Breast Feeding Room to pray. This again provided time for reflection. While we are very female and wholehearted-friendly on the Precinct I wondered just how culturally accommodating we are. In a time of increasing pressure on our Muslim communities because of terrorism acted out in the name of fanaticism and not religion I pondered what we were doing to provide safe prayer facilities for our Muslim customers. A quick meeting with the person concerned has us now in advanced stages of installing a prayer room. Not as easy as it seems. Sure it’s easy to buy a prayer mat, Quran and put up a sign showing the direction of the Qibla. More difficult is dealing with the uncertainty amongst team members and tenants who do not have the level of cultural quotient that would otherwise allay their fears. What is important about the introduction of, on the face of it, a very small room is the fact that team members can raise concerns in a way that supports their concerns but also enables them to gain additional information that will make the concept be seen for what it is; an endeavour to continue to provide value adds to our tenants and their staff.

Being aware of culture, be it organisational or geo-political is an important aspect for a well-rounded manager. Managing this to provide business outcomes is a very important and over-looked feature. I think our culture is good at work but we can always improve. Culture is not static it changes from week to week sometimes. It changes when team members leave and new ones come in. Everyone leaves a mark. If they didn’t they would just be robots. I’d like to think that our new way of considering ourselves, as small, will be a breath of fresh air. Of course when put in the context of my recent trip to Wellington that has a whole other connotation!

When Mainstream Plays Catch-Up

03 Wednesday Dec 2014

Posted by Burning Manager in Uncategorized

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AirBnB, Australia, BMW, collaboration economy, collaborative consumption, commercial leasing, CTC, DriveNow, Environment, Gen Y, Hot Leasing, industrial leasing, Millenials, Rachel Botsman, Share Economy, The Australian Financial Review, Uber, US car sales

P90074325                                                               IMG_7253 DriveNow ist ein Carsharing - Joint Venture der BMW Group und de

I read with interest in The Australian Financial Review (2nd Dec 2014) that BMW is joining in the collaborative consumption movement. Otherwise known as the collaborative economy or share economy (yes we have issues with nomenclature). You know when the more staid Germans start adopting new ideas that they really are becoming the new paradigm. Their contribution to the share economy is something called DriveNow. What is different from car rentals you may ask?  Well it’s a disruptor to that model (check out my previous blog on disruptors) and something that must be a concern to the car rental market and indeed traditional car manufacturing.

In the same way as the Gen Y don’t want to own the book, but just read the content, or not own the CD but just listen to the music, so people are not wanting to own the car but just get from A to B. What is different about DriveNow is that is operates a bit like the bike schemes most large cities have (except the Brisbane one where the bikes seem always to be parked up not ridden). So it is a one way disposable trip, in other words you just drive then park it. GPS lets BMW know where the vehicles are. Access is via a smartphone app and you pay by the minute. Brokerage company Aviate Global has estimated that 1 sharing vehicle removes 32 personal vehicles. You can see therefore how this can be good for the environment as well; which is a core pillar of the share economy. 5% growth in car sharing by the 2020 could halve US car sales. What is driving many squeezed by the economy and rising house prices is the fact that the second biggest asset we are likely to own, our car, is utilised on average only 4% of the time in a 24 hour day. That’s a lot of idle time.

The opportunities for BMW to tailor the experience through mass customisation to the driver are immense. Imagine getting in your DriveNow vehicle to have you Spotify database available immediately through the car’s entertainment system, the 50 most recent destinations pre-loaded into the Sat Nav, reminders through the car stereo of birthdays and anniversaries pending as you are approaching a florist. Seat positions can be pre-programmed and comfort levels for temperature etc. the possibilities are endless as is heads-up information on the screen as driverless technology takes hold. London cabbies must be quaking in their boots. Uber must be quaking in its boots. Here is old school disrupting the disruptor…the fight back has begun methinks.

While share economy companies are good for the customer and the environment one of the key issues upon which their success relies is trust. Take AirBnB for example. I was fortunate to hear Rachel Botsman do a keynote address some years ago and as a result stayed in Pat’s New York apartment for three weeks. He wasn’t there of course but he did meet us at 11pm when we arrived and he gave us a run down of the apartment and the neighbourhood before depositing his key with us and pedalling off down East 71 Street into the night. He didn’t know us from Adam but there we were in his apartment amidst all of his clutter and his most valuable possessions. Trust. As we now know Air BnB is a worldwide phenomenon. In the case of BMW’s DriveNow initiative trust will also be key, but they start off a high base because the brand of BMW smacks of trustworthiness. It’s quality cars they are offering that are fun and environmentally responsible. Once again trust. As we know from the theory of sales, once trust has been established it makes moving to sales closure much easier.

The second core pillar in making your share economy company succeed is a willingness by the public to ditch the status quo and try your offering. That first encounter they have can be all important. Everyone knows that complaints travel faster than compliments and Baby Boomers will tell 10 times more people about a bad experience than a good one. Gen Y’s will Tweet and/or Facebook about bad experiences. Millennials, according to Nick Bowditch, Twitter’s main man in Australia, will just set up a business in opposition to yours if they don’t have a good experience and disrupt yours by doing things better and faster. So the offering has to be based on trust and be enticing and fulfil or exceed expectations. Nothing difficult here then. At my company we have our own share economy initiative called Hot Leasing . The trust issue is OK as we have been in business approaching 21 years and have a reputation in the market for being ethical and reliable. The challenge for us is the presentation of an idea so radical that it will take time for the market to adjust to a new possibility. Unlike say a taxi journey or a few nights stay in an apartment, our offering requires a massive change in business behaviour with companies moving from long-held leases to a free-wheeling working life where they pay as they go, only interacting with us when they are interfacing with their clients. We are, simply put, the Air BnB of the commercial/industrial leasing space. And we are excited about it. Gradually people are catching on. There is no need to own expensive equipment like forklifts or elevated work platforms etc. There’s no need even to lease or hire them. With us that’s all part of the package. We have a well-developed process for cherishing each and every brand that uses our facilities and the experience of students and trainers exceeds expectations. We await the main-streaming of the share economy so that the more risk averse can start looking at our proposition for what it is; an excellent, low-risk, environmentally sound way to do business.

While on the subject of the environment it is always good to buy local as opposed to buying nationally and buy nationally as opposed to buying internationally. In order to assist with some Australian examples here are share economy companies collaborative evangelists may wish to consider. I’m more than happy to share these with you. After all isn’t that what collaboration is all about?

 

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