Here’s my column in response to the Manufacturing Industry Taskforce’s proposal for ‘smarter workplaces’ – some transparency to enable us to determine what workplaces are – at least in the opinion of their workforce engaging places to work.
AMID the endless alarums and excursions of national life, governments are forever in ”something-must-be-done” mode about this crisis or that. With manufacturing suffering from our surging exchange rate, the Prime Minister’s Taskforce on Manufacturing recently advised what ”something” should be done.
Predictably enough for a group comprising manufacturers and their unions, they’re after handouts – but the government hasn’t the fiscal room to oblige even if it had the inclination. Expect some tokens, but nothing more.
The taskforce also bells the cat on our continued inability to get business and academics collaborating effectively. We’ve been working on this since John Button highlighted it three decades ago, yet our academics are now rewarded even more disproportionately for the prestige of their publishing (often meaning they can’t address Australian problems because that precludes publication in the highest status international journals!) We urgently need to encourage them to also collaborate with business innovators. A less costly taskforce theme is fostering smarter workplaces through ”continuous innovation in managerial and workforce skills and practices”.
A recent major Australian multi-institute study identified these characteristics as typifying high-performing workplaces:
? Responsiveness to changes in stakeholder and customer networks.
? Employee participation in decision making.
? Behavioural and skills flexibility in employees.
? Effective use of information and communication technology.
? Excellence in attracting and retaining high quality people.
Workplaces best exemplifying these characteristics had profit margins three times the laggards – 15 per cent compared with five!
So how do we get more high-performing firms? More management training? Perhaps, but not necessarily. As the spearhead of a major initiative to improve Australia’s workplace culture, Steve Vamos stresses good management is a skill rather than a domain of knowledge taught in business schools. Formal knowledge may be important, but far less so than on-the-job experience and mentoring within an effective performance management framework. Is there any way of reaching into Australia’s workplaces to get that happening?
Here the taskforce pledges to commit its constituent organisations – such as the Australian Industry Group and the various unions – to promote better, more co-operative arrangements within workforces. I’m sure they’re sincere, but somehow I’d have faith in something harder edged.
The biggest problem in the market for managers is how little hard information we have about their performance. Eventually financial results tell us something about how well firms are managed – though it’s usually difficult to untangle good management from good luck.
One thing we could do is piggyback on the efforts already made within firms to measure and optimise employee engagement. If we could get that information published, employees could use it to search for the most rewarding work. And given the evidence that self-assessed employee engagement is a leading predictor of companies’ future financial performance, such information could influence investors.
But why would a firm publish that kind of information? Poor performers wouldn’t want to, but why don’t the best performers release the information? After all, it would help them recruit and it could underpin their share price. Because there is no common standard to report to – employee surveys differ between firms, so their metrics aren’t comparable.
So if we’re to really create the incentives for firms to self-report such information, we need to get together those firms with something to gain from the exercise and see if they can agree to standardise their existing practice. They need only agree to standardise, say, the first fifteen or twenty questions on their surveys, and on auditing protocols to prevent cheating.
The Bureau of Statistics could survey a random sample of Australian workplaces to identify benchmarks that would enable anyone to know where any firm that reported against the standard was placed among its peers. Employees could vote with their feet and head for the best-run companies, investors seeking well-managed companies could vote with their dollars.
Government agencies should participate in developing and reporting to the standard. Despite our efforts to open up government data, the Australian public service doesn’t even release the survey data on its own performance in sufficiently disaggregated form to show up the best agencies. Why? Because it would also show up the worst.
Piggybacking off existing practice, the costs of such a scheme would be negligible. For as long as it remained voluntary so, too, would the risks of unintended consequences, though as experience developed the case may become stronger for mandatory disclosure.
We’ve got sophisticated markets for consumers and for investors supported by disclosure requirements. For the sake of innovation and productivity, not to mention more satisfying jobs, isn’t it time we started building a better market for good management?