Prescott Lecture by Peter Wilson
“New Workplaces Reflect Continual Global Change”
The 2016 Prescott Family Lecture
Human Resources Management (‘HRM’)
Monash Business School
Peter Wilson (1)
The world of work and the modern workplace is a giant work in progress itself. The 2016 Prescott Family Lecture provides an opportunity to draw breath and look at the critical changes that we the workers are confronted with today. It is indeed a breathtaking new global digital world of business. Information is moving faster than the speed of light, and we are all ‘connected’ whether we want to be or not. Twelve Disruptive Technologies will erase half of today’s jobs by 2030. Will the new ones be done by a human or a robot? We now live into our eighties and it will exceed 100 for most of the next generation. Working lives will lengthen to 70 years. Are we up for all that means? In the next 30 years, it is expected women will have half the jobs – at all levels, and yet as primary care providers, their demands will drive workplace flexibility arrangements to new heights of innovation. Top firms are finding their employees now speak 50 different languages fluently. The war for talent has been won by talent but they seem bewildered about what to do with their victory. Growth imperatives mean we will need to continue to source much of our top talent from overseas, which will also drive our need to be cross cultural experts in order to get the job done. To keep our sanity, we are having to develop new digital management disciplines to survive. Restrictions on meetings to occur only in the middle of the day is an example, as is doing our own work whenever and wherever makes sense. These are our new workplace standards – because employers have to do so to keep their top talent, and the top talent simply demands it. Leadership is also having to transform itself, as are organizations. Some of these changes are “Back to the Future” in nature. Big firms like Telstra are being weaned off command and control leadership styles, and their former wholly ‘owned and controlled’ business philosophies are being weakened - because their most effective competitors are the new nimble digital disruptors, closer to the customer and rapid in their market responses. But as they grow huge themselves, 15 year old firms like Facebook and Uber are now encountering their own growth dilemmas, and becoming exposed to newer disruptors like Instagram and Didi. We have never seen such short business life cycles before. These massive changes have forced us back to our own traditional Value Systems, in order to compete. The Worlds Most Admired Company Awards are won by those organizations with the best people management practices, and their leaders use modern positive psychology and traditional values employed for a compassionate society , as first articulated by the Greeks. The best way to lead others is now agreed to be through inspiring, and also caring for them. But those who just prefer to bark out orders, and be the only ones to ‘ask the questions’ are holding on grimly, and training many others to follow in their footsteps. The laws of bullying and harassment are slowly encircling them, but the side steps of avoidance continue around a cumbersome legal framework. The sad cost and consequence to these rapid changes is seen in our deteriorating mental health statistics. One on four adults of working age suffer in any one year; it’s one in three law firm partners, and law students. This is an area we can get on top of, but not everyone is pursuing the comprehensive set of successful remedies. The solutions come from - understanding the job and its consequences, the person, support for the consequences of family trauma, reshaping the organization and its leadership to be pro-active in support, and anticipation of the problems before they get too severe. The workplace is changing rapidly. Some would say its ‘out of control’, because that’s how they feel. Others see the risks and transform those into opportunities. The way we always have – by seeing the pathways to grow but also to maintain our humanity and spirit. However only one thing is certain – in future, we are going to look and feel different in the ways we go about our work and life ‘on the job’.
John B Prescott AC (2) is a distinguished Australian and businessman, and it is my honour to present the inaugural Prescott Family Lecture in Human Resources Management at the Monash Business School.
I would also like to begin by paying my respects to the Wurundjeri people of the Kulin nation, the traditional custodians of the lands on which we meet, and to all their members and leaders past and present and to any other members of the indigenous nations of this great country, who may be present here this evening.
Looking at John Prescott’s career shows not only that he has had an enormous passion for his family, and his business pursuits over a lifetime, but also what this country is, and the welfare and prosperity of our people. Not to mention a passionate interest as to what is coming next over the horizon, and how best to travel there? On John’s journey so far, his work and life have been committed to very many interesting business, policy and public interest arenas. I encountered him in some of these policy theatres on a few occasions during the 1980s and 1990s, most usually in the company of that erstwhile after dinner raconteur but also Industry Minister during the Hawke and Keating Governments, the late Senator John Button.
The origins of John’s training and education are a somewhat unusual basis of preparation to become Chief Miner at the Big Australian; to Chair our largest Rail Company, the ASX listed Aurizon Group, and also to become Head Submariner, & Chairman at the Australian Submarine Corporation. You would expect from this track record perhaps, a person steeped in the dark arts of chemical, mechanical or metallurgical engineering, perhaps with a spot of marine biology, and possibly inorganic chemistry. But, not so. Although John has undoubtedly known and enjoyed working well with many of these professionals over his lifetime, this is not his background at all. John was about to begin his Bachelor of Commerce in Industrial Relations, soon after Elvis Presley had burst onto the scene, and graduated when future Prime Minister Bob Hawke was making his indelible mark on national industrial relations. Some company for a future career to kick off, and indeed rock along with. Over that career, John also been invested as a Companion in the Order of Australia and also received honorary doctorates in law and science, as combined testaments to his significant contributions to the evolution of business thinking and social leadership. He was a long-term executive of what is now BHP Billiton Limited, including 10 years as an Executive Director, and seven years as Managing Director and Chief Executive Officer from 1991-98, during a turbulent and also controversial period of global and national recessions “we had to have” (but really didn’t).
I was a senior civil servant and banker during the height of John’s career, and although I didn’t know him well personally, I can remember six hallmark characteristics from the public and private reputation of the man and his values –
- he exhibited great humility and respect towards all Australians he met and moreover ever had the honour to lead;
- he was prepared to speak up and advocate on issues he believed in, even if they weren’t mainstream thinking of the time,
- he sought ultimately to build on the strength of teams through active listening, discussion and agreement with others, whatever diverse viewpoints they held;
- he constantly searched for new and innovative ideas that we could adopt, in order to become better at not only who we were, but also what we were capable of;
- he always accepted the ultimate responsibility that comes with authority for any role he had as Chair or CEO – especially when matters didn’t go well.
- finally John was one of the first great Australian CEOs to really get the people management factor at work. He very much believed in Peter Drucker’s view that “Culture eats Strategy for breakfast” throughout his career, and at times when certain fund managers preferred to have such leaders on toast.
John, on behalf of everyone here we thank you most sincerely for who you are, and the significant contributions to the work and life of this great country.
John’s career started with industrial relations work in steel at Newcastle and Whyalla, and then in shipping and stevedoring, (somewhat difficult industries for a callow University graduate to cut his teeth on). Early experiences steeped in matching the wily ways of union negotiating tactics, and the czars of that trade. This was at a time when the unionization rate was running at its post war peak of 57% of the total workforce. A far cry from the 11% we see in the private sector today, combined with a massive movement away the reliance of centralized bargaining outcomes and conditions to determine actual pay. How many here can recall the determinations by that distinguished but also somewhat mysterious Mr Justice Sir John Moore after midnight on a Sunday, that were delivered with authority on our flickering black and white TV screens to national acclaim and occasional business shock and horror. This high theatre of the time compares to the simple set of minimum conditions we have today, and the actual determinations occurring widely on a very decentralized and consent basis on the job, and well out of court.
There is probably no better turning point than this simple contrast provides, to move off and look at where the world of work and the worker has gone recently, and is likely to proceed in future. I would strongly argue that John Prescott’s life and values showed foresight for many of these trends that began to emerge twenty-five or more years ago. He sought to pursue them and steeped himself into the national debate when appropriate, and also sometimes the inevitable controversies that followed.
There is no doubt the world of work itself today, is a giant work in progress.
- What does the present world of work for the modern worker look like?
- What can younger people today expect from their career?
- What expectations do they have of their leaders?
- What forces are at play in our daily working lives, and
- Which of them can we control, and what must we accept are those that now control us?
- The New World of Work
We all live and work in a new global digital business world where goods, capital and people all flow over borders, and seemingly at the speed of sound on some days. Financial markets blink out significant changes to major asset prices in a nanosecond, and happily take the unwitting fortunes of Boards and senior management teams along with them. The new characteristics of our contemporary business world can perhaps best be characterised as:
- Superfluidity – information is moving faster than ever. For example, we can go online to design, alter and despatch delivery of our new clothes and/or our evening meal of choice within five minutes of the initial inspiration;
- Network acceleration – the power of networks in our lives is huge, especially social media;
- Hyperconnectivity – anyone can connect to anyone else, even millennials now aged in their late twenties and early thirties, can and do bail up their CEOs to deliver and request some advice directly, when they choose;
- Ultra-mobility – mechanical problems are being increasingly subjected to information based solutions e.g. 3D Printing;
- Disruptive Technologies – The McKinsey Global Institute has described 12 disruptive technologies like driverless cars, mobile technology, advanced materials, cloud technology, and robotics - which are collectively predicted to cause the extinction of 50% of the world’s current jobs by 2030. So who wins here? A human in a new job, or a robot? The answer is probably both and somewhere in between, with continuous education becoming the key to future and gainful employability for those who seek it.
The impact of these digital forces at work is being compounded by two other “D’s” at play – demographics and diversity.
We are all living longer. Lynda Grattan (2016) of the London Business School has assessed what The 100 Year Life means in her new book of the same name. Further, the OECD predicts 50% of people born today will live to the age of 104 in most Western economies. (And 107 in Japan – perhaps it’s the origami, sashimi, and kabuki.) The people at this lecture tonight have an average life expectancy now into their early 80s and those of us still here in ten years’ time will probably be able to put a ‘9’ at the beginning of that number. But, as we know we don’t have enough superannuation to support that, so future working lives will need to be reinvented and span nearly 70 years, and not the traditional 40 years experienced at the end of the last millennium. But that’s already happening. Bunnings currently employ many 80 year olds, and actually have one 93 year old ex-tradie wandering the aisles in a red shirt and grey apron giving valuable advice to weekender handymen. He does so long after his arms have given up being able to turn that wretched wrench around a rusted recalcitrant pipe somewhere inside an inaccessible sink cavity. McDonalds in the US recently found that service levels and business results at outlets with a few customer service operators aged in their 60s, seriously outperformed those staffed by millennials only. People apparently still prefer food served by Ma and Pop characters, even if those meat and potatoes come out hot and fast across the counter.
At the same time, more women are making their way into a fulltime career alongside that of men, and are increasingly making an impact into all operating, management, executive and board roles. Westpac has shown the way to sustainability on gender equity with 45% female participation at all employment levels in the company - by simply rewiring all HR processes to give woman 50% target access, whether that’s to recruitment on long and short lists; to any learning and development course; or to any other development opportunity. ANZ have accelerated universal access on the job by having all aspects of your career with the company placed on your own digital app, whereby you can assert your credentials to growth and development opportunities by choice, and whether invited to or not. Women in particular relish having this new resource available for their continuing lives of multi-tasking.
Furthermore, five generations are working together now. Traditionalists born during the War now team up on the job (at Bunnings and elsewhere) with Baby boomers, Gen X, Y and the new Z generation leaving high school today. Further we are pushed further into diversity at work by responding to compelling claims for inclusion from Lesbian, Gay, Bi-Sexual, TransGender, Intersex, and Questioning (“LGBTIQ”), Indigenous, people with disabilities, and other nations and races working hard every day, or seeking to, throughout this great country. The Insurance group IAG surprised themselves with results from an employee survey that showed their staff spoke 51 different languages. This is not Australia in the year 1966.
- The Modern Worker
In my 2014 Kingsley Laffer Memorial Lecture at Sydney University, eight characteristics of the modern workers and their attitudes were outlined:
“Modern Australian workers are much more knowledgeable about the global workplace and its implications on their job and their future …….
Looking to the future, young Australians expect a much more diverse workplace …..-
They are relatively GFC resistant (AHRI 2009). 90% of CEOs and HR professionals surveyed by AHRI after the post 2008 Great World Recession (also known as the “GFC”) accepted the need for significant workplace change and appropriate downsizing when global competitive pressures are intense. On the other hand those workers also expect downsizing of scarce talent to be a last and not a first resort, and only to occur after extensive, transparent and detailed analysis by management ……... -
They expect co-workers to have equitable access to gainful employment, and also be treated fairly (AHRI 2010a, 2010c, 2011a, 2012b, 2012c, 2013b, 2014) ……. -
They see higher rates of employee turnover as the norm (i.e. 15-20% p.a.) (AHRI 2013a) …….On this scenario, the modern co-worker ………. indeed expects to experience 8-10 different employers during a 40-plus year career. Westpac Chief Economist Bill Evans has estimated that 400,000 Australian workers, or about 3% of the workforce change jobs each month, both with their current employer and/or new ones …….. -
They expect access to flexible working, when appropriate, and especially in services which will account for 70-80% of future jobs ……. -
They are demanding their workplace employment and bargaining arrangements cater increasingly for individual rather than collective needs (AHRI 2010b, 2012a, 2012b, 2012c, and 2014) …….. -
They believe that imports of skilled workers will also be mandatory in order to realise higher potential economic growth rates in future (AHRI 2013a).”
It’s clearer now that this ‘group of eight’ characteristics hasn’t gone far enough. In the last two years my Institute has observed four other critical features of the digital ‘me’ generation that have emerged to create a ‘top dozen’ of younger worker needs.
They are tired of sterile terms like work life balance, when they seek extensive workplace flexibility environments that offer continuous work life integration for what they will discover to be a future 70 year career. The evidence is that their expectations have ramped up several notches, and they want to work in a mode of continuous substitution between home, personal and business issues and to take and manage career breaks for family, study and private pursuits, as and when they emerge. The 2015 Global Thought leaders conference in the USA reported that 25% of all workers expect to be globally mobile, which is unsurprising when its considered that the same Conference estimated from UN data that one fifth of the world’s population is now living outside their country of birth. That’s 1.4 billion, but migration flows to other countries last year alone was 244 million people. The challenge for the millennial “me & now” generation will be to discover in future what older workers now realize – living for longer means continually investing and reinvesting in the ‘me’, and reskilling today so tomorrow remains a positive experience.
From an employer’s perspective however, those demands from digital millennials aren’t always seen as rational or sustainable. However, the war for talent has been won by talent even if they aren’t always clear, and some days look quite confused on how best to use it for themselves or their organization. Their bosses are now well versed in the costs of replacing a top employee that’s about equal to two years’ salary, when recruitment induction development & training are accounted for. Avoiding that through providing a little more workplace flexibility makes for a sound business case. However, the implied complexity and risk concentrations introduced to workforce planning from an abundance of workplace flexibilities are still being grappled with, because they must. As one major bank HR Manager said to me recently “We almost have too much elective flexibility, but we can’t resist or rationalise it yet, much as we would like to.”
Similarly the digital native seeks access, and active input to the important matters confronting the organization and their careers (AHRI 2015d). CSIRO Chair and immediate past CEO at Telstra, David Thodey used to embark on an ‘open mike’ experience fortnightly on Yammer, in order to hear the voices from Telstra employees. He advised me he often felt bruised and was left with nose bloodied after these experiences of views from the coal face, but also acknowledged they gave him important information, not always available from traditional KPI reports, on how the company was working (and not) from those charged with serving the customer.
Further todays younger workers are prepared to work hard and outperform, but they expect instantaneous rewards, and continuous feedback and recognition as a quid pro quo (AHRI 2015b and 2015c). The rationale is simple. They understand the power and value of their talent, but also that employers will embark on another restructuring at a moment’s notice if it suits them, and one which could make their own job forfeit. To that extent they are not motivated by promises of promotion and pay ‘down the track’. If they work hard for you and deliver results, they want a share of the rewards now. And that’s not unreasonable. As an extension of this thinking, the Fortune Magazine and Hay Group 2015 Survey found that 38% of millennials in OECD countries want to start their own business, and seek entrepreneurial experiences at work within a socially responsible environment.
Further they expect access to Talent development activities, almost as of right (AHRI 2015c). When visiting Infosys in India recently, I was advised by the HR Manager that they had talent development activities each and every day for all new graduates inducted, during their first two years with the company. When I suggested that might be excessive and unnecessary, I was assured it was necessary as “recruiters are waiting in the foyer of this building every evening, to offer them new and enticing roles elsewhere, as they are leaving the office to go home each day. If we don’t respond to that, we will lose them,” she said with the voice of painful experience.
- A New Organization Emerges
In the midst of these massive changes to the world business environment and the assertive attitudes of younger workers, it is unsurprising that organisations have had to change as well. This will be necessary not only to compete more effectively but also to retain their top digital native talent, that covers millennials and the new Generation Z, about to leave high school.
When I worked at ANZ in the late 1990s, I did a calculation that we had about thirteen levels of supervision from CEO to Branch Teller. Not something we put in the Annual Reports or that the boss enjoyed hearing, and we had a Personnel group who were very inventive at grouping and reclassifying it in ways that always made it look better, flatter and leaner than it really was. Those days we also had McKinsey, BCG, Deloitte, First Manhattan and a cast of other highly paid external experts join us every few years to recommend our organizational structures be swung on a pendulum from
- From centralized to decentralized forms, and
- from functional/geographic to international customer centric lines,
- And then to matrix organizations that put both ends of the pendulums together.
Saying this makes me dizzy, and I’m not quite sure how I survived it. Today’s changing work environment is even tougher, although some of the sources of beneficial impact seem more durable.
Today the successful new digital disrupters are very disciplined about their informal organizational size and management levels, and that rigour is having its impact on big organization thinking and practice.
As an illustration, Uber holds themselves to only 3 core leadership levels in any country:
– A city GM;
– A Head of Community;
– A Head of Operations;
And the rest of the Uber organization must adapt to that, because Uber Central says so.
At the Australian Financial Review Workplace Productivity Summit I co-chaired late last year, the then Telstra Chair Catherine Livingstone effectively described her organization as one where all businesses, processes and organizational levels were now mapped against competitors and contestability, whereby insourcing, outsourcing, acquisition, restructuring and removal options could be taken as needed. In 1966, the ACTU could have taken an organization like Telstra to very public task on such a declaration, and indeed prevailed on the latter with an alternative view. Today, however, there is not much they can do about this new normal in business thinking.
The new change in competitive organizational thinking is manifest further with companies like Cisco, which has an innovative induction program for new employees. The course opens with the statement that “We compete against market transitions, not competitors”. And then it goes on to explain why and how …..
In its 2015 Global Human Capital study, Deloitte identified that only 38 per cent of organizations surveyed were functionally structured still.
A case study now being well used in business schools for this new world of organizational redesign, is that of General Stanley McChrystal, who ran the US Armed Forces in Iraq after the George W Bush invasion in 2003. In his first two years there, McChrystal found the traditional hierarchical approach of orders passing from top to bottom was slow, cumbersome and ineffective in dealing with guerrilla and terrorist tactics on the ground. So he moved to devolve power to squad commanders in the field and reset the approach of the Executive Command to one of Mission, Communications of Intelligence, Supply Chain support to the field, and the training of commanders on flexibility, adaptability and autonomy in decision making on the spot. That game of war soon changed in their favour. This is similar to the Hollywood bespoke model, developed some years earlier by Stephen Spielberg and his Dreamworks organization, whereby entertainment businesses evolve to operate virtually. No longer does cinema production reside solely in mega production studios, but rather out in the community where the principals of film making are able to insource global and local resources to deliver their mission on the ground autonomously.
Another example closer to home comes from Alan Joyce, CEO of Qantas. Recently Alan told me the story of when he was sitting next to a business customer on one of his planes, and there was a delay to taking off. Something we can all identify with. This increasingly irritated customer asked whether there was anything Alan could do to encourage the Captain to get a move along and take off more quickly. Alan’s response was “Absolutely not. For safety and operational reasons – the Captain is in charge here, not me. If we take another 10 minutes to push back, I can assure you there will be a good reason for it, even if I don’t know what that is”. Words like this from a CEO in the last millennium would probably have led to his prompt referral for medical assistance, and furtive calls from the Chairman to the Head of Personnel to comb through the exit trigger clauses of his employment contract.
- And New Leaders Thrive …
As organizations are having to change, so is our leadership style. Indeed there is a Silent War going on today between two quite different approaches to leadership that I touched on with the Stanley McChrystal case I mentioned earlier.
One group in this silent war can be called the ‘command and control’ school. Harvard University reshaped the leadership module of its MBA in 1946 to reflect the leadership approaches of the US military. After all, the latter had just won the war so it must work for businesses in peace time too. This was the thinking of the time. In a world of massive post-war reconstruction, and protected national markets – it did work for many decades. Reliance on this approach started to change in the late 1980s, but as we know the MBA graduates from the late 1980s are our CEOs and Chairs of today.
The other group in this War has been referred to variously as the modern leadership, servant leadership or ethical leadership school. It fits the needs of the present and the future, but the competitive control commanders are holding on grimly, and their behaviours underpin some giant problems in the workplace we are still dealing with like bullying, intimidation, and harassment, not to mention mental health illness rates – which I will return to later in this address.
The modern or ethical leadership school has developed for three basic reasons
- First came the beginnings of powerful global competition from the East – starting with the Japanese economic miracle in the 1970s and 1980s. The great author Edwards Deming attributed the acceleration of economic growth in Japan to their successful use of work-circles, and team management – that was implemented on an inclusive if also somewhat exhaustive buy-in basis. That influence was followed by unassailable competition from ethnic Chinese family businesses in East and South East Asia, and now mainland China, where Sun Tse’s Art of War is the prime business text. It focussed on using the mind and a competitor’s own power against themselves. A classic line of thinking from the Art of War can be quoted as follows: “just before dawn, run deep into the heart of your enemy’s camp and steal his quartermaster”. Both these Eastern leadership traditions from Japan and then China started to change thinking on Western leadership and initiate revisions to its then diminishing effectiveness, relevance and impact.
- Then came the Global Digital Revolution, and the Rise of the New Millennials – as I have described above. We have basked in our new technologies, and also reared and fortified the next generation with wonderful new devices and a landscape of choices. It’s little wonder they are using them big time. So the challenge to modern leaders is how to marshal them effectively, and not to oppose and suppress them
- Third there has been a rediscovery that values based leadership is the best antidote to the new uncertainties of global life. American lawyer and theorist, Philip Bobbitt has provided a recent and compelling analysis in his book The Shield of Achilles, that powerful democracies will continue to face global cyber and terrorist threats to their security, and many of them state centred. Bobbitt argues we can lose sight of the fact that this is an ideological battle where a values empty foe contests the core values that have made democracies, great nations. Further, HHhHenry Kissinger argues in his book Diplomacy that Peace will only derive from physical balance and moral equilibrium, and after times of great trial like World War Two, a shared sense of justice emanates from a sustained practice of our core democratic values. So is modern leadership reconnecting these foundations for better performance and greater harmony on the job today?
Whilst these new forces have changed the characteristics of our environment and personal expectations on the job, my Institute’s research has shown it hasn’t changed the six core expectations people have at work, which have emanated from the earlier writings of Maslow, Drucker, Jaques and others over the last 50 years. People at work today still want:
- To know what their job is?
- What is expected of them?
- What other workers around them are doing?
- What this organization stands for in the community?
- What is our core Purpose and Mission or “Light on the Hill”? In other words, what are we trying to become?
- They want to be treated fairly and with respect by leaders, they can also respect.
So the move to the new leadership school is inevitable, but the battles in this silent war continue as the control commanders are unwilling to give up what has delivered them material personal benefits. Whilst retirement is seeing most of them off, many are leaving indelible marks on others who follow them, and that second generation influence is proving difficult to eliminate.
The potential power and opportunity for this new leadership school can perhaps best be illustrated by the annual international Gallup poll on worker engagement. These results haven’t changed much over time and can be described as “20/60/20” – 20 per cent of workers are actively engaged with their work and jobs; 60 per cent are neutral – that is - neither much engaged nor disengaged; and 20 per cent are actively disengaged. These statistics are complementary to those produced by eminent English Philosopher and author Charles Handy, who has estimated that 17 per cent of employees will at some time conduct an act of sabotage against their employer. So the “80 per cent” of those missing in action (i.e. the last two sub-groups of 60 per cent and 20 per cent) is an enormous source of potential future productivity and growth, if they could be turned into joining the first group. Easy to say, but hard to do. However, the evidence from Surveys like Aon Hewitt’s Best Employers and the Fortune Magazine’s Worlds Most Admired Companies is that high company performance is very highly correlated with best modern practices in human resources management, and leadership.
In Australia the global average of 20 per cent engaged/60 per cent neutral/20 per cent disengaged (20/60/20) is better at 25/60/15, but when you look at the engagement and cultural scores of our leading companies 85 per cent of workers are highly engaged (and not 25 per cent), so reducing the negative impact of the last two subgroups.
- But Many Challenges Remain, and this one in particular …..
Whilst a workplace that is a work in progress is the reality, it would be remiss of me to use that as an excuse, and not pose a greater call for action with an economic and social challenge that is part of the new global digital business world, where many of us are under pressure on the job 24x7x365.
That is the area of mental health.
The statistics are alarming any way you want to look at them. One in five adults of working age experience a mental illness in any year; one in two over a lifetime. In some work and age segments the rates are higher – its about one in three annually for law firm partners, and also unemployed adolescents, and twice that rate amongst law students. The most common mental illness is anxiety, followed closely by depression, psychosis and conditions like bipolar, paranoia, and schizophrenia. Everyone in this room has been touched by mental illness in family, relationships or amongst close friends. Its that much of an epidemic. The costs of mental health have been estimated to be between $11-12billion annually and up to $21billion if all indirect impacts are accounted for. To use the language of parliamentarians and economists, that’s between 1 and 2 per cent of potential GDP lost each year. Significant inroads to this would lift productivity, profitability, and other major economic indicators.
Whilst I am sceptical of many of the public calls for business to do more in areas of life where others have a primary responsibility it suits them to ignore, mental health is an exception where the average experience in Australia is well below potential best practice. As in many Human Resources (HR) areas, the exemplar companies are already on the job here, and doing great things for the welfare of those working with them.
When I ask an HR manager what they have in place for mental health, the first and often knee-jerk response is to say they have an Employee Assistance Plan (EAP). Far too often, such a declaration is followed by silence. EAPs are a very important part of any program, and they have been around for twenty years, enabling a worker to ring up a confidential counsellor at the employer’s expense, and seek professional advice anonymously. But if that’s all a organization has, it telegraphs some mighty bad signals to workers – viz that we are ‘hands off’; ‘stigmatised’; and ‘discriminatory’.
The best companies have EAPs too but also programs that work on seven different levels – four at the level of the individual, and three at the organizational level. None of these seven areas involve rocket science and yet I am amazed as to why more comprehensive programs on mental health haven't been picked up by our various corporate leadership councils. The business case is very clear, not to mention its impact in advancing a more compassionate society.
At the individual level, the best organizations
- Understand what a job comprises, and that it is fairly sized.;
- Assess and build skills of each worker. These skills need to be well matched to roles undertaken. If the person is suffering a mental illness, an employer is expected to review the innate requirements of any role, the person’s skills with and without the impact of mental illness and to assess what reasonable changes could be made;.
- Support over the employment life cycle for mental health remediation. This can best start with mental health checks on recruitment, resilience training and exposure to a set of policies and values that demonstrate acceptance of the reality of mental health as an issue that needs to be addressed. EAPs are part of this too.
- Understand the Impact of Home. Mental illness rates of workers are higher if there is a major contributory issue at home – from the pressure of children or elder care, to domestic violence. What role a business has at home is a vexed ethical issue. However, there is general acceptance that such situations are best recognised by an employer in an environment that attributes no fault or blame, and that practical assistance or support is offered the employee to manage through that.
At the organizational level you will find three further types of best practices:
- Corporate Practice and Policy – where mental health will be covered front and centre in terms of attitudes, values, support and neutrality.
- Team behaviours and actions – a key issue to address mental health on the job is to train teams to spot symptoms in a co-worker, and to ask ‘RUOK?’ when needed. The person most able to act effectively on this at work, is an informed and trusted colleague. Groups like Mental Health First Aid provide training for workers on mental health symptoms, and recommend having one in twenty persons with this skill.
- Leadership – this is critical. The best employers have CEOs and executive teams who walk the talk on mental health. Lend Lease is a case in point. The mental illness and suicide rates in construction are eight times the average for all industries. In 2015, this company introduced a “Mates in Construction” program that had most of the features described above but more importantly featured in regular addresses by the CEO to its people, and extensive walking of the talk.
It's ambitious perhaps to choose a topic like this, because the world of work and the modern worker is an endlessly changing sea to navigate. But we are all upon it now, and it can be not only a hard one to understand, but also to find ways that make sustainable progress.
The evidence available to this writer is that even the greatest exemplars of best people management practices have opportunities to contemplate today, and improvements to make tomorrow.
Let me finish with an example of this.
Facebook is a fast growing innovative high technology company, that will be known to everyone in this room. Its rapid growth of business income and employment has meant it has had to move head office locations within Palo Alto, a number of times. The current one is a recently constructed giant Glass Menagerie. Right in the centre of this building sits the founder and principal shareholder, Mark Zuckerberg in his fully encased glass office. As you approach it you will find a small printed sign stuck on the wall facing out, that reads
“Please don’t take photographs of the animals.”
Is this the ironical sign of a modern servant leader in complete harmony with this new and fully tranparent global digital world, that he helped create? I’ll leave you to answer that question yourselves. Hopefully you have found some useful material for your answer, in what I have had to say tonight.
To John Prescott and your Family, Jennifer and Claudia, and also to Monash University – thank you for the wonderful opportunity to present this lecture tonight. I trust I have done justice to your intentions and aspirations.
Ladies and gentlemen – thank you too for listening, and I hope you have enjoyed the evening.
10 October, 2016.
(1)Professor Peter Wilson AM is Chairman Australian Human Resources Institute Limited & the Australian Network on Disability Limited; he is a Director of Vision Super and The Victoria Teachers Mutual Bank; Adjunct Faculty Member at the Monash Business School, Monash University; and World President-elect of the WFPMA, the peak global human resources organization covering 700,000 HR managers in 95 countries, and based in Lausanne, Switzerland and with its Secretariat in Washington D.C., USA.
(2)Dr. John Prescott AC has wide experience in major companies in the resources, manufacturing and transport sectors, including roles as CEO of BHP; Chairman of Aurizon and the Australian Submarine Corporation; a Director of Newmont Mining; and also as an advisor to Governments on defence, transport, and manufacturing. The Prescott Family Foundation is sponsoring a series of open lectures at the Monash Business School, of which this is the first.
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Australian Human Resources Institute (AHRI) 2012c, “Disability Employment Report”, AHRI Pulse Survey, www.ahri.com.au, June, Melbourne
Australian Human Resources Institute (AHRI) 2011a, “Gender Equity” AHRI Pulse Survey, www.ahri.com.au, March, Melbourne.
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Australian Human Resources Institute (AHRI) 2011c, “Recruiting People with a Disability: An Employer Perspective” AHRI Pulse Survey, www.ahri.com.au Melbourne.
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