Monthly Archives

May 2019

The Hayne Commission: How Diversity and Inclusion Can Help to Mend the Banks’ Broken Cultures

By | Knowledge | No Comments

Trust in Banks has been weakened

The implicit trust which many Australians had in their banks and the belief that financial institutions would generally do the right thing has been rudely shattered. The final report of the Royal Commission into misconduct in the Banking, Superannuation and Financial Services Industry laid bare the sorry state of affairs within Australia’s leading financial institutions. Financial misdeeds were not the acts of a few “bad apples,” but pervasive across the industry. Greater regulation and oversight is now inevitable, but it is widely recognised that this by itself is not enough to meet the challenge of reform.

“…every financial services entity, named in the Commission’s reports or not, must look to its culture. Every financial services entity must look again at the way it governs itself and manages not only its employees but also the entities and individuals who act as its intermediaries or are seen by consumers as representing or associated in some other way with the entity”. [Commissioner Kenneth Hayne, Royal Commission]

 

Banks ignored their deteriorating Culture

The Federal Reserve Bank of New York has pointed out: “[financial institutions]… exist, in part to benefit the public, not simply their shareholders, employees and corporate clients”.

Nevertheless these principles can be lost sight of when values and controls go awry. As we now know, in the Australian institutions examined by the Hayne Commission greed and self-interest were clearly on display in financial rate manipulations; giving totally inappropriate financial advice; encouraging vulnerable people to enter into unnecessary and onerous loan agreements; failing to implement controls against money-laundering; charging fees for no service; and lying to regulatory bodies.

The damage to banks’ brands and the trust they have lost will require each of them to examine and to recast their value systems. Calls for “a change in culture” have been coming from many quarters and the institutions themselves now seem to recognise that across the industry as a whole, values and norms had gone badly awry. But there is currently little consensus as to how to repair these cultures.

Since leaders set the tone for the any company cultures, they bear ultimate responsibility when the culture is shown to be blighted. In the process of cultural overhaul, leaders must show unequivocally that they are aware that their behaviour and attitudes serve as models for everyone in the organisation.

 

What went Wrong in the Culture of the Banks?

Repairing a culture that is acknowledged to be severely impaired requires, in the first instance, an understanding of what culture is and how it evolves.

Culture is a concept that describes a complex set of implicit understandings that exist within a group. Every organisation has a culture, but it is not fixed or immutable and it is influenced by many sources. Primarily it is the leadership which shapes the culture either through pronouncements and conscious behaviour on their part or else passively by what they are seen to condone or permit.

Organisational Culture has been described as:

“ …the shared values and norms that shape behaviours and mindsets within an entity. It is what people do when no-one is watching. Culture can drive or discourage misconduct”

The Hayne Report set out some signposts of a healthy corporate culture

There are basic norms which underpin an acceptable commercial culture

-obey the law

-do not mislead or deceive

-act fairly

-provide services that are fit for purpose

-deliver services with reasonable care and skill; and

-when acting for another, act in the best interests of that other

These signposts basically tell us whether organisational culture is meeting or falling short of acceptable commercial and community standards. But they do not describe or identify the essence of a culture which organisations should aspire to and which, amongst other things, might promote more ethical behaviour.

 

How Diversity and Inclusion Contribute to a Robust Culture                        

It is not only in Australia that the contagion of poor culture and misconduct by financial institutions has made its appearance. Following the Global Financial Crisis, the Group of Thirty (G30) published a series of reports focusing on governance of global financial institutions.

In the latest of these reports Banking Conduct and Culture – A Permanent Mindset Change, the G30 made 12 specific recommendations which would place the banks firmly on the path to cultural reform. Notably amongst these recommendations were these two:

Banks should make efforts to promote diversity and inclusion in the workplace

The G30 notes that a diverse workforce has numerous business benefits and fosters better decision-making processes but for this to be truly successful all employees need to be fully engaged and empowered, something which can only be achieved via an inclusive environment

Banks should encourage an environment of ‘Psychological Safety’

Here the G30 notes that employees should be encouraged to speak up without fear of retribution and employees must be made to feel that their voice will be heard and their concerns will be addressed.

And also a statement from top officials of the Central Bank of Ireland (Rowland and Sibley, Oct, 2018):

“Low levels of diversity among key decision-makers in banks and other financial services create excessive risks and inhibit necessary cultural change.

Similar people looking at similar information and facing similar circumstances are, unsurprisingly, likely to rely on similar assumptions and make similar decisions. This type of groupthink contributed to the depth of the financial crisis internationally and in Ireland and also contributed to many of the conduct scandals that have subsequently emerged.”

 

Greater Diversity Needed at the Top in Financial Institutions

On the face of it, these comments appear equally relevant to the Australian landscape.

The Australian Human Rights Commission’s ‘Leading for Change report (2018)’ found that 72.5 per cent of ASX 200 CEOs had an Anglo-Celtic background; 23.5 per cent had a European background and just 4 per cent had a non-European background – figures that are entirely out of kilter with the proportions in the general Australian population.

The Financial institutions are little different from other ASX 200 companies in their lack of diversity at leadership level. According to the 2018 report of the Australian Institute of Company Directors, only two of the banks, Macquarie and Westpac, had reached the baseline goal for that year of 30% female directorship. As far as ethnicity is concerned, board members and directors of these institutions are almost exclusively Anglo-Celtic in origin.

The question may legitimately be asked as to whether the failure to deal with eroding ethical norms in financial institutions was a function of similar thinking by similar people. Did the lack of sufficiently diverse thinking in the leadership of the financial institutions lead to complacency and the institutional diffusion of unconscious biases – entrenching beliefs that there are no alternative ways of doing things?

Just as was the case with overseas banks, the Hayne commission revealed that uniformity of thought prevailed at leadership and executive levels, not only within each institution but across the whole industry in Australia. As they battled for short-term financial advantage, very few in these institutions either noticed or acknowledged the extent to which the erosion of basic norms became acceptable.

 

Groupthink makes Unethical Behaviour more Likely

The relationship between organisational culture and ethical or unethical conduct from its employees has been emphasised by the Financial Stability Board (FSB) in its recent report on strengthening governance frameworks. The FSB observes that governance frameworks, culture and conduct all interact and mutually influence each other either positively or negatively.

The FSB report sets out in the table below a number of key cultural drivers of misconduct along three broad parameters: leadership; decision-making; and values and behavioural norms. Symmetra’s own research confirms that many of these drivers of misconduct are more likely to emerge in organisations which are not inclusive or largely homogenous. In working with clients to build inclusive cultures, we specifically assess many of the highlighted behaviours below and work to address the gaps we discover.

 

Financial Institutions need to get strategic on D&I

The solution we propose is the adoption by Australian financial institutions of a more progressive and strategic approach to diversity and inclusion. The focus on diversity should not be limited to the goal of improving representation of diverse groups at leadership levels  but rather on the creation of teams which exhibit the greatest diversity of thought. Increasing demographic diversity will certainly contribute to this as it is a reliable indicator of diversity of thought, and should be positioned as the means to achieving this end, but not as an end in and of itself.

But more importantly with respect to inclusion it is critical to focus on what inclusive leadership looks like and how its scope has evolved dramatically over the last decade.  Inclusion, and inclusive leadership are no longer only about valuing, respecting and engaging with difference, but now encompass a wider and more complex range of behaviours.  

Symmetra’s model of inclusion, which we have refined over many years of working with global clients is purpose-driven, and designed to entrench a trajectory for business growth, performance and innovation.

This paradigm encompasses 11 competencies:

  • awareness of differences
  • learning mindset
  • valuing diversity
  • engage effectively with difference
  • working in flexible and agile ways
  • counteracting bias
  • openness to new ideas
  • embedding psychological safety
  • boundary spanning
  • advocating for diversity and inclusion
  • creating empathy and trust with customers

At a more granular level and looking closely at the drivers of misconduct identified by the FSB, it is clear that inclusive behaviours so defined will reduce the likelihood of misconduct becoming the norm in an organisation. In inclusive organisations mindsets will be attuned to the interests of colleagues, customers and other stakeholders rather than only of oneself; leaders will be aware of their fallibility and will welcome contesting and contrary ideas; information will be shared and disseminated across the organisation leaving fewer opportunities for mistakes through ignorance; debate will be the rule rather than the exception so that a greater range of options can be considered when decisions are taken; and team members will speak up to raise doubts or reservations about questionable actions so that mistakes can be forestalled rather than rectified after the event.

 

Inclusion must Extend to Customers

An inclusive culture is the antithesis of one where self-interest and greed prevail. An inclusive culture is one where the needs, aspirations and potential contributions of employees, stakeholders and customers are always part of the mix when important strategic and other decisions are made

Customers are, of course, the group which have been the primary victims of bankers’ misdeeds and therefore it is appropriate that in any paradigm shift on the part of the banks, their participation is sought. The concept of ‘customer inclusion’ which is embodied in our model (and should form part and parcel of any inclusive culture) is much more expansive than the notion of ‘customer centricity’ which involves merely focusing on the needs of and interaction with the customer. Customer inclusion is a process of establishing an authentic partnership with the customer, showing empathy and generating confidence and sustaining these over the long term. It is probably fair to say that in the absence of a genuine outreach to customers the broken bonds of trust will not be restored.

 

Conclusion

The wholesale rebuke delivered by the Hayne Commission to the financial services industry and the ensuing outrage from a whole range of institutions and individuals demands that this industry will be forced to take stock. It is unlikely that any of these institutions will be able to carry on in the same cavalier way as they did previously. The industry will certainly have to face up to the formidable challenge of culture change. But this is a challenge which should be welcomed, because if successful, these institutions (and Australian society) will be far better for it.

For each individual institution the test will be whether they will make changes defensively to minimise the risks of regulatory enforcement or whether they will be proactive in building a system of positive values, and an inclusive culture, to make their business more sustainable. As we have argued, an inclusive culture is a sure way of ensuring that at least some of the negative drivers of misconduct highlighted by the FSB are eliminated in a given organisation.

Regulators, legislators, stakeholders and customers will be watching intently to see whether real progress is made. It is thus essential that the institutions take steps to start building inclusive behaviours and measure and benchmark themselves in this regard. Application of suitable inclusion surveys, assessments of team and leadership inclusivity and other metrics, together with the maximum degree of transparency, will all assist in determining whether real cultural change is taking root.

It remains to be seen which of Australia’s financial institutions will rise to this challenge to be seen as trustworthy citizens in an industry which has let down so many Australians.

 

Under the law, Australian women are equal – it’s invisible barriers that cause the problem

By | Knowledge | No Comments

Women in Australia face almost no legal barriers in pursuing their careers or other economic activity. The just-released report by the World Bank: Women, Business and the Law, 2019: a decade of reform measures the level of gender equality across 187 economies – with specific reference to economic activity. The areas measured are: going places; managing assets; getting married; getting a pension; starting a job; getting paid ; having children. In each area countries scored from 0 to 100 where 100 is perfect equality.

Six countries for the first time scored an overall 100, being Belgium, Denmark, France, Latvia Luxembourg and Sweden. Australia ranked 16th overall with a score of 96.88.  Australia, in fact ,scored a maximum 100 on seven out of eight criteria with the exception being getting a pension– scoring 75 here.

Having what is in substance almost complete legal equality is hugely important and is the basis upon which full equality can be built. It is certainly a situation not enjoyed by women in many other countries. But it would be a mistake to believe that legal equality signals true equality in the workplace.

The factors that disadvantage Australian women are often hidden or disguised and therefore more difficult to combat than blatantly legalised discrimination.

Three of the most significant factors are :

1       Unconscious Bias – Biases which exist at various levels of organisations and which come into play at various stages of women’s career paths tend to constitute barriers which prevent them from advancing as fast as men. According to the Bankwest/WGEA Gender Equity Insights Report  the current trajectory women will have to wait until 2100 to have an equal number of CEO roles as men.

2        Sexual Harassment – This is a major problem for women in Australian workplaces and it appears to be getting worse. Sexual harassment prevents many women from fulfilling their potential at work and forces a good number to change jobs just to avoid it. The Australian Human Rights Commission, 2018 Report states that the prevalence of sexual harassment in our workplaces has grown since the last report in 2012 with 39% of women aged 15 years and older having experienced it. 79 % of perpetrators are men; 83% of incidents of workplace sexual harassment went unreported; and 43% of those who did make a formal complaint experienced negative consequences as a result.

3       Structural Issues – Inbuilt economic detriments which tend to prejudice women have often been accepted as inevitable and almost impossible to change. These include industrial and occupational segregation where women who are the preponderant numbers in certain occupations are paid less than males in industries when men have the greatest numbers Also greater caring obligations falling on the shoulders of women which makes many of them work part-time

While we can celebrate the fact that Australia is an open and democratic society which does not have laws on its books which overtly treat women as inferior, we must recognise that there is work to be done before women in this country can be said to enjoy absolute equality of opportunity in every way.

 

The Hard Truth About Innovative Cultures

By | Knowledge | No Comments

By Gary P. Pisano (Harvard Business Review, Jan 2019)

ABSTRACT:

This article offers some important insights as to why some companies are successful in pursuing innovation while others fail at it. The proposition advanced by the author is that the nature of innovative cultures is misunderstood. He seeks to dispel five common misconceptions about how innovative companies work  and at the same describing what in fact they do.

The author sets out under five headings some widely-held myths about how innovative companies go about doing their business and he points out why they are misplaced or inaccurate. He asserts based on his research over a long period that only a proper appreciation of the demands which are made of employees in highly innovative organisations will enable those seeking to emulate them to do so.

The five myths he enumerates and his commentary on each one can be summarised as follows:

  • There is no generalised tolerance for failure in innovative organisations. Many people believe that there is a free and easy atmosphere in such organisations where almost anything goes and team members have carte blanche to embark on any project that takes their fancy. In fact, innovative organisations accept that some failures are inevitable but they do not accept those that result from incompetence. They will not tolerate “… mediocre technical skills, sloppy thinking, bad work habits and poor management…”.
  • Willingness to experiment does not mean that that experimentation can be hit or miss affairs. Rather they require careful formulation of goals, careful setting out of process and rigorous execution.
  • Innovative organisations, typically are ones where psychological safety prevails which means that everyone feels that they can voice their opinion without fear of retribution. However, by the same token when employees fall short the criticism can be harsh and sometimes brutal. Every action or statement may be scrutinised regardless of the person’s title.
  • Collaboration is not the same as consensus. While working together towards common goals is a feature of innovative organisations, responsibility for decisions cannot be shared. Ultimately, someone has to bear the responsibility and be accountable for decisions that are made.
  • No multiple levels of executive status does not mean an absence of leadership. Strong leadership is still required to set out a vision for the organisation and to hold the reins so that plans reach fruition.

These pointers can offer valuable guidelines and criteria for those wishing to transform their company culture or to adapt it to one where the search for innovation is amongst the top priorities. Some features of innovative culture are easy to digest and will be popular, others are less palatable but are a necessary part of building an innovative and competitive organisation.

Read original article here

Organisations can and should measure their employees’ sense of belonging

By | Knowledge | No Comments

Symmetra has long advocated objectively rating and benchmarking the salient features of a diverse and inclusive workplace.

One of the most important indicators of the level of inclusivity in a workplace is whether employees have a positive sense of belonging. Belonging advances employee engagement, motivation, identification with the goals of the business and collaboration.

It is pleasing indeed to see that EY has recently underscored the importance of measuring the sense of belonging in workplaces by devising its ’Belonging Barometer’ (Nov.2018).

The Belonging Barometer reflects the findings of a survey of more than 1000 employed adult Americans as to how they define “belonging”; what makes them feel like they belong; and what makes them feel like they do not belong.

  • Key findings of the survey recorded in the Barometer are:
  • More than 40 per cent of respondents across generations and genders feel physically alone or ignored, creating a sense of emotional isolation;
  • 56 per cent of employees feel that they belong most when they consider that they are trusted and respected;
  • 44 per cent of women and 33 per cent of men say that when colleagues check in with them about how they are doing, they feel the greatest sense of belonging;
  • Whereas belonging is accepted by all as a highly positive feature in a workplace, more than half perceive its opposite – exclusion – as a form of bullying

Data of this sort provide important insights as to what triggers feelings of belonging and how this can be sustained. The granular data generated also empowers leaders to address those obstacles that stand directly in the way of developing a strong sense of inclusion and belonging in a team or the organisation as a whole.

In a similar endeavour to elicit hard data, Symmetra has developed a range of assessment tools which separately measure the inclusivity of leaders, of teams and of the organisation as a whole – each of these tools has been tested for statistical reliability and validity and have been used now with thousands of leaders across the globe.

The increasing emphasis by EY and others on the desirability of measuring attitudes, perceptions and feelings of employees about belonging and inclusion is a noteworthy development. These factors ultimately are key predictors of commitment, performance and retention. Feelings of inclusion, belonging and motivation may be intangible, but they are not amorphous and are capable of identification by the persons directly affected. Many executive leaders confirm that these metrics are of vital significance as they provide rich and objective insights into the attitudes, satisfaction and sense of well-being of employees rather than leaving leaders to make assumptions or draw conclusions from evidence which is often hopelessly incomplete or biased. Assessments of inclusion , whether organisation wide, team-based or of individual leaders are a giant leap forward for advancing the inclusion agenda.

Experts Say Australian Sexual Harassment Laws in Need of Drastic Reform

By | Knowledge | No Comments

Sexual harassment in the workplace has been described often as an “intractable problem”. Despite legislation designed to combat it which has been in place in Australia for decades, and despite corporate leaders proclaiming that there will be zero tolerance for acts of sexual violence or harassment, evidence is that its occurrence has not come down.

Sexual harassment and associated workplace misconduct such as sexist behaviour and bullying are no longer peripheral matters which organisations can choose merely to quickly dispose of when an incident arises rather than treating it as a core issue relating to employee wellbeing and productivity.

just-released report from LinkedIn identifies instilling an anti-harassment culture as one of the four major global workplace trends in 2019. According to the survey conducted by LinkedIn, 71 per cent of talent professionals see combating workplace harassment as important to the future of recruiting and HR.

The LinkedIn report notes:

“…companies face growing pressure from employees to take action [against harassment]. Employers are seeing anti-harassment as a business necessity, not just a legal and moral one. Hostile workplaces hurt the bottom line through lost productivity and turnover, while respectful ones attract talent…”

Coincidentally, the Australian Human Rights Commission is currently engaged in a formal investigation of sexual harassment in the workplace. Two academics, Professor Paula McDonald (QUT) and Professor Sara Charlesworth (RMIT) have prepared a wide-ranging paper submitted to the Commission.

They note that sexual harassment is a highly prevalent problem in Australian workplaces and that the effects on victims can be, and often are long-lasting and severe. By its nature it gives rise to systemic harm “in that it strips away an individual’s identity, reduces the quality of working life, creates barriers to full and equal participation in employment across the life course and imposes costs on organisations.”

The central drivers of sexual harassment, sex-based bullying, everyday sexism and predatory behaviour are unequal power between men and women and rigid adherence to gender stereotypes that is supported by structural and attitudinal barriers to gender equality.”

Nevertheless, as the two academics argue, few employers take primary preventative action to ensure that the work environment is free of sexual harassment. International research indicates that employees who bring to light instances of sexual harassment are frequently ignored or victimised. This shifts the risk on to individual employees who have been the victims of sexual harassment to initiate remedial action.

Because major obstacles and disincentives exist against pursuing complaints of sexual harassment, incidents go unreported and victims respond by trying to avoid the harasser or minimising the severity of the conduct. Overwhelmingly the victims of sexual harassment are women and the perpetrators are men. International research reveals that only between 5% and 30% of those who experience sexual harassment file formal complaints with their employer.

When it comes to remedial mechanisms under current Australian legislation, essentially the same problem applies. Both at the Federal and State levels, claims arising from sexual harassment are primarily dealt with under the overarching jurisdictions of the Human Rights Commission or State anti-discrimination bodies. Individual complainants must pursue the claims to external agencies through the somewhat complicated regulatory mechanisms provided by Federal and State legislation. Most are disinclined to follow this route as they feel the odds are stacked against them and it is not worth the long-term negative impact on their career. Thus, as the two academics point out fewer than 1% of complainants formally participate in legal proceedings.

Current legislation in Australia is clearly not up to the task of counteracting this widespread incidence of sexual harassment in our workplaces which is undermining the right of many employees to work in an environment of safety, respect and harmony.

A number of overseas jurisdictions have responded to the #MeToo movement and the rising outrage against unpunished acts of sexual harassment and violence by passing legislation to cast greater duties on employers to take proactive measures to put a stop to this. The States of New York and California are amongst these jurisdictions.

The solution, which the two professors propose, is that the focus of the law be shifted from the complaints paradigm to one imposing clear obligations on employers to take preventative action against harassment, victimisation and other forms of offensive conduct in the workplace. They recommend that three legal avenues be used to implement these kinds of regulatory obligations on employers: anti-discrimination; workplace health and safety; and industrial relations. Furthermore, they recommend that financial penalties be imposed where employees fail to comply.

We at Symmetra believe this is a sound approach in an area where harm is being done to employees and there is a crying need to put comprehensive and effective legal systems in place to combat it. 

It will be some time before the AHRC reports on all the evidence gathered, the submissions heard and further time for any legislation to be passed. But the ground on workplace harassment has undeniably shifted and employers would be well-advised to reassess whether their workplaces and managers and employees are properly equipped to deal with a more robust and less forgiving attitude to unacceptable behaviours at work.

Be proactive in preventing sexual harassment and everyday sexism in your workplace with E-Challenge

Three Cheers for Gillette in Confronting Unacceptable Macho Sexism

By | Symmetra | No Comments

Gillette’s latest video advertising campaign for its men’s razors with the title: “We believe: The best men can be …” has evoked howls of outrage in some quarters for being a demonisation of the male gender as intrinsically bad and incapable of refraining from intolerable behaviour. It is suggested that the video is simply an all-out and totally unjustified attack on masculinity and a negation of positive male attributes such as self-reliance, assertiveness and stoicism.

The video depicts instances of unrestrained toxic male aggressiveness and offensive behaviour and effectively calls upon responsible men to reject this type of behaviour openly and unequivocally. They cannot excuse or condone it or as the narrator says: “men can no longer hide from bullying or sexual harassment.”

Release of the video prompted a huge amount of online interest with most people taking a strong view either in support or against. A number voiced strident opposition to either the fact that Gillette had chosen to wade into the swirling #MeToo debate at all and others opined that the tenor of the video was implacably hostile to the male gender as a whole. Some well-known personalities such as broadcaster Piers Morgan and actor James Woods were incensed to the point where they said they would stop using Gillette products.

The Gillete advert generated the further criticism that the manufacturer was guilty of taking an opportunistic ride on the wave of anger flowing out of the #MeToo movement and this was a cynical attempt to stir a public debate.

In our view, Gillette is to be commended for taking the undoubtedly risky step of linking its product with a stated position on a highly controversial but undeniably important issue which needs to be confronted by both genders. Most marketing and advertising campaigns have up until now, studiously avoided contentious social issues . In so doing they have presented hopelessly idealised and artificial images of genders and the way they behave. When they have touched on issues pertaining to gender, race age and sexual orientation this has often been accidental and occasioned by importing unconscious biases into advertising material which has offended one group or another.

But there are good reasons for manufacturers to show that they are alive to the issues that are of concern to their customers and the community. As a spokesperson for P & G,  the owner of Gillette stated;

Successful brands today have to be relevant and engage consumers in topics that matter to them. “

The frenzied response from some conservative men’s groups to the advert is inexplicable and in many ways, disturbing. Gillette does not condemn men as a gender but rather points out that bullying and sexual harassment, which most reasonable people agree are obnoxious, can and ought to be combatted. This is not a crusade for women alone but should be an enterprise in which men would want to join. Only a high level of insecurity and immaturity could prompt any man to rebel when called upon to acknowledge and speak up against socially- subversive behaviour.

As George Monbiot writing in The Guardian noted:

The notion that men should be distant, domineering and self-seeking is often described as toxic masculinity, but this serves only to alienate those who might need most help. Its proponents describe their behavioural ideal as traditional masculinity, but conceptions of maleness, like conceptions of the family have changed from century to century.

Moreover, two documents recently released, one being the American Psychological Association, Guidelines for the Treatment of Men and an Australian Study by the Queensland University of Technology into notions of masculinity have shown very convincingly that conceptions of masculinity which emphasise dominance and aggression are as harmful to men as they are to women. It leads not only to violence against women but violence against men and according to the Australian study leads men ‘….to consider suicide, drink excessively, take risks and drive dangerously.’

If nothing else, the Gillette advert has given impetus to a public debate which is important and pressing. It will give many men pause and grounds to reflect. If its message is taken to heart it will help to reduce the corrosive atmosphere which prevails in some Australian workplaces and public institutions. If it does that it will have achieved something valuable.

UK Parliament report: Sexual harassment in the workplace

By | News & Knowledge | No Comments

House of Commons, United Kingdom – Sexual Harassment in the Workplace – Fifth Report of Session 2017-2019 – July 2018

This comprehensive report provides a broad and incisive perspective of the current state of sexual harassment in UK workplaces and sets out in great detail the failures of the existing system and why the present legal framework is inadequate to address the problem.

These inadequacies have been repeatedly highlighted across many developed countries since the emergence of the # MeToo movement. The comments and conclusions in the report are relevant to Australia where many surveys on the topic of sexual harassment have revealed that the same issues rear their heads in both countries.

The rates of workplace sexual harassment incidents are high in the UK, as is the case in Australia. In the UK 40 per cent of women and 18 per cent of men have experienced it. In Australia the figures appear to be even higher. An analysis by the Australian Bureau of Statistics in 2016 reported that 53 per cent of women and 2 per cent of men had been sexually harassed in their lifetime.

The Report criticises the UK Government for failing to carry out its responsibility to tackle sexual harassment by implementing systemic protections against it. This failure is in contrast to the stringent legal and regulatory responses to other workplace malpractices such as theft of data and money laundering. Once again, the parallels with Australia are clear.

There is a lack of appropriate support for victims of sexual harassment and internal grievance procedures do not work well. Thus the burden falls squarely on the victim to take complaints forward. In many cases, victims are reluctant to take any steps for fear of reprisals and victimisation.

The Report also lambasts the “improper” use of non-disclosure agreements (NDAs) which are often forced upon traumatised victims to ensure their continued silence.

This Report is well worth reading and digesting for us in Australia as it provides many important signposts about what can work and what does not in the battle against sexual harassment in the workplace.

 

Original report: House of Commons Women and Equalities Committee – Sexual Harassment in the Workplace 

How Artificial Intelligence will Stimulate Cognitive Diversity in the Workplace

By | News & Knowledge | No Comments

Artificial Intelligence (AI): a branch of computer science which enables a machine to imitate intelligent human behaviour and which through artificial neural networks is capable of learning through experience.

The arrival of the technological wave created by artificial intelligence has elicited a huge number of assessments and predictions as to what this means for the future of work. Some people embrace AI unreservedly as embodying huge potential for good, while others see a dismal future for a large part of humanity, predicting dire consequences as machines surpass humans in overall intelligence and render much of humanity redundant.

A widely held perception is that the changes likely to be wrought to our societies and workplaces by the advent of AI will be nothing less than revolutionary-destroying or replacing in a short space of time much of what is familiar and creating entirely new systems and ways of solving problems.

This has given rise to a great debate as to whether to welcome the great opportunities afforded by AI or to fear it as representing a force which we will be unable to control.

In a speech given in November 2017, the late Steven Hawking, while emphasising that embracing AI may be initiating or even inviting unforeseen perils, said the following:

“I am an optimist and believe that we can create AI for the good of the world. That it can work in harmony with us. We simply need to be aware of the dangers, identify them, employ the best possible practice and management and prepare for its consequences well in advance “

Since AI is already a presence in many workplaces, we need to understand the long-term consequences on our workforces as tasks pass from workers to machines. More particularly, how will increasing implementation of AI systems affect the drive to make our workplaces, demographically and cognitively more diverse?

Many progressive organisations and businesses have recognised and embraced the notion that establishing teams composed of people who possess diverse thinking styles enhances the capacity for innovative ideas and creates material benefits for the organisation. Will the power of AI render workforce demography irrelevant and eliminate the need to diverse thinkers who collectively generate the bulk of innovative ideas?

This is not a hypothetical question or an issue to be reserved for future deliberation.  The influence of intelligent technology is changing the commercial landscape at a bewildering pace. Entrepreneurs are seizing upon the powerful learning ability of algorithms to look for ways of disrupting entire industries. A notable example here is driverless cars in the transport industry. At the same time, companies are seeking opportunities to radically remodel all aspects of their operations so as to gain competitive advantage while labour experts have concluded that many job categories will simply disappear as their functions are superseded by computers applying algorithms which do the job much more efficiently.  

On the jobs front, a McKinsey report found that 30% of work activities could be automated by 2030 and up to 375 million workers worldwide could be affected by emerging technologies. The OECD has taken a different approach focusing. on “tasks “rather than jobs”. It estimated that 14% of jobs are highly automatable and another 32% have a significant risk of automation.

More recently, a somewhat more optimistic view has been taken of the way that AI will be integrated in our workplaces. Experts who spoke at the MIT Sloan Summit (2018) indicated that while machines can undoubtedly perform some tasks better than humans, they cannot generally perform all tasks needed for a job. A similar view is to be found in a comprehensive analysis from McKinsey Global Institute (May 2018), where the following assertion appears:

“Accompanying the adoption of advanced technologies into the workplace will be an increase in the need for workers with finely tuned social skills-skills that machines are a long way from mastering”

Thus instead of an outright contest to see whether humans can resist an invasion by AI there will very likely be partnerships or collaboration on a broad scale in the workplace between AI machines and humans.

An insightful and cogent appraisal of how AI could be leveraged to be married with soft skills possessed by humans comes from a report published by TATA communications (2018). This report also adopts and endorses the premise that humans and AI systems can, and most probably will, interact in ever increasing ways in the workplace.

It bases its theoretical approach on the highly regarded work of Professor Scott Page , especially in his latest publication, The Diversity Bonus which postulates that the more diverse the participants, the more opportunities to discover insights and novel approaches. Accordingly, the authors of the TATA study set out to ascertain how this principle might work when one or more of the participants is an AI machine.

The study surveyed more than 120 business leaders across a range of industries to gauge current interest in and understanding of, AI with particular regard to the impact of positive trends within their organisations.

 

Four themes about the future role of AI emerged from the study and each one has implications for optimising cognitive diversity within the organisation:

  • The structure of work will change and require greater agility and flexibility

Today candidates are hired for a specific role. In future candidates might be hired on the assumption that they will fill multiple roles over their career. Roles will move from being task-based to strategic, requiring more expansive cognitive skills. Since roles will be changing multiple times over the course of  careers, each candidate will have to employ diverse cognitive skills to manage the different roles and AI can be used to map the diverse talent opportunities available within a company .

  • AI has the potential to help individuals become more agile, curious and nimble.

As time is freed up through the use of AI, workers’ time will be available for more creative tasks and more opportunities to think in non-linear ways. Team members will have  time to debate and seek fresh ways of approaching and solving problems. The more diverse the totality of contributors, the greater the likelihood of coming up with innovative solutions.

  • AI has the potential to enhance human collaboration

AI could facilitate team composition, organisation and communications such as offering new and alternate ways of approaching a team session,( especially those where various members are dispersed across diverse global locations) and utilising its ability to translate multiple languages used by participants. This means that diverse thinking from many sources across the globe could be merged and cross-pollinated in real time more efficiently

  • AI has the potential to enhance cognitive diversity within groups

Leaders often make judgements on their own about strategic and operational matters. AI systems could help to source expert advice from other areas in the organisation  efficiently, breaking down silos and bringing together a diverse set of viewpoints.

 

Most crucially, the overarching conclusion is expressed thus:

With autonomous processes becoming more scalable, original and diverse ideas will create competitive advantages. By building diverse teams through a combination of workers and machines, the number of new cognitive skills will be multiplied, increasing the ability to turn a problem around, look at it from different directions and deploy different skills to find creative solutions.”

Having said that, it will be up to organisations and their leaderships to lay the groundwork by pushing ever harder to employ and promote employees whose thinking styles differ from the conventional. Companies and organisations will reap the benefits of AI to the maximum if the workers who interact with it possess the diversity of cognitive skills  to discover the myriad ways in which AI can be used to the advantage of the organisation. If this is done, workers will be able to employ to the maximum the humanistic skills which still distinguish them from machines and to get the best outcomes from the diverse thinking when humans and AI machines work in concert.

 

 

Reference: Skill Shift-Automation and the Future of the Workforce

Delivering Through Diversity

By | News & Knowledge | No Comments

V Hunt, S Prince, S Dixon-Fyle, L Yee – McKinsey & Company Report – January 2018 

This new research report by McKinsey is a follow-up to their 2015 report “Why Diversity Matters” and extends the mounting body of evidence supporting diversity as a means to better organisational performance. Significantly it is an attempt to determine whether the perceived benefits of diversity are simply localised phenomena or whether they are more generalised benefits which apply regardless of where an organisation is situated. The 2018 report expanded in scope and numbers on the 2015 report and while the earlier report had found statistical evidence showing that diversity had financially beneficial effects the later report shows that the benefits are even larger.

The report is divided into two distinct parts. The first is to assess whether diversity in organisations can be shown to be of benefit regardless of a country’s ethnic makeup, its geographical situation and its state of economic development. Data was drawn from more than 1000 companies in 12 countries.  

The report first measured both profitability and value creation in relation to the degree of gender diversity. It found a positive correlation between gender diversity at executive level and both profitability as well as value creation; a 21% difference in profitability between most diverse and least and 27% when it comes to value creation.
 
The difference is even more emphatic when ethnic diversity is considered. When executive teams are more ethnically diverse organisations are 33% more likely to outperform their peers( no figures are given with respect to value creation).

 

The noteworthy conclusion is that both gender diversity and ethnic diversity are correlated with better financial performance across geographic regions, although there are some variations between different countries. However, the report also notes that in all the countries surveyed there remain substantial challenges to achieving meaningful diversity goals with regard to both gender and ethnicity.

The second part of the Report focuses on the now widely accepted proposition that both inclusion and diversity are necessary and complementary ingredients for businesses to achieve long-term benefits.

It sets out 4 imperatives for a coherent and successful inclusion policy.

  • Articulate and cascade CEO commitment
  • Define inclusion and diversity priorities
  • Craft a portfolio of D&I initiatives
  • Tailor the strategy to maximise local impact

The authors of the report conclude that there is ample evidence to show strong correlations across the globe between gender, ethnic and cultural diversity and better financial outcomes. They concede that it is a hard road to achieving sustained diversity and inclusion but for those companies and their leadership willing to undertake the task, benefits will undoubtedly accrue.

 

Read the full report: Delivering Through Diversity

Why the Typical Performance Review is Overwhelmingly Biased

By | News & Knowledge | No Comments

B Jones and D Rock – Psychology Today – May 2018

This article offers an interesting new perspective on how to mitigate the biases which creep into performance appraisals.

Biases infiltrate themselves into many of the decisions we make daily. Recognising this means we need to guard against the harmful results flowing to ourselves and others in the course of making consequential judgements and decisions.

Performance reviews have garnered a good deal of attention over recent years. Much criticism has been levelled at the traditional way performance reviews are conducted, which often do not constitute an objective appraisal of an employee’s performance.

Well-known biases that impede proper assessments in traditional performance reviews are: the “halo effect” which bases the entire review on one criterion to the exclusion of others; the “crony effect” which distorts the review process because of the closeness of the relationship between appraiser and appraised; and the “recency effect” where the person reviewed is appraised simply with regard to the most recent action or behaviour.

The authors note that despite the well-known difficulties with performance reviews, some 57% of companies they surveyed in the USA were not doing anything to remove biases in these processes.

Many observers who have written about the biases which come into play in performance reviews have suggested simply that the appraisers alert themselves to the difficulties and do their best to overcome their impact. But since many of these biases, by definition, operate at an unconscious level it is almost impossible for a decision-maker to address them on their own in real time.

The solution suggested in this article is for managers to solicit the views of others in the organisation. Collective opinions are much more likely to get closer to an objective assessment which may turn out either more favourable or less favourable than that which the manager alone would have given.

This is a useful approach to performance reviews because it introduces an element of systematic checks and balances against unconscious biases rather than leaving it to the individual to ward them off.

 

Original article: Why the Typical Performance Review is Overwhelmingly Biased