Keeping a regular eye on risk

Has there ever been a more important time to be monitoring new and emerging risks to your organisation? Perhaps it is becoming one of 2020’s most overused words that we are living in “unprecedented” times.

The emergence of the global coronavirus pandemic this year has forced every organisation to review its business continuity plan and take a number of other steps to ensure the safety of employees and clients, modify operations, change marketing priorities and shore up the financial position.

On the subject of coronavirus, CBB have shared a link to some resources available through the South Australian Department of Human Services via our LinkedIn page which readers may find of interest. Other information is available from the NDIS Quality and Safeguards Commission.

However, even in the midst of this significant risk scenario unfolding, there are other emerging risks that also need regular attention.

We have seen the impact of the summer bushfires which has been a challenge in some regions, and put together with current job losses and share market volatility will put pressure on donations to some not for profits . Regulatory changes are emerging with the Disability and Aged Care Royal Commissions, and the NDIS continues to evolve and make changes almost daily. Cyber attacks have continued, and not for profits are not immune from events like this. Social behaviours have changed as a result of shutdowns within society now, and it remains to be seen how society will permanently change after the current crisis.

Last month we looked at the specific risk in relation to whistleblowing after issues at World Vision. You can click here to go back to that article. We have also written recently on steps to protect your organisation from cyber risk.

It is important that Boards and management committees regularly review and monitor for new and emerging risks, and that risks other than the coronavirus still remain part of regular board discussions.

The frequency of reviewing risks and the risk register will vary depending on the complexity of the organisation, pace of internal and external change, and risk exposure. Whilst lower risk organisations in a stable environment might review risks quarterly, many organisations should look at it more frequently.

However, best practice organisations make risk a part of the business as usual with regular monitoring of the internal and external elements of the organisation for changes, and then alerting decision makers to these changes in a timely way, so that appropriate actions can be taken.

We believe that best practice risk management monitoring includes the following:

  1. Ensuring a well-constructed risk register is in place and reviewed regularly for changes.
  2. Undertaking broad engagement across the organisation to identify new and emerging risks, ensuring that different perspectives are taken in to account and the full range of risks have mitigation plans.
  3. Risk appetite is discussed, understood and calibrated across the board and management, with changes made as context changes.
  4. Making a report on new/emerging risks a regular part of the board reporting template helps the Board and management team consider the risks in a timely manner.
  5. Including responsibilities within key management team member position descriptions to monitor and report on risk.
  6. Monitoring of relevant internal KPIs (staff turnover, safety incidents etc) to look for emerging internal trends and risks.
  7. Involvement in industry forums and conference attendance to hear from thought leaders on how the market is changing and new risks that are emerging.

In coming months and future editions of Foreword, we will provide more suggestions on how to develop your risk management to a greater level of maturity and integrate it into everyday decisions and business practices to provide a robust framework for managing risk.

If you have a topic that you would like us to consider when writing more about risk, then please get in touch with us and we will endeavour to include it in a future edition. HOW??

CBB consultants have had experience in helping organisations plan their risk management activities. If you’d like assistance with risk management, please contact 1300 763 505 for an obligation free consultation.

 

Andrew Ellis
Business Consultant
Email: aellis@cbb.com.au
Phone: 1300 763 505

 


Understanding your market dynamics

Question: Why did the thief rob the bank?
Answer: Because that’s where the money is.

In this situation, the thief understood enough about his market to know where to find the money!

It’s important for an organisation to have a solid understanding of where the money is in their own market segment before they can maximise their organisation’s potential.

Data on the market can be used to answer a number of questions that lead to better decision making. What is the size of your market? Is it growing or contracting? Why? How is the market evolving or changing? What disruptive forces are impacting the market? How are competitors’ actions changing the market? What are the bounds and scope of the market that you are operating in? Should we look to another market segment in order to continue growing the business? How much should we spend on acquiring the knowledge necessary to answer these questions?

Unfortunately, this is one area of business where it can be easier to ask a question than to answer it! Getting reliable and detailed information on your market is challenging in many sectors, but there is now considerable information available to providers working within the NDIS.

In some sectors, it might only be possible to find aggregate data on the whole of an industry rather than something specific to the sector of interest. In those cases, high level observations might be drawn about the market, but there would be varying degrees of accuracy.

Where can I get data on the market? Industry associations often publish reports with this kind of information. For disability providers, the NDIS quarterly reports provide a wealth of information – but this needs to be analysed closely to understand the relevant trends down to your market segment.

A robust market assessment is perhaps the most important part of the strategic planning process. Without it, the strategy can suffer from just being a plan about what direction you think the organisation should be heading in, without actually having the logical and rational thought to why that should be the right direction.

The market assessment involves a number of steps and exercises that create a critical analysis of the organisation which aids in understanding the market dynamics better and leads to better strategic decisions and direction.

We believe that a best practice market assessment includes the relevant aspects of the following:

  • Understanding the market context at a macro level through using a tool like PESTEL.
  • Considering your organisation’s place within the market context using a model like SWOT or SOAR.
  • Internal Analysis – identifying critical internal issues that need to be addressed within the strategic plan.
  • Market Size – projecting forward changes in the size and dynamics of the market segments you are operating in; and understanding how to adapt the business and services to fit that.
  • Customer Analysis – understanding the changing needs of customers, and what makes them choose your services.
  • Competitor Analysis – looking at the major competitors in the market and developing strategies for how you compete against them.

This approach can be scaled to small and large organisations with varying levels of detail.

A structure like this helps the Board and management team to focus on the myriad different issues impacting on the organisation’s strategy and ensure the strategic plan fits that context.

Last month we looked at how the market is continually changing; and how to ensure that the market conditions are monitored and part of regular management/board discussion. Click here to go back to that article.

In coming months and future editions of Foreword, we will provide more detail on these elements that make up the market assessment.

CBB has worked with a number of organisations to help them better understand the market they operate in. We can help your strategic planning process by preparing a market scan or review.

For providers working in the NDIS currently or planning to in future, we suggest you can sign up to the NDIS Success Program. This program aims to increase the supply of NDIS services in communities, with a particular focus on regional, remote and rural communities and Aboriginal and Torres Strait Islander communities. Delivered via webinars and online resources, we’ll give you all the tools and information you need for NDIS Success.

If you’d like any assistance with reviewing your market environment, please call 1300 763 505 for an obligation free consultation with one of our Business Consultants.

 

Andrew Ellis
Business Consultant
Email: aellis@cbb.com.au
Phone: 1300 763 505

 


The need for a whistleblowing policy

We have seen recently World Vision Australia reported on ABC news, with a staffer suspended pending investigation into an alleged conflict of interest, with the Sydney Morning Herald (SMH) saying that World Vision brushed off reports of corruption.

silver whistle

The articles describe allegations wherein the father of a senior employee was engaged to advise on the procurement of printing contracts for the organisation, and that he collected commissions from the printing company that were never disclosed to World Vision Australia.

The SMH article describes that a whistleblower made enquiries to meet with the CEO, but that the CEO’s office alerted the employee who was the subject of the allegation and did not investigate the matter appropriately.

Sadly, it is not just the corporate sector where organisations can fail to live up to their values, and the not for profit sector is not immune to this type of conduct.

The World Vision example demonstrates the potential negative impact that media attention resulting from an external party can have on a not for profit organisation’s brand.

Trust is such an important asset for a not for profit organisation to have with its community and stakeholders, and examples like this can undermine the trust and confidence people have in an organisation and brand. In fact, trust is actually the currency that the not for profit sector relies on – it underpins voluntary donations, volunteering and government tax treatments. Damage to the trust of a big brand in the sector actually risks undermining trust in the sector as a whole.

The World Vision case also demonstrates the importance of having a robust whistleblowing policy, which not only defines the process for someone to raise a concern, but also includes a robust approach to investigating such concerns.

Many not for profit organisations were caught up in recent legislative changes requiring a whistleblowing policy to be in place for public companies and large private companies. Charities that are companies registered with ASIC must comply with the legislation which came in to place in July 2019. Further information is available online from the ACNC.

This case also brings in to question the decision-making structures around procurement decisions, and is a timely reminder to review levels of delegated authority, along with who has the ability to influence or approve certain procurement contracts.

A major focus of the role of a leader is in building a positive aligned workplace culture. Boards, CEOs and management teams all need to do their part to ensure that the culture aligns to the values of the organisation, such that inappropriate behaviour is never tolerated. There are important practical steps that leaders can take in building the culture that your employees and clients deserve which we wrote about in the article Is your workplace toxic?

Some steps that not for profit providers can take to prepare now and mitigate the risks identified through the World Vision case are:

  1. Review the requirements (and take legal advice if necessary) regarding having a whistleblowing policy.
  2. Ensure that delegated authority levels are clear, documented and recently reviewed.
  3. Look at what further actions can be taken to positively shape the workplace culture.

References:

  1. ACNC Factsheet – https://www.acnc.gov.au/tools/factsheets/whistleblower-protections
  2. https://hallandwilcox.com.au/thinking/new-whistleblower-laws-apply-from-1-july-2019-3-things-employers-should-do/
  3. https://www.bdo.com.au/en-au/accounting-news/accounting-news-july-2019/whistleblowing
  4. https://www.nortonrosefulbright.com/en/knowledge/publications/63b0f230/update-on-new-whistleblower-protection-laws-in-australia

CBB consultants have experience in helping organisations plan their risk management activities. If you’d like assistance with risk management, please contact Andrew for an initial obligation free consultation with one of our consultants.

 

Andrew Ellis
Business Consultant
Email: aellis@cbb.com.au
Phone: 1300 763 505

 


Understanding market changes

Coronavirus, stock exchange losses, countries going in to lockdown, businesses being shut down, stock shortages in the shopping centres.managers having a conversation

We live in unprecedented times with the business models of decades’ old organisations quite literally changing overnight.

The radical changes we have seen over the past few weeks have demonstrated the speed at which market dynamics can change, and the need for businesses to respond quickly.

Boards and management teams are needing to respond with urgency to scenario plan and make decisions with imperfect information as the situation unfolds.

The markets that we operate in and the customers we serve are always changing. Whilst the speed of change is not necessarily what we have seen recently, now is a time not just to focus on the immediate crisis at hand, but to think about how to structure management and board meetings so that market changes form part of the regular and ongoing conversation.

From our experience, we observe that management reports typically fall into one of three different categories:

  1. Activities completed or in progress in the week or month.
  2. Business KPIs which are typically backward-looking and reviewed to ensure the business metrics are on track, trends can be identified and corrective actions put into place. e.g. finance, HR, work health safety.
  3. Progress against the strategy which is often a table that lists out the: goals/objectives, comments on the status against them and an indicator (e.g. traffic light).

As part of aspiring to best practice, any discussion of the strategic plan and, in this case, progress against the strategy, is worth including an item to identify and (as required) discuss any changes to the market conditions.

The review of market changes can often be addressed simply with a few bullet points and identifies by exception, any material changes in the market environment since the last report. It is important to identify both what is going on in the external environment and the potential impact on the business.

Sometimes, where a significant change is occurring or has occurred, it might be appropriate to include a white paper or an article talking about the change, or set up a special meeting to consider those changes. A major technology change; action such as a significant merger or acquisition by a supplier, customer or competitor; or change in government/stakeholder funding might lead you to establish a separate meeting of the Board or a sub-committee like risk/finance.

Within the disability sector, we have seen changes every few weeks or months that impact on organisations. Changes to the NDIS price guide, the Royal Commission and new quality and safeguarding requirements are just a few recent examples.

Making a report on market conditions a regular part of the board reporting template can help to keep the Board and management team coming back to the important strategic matters, and not to just be stuck in the operational issues.

Next month we will share more about some tools that can be used to analyse and better understand your market.

If you’d like any assistance with reviewing your market environment, please contact Andrew for an initial obligation free consultation.

 

Andrew Ellis
Business Consultant
Email: aellis@cbb.com.au
Phone: 1300 763 505

 


Governor’s Leadership Foundation Program

By Scott Mosen – Guide Dogs SA/NT

The Governor’s Leadership Foundation (GLF) Program is nothing less than an incredible experience.Bulb made up of small bulbs

Since 2004, Community Business Bureau has offered the Keith Fulton Memorial scholarship to community sector employees in South Australia who want to broaden, enhance and accelerate their leadership capability.

For me, it had an impact on many parts of my life and I would suggest that many other participants would tell you the same. It helped me to better understand and manage the grey areas that exist in our professional and personal lives on most days.

The Governor’s Leadership Foundation brings together leaders from community, business and the public service, a unique blend of people that bring different perspectives and experience, creating an environment where you cannot help but learn from others, and it will almost certainly challenge your own thinking.

During the ten-month program we were fortunate to experience many different facets of our community, from sessions on farms, in businesses, in a prison, in Parliament House, an Aboriginal community, homeless centres, Government House and more. We had the opportunity to learn about the complex issues that exist in our State and the interactions between economy, society and environment.

You could be forgiven for thinking the first few paragraphs sound like an advertisement for the program, but it’s not. I learnt more about myself than I could have imagined.

During the year, I was made redundant from a position that I was personally invested in, and while the decision was the result of organisational changes and centralisation, it still hurt a bit. But it got better. The program helped me understand that there are moments in time where you have little control, it is okay to press pause and take a breath, and that leadership is often about managing the ever-present ambiguity in our lives with care, courage and authenticity.

The guest speakers throughout the year, incredible leaders from across many sectors, were insightful and generous in sharing their successes and experience with our group; they all left an indelible impression on me.

Our facilitators across the year introduced to a host of topics, from polarities to shadow work, often gently tipping us upside down and shaking our preconceived ideas before carefully placing us back on our feet. The sessions and resources can be difficult to quantify or explain, as the sum of this program is greater than its parts. If you know someone that aspires to be a great leader, then perhaps you should send him or her the link to the scholarship.

I am grateful for the opportunity to participate in the Governor’s Leadership Foundation program and would like to show my heartfelt appreciation to the people that provided such a wonderful opportunity for me to learn and grow as a person and a leader.

GLF Registration of Interest for 2021 is now open, via the Leaders Institute of South Australia website

Thank you to everyone who supported me including the other 41 GLF participants that will continue to do great things in South Australia and beyond.

This year I have joined the wonderful team at Guide Dogs, so send me an email if you would like to learn more about us. And remember, it’s okay to paws and take a breath.

Governor's Leadership Foundation

 

Scott Mosen
Manager – Individual and Community Fundraising and Business Development
Email: scott.mosen@guidedogs.org.au

 


Governor’s Leadership Foundation Program 2019

By Mel White – Southern Volunteering SA Inc

Thanks to the support of the Community Business Bureau through a half scholarship, plus the support of the Southern Volunteering Board of Management and my own personal financial investment, I was delighted to be successful in obtaining a place to embark on the Governor’s Leadership Foundation (GLF) in February 2019. GLF is an intensive leadership program run by the Leader’s Institute of South Australia, providing development to South Australian leaders across all sectors. Each year, CBB sponsors two half scholarship for not for profit leaders, in memory of one of CBB’s founding board members, Keith Fulton.

As the opening retreat grew closer I was feeling apprehensive and excited as to what the year would bring. The opening weekend was a fabulous start to the course ahead, with highlights being the immediate – and sometimes confronting – intense examination of yourself as a leader. I was very interested to explore my fears and what was potentially holding me back, and to see that everyone else in the room had fears, despite their career stature. It was exhausting but incredibly valuable. I was able to share my Leadership Circle profile with staff and Board at Southern Volunteering SA (SVSA), asking for their help to let me know when my areas for improvement were showing up – particularly my ‘courageous authenticity’. This early sharing led to a regular scheduled feedback after each month’s GLF, at the staff and Board meetings, whereby I could cascade my learning to everybody in the organisation, thus getting more ‘bang for the buck’ on the investment.

Applied learning examples

  • Redarc visit – a scheduled visit to a large electronics company near our office base had me thinking beforehand what on earth I would gain from the session. How wrong could I be! Anthony Kittel, the owner of the company, talked about values and planning in a way that resonated with me, running a small not for profit. Following the visit, I reached out to Redarc and asked if Anthony would address our Board and staff team in preparation for drafting SVSA’s new strategic plan for 2020. He obliged and the whole team benefited from looking at our own planning through a different lens, which I believe broadened everyone’s horizons and generated more ideas than previous planning ever has. In return we also held a session via one of our Board members on innovation and invited Redarc staff to attend. We have established our first corporate relationship with Redarc, with them offering use of their meeting room for us to host future volunteer training sessions.
  • Training for volunteer managers – I was able to incorporate learning on adaptive leadership into a workshop I delivered to local government volunteer managers. One of the main issues facing volunteer managers is leading volunteers through change. An insight into adaptive leadership and cascading this learning gave a different viewpoint as to how to deal with this. Particularly the insight that people do not fear change, they fear loss. Adaptive leadership is about assessing the potential losses the change may bring and working with people to address this.
  • Reconciliation session – this session has led to us planning new exercises to incorporate into cultural training we intend to deliver with future funding, in particular a ‘privilege walk’.
  • Shadow work session – this information was cascaded to staff to look at in their own time. I certainly felt the learning around the awareness of your own personal shadow was fundamental to understanding how to engage successfully with people you generally find it challenging to interact with.
  • Environmental sessions – this put a spotlight on our practices as an organisation and, although considerably environmentally conscious already, we have made further small changes
  • Presentation skills session – a session on presentation skills also talked about values statements, learning which was brought back to the organisation and incorporated into our new strategic plan.

General summary

The Governor’s Leadership Foundation Program has given me the opportunity to interact with professionals from diverse backgrounds and sectors, giving me differing viewpoints on a range of issues. As a fairly new arrival to Adelaide, the presentations and visits have deepened my knowledge of the country and state I now call home, enabling me to understand the business, political and economic systems much better. What I have valued most of all, is the spotlight the program has put on my own leadership style and the opportunity to examine this and develop as a leader. I have also been able to cascade many of the learnings in my own organisation and out into the sector.

GLF learnings have enabled me to cope with some huge personal life changes in 2019, giving me clarity in decision making and a renewed sense of resilience. Most importantly it has given me a new network of 41 peers who I know I can rely on and with whom I share a very special bond now. I am particularly delighted to have connected with two other participants whom I now consider close friends.

 

Mel White
Executive Officer
Southern Volunteering SA Inc

 

 


Do you feel that you are paid fairly for your job?

The topic of salaries in not for profit organisations is a sensitive one. To a certain extent, we’ve shot ourselves in the foot with some of our messaging about ‘every cent you donate’ going to the cause, creating an expectation that employees in the not for profit sector should work for the love of it, rather than drawing a market wage.

The truth of it is that we are dealing with some of society’s most complex issues and it takes skill, experience, perseverance and long hours to lead and manage organisations that deliver social impact, meet stakeholder expectations and generate sufficient profit to keep your organisation afloat, and to invest in the necessities of new technologies and innovations. The move to consumer-directed care models in aged and disability services has pushed the sector further towards commercial business models, broadening the range of skills and experience needed to operate effectively.

Continue reading…


Key person risk – Is your organisation vulnerable?

If your business depends on you, you don’t own a business – you have a job. And it’s the worst job in the world because you’re working for a lunatic!
– Michael E. Gerber

Organisations can live forever, but people cannot. In the UK, the oldest not for profit organisation is said to be King’s School, Cantebury which was established more than 1400 years ago in 597.

There are many factors that contribute to the longevity of an organisation and one of them is ensuring that key person risk is mitigated.

Continue reading…


When leadership is an impossible job

Impossible leadership

As a Brit living and working in Australia, I’ve been reflecting on the mess that is Brexit, and, in the wake of Theresa May’s resignation as British Prime Minister, what it tells us about leadership, and the impossible job. Leadership – given its embeddedness in individual and organisational psychology – is a complex topic. There have been millions of words written about it, some based on sophisticated studies, and some of which are probably nonsense. What follows are my personal reflections and observations based on a 25 year career of working with leaders, and being in leadership positions myself. Central to the meaning of ‘leadership’ is that it requires followers. I’m not a fan of the term ‘followers’ because it implies subservience – definitely not something I want from the people I work with. However, leadership does require a team. You can’t lead in a vacuum, or without vision. These are the two key features that have been lacking in the last three years of the British Prime Ministership, making leadership a near impossible job for Mrs May.

  1. Leadership rests on shared vision

Rule #1 of leadership: develop a vision – or at least some common goals and objectives – that your team can commit to. With significant divisions within the UK Conservative party regarding the shape Brexit should take, Mrs May has been unable to build consensus within her own team. The same weekend that Mrs May resigned, I read articles about the Australian Federal election, and the anti-vaxxer movement. Both cited research showing that, when presented with evidence that contradicts their opinions, people hold on to their existing opinion more strongly. Our human tendency to look for evidence that validates – rather than challenges – our viewpoints, coupled with social media’s propensity to present more of what we like, means most of us live in an echo-chamber with inadequate perspective on the broader world. More dangerously, we heavily criticise politicians for changing their standing on an issue, making them reluctant to actually listen to evidence and shift their position. One British political commentator, Peter Oborne (who was a Brexiteer) has publically changed his stance on Brexit and urged others to do the same. Although his story has been widely shared, it’s had little impact. Instead, positions have become more entrenched and more polarised, and the behaviours more vicious. Little space is left for negotiation or compromise, and there’s scant hope of creating a shared vision across the ‘team’ responsible for delivering Brexit.

Shared vision depends on diversity and a healthy culture

We hope that, in our professional lives, we operate with a more open mindset, with the capacity to take on board new evidence, and alternative perspectives. This is why diversity in teams – of experience, perspectives and thinking styles – is so important. Challenging and testing assumptions is critical to busting groupthink and building a robust, shared vision that everyone can get behind. But to build a consensus, you need a safe environment for constructive challenge and considered debate. It’s pretty difficult to have honest face to face discussions if everyone’s watching their back and waiting for the next manoeuvre. Which brings us to point two…

  1. Leadership requires team support

Leaders are only as good as their teams. Team support is vital to getting the work done, in thinking through challenges, in creating new opportunities, in innovating improvements. You can’t do it alone, and you certainly can’t do it if your team are fighting and undermining you (and each other) all the time. This has clearly been another major challenge for the UK Prime Minister. It’s not necessarily a bad thing to have people in your team that want your job (and who have the competence or potential to do it). They can stretch you as a leader and build a pipeline for succession. What’s not good is having people that are openly hostile and trying to unseat you. Exit Mrs Theresa May, British PM.

Build a stronger team with clear behavioural expectations.

While we would hope for better behaviours in the workplace, people’s professionalism can’t always be assumed. A behaviours framework that sets explicit and objective expectations of workplace behaviour – towards each other, clients and stakeholders – is useful here. Formalising a behaviours framework gives you criteria against which you can recruit and select new employees, and manage those whose behaviours undermine the integrity and values of your organisation.

Support for Leadership

Whilst we hope that the febrile environment of national politics is not played out in not for profits across Australia, organisation cultures – and organisation leaders – do need to be nurtured and cared for to keep them healthy. You can read more about how to avoid a toxic workplace here.

If you have concerns about the culture in your organisation, or you’re a leader that needs a bit of external support, get in touch with Jane:


Jane Arnott
General Manager, Consulting and Business Services
Email: jarnott@cbb.com.au
Phone: 1300 284 364


Is your workplace toxic?

Danger sign on office door

It was disappointing, but unsurprising, to read recent articles in Pro Bono and Third Sector on the toxic culture at Amnesty’s International Secretariat in the UK. The response of the Australian Unemployed Workers’ Union was similarly unsurprising – effectively stating that toxic work cultures are present in the Australian not for profit sector too.

Continue reading…