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High demand for board positions for CFO’s

High demand for board positions for CFO’s

CFOs to participate on corporate boards is increasing.

Seventy-nine per cent of CFOs are experiencing increased demand for their expertise on corporate boards, according to an Ernst & Young survey of 800 global finance chiefs. CFO and Beyond: The Possibilities and Pathways Outside Finance communicated the results of the survey and a study of 347 companies worldwide with annual revenue over $5 billion.

Current or former CFOs make up 14% of board members of the companies studied, up from 8% in 2002. And 41% of audit committee chairs are current or former CFOs, up from 19% in 2002.

The desire on the part of CEOs to have finance professionals look beyond their functional silo to collaborate effectively on strategic decisions was revealed in the CGMA report Rebooting Business: Valuing the Human Dimension. Those same skills are sought by corporate boards, and CFOs are supplying them.

Jim Ladd, CPA, CGMA, senior vice president of finance and operations at the Institute for Systems Biology in Seattle, estimated that he has served on about 18 boards during his career. His current board responsibilities include an audit committee role for a New York Stock Exchange-listed company, a lead independent director position with a privately owned company in Seattle, and participation on two not-for-profit boards.

He said finance executives can contribute a lot to boards.

“They’re generally sought out initially because of finance background and a knowledge of financial reporting and audit risks and that sort of thing,” Ladd said. “But CPAs have a broader background than that. And people discover that.”

Audit committee a good fit

Finance skills make CFOs ideal candidates for audit committee positions. In many jurisdictions, regulatory requirements demand that at least one audit committee member have financial expertise to keep abreast of evolving accounting standards, risks and regulations.

Public companies listed in the United States, for example, must disclose whether they have at least one financial expert independent of management on their audit committee. The United Kingdom’s Corporate Governance Code says a board should satisfy itself that at least one audit committee member has recent, relevant financial experience.

This can be a benefit and a frustration to CFOs. Eighty-one per cent of them say finance leaders are good choices for audit committee jobs because of their finance acumen. But CFOs want to make sure their skills in strategic development and other areas are recognised, too.

“Some of them can be a little insulted that the breadth of their experience as CFO is not necessarily recognised,” Gerard Dalbosco, an E&Y managing partner, said in the report.

Opportunity to branch out

Although CFOs already have busy jobs, about two-thirds of them reported that they have taken on, or would be willing to accept, more part-time, voluntary or non-executive roles. Twenty-seven per cent said they already have taken such a role, and 40% said they haven’t yet, but would be interested in doing so.

Scott Lampe, vice president and CFO of Hendrick Motorsports in North Carolina, serves on a few community and government boards and said he is willing to consider working on boards of companies that don’t have a lot of risk and are looking to grow organically. “I want to work with companies who share my philosophy about how a business should be run and what kind of contribution it can make in improving the communities is operates in,” Lampe said.

What do CFOs reap from serving on boards? Three-quarters of survey respondents said gaining general management or board level experience is a benefit. Other top benefits included gaining exposure to another company or industry (65%) and getting a different perspective on running an organisation (62%).

“You get to look beyond the purely financial and think more strategically about a different organisation,” Qatar Foundation CFO Faisal Al-Hajri said in the report. “You can also use these roles to play a broader role in society or the community.”

Serving on charitable and community service boards also gives CFOs an opportunity to give back to the community. Mick Armstrong, CPA, CGMA, recently agreed to serve as treasurer on the board of directors of the chamber of commerce in Meridian, Idaho, where he is employed as CFO of Micro 100 Tool Corp.

“We as a company are committed to the community and realise that just our business environment, the quality of life for our employees, all is wrapped up together,” Armstrong said. “So we choose to be involved in the community.”

Protection from liability

Ladd said a key question any potential board member should ask before considering a seat on a board is whether the organisation carries liability insurance for its directors and officers. He said risk exists even at not-for-profit organisations, so board members should make sure they are protected.

In addition, Ladd said, it is important to make sure you are working for an organisation that supports your involvement on an external board. And you need to have the time and energy to fulfil your board duties in addition to your regular job.

Armstrong, for example, said his duties as chamber of commerce treasurer are made easier by Micro 100’s recent hiring of an accounting manager with a public accounting background. As Armstrong moves toward more of an executive leadership role with his company, this distancing from Micro 100’s daily accounting activity also has helped him find more time – early in the morning, at lunchtime and on weekends – to devote to his board duties.

Ladd said he does a lot of his board work during evenings and weekends.

“I sometimes joke with my wife when I come home at night that I’m starting my second job,” Ladd said. “…But most of the meetings are during the day, so you do have to have an understanding employer. That puts some strain and requires extra time in your life. There is no doubt about that.”

Source :GCMA

Strategies to use analytics for competitive advantage

Strategies to use analytics for competitive advantage

Organisations are building momentum for the use of Big Data by integrating data analytics into their strategy in small projects that deliver substantial results, according a new report.

Almost all respondents – 96% – said that analytics will become more important to their organisations in the next three years, according to a Deloitte report based on a mix of 100 online surveys and 35 interviews conducted with senior executives at 35 companies in North America, the UK and Asia.

Although analytics already is an important resource for many companies, analytical technology remains immature and data under-utilised, according to the report. Getting buy-in for further projects is essential, so analytics leaders are starting small.

“Projects that demonstrate analytics’ ability to improve competitive positioning help these initiatives gain traction across the enterprise,” Deloitte Touche Tohmatsu Limited’s Global Analytics Leader Tim Phillipps wrote in the report.

Companies can prepare themselves to use analytics for competitive advantage, according to the report, by using the following strategies:

  • Acquire the right talent now. Talent for analytics and Big Data is in high demand. Talent shortages may become more of a barrier to analytics implementation as more companies use data to drive more processes and decisions.
  • Tie analytics to decision-making. Better data and analysis don’t necessarily result in better decisions. Specific initiatives to improve decision cultures and processes, along with changing the understanding and behaviours of front-line workers, lead to better decisions, the report says.
  • Apply analytics to marketing and customers. Finance operations are the most frequent area of analytics investment, with implementation by 79% of respondents. Marketing and sales groups, at 55%, are the second-most frequent analytics users, and the report says the best financial returns from analytics often come from marketing and customer-oriented applications.
  • Coordinate and align analytics. There is little consistency among companies with regard to who oversees analytics initiatives. Business units or division heads (23%), no single executive (20%), CFOs (18%) and CIOs (15%) were most commonly cited. More co-ordination may be needed to realise the full benefits of data throughout the organisation.
  • Create a long-term strategy for analytics. While current analytical processes are being implemented, a multi-year plan for the growth of analytical capabilities – linked to strategy development – will help organisations better use data over time, the report says.

TOP key concerns keeping directors up at night AND How board can address them

TOP key concerns keeping directors up at night AND How board can address them

Concerns on board members’ minds are similar across the globe, the surveys suggest. Here are the top four:

Managing cybersecurity. “In my opinion, and as reflected in the two surveys referenced, cybersecurity is an area of focus for most boards,” Pickering said.

New digital technologies and cybercrime were two of the three top concerns amongst respondents in the InterSearch survey. The PwC survey found that cybersecurity is top of mind for US directors, with 95% of respondents saying their board is preparing for cybersecurity incidents and two-thirds (67%) saying their board is receiving more reports on cybersecurity metrics. Among the tactics boards are using to address gaps are increasing cybersecurity budgets (57%), engaging third-party consultants or advisers (56%), and providing directors with additional education opportunities on cybersecurity (66%).

The PwC survey suggests that increasingly, directors want the entire board to oversee cybersecurity instead of allocating the responsibility to a smaller group, such as the audit committee. In 2017, half of directors said the audit committee was responsible for overseeing cybersecurity, but in 2018, that number fell to 43%. In 2018, more than a third (36%) said the full board has taken responsibility for cybersecurity, up from 30% last year.

In Pickering’s experience, cybersecurity has best been overseen by the risk committee. “It’s such a specialised area, we really need people who are involved in risk oversight on a more regular basis,” she said, adding that the full board gets regular reports and participates in drills. According to the survey, just 34% of directors said their companies had staged crisis management drills or simulations.

Refreshing the board. Serving as a director is more demanding than ever, said Pickering, who was appointed to her first board two decades ago. “It takes a lot of time. You have to stay informed, read the journals, and make sure you are on the leading edge of what’s coming down the pipe. I believe every director needs to be fully engaged.”

But not all directors are as engaged as colleagues expect, both surveys found. Just 10% of the respondents in the InterSearch survey thought the competencies of current board members matched the competencies needed for the future, and 32% suggested their boards needed alterations. Competencies respondents felt were needed more on the board were digitalisation and new technologies (24.3%), innovation (12.2%), and customer orientation (9.3%).

In the PwC survey, 45% of respondents said at least one board member should be replaced. Directors age 60 or under were also more likely to say a fellow director should be replaced (52%) compared with those age 61 or older (43%) who wanted to replace a colleague. Among their chief complaints about colleagues were directors overstepping their roles (18%), being reluctant to challenge management (16%), negatively impacting board dynamics with their interaction style (14%), and lacking the appropriate skills or expertise for their role (12%). At the bottom of the list, 10% of respondents said they thought advanced age had diminished a colleague’s performance, which ties into long-standing debates about mandatory retirement ages and director term limits.

According to the PwC survey, directors think both mandatory retirement ages (73%) and term limits (64%) are effective strategies for refreshing boards, but less effective than a leadership focus on board refreshment, as well as assessments of the board, committees, and individuals.

PwC recommends annual assessments to identify directors whose expertise no longer aligns with the company’s needs. Less than one-third of respondents (31%) said their boards already use director assessments, but another 46% said they thought the board would be willing to adopt their use.

Avoiding corporate culture crises. Corporate culture is often thought of as the “tone at the top”, but according to the PwC survey, most directors think cultural problems can start both at the executive level (87%) and in middle management (79%). That’s why it’s important to offer employees at all levels opportunities to offer feedback, such as with an anonymous survey, Pickering said.

“You shouldn’t be afraid to ask your employees these questions,” Pickering said. “You need to know if there’s a potential issue. It’s good for culture and the health of the company.”

More than 80% of respondents in the PwC survey said their companies have taken action to address culture concerns, many by enhancing employee training (60%) or improving whistle-blower programmes (42%). But some organisations still are missing the mark by using ineffective tools.

According to the PwC survey, 64% of directors said they evaluated company culture using their intuition or “gut feelings”, even though just 32% said this was a useful approach. Another 63% said they looked to employee turnover to get a read on work culture.

PwC recommends that boards review the quantitative and qualitative metrics the company may already measure to identify gaps and ensure organisational culture is a regular topic on the full board’s agenda. Even if elements that contribute to organisational culture, such as ethics or compensation, are broken off and discussed in committees, the full board should discuss concerns that arise as part of their broader oversight of culture.

Determining the value of diversity. “Gender diversity on boards is still not where it needs to be,” Rand said. “Increased diversity on boards should not be the result of a box ticking or a public relations exercise.”

Almost all directors (94%) in the PwC survey agreed that board diversity brings unique perspectives into their discussions, and 91% said their boards are taking steps to increase diversity on the board, which is a slight increase from last year. However, about half the directors surveyed also said they thought efforts to increase diversity on boards are driven by a desire for political correctness (52%) and that shareholders were too preoccupied with this issue (48%). About a third (30%) said diversity efforts result in boards nominating extraneous candidates, and 26% said diversity results in unqualified candidates being nominated.

In the InterSearch survey, 43% of respondents reported changes in board membership that had already taken place to make the boards more diverse — 67% were driven by the wish for greater gender diversity, 46% to promote greater diversity in competencies, and 25% to provide greater diversity in nationality.

“Being a female, I understand and appreciate diversity,” said Pickering, who was the sole woman on the board for Hancock Whitney Bank for years. “You want to have a diverse board; I believe it makes a huge difference in how boards operate.”

Among attributes, respondents in the PwC survey placed the most importance on gender diversity (46%) compared with racial and ethnic diversity (34%) and age diversity (21%).

PwC recommends that boards consider diversity whilst developing strategies for board refreshment. Boards often recruit new directors by relying on recommendations from current ones, which limits results. The firm encourages boards to look more broadly and consider recommendations from investors rather than board members, and find candidates outside of the corporate world, such as those who have served in the military or worked in academia or at a not-for-profit.

To her board’s credit, Pickering said, it has added two female directors in the last two to three years, including one who was featured in Savoy magazine as one of the “2017 Power 300: Most Influential Black Corporate Directors”. “We partnered with a search firm and found great talent,” Pickering said.

 

How visionary CFOs approach tech investment

How visionary CFOs approach tech investment

Customer experience

Digital transformation is on the minds of CFOs, who expect to invest more in advanced analytics and artificial intelligence (AI) that can transform their businesses by improving customer experience.

That’s according to a recent Grant Thornton report, which shows that 69% of CFOs and senior finance executives plan to increase investment in technologies that quicken business change. CFOs themselves will need to have more technical skills, and they are divided in how to improve their overall workforce’s financial and technical expertise.

“It’s really a question of who’s more visionary as a CFO in moving forward with their products and services and reaching their customers,” said Srikant Sastry, Grant Thornton’s national managing principal for advisory services.

IMPROVEMENT TIED TO DIGITAL INITIATIVES

Companies that have figured out a way to reach customers more effectively through digital advances are reaping benefits. In one notable increase, Costco saw its second-quarter 2018 e-commerce sales grow about 29% year-over-year, to $1.5 billion, CFO Richard Galanti told analysts and reporters on a recent earnings call.

Additionally, firms that embraced digital transformation averaged a 55% increase in gross margins over a three-year period, according to a 2016 Harvard Business School study. Companies that were slow to adapt generated lower margin growth on average (37%) during the same period.

Meanwhile, International Data Corporation estimates that, by 2019, enterprises will spend $1.7 trillion on digital transformation — a 42% increase compared with 2017.

A year ago, Sastry said CFOs likened strategising on digital transformation to gazing into a crystal ball. Now, he says they are trying to gain a clearer picture of what is inside the sphere.

Accordingly, CFOs are not necessarily seeking digital transformation to improve efficiencies in their IT systems. The goals now are to enhance the customer experience, grow the business, and outperform the competition, according to the Grant Thornton report.

CHANGING THE VIEW OF ANALYTICS

CFOs have recognised that they were not thinking enough about analytics. Consequently, 24% of respondents said their finance team is currently adopting advanced analytics, another 24% will do likewise over the next year, and an additional 25% plan to adopt advanced analytics within two years. But CFOs will have to adapt, too.

CFOs have traditionally been focused on operational performance, cost reduction, and business management, but now they want to drive strategy and clear a path to digital transformation by leveraging information and technology, Sastry said.

“They have to make sure that they have the right skillset and innovation to leverage advanced analytics,” he said. “So the crystal ball is still there, but I think they’re trying to clarify the fog in the ball.”

Forty-one per cent of respondents do not believe they have good financial metrics that show the return on IT investments. And only 12% strongly agree that they possess an effective system to measure financial performance tied to newly implemented technology.

The report points out tension between companies’ current need to invest in maintenance and system updates and their desire to allocate funds to new automation technologies, such as AI. Investment in AI is projected to increase significantly: Beyond the 7% who say they have already adopted AI, an additional 47% expect to adopt it over the course of five years. A similar number of CFO respondents expect implementation of innovations such as distributed-ledger technology (also known as blockchain), machine learning, robotic-process automation, and optical-character recognition within five years.

“Ostensibly, AI will help improve quality, improve accuracy, and streamline the number of people required to perform tasks,” Sastry said. “It’ll change the face of business, including financial management.”

The top IT challenges in the survey are:

  • Systems complexity, including enterprise-wide systems integration;
  • Upkeep of legacy systems; and
  • IT talent.

Regarding the talent challenge, most executives — 52% — would prefer to retrain existing staff. Twenty per cent want to recruit new, technically skilled employees, and 17% aim to outsource tech hiring.

In addition to being aware of AI concepts, Sastry said, CFOs will need to know how AI systems work and how they can improve the business through a better customer experience.

“Those skillsets have, historically, resided in the technology space,” he said. “They’ve resided in the IT shop and the CIO [chief information officer] function. So CFOs need to really embrace the technology portions of their business, or the CIOs.”

Source : FM

10 ways to generate and deliver great insights

10 ways to generate and deliver great insights

A model helps organisations deal with the data deluge and provide insights that support robust decision-making.

In a world where uncertainty is the new norm, where technology is getting smarter, where robots are automating and simulating human activity, and where big data is getting bigger, the pace of winning and losing is getting even faster. The margin for error for organisations is now even smaller, meaning high-quality decisions grounded in insight have never been more important. 

It’s true: Technology is capable of automating a lot of what we used to do when it comes to analysing data. It can even take this a step further and simulate some of our thought processes. That said, technology has one shortfall: It is not human, and generating insights is an inherently human process that needs human traits to interpret what is happening.

Faced with a deluge of data, finding a way to combine these human qualities with the tools on offer will provide organisations with more opportunities to make high-quality decisions grounded in great insights.

I propose a ten-step approach to accelerate the process of generating and delivering insights, which forms the basis of the Define-Determine-Deliver model. The model draws on a number of sources. First and foremost, it is based on my experiences of working with some of the largest insight-driven companies in the UK and US. (Deloitte defines an insight-driven organisation as “one which has succeeded in embedding analysis, data, and reasoning into its decision-making processes”.) I was able to observe best practice in the way these companies collected and organised huge amounts of diverse data, and I gained a profound understanding of performance and how they were able to engage their people to take the right next steps, which led to stronger performance.

Second, the model takes up the themes being debated by practitioners, experts, and authors, in terms of how to organise and interpret the huge, diverse data sets organisations are now collecting. And the more diverse and complex the data, the greater the challenge of communicating insights.

The model consists of three stages. The define stage will help you clarify what you need to do and why. The determine stage offers a set of principles to help you generate insights, and the final stage looks at how to deliver your message to achieve the level of impact and influence your insights deserve.

DEFINE: PLANNING YOUR ANALYSIS

1. Be clear on the value of your insights. The beginning of the insight process involves being clear about what you are being asked to analyse. Over the years of working for a number of insight-led companies I quickly came to appreciate that the significant first question was not “what?”, but “so what?” Understanding the value (the “so what”) that your insights will add helps you engage with what the person requesting the information is trying to do. When you are informed and engaged, you build a more relevant and more focused analysis plan.

Tip: If the person making the request hasn’t already outlined the “so what”, asking them “How will the analysis help?” is a good way to understand what they are hoping to gain from the insight.

2. Partner with an expert. In my experience, those who seek help from someone who knows the particular area of operations well deliver the best insights. They could be a call-centre agent or warehouse manager, for example. Share what you are trying to do with them and ask their opinion. Their support can come in many forms. They may share their experiences of the topic being analysed, may highlight obvious pitfalls, or simply confirm that what you are doing is on the right track.

Tip: Ask the person making the request to recommend the right contact. Once you have a partner, be curious, ask good questions, and listen well to what they have to say.

3. Create a hypothesis. It is important that when you are doing your analysis, you don’t try to analyse all the data available because this could take too long. The process of forming a hypothesis will help you think about the relationships between your data, which should end with your forming an opinion (your hypothesis) on the answer you might find once you have done your analysis. A clear hypothesis, therefore, provides you with an indicator of what to look out for when doing your analysis, helping you to stay focused, whilst reducing any wasted effort.

Always create a hypothesis statement that captures this belief before you start analysing your data (eg, “product availability has decreased because supplier “˜out of stocks’ have grown as the cost of raw materials has increased”).

Tip: Take time to run through your hypothesis with your expert (from tip 2) or any other relevant people. This will help ensure you have a reasonable and balanced hypothesis, and help to avoid confirmation bias.

4. Visualise your analysis. It is all too easy to just dive in and start analysing data. Before you begin, be specific about what you need to analyse. This involves visualising what your analysis will look like once it is finished.

Tip: Get a sheet of paper and sketch out what your data will look like once you have collected it all, listing the rows of data down the left-hand side and the column headings across the top. Then sketch out the analysis you will carry out or the techniques you will apply. For example, do you plan to create a column of data that looks at the difference between two data points or a graph of certain variables? Be as specific as you can, as this will really pressure test what you are planning to do and whether it will add value.

DETERMINE: DOING YOUR ANALYSIS

5. Collect, clean, stay connected. Developing a plan of how and when you will collect your data is important, as this will help to ensure you have everything you need when you are ready to start analysing. Before you start the analysis, you will need to clean your data to ensure it is accurate, complete, and in the right format. There is nothing worse than unclean data undermining the credibility of your insights. Finally, staying in touch with your expert partner from the previous stage will ensure you get the most out of your analysis.

Tip: It is helpful to have a few (but not too many) expert partners. Picking partners with different types of experience is a great way to get a variety of viewpoints, leading to a fuller piece of analysis.

6. Analyse well. In practice, every piece of analysis is different. Therefore, adapt your approach using these key principles:

  • Let the data lead you to the insight. Don’t assume you know the answer before you have done your analysis; this could really bias your analysis. Be open-minded and let the data lead you to the answer.
  • If there is an elephant in the room, say so. Sometimes, when it comes to analysis, we don’t want to accept the most obvious insight; we yearn for something more detailed and more profound. But sometimes the most obvious answer is the right one, and it’s OK to accept it.
  • Correlation doesn’t equal causality. Take care when verifying whether two variables are linked.
  • Focus on what the business needs. If the person asking you for insights needs them in two days to assess an opportunity, then focus on what can be done in that time frame, rather than on the ideal piece of analysis you would produce given more time.

Tip: When analysing data, it is often more useful to focus on trends rather than on single data points. Trends often give you a more reliable view of what is happening. For example, if you are trying to determine which stores are driving low product availability over the year, then focus on the stores that are experiencing consistent decline over the time period (those trending downwards) rather than focusing on one store that had a low score for a small amount of time. (It would be interesting to know why, but don’t miss the big trends contributing to your low product availability.)

7. Bring it all together with a conclusion and indicated actions. Once you have developed some good insights, the next step is explaining what is happening and how the business should respond. This can be a daunting task for finance teams, as the fear of suggesting the wrong thing can create a lot of pressure. Grounding your “indicated actions” in insights will give you confidence in your proposal.

Tip: Seek to ensure your conclusion-indicated actions are correct by writing them out using the following structure: dilemma, insight conclusion, indicated actions:

“I conclude that the reason for ‘the shortfall in sales’ (the dilemma) is because store staff are struggling to get the stock out onto the shelves as the increase in customer numbers means they do not have enough time to restock (the insight conclusion). I propose a pilot project to increase staff in the stores with the biggest declines in sales. If this is successful, I propose a wider review of resourcing in our stores (the indicated actions).”

DELIVER: COMMUNICATING YOUR INSIGHTS

8. Prepare a clear insight message for your audience. The previous step, in which you generate conclusion-indicated actions, is based on what is happening and what you need to do next. The critical difference in this step is that you need to build an insight message to convey to your audience. The insight message is often the only part of your process that the audience sees, and if you want to achieve the right impact and influence, the message needs to be clear and engaging.

Tip: Do the “elevator test” to see if you are ready to deliver your insight message. If you were in the elevator with your manager, could you convey your message (the dilemma, the insights, your recommendation) clearly and succinctly in the time it takes to reach the right floor, all in a way that will resonate and inspire the audience to act on your findings?

9. Craft an engaging message. If you want to deliver an engaging message, then logic alone will not be enough. Engagement requires you to connect to people’s emotions. Your message may well have a good structure, clear visuals, clear arguments, and recommendations grounded in your insight findings. But you also need to build an emotional connection by finding the right tone, forming a connection based on shared aspirations, or focusing on how the proposal will directly benefit the insight requestor and their teams.

Tip: Stories are a good way of helping to deliver a more engaging and memorable message. Stories grab people’s attention, bring messages to life, and help link insights to the big picture. For example, if you are trying to put new customer service metrics into context, you could use statistics. “Customer service scores are at 60%. This is a reduction of 10% versus last year, and we need to do better.” Alternatively, you could tell a story that brings your numbers to life. “Last year we were not at our best for 40,000 customers. That is two out of every five customers that came to us. Here are some of the things our customers said and how we impacted their lives by not being at our best …”

10. Build an insight-led culture. Having a framework is a good way to accelerate the insight process. In the insight-led companies that I have worked for, this framework was embedded into the beliefs of their people, which was demonstrated every day in their behaviours. This level of engagement with the principles of the framework allowed these companies to accelerate insight generation, as well as to adapt those principles to address a particular problem when required.

Tip: Always be a role model for insights, giving your teams or colleagues the confidence and the right to be curious and to always seek out the underlying truth as to what is driving performance.

Source : FM

How To Predict Which Of Your Employees Are About To Quit

How To Predict Which Of Your Employees Are About To Quit

You’ve got more data on how your team members are behaving, thinking, and feeling than you probably realize. Here’s how (and why) to tap into it.

How To Predict Which Of Your Employees Are About To Quit

“People analytics” may sound daunting, expensive, and difficult—something the ordinary manager can’t possibly concern herself with even if she’d like to. But the field isn’t necessarily as high-tech as you might imagine.

There’s more untapped data, of some kind or another, floating around your workplace than you probably think. With a little extra effort to spot behavioral patterns, you may be able to get ahead of some of the more common issues, like employee attrition, that can hurt your workplace and your organization’s bottom line. Here’s how.

PHONING IT IN

Turnover tends to be high at call centers, where many people take jobs temporarily, then quit when once they’ve earned enough to return to school or cover a big expense. Lower attrition means higher performance, so managers are interested in predicting and reducing attrition.

My company helped one call center analyze some basic data that it was already collecting: the length and number of calls operators were taking, and how often those calls got escalated or resolved. At the end of each shift, employees received a “report card” reflecting those data points. Since the call center employees’ compensation was linked directly to that performance data, they were highly incentivized to earn good marks.

But a low overall score wasn’t necessarily a sign that an employee was performing poorly, getting paid less, and therefore planning to bounce. Analysts found two specific factors were much more predictive: increased time spent on calls, and fewer calls ending in resolutions. Those operators were just going through the motions.

So the call center’s managers sent supervisors to meet with each operator within a day of those two indicators popping up. Most, however, hadn’t yet reached a point where they were considering quitting. But they often didreveal job frustrations that were usually easy to address, a like a faulty headset or having to work an undesirable shift. Supervisors were empowered to fix most of these problems, and over the next few months, the call center’s attrition rate fell by half.

FEELINGS AND ACTIONS YOU’RE NOT PICKING UP ON

“Sounds great,” you might be thinking, “but I don’t run a call center.” Even so, you can probably start looking for small, early signs of dissatisfaction that are relatively easy to remedy once you spot them. Here are two:

1. Ask employees how they’re feeling–continuously. Measuring “perceptions” might seem impossible, but it’s not. To collect data on something like this, you can use pulse surveys, run focus groups, or take snap polls using common Slack integrations like Polly.

Some large, physical office spaces even go analog and install those sentiment buttons you might have seen in airports or hotels. They’re simple, inexpensive devices that ask a question like, “How was your day?” and provide red (bad), yellow (okay), and green (good) buttons for people to press quickly as they go about their day. Whatever method you use to gather sentiment data, aim for something easy and anonymous, and watch for trends, not absolute values.

2. Look for dips in hours worked or effort spent. A basic place to start is total login time, but unless your office requires workers to “punch in” or “out,” introducing software to monitor exactly who’s sitting in front of their computers when can feel like surveillance. So start with the data you’ve already got on hand but may not be analyzing fully: How much sick leave is being taken this quarter, compared with last quarter or with the same quarter the prior year? How much annual leave is being requested (regardless of what’s actually granted)?

These are usually good indicators of who may be on their way out. Sick days can be requested to attend interviews or to burn up unused leave balances—or maybe that person is just feeling burned out and needs to take some mental heath days to deal with on-the-job stress.

THE LINKEDIN TRICK

There’s a third method, too, that I’ve seen work wonders. A well-known tech firm that recently worked with my company was losing its precious engineers. Recruiters who spent a lot of time looking for coders on LinkedIn were already in the habit of noticing recently updated “Skills” sections, interpreting that as a sign an engineer might be interested in hearing about new opportunities. So it occurred to the tech company to apply this principle in reverse.

The managers realized that their own coders were probably doing the same thing–updating their LinkedIn profiles whenever they were ready to hear from other firms. So the company wrote a simple script to capture the LinkedIn update feed for the profiles of around 2,000 of its top-performing coders. That let managers to react quickly whenever one of those employees added new info. Similar to the call managers, supervisors then swooped in to discuss the career goals and professional-development opportunities with the coders who might be wavering.

As a result, turnover fell, and many of those engineers were moved to assignments or projects that suited their talents and interests much better.

USE YOUR DATA WISELY–AND FAST

Whatever patterns you decide to watch, make sure you’re gathering data for two weeks to two months, so you’ll have enough information to perform a reasonable analysis.

But once you do spot a certain trend, don’t wait to act. Start looking for the source of the dissatisfaction in the corner of the company where you’re picking up on it. Maybe a certain team just really needs flex schedules or better recognition, or they feel starved for information. Often the most effective remedies aren’t even monetary. Once you’ve determined a solution, measure its effectiveness to make sure it continues to produce the outcome you’re hoping for.

At the end of the day, most employees all want the same basic things. Done right, people analytics starts from that humane premise and doesn’t reduce people to numbers–it just helps companies understand why certain situations cause people to keep behaving in certain ways. Ideally, it’s good for everyone when there are fewer surprises, and there’s more happiness to go around.

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Delegating like a boss

It isn’t always easy. Delegating can be difficult because many people link accomplishments with working hard. They may also fear being viewed as bossy or lazy. But delegation can help advance careers. “If you’re focusing on the most important things that need your attention, you’re going to make more impact on the organization and more impact on your career success,” said Joel Garfinkle, an executive coach and author of Getting Ahead: Three Steps to Take Your Career to the Next Level. “Shift the mindset from ‘I’m going to do everything myself’ to ‘I’m going to let people learn.'”

Here’s how to get started:

Think about what you can give up. Consider what only you can do and keep that. Anything confidential, essential, or sensitive likely needs to stay with you. Client meetings might be kept, but scheduling those meetings could be passed along to someone else. But don’t focus on just the mundane tasks, Garfinkle said. Delegate things that will help colleagues enrich their jobs and feel empowered.

Identify to whom you can delegate. People have to have the “skill and the will,” said Lisa Barrington, a workplace strategist and speaker based in Phoenix. An employee with more experience may not be interested, but a lower-level staffer may be willing to take on the task. You can also consider peers at your level, provided they can benefit from the work. Remember that everyone can “get bored if they’re not trying new things or learning new things,” Barrington said. Of course, beware of overloading someone.

Do the heavy lifting early. To ensure the task is done properly, delegating requires ongoing communication. First, explain that this as a growth opportunity, provide detailed instructions, and be specific on outcome expectations. “The more you’re involved upfront, the less time you need to be later on,” Garfinkle said. Then, set up check-ins to discuss progress and issues. Express gratitude for a job well done.

Alter guidance. Be available for questions, and be willing to make adjustments as needed. Then, as the person masters the task, reduce your oversight. “You can pull back on the direction to more of a guide,” Barrington said. Then, let them “come to you if they need to.”

Workplace Health and Safety a Vital Component of Mature Risk Management

Businesses of all types are being transformed by technology, and so are the many kinds of workplaces that support their operations. Changing business strategies and increased productivity lead to rapid changes in process, which often means that executives lack a full understanding of the impact on the health and safety of employees and third parties. Workplace health and safety risks are among the most critical to address, as they can result directly in loss of life and limb—not to mention chronic injury and illness, work stoppage, lawsuits, and damage to brand reputation.

Traditionally, workplace health and safety matters have been addressed by dedicated safety teams working apart from the business, and risk management teams relying on spreadsheets, checklists, and incident reports as tools of the trade. As the number and interdependence of risk factors increases, this is no longer a sustainable approach—the cost of managing each regulation, requirement, change, or incident out of siloed programs will continue to rise, while effectiveness erodes.

The growing influence of international standards for risk management (e.g., ISO 31000, ISO 9001 and ISO 45001), and emphasis on integrated risk management as a key factor in cultivating business resiliency have created prime opportunities for workplace safety professionals to raise awareness of their role in risk management and of the impacts of accidents. With the right processes and technology, safety professionals can help protect their organizations from a range of negative outcomes from employee absences to insurance premium increases to fines and lawsuits.

With this in mind, health and safety leaders, C-level executives, and boards should be incorporating workforce well-being into strategic planning, corporate responsibility programs, and risk maturity initiatives across the enterprise. Governance, risk management, and compliance (GRC) efforts are not abstract—they are interrelated, and each function can be made stronger when addressed holistically. Carrying out integrated GRC initiatives (including health and safety programs) involves orchestrating and centralizing numerous interdependent policies, processes, and reports.

Integrated risk management should raise continuous, data-driven improvement of health and safety measures to the same level as other operational risk measures (e.g., cyber security, outsourcing, fraud prevention). Supporting these efforts with a systematic and streamlined process and toolset for documentation, tracking, training, reporting, and analysis is fundamental to incorporating them throughout the enterprise.

Integrated risk management processes help organizations foster accountability and collaboration, form a clear and complete picture of risk, cover compliance obligations more efficiently, reduce safety and health incidents, and improve incident response. The longer problems remain unaddressed, the greater the liability and risk exposure. Ineffective responses to workplace health and safety issues can lead to repeat accidents, illnesses, absences, loss of productivity, higher fines, higher insurance premiums and increased scrutiny from regulators and business partners. The GRC processes that need to be optimized include: performing risk analysis and business impact analysis; maintaining and reviewing process and safety documentation; investigating and reporting on accidents, injuries, illnesses and near misses; analyzing injuries and issues by site to pinpoint and measure risk; automating generation of incident forms for outside agencies (e.g., OSHA and HSE); executing job hazard analyses; managing site inspections and remediation actions; and ensuring employees are aware of safety processes.

There are few excuses for the blind spots that lead to major workplace health and safety issues. If we integrate policies and controls with processes and systems across the enterprise, we can gather and analyze metrics on just about every aspect of operations, as well as incorporating employee input and best practice guidelines. GRC technology solutions that include a health and safety component can help automate and bring a new level of intelligence to the associated risk analysis.

Enterprise-wide data integration enables predictive analytics capabilities, making it possible to identify health and safety issues and communicate them to executive decision-makers before they turn into incidents and losses for the company. Data captured during risk or safety assessments, and investigations into near misses and incidents generates insights to be incorporated into safety protocols and job training. The same types of analyses can be applied to vendor and supply chain management to improve health and safety outcomes throughout the value chain.

Data-driven safety programs should also include mechanisms for gathering input and feedback from the workforce. Whistleblower capabilities, responsive communications, and reliable procedures for following up after an incident or near-miss cultivate a safety-first environment. The ability to reassure workers that their wellbeing is a management priority positively impacts everything from recruitment and retention to incident rates, productivity, and corporate reputation.

Organizations cannot reach a mature, effective level of risk management without incorporating health and safety into their operational risk programs. An informed and comprehensive view of risk leaves enterprises better prepared for planned growth as well as unexpected opportunities and challenges. To strengthen business resiliency and sustain competitive advantage, executives must prioritize the continuous monitoring of health and safety risk and compliance across all business units, partners, and vendors. Mature risk management not only saves lives, but also lowers insurance costs, increases productivity and protects the sizable investments companies make in acquiring, training, and retaining their workforce.

Keys to Embracing Disruptive Technology

Keys to Embracing Disruptive Technology

In taking stock of potentially disruptive technologies, CEOs should be ready—really ready. Reinhard Fischer, chief of strategy for Audi of America, urges CEOs to “stop denying reality, which is what taxi operators did with Uber. Now Uber has taken about one-third of the taxi traffic in big cities.” Disruption is happening faster than ever. “Before when you talked about technologies coming, you’d name one or two,” says EY global chief innovation officer Jeff Wong. “Now there are 10, and they’re all relevant and important. That’s what’s really changing for the CEO.”

Here are some key pointers for CEOs looking to embrace disruptive tech solutions:
Don’t panic. The world is rife with examples of businesses where technological revolution fell short of its warnings. Early participants in e-learning, for example, still haven’t made money, says Julian Birkinshaw, a professor at London Business School. “Sometimes we forget about industries that haven’t been turned completely, immediately upside down. You have to make an ultimate commitment to new technology, but it’s not like you necessarily have to do that immediately.”

 

1. Take a long and broad view. Wall Street may demand rapid returns but woe be unto the CEO who concedes wholesale. “You’ve got to try to optimize for 10 years from now, not even just one to two years ahead,” warns Guo Xiao, CEO of the consulting firm ThoughtWorks. CEOs must also broaden their transformation push to encompass relationships with suppliers, customers and other external constituencies. “The greatest success comes through building an ecosystem of alliances and not thinking that the impact of technology is all within the four walls of your company,” says Nichole Jordan, national managing partner of markets, clients and industry for Grant Thornton.

2. Disrupt yourself. Critically evaluate your existing business model much as a hacker would try to take down a cybersecurity network. “Find out what the weak points are that you don’t see so that a disruptor can’t take advantage of them—and so you can disrupt yourself,” says Fischer.

“YOU’VE GOT TO TRY TO OPTIMIZE FOR 10 YEARS FROM NOW, NOT EVEN JUST ONE TO TWO YEARS AHEAD.”

3. Seed early successes. Enable a “culture of testing and learning new technologies, not necessarily passing and failing them,” advises Roger Park of EY. Former Humana innovation chief Paul Kusserow, now CEO of Amedisys, recommends testing technologies with “people in the company who have a very specific problem that a technology could solve—more acute than anywhere else in the company—or who believe that a process needs to be changed and this could help it. Then you need to make sure these people get not only the benefit of the innovation but credit for taking the risk.”

4. Create emerging-tech scrums. EY’s Jeff Wong suggests charging a team with “actually getting dirty with tech and playing with it, trying to address and answer problems.” Audi of America created a “digital team where we pull all the bright young minds that are working on digital topics and merge them with people who do strategy for the long term,” Fischer says. “It’s a little lab where we play around with all kinds of ideas and ask ‘what if?’ questions.”

5. Expect resistance. “There are incredible forces working against innovation” in any organization, Kusserow says. “Technology has to be so good that someone has to be willing to take the risk of restructuring or disassembling an existing process to which their success or maybe their careers may be tied.”

6. Don’t get hung up on a specific technology. Resist the urge to make a big bet on the latest buzzword technology, says John Mullen of CapGemini. “Don’t prepare yourself to chase certain technologies, but [rather] to get better decision making in your organization, because the technologies that pass through your ecosystem are going to be different tomorrow than today.”

7. Focus on building capabilities. CEOs need to see their roles as “building an organizational culture that can rapidly figure out which technologies are advancing, what the paybacks are and what the future leverages of those technologies are in order to determine whether they’re part of the business strategy going forward,” Mullen says. Consider putting tech people on the board and add the CIO to the company’s core management team. “You need to infuse specific technology skill sets in management—people who understand digital as well as your industry,” says Jeanne Beliveau-Dunn, VP and general manager of Cisco Systems. “They need to be embedded in each business unit.”

8. Reckon with legacy IT. A company’s IT base typically must provide the computing horsepower and platforms for embracing machine learning and other data-intensive disruptors. Many CEOs get excited about a shiny new app, “but they shouldn’t lose sight of the fact that existing IT can be an enabler or an inhibitor of new digital services,” advises Paul Appleby, EVP of transformation for BMC Software. “They have to work on how to turn their existing infrastructure into a competitive differentiator. It may not be the exciting piece, but it’s what will allow you to be agile and scale and do so in a trusted environment.”

Chinese airlines poised for windfall as in-flight broadband fosters sky-high e-commerce

Chinese airlines poised for windfall as in-flight broadband fosters sky-high e-commerce

 Carriers are expected to gain a significant share of the estimated US$130 billion global in-flight broadband ancillary revenue by 2035

 

The mainland, which has the world’s largest smartphone and online retail markets, is predicted to corner a considerable share of the estimated US$130 billion of global in-flight broadband-enabled ancillary revenue forecast for airlines by 2035.

“Globally, if airlines can provide a reliable broadband connection, it will be the catalyst for rolling out more creative advertising, content and e-commerce packages”

“We can expect to see significant growth in China because passengers prefer to bring their personal electronic devices on board to access their choice of content and services, as they would enjoy on the ground,” Otto Gergye, the vice-president for Asia-Pacific at British satellite telecommunications company Inmarsat, told the South China Morning Post on Thursday.

“In-flight broadband is able to bring about tremendous customer service and revenue possibilities for airlines, brands and internet companies.”

His comments followed the release on Wednesday of a research study on the emerging in-flight market segment, Sky High Economics, by the London School of Economics and Political Science in association with Inmarsat.

Airlines in Asia-Pacific can expect to see the greatest opportunity from in-flight broadband-enabled ancillary services, with total revenue projected to reach US$10.3 billion on the back of passenger growth and wide availability of such services, according to the study.

Revenue would come from broadband access fees, advertising, so-called premium content and e-commerce sales  arrangements with companies such as JD.com and Alibaba Group Holding. New York-listed Alibaba owns the Post.

The study estimated airlines around the world currently receive, on average, an additional US$17 per passenger from traditional ancillary services, such as duty free buys and in-flight retail, food and drink sales. In-flight broadband-enabled ancillary revenues would add an extra US$4 by 2035, it said.

“Globally, if airlines can provide a reliable broadband connection, it will be the catalyst for rolling out more creative advertising, content and e-commerce packages,” said Alexander Grous, the author of the study.

A recent global survey of 9,000 airline passengers from 18 countries conducted by market research firm GfK and Inmarsat found 68 per cent of passengers in China ranked in-flight connectivity as more important than in-flight entertainment.

The survey also found the mainland airline likely to lead in providing in-flight Wi-fi services is Beijing-based national flag-carrier Air China, according to 46 per cent of respondents. It was followed by China Eastern Airlines, headquartered in Shanghai, and Guangzhou-based China Southern Airlines.

“The major airlines in China have already struck strategic partnerships with the country’s largest online retailers, such as JD.com and Alibaba Group, to serve their passengers,” Gergye said.

“These include making online flagship stores available across various flight routes and providing online payment support, such as through Alipay.”

Such demand is fuelled by how mainland consumers are more accustomed to using the internet than anywhere in the world, with 731 million users at the end of December last year, according to the China internet Network Information Centre. Of that number, 695 million people access the internet on their smartphones.

Online shopping has also remained buoyant on the mainland, despite a slowdown in the domestic economy. The country’s online retail market is predicted to grow to US$1.7 trillion by 2020, compared with US$750 billion last year, according to a report from Goldman Sachs.

“There’s no doubt that in-flight broadband will revolutionise the way we work, play and consume content whilst in the air,” said Paul Haswell, a partner at international law firm Pinsent Masons.

“There is potential for airlines to generate additional revenue, but these carriers should not just treat in-flight broadband as an extension of an in-flight shopping magazine. Instead, they should look at innovative ways to entice passengers to spend.”

At present, only 53 out of an estimated 5,000 airlines worldwide offer in-flight broadband connectivity, the study said.

China is forecast to record a total of 1.3 billion passengers flying to, from and within the country by 2035, according to a forecast made last year by trade group the International Air Transport Association.