Archive for virtual CFO

Problem-solving – Creating a culture of blameless 

Problem-solving – Creating a culture of blameless

Companies that fail exceptionally have the potential for greatness.

Finance is complex, and whenever you have complication and uncertainty, it is a given that things will go wrong at some point. When they do, the best way to deal with those mistakes is to use them to learn and grow. And the only way an organisation can be aware of issues while they’re still small-scale is to create an environment in which employees and managers at all levels feel safe voicing their concerns and thoughts.

“The reality is human beings will make mistakes,” said Amy C. Edmondson, Novartis professor of leadership and management at Harvard Business School and author of The Fearless Organization: Creating Psychological Safety in the Workplace for Learning, Innovation, and Growth. “When we’re in novel settings, beyond just mistakes, we’ll also have failures that aren’t, strictly speaking, mistakes because no one’s ever been in that situation before. The most important thing is that you hear about what went wrong in a timely way because that’s how you can jump on it and avoid larger-scale problems.”

Companies that foster a culture of blameless problem-solving have the potential to learn from what goes wrong, and also to innovate, through smart experimentation, while companies that habitually blame individuals are in danger of running into large-scale disasters without a hint of impending doom, according to Edmondson.

Here are some tips for creating a workplace environment in which people feel they can speak up about what’s happening and collectively work hard to improve and avoid big problems:

Promote smart experimentation. Experimentation is how companies innovate and develop tomorrow’s new offerings, but you want to make sure that the experimentation strategy is a smart one. Organisations should never experiment on a grand scale in uncertain domains. Experiments need to be big enough to get valid data about their viability, but not so big that the potential failure will be devastating to the business.

“For organisations to create a culture that doesn’t blame or punish mistakes, they must embrace entrepreneurship culture,” said Ebrima Sawaneh, a Lagos-based accountant and finance blogger. “Every employee should be trained and empowered to innovate solutions without fear of being punished if they make genuine mistakes. Employees should be encouraged to report any mistake, and organisations have to clearly set what is acceptable and create a line of sight.”

Once you have a clear experiment strategy of an appropriate scale, you must make sure that everyone’s expectations are aligned.

“Everyone (high and low) must know that this is an experiment, and the nature of an experiment is we don’t yet know what will happen,” Edmondson said. “Make sure everyone is aware of the fact that this may or may not work, and in both cases, what happens will provide great data.”

Invite input. Leaders need to make it clear to people that their voice is not only expected but also welcomed.

“A lot of times, especially when they are nervous that there might be layoffs, people have the tendency to hold back,” Edmondson said. “There’s an implicit belief that no one ever got fired for silence. I think the job of leaders is to flip that around. In the complex, uncertain industry in which we operate, the people that we’re not hearing from are not of much value.”

Because the tendency for employees is to remain silent about issues, leaders need to be proactive in inviting input. It’s one thing to say, “I’d love to hear from all of you,” but it’s another to turn to a specific employee and ask, “What do you think of this situation? I’d love your thoughts.”

“After painting the situation we find ourselves in in such a way that it becomes clear that voice is necessary, leaders must be proactive in asking ‘What are you seeing out there? Is there anything not going well? What are you excited about?’” Edmondson said.

Foster psychological safety. In her latest book, Edmondson discusses why it matters for company performance that people feel psychologically safe to speak up and what leaders can do to help bring it about.

“I don’t mean to say we have to get rid of all fear,” Edmondson said. “I think it’s fine to be afraid of missing a deadline or afraid of the competition. It’s not fine to be afraid of one another or the boss.”

Edmondson explained that while managers have an outsized influence on the climate at work, any employee can make a more psychologically safe space for colleagues simply by showing up with a spirit of openness, asking questions, and truly listening.

“When you listen thoughtfully to a colleague or a subordinate, you are making a difference. You are making work life that much more safe and enriching,” she said. “In addition to asking questions, when you say things to colleagues, subordinates, or managers such as ‘I made a mistake’ or ‘That didn’t work out the way I thought,’ it sets a shining example of a learning orientation. If you model a learning orientation and interest in others, you will make that small difference, in your vicinity, in helping create a learning organisation.”

Sawaneh agrees that fostering psychological safety can help create a high-performing financial organisation.

“When people fear that they will be blamed for mistakes, it can affect their active participation and sometimes result in their being too careful,” he said. “The key resource of accounting firms are their people, and when individuals are less concerned about mistakes, they will be willing to delegate, create a learning culture, become team players, and embrace change.”

Avoid stretched goals and closed ears. While there are several examples of organisations doing a good job of creating a culture of blameless problem-solving, there are also examples of companies that have faced the consequences of squelching safe and open communication.

Wells Fargo’s recent failure, in which millions of accounts were created without consumers’ consent, is one such example. According to Edmondson, the bank’s initial cross-selling strategy wasn’t fully in touch with the reality of customers’ limited wallets, which created immense pressure to have more and more products per customer, leading employees to activities that became fraudulent and problematic in other ways. Had employees felt able to speak up, push back, and say what they were learning, the strategy might have been tweaked.

“A recipe for failure is stretch goals and closed ears,” Edmondson said. “When managers, getting the messages from on high, are saying, ‘You better deliver on this,’ the implied rest of that sentence is, or else. People will deliver, at least on the illusion of creating the desired results, so then what you will often see is the illusion of good performance rather than good performance itself.”

Develop a productive response to bad news. Psychological safety in the workplace can be shattered the second a boss erupts in anger over a reported failure.

“Leaders need to train themselves not to overreact emotionally to bad news,” Edmondson said. “They need to pause, breathe, and disrupt what might be the natural, instantaneous reaction of emotion or disapproval, and say, ‘Thank you for that clear line of sight. Now what should we do next? What are your ideas? Here are my ideas.’ It’s what I call a productive response to bad news, as opposed to a natural, in many ways normal, response to bad news.”

Source : GCMA

Working For A Boss Who Supports You

Working For A Boss Who Supports You

Employers seek loyalty and dedication from their employees but sometimes fail to return their half of the equation, leaving millennial workers feeling left behind and unsupported. Professional relationships are built on trust and commitment, and working for a boss that supports you is vital to professional and company success.

Employees who believe their company cares for them perform better. What value does an employer place on you as an employee? Are you there to get the job done and go home? Are you paid fairly, well-trained and confident in your job security? Do you work under good job conditions? Do you receive constructive feedback, or do you feel demeaned or invisible?

When millennial employees feel supported by their boss, their happiness on the job soars — and so does company success. Building a healthy relationship involves the efforts of both parties — boss and employee — and the result not only improves company success, but also the quality of policies, feedback and work culture.

Investing In A Relationship With Your Boss

When you’re first hired, you should get to know your company’s culture and closely watch your boss as you learn the ropes. It’s best to clarify any questions you have instead of going rogue on a project and ending up with a failed proposal for a valuable client.

Regardless of your boss’s communication style, speaking up on timely matters before consequences are out of your control builds trust and establishes healthy communication. Getting to know your boss begins with knowing how they move through the business day, including their moods, how they prefer to communicate and their style of leadership:

  • Mood: Perhaps your boss needs their cup of coffee to start the day. If you see other employees scurry away before the boss drains that cup of coffee, bide your time, too.
  • Communication: The boss’s communication style is also influenced by their mood. Don’t wait too late to break important news. In-depth topics may be scheduled for a meeting through a phone call or email to check in and show you respect your boss’s time. In return, your time will be respected, too.

Some professionals are more emotionally reinforcing that others. Some might appear cold, but in reality, prefer to use hard data to solidify the endpoint as an analytical style. If you’re more focused on interpersonal relationships, that’s your strength, but you must also learn and respect your boss’s communication style.

  • Leadership: What kind of leader is the boss? Various communication styles best fit an organization depending on its goals and culture, but provide both advantages and disadvantages. Autocratic leaders assume total authority on decision-making without input or challenge from others. Participative leaders value the democratic input of team members, but final decisions remain with the boss.

Autocratic leaders may be best equipped to handle emergency decisions over participative leaders, depending on the situation and information received.

While the boss wields a position of power over employees, it’s important that leaders don’t hold that over their employees’ heads. In the case of dissatisfaction at work, millennial employees don’t carry the sole blame. Respect is mutually earned, and ultimately a healthy relationship between leaders and employees betters the company and the budding careers of millennials.

A Healthy Relationship With Leaders Betters The Company

A Gallup report reveals that millennial career happiness is down while disengagement at work climbs — 71% of millennials aren’t engaged on the job and half of all employed plan on leaving within a year. What is the cause? Bosses carry the responsibility for 70% of employee engagement variances. Meanwhile, engaged bosses are 59% more prone to having and retaining engaged employees.

The supportive behaviors of these managers to engage their employees included being accessible for discussion, motivating by strengths over weaknesses and helping to set goals. According to the Gallup report, the primary determiner of employee retention and engagement are those in leadership positions. The boss is poised to affect employee happiness, satisfaction, productivity and performance directly.

The same report reveals that only 21% of millennial employees meet weekly with their boss and 17% receive meaningful feedback. The most positive engagement booster was in managers who focused on employee strengths. In the end, one out of every two employees will leave a job to get away from their boss when unsupported.

Millennials are taking the workforce by storm — one-third of those employed are millennials, and soon those numbers will take the lead. Millennials are important to companies as technology continues to shift and grow, and they are passionate about offering their talents to their employers. It’s vital that millennials have access to bosses who offer support and engage their staff through meaningful feedback, accessibility and help with goal-setting.

In return, millennial happiness and job satisfaction soar, positively impacting productivity, performance, policy and work culture. A healthy relationship between boss and employee is vital to company success and the growth of millennial careers as the workforce continues to age. Bosses shouldn’t be the reason that millennial employees leave. They should be the reason millennials stay and thrive in the workplace, pushing it toward greater success.

Trends to look out for in 2019

Trends to look out for in 2019

What will the year ahead bring for you and your business?

What developments will we see in the business landscape over the next 12 months? We asked some of our faculty to look ahead and, well, there’s good news and bad… On the plus side: exciting new opportunities to do things differently and get results. Better stop reading now, though, if you’re hoping for quick fixes.

1. Companies will own less
Tammy Erickson, Adjunct Professor of Organisational Behaviour

2019 will be the year in which we’ll begin to see companies step up to the “own less” reality: identifying resources (functions, facilities, people) it makes sense to “own” and embracing a variety of flexible arrangements for others (rent, contract, share).

Notice the rapid growth of companies that rent ever-changing wardrobes, allowing customers to have exactly the clothing they need for this week’s activities. Or the number of teens and twenty somethings who are not learning to drive, content to rely on just-as-needed transport options. Watch how young people arrange to meet – not through pre-established commitments, but rather through real-time coordination, based on immediate need and convenient availability.

These behaviours make sense. Economists, beginning with Ronald Coase in the 1930s, predicted that as communication costs fell, we would own less. Today it’s easy – and virtually free – to get what you want, when and where you need it.

Smart companies will continue to own or employ full-time certain categories of resources: those that are extremely scarce, to ensure availability; those that are highly strategic, to prevent availability to others. I would also argue in favour of holding tight to the humans who perform roles that will be least likely to be taken on by technology: those who form relationships and make tacit, values-based judgements. 

But there are other categories of resources, both physical and human, that companies should begin to access in new and creative ways, leveraging today’s technology: fungible resources – particularly if demand fluctuates and if qualifications are easy to verify and, most importantly, resources for which future demand is difficult to predict and where greater optionality would have high value. 

Just as the 1980s was the decade of process redesign as businesses leveraged the power of computers, the 2020s will be the decade of enterprise or business model reconstruction, leveraging the power of digital and related technologies. Smart companies will get a head start in 2019. 

2. Performance management will give way to performance leadership
Dan Cable, Professor of Organisational Behaviour

In 2019, leaders will start thinking more about performance leadership systems instead of performance management systems.

The goal of management is to relieve uncertainty by making processes more predictable and efficient. Performance management systems focus on hitting quarterly targets and following known processes, so that promises and regulations are met. Achieving these results is really good, until you end up efficiently producing what customers don’t want any more. Think Kodak, Blackberry, Nokia, Sears, Borders. The goal of a leader is to help an organisation stay effective and competitive. Leaders need to balance something that doesn’t want to be balanced. Efficiently meeting promises to customers and regulators makes it hard to experiment and learn. But short-term results are in vain if they can’t help keep the organisation relevant to the future. As one leader told me: “We need to be able to work on the plane while it is flying.” 

There are two good reasons why leaders will become increasingly wary of performance management systems in 2019. First, they are usually focused on the past, not the future. Focusing on high-quality cellphone reception might work until competitors offer internet access and music capabilities on cellphones. Aiming for more and more efficient performance today is a great way to go out of business in five years. Second, measuring results means that you are not rewarding learning. When you focus on outcomes and achievement, what you lose is experimenting with new approaches. If we want people to innovate, stop rewarding good results based on bad processes and start rewarding experimentation even if the results are bad.

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“In 2019, organisations will continue to experience greater complexity and ambiguity, fuelled by the growth of nationalism, divisive politics and reverse globalisation.”

Performance leadership is when each employee understands and feels responsible for working on the airplane while flying it. Helping to meet current promises while helping the organisation adapt and learn about the future. Performance leadership encourages teams to work together to solve problems and stay market competitive, rather than individual employees trying to look good and compete with each other. Performance leadership is when an employee understands that her job is to find ways to do her job even better, and brings her unique talents, passions and interests to the work. 

3. AI will remain top-of-mind
Julian Birkinshaw, Professor of Strategy and Entrepreneurship, Deputy Dean 

Every year brings another tech trend. 2016 was all about big data, 2017 was blockchain, and 2018 was the year AI hit the mainstream management press. 

So what comes after AI? My hunch is it will continue to stay top-of-mind among businesspeople for another few years yet. But rather than focusing on the potential benefits of artificial intelligence, we will see a complementary narrative take shape about the unique qualities of human intelligence. 

John Naisbitt and Patricia Aburdene, authors of the 1982 guide Megatrends: Ten New Directions Transforming Our Lives, said: “Whenever a new technology is introduced into society, there must be a counterbalancing human response… We must learn to balance the material wonders of technology with the spiritual demands of our human nature.” 

The AI debate is already turning to these questions. What is left for humans to do when the computers take on more of our traditional jobs? What is the point of having firms for coordinating activities when technology can make coordination happen seamlessly and instantaneously? And what are the risks we create – for society – when we use algorithms rather than human judgment to make business decisions? These are important questions, but we have incomplete answers to them. Expect the debate in these areas to intensify in the next year or two. 

4. Data science will be democratised 
Nicos Savva, Associate Professor of Management Science and Operations 

Few pundits would disagree that data science, machine learning, and artificial intelligence offer a paradigm shift from reactive, approximate and slow decision making to proactive, precise, and fast decisions. With few exceptions, these tools have been the prerogative of technology firms born in the digital era (Google, Facebook, Amazon, Uber) or incumbents with substantial scale (Walmart, P&G, Marriott). 2019 is going to be the year where data science will revolutionise non digital SMEs (manufacturers, hospitals, traditional media and more).

“This coming year is likely to be full of uncertainty – due to events ranging from Brexit to the US-China trade tensions to EU reforms.”

Three factors are converging to make this happen. First, cloud computing is delivering substantial amounts of computational power to anyone that needs it — power that was only available at a huge upfront cost is now available at a small variable cost. Second, new tools have made it easier to collect, analyse and use data — you no longer need a PhD in data science to be able to meet the data science needs of an SME. Third, human capital is becoming more sophisticated. The emergence of data science masters and data-science-focused MBA programmes is producing analysts and managers who have the skill sets and the imagination to make data science work at smaller scale. 

What are the implications of the new wave of data science? In the short term, more customer choice, better products/service customisation and lower costs. In the longer term, new and highly successful business models that would not have been possible without data science (e.g. AI-driven medical consultations or self-driving fleets of taxis). But as more decisions are delegated to automated data-driven systems, we need to worry about social implications — white-collar employment, data security and privacy, and algorithmic bias/discrimination will come to the forefront of public debate, as they should. With every new technology, there will be risks, and data science is no different. 

5. Political and economic uncertainty will continue
Linda Yueh, Adjunct Professor of Economics

This coming year is likely to be full of uncertainty – due to events ranging from Brexit to the US-China trade tensions to EU reforms. And it’s coming at a vulnerable stage in the business cycle where half of US Chief Financial Officers are expecting a recession in 2019 and over 80% of CFOs expect it by 2020. Starting in the UK, there is considerable uncertainty about whether Parliament will pass the Prime Minister’s Brexit withdrawal agreement, now scheduled for a vote during the week of January 14th. 

The EU has indicated that they would be open to extending the departure date by three months, but that hasn’t precluded the Cabinet from stepping up “no deal” preparations to ensure the UK can trade on WTO terms at the end of the first quarter of 2019. 

As if that wasn’t enough uncertainty, the first quarter of the year will also see the US and China aim to agree a trade deal or see 25% tariffs on all Chinese imports into the US and likely retaliation by China. The stakes are high. Can the US and China negotiate a trade agreement in three months? In one sense, a deal can be done fairly quickly if China opens up its market, particularly for services, as that should increase American exports since the US is the world’s largest exporter of services. 

And there is uncertainty in the EU as well. Italy seems to have softened its stance around its budget deficit while France looks to be running afoul of EU budget rules after granting concessions to defuse the “yellow vest” protests. In addition, President Macron’s proposed EU reforms to create a central fiscal authority have stalled. So, where EU reforms are headed looks uncertain. 

All of this uncertainty is coming at a time when the business cycle looks to have passed its peak. That’s the consensus for the US where economic growth likely peaked in the middle of 2018. And we tend to fall within the same business cycle. So, if the above uncertain geo-economic events affect the economy, it may worsen the cyclical slowdown. 

Therefore, brace for uncertainty in 2019. It’s likely to be a volatile start to the year. 

6. Complexity will throw up new opportunities
Richard Jolly, Adjunct Professor of Organisational Behaviour 

In 2019, organisations will continue to experience greater complexity and ambiguity, fuelled by the growth of nationalism, divisive politics and reverse globalisation. My current work with CEOs shows that they are less clear about what to do than ever before. We will continue to see firms with a track record of success struggling if they are unable to evolve. 

Themes such as agility, the emergence of millennials into managerial positions and the rise of artificial intelligence (AI) and blockchain will make traditional command-and-control styles of management increasingly problematic. But, while things will get more challenging, the opportunities are going to be greater – whilst there will be losers, there will be winners. 

So what will differentiate these winners? Less and less is it having the right strategy. Many organisations that fail have the right strategy – they just can’t get it to happen. The role of leaders is increasingly to create an empowering context. 

When things are so complicated, one of the toughest challenges is building and retaining confidence. Some organisations bounce between over- and under-confidence. The great ones, whether mature or early stage, are able to retain the middle ground of the confidence spectrum. 

What does this middle ground look like? Confident organisations have a well-articulated, compelling purpose; senior managers who role-model the behaviours they want from others; effective communication about what specific behaviours are needed to achieve the firm’s ambitions; a culture of psychological safety where people support each other, balanced with healthy challenge and feedback. They have a resilient attitude where “what doesn’t kill us makes us stronger”; people spend their time on their key priorities, rather than being lost in emails and inefficient meetings; and an environment where everyone feels that they can contribute.

Source : London Business School

Transformation-The Head, Heart, and Hands

Transformation-The Head, Heart, and Hands

It is rare these days, as digital transformation sweeps the business landscape, to meet a business leader who hasn’t either recently led or been part of a transformation. Once a one-off event in response to an urgent need—a dire competitive threat, sagging performance, an overdue process overhaul, or a post-merger integration—transformation is now the new normal. In fact, it has become so commonplace that we have dubbed this the era of “always-on” transformation. 

Yet from experience we know that transformation continues to be very difficult, and the evidence shows that it often fails or falls short of expectations. Moreover, it can exact an enormous toll on leaders and employees, who are constantly being asked to step up, reach further, move faster, and adapt to change, with no end in sight. For leaders and employees alike, it’s less a marathon and more a triathlon; no sooner does one leg finish than another is under way, giving participants no chance to catch their breath before giving their all once again. Still, many organizations overcome the odds; some even achieve lasting results. How do these companies succeed where others fail?

A REIMAGINED APPROACH TO TRANSFORMATION

While there is no one-size-fits-all method, our extensive client work, along with our study of more than 100 companies that have undergone transformations (three or more for 85% of them), points to an approach that combines three interconnected elements. It involves thinking expansively and creatively about the future that the organization aspires to and focusing on the right strategic priorities to get there. It addresses the unrelenting, ever-shifting, ever-growing demands on employees by elevating the importance of actions that will inspire and empower people at all levels of the organization. And at a time of rapid change and disruption, it calls for more than just applying the appropriate means and tools to execute; it calls for companies to innovate while they execute—and do both with agility.

“Transformation in the new digital era requires a holistic, human-centric approach.”

In other words, transformation in the new digital era requires a holistic, human-centric approach, one we call the Head, Heart, and Hands of Transformation. The heart has received the least consideration, but it is attention to all three elements that enables organizations to succeed today and thrive tomorrow.

THREE CHALLENGES IN THE ALWAYS-ON ERA

Transformation today takes place from a variety of starting positions. Some organizations need to move quickly to improve the bottom line. Others enjoy respectable performance but lack a clear path to enduring success. Many companies are simply in need of rejuvenation, ready to imagine a new destiny and perhaps even to increase their contribution to society.

Transforming not merely to survive but to thrive entails addressing three broad challenges, crystallized in these questions:

  • How do we create our vision for the future and identify the priorities to get there? Many companies face an even bigger challenge than overcoming short-term performance pressures: How to reconcile multiple strategic options to envision a different future amid shifting customer needs, evolving technologies, and increasing competition. 
  • How do we inspire and empower people? The relentless pace of always-on transformation can demoralize even the most engaged employees. Sustaining it while offering employees meaningful opportunity and fulfillment—intrinsic rewards that millennials and “digital natives” seek—adds substantial complexity to the challenge.
  • How do we execute amid constant change? Changing the business once meant executing from a playbook of primarily short-term, discrete actions. But transforming to thrive in the future often requires disrupting existing business models and value chains to solve customer needs—and doing so at digital speed. Today, when changing the business means simultaneously executing and innovating with agility, a conventional approach to execution is no longer enough.

Taken together, these three challenges can seem overwhelming. But they need not be.

Consider Microsoft. In February 2014, when Satya Nadella took the helm, the company was by no means broken, yet there were strong headwinds: Windows’ market share had declined, Microsoft had missed the mobile wave, and competitors—and customers—were moving aggressively to the cloud. The company’s inhospitable culture was depicted in a now-famous meme showing managers in different corners of the organization chart shooting guns at one another.

Since then, Microsoft’s performance hasn’t just improved; it has flourished. Revenues (particularly cloud-based revenues) have soared, the company’s stock price has more than tripled, market capitalization is approaching $1 trillion, and annualized TSR, at 26.5%, is twice that of the S&P 500. Perhaps most important, the company now boasts a visibly new culture of cooperation and a renewed commitment to innovation.

“Microsoft’s wholesale transformation has been the result not of a single move but of many changes orchestrated in parallel”

Microsoft’s wholesale transformation has been the result not of a single move but of many changes orchestrated in parallel that have touched every part of the organization. Nadella honed a mobile-first, cloud-first vision, aligning leaders around it and shifting resources toward the relevant businesses to accelerate innovation. In other words, he addressed the head of transformation. He articulated a new purpose—“to empower every person and organization on the planet to achieve more”—and fostered a new culture and leadership model, thus tending to the heart of transformation. He also unleashed new ways of working that have not only enabled execution but also have spurred innovation and agility; that is, he equipped the hands of transformation.

Microsoft’s transformation has reinvigorated a maturing company, positioning it to define and embrace its future with the strength and agility needed to thrive in a fast-changing, tumultuous business landscape.

THE POWER OF HEAD, HEART, AND HANDS

What actions constitute this fresh take on transformation? And what sets it apart from more traditional approaches?

  • The Head: Envision the future and focus on the big rocks. In the digital era, constant change makes it harder to commit to a view of the future; yet providing direction to the organization remains essential. That means companies and their leaders must draw on their strategic thinking, their imagination, their knowledge of customer needs and desires, and their pool of expertise, experience, and wisdom to forge an aspirational vision of a digitally enabled, growth-oriented future. They set priorities, focusing on the “big rocks” that will deliver results and create enduring value.1 They secure the alignment and commitment of the leadership team. And they establish and communicate a compelling case for change, internally and externally. In the past, these actions might have been one-and-done moves, distinct from the daily rhythms of business. But today, because the environment is constantly shifting and these strategic actions generally affect the whole enterprise, they must be revisited and updated on an ongoing basis (ideally, annually) and be integrated into the operating model of the organization.
  • The Heart: Inspire and empower your people. When transformations were viewed as one-off, short-term programs, inspiring and empowering people wasn’t seen as being essential to them; in fact, people were often treated as a means to an end or, worse, as collateral damage. But successful transformation today depends on people who are engaged and motivated to go above and beyond. Organizations can create this condition through a set of heart “practices.” What does this mean? Leaders invest time and energy in articulating, activating, and embedding the organization’s purpose. Companies create an empowering culture, shaped by leaders, that allows people to do their best work. They also demonstrate care for those whose lives are disrupted by the change—not only departing employees but those who remain to carry out the new vision. Finally, senior managers exercise a more holistic form of leadership: they clarify and navigate, they include and empower, and they delegate and enable their people and teams.
  • The Hands: Execute and innovate with agility. Executing a prescribed set of actions used to be enough to generate short-term bottom-line improvements. In this new era, when the future is unclear and the present is constantly changing, organizations need to innovate as they execute, and do both with agility. Consider this: Rather than delegate responsibility for execution to a transformation program owner (who occasionally updates leaders), companies give joint ownership of the ongoing transformation agenda to senior leaders. They ensure disciplined execution by equipping teams with the resources they need to make sound, prompt decisions. Companies also apply innovative methods and digital tools, and institute agile ways of working, to accelerate output, remove impediments, and enable end-to-end focus on the customer. Whereas building organizational capabilities was often an afterthought, today companies build capabilities while carrying out the transformation.

The head, heart, and hands approach to transformation is most powerful when each element is fully deployed. For this reason, the three elements should not be viewed as sequential actions but as three vital sets of activities that should happen in parallel—a holistic system.

Evidence of the impact of this approach is striking. In our study, which included in-depth interviews of leaders involved in these efforts, we asked whether the companies had addressed the actions consistent with the three elements. We then correlated the response with their subsequent performance. Ninety-six percent of the companies that fully engaged the three elements achieved sustained performance improvement, a rate nearly three times that of companies that did not engage the elements. (See Exhibit 1.)

When we asked survey respondents about the relative attention given to each of the three elements during transformation, the head consistently got the highest rating, followed by the hands. The heart came last. (See Exhibit 2.)

It’s thus only fitting that the heart—as the metaphorical center and source of inspiration and power—is at the center of this holistic approach.

THE HEART OF TRANSFORMATION: INSPIRE AND EMPOWER YOUR PEOPLE

People—individuals and teams—are the lifeblood of successful transformation. Transformation requires their effort, engagement, alignment, and willingness to go the extra mile. But in practice, the importance of people in transformation is often neglected; people often end up being treated as expedient or even dispensable. In the always-on era, the consequences of this neglect can be great, as people grow exhausted from keeping up with the latest technologies and adapting to relentless change.

Successful transformation takes heart. The heart serves as an apt metaphor, capturing the essence of the vital, life-giving source of power that people need to effect change.

So how can organizations develop a strong, healthy heart to inspire and empower people? In the context of transformation, we see four imperatives. Each of them, like the atria and ventricles of the heart, works in concert to perform the heart’s complete job: empowering and enabling people to give life to the transformation. (See “Healthy Heart, Strong Performance.”)

HEALTHY HEART, STRONG PERFORMANCE

Activate and Embed Purpose

Increasingly, employees seek much more than a paycheck or tangible rewards; they want meaning, connection, and joy. They want to contribute, develop, and achieve. Organizations with purpose tap into these needs, producing a virtuous circle of benefits.

“In the always-on era, purpose is more important than ever.”

Purpose is an organization’s “why”—its existential reason for being. In the always-on era, it is more important than ever; it fuels transformation by fostering an emotional connection that inspires greater commitment and the willingness to go the extra mile. Purpose illuminates a direction as it links various transformation efforts in a way that is logical and accessible to everyone. But it can do so only when the organization translates it effectively into action.

Create an Empowering Culture

Culture is the lifeblood of the organization. It comprises a clear articulation of the values and behaviors that define how things get done in an organization. Activated by leaders, culture is reinforced by the organizational environment, or context, through such levers as customer service rituals, performance management systems, and informal interactions. A healthy culture serves as a tacit code of conduct that steers individuals to make choices that advance the organization’s goals and strategy. In the digital era, when self-direction and team autonomy are emphasized, a strong culture is particularly important.

Demonstrate Care

Layoffs, redeployments, and reskilling are inevitable today. Even healthy companies will likely have to restructure their workforce to add talent—in particular, people with digital skills and experience that align more closely with the business’s future needs. Such workforce turbulence can be traumatic not only for those who are laid off but also for those who remain. If left unattended, it can undermine morale and progress. At the very least, transformation can dampen engagement and disrupt employee cohesion, and it almost always puts extra demands on people.

For all these reasons, leaders must demonstrate care, compassion, and empathy—and not just through their words. For example, it is critical that leaders continue to solicit the input of employees who remain (say, through pulse checks or broader two-way communications) and actively, visibly address their concerns. To help employees who are leaving, companies can offer a battery of program options beyond the standard outplacement services, such as coaches to help individuals create a personal roadmap, job-market information sessions, resources for financial advice, and even guidance on entrepreneurship.

Lead with the Head, Heart, and Hands

Nothing is more important to the success of transformation than leaders. While they play many roles, leaders embody the heart of transformation.

Leaders clarify and navigate the way forward. Beyond envisioning the future and revisiting strategic priorities regularly, leaders provide constant guidance to their reports and unit heads and ensure that priorities remain linked to purpose. They are action oriented; they set clear accountabilities; and they work tirelessly to communicate a compelling case for change internally and externally.         

Leaders are inspiring, empowering, and inclusive. Leaders instill confidence and courage, and motivate and inspire people to perform. They strengthen and encourage teams and support cross-organization collaboration. They demonstrate care and empathy, actively and candidly communicate with their people, and exercise inclusiveness.

Leaders delegate and enable agile teams. Leaders delegate responsibilities to autonomous agile teams, remove obstacles, and ensure all the necessary cross-functional resources are in place. They also support capabilities building, both human and digital.

EMBRACING THE HEAD, HEART, AND HANDS OF TRANSFORMATION

In the digital era, transformation has become the default state for most organizations. But always-on transformation needn’t be debilitating, exhausting, or demoralizing. We owe it to ourselves, our organizations, and society itself to boldly transform the approach we take to transformation.

Leaders need to move beyond short-term fixes to envision a compelling future, and focus on the big rocks required to get there. They need to stop treating people as a means to an end or, worse, as collateral damage, and instead inspire and empower them. They need to change how work gets done, moving from the expedient and prescribed set of actions to an approach that enables execution and innovation to occur simultaneously, with agility.

The head, heart, and hands of transformation is not a panacea, but it is a holistic and human-centric approach that is proven to enable organizations that truly embrace it to succeed today and thrive tomorrow.

Source : BCG.com

What a data breach means to your business

What a data breach means to your business

Consequences of a data breach could now be a lot more serious

Consequences of a data breach could now be a lot more serious

By Michelle Lindsay

In October 2016, the Australian Red Cross Blood Service announced it had been the victim of a significant data breach. More than half a million donor records, including personal information on sexual activity, drug use and health, were compromised when they were accessed from an unsecured server.

The scale of the breach, and the sensitive nature of the information disclosed, made it one of the most serious in Australia’s history, damaging the organisation’s reputation and opening it up to potential litigation.

While 2016 saw a number of high-profile data breaches, experts warn that this is not just an issue for the big end of town. With new mandatory reporting legislation also set to take effect in 2017, the consequences of a breach could now be a lot more serious.

According to new report, the IBM Cost of Data Breach Study: Australia, a malicious or criminal attack caused 46 per cent of data breaches in 2016, while 27 per cent were caused by a negligent employee or contractor, and a system glitch was the source of the remaining 27 per cent.

Organisations may be required to report data breaches

Under the proposed Privacy Amendment (Notifiable Data Breaches) Bill 2016, organisations will be required to go public on any unauthorised access, disclosure or loss of personal information which is likely to result in serious harm to the affected individuals.

If a business suspects a data breach, it will be required to carry out an assessment within 30 days. Then, if there are reasonable grounds to believe a data breach has occurred, it will need to notify the Privacy Commissioner, as well as all the affected individuals.

According to Ian Cunliffe, chief privacy officer at CPA Australia, the legislation will be a game-changer, making lapses more public and potentially more costly to address.

“Up until now we’ve had legislation that has the potential to impose serious penalties to people who breach privacy, but the obligation to self-declare, as the legislation proposes, raises the stakes enormously,” he says.

“Currently businesses are not required to self-declare, so we don’t know how many breaches there have been. If this legislation is passed, there will be the obligation to shout any data breaches from the rooftops, and a failure to do that will double the embarrassment if the company is found out and greatly increase the risk of criminal sanctions.”

Failing to disclose could also prove expensive, with businesses facing a range of potential penalties, including fines up to A$1.8 million.

Accountants are at high risk of a data breach

Cunliffe says that some small businesses may be underestimating their exposure to data security incidents.

“Every business has information that is confidential in relation to the privacy obligations that apply, for example, employment records. This might be information about people’s sick leave and the reasons for it and other personal information, so maintaining its confidentiality is a serious matter.”

He says that accounting practices are at particular risk, given the sensitivity of the data they hold.

Professional Development: Technology, accounting and finance forum on demand: stay ahead of the latest trends and issues into technological developments for accountants and finance professionals

“Accountants’ stock-in-trade is providing confidential advice based on personal information – so it would potentially be very embarrassing if that information made it into the public arena.”

Cyber insurance expert Drew Fenton, from insurance and professional indemnity protection firm Fenton Green, agrees that accountants cannot afford to be complacent.

“If I were to rate clients from zero to 10, where 10 is the highest risk, accountants would be seven or eight. Even though they don’t have a large database, they have all of our personal information including our financial details. From that perspective they are high on the target list for hacking.”

He says that being aware of the potential for a cyber attack can go a long way to protecting a business from the reputational damage and financial costs that accompany a data breach.

“The number one risk is opening an infected attachment – that’s where viruses get into your system. On average a virus is in your system 140 days before it is detected – watching, waiting and collecting information.”

Maintaining trust

The IBM report on the cost of data breaches in Australia shows that the average cost of managing and rectifying a breach is around A$142 per compromised record.

Although the financial cost is high, IBM says the biggest consequence of poor data security is a loss of business following a breach.

Fenton agrees that reputational damage and reduced client trust are probably the biggest concerns for small businesses.

“If it happens, once, we’ll probably forgive it. Twice we’ll be very cautious, but if it happens three or four times, the company will have a very severe PR problem.”

Protect your business from data breaches

Here are three strategies to help keep your data safe.

1. Put robust data security protocols in place

The first line of defence against cybercrime is having a strong culture of data security and reporting, and up-to-date security software. Your systems, and those of your partners and suppliers, should be regularly tested for vulnerabilities, and a risk assessment and management process put in place.

Be aware of your industry compliance obligations such as the Payment Card Industry Data Security Standard (PCIDSS) for organisations handling credit card information or the Information Security Registered Assessors Program (IRAP) for businesses or other groups wishing to store or process Australian Government information.

Educate your employees about the importance of protecting client information, and create clear management reporting processes.

Only collect the data you need – the less you have on file, the lower the risk if a breach occurs.

2. Consider taking out cyber insurance

Cyber insurance is a relatively new type of insurance cover, which can help cover costs related to a data breach. Cyber insurance can cover first-party costs, such as having an IT expert come in and wipe the virus, or the cost of reporting the breach. It can also cover your liability costs if an affected client takes legal action.

3. Seek help if you suspect a data breach

As the proposed legislation hasn’t yet passed, it’s not clear exactly what the notification process will require. So if you think there may have been a breach of your data, speak to a solicitor to confirm whether you need to report it, and how to go about making the required notifications.

You may also want to consult a public relations firm to help limit the reputational damage, and help shape the message to affected clients.

Source :CPA

Data analysis skills lacking among finance teams

Data analysis skills lacking among finance teams

Keeping pace with rapid changes in technology is a cause of concern amongst CFOs. So, too, is talent management – finding good talent, keeping it, and nurturing it.

So with technology altering job roles, and jobs harder to fill, a skills gap has developed in finance roles related to data analysis.

Companies face a steep learning curve in harnessing their data for commercial benefit, and finance is well-positioned to be part of that movement, according to CGMA research. Finance professionals crave data analysis skills: In a 2013 survey, 85% of finance professionals said increasing their ability to work with Big Data would enhance career prospects – but they’re not always finding time to focus on strategic analysis.

Finance business partners in nearly half of companies spend the majority of their time creating and updating reports instead of analysing and interpreting information, or interacting with the business, according to a global report by Deloitte, which shows that finance leaders want staff to focus more on analysis and interaction. In companies where analytical skills are available, finance staff spend far more time on such analysis and interaction.

In another survey, three-fourths of managers listed “identifying key data trends” as a skill important to success. Yet, just 46% said their teams possess that skill, according to a new survey report by global staffing firm Robert Half and the Institute of Management Accountants (IMA), which used responses from 479 CFOs, controllers, and other executives and managers, mainly in the US and Canada.

The leaders face significant shortages of accounting and finance staffers who have the skills required for data analytics initiatives.

They are combating this skills gap in several ways, including these top three: developing skills from within (68%), hiring from outside the company (44%), and using consultants or project professionals (39%).

However, the skills development is at times off the mark. It’s one thing to offer skills training, but the training must focus on the right skills: 14% of respondents say their companies are offering training related to business analysis.

Need for training

Companies know what they need to do, but they haven’t done it yet, said Paul McDonald, senior executive director at Robert Half. They have growing volumes of data, but 86% are struggling with how to turn them into valuable insight, according to the CGMA report.

Offering skills training is valuable not only to current staff but to potential hires. A different Robert Half survey showed that 64% of job-seekers viewed the chance to gain new skills as very important when evaluating an opportunity. Companies that don’t have a reputation for training workers might not get the chance to hire a talented worker if that person believes better development opportunities are available elsewhere.

“Companies that are effective at staffing now are offering attractive compensation and perks,” McDonald said. “They’re offering training, and they’re presenting their culture because these individuals are not only looking at the current employer they’re auditioning with, but they’re also looking at what the job will do for their knowledge base and career. They’re getting a good feel for the culture, which is so important to employees today when they have choices.”

Money is the most-cited obstacle as it relates to hiring for a business analytics role, according to the Robert Half/IMA report. The top four challenges were lack of competitive compensation (31%), inadequate workforce planning (23%), not enough available professionals with the right skills (22%), and poor job description (16%).

In addition to better training programmes and hiring practices, companies must continue to update their technology platforms to give staff the best chance to apply those data-related skills.

7 ethics questions finance professionals should ask prospective employers

7 ethics questions finance professionals should ask prospective employers

An organisation’s ethical credentials and values are an increasingly important factor in their ability to attract and retain talent, but it’s not easy for candidates to get a handle on organisational culture from the outside.

Assessing whether an employer can offer an environment conducive to ethical practices is a crucial part of the decision-making process, especially for professionals such as accountants who must abide by ethics codes.

More broadly, being associated with a company with a poor ethics record could have repercussions for a candidate’s future employability. Organisational stigma attaches itself to any company perceived to have acted in a fundamentally flawed or immoral way. A scandal in one section of a firm’s operations could affect prospective employers’ perceptions of that firm’s workers around the world, according to research published in Harvard Business Review.

A new CGMA briefing, prepared in conjunction with the Institute of Business Ethics, sets out some steps individuals can take to conduct ethical due diligence on a prospective employer.

7 key questions to ask

The authors of the report suggest candidates consider asking the following questions at an interview:

  • How do you assess your culture or values, and how do you assess to what extent the culture and values are embedded?
  • What training do you offer in this area?
  • What routes do you have for escalating any ethical concerns? Do you have “speak up” procedures and, if so, how are they managed?
  • How is individual performance assessed in relation to the desired and/or stated behaviours?
  • What action do you take against staff members who breach company policies or are found to have breached any regulations?
  • Have you identified any areas of concern in staff engagement surveys or customer satisfaction surveys, and how are they being dealt with?
  • Would the organisation welcome appropriate challenge in regard to issues of integrity?

The benefits of opening up a discussion on ethics and culture

Employers who are interested in best practice will welcome these questions, as they will be looking for candidates who can talk about ethics issues and demonstrate how they have handled them in the past.

In organisations that take ethical concerns seriously, it’s a particularly important requirement for senior management roles, as leaders help to set the tone from the top. Recruiters will also be looking for these qualities in finance candidates, as they have a duty to challenge and provide an objective view to support decision-making.

Source : GCMA

5 steps to strengthen internal controls at small businesses and not-for-profits

5 steps to strengthen internal controls at small businesses and not-for-profits

Internal controls may lag at smaller organisations as managers sacrifice them for the sake of service delivery, particularly at cost-conscious not-for-profits and start-up organisations.

Yet the risks are too great to ignore. Consider that the Association of Certified Fraud Examiners (ACFE) in its Report to the Nations on Occupational Fraud and Abuse: 2016 Global Fraud Study found that businesses with fewer than 100 employees are more vulnerable to occupational fraud. The median annual fraud loss for religious, charitable, or social service organisations was $82,000. This amount does not take into account the cost to the organisation’s reputation. Because charitable organisations are in the public eye, the occurrence of fraud, or even allegations of fraud, can significantly affect an entity’s ability to attract support.

There are many approaches to risk management, but the Committee of Sponsoring Organizations of the Treadway Commission’s (COSO’s) Internal Control – Integrated Framework can be used by virtually any organisation, large or small, to strengthen governance, improve the reliability of financial reporting, and deter fraud. The COSO framework emphasises that internal controls should be designed with consideration for the entity’s unique environment and its risk tolerance. It does not prescribe specific activities. Instead, it offers a structured approach to making risk-based, informed decisions. Applying the COSO framework, leaders can lend analytical abilities to identify risks and optimise controls to support critical processes.

Here are five low-cost steps to consider as a starting point:

Set a strong tone internally. Internal controls are processes affected by people and the actions they take every day in our organisations. The ACFE’s study showed that only 6.4% of fraud is discovered by external auditors. Internal controls involve everyone in an organisation, and the board and leadership team set the tone.

Provide a formal system for individuals to raise concerns without fear of retaliation. The ACFE study found that fraud is most often discovered from tips – in 29.6% of cases. The best thing managers can do is create a mechanism by which employees can report concerns. Even the smallest organisation can adopt a whistle-blower policy and incorporate that policy into employee handbooks and training for new workers. The online resource library of the American Institute of CPAs’ Not-for-Profit Section has a sample of such a policy, which can be downloaded and tailored to individual organisations.

Be attuned to what is happening within the organisation. Managers should be aware of conflicts, tensions, pressures, or incentives that could compromise decision-making, integrity, and the reliability of the entity’s financial reporting. Examples of such pressures could be aggressive growth goals, a poorly designed incentive-based compensation structure, or unbalanced workloads that lead to unfair treatment, employee resentment, and burnout. Employees who are under pressure are more prone to ignore internal controls or take advantage of control weaknesses for their own benefit.

Focus on relationship-building and open communication. It is possible to maintain an attitude of professional scepticism and, at the same time, build relationships on a foundation of trust. One way: adopting open-book management practices and explaining not just “how” but “why” particular processes are needed from a business perspective. Address issues of noncompliance first by identifying the behaviour you observed, then giving the employee an opportunity to voice his or her concerns. Second, acknowledge the employee’s viewpoint and then explain the business reason for the change. Finally, clearly state your expectations going forward. Use “I” instead of “you” in communication. Example: “I noticed that your supervisor did not preapprove this transaction” is better than “You didn’t get proper approval from your supervisor.” Keep interactions professional, not personal.

By establishing controls and processes that did not exist previously, you may cause an internal power struggle. An employee may perceive a new process, such as a new process for authorising transactions, for example, as a sign of distrust. Give employees a chance to express concerns before implementation, and be sure to explain the business rationale.

Consistently enforce policies across the entity to uphold fairness. Periodic, one-on-one discussions with individuals about organisational policies can be enlightening. Training new employees is a given, but some organisations fail to apprise employees of the acceptable use of the organisation’s property, including confidential and sensitive information. Check references and conduct pre-hire and periodic background checks, particularly for employees involved within the finance or accounting function and for those who have access to sensitive information. Also, review IT systems access logs. As much as possible, separate duties so that no single individual has control of all aspects of a transaction, and separate authorisation from recordkeeping.

In small organisations, unwritten policies can be effective where a process has existed for a long time and is a well-understood practice and where communications channels involve a minimum number of management levels as well as close interaction with, and supervision of, personnel. Keep in mind, though, that no matter how well designed controls are, they are not failsafe. Although managers cannot prevent all problems from occurring, the leadership tone they set by treating individuals fairly, and identifying and remedying issues, sends a strong signal about activities that are acceptable and those that are unacceptable.

The AICPA’s Not-for-Profit Section has resources on risk management and internal controls for NFPs. It recently published a new e-publication, the Controller Toolkit for Not-for-Profit Entities, that has sample polices and transaction cycle narratives to assist with design and implementation of internal controls.

Source : GCMA

3 ways to improve your vendor management

3 ways to improve your vendor management

Most companies hire vendors in the course of doing business. The vendor could be a supplier of goods, a service company, a technology provider, or a building contractor. Senior management and corporate boards justifiably have questions and concerns about how to protect against vendors’ actions that might produce a loss.

Examples that could happen to any organisation include the following: (1) a software vendor’s employee sabotages the hiring company’s records because of personal animus; (2) a vendor hired for window washing has an accident at the hiring company’s building, suffering a crash that injures the vendor’s employees and passersby; or (3) a vendor hired by a doctor to handle medical records leaves files on the train by accident, exposing patients’ confidential personal indownloadformation.

If the vendor will not or cannot cover the cost of losses it creates, either through insurance or liquid assets, then the hiring company will be on the hook for these costs. Even if the hiring company has insurance that will cover the loss, it will likely have to pay a deductible, incur further expenses, and get a rate increase from its insurer at renewal. The financial hit often can be less costly than the reputational damage a company suffers as a result of a vendor’s mistakes or poor judgement.

As hiring companies focus on making sure they have protection against vendor risks, they should recognise what they can do well themselves and what they may have to hire experts to do for them. There are firms that review vendor credentials, including insurance coverage and other aspects of vendor status. Here are three methods to adopt for better vendor management:

Selection criteria

Using of set criteria for each vendor category will enable the hiring company to narrow a large list of possible vendors to a handful. The final choice may be based on the weighting of the criteria, price, or another factor. Hiring companies can create criteria based on their experience, benchmarking with similar companies, or their best judgement. Some typical criteria include:

  • Minimum number of years in operation: Is a vendor mature enough to have a track record?
  • Minimum size (revenues or staff): Is it large enough to handle the assignment?
  • Geographic presence: Are its locations where you need them to be, and are any in a location that might be subject to high risk?
  • Satisfaction data (references, social media reputation, ratings by recognised accreditation services): Is the track record acceptable?
  • Management structure: Is there sufficient accountability?
  • Ownership: Is it reputable?
  • Financial stability: Do the financials raise any red flags?
  • Staff tenure: Is turnover a problem?
  • Staff education/certification: Is the staff knowledgeable?
  • Bonding: If staff needs to be bonded, what is the proof?
  • Staff hiring protocol: Are workers adequately vetted?

For these criteria to be effective, they must be used without exception. That someone in the hiring company knows a particular vendor’s CEO or has used the vendor in the past should not preclude the need for the vendor to meet the criteria.

Vendors can make claims that aren’t true. Therefore, care should go into making sure that information provided by the vendor is verified. Even references by the vendors’ other clients should be treated carefully. Do these clients have ulterior motives for giving a good reference? Are there a sufficient number of references to be meaningful? Are the references consistent with the vendor’s general reputation, comments about the vendor on social media, or the vendor’s legal history?

Insurance review

When a hiring company chooses a vendor, there is an expectation that the vendor is properly covered by insurance for losses incurred by its acts. To ensure that such insurance coverage exists, the hiring company needs to review proof that the vendor has executed a proper hold-harmless agreement protecting the hiring company and has appropriate levels of insurance to cover losses it creates.

A commercial general liability policy, for example, will cover situations such as (1) the vendor damaging the hiring company’s or another’s property or (2) the vendor injuring the hiring company’s employee or another person while performing work on behalf of the hiring company. Such a policy is not intended to guarantee the vendor’s work. That type of coverage would come under a performance bond.

A thorough insurance review of the vendor should determine the following:

  • The existence of insurance.
  • The insurance policy’s expiration date.
  • The identity and rating of the insurer.
  • The coverage or types of policies the vendor has (commercial general liability, workers’ compensation, commercial auto, cyber, etc.).
  • The insurance policies’ limits, deductibles, and exclusions.
  • Whether the hiring company is insured on the policy.

Typically, vendors present the hiring company with a certificate of insurance (COI) to prove that they have insurance. However, looking at the vendor’s COI does not provide sufficient assurance that the vendor is maintaining its coverage, the hiring company has been added as an additional insured (if that is part of the agreement between the vendor and hiring company), or the policy is free of problematic exclusions.

A thorough insurance review includes looking at the actual policy and checking the status of coverage during the policy period. An insurance review is not a one-time exercise. Periodic checks must be performed to make sure the policy has not been cancelled by the vendor or insurer and that endorsements, which might alter the coverage from the initial terms and conditions, have not been enacted.

Firms provide this service for companies to ensure that this aspect of vendor management is done thoroughly and professionally.

Performance evaluations

It is not enough to assume that no news is good news when it comes to vendor performance. Hiring companies should institute formal performance evaluations for each vendor at least once a year if not more. Time frames can be selected based on the significance of or the budget associated with a vendor relationship. These evaluations are a way to ensure that expectations of the hiring company and vendor do not deviate too far or too long without being addressed.

The evaluation criteria should include, at the very least, performance against the following indicators:

  • Budget.
  • Service-level agreement standards or other agreed-upon standards.
  • Ability to respond to changes or special requests.

This should not be an internal, secret document but rather a transparent gathering of performance data, resulting in an assessment and dialogue between the hiring company and the vendor.

It should become part of a larger record on the vendor, which includes historical and current information.

Source : GCMA

 

10 Things That Abruptly Happen When Real Leadership Shows Up

10 Things That Abruptly Happen When Real Leadership Shows Up

“There are no bad teams, only bad leaders.”―Jocko Willink

What does the environment around you look like?

Is it obvious to you and everyone else what you stand for?

Is your benchmark for success clear and understood by all?

Do you, as the leader, clearly reflect your vision and standards to such a degree that reading them is unnecessary?

Are you consistent in good times and bad times?

Are you a master of the basics and technical stuff, or have you lost touch?

When you experience failure, do you confront the future or wallow in the past?

No Bad Teams

There are no bad teams, just bad leaders.

Leadership is what determines how successful you and those around you are. If there is minimal success, there is minimal leadership.

There are very few real leaders:

  • Who genuinely stand for something and brightly reflect those standards
  • Who are willing to put everything on the line for what they believe in
  • Who create change and lead

Leadership is not born, it’s made. If you’re not excited about your current circumstances and success, you have complete power right now to make radical transformations.

Until you do, nothing will change.

Here’s what abruptly happens when you take ownership of your life and situation:

  1. Inject a winning standard of performance before you start winning

“How would your life change if you made decisions TODAY as if you were already the person you want to become TOMORROW? We tend to live up to our own feelings of ourselves (for better or for worse). If we plan to become something else, what better way to do so than to step into that skin now?” — Richie Norton

It doesn’t matter what your current circumstances are. Winners act like winners before they start winning.

Your mindset is what you grow into. Mental creation always precedes physical creation. Who you are in your head is who you eventually become.

Who are you in your head right now?

The first thing that happens when you step up as a leader is that you and everyone around you begin looking toward success. You start craving it, and believing it’s possible. In turn, your behavior starts changing.

It all starts with you.

It doesn’t matter where you are in your organization. As Robin Sharma explains, real leadership requires no formal title.

  1. Constancy among chaos and success

“Consistent effort is a consistent challenge.”―Bill Walsh

Most people can’t handle failure or success. They’re on a behavioral roller-coaster depending entirely on external circumstances. When things aren’t going well, they’re overwhelmed or depressed. When things are going well, they’re overconfident and lazy.

However, when you show up as a leader, your mindset and behavior remain constant regardless of success or defeat.

You are marching forward to the beat of your own drum. Everything outside of you is noise. You’re compelled forward by intrinsic vision and values. Your consistency reflects your conversion to your cause.

  1. Clear point of reference is established to keep you consistent

When you decide to lead, you provide a clear standard of excellence. Your standard of excellence becomes your point of reference, keeping you honest and consistent in all circumstances.

It ensures you don’t have too many bad days in a row. Or get derailed by haters. Or get overconfident when successful.

Your point of reference is what you really believe in. It’s why you do it.

When you’re struggling and failing, you look to your point of reference. When you’re crushing it, you look to your point of reference.

What’s your point of reference?

  1. Clear performance metrics are established to keep you accountable

“Where performance is measured, performance improves. Where performance is measured and reported, the rate of improvement accelerates.” — Thomas S. Monson

What does success looks like for you, behaviorally? What is your actual job? What do you need to do?

How do you determine if you’re failing or succeeding?

There should be clear metrics to measure yourself against. However, simply knowing what you should be doing isn’t enough. Clear accountability needs to be put in place.

That accountability, if possible, should be to an actual person, not just a spreadsheet. When you are required to report your progress — especially to someone you respect — your performance will improve.

  1. As the leader, you reflect the standard of excellence and recognize you are the ultimate bottleneck

When you don’t show up as a leader, everything falls apart.

You are the example of what optimal performance looks like. You become the living and breathing standard of excellence for others to emulate. You reflect your mission and values.

One thing is absolutely certain, your performance will be mimicked by those following you — whether good or bad. Thus, you are the ultimate bottleneck. Your failure to get to the next level hinders everyone relying on you. You can’t take people beyond where you currently are, personally and professionally.

Hence, Darren Hardy, author of The Compound Effect, has said, “Never take advice from someone you wouldn’t trade places with.”

Who you follow determines where you get in life. If your leader isn’t moving forward, you’re not moving forward, because your results are a reflection of your leader’s results.

Consequently, as the leader, you should be insanely determined to become the best you possibly can. The better you become the more clearly you can help others get where they need to go, because you’ve been there yourself.

The essence of true leadership is pure ownership. You’re no longer doing it for yourself, but so you can take those you leader further.

  1. A radical and permanent change in the environment and culture

“Man is not the creature of circumstances, circumstances are the creatures of men. We are free agents, and man is more powerful than matter.” — Benjamin Disraeli

Most people work from the outside in. They focus on the external environment, and thus, would take people out of the slums in hopes to improve their lives.

Conversely, as a true leader, you works from the inside out. You focus on the person, and thus, take the slums out of the people and empower them to take themselves out of the slum — so they can improve their own lives.

Most people focus on behavior. True leadership focuses on human nature.

As a leader, you know a person’s environment and behaviors are merely a reflection of them. If you change the person, they’ll change their own environment to match their new values and identity.

As you show up as a leader, and establish and exemplify a new standard of excellence, your environment immediately changes to match your internal reality. You create an environment that reinforces what you’re trying to accomplish, making your success automatic.

  1. A focus on values, principles, and philosophies over specific behaviors

In the book, Tribal Leadership, Dave Logan and John King distinguish organizations based on their tribal culture.

Most cultures focus on specific behaviors and practical applications. However, according to Logan’s and King’s extensive research, the most innovative organizations are not guided by behaviors, but rather, by values and principles.

When you’re doing what’s never been done before, there is no map or instruction book. Thus, you’re guided by ideals, and your behavior adjusts to meet the unique contexts you find yourself in.

And that’s the difference.

When you really show up as a leader, you instinctively place an enormous emphasis on teaching and learning. The human capital around you iseverything. The better your people become — as people, not employees or “followers”— the more successful and impactful you will all be.

  1. Any perception of independence is replaced with connection and extension

Most people focus on individual behaviors, and thus view themselves as independent entities.

However, when you become a leader, you recognize the inter-connected-ness of everyone you lead. Each and every person is an extension of each other. Each person lifts where they stand and fulfills their specific duty. Without each member, it all falls apart.

Independence is a broken concept, and has no place in real leadership. Being interdependent is where you want to be.

  1. An obsessive focus on the nuts and bolts (the fundamentals) creates an expectation of ensuing success

“Just as the yin-yang symbol possesses a kernel of light in the dark, and of dark in the light, creative leaps are grounded in a technical foundation.” — Josh Waitzkin

It’s all about the fundamentals. The better you get at the basics, the more confident you will be.

Like happiness, you don’t pursue success directly. Instead, you focus on perfecting your performance, and as famous coach Bill Walsh says, “The score takes care of itself.”

You don’t have to worry about the outcome when you master the nuts and bolts. Success takes care of itself. You just do work that’s so good it can’t be ignored. You focus on becoming a true professional in every sense of the word. Success becomes an organic and natural consequence of something much more important — who you are.

  1. Embrace failure as the path to victory

“If I fail more than you do, I win.” — Seth Godin

Failure is the path to your greatest success. And you will fail. You will fail hard if you really want to succeed.

And it will hurt like hell.

It will sometimes be hard to pick yourself back up. And in your deepest despair, you’ll confront your future as the leader you are, rather than wallowing in the past like so many do.

The past is over. It’s behind you. You are in this moment. And this moment is what’s going to make you.

Picking yourself up and continuing after big failures is the most important aspect of your personal development as a leader. Your personal confidence will be strengthened and solidified. You will begin to believe you can achieve anything.

Here are Bill Walsh’s 10 rules for failure:

  • Expect defeat and on’t be surprised when it happens.
  • Force yourself to stop looking back on the past.
  • Allow yourself some time to recover and mourn your loss. But not too long.
  • Tell yourself you are going to stand and fight again. You’re actually far closer to your destination than you can imagine.
  • Prepare yourself for the next encounter. Your next battle. One game at a time.
  • Don’t ask “why me”?
  • Don’t expect sympathy from others.
  • Don’t complain.
  • Don’t keep accepting condolences from others.
  • Don’t blame others.

Conclusion

The moment you’re ready to become a leader, you will experience these changes almost immediately in your life.

You are a magnet, and your environment directly responds to your inner world.

Are you ready to become a leader?

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Thank you for reading! Have a beautiful day.

Source : Observer.com