Angus Mitchell Oration - 2004/2005

It was with a great deal of pleasure that the Club invited Ms Elizabeth Proust to deliver the thirty-fifth Sir Angus Mitchell Oration.

"Reflections"

Anne Jacques, President of the Rotary Club of Melbourne, Ladies and Gentlemen, thank you very much for the honour of inviting me to be your Angus Mitchell Orator for 2005.  I understand that Angus Mitchell joined the Rotary Club of Melbourne in 1927, was President in 1931, then District Governor twice (1934/35 and 1937/38) and the first Australian to be elected as president of Rotary International.  The annual oration in his name was established to honour him and his contribution to Rotary, as well as to celebrate the 50th birthday of Melbourne Rotary.

I have spoken to Melbourne Rotary on one previous occasion: in the early 1990s when I was Chief Executive of the City of Melbourne.  Thank you very much for inviting me back.  I'm well aware that this is a Club with a proud tradition, going back to 1921, making it the oldest in Australia, and one of the largest.

I'm also delighted to be speaking to you in the year in which your first woman President, Anne Jacques, is in the Chair.  Congratulations Anne on your appointment.

I would like to use this occasion to reflect on a number of aspects of life today, in particular, on life in large organisations.  I'm well aware that many of you work in such organisations and I would be interested at question time to understand whether your perspectives are similar to, or different, from mine.  I have chosen to do this because over the last few years I have begun to reflect on a number of changes which have been underway for some time which impact on people and on our community - not all of them positively.

My working career began in 1980 and since that time I have worked in the public and private sectors, in Australia and in the United Kingdom, in Local, State, and Federal Government bodies.  It has been a remarkably eclectic career which has given me great opportunities to contribute, to learn and hopefully to make a difference.

Many of you will recall the 1980s.  Before "the recession we had to have" my memory is of seemingly endless resources, reasonably rigid hierarchical organisations, remote bosses (I can't recall ever using first names for senior people, they were always "Mr" - I will come to the issue of whether we have made much progress on female bosses shortly).  When I think back to those times, key words that come to me include management, efficiency, long lunches, RDO's (I, and all my colleagues in the oil industry worked nine-day fortnights), work life balance (not the phrase but the reality of a relatively unstressed time), equal opportunity

Looking back, productivity was probably not high and there was much that was wrong in organisations (as now) but it is possible to look back on much about those times with fondness and nostalgia.  Twenty-five years later - much has changed.  Even flourishing, profitable organisations have a constant focus on costs, our organisations are flatter and much more fluid, informality is a hallmark of almost every organisation, there is more talk of 'leadership' rather than management, and many new words and phrases have entered our vocabulary.  The talk is of 'values', cultural change, downsizing, outsourcing, offshoring' etc.

All of these could be the subjects of a talk all by themselves.  I want to focus on but two - cultural change and, reference my allusion to the gender of managers, the role of women.  On the latter, I want to ask whether, with all these other changes, has much really changed?  Has the promise of equal opportunity been delivered?  But before I attempt to answer that, let me start with:

Cultural Change

I think that some very significant changes have occurred around how people are valued and treated in organisations over the last ten years or so, perhaps it is even more recent than this.  When I joined ANZ over seven years ago, my first reaction was that little had changed in organizations - it was hierarchical, bureaucratic, slow to respond - very different indeed from the Jeff Kennett public sector, which I had just left. But a remarkable change has occurred in ANZ over the last five years or so.

Then (1998) we talked about (implicitly at least) winning by capturing economic surplus from our customers; now we talk about creating value for our customers.  Then performance improvement was driven from the top; now everyone understands it's his or her responsibility.  Then organisational boundaries were major barriers that were seldom crossed; now they are (mostly) ignored.  Then delivering on our promises was patchy; now we are getting much better at reliable service delivery.  Then innovation and growth were problems for the senior team when times were good; now everyone has the chance to do this.

How did these changes occur in ANZ?  A remarkable program of cultural change, known as "breakout" is changing the very nature of how we work together.  I won't go into the detail except to say that for someone like me, who was sceptical at least, about cultural change programs, breakout at ANZ has created an organisation where people feel free to speak up, to solve issues for the customer and to be themselves at work.  Much of this of course is subjective and qualitative; so let me give you but two quantitative measures.

In 1998 the first staff survey showed that only 49% of ANZ staff were satisfied, or very satisfied, to work at ANZ.  In the last such survey in 2004, this had risen to 81%  - a remarkable change in six years.  At that point, John McFarlane, our CEO, who has led this cultural change, decided to adopt a measure which is tougher than satisfaction.  He decided to undertake an engagement survey.  This does not measure whether people are merely happy at work, it measures whether they are really engaged in what they are doing, and inclined to remain with the organisation.  In last year's survey the number of people engaged or very engaged at ANZ was 60%.  Hewitt, the company that conducts the survey, commented that while this is not yet best practice, it is the best result that they have seen for a first-time survey.  Something is working and the sceptics, myself included, have been won over.  It is possible to engage in long-term cultural change that is in the interests of both people in the organisation and the organisation itself and its shareholders or stakeholders.

Having said that, I acknowledge that there is still within all organisations stress, poor work life balance for many people and unacceptable practices.  Modern technology, in particular computers and mobile phones, have made working life easier on one level, on another level many of us feel that this technology has meant that we can never be away from work.   It used to be possible to travel overseas for work and only contact the office when it suited us.  Now it is impossible to be out of touch with the office even for very short periods during the working day or night.

So the very nature of how we think and talk about work has changed dramatically in a short period of time, and is likely to continue to change.

The Role of Women

Let me turn now to an issue, which I would argue, is little changed since I began my career in 1980: women in organisations and their representation.  Here I am not going to argue on equity grounds but on economic grounds: organisations, but particularly those in the private sector (I think Governments in this country have made some good progress) are losing the opportunity to employ, retain and promote some great women who are choosing to work for themselves, for small businesses, etc, anything except to work in large organisations.

The growing shortage of skilled people is becoming a significant problem for our economy.  Baby boomers (many of us including myself) will retire and die...eventually.  We do not have enough generation x & y's to replace us.  It makes economic sense to utilise our entire talent pool more effectively.

Some of the current problems include:

Lack of quality childcare (great child care was a very important part of my early career), the fact that women still have a disproportionate responsibility for children and household activities, and the fact that women's careers are often seen as secondary by many people. 

Research on women in large corporations in this country points to a significant and continuing shortage of women in senior ranks.  Some people argue that time, the passage of time, will fix this.  I do not any longer believe this.  Let me share the research with you. 

The 2004 census on women in leadership positions in the ASX top 200 companies, conducted by the American organization Catalyst, found that 45% of the workforce in the ASX 200 companies are women, and while this is trending upwards, in that the proportion of women in leadership roles is increasing: -

·         Only 10.2% of executive management roles are held by women (1.4% up on 2003);

·         8.6% board directorship positions held by women;

·         2.3% CEO roles occupied by women;

·         1.1% Chairmen.

So, a very significant discrepancy remains.  At the current rate of progress, Catalyst argues that women will achieve full equality, measured by the participation in the top 200 companies, in 177 years! 

Legislation and socio-cultural shifts about the role of women have led to improved career opportunities and choices for women.  Despite this, current evidence including comparison pay rates, the proportion of women in senior roles, and feedback from women themselves, do not paint a progressive, or healthy picture.

There is a compelling business case to address this issue, including a shortage of labour, trends in litigation, improved business performance and talent retention.  Reasons for our lack of progress are complex - there are no quick fixes.

Since 1996, the gap between women and men's average earnings has grown from a gap of $229 per week to a gap of $310 per week.  This is an average difference around $16,000 per year.

The shift to casual labour is a growing phenomenon; most of the newly created jobs have been casual or part-time - predominantly occupied by women.  Dr Isabel Metz from the University of Melbourne (who is a former ANZ employee) has recently undertaken a very extensive study of women in the Australian Banking and Finance Industry.  She found that:

·         Women remain significantly under represented in banks' management ranks;

·         Women make up about 62% of their workforce - however they occupy only 18% of management positions and only about 7.5% of senior management positions;

·         Women Directors make up only 7%of Board Members.

Reasons for these findings - Isabel surveyed 1,200 plus women in banking and finance to understand the reasons for this.  The barriers identified were divided into 2 groups:

·         Variables that were within control of the individual - the main reasons included:
- lack of education, experience, training & development; and
- not working enough hours.

·         Variables that were outside control of the individual - these featured heavily as a problem too, particularly as women became more senior:
- immediate boss - not supportive, no direction or feedback;
- gender discrimination;
- stereotypical attitudes - women will leave to have kids etc.  

These in combination point to a business culture that is not supportive of women. Why worry about this?

·         Litigation imperative - emerging claims

Emerging large profile cases by senior women claiming "institutionalised sexism".  Merrill Lynch recently settled at arbitration a US case brought by hundreds of female brokers who claimed that women were being promoted less, and paid less on the basis of their gender.

·         Business longevity and performance

Research has demonstrated that having a diverse workforce (diversity here is more than just gender) is linked with longevity, improved performance over competitors, and innovation, and can act as a "buffer" against 'group-think' (sense of infallibility that leads to flawed decision making by leadership due to inherent need to agree).   

·         Retention of talent

Women have been opting out of large organisations for some time now.  The recruiting and training of people is a significant cost to business.

There are also self-perpetuating networks:

·         Recruiting manager - the majority of senior roles is filled through networks.  It is human nature to prefer someone who is "just like you" and it is stating the obvious to state that male networks equals male candidates.

·         Search consultants -most search consultants are male (with notable exceptions, of course!).  Again this tends to lead to situations, which I regularly see where search consultants would present male only lists to the ANZ, at a time when there were a large number of well-qualified female candidates.

·         Women's filter criteria in job application - several studies have found that in comparison to men, women apply very stringent criteria when evaluating their suitability for the role, which results in women tending not to apply for roles unless they are very well qualified, eg Victorian Government role / head of small business. 

Women Need Mentors

 "There is a special place in hell for women who do not support other women" quote by Madeline Albright (ref).

"In my experience, the single most important reason why men tend to rise higher than most women, is that most men have mentors, and most women do not" - Sheila Washington - CEO Catalyst Recruitment.  Work structures, systems developed by men.  Women recent entrants less experienced.  Therefore mentors very important for women to learn and navigate successfully at work.

"Our research shows that while being a mother offers many pleasures and delights, it is very hard work and the burden of that work is not being shared.  Research reveals an epidemic of guilt, workplaces that are far from truly flexible and a growth in casual work (where women find flexibility) at the cost of wages, conditions and employment security" - Dr Barbara Pocock, Director Adelaide University Centre of Labour Studies. 

Conclusions

In these reflections, I have chosen but two out of many possible issues.  I am optimistic that the trends in large organisations are mostly positive and that, while the stresses and tensions for people working in such organisations are real and concerning, good progress is being made to ensure that organisations are better places, by and large, to work in than they were in previous years.

I am less optimistic however about progress on the recognition of the role women can and should play in our organisations.  The 1970's, 1980's and 1990's saw very significant legislative and policy changes that have helped women advance.  I think any further legislative changes would be largely at the margins.  The issues which are holding women back from making a meaningful and lasting contribution to our organisations, and to the broader community, are cultural and attitudinal.  For me, it is a major issue that needs much greater focus and a sense of urgency from within organisations and from the broader community.  If I had been asked in 1980 what level of women in senior positions I would have expected in 2005, I may not have expected to full equality but I would not have expected so little progress. 

Thank you again for your invitation to me to be the 2005 Angus Mitchell Orator.