Culture is strategy and strategy is culture

In what is now a well-known piece of testimony given to the 2018 Hayne Royal Commission, a then senior executive, Matt Comyn, reported proposing to his then CEO, Ian Narev, that he wanted to do the right thing by the bank’s customers by abolishing a range of lucrative junk insurance products.

The response from the CEO received at the time was to “temper your sense of justice”. Comyn reportedly added that he did not take that flawed advice to the board because he believed the board shared the same view: that financial results mattered and that customers were expendable in achieving them.

Three years earlier the same bank had put a remuneration report to its annual general meeting which consisted of executive bonuses paid on the basis of meeting a number of non-financial key performance indicators that included good governance practices and customer satisfaction targets. A number of institutional shareholders objected, complaining that bonuses should not be paid on the basis of meeting ‘soft performance targets’ and that only financial indicators can be taken seriously.

It’s worth reflecting that even though Ian Narev was ostensibly a powerful chief executive of a prestigious institution, he was part of and captive to the culture of an entity that was bigger than one person, and that entity included the board to which he reported and the shareholders to whom the board reported.

It was therefore a pleasure to hear in March 2019, three years later, the Australian Prudential Regulation Authority chairman, Wayne Byers, state that the formulaic approaches to executive pay, that some investors favour, based on the single metric of shareholder return is “not going to cut it”.

In calling for a remuneration metric based on an even balance of financial and non-financial considerations, the regulator has picked up on Kenneth’s Hayne’s conclusion about the vagaries of human nature.

When Commissioner Hayne concluded that “entities and individuals acted the way they did because they could,” it seems reasonable to infer that he wasn’t simply touching on the fragility of the moral compass that order individual lives; he was also making a judgement about how the group thinking of people within entities is self-generating and requires effective self-checking and correction mechanisms.

In delivering his report to Government, the Commissioner left little doubt that while it might be people who create value in an organisation through their ideas, innovations and dynamism, it is also the people in an organisation who will lose their way if there are no corrective instruments preventing them doing so.

It is those instruments that have the potential to contribute to culture, a word often used as shorthand to describe ‘the way things are done around here’.

While the Hayne Commission has been a sobering experience for the Australian finance sector and business in general, as the head of the HR peak body, I noticed with a degree of curiosity that the executives called to give evidence and reveal the lamentable flaws in their corporate practices, were almost all in charge of operational divisions.

The counsel assisting the Commission, Rowena Orr QC, refrained from calling chief human resource officers to the stand even though they would ostensibly be the executives charged with the ownership of culture.

There may be a number of reasons for HR flying under the Commission’s radar but the one that interests me is the likelihood that the HR function was not taken sufficiently seriously within the entities that appeared at the Commission. By that I mean not only did the counsel assisting believe HR executives did not exercise enough influence to deserve a grilling from her, but that the entities themselves did not believe so either.

The Hayne Commission is not the only time I’ve been struck by the phenomenon of the HR function flying under the radar when it might be expected to be in the firing line. Another was the VW emissions scandal, which if nothing else was a case of a company living comfortably with a people culture in which coyness to speak out about grossly unethical and illegal behaviour was acceptable, and in which remaining mute was the unspoken code that was rewarded.

In resisting the temptation to suggest that business needs to take the HR function more seriously, I would say that a greater number of HR executives and practitioners, many of whom are members of the organisation I lead, need to be more upfront and visible in assuming their role as the owners of culture, and where that is not seen as their role, to take a lead in putting the case to the entity for doing so.

For that eventuality to succeed, HR leaders must be credible professionals in their own right so that the organisation has the confidence to vest the HR function with responsibility for culture in its own interests.

There are organisations which have done just that. They have seen that HR can boost the performance levels of its people which in turn contributes to achievement of its mission and sound financial results by paying appropriate attention to its customers.

A contemporary example of such a company is the entertainment service to which many of us subscribe. I refer to Netflix, which over the past decade has moved from physically shipping DVDs, to mailing content, to streaming movies digitally, to where it is now – a major creator of content, the 2018 Oscar winning movie Roma being a case in point.

In a 2018 Harvard Business Review article, the Fast Company co-founder Bill Taylor put Netflix success down to three things.

The first relates to big data, but not so much to the data itself as the ‘big ideas’ generated by using big data.

The second is a point about disruption. Netflix’s success involved breaking free from the accepted wisdom within the industry of which it was part. The company was not simply interested in how its customers watched but was keen to influence what thy watched, and it replaced an industry focus on demographics with the creation of ‘taste clusters’.

Taylor’s point is that Netflix didn’t just disrupt an industry, it also disrupted itself in the service of its mission. A company that ships DVDs is not the same company that makes content.

The third point goes to Netflix’s philosophy, described as ‘culture is strategy and strategy is culture’. Taylor sees Reed Hastings, the CEO of Netflix, as a leader who thinks just as rigorously about people and culture as he does about digital streaming and content.

Culture for Reed is about values, and he believes that values written down are less indicative of culture than “the real values of a firm which are shown by who gets rewarded or let go”.

And going to the question of who gets rewarded, he says they are people “who say what they think, when it’s in the best interest of Netfix, even if saying it is uncomfortable”. They are willing to be critical of the status quo and make tough decisions without agonising.

Netflix doesn’t make artificial distinctions between financial and not-financial metrics. They are the same thing. If the company can service its customers within the bounds of its mission better than its competitors, it will be successful. And it has at the expense of Blockbuster, which no longer trades.

So we are talking about a serious success story with Netflix, and on all three of Taylor’s success measures, people are central.

Only people can generate big ideas.

Only people can decide that in order to disrupt an industry it’s necessary to disrupt yourself, and then do it.

And only people can decide to adopt a philosophy about the interconnected centrality of culture and strategy, and make it work.

If Netflix is a stellar success story founded on a people culture, the aftermath of the Hayne Royal Commission is a crisis presented to the finance sector with culture at its core, and survival of 2019 annual general meetings without incurring a second strike on executive remuneration.

When Winston Churchill wanted to set up a United Nations at the end of World War II, he reminded world leaders that they should “never let a good crisis go to waste”.

For the HR profession in Australia, there has never been a better time than now to assist the banks in dealing with a culture crisis. Since 2015 the Australian HR Institute has set a high certification bar on professional HR standards and practice. We now require eligible practitioners to undertake a set number of exacting internationally benchmarked postgraduate units, as well as minimum years of service, and mandated continuing professional development.

In a profession which has previously set no bar to entry, this is a significant initiative that recognises the demands that businesses are now making on the skills, knowledge and behaviours required of an HR professional working as a partner to the business. HR certified practitioners can and will take ownership of driving economic performance while at the same time exercising the influence and courage where necessary to ensure the people and the entity remain ethically and legally focused on achieving its mission.

Lyn Goodear FAHRI GAICD is the CEO of the Australian HR Institute, www.ahri.com.au.

Why blog? Six reasons why every website owner needs one.

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Every business needs a website and I remember the days in early 2000 – 2005 clients saying to me they don’t need a website. How the view of websites has changed so much since then.

I have found that up until 2014, all I needed to do was create a brilliant website for my client. This website would be filled with fresh and unique content on the subject, and organic search engine optimisation SEO applied to the site. Within a few months, they would be on page one for most of the keywords.

Since February 2014, Google has changed the game and so much more work is now involved to gain a high score for your website. Fresh and unique content is still significant. Now, we supply Google with this via blogs.

Outbound marketing vs. inbound marketing

Outbound marketing is essentially the use of traditional advertising methods such as flyers, email marketing, and cold calling to reach potential customers. This wide-net method tends to be rather costly and ineffective due to the lack of targeting and usually offers a relatively low ROI.

While outbound marketing focuses on reaching out to potential customers, inbound marketing methods are aimed at attracting prospective customers who are already seeking a product or service like yours. By providing value by offering useful and helpful content at every stage of your prospects buying journey, they are much more likely to purchase from you.

However, what is the most effective inbound method to include in your marketing strategy? The answer is surprisingly simple yet highly effective: launch a blog (short for ‘web log’) on your company’s website and regularly publish useful and relevant content.

With this in mind, here are six reasons why every company needs a blog on their website.

1. A blog can increase traffic to your site

If your primary marketing strategy focuses on outbound methods, you most likely only attract a low number of qualified leads per month. Chances are, your website doesn’t receive much traffic from search engines – and this is where a large proportion of your potential customers will be coming from.

As most business websites are just a few pages long, they are unlikely to be found when people are idly browsing the internet. However, by publishing articles that cover trending topics, provide solutions to both common and specific problems, and offer a unique perspective on important issues, your web presence will be significantly expanded.

This will result in more web pages for search engines to index your website and include it in web searches. Therefore, when your potential customers type a query into Google, the chances of them finding the useful content – and in turn, your website – increases exponentially. Simple? Yes. Effective? Most definitely

2. A great blog can encourage purchasing behaviour

Research has found that B2B companies with a regularly updated blog have an 88% higher monthly lead generation than those without a blog. To discover exactly how this happens, we need to understand how buyers make their purchasing decisions.

The purchasing journey begins with research – usually through online reviews and company blogs. This information helps buyers to decide if they will buy, and if so, which company they will buy from. A helpful and informative blog can help to build trust with buyers, which often leads to higher sales.

3. Blogging can help with your company’s social media marketing

As your current and potential customers regularly use their favourite social media platforms such as Facebook, Twitter, Instagram and LinkedIn, these are the ideal places to be sharing your latest blog posts.

Social media serves as an incredible marketing tool for keeping your business in front of your customers – as long as your content is relevant and engaging.

4. A blog can improve your social media engagement

A regularly updated blog provides fresh content for your audience on social media, which leads to more traffic to your website, more qualified leads, and more sales.

5. Blogging helps to improve your website’s SEO

A blog can help tremendously towards your SEO efforts, as search engines rank websites with fresh, quality content higher than those that don’t. The more original and diverse content you publish – such as videos, images, and relevant keywords – the more opportunities you provide search engines to find you. Other website owners will be more likely to backlink to your site, which is another excellent way to improve your SEO.

6. An exciting blog can support your email marketing strategy

If you have a company blog that is kept fresh with interesting, useful, and informative content, your email subscribers will look forward to seeing your emails in their inbox – rather than clicking the unsubscribe button. A blog that provides valuable information is a great way to keep existing and potential customers interested in your business, which in turn leads to more sales.

Vlogging – what is it, and how is it shaping digital media?

Between 2012 and 2016, online video viewers increased by 87% from 372,000,000 to nearly 700,000,000, while viewing time has risen from 26 minutes a day to almost an hour. These incredible increases are mainly due to the popularity of mobile internet browsing, which has overtaken desktop viewing.

Online video is rapidly becoming the media of choice for web users due to its low engagement requirements. A certain type of video proving to be popular with audiences – Vlogs. A vlog, or ‘video log’ is a type of video where ‘vloggers’ share self-recorded videos of their lives.

As these six reasons show, having a blog on your company website and adopting a strategic approach to your blogging efforts can lead to higher website traffic, which results in more qualified leads and an increase in sales. It certainly takes some effort and consistency, but your business bank account will thank you for it.

Senka Pupacic is the founder of Top 10 SEO: www.top10insydney.com.au.

Destination New Orleans: Experience Southern hospitality

A former French colony, New Orleans, often referred to as ‘The Big Easy’, is a truly unique city, not just in the United States but across the world. With a proud cross-cultural and multilingual tradition, this one-of-a-kind city situated alongside the great Mississippi river is a growing tourist destination, welcoming close to 18 million visitors in 2017.

Marketing itself as a state of opportunity, Louisiana offers a business environment built for success, combining an extensive collection of competitive advantages, including customised workforce training, low business operating costs, and robust infrastructure. As a major port, New Orleans is considered an economic and commercial hub for the Gulf Coast region.

Founded in 2004, the New Orleans Chamber of Commerce helps members build mutually beneficial partnerships within the city, and currently boasts around 1,300 members. This focus on business has helped Louisiana rank among the top ten business climates in the nation across three independent sources.

The recently revamped New Orleans Ernest N. Morial Convention Center plays a major role in the success of the city’s business events. The centre is the sixth largest convention facility in the United States, boasting over a million square feet of exhibit space, and regularly ranks in the country’s top ten facilities holding the most annual conventions and tradeshows.

In New Orleans, both business and culture are abounding. Steeped in a proud musical tradition, there is never a night in New Orleans where one can’t see the finest jazz and blues musicians lighting up a stage, along with a host of other performances that give a real flavour of the city’s historic music and arts scene.

If one is lucky enough to visit the city in carnival season, then the Mardi Gras celebrations across New Orleans are less of a ‘must see’ and more of a ‘cannot miss’. For two weeks in February/ March, the city is transformed into a cornucopia of celebration, hosting parades, balls and many more vibrant community events that get the streets dancing and singing.

New Orleans has earned a reputation as one of the world’s most culturally rich destinations
New Orleans has earned a reputation as one of the world’s most culturally rich destinations

Those visiting outside carnival season are still in for a treat. The French Quarter is the city’s historic heart, famous for its vibrant, around-the-clock nightlife, and colourful buildings resplendent with cast-iron balconies. The centre of activity is famous Bourbon Street, packed with such crowd-pleasers as jazz clubs, Cajun restaurants and rowdy cocktail bars.

Head down to the Toulouse Street Wharf and one can see the city differently by taking a ride on New Orleans’ only steamboat, the Steamboat Natchez. This two-hour cruise from the heart of the French Quarter will take you around the beautiful crescent of the lower Mississippi River, with food, cocktails and wine available on board to help you float in style.

A short walk further south, in the CBD, is the National WWII Museum. Designated by the U.S. Congress as the nation’s official National WWII Museum in 2003, it offers a range of fascinating special exhibits and events, as well as museum tours across its six-acre campus, interactive features, oral histories, and personal vignettes.

A visit to Louisiana wouldn’t be complete without exploring the New Orleans plantations, which provide insight into some of America’s most interesting and tragic stories. The history of slavery in the state, and the nation, is not always comfortable to learn about, but these tours give a fascinating glimpse into both the opulence and exploitation of plantation life.

New Orleans has earned a reputation as one of the world’s most culturally rich destinations, and the sense of excitement and joy that permeates this great city is infectious.

Stay Alfred New Orleans

Our accommodation provider of choice when staying in New Orleans is Stay Alfred, offering short or long-term stays right in the downtown core. Find out more at www.stayalfred.com.

 

Destination San Francisco: Golden Gate City

The jewel in the crown of the San Francisco Bay Area on America’s west coast, San Francisco has a reputation for progressive living and technological innovation, and was the highest ranked American city for liveability in 2018. To those living in the area, San Francisco is normally referred to as ‘The City’.

The cultural, commercial and financial centre of Northern California, San Francisco is the thirteenth-most populous city in the US, and the fourth-most populous in California. Nearby San Francisco International Airport offers non-stop flights to more than 39 international cities on 33 international carriers, averaging over 55 million passengers per year.

Two of the Bay Area’s major cities, San Francisco and San Jose, have the strongest economies in the US. In 2017, the Bay Area alone generated a GDP of $748m, with an annual growth rate nearly double that of the entire nation. If the Bay Area were a country, it would be in the top 20 largest economies in the world.

Much of the region’s prosperity is generated by its proximity to Silicon Valley, the epicentre of the tech world, which has become one of the biggest contributors to the national economy in the past few decades. A host of tech giants call San Francisco home, including Twitter, Pinterest, Dropbox and Reddit.

The city’s tourism industry is another of its key strengths. In 2016, San Francisco welcomed around 25.1 million visitors to the city, helping to generate over $9.5 billion for the city’s economy. In addition to being a favourite for international visitors, the city remains in the top ten US cities for domestic vacations.

San Francisco is the cultural, commercial and financial centre of Northern California
San Francisco is the cultural, commercial and financial centre of Northern California

There is plenty to do and see around the city. Those who are already a little familiar with the area will be keen to visit the Golden Gate Bridge, a spectacular sight that can be viewed from a variety of awe-inspiring spots. Those wishing to get a little closer can walk or bike across the bridge, or even take a guided tour.

While in close proximity to the Bay, the next stop is likely to be the former island prison at Alcatraz, the top tourist attraction in San Francisco, and just a short ferry ride from Fisherman’s Wharf. Make sure your trip is organised beforehand, as there is just one ferry company, Alcatraz Cruises, which takes people to and from the island.

In the city’s Financial District, the 48-story futurist building known as the Transamerica Pyramid is the second-tallest skyscraper in the San Francisco skyline. When completed in 1972, the Pyramid was the eighth-tallest building in the world. Stop in to the tower’s visitor centre for live-feed views from the top, and to explore the history of the Pyramid.

Those interested in the city’s role in the 1960s counterculture movement will be keen to visit the Haight-Ashbury area, just east of the Golden Gate Park. Head down Haight Street to soak up the hippie vibe and sample a mix of vintage clothing boutiques, record shops, bookstores, dive bars and casual, eclectic restaurants.

A few blocks north is the famous historical landmark of the Painted Ladies, an iconic row of Victorian homes well-known for appearances on movies, TV shows and postcards. Further north again, near Pier 39, is the city’s Chinatown area, the oldest community of its kind in North America.

Best known for year-round fog, cable cars and Victorian houses, San Francisco is one of the United States’ most unique and iconic cities.

Stay Alfred San Francisco

Our accommodation provider of choice when staying in San Francisco is Zeus, offering a home of your own for business travel. Find out more by visiting www.zeusliving.com.