From the Knowledge@Wharton today blog.

Thanks in part to the growth of mobile technology, it’s no secret that work is starting to seep into people’s home lives. But life is also seeping into the office, with an increasing number of employees setting aside a few minutes — or longer — during the workday to send personal e-mails, run errands or take a coffee break.

Those tasks were among the most mentioned in a recent survey by data protection firm Mozy. Other activities that respondents said they felt comfortable doing on company time included leaving early for doctors’ appointments or for a child’s performance at school.

The study of 1,000 employees and employers from the United States, Great Britain, Germany, France and Ireland also found that many managers are taking an increasingly relaxed attitude toward how workers structure their days, in part because the bosses assume — correctly, according to the study results — that many are putting in time outside the office to finish work tasks.

As the workday strays further from the traditional 9 a.m. to 5 p.m. structure, how do employees figure out when it’s permissible to slip in time for personal business — and determine what types of “life-related” tasks are acceptable?

“It’s a combination of factors,” says Wharton practice professor of management Stewart Friedman. “You’ve got to consider the work culture [and] the personal ethical standards and conscientiousness of the employee. The age of the employee probably has an effect as well.” But the most critical factor is the “social and political environment at work, what the expectations and assumptions are about how people are supposed to operate, and whether the emphasis is on results as opposed to how those results are achieved,” he adds.

Workers on an assembly line or in similarly regimented and location-dependent positions are limited in the amount of flexibility they have. “In the pre-Internet world and in the manufacturing-based economy, your physical presence was really the thing that mattered,” Friedman notes. “Performance management systems were created around the idea of time as the essential metric.”

That remains the traditional model and mode of thinking for many organizations, Friedman says. But he adds that managers should consider that it’s just as important for employees to be psychologically present. “It’s harder to be psychologically present when you’re distracted by the demands of other parts of your life. I think the principle to go by is that if [time for personal tasks on the job] helps you take care of things that matter to you – and that you are  responsible for in other parts of your life — an employer is going to want you to do that so long as you meet performance standards and deliver results in ways that create value for the company.”

Friedman knows of a company where employees have even been put in charge of their vacation time. Instead of earning a set number of days, “you take vacation when you need to, just in the way they trust [employees] on a daily basis to figure out when they need to check out to do other stuff.”

Moving toward a more flexible, less location-dependent method of accounting for a worker’s time requires a certain level of trust on both sides, in addition to a transparent, results-focused system to evaluate employee performance, Friedman says. “What you want are people who have a sense of responsibility for the outcomes that matter, and you engender that when you give people the authority to make decisions about when they get things done.”

This blog was previously posted in Knowledge@Wharton today blog: Taking a Long Lunch? When Doing Personal Chores on the Job Is OK

From the Knowledge@Wharton today blog.

Yahoo’s hiring of Marissa Mayer — a high-profile executive and innovator ensnared from rival Google — as its new CEO has all the trappings of a coup. But Wharton experts say Mayer will have to move quickly to win the search engine new users and advertisers, and to jump-start product innovation.

“Will Mayer be the one to finally work some magic at Yahoo and restore its glamour in the industry?” asks Wharton management professor Lawrence Hrebiniak, adding that he his happy with the choice. “She brings experience with, and knowledge of, consumer websites gained at Google, a good place to work and learn.”

Mayer’s last post in her 13-year Google career was vice president of the search giant’s local, maps and location services, overseeing product management, engineering, design and strategy. Yahoo credits Mayer — who made Glamour magazine’s 2009 list of “Women of the Year” — with heading up some of Google’s most successful innovations and launching more than a hundred features and products, including Gmail, Google News, and the “look and feel” of the Google experience.

“Marissa Mayer is a great win for Yahoo,” says Wharton operations and information management professor Kartik Hosanagar. “She’s from a relevant domain and is a star exec. She will provide good, positive PR and will help in recruiting some good folks back to Yahoo.”

Prior to Mayer’s hiring, Hosanagar told Knowledge@Wharton Today that Yahoo needed a leader with an “entrepreneurial spark” as CEO. “Marissa is close, but not quite that,” he says now. “She joined Google very early … but she’s been at Google too long and it’s not clear to me she’s the person who comes up with new product ideas and gets them done. I’d have preferred someone who has started and grown a company. Even Jack Ma [founder of Chinese business-to-business trading platform Alibaba.com] would have been a great choice. That said, I think Marissa is overall not a bad choice.”

Mayer will have to hit the ground running at Yahoo, which has struggled to maintain stable leadership at the top and seen a steady decline in revenue over the past few years. “Her focus will be on Yahoo’s core advertising business,” says Hrebiniak. Adds Hosanagar: “The one thing Marissa needs to do is to focus on developing a new winning product at Yahoo instead of financial reengineering, restructuring the organization and the like. Some of the latter is needed, but what will get Yahoo out of this mess will be a new product, much like [the introduction of the] iPod for Apple. Given her background, I think her focus will indeed be on products.”

Hrebiniak suggests that the work done by Mayer’s predecessor, interim CEO Ross Levinsohn, including settling disputes with Google and Alibaba, will allow her to focus on the advertising business.

Closing the Revolving Door?

But Mayer could face other distractions, as well as formidable hurdles to overcome, Hrebiniak points out. “Levinsohn’s being passed over may generate resentment among key managers and employees, which could [lead to] defections and other problems,” he says. “Google and Facebook, which have steadily been stealing Yahoo’s users and advertising revenues, aren’t going away. A frontal attack by Mayer is certainly anticipated and the two formidable foes will assuredly be prepared for Yahoo’s new assaults.”

Mayer is Yahoo’s fifth CEO in as many years, and “a revolving door itself creates uncertainty and possible confusion,” Hrebiniak notes. “Levinsohn, for example, was reportedly in the process of formulating and executing his version of a new strategy. Mayer may upset the apple cart with something new and different, creating confusion and a feeling of ‘here we go again.’”

Wall Street seemed to cheer the choice of Mayer, notes Hrebiniak, but adds that “only time will tell if the trust in her capabilities in a competitive marketplace is warranted.” Mayer has a lot going for her — including a baby boy due Oct. 7 — and has been named in four consecutive years starting in 2008 to Fortune‘s list of the “50 Most Powerful Women in Business.” As one of only 20 female CEOs of Fortune 500 companies, and Google’s 20th-ever employee, “maybe 20 is the magic number,” for Yahoo, says Hrebiniak.

This blog was previously posted in Knowledge@Wharton today blog: As Mayer Brings the Pizzazz, Yahoo Waits for the Magic

From the Knowledge@Wharton today blog.

Bruce McColl isn’t an engineer, and his responsibilities have a lot more to do with building brands than building bridges. But the much-celebrated global chief marketing officer for Mars nonetheless believes that the spectacular failure in 1940 of the original Tacoma Narrows Bridge – a suspension bridge in Washington state –offers valuable lessons for brand managers as they attempt to navigate the fractured, difficult, fast-shifting marketing landscape of the 21st century. 

“The real insight [from the collapse] is that the engineers on that project jumped in too eagerly with new technologies and new methods,” said McColl, who spoke during Wharton’s recent Future of Advertising Conference. “There were new variables and new techniques, and they weren’t yet tried and tested. They used them on a scale that they weren’t ready for.”

As McColl noted, while other, apparently more daring designs had preceded the Tacoma span — the groundbreaking Brooklyn Bridge in 1883, the even more enormous George Washington Bridge in 1931 and the stunning Golden Gate Bridge in 1938 — and while the Tacoma bridge basically followed the same blueprint as those spans, it failed anyway. It failed not necessarily because of its basic layout, or because of the inadequacy of its designer (indeed, the Tacoma project was headed up by Leon Moisseiff, who also designed the Golden Gate Bridge), but rather because the technologies and innovations used there — specifically, its elegant but narrow girders — simply pushed the envelope too far, too soon. Moisseiff’s design may have been a good fit elsewhere, but it wasn’t a good fit for blustery Puget Sound.

Construction workers became familiar with the bridge’s flaws early on, so that when the bridge collapsed into Puget Sound just four months after its opening (no injuries were reported), hardly anyone was surprised.

The lesson — not just for engineers, but for marketers — is clear, McColl said: Technology and innovation in and of themselves are not necessarily the answer to any single problem or challenge. Employ new technologies incorrectly, or put too much faith in innovations that aren’t yet fully understood, and failure — even catastrophic failure — is possible.

“In my job, I’m concerned with big, valuable brands,” McColl said. “I don’t want to see them destroyed because I jumped in too quickly with technologies that weren’t proven…. You look at the things that have been built, from the great pyramids to the wonderful Sydney Opera House, and there’s a massive difference in technology. But the laws of physics have not changed. Engineers and architects still contend with the same laws of nature, and we as marketers need to understand [this] as we apply technology to the laws of marketing.”

Of course, there’s a catch in that statement, McColl says: In marketing, there are no hard-and-fast laws of physics, especially now, as social media opens up vast new possibilities and poses enormously difficult new challenges. There is only the bottom line, which is what marketers must constantly keep in mind as they work to craft smart, modern marketing campaigns that may or may not rely heavily on social media or other new technologies to meet their sales targets.

While McColl joked that he has not always enjoyed success during his long and accomplished career — “It’s unlikely that any marketer can destroy a brand like those engineers destroyed that bridge, but Lord knows I’ve tried” – recently his Mars team hit a marketing home run. The successful campaign they launched in conjunction with the 2010 Super Bowl was a smart mix of new-age social media savvy and tried-and-true marketing methods, all powered by the company’s risky decision to use an elderly actress, long out of the public eye, to form the center of their campaign.

In the Super Bowl ad that kick-started what would prove to be a long-running profitable campaign, actress Betty White was shown playing football with a bunch of young men. White goes out for a pass, drops the ball and gets knocked flat. She returns to the huddle and is told by her teammate that she was playing like, well, Betty White.

Then White eats a Snickers bar, transforms back into who she actually is — a young man who just happened to be suffering form a lack of energy — and returns to the field, rejuvenated. The ad was funny, smart and modern. By the time the Super Bowl ad reviews were in the next morning, the Snickers ad was seen by many as the single most popular of the evening. Viewers loved the concept, the offbeat approach and, perhaps above all, White’s willingness to play along with the joke.

But McColl and his team never intended the Super Bowl ad to be a standalone piece, but rather the first step of a three-month campaign — one that would help them reach the 270 million people worldwide who have eaten a Snickers bar at least once in their life, as well as the 70 million who do so regularly, in order to keep their brand prominent and “top of mind.”

While the initial buzz about the ad kept Snickers in the news for a few days, the full impact of the campaign would be revealed in the months to come. A few weeks after Super Bowl Sunday, White ended up on Saturday Night Live, followed by appearances on Larry King Live and Oprah. Because of a 30-second ad and a good sense of humor, White was back. But Snickers — and Mars — may have been the bigger winner.

In total, McColl said, the White campaign generated a stunning 350 million media impressions. More importantly, those hits actually translated into sales: Revenues in the wake of the campaign shot up by double digits. “We found a way to do a campaign that could get amplified by the mass media,” McColl said. “It was a very interesting year.”

Even in the wake of that success, however, and even though he and his Mars colleagues know that social media did play a massive role in the campaign’s meteoric rise, McColl admits that it’s been difficult to figure out exactly how Facebook and Twitter influenced the sales jump, and why this campaign, unlike others, lit such a fire under social media users.

It’s easy enough to stand back and say that social media helped, McColl concluded. It’s not so easy, however, to figure out why it helped — and what lessons can be gleaned from a campaign that seemed to surprise even McColl with its results.

In other words, the laws of physics in social media marketing remain unknown, and likely will for some time to come.

“When you try to connect social media to all of this, unfortunately it’s like lightning in a bottle,” he said. “And these are just some of the factors we have to run through when we look at these new technologies. As mass marketers, we need to go out there and reach hundreds of millions of people, but we need to understand how these new technologies can help us achieve that. That’s the core that we’re talking about as we transform our growth agenda.”

This blog was previously posted in Knowledge@Wharton today blog: Social Media and Snickers

From the Knowledge@Wharton today blog.

Yahoo’s board is on borrowed time to fix its woes — a situation that was no doubt aggravated by the board’s decision not to name a new CEO at its annual meeting on Thursday. Wharton professors Kartik Hosanagar, Eric T. Bradlow and Waheed Hussain have advice for the board on how to ensure stable leadership and reposition the struggling company for growth.

Hosanagar, Wharton professor of operations and information management, states that time is running out for the company’s board. “They need to elect someone … who can bring back some of the entrepreneurial spark in Yahoo,” he says. “Traditional, seasoned management veterans are not the right candidates for Yahoo given all that it’s going through.”

Many expected Yahoo’s board to name interim CEO Ross Levinsohn to the top job, but now speculation is growing that the board is considering other candidates, too. Levinsohn, 48, took over as interim CEO in May from Scott Thompson, who quit after being accused of making false claims on his CV. Since then, Levinsohn has scored several victories, including making peace with Facebook last week by settling patent disputes. Also, Yahoo and Facebook agreed to form advertising and content-sharing partnerships. Finally, Levinsohn in May guided Yahoo’s decision to sell half its 40% stake in Chinese e-commerce firm Alibaba for $7.1 billion, ending tensions over how much value Yahoo can extract from that investment.

What should guide the Yahoo board as it picks the firm’s next CEO? “The last two Yahoo CEOs were outsiders, and it seems that Levinsohn is also essentially an outsider, having been at Yahoo for only two years,” says Hussain, Wharton professor of legal studies and business ethics, whose research areas include corporate governance issues. “You never know an outsider the way that you know one of your own executives, and you naturally have to take much more on trust.”

Hussain’s advice for corporate boards in general, including Yahoo, is to build better structures and processes for grooming leaders from within the corporation. “There is no hard and fast law that says internal leaders have less viable and transformational ideas than outsiders,” he says. “And in general, the devil you know is better than the devil you don’t know.”

Wharton marketing professor Bradlow says the new CEO must develop “a core niche strategy” to restore Yahoo’s fortunes. “[That person] should rebuild from the ground up by owning a segment of customers and branching [out] big from there.”

Bradlow has a specific to-do list: “Be willing to experiment,” he says, such as offering value-added services like web page layouts. His other suggestions: “Track much more than visits/sales to understand performance. Make sure you understand repeat visitation behavior, page depth and [other] things at the individual customer level.” Any company, including Yahoo, that tracks only aggregate behavior will miss out on important diagnostics showing whether a strategy is or is not working, he adds.

Hussain cautions against placing too much emphasis on just the CEO’s actions. “In the long run, the choice of a CEO is only one moderate factor among many that figure into making a company successful,” he says. “These decisions get an enormous amount of attention in the media, so boards tend to feel enormous pressure to do something dramatic. But it’s important to be realistic. You can only do so much to move an ocean liner in a short amount of time. Where it ends up depends a great deal on the seas and the winds.”

Shaky at the Top

Yahoo has had more than its share of instability at the top. Thompson, who quit after less than six months as CEO, had replaced Tim Morse, who had been at the helm for four months. Morse was named interim CEO last September after Yahoo’s chairman fired then-CEO Carol Bartz for what was widely seen as a failure in her efforts to boost the company’s fortunes.

Bartz, who had been CEO since 2009, had a little more than a year left on her contract when she was fired. Bartz had replaced Yahoo’s co-founder Jerry Yang, who had taken on the CEO role in July 2007. Yang had replaced then-CEO Terry Semel, a six-year veteran at the company, amid worries that Yahoo’s ad revenues were shrinking as business opportunities on the Internet were expanding.

Concerns over revenues persist to this day. Yahoo’s revenue has fallen steadily from $6.46 billion in 2009 to about $5 billion by 2011, although net income has grown in that period from about $600 million to a little more than $1 billion. “The major issue is that [its] growth is lagging the industry, especially [that of] Google, Facebook, etc.,” Hosanagar had noted in a Knowledge@Wharton Today report after Bartz’s exit.

Meanwhile, Yahoo’s shareholders seem to be losing patience. “You are behind the ball and you have been behind the ball, regardless of which CEO has shown up,” a shareholder told Levinsohn and other Yahoo executives at a Q&A session on Thursday, according to The Associated Press. “You don’t execute…. As a consumer, I have given up on this company.” Many still rue Yahoo’s decision not to sell itself to Microsoft four years ago for $47.5 billion. Back then, Yahoo’s share price was $33; Last week, it closed at $15.69.

This blog was previously posted in Knowledge@Wharton today blog: How Yahoo Can Search for its Growth Engine

Tim Harcourt | The Airport Economist

The world economy is used to surprises – usually on the downside. But one on the upside over the past year has been the reforms in Burma and the lifting of economic sanctions. The surprise reforms of the new Burmese government of President Thein Sein, the election of Aung San Suu Kyi to parliament and the latter’s call for Burma to open up to trade and investment have been monumental changes given Burma’s recent past. Australian Foreign Minister Bob Carr was one of the first foreign politicians to visit Burma since the new developments and other western nations have lifted sanctions and made (tentative) moves to invest in and trade with Burma under the new regime.

But what is the economic impact of sanctions and what happens to economies after sanctions are lifted? The economic evidence is mixed when looking at trade sanctions against South Africa, Southern Rhodesia (now Zimbabwe), Cuba, Fiji and now recently Burma. According to Yale University economist Philip Levy the economic sanctions against South Africa were more ‘psychologically hurtful’ to the apartheid regime than economically damaging, although there is evidence that disinvestment by major institutions like Chase and Barclays had more of an impact than trade sanctions. As in the case of Cuba and Southern Rhodesia, trade sanctions did not have as much impact as restrictions to foreign investment and in any case the economic distortions in the domestic economy (like South Africa’s apartheid labour market distortions) were as damaging as external sanctions. Levy believes that the collapse of the Soviet Union was the key factor in enabling the white minority government to start negotiating with Nelson Mandela and the African National Congress, making South Africa a ‘special case’ in terms of effectiveness of sanctions.

But what about Burma? Will it be a special case? It is clear that Burma has some big mountains to climb economically given the long days of military rule, isolation and the fact that it is a very poor and populous country. As the world’s leading Burma expert Professor Sean Turnell says: “Burma is paradoxically a resource rich but economically poor country.” One reason has not just been the isolation due to sanctions but also the enormous economic distortion of maintaining such a large military presence with no external defence purpose. According to Turnell, Burma kept “300,000 men under arms” (i.e. almost the population of Canberra) despite there being no obvious “genuine external threat”, which is similar to the economic burden placed upon South Africa of the vast bureaucratic apartheid apparatus (not to mention the ethical burden). The defence overhang for Burma has put its fiscal policy under serious strain and created inflationary issues dissuading investment. Maintaining the military apparatus in Burma has also created bureaucratic distortions, sucking away resources from much needed infrastructure, health and education, and handicapped Burma’s human capital development (creating too many idle low skilled soldiers and not enough farmers, teachers or other skilled workers).

The military overhang is the most pressing constraint on Burma’s return to any form of economic normalcy. But now Thein Sein has made some moves in the pro-democracy direction, what can Burma do straight away economically? Turnell has identified ‘low hanging fruit’ such as providing visas on arrivals for tourists, eliminating export taxes and import licences, allowing banks to lend to farmers, and deregulating interest rate ‘caps’ and other financial regulations. But at the end of the day, economic development must come in the agricultural sector and in resources and Burma needs to develop institutions in areas like banking and finance where there is almost no viable sector to speak of. And that’s all dependent on the capacity of Burma to reduce the military presence in the economy and society and create ‘room’ for other sectors. In a country where the armed forces have had so much control for so long, that’s a big ask.

So can Australia play a key role? Bob Carr gave Aung San Suu Kyi a strong assurance that Australia was willing and able to play an important role in Burma’s return to democracy and long term economic viability. Australia has a big role to play in infrastructure given the need for roads, rail, ports and telecommunications to serve its 62 million plus population, BHP Billiton can help in the development of oil and gas, and ANZ can play a similar role to its Pan Asian banking strategy in neighbouring Vietnam, Laos and Cambodia, and Australia’s education institutions can help with human capital development. But most of all Australia’s comparative advantage in agriculture, as well as our expertise in education and tourism, means we are well placed to help with Burma’s capacity building in the same was as we’ve helped the developing economies of Burma’s neighbours in the Mekong Delta. But it will be gradual and ‘softly, softly’ as the world investment community monitors the progress of the pro-democracy reforms.

It will take years to recover from what has happened in Burma since the 1960s, economically, politically and psychologically, but the lifting of sanctions and some luke warm (but positive) responses from investors and exporters (including from Australia) may signify some small steps to recovery on the new road to Mandalay.

Tim Harcourt is the JW Nevile Fellow in Economics and an adjunct professor in International Business Strategy, at the Australian School of Business, the University of New South Wales (UNSW) & author of The Airport Economist:  www.theairporteconomist.com.

Greg Wall | CSI Blog

A huge opportunity has opened up for co-operatives everywhere. The door is wide open. The timing is right. The global debt crisis is not going away. Pundits predict 10-15 years of slow global growth. Australian businesses, even in a more robust national setting, have to compete in this slow growth international economy. This is the chance for the global co-operative sector to demonstrate it can outperform other forms of business in challenging times in terms of growth, productivity, and the capacity to make the tough operational changes to stay competitive.

A major report handed down in the UK has shown this superior economic performance. The Co-operative Economy 2012  released last week reported that the sector had outperformed the corporate sector for the fourth consecutive year. The UK co-operative sector has grown by 21% since the start of the credit crunch in 2008 whilst the UK economy as a whole has stagnated. The co-operative financial services sector in the UK grew 12.9% from 2008-2010 compared to 8% for the rest of the sector. The growth rate of employee owned businesses is 50% higher than the UK economy (1.1% compared to 0.7 for the economy at large). The sector includes the John Lewis Partnership and we are fortunate to have ex-John Lewis Chair, Sir Stuart Hampson’s blog this week to tell us why their model is so successful.

This is further evidence that co-operatively owned businesses are more resilient in economic downturns than their conventionally owned counterparts. I would like to be able to report on the economic performance of Australian co-operatives with such clarity.

Fortunately, the United Nations International Year of Cooperatives has provided us with the opportunity to launch some sector initiatives and we have a mapping project for the Australian co-operative and mutual sector currently underway. The report is due in September. Co-operative Australia’s Top 100 list  of Australian co-operative and mutuals businesses, updated for 2012, is also due out at the end of this month.

This Saturday, 7 July, marks the most important day of the year for co-operative businesses – International Co-operative Day. This year is of particular importance given that 2012 also marks the United Nations International Year of Co-operatives, a landmark achievement for the one billion owners of co-operative businesses globally and the estimated 7.5 million Australian co-operative and mutual members. 

It is no accident that this is the first time that the United Nations has awarded a business structure with International Year status. In dedicating 2012 to co-operatives, the UN recognises the vital contribution of co-operative enterprises to global socio-economic development and to achieving the Millennium Development goals, in particular poverty reduction, employment generation and social integration; and we are very pleased that Australia’s Foreign Minister, Senator the Hon Bob Carr, will give a keynote address at the Development Co-operation Forum hosted by UN Secretary General Ban Ki-moon in New York this week (5 July).

In the IYC, the UN encourages Governments and regulatory bodies to establish policies, laws and regulation conducive to co-operative formation and growth. We believe that strong government support will go a long way to helping achieve these goals. 

The recognition of the role of co-operatives in Australian communities and the economy has recently gained momentum at the Federal level. Co-operatives received strong bi-partisan support in the House of Representatives on 25 June during the debate of the Private Members’ Bill tabled by Mr Luke Hartsuyker MP, Federal Member for Cowper. In addition, the passing of the Co-operatives Bill 2012 and Co-operatives National Law 2012 in the NSW Parliament marks a renewed commitment by Government to the co-operative sector. 

In launching the IYC 2012 Commemorative Coin in Australian Parliament House on 22 November 2011, the Minister for Employment and Workplace Relations, Financial Services and Superannuation, the Hon Bill Shorten MP noted: “We are the only nation in the world to produce a collectible coin celebrating the UN International Year of Co-operatives in 2012, as we recognise the impact of the co-operative business model on the burgeoning strength of the Australian economy on the world stage”.

Plaudits such as these are nice but the real opportunity of an International Year focusing on the co-operative model of business is the platform it provides for co-operatives, credit unions, customer owned banks, mutuals and other forms of member-owned business to showcase their economic and social achievements, and to raise awareness about the important role they play in providing a competitive marketplace and promoting social responsibility.

Australia’s IYC 2012 campaign has been fully funded by the industry – the co-operative members of Australia – and focuses on our vision for sustainable growth into the future.

The campaign aims to raise community awareness about socially responsible forms of business and the role they play in supporting local communities in Australia. I am proud of our ‘co-operative’ achievements as a sector this year, but the real game is the long term one. Charles (Chuck) Gould, Director-General of the global peak body for co-operatives, the International Co-operative Alliance, believes that the co-operative will be the fastest growing form of enterprise by 2020, and that 31 December 2012 marks a beginning not an end, of a ‘co-operative decade’.

 I am willing to place a bet that Chuck is right.

This post previously appeared in the CSI Blog: Open door beckons for rising stars of the global credit crunch – co-operatives

From the Knowledge@Wharton today blog.

We’re entering the next big wave of corporate social responsibility. At least that’s how Daniel Korschun, a Drexel University marketing professor, sees it.

The first wave of corporate social responsibility, known as CSR, was embodied in people like Sir Titus Salt, a British textile baron who improved conditions for workers toiling in what were then known as “dark satanic mills,” Korschun noted during a panel at this year’s Wharton Social Impact Conference. Salt brought them out of the economic darkness by providing housing, health care and a better way of life.

The second wave came during the 20^th century with the growing debate in corporate America over whether CSR should be considered an essential piece of good management or just a marketing tool to garner favor from communities, he said.

Today, “the debate is over,” noted Korschun, who acted as moderator of a panel focusing on innovation in corporate CSR. “We’re seeing the third wave of CSR, and companies are trying to incorporate CSR into the business model. That’s putting the onus on companies and management to find ways to innovate. It’s no longer enough to be somewhat engaged.”

Indeed, panelists at the session talked about how deeply involved companies have become with regards to giving back to society, either through philanthropy or sustainability efforts, and how far they still have to go in this effort.

Catherine Potter, a senior associate at consulting and management company Green Order, spoke about the environmental reality check her company has been able to provide to a client roster that includes General Electric, Pfizer and DuPont. GreenOrder focuses on how environmental innovation can actually make businesses more competitive and profitable, she said. “We’ll be the first to tell them, ‘Don’t just go … green for green’s sake.’ It should be rooted in business value.”

Building an enduring and effective sustainability platform, she added, takes many steps, but companies first have to understand what their core business model is, how they make money and how environmental sustainability plays into that. When clients come to GreenOrder, it’s usually the CEO who has bought into the idea of promoting green, “but the rest of the team thinks it’s hooey.” Yet buy-in at all levels is critical for making it work, Potter noted.

One example of a company that’s gone all in, she said, is General Electric, which GreenOrder has been advising since 2004. The multinational conglomerate, a global manufacturer of  everything from lighting to wind turbines, was able to cut more than $130 million in yearly energy costs while reducing greenhouse gas emissions and water usage.

Agencies in the public and private sector are coming to realize that CSR is not just about newfangled technology, but about changing behavior. For example, Potter pointed to utility clients who put in smart meters and devices for consumers to track energy usage. “It’s not going to work if you don’t engage people and figure out how to change their behavior,” she noted, adding that companies need to do more outreach to customers and make sure they have the information needed to form a realistic action plan.

Action is exactly what Chhavi Ghuliani, another speaker during the session, wants from all the players when it comes to environmental and social change. Ghuliani is a manager in advisory services for BSR, a consulting and research firm that works with 300 member companies all over the world to develop sustainable strategies for organizations, including everything from health education programs at a Bangladesh factory to creating green initiatives at a news organization.

In the past, Ghuliani said, companies viewed community investing and philanthropy as more important for brand recognition and boosting employee morale than for figuring into their core business operations. But today, it’s beginning to be seen more holistically. For example, he noted, BSR has completed a project with Bloomberg News to define what sustainability means, and was able to define what types of goods the company should be procuring to keep facilities running properly, while also focusing on what was the most sustainable. “As a result, Bloomberg saved $25 million in costs, but [the effort] also positioned them to be leaders in sustainability,” he added.

Figuring out which organizations are leaders in CSR, and which are falling behind, was another area BSR recently tackled by launching a new data service that compares CSR efforts among companies. Looking at two companies and comparing their energy efficiency is one example of this, noted Ghuliani.

This blog was previously posted in Knowledge@Wharton today blog: Corporate CSR: What It Means to Go ‘All In’

Sir Stuart Hampson | CSI Blog

When Jigme Singye was King of Bhutan he took the unconventional approach of declaring ‘Gross National Happiness’ as the measure of success for his government.  Bhutan is, of course, a country with a tiny population in a remote Himalayan region; it benefits from being able to sell hydro-electric power from its melting snow to its energy-hungry neighbour India, and you might say that they can afford to stand aside from the urgency of raising productive output or the international competitiveness of their workforce.  But during my fourteen years as Chairman of UK retailing group, the John Lewis Partnership (JLP), I felt a close affinity with Jingme Singye and his different view of life.  We didn’t have the magic equivalent of melting snow to drive customers through our doors, but our competitive edge was the power of employee ownership and the happiness it created.

John Lewis is the UK’s largest department store group and is widely regarded as ‘a great British institution’.  Its customer loyalty is legendary, and its readiness to publish weekly sales figures means that it’s regularly cited as a bellwether of the consumer economy.  The other part of the company is the Waitrose supermarket chain, a niche operator with some 4% of the UK market, but punching well above its weight with a reputation for high quality and product innovation.  With combined sales last year of £8.7bn (some AUD13bn) and profits of £354m (AUD527m), JLP would comfortably occupy a place in the FTSE100 – except that it’s not quoted.  JLP is a private company, and since 1929 it’s been owned by a Trust for the benefit of the people working in the business, all of whom are called ‘Partners’.  So, no outside shareholders, and almost half of last year’s profits – £165m – was divided up among the 81,000 Partners, with everyone, from long-serving Chairman to newly recruited part-time sales assistant, receiving the same 14% of their annual pay.  The rest was ploughed back into expansion of the business.

Like Jigme Singye, JLP starts from a different place from its retailing competitors, but this doesn’t mean it can ignore efficiency or customer attraction.  Despite that sobriquet ‘a great British institution’, there’s no room for resting on one’s laurels in the vigorously competitive UK retail sector.  Nonetheless, its unusual business structure enables JLP to strike a distinctive chord in its statement of corporate purpose:

The Partnership’s ultimate purpose is the happiness of all its members, through their worthwhile and satisfying employment in a successful business.

On first reading, this focus on happy staff might look like a defiant fist-shaking to the orthodox obsession with satisfying shareholders, but it’s just a logical extension of the well-recognised ‘employee-customer-profit chain’ concept championed by the Sears retailing group in the USA.  Sears saw that well-trained and motivated staff would serve customers better and lead to higher profits for shareholders, and therefore investment in the first part of that chain was beneficial to the dividend flow and capital growth which investors could expect.  Crucially, it went beyond the modern mantra adopted by many businesses of having to be ‘customer oriented’ as it recognised that the delivery of excellent customer service depended on the quality of the employees and the interest they took in caring for customers.  The former Chairman of Marks & Spencer Sir Rick Greenbury was proud of the reputation his company had for employee benefits: “We look after our staff well, but look at how well they look after our customers.”  In the same way, employees who feel a commitment to the success of their business will be better motivated to develop innovative products and processes, get the best out of supplier relationships and nurture a sound reputation in the community – all key ingredients to sustainable success and even to that goal of creating shareholder value.

The John Lewis Partnership converts the Sears model of an ‘employee-customer-profit chain’ into a self-sustaining circle.  Happiness isn’t just about having fun, working in a pleasant environment or being well paid for the job – though all three are energetically pursued.  The model asserts that happy Partners doing worthwhile jobs get satisfaction from those jobs, ensure that customers experience a high level of satisfaction too, and thus create a successful business.  There are three key points here.  First, the jobs have to be ‘worthwhile’ – no room for inefficiency or soft options, and experience shows that peer pressure in an employee-owned business creates an expectation of high performance rather than complacency.  Secondly, let’s be clear – there’s no satisfaction or happiness from working in an unsuccessful business.  And thirdly, the benefits of success are returned to the Partners, whose happiness and job satisfaction are increased accordingly. 

So, employee ownership creates a virtuous circle designed to achieve continuous progress, in contrast to the Sears model where the chain is seen in terms of the benefit to shareholders, who are divorced from the creators of success and where the objective is a flow of profit out of the business. 

Although I believe passionately in the merits of this kind of mutual ownership of businesses and feel encouraged to see it being more widely adopted, I’m also realistic enough to recognise that most companies have an established corporate structure which they’re unlikely to change radically.  Revolutionary cries of “more ownership for the workers” are not my scene.  I do believe, however, that companies which, in one way or another, embrace the concept of the self-sustaining circle described above will outperform their less enlightened competitors, give better service to their customers and deliver higher returns to their investors – which seems to me what most managements would see as their agenda.

Many companies might consider that they’ve grasped this point already by introducing profit-sharing schemes.  I’ll gloss over the observation that frequently the nature of such schemes either skews the benefit to the top echelons of management or encourages behaviour which is hostile to business sustainability (both topics currently enjoying plenty of public airing, and so I’ll say no more).  But if profit-sharing is to provide the incentive to improved efficiency and productivity, not only does it have to recognise that commercial success is the result of every person working in the business, but it also has to influence behaviour towards creating long-term success.

Profit-sharing is ineffective unless matched with constant communication – in two directions – on the link between the efforts of employees, whatever their role, and the profits which are generated.  Companies need to share knowledge – to update their employees as a matter of course throughout the year on the progress the business is making, to trust them with real figures, to engage them in the challenges it faces.  When I’ve suggested this to companies they frequently pale at such open disclosure and plead the need for commercial confidentiality, and obviously some information does have to be retained on a ‘need-to-know basis’ during sensitive negotiations or product development.  But generally it comes down to trust:  if you can’t trust your staff to know your figures and to be aware of your overall corporate strategy, can you really expect them to understand the direction the business is supposed to be taking?  Can you trust them to convey to your customers the corporate image which might be in the mind of top management?

Sharing information is the essential starting point, but this needs to be linked to what some may see as the even more unnerving idea of sharing power – taking notice of what employees are saying and harnessing those ideas for improving the business.

Again, the John Lewis Partnership’s unusual constitution means that it has crystallised this process in its statement of purpose:

 “Because the Partnership is owned in trust for its members, they share the responsibilities of ownership as well as its rewards – profit, knowledge and power.”

As well as sharing profit, conventional shareholder/owners also expect to enjoy full knowledge about their business and to have the ability to wield power at least through their ability to appoint directors.  At JLP this opportunity applies to all employees – Partners – but it isn’t seen as a right but as a responsibility.  Employee/owners don’t take a share of the profits just through turning up at work.  They have a responsibility to share knowledge about what’s going on in the business – contributing their experience and perceptions and facing up to some of the unpleasant truths about the competitive scene.  And then they have a responsibility to use their power to do something about it, both through their individual actions and also through elected councils which are involved in many commercial decisions. 

Companies might be nervous that consultation will slow the business down, and in the 1970s the Labour government in the UK encouraged the setting up of worker co-operatives which precisely demonstrated that weakness.  At JLP there isn’t management by committee.  In contrast to the fashionable enthusiasm for ‘flat companies’, it recognises that business decisions are of varying magnitude and need to be taken at various levels of authority.  Hierarchies are beneficial to speed of management initiative, as long as they are characterised by respect for the essential contribution made at all levels and for the people making that contribution.  I was always conscious that I didn’t serve customers, and yet the John Lewis reputation depended every day on the care taken over that critical interface.  Respect for the ‘front line’ sits alongside  the importance  of the strategic planning  provided by senior directors.  Sharing power implies no diminution of the responsibility of management to manage, but there is an expectation that this will be matched by a willingness to explain and to listen to the views of Partners who haven’t been involved in that part of the business. 

If one judges by published Reports & Accounts a large proportion of companies ought to have no difficulty with this approach.  “Our greatest asset is our workforce” is a truism which is rarely omitted, but too often these are empty words.  The consistent performance of JLP demonstrates that consultation and genuine sharing of information and responsibility between managers and managed is an accelerator not a drag anchor.  It’s often described as ‘managing in a gold-fish bowl’.  Undeniably, for some managers brought up in a more authoritarian school this style of management will prove uncomfortable or maybe even impossible.  The good news is that those managers will tend to work for the competition!

In case I seem to be describing a Utopian vision of management when everyone can be happy all the time, I readily acknowledge that employee-owned businesses go through tough times just like any other company.  Sometimes units which clearly have no long-term future have to be closed down.  This was the conclusion reached about two small department stores in the London suburbs, and the decision to close them down meant that the jobs of 800 Partners were lost.  Not much happiness around when that news was broken.  But the survival of an employee-owned business – just like any other – will involve tough decisions, and the greater good of the business as a whole is well understood.  Probably the main distinction of JLP when handling those job losses was the extent to which there was forward planning, holding vacancies at other neighbouring department stores and Waitrose supermarkets and arranging transfers where these were feasible.

In his book ‘The Loyalty Effect’ [Harvard Business Press 1996] Frederick Reicheld quoted some grim statistics:

US corporations lose half their customers in five years, half their employees in four years and half their investors in less than a year.

He painted a picture of a future ‘where business relationships are opportunistic transactions between virtual strangers’.  I find that an unappealing prospect in terms of the kind of dysfunctional society it predicates as well as its contradiction of the aim of business sustainability.  Yet it’s a prospect which is encouraged by a narrow focus on short-term profit as the indicator of success.  The ability of a company to survive through bad times as well as good – and that much targeted goal of shareholder value – is the outcome of a process driven by the engagement of its employees.  Anyone hoping to create long-term value needs to concentrate on the people who will make a difference rather than on the share register or the quarterly profit figure analysts are expecting. 

The accountancy profession will have problems determining how ‘happiness’ can be quantified as an asset on a company’s balance sheet, but the extent to which it is identified as a management objective will provide a better forward indicator of performance than just historical financial data.  Happy, satisfied and committed employees will want to stay with a business.  They’ll ensure that you have loyal customers, engaged suppliers and a sound reputation in the community

If you’ve worked in a company which already practices these ideas, then it seems impossible to think of managing in any other way.  The idea of ‘mutual interest’ is self-evidently practical and powerful.  If, however, you’ve seen nothing but ‘command and control’, all this consultation must look scary – but not as scary as being overtaken by competitors which are sharing knowledge, power and profit with employees throughout their business and enjoying the acceleration in performance which that brings.

This post previously appeared in the CSI Blog: Happiness – the key to company sustainability

From the Knowledge@Wharton today blog.

Rupert Murdoch’s move to split News Corp. into entertainment and publishing businesses may unlock the value he seeks. But the big imponderable in that shift could be Murdoch himself and his tainted legacy, say Wharton management professors Lawrence Hrebiniak and John Kimberly.

“Murdoch overseeing both companies actually may be a drag on performance,” notes Hrebiniak. The phone hacking scandal involving News Corp.’s defunct newspaper, News of the World, and other group publications has “definitely hurt Murdoch’s image and perceived effectiveness as a leader,” he adds. The newspapers’ employees were accused of phone hacking and bribery in publishing stories between 2005 and 2007.

Hrebiniak says Murdoch’s “past mistakes still are fresh in many peoples’ minds.” He refers to criticism that News Corp. overpaid in its August 2007 purchase of Wall Street Journal publisher Dow Jones from the Bancroft family for $5 billion. “As head of both companies and CEO of the entertainment division, [Murdoch] could easily stifle and overwhelm the creative thinking, influence, and strategic autonomy of the chosen head of the publishing business when these capabilities or skills are most needed to turn the business around,” notes Hrebiniak. “Murdoch should take a step back and reduce his active management role.”

Murdoch could still oversee both businesses, Hrebiniak adds, but needs to appoint new CEOs for each of the two divisions, and become a hands-off executive. Those CEOs could then focus on strategic opportunities and challenges “with a fresh vision, without excessive Murdoch influence or interference.”

News Corp. also has to contend with the overhang of Murdoch’s legacy, and two key components of that are unclear, according to Kimberly. First, he wonders how history will view the man as a business leader given the stain of the hacking scandal and the questions it raised about Murdoch’s personal integrity. Second, how well would Murdoch’s empire fare once he is gone, Kimberly asks. “Arguably, the most important challenge facing any leader is building an organization that can thrive in his or her absence.”

The phone hacking scandal has “severely tarnished” Murdoch’s personal reputation, and its economic consequences will not be known for some time, Kimberly notes. The fallout from the incident also led Murdoch’s son and heir apparent James Murdoch to step down as chairman of British satellite and broadcasting company BSkyB (of which News Corp. owns a 39% equity stake) this past April.

Unshackled by the Murdoch style and legacy, News Corp.’s split will bring some obvious benefits, experts say. For one, it allows for separate strategic attention to the two very different businesses of entertainment and publishing. “Each business can focus more directly on its own industry forces, competitive problems and opportunities,” Hrebiniak says.

Hrebiniak also suggests that with a more sharply focused entertainment business after the split, Murdoch could revive his attempt to complete his ownership of BSkyB, which is the biggest pay TV broadcast company in the U.K. and Ireland. The phone hacking scandal forced Murdoch to withdraw his bid last year to buy the remaining equity in the firm. Hrebiniak points to the immediate increase in the stock value of both News Corp. and BSkyB shares after the split announcement as indicative of the value investors see in the move and what might follow.

But News Corp. still faces major challenges after the separation, which is expected to be formalized over the next year after regulatory approvals. Hrebiniak notes that not all of its entertainment businesses have high growth prospects and profitability. The company’s cable business is doing well — much better than broadcast and satellite TV. “But the split won’t guarantee increased growth and profitability for the entertainment side of the business; serious strategic and execution issues won’t be overcome automatically,” Hrebiniak says.

In steering the newly separate publishing business, News Corp. will need major efforts to reduce costs and avert further slippage in already thin profit margins, according to Hrebiniak. He doesn’t see that as an easy task, given the many competitive challenges to publishing.

The split, in fact, raises more questions about the future of News Corp.’s publishing business than the entertainment arm, according to Kimberly. He notes that the publishing business is the “historical core” of Murdoch’s empire, and that he is understandably very attached to it. “By spinning it off, and by painting an optimistic picture of its future, he is playing a very risky game,” says Kimberly. “If he wins, his judgment is vindicated and some reputational capital will be rebuilt. If he loses, he loses big.”

Sasha Graham | CSI Blog

What kind of Australia do we want?

We all want a better life, for ourselves and our children. We also care about the progress of our communities and our country. We like to think that we will leave a positive legacy for the generations that come after us. But how do we know if we, as a nation, are on the right track?  What does progress really mean? How do we decide what counts as progress? How can we measure how well we are succeeding? By definition, the progress of a nation or a community is measured by how well it moves towards set goals and values. Until recently, most of the national conversations about our progress have been focused on economic growth or GDP as the key goal for Australia. The growth of wicked problems such as social and financial exclusion, mental health and environmental degradation are all linked to our state of wellbeing. Now, more than ever, human progress is increasingly being understood as more complex than this, including the values that underpin our life together, goals that relate to our wellbeing as individuals and as communities, and the effective and sustainable use of our resources for the wellbeing of future generations.

Deciding what progress means for Australia and how to measure it isn’t simply a matter of policy for lawmakers or a technical question for experts. It’s a democratic question for all Australians. Interestingly, the Australian Bureau of Statistics (ABS) was the first national statistics office in the world to develop an integrated set of national progress measures and this project itself became one of the main inspirations for the OECD’s global project. Over the past year, there have been some interesting developments at the Federal level, with commencement on development of Australia’s Wellbeing Index announced in 2010. Where traditional polling methods and ‘social-lite’ census questions exist, there is a need for local place-based approaches in addressing disadvantage and sustainability. 

Place or asset-based strategies have emerged as a key element of the Australian Government’s Social Inclusion Agenda, and last year its Social Inclusion Unit released a groundbreaking report, Governance Models for Location Based Initiatives. Based on deep research and consultation, the Board provided a set of recommendations and proposed that location-based initiatives should be based on six key elements:

• a clear connection between economic and social policy and programs at a local level;
• a framework for providing integration of effort across governments;
• a level of devolution that allows significant and meaningful local involvement in determining the issues and solutions;
• capacity development at both local level and in government, without which greater community engagement or devolution of responsibility will be impossible;
• and funding, measurement and accountability mechanisms that are designed to support the long term, whole-of-government and;
• community aims for an initiative, rather than attempting to build an initiative around unsuitable measurement and accountability

This is reinforced by recent developments in NSW Government with release of the Department of Education’s Connected Communities strategy. The strategy positions disadvantaged schools within high Indigenous/disadvantaged populations as community hubs. Similar to any location or ‘asset’ or place-based strategy, these hubs will be co-designed with each community based on contextual information from a comprehensive community profile, including input from the community about its strengths, issues, vision and aspirations. And, this month the Strategy was raised as a matter of public importance in NSW Parliament with support by the Opposition. This is a radical move which is sure to advance the collective social impact mission. 

Progress is more than economic growth

In the past decade, there has been increasing recognition that national wellbeing is based more than just economics. This movement is being driven by citizens, policymakers, academics and statisticians working together globally and locally and championed by international organisations like the OECD and the United Nations.

This has stimulated research to define fulfillment and quality of life through measures related to social, cultural, spiritual and environmental dimensions. A focus on wellbeing recognizes that increased economic wealth is not always positively aligned with increased health and happiness of an individual or the wider community. Hazel Henderson put it aptly that, ‘statistical codes become the DNA of our nations’ and that ‘they reflect society’s values and goals and become the key drivers of economic and technological change’.

Here is an interesting link to national “indicator land map” which highlights various indexes and projects from the Australian Community Indicators Network.

So, who should decide what progress is, our values and goals are for our nation or communities? Why should citizens be engaged in that task? And how can they be best engaged? And, why should we measure our progress (national, community) and how best to? 

Understanding community wellbeing 

Wellbeing is a holistic concept that is closely related to ‘quality of life’ and wicked problems that face communities require non-linear, iterative processes to solve them. An understanding of genuine progress requires multi-dimensional measurement. Each of these dimensions is a ‘domain’, for example; environmental, social, economic and cultural. Within a domain, there are numerous specific indicators of progress and programs or activities (outputs) to support them. Indicators, Schmindicators *reader mumbles*.  Perhaps the best way to convey the concept of a community wellbeing project is to explain my experience whilst working on fly-in/fly-out social impact projects in rural and remote areas of Queensland while at The Hornery Institute. In order to gain a deeper understanding of these communities, we developed a place-based strategy to engage all stakeholders in exploring the issues, aspirations and opportunities inherent to the local government area (Maranoa and Gladstone). Through an inclusive approach we were able to meaningfully engage people about what they value, working collaboratively to prototype and develop community agreed sustainability indicators framework and suggested social programs that would help mitigate potential negative impacts of industry.

We consulted widely, with over 750 voluntarily participants from schools, local businesses, farmers, landowners, NGO’s, industry, Indigenous groups, local government, universities and state government using a combination of participatory group action research methods and face-to-face meetings. Meanwhile, back at headquarters desktop team members undertook research to profile the community using demographical ABS data, regional strategies and other ethnographic research. Appreciative enquiry methods had us also photographing the urban character and its heritage as we mapped the local community services and facilities (assets).

We gained a lot through the ‘wisdom of the crowds’ and I was blown away with the willingness of the community in sharing their insights to intelligently map and tap the resources within the local area. They were knowingly committed to helping themselves with that self-determination common to most Queenslanders. Throughout the project we returned to engage original community groups and present findings, adding to their ideas for suggested programs, community assets and urban planning. Given the independent status of working for a non-profit community development organization, we were able to scaffold trusting relationships.

Reams of butchers paper later, delivery of the studies to community groups they intelligently deliberated, voted and agreed on priorities for approval of each community wellbeing framework. It was true democracy in action. The indicators in each domain are transparent, were publicly released and are referenced often. To demonstrate the impact of the study (Maranoa LGA) fifteen community development programs have been implemented since 2010. Not all issues could be addressed alone by the local community, but the process served as an evidence gathering exercise to identify externalities that could inform higher tiers of government  to undertake more research in areas, such as health and human services or environmental legislation. However, combined with a collective impact approach, there is unlimited potential for more humanitarian service design which can serve to create system level change.

Through our work we developed strong relationships, particularly the Lord Mayor who invited us to present the study at Council’s AGM. Based on community support for the project, we also met with Premier Bligh’s office and Queensland University to discuss the community wellbeing approach as a more stringent method of evaluating social impact assessments for environmental impact assessment development applications.

The community wellbeing framework is intended to provide complete impact data to drive forward positive change and sustainability around key areas of community defined progress. Once experienced and understood, the approach is essentially a concept which makes sense to everyone. Despite the complexity and ambiguity of working on experimental projects with communities, my intention is to leave you with a good impression of just how practical and enjoyable place-based projects can be. A transparent framework for measuring progress, over time, is a journey that involves all stakeholders within a local context to establish agreed priorities for the community, therefore creating evidence of a shared vision for the future. Local engagement with as many stakeholder groups as possible serves to articulate community concerns, aspirations and policy priorities for the future of their area and community – which is really, everyone’s business.

The need for a locally supported approach

Redefining progress requires a contextual approach, and while common wellbeing framework methodologies exist, perhaps the biggest barrier is that current indicator initiatives are a bit of a magpie. Given that measurement of community wellbeing requires the development of location-specific studies, currently we are lacking a cohesive and visible national entity at the macro level that supports local community and governments to undertake this work easily on the ground. And, although data research has gone to great lengths in seeking to highlight certain indicators, for example, financial exclusion, there is no one-size-fits-all solution that truly reflects other meaningful priorities and indicators for sustainability from one community to the next. This is why a shared cross-sectoral commitment by State and Local Government is urgently needed in building momentum for the development of community wellbeing action plans.

We expect place-based indicator frameworks will provide a richer evidence base from local governments that will inform and guide Federal government on ‘community accounts’ of wellbeing to prioritise strategic funding and policy decisions. This will be enabled by a combination of networked and online engagement. With the growing innovation of interactive platforms, the proposition of using the internet makes this idea a whole lot more do-able. Perhaps one of the most impressive examples of community accounts we could hope to emulate is in the Canadian province of Newfoundland-Labrador.

Once in full swing, a platform like this would help guide due diligence for social investment; scope more strategic social enterprise development; provide crowdsourcing opportunities; form volunteering initiatives, providing an evidence base of unmet need to stimulate creative financing, for example, matched community development funding through councils and community banks.

There are a number of benefits from a national index which reflects more holistic local priorities. With the capacity to distil multiple dimensions of progress measures, it will also attract high levels of public, political and media attention that will be referenced frequently. The single number result will be the doorway through which people will start thinking about which elements of progress matter most to them. It will also challenge the specificity of economic measures that are currently used.

Progress on measuring progress – an Australian National Development Index (ANDI) is underway

….which brings me to ANDI and what this blog is really all about. Its development has been a long process in Australia going back 16 years, with some members providing international input since the 1970s. It is an independent, citizen-led, community initiative to revitalise our democracy and engage all Australians in a national debate about our shared vision for Australia. Based on the idea of an ongoing national conversation about what kind of society we want to be, ANDI’s aim is to help develop clear, ongoing measures of our progress towards increasing equitable and sustainable wellbeing through an Australian National Development Index. ANDI’s interim National Organising Committee comprises a large collaborative of distinguished practitioners from government, non-profit and academic institutions, with key advisors and sponsors from across the sectors. ABS is a key partner to ANDI for development of the Australian Wellbeing Index. ANDI seeks partners from the private, not-for-profit, academic, government and philanthropic sectors. ANDI and the Australian Community Indicators Network are working closely together to develop the tools for citizens to be engaged in measuring, planning and discussing their own communities, whether local or national. ANDI is currently seeking to form a partnership with an information technology company to support the technical development of  its website, as well as media partners and sponsors to help advocate and drive this national and locally led initiative.

For more information please see the ANDI website: www.andi.org.au

This post previously appeared in the CSI Blog: What kind of Australia do we want and how do we know if we are making progress?