Chris Styles

When I speak with business leaders they often express a great deal of frustration with the present political process. A plethora of reviews and inquiries, but not much effective action.

Short-termism is a key problem. Press release of the day, poll of the week, and annual budgets appear to be driving the political agenda. The focus on the federal budget in particular has had an almost paralysing impact.

But budgets aren’t strategies. Budgets may have been used as the key planning tool in the 1950s and 60s, but this is 2015 and we need to think more strategically about the next 10-20 years in a rapidly changing landscape.

Catherine Livingstone, president of the Business Council of Australia, has called for a decoupling of the strategic conversation about reform on the one hand and the budget on the other.

She was quoted in The Australian, saying: “We don’t have a long-term plan. And even if we had a long-term plan, the process we have now for implementing it means we are using the budget as a tool it was never designed to be.”

Confusing a budget with a strategy is not uncommon (particularly in the public sector), but this practice leaves an organisation without direction.

Indeed, the only thing a budget in a vacuum provides is guidance on how much to spend on what, with a best guestimate of how much revenue will be coming in. Hardly a long-term strategic plan.

An organisation’s approach to strategy can be likened to the evolution of strategic planning itself.

In the 1950s/60s, budgeting was in fact the key tool used in planning. Environments – both external and internal – were viewed as relatively stable. Last year’s financial position, plus a linear extrapolation based on past years’ trends, were a good estimate for next year. The resulting numbers became the plan, and off we went.

The 1970s/80s saw greater environmental turbulence, both at the macro (for example, oil price shocks) and at the industry level. Focusing internally and preparing mechanistic budgets based on past trends proved unhelpful in this new world.

Instead, the idea of “fit” between the external environment and the organisation became the focus. Key questions were around which environments (such as, industries) were most favourable for the organisation, and what should the organisation do to succeed in those environments.

The management consulting industry came into its element and with tools such as the BCG matrix and Porter’s Five Forces. Global corporations from GE to airlines embraced the new strategy world with vigour.

In the 1990s we saw another shift. The idea that the environment was a given, and that an organisation should adapt to it, was challenged. If an organisation could acquire, harness and develop the right capabilities and assets it could influence the environment – indeed, disrupt it.

Dell challenged the staid PC market, Häagen-Dazs shook up a rather bland ice-cream market, and new tech firms created new markets.

More recently, strategists have focused on dynamic capabilities and strategic agility.

Strategy academics Yves Doz and Mikko Kosonen in their book, Fast Strategy (Wharton School Publishing, 2007), refer to three levers for strategic leadership under this new paradigm.

First, strategic sensitivity: seeing and framing opportunities in new insightful ways.

Second, resource fluidity: mobilising and redeploying resources rapidly and efficiently.

And finally, leadership unity: whereby senior management teams make tough collective decisions that they stick to and which get implemented.

What would the political and national landscape look like if the government were more Doz and Kosonen than “budget = strategy”?

Rather than budget night being full of surprises and announcements, it would likely spark debate about whether the allocation of taxpayers’ money reflected in the budget was consistent with, and supported, the government’s long-term strategy.

And elections would focus on debates around leadership teams, tough decisions and the ability of each side of politics to see and create new long-term opportunities for the nation.

A far cry from the expediency of short-term governments and the recent trend of revolving leadership.

Professor Chris Styles is the dean of UNSW BusinessSchool.

Richard Holden

Much will be written in the coming days about the turbulent political times in which Malcolm Fraser ascended to the prime ministership. But it is worth remembering that they were terribly turbulent economic times as well.

A simple chronology will note that Fraser’s prime ministership was wedged between the chaos of the Whitlam years and the seismic reforms of the Hawke-Keating era. But there’s more to Fraser’s economic legacy than that.

Fraser came to power amid a shocking economic occurrence: stagflation. Until the early 1970s it was thought by economists that high inflation and high unemployment could not occur at the same time.

This belief came from the prevailing Keynesian models of the era which posited a stable trade-off between inflation and unemployment. Rev the economy a bit faster and you got more employment and output but stoked inflation. Take the foot off the pedal and the opposite occurred.

But from 1973 onward this all changed. In 1975, inflation hit an alarming peak of 16%. In the decade that followed, Australia’s unemployment grew five-fold, spiking in 1982 as high as 10%.

At the same time, wages shot up, putting pressure on prices, which in turn put pressure on wages. This so-called wage-price-spiral was hard to break.

The Fraser government took a pragmatic, if not principled approach. Serious downward pressure was put on wages, but the spiral was never broken until the prices and income accord of the subsequent government.

Fraser’s “razor gang” cut back on commonwealth spending in a serious way — spending that was completely out of control under Whitlam. The Campbell report on financial reform – a watershed in Australian economic history – was commissioned, though not implemented.

Yet he didn’t go nearly as far as many members of his own government wanted in cutting back the role of the state and advancing free enterprise. The “dries” of the Liberal Party wanted a much more Thatcherite approach to the problems facing the Australian economy.

Yet Fraser resisted. He certainly pushed in a more free-market direction: government spending was cut, trade became more free, huge wage claims were curtailed. But he didn’t go all the way to Reagan’s “government is the problem” or Thatcher’s radical individualism.

In many ways Fraser approached the economy like a wise family doctor advising on dieting and weight loss: enjoy a little of everything, in moderation.

When Fraser became prime minister, the economic theory that would replace radical Keynesianism — the rational expectations revolution — was still being formulated and refined by Robert Lucas at the University of Chicago, along with others.

There was no clear path for what to do, and Fraser neatly steered a middle course. He did no harm to the patient, and laid the groundwork for the recovery to come.

In hindsight, could he have done better? Sure. His treasurer, John Howard, intimated as much in his recent interviews with News Corp columnist Janet Albrechtsen.

From my perspective we could have used a bit more Lucas and a lot less Keynes. More understanding of the virtues of competition and free trade. But Fraser lived economic events forward, without the benefit of hindsight, time to assess and reassess, and without the sophisticated number crunching that policy-makers have today.

Of course, Fraser’s legacy was arguably chiefly outside the economic sphere. Others will no doubt point to a variety of principled moral stands: against apartheid, for indigenous land rights, and in his post prime-ministerial years for a range of humanitarian causes.

Fraser was clearly a very decent human being.

But it would be wrong to think that he wasn’t also a good economic manager. In many ways he laid the groundwork for the Hawke-Keating years.

He certainly wasn’t a visionary like Keating, nor did major reforms take place on his watch. But he did steady the Australian economic ship for long enough that Keating had something to work with.

Australia can be justifiably proud of an approach to economics that is squarely between Europe and the US. The US, on the whole, champions free enterprise despite the social costs; Europe sees a much larger role for the state, even if that inhibits free enterprise. The Australia in which we live today is somewhere in between.

When Fraser became prime minister that was all up for grabs. We could have become “old Europe” or veered on to a radically individualist path in response to the debacle that came before.

Fraser helped us chart a middle course, and we should be very grateful for that.

Richard Holden is a professor of economics at UNSW Business School. A version of this post appeared on The Conversation.

Renée Adams

There is a popular notion that women are not risk takers and their mere presence on a bank board will reduce risky strategies and behaviour.

During the past few years there has been an increasing trend of female directors on company boards. A leading factor has been the introduction of gender diversity policies. Already women hold 23% of directorships in the UK’s top companies, just shy of the government’s target of 25% by 2015.

According to the Australian Institute of Company Directors, at the end of August this year, 18.3% of top 200 ASX company board directors were women.

Among the Big Four banks, the ratio ranges from two women on a board of 12 for NAB, to four women on a board of nine for Westpac. On the Reserve Bank of Australia board, three of the nine directors are women.

Does this mean our banks, by virtue of this trend, are falling into an increasingly safe pair of hands?

The safety factor concept has been used in the past to support the argument for gender quotas for boards. Some of the world’s leading economic spokeswomen (and men) have very publicly argued women are “typically” more risk-averse and therefore their presence on boards helps contain risky behaviour.

This premise led to what became known as the “Lehman Sisters” hypothesis, which arose in the years following the global financial crisis. The theory was if Lehman Brothers had been Lehman Sisters (or brothers and sisters), there would have been no collapse

Sadly for those who believe banks revel in the occasional risky business, adding more women to the board is unlikely to have an impact.

In a research paper I co-authored with the University of Queensland’s Vanitha Ragunathan, we showed that more women on boards will not lead to less risk in banks.

Women who choose to follow a career path leading to a directorship are not the “typical” woman in risk-aversion studies. Instead, female directors are likely to be less risk-averse than the “typical” woman because of selection. That is, they would not have chosen this career path if they were so risk-averse.

Selection is likely to be even more important for financial firms because finance is a business dealing with risk. Women in finance may well have the same average levels of risk aversion as men in finance.

Our research showed that female MBA students who choose to enter finance after graduating are much less risk-averse than female MBA students not entering finance. In fact, female MBA students in finance are less risk-averse than male MBA students in finance.

The research shows the dangers of stereotyping women. Applying gender differences that may occur within the population to the management level does not work.

However, though having a greater proportion of women on bank boards may not reduce risk, it does provide other benefits.

Our study reviewed around 300 large publicly traded US banks and bank holding companies across a four-year period spanning the 2007-2008 financial crisis. We found that US banks with more women on their boards were not less risky during this period. However, they did perform better during the financial crisis.

Male directors on boards with more women have fewer attendance problems. Female directors also tend to perform different committee duties than male directors.

Women are more likely to sit on board committees, especially those with key monitoring duties such as auditing or corporate governance. However, they are not more likely to sit on banks’ risk committees. Banks themselves seem to not view their female directors as being more or less prone to avoiding risks than their male directors.

We still do not have a complete understanding of how and why gender diversity matters for corporate outcomes. We also do not know when diversity matters. However, the concept of using women on bank boards as a quick fix for bad corporate behaviour is simplistic and devalues the other benefits that diversity brings.

Renée Adams is a professor and Commonwealth Bank Chair in Finance at UNSW Business School. A version of this post appeared on The Conversation.

Nick Greiner

One of the fashionable new positions at a senior level in universities is the head of engagement, or some variation on the title. There’s clearly a perception that relationships with the world outside the academic community are not as developed as they could be.

So is there an engagement issue for universities in general, and business and economics schools and faculties in particular? I would say, yes.

Take the top public companies. Across the boards of the ASX100 there are about 700 directors, but only four are current business or economics professors, and in each case they’re on a single board.

Given the quality of thinking and research experience of our business school academics, their board representation is much lower than one would expect. There are also four health and life science professors on ASX100 boards.

Among large government-owned enterprises, there appear to be no practicing academics on the boards where surely the complex regulatory and economic issues could benefit from their expertise.

Of course, academics frequently conduct public policy research as consultants for governments, make submissions, and do joint studies with corporations, but that’s quite different from having a seat at the table where decisions are made.

Going the other way – from business back to academe – I looked at how many directors of the same ASX100 companies say on their CVs that they’ve got anything to do with universities. The answer is nine, who hold honorary appointments as adjunct professors.

There are also a number of business leaders on university advisory boards, but that’s mostly about helping to raise money.

The era of board vacancies being filled via an old mates’ network has passed. Placements are now made using executive search firms, which comprise a large professional group. My theory is that these headhunters overwhelmingly do not know who exists in universities – such as the brightest people in marketing or finance – and consequently don’t put their names forward.

We need to somehow get the existence and merits of our top academics exposed to the executive search community. They are obviously relevant. For example, there’s a lot of work being done in business schools on risk and risk assessment, which is an issue the banks are very worried about.

Is it that academic is a dirty word at the higher levels of Australian business, and that the instinct about what’s needed is “people who have met the payroll” – basically, CEOs? Perhaps there’s a prejudice against those whose life experience and success has been academic, and they’re seen to be more about theory and process while the business world is more about results.

On the other side, it’s possible academics aren’t putting themselves forward for fear of not doing well, or that they may suffer reputational damage because companies occasionally go broke or are the subject of controversy.

In the US, it’s seen as a badge of honour for an academic to be accepted on to the board of a company that employs tens of thousands of people, a positive thing in terms of promotion and reputation. It may well be that in Australia it’s not.

Much is written about diversity on boards, how it’s very important, yet at the moment it’s mostly defined as gender diversity. True diversity would have different relevant backgrounds. University experts on the boards of our major economic institutions would clearly add to the diversity.

One way of connecting academe with business is through case studies. We could look to the Harvard model which teaches by sending its academics out to firms and writing real-world cases, such as why something may have succeeded or failed. It puts the academics inside the company. This happens to some extent in Australia but not as much as it could.

And then there’s the question of our research programs. Are they sufficiently relevant to industry? It’s appropriate that research is put through the academic filter of peer-review, but could it also be put through a real-life filter? Is the research answering a question that anyone cares about, or just a theoretical question that nobody outside of universities thinks is important or interesting?

Recent data from the Australian Bureau of Statistics on innovation-active businesses revealed that only 10% had a collaborative arrangement with universities. Figures from the level of start-ups, venture capitals and SMEs revealed that only 3% saw universities as a source of innovation.

It highlights that universities are right to be concerned about a lack of engagement with the outside world, and the business community in particular. The disconnect is coming from both ends – we’ve got academics that are probably not putting themselves forward and companies that are not actively trying to attract  them.

It amounts to a missed opportunity all round.

Nick Greiner is a former premier of NSW and a distinguished visitor at the Australian Graduate School of Management at UNSW Business School. A version of this post appeared in The Australian Financial Review.

Professor Chris Styles

Twenty years ago, St Kilda footballer Nicky Winmar made an important statement about the place of indigenous players in the AFL and the place of indigenous people in the wider community.

He lifted his shirt in an act that said: “I’m black and I’m proud.”

It was a line in the sand, a moment that shaped the AFL’s approach to indigenous affairs and had a huge impact on the community generally.

Winmar’s message was that indigenous players should be proud of their contribution to the sport and not accept the abuse they were regularly being subjected to.

Last weekend, the AFL played its Indigenous Round which celebrated the extraordinary and disproportionate contribution made by indigenous players to the sport over the years. The game – and Australian society – has come a long way since Winmar’s statement and that is something to be noted and celebrated.

But in the opening Friday night match, as has been extensively reported, a 13-year-old girl called Adam Goodes – a dual Brownlow medallist (the highest individual honour in the AFL) – an “ape”.

Goodes is not just a great athlete, he is a proud member – and leader – of the indigenous community and was having one of the greatest games of his career.

His reaction to the slur was spontaneous, heartfelt, and that of a true leader. How he conducted himself in the following days has further demonstrated his leadership.

When the incident happened, near the end of the game, Goodes’s reaction was instantaneous. The Aboriginal high school student who had been racially vilified in the playground and just took it, finally stood up.

Goodes identified who was at fault to security guards and made sure she was evicted. The message to his playing peers was clear and by taking this very public stand, he dramatically highlighted that such behaviour is not acceptable and should not be condoned by the community.

He also showed all those non-athletes, especially children experiencing school-yard bullying, that there is no place for racism anywhere. By practicing what he preaches, Goodes showed strong leadership.

When he fronted the inevitable media scrum following the event, Goodes again highlighted why he is one of the Australia’s bravest leaders. He described the situation as “sad”. Rather than laying blame directly on the teenager, he suggested that she didn’t know what she was saying and that she was an innocent teen who didn’t realise that her comments were derogatory.

Great leadership means not only standing for something, but being able to articulate that something in a way others can relate to. The overwhelming and positive response to this incident, particularly on social media, says much about Goodes’s ability to create a strong narrative around the ideas he stands for.

In his press conference he recounted the experience of being bullied in his youth, and painted a picture of how we should be reacting to analogous events in our lives. This was not an angry man who had been wronged, but a leader who used a personal incident to tell a story and provide a path forward for the community.

Importantly, Goodes also followed up on his initial outburst and made sure the incident had a resolution. He didn’t throw the young girl to the wolves but encouraged the public, via social media, not to vilify her. He used social media as a tool for educating the public about the issue rather than as a way to score cheap points. There are many others with influence in the public eye who could take note.

Goodes pointed out that the teenager was a victim of the environment in which she had grown up. He wanted the girl to take responsibility for her comments and offered her the opportunity to call him and apologise. He wanted to be able to take time to explain to her what she had done.

And while the nasty incident was an unfortunate blight on this important round, he hoped it would serve as an important lesson and talking point for the community about the importance of respect for Aboriginal people.

She did apologise. He did explain. And now we’re talking.

Professor Chris Styles is Deputy Dean and Director at Australian Graduate School of Management. This article first appeared on The Drum.

Professor Chris Styles

Former British Prime Minister Margaret Thatcher has died at the age of 87.  Famously the daughter of a grocer she was in the top job for 11 years.  She was also a highly divisive figure who was to some the saviour of the British economy, but to others responsible for decimating industries and communities.  Irrespective of which side of the fence you sit, it’s hard not to recognise her as a strong and highly effective leader.

What kind of leader was she?  In modern parlance she might be described as a values-based leader.  Whether you ascribe to her values or not, her model of leadership was about articulating her core values, and making decisions consistent with them, even in the face of strong opposition.

How do today’s leaders stack up to the Margaret Thatcher model?  Sheena Lyengar, a Professor at Columbia Business School, told an audience of over 1000 senior business school academics gathered in Chicago this week that we are facing a ‘leadership crisis’ that applies to business as much as politics.  Whether we are indeed in a crisis is debatable, but there are legitimate concerns over short termism, popularism (whether its politicians reacting to the voter polls or CEOs pleasing market analysts), and revolving door leaders. To better understand Thatcher’s approach to leadership, consider her three biggest achievements. First, with Ronald Regan, she was credited with ending the Cold War.   Their approach was to negotiate from a position of strength, which controversially included deploying nuclear missiles across Western Europe (including in Britain).  While Mikhail Gorbachev was a man she said she could ‘do business with’, she had a deep distrust of communism and saw its end as a moral imperative.

Second, she fought and won a war in the Falkland Islands that no one seriously thought she would enter into. Although a group of Islands where sheep outnumbered people, she said that it was a matter of principle that she not sit by and see British citizens invaded by ruling military junta in Argentina.

Finally, she transformed the British economy.   When Margaret Thatcher came to power in 1979 inflation was rife and the economy in poor shape.  She tackled inflation head on, cut spending and took on unions to move the economy towards the more flexible, market driven system that essentially operates today.  She was hated by many for the hardship her measures caused, but was resolute in reshaping an economy that in her mind would reward the efforts of local grocers like her father.

All three of these achievements are defined by a strong set of core values that were translated into strategies and action.  For example, her commitment to free and flexible markets led to strategies that reduced union power and privatised state industries which ultimately led to actions such as the miners’ dispute.  And once she went down a path, she did not waiver a position made famous by her remarks, “the lady is not for turning”.   Many of her decisions led to short term pain, including job losses, and indeed 255 British servicemen and three Falkland Islanders, as well as 649 Argentineans, lost their lives as a result of the Falklands conflict. She saw leadership as actions reflecting principles rather than basing decisions on popular sentiment.  She also displayed what many now see as a critical leadership quality, resilience.

When selecting leaders, whether on election day or for senior positions in business, we would do well to focus on a person’s core values and beliefs, and assess their record of delivering against them, particularly when the going gets tough.   If values are well articulate and we buy into them, then decisions and actions are better understood, respected and followed, even if not always liked.  Values-based leadership has much going for it and Margaret Thatcher was a great exponent.

Professor Chris Styles is Deputy Dean and Director Australian Graduate School of Management (AGSM).

Professor Renée Adams

It’s accepted across the globe that women are under-represented in business leadership positions and that something should be done about it. To date, the focus has been on increasing the number of women invited to sit as non-executive directors on boards. The aspirational figure is 40% female representation, with some countries legislating quotas and others just setting targets.

While championing diversity in this way may have merit, it’s like treating a symptom rather than the disease. Quotas and targets seem too narrow a policy tool to address the underlying factors associated with the lack of women reaching the top.

My recent research, in association with Tom Kirchmaier from the University of Manchester, has found a strong correlation between the rates of full-time female labour-force participation and the number of women in boardrooms. That is, countries with more women working full-time have more women on boards.

It stands to reason that in order to gain the experience necessary to be a director, you have to have a career. Not all women, particularly those with children, are able to sustain one. Legislators need to look at developing policies that promote full-time employment by women to generate a pipeline of talent that can eventually perform leading corporate roles.

When most people talk about representation on boards, they are looking at the largest listed companies – the top 100, or maybe the top 200. Our research studied a more comprehensive sample comprising 9,888 listed companies in 22 countries: Australia, Austria, Belgium, Bermuda, Canada, Denmark, Finland, France, Germany, Greece, India, Ireland, Italy, Luxembourg, The Netherlands, Norway, Portugal, Spain, Sweden, Switzerland, the UK and the US.

We obtained the data from business intelligence service BoardEx for a 10-year period from 2001 to 2010. To ensure our sample was representative, we restricted ourselves to country-years for which BoardEx covered at least 70% of the total market capitalisation of listed companies in that country and year.

Aside from the correlation between full-time work and representation on boards, our data revealed that female boardroom participation was actually lower than the usual surveys suggest. For example, the 2011 Davies Report for the UK found that “in 2010, women made up only 12.5% of the members of the corporate boards of FTSE 100 companies. This was up from 9.4% in 2004.” Our wider sample showed that the proportion of unique female directors on the boards of listed firms in the UK in 2004 was only 5.1% and in 2010 it was 6.5%.

To reach a board position, women need to stay in the workforce. But our evidence suggests that full-time employment may not in itself be sufficient. The level of government services to families also appears important. More services, such as childcare, make it easier for women to remain working and to pursue ambitious career paths.

A key adverse factor that is less easily addressed is the attitudes to women imposed by cultural barriers. It’s not surprising that there are less women on boards in the more traditional societies, where staying at home being a housewife is deemed to be equally as fulfilling as going to work.

It is possible that present diversity policies which target boards directly may help overcome cultural barriers in the long run, though they may also reinforce gender stereotypes. There are three main types of these policies: quotas, governance codes and disclosure requirements. It’s not necessarily clear that their effect is going to be unambiguously positive. Affirmative action can produce negative results when the unqualified or unprepared are placed in roles just to make up the numbers.

The magnitudes of female director participation are still low, but they do show a clear upward trend over time. To foster this progression, policy-makers should try to remove the impediments to full-time labour-force participation rather than simply trying to put more women on boards.

Renée Adams is the Commonwealth Bank Chair in Finance at the Australian School of Business.

Rafal Chomik

Since its proposal at a 1910 conference, International Women’s Day, which we celebrated last week, has served as a reminder of the role of women in society and the struggle for equality.

The most commonly debated element of this struggle relates to balancing child care and work. Policy makers have responded with various measures.

In Australia and elsewhere even cuts to parental benefits are justified on the basis that they are aimed to help parents, particularly single mothers, into work. The recent introduction of paid parental leave for fathers and partners is intended to help parents become more equal in balancing work and family. And in courting women’s votes for the upcoming federal election the Coalition has pledged to take the issue further by proposing to extend paid maternity leave.

But another area of unpaid work in which women overwhelmingly participate involves care for people with disabilities and the elderly. Australian Bureau of Statistics data on unpaid care shows that women comprise 68 per cent of primary carers overall, 92 per cent of primary carers of children with a disability, 70 per cent of primary carers of parents, and 52 per cent of primary carers for partners. It translates to 1.5 million Australian women acting as either primary or secondary carers.

The benefit of this unpaid work is considerable. One set of recent estimates puts the value of unpaid care by both women and men at $650 billion – equivalent to 50.6 per cent of GDP.

But carers often bear the cost of their unpaid responsibilities. Informal care is associated with lower levels of formal employment, higher risks of poverty, and a higher probability of mental health problems.

Unpaid primary carers are half as likely to be participating in the labour force as non-primary carers. And when they are employed, they are twice as likely to be in part-time work and 30 per cent more likely to hold a temporary job. These impacts increase with hours of care provided.

Of course, the care involved may be incompatible with a full-time job or there may be a level of ‘self-selection’ into the role of unpaid care-giver by those who had lower market opportunities in the first place. But analysis shows that even controlling for such socio-demographic variation, informal carers are less likely to be in paid employment.

Lower employment rates, fewer formal working hours, and fewer household members with earnings can mean that unpaid carers have a higher probability of experiencing poverty. Women carers appear to be particularly vulnerable to such a risk. Moreover, less work and lower earnings during their working life translates to lower savings and incomes in retirement.

The psychological distress and isolation of caring and the lack of support are possible reasons why unpaid carers in Australia are shown to have a 40% higher rate of mental health problems than non-carers. Again, even controlling for socio-demographic characteristics shows that informal caring is associated with more mental health problems and that the impact is more detrimental for women. Being the recipient of a carers’ allowance does not seem to alter the negative impact on mental health in Australia.

With an ageing population the demand for informal care is only going to increase. Indeed, the Productivity Commission sees such care as an integral part of the Australian aged care system. At the same time, the Commission points to the likely reduction in availability of informal care due to demographic and motivational factors. Yet, most informal care is low intensity, with 55% of informal carers providing 0-9 hours of care. Such figures suggests that with the right level of support there is scope for some carers to increase their hours of care with limited impact on work and mental health outcomes. So how do we design support systems for informal carers that avoid the negative impacts?

The Australian government has started putting various measures in place. It developed a National Carer Strategy as a framework to address the economic, educational, and health needs of informal carers.

While flexible work for women with children has been on the agenda for a while, only recently has care responsibility across the life-course been recognised. Last month, the Prime Minister announced that the Fair Work Act will be amended to extend the right to request flexible working to carers – it was already available for those caring for children.

As ever, there is more that can be done. In January, the Sex Discrimination Commissioner, Elizabeth Broderick, released a report calling for a series of possible reforms to support unpaid carers including legislative mechanisms, flexible work arrangements, carer support payments, leave arrangements, services for carers, workplace initiatives and mechanisms within the retirement income and savings system.

Investing in unpaid carers would mean not only relieving pressure from the formal aged care system and improving the quality of care for recipients, it would also go some way to redress this particular area of gender inequality.

Rafal Chomik is a Senior Research Fellow at the Arc Centre of Excellence in Population Ageing Research at UNSW.

From the Knowledge@Wharton today blog.

It’s a conundrum that most men face at some point: thinning hair. And while it may not seem to be an especially grave problem, male-pattern baldness “has been linked with poor self-esteem and body image and with greater stress and depression,” according to Wharton operations and information management lecturer Albert Mannes.

But new research by Mannes points to a somewhat radical solution to the problem — one that directly contradicts a growing number of hair replacement services, growth serums and other products that promise to produce a robust mane. His suggestion? Just shave it off.

In his recent paper titled, “Shorn Scalps and Perceptions of Male Dominance,” published in the journal Social Psychological and Personality Science, Mannes describes three experiments he conducted that had some surprising results. Specifically, men with shaved heads were viewed as more masculine and dominant than other men. But it doesn’t end there: Two of the experiments showed that such men were perceived as taller (by an inch, on average) and stronger (that is, seen as being able to bench press 13% more) than those men who were well-coiffed. They were also viewed as having greater potential as leaders.

“The broad take-away is that perceptions about leadership and related traits like dominance can emerge from peculiar characteristics that aren’t really related to leadership at all,” says Mannes.

Mannes — who sports a shaved head — says the impetus for his research came from his own experience in his early thirties, when he began losing his hair. “After fighting it for a while, one day I just decided to shave it off.” Mannes liked the look and received some positive feedback, but his new appearance had one unexpected consequence: When he interacted with people who didn’t know him, they seemed “stand-offish and even deferential.” That led him to wonder if his experience was unique.

To test his notion, Mannes structured three experiments. In the first one, subjects were asked to look at a series of photographs of men of similar age and dress, including some with shaved heads. Then, they were asked to rate the men in terms of how powerful, influential and authoritative they looked. When the numbers were tallied, the shaved heads won.

In a second experiment, Mannes tried to control for other physical features that could convey dominance by showing his subjects the images of four men, but in two different versions: one with their hair, and one with their hair digitally removed. Again, the images of men without hair were perceived as more dominant — and, much to Mannes’ surprise, also taller and stronger.

For his third experiment, Mannes avoided all visual cues and offered subjects physical descriptions of men, including whether they had hair, thinning hair or a shaved head. Again, the shaved men came out on top.

Mannes says he does not advise that, in general, men looking for a boost in perceptions about their leadership capabilities should automatically shave off their hair. In fact, there is a cost to opting for a shiny pate. In his studies, those with shaved heads rated lower on scales of attractiveness and were also seen as older. However, his findings hold particular relevance for men with thinning hair, who may be tempted to invest money in hair replacement or other means of salvaging what’s left. By shaving their heads, not only will these men save money, they will receive a bump in terms of how dominant they are viewed by others.

Part of the effect may have to do with the bold nature of the move. Mannes notes that in his experiments, men with thinning hair were consistently rated lower in terms of dominance. Clearly, there is a difference between simply succumbing to male-pattern baldness and making the confident, but somewhat unconventional, choice to remove one’s hair altogether.

And according to Mannes, that’s where his study could have some relevance to women, who obviously have an equal investment in being perceived as leaders in a business environment. Just as head-shaving could be perceived by some as an unconventional move for men, women who show a similar disregard for convention may come across to others as self-confident, he notes. That doesn’t mean they should shave their heads, of course. “There is evidence, for instance, that unconventional dress in women is viewed as status-enhancing. So women may have more of an impact just by engaging in unconventional behavior.”

This post was previously posted in Knowledge@Wharton today blog: Hair Today, Gone Tomorrow: Why Shaved Heads Lead the Pack

Christina Boedker

Lifting Australia’s productivity is an ongoing challenge. Business leaders have blamed the industrial relations framework and almost every day there are calls to make labour more flexible – to some, this means cheaper and more disposable.

But manipulating staff as inputs within a market equation is not a sustainable way to lift productivity. Cutting wages and conditions is hardly an incentive for individual employees to work harder and produce more.

A critical part of lifting workplace productivity is having a great boss. Great bosses are those that enable workers at all levels of organisational hierarchies to lead change and be the best they possibly can.

Ongoing research that I have led since 2009 has canvassed more than 5600 employees at 77 Australian companies. It clearly identifies leadership as having the greatest correlation with firm productivity and profitability. It is the interpersonal and motivational skills of bosses that prompt staff to exercise discretionary effort.

Front-line managers especially have the strongest impact on profitability. This level of leaders manages important relationships with customers and has the biggest span of control.

Great leadership is about valuing employees and being compassionate. Compassion does not necessarily mean being soft: sometimes as leaders we have to ‘be cruel to be kind’. This will involve having hard conversations.

Compassion is also a two-way thing. It flows from the ‘top down’ but also, importantly, from the ‘bottom up’. In other words, hard conversations must be initiated by all staff, including subordinates. A great leader then, is a person who values feedback and criticism as learning opportunities.

The key question for Australia in future decades is how to sustain our position as a leading economy. Enterprise bargaining during the 1990s got the productivity levers moving at a workplace level, but what is the next big thing for moving Australia’s productivity agenda forward?

Focus could be provided by a new entity, such as the leadership institute recommended by the Prime Minister’s manufacturing task force. It could help firms lift leadership skills through education and research programs. And it should work with all sectors, operating collaborative industry projects that collect and benchmark productivity data to generate new policy insights.

Here, too, a compassionate approach will be required. A government-sponsored initiative can provide support and offer leadership, but unless it fosters the co-operation and engagement of industry and workers across all sectors, nothing will happen. Government, enterprise and its associations, unions and others all have to come together to jointly drive this agenda.

Dr Christina Boedker is a senior lecturer at the Australian School of Business. She will discuss her research at the Australian Graduate School of Management’s 35^th anniversary conference in Sydney on 11 September. This opinion piece was previously published in The Australian Financial Review: Bosses are key to productivity.