This article was originally published on Linkedin in September 2020.
I arrived at breakthru Ltd on 1 February 2018, following about 30 years in Corporations, of which the last 23 were in Management Consulting and Financial Services – the “corporate end of Corporate!”.
This was a fundamental transition in my career, at a time when I wanted to broaden my scope of work and do work that is more meaningful to the community. breakthru offered that change, and was somewhat of a surprise to me. A call from a search consultant “....this might be a long shot, but....” to interviews with the Board, and a presentation of my rather corporate-looking turnaround plan secured me the opportunity and job of a lifetime.
I left Westpac at the end of 2017 and spent the year-end festivities and January 2018 doing the AICD Company Directors’ course. A large personal L&D investment that was well spent – it refreshed my finance knowledge and gave me a solid base upon which to interact with my new bosses – the Board.
The (mainly negative) characteristics of the Corporate world are well known; focus on profit margin and market share, big salaries, short term shareholder focus, politicised/toxic workplaces, self-interest.... Corporates also fulfil a purpose, and that’s what I related to – for example; insurance companies protect you against the risk of losses, banks help you realise your life objectives and enable businesses to thrive.
There are also (in the case of Westpac) a clear focus on customer satisfaction in the KPIs, service promise stand-up meetings to share examples of excellence, documented, automated and efficient processes and big transformation budgets – good things.
As I transitioned to breakthru Ltd, my attitude was that of the Corporate turnaround leader. That was necessary at the time, and my attitude and style reflected a need to professionalise processes, cut costs, promote new services and provide better information to the Board.
With time and positive results my attitude evolved; I engaged more with our customers, our staff and our elected representatives at both Stated and Federal level. I discovered For Purpose and what it means.
In reflecting on For Purpose or Not-For-Profit (NFP), 7 key differences between the Corporate world and for purpose became clear, beyond the often-noted difference in remuneration for leaders:
1. Purpose over profit drives different behaviours
At breakthru the purpose is to promote the unique value & inclusion of our customers in the life of their community. The vision is seamless inclusion of people with disabilities in their communities. That is what drives the company. We need to do it sustainably otherwise we will disappear. That means making a profit, but 5% is acceptable, we don’t need to make 30%.
For Purpose drives a different mindset than for profit, for example:
We look to offset loss-making but high impact services with higher margin ones so as to continue servicing vulnerable people – unthinkable in the Corporate world where every product or service needs to pay its own way.
Leaders are less motivated by financial rewards and derive satisfaction from the relationship to the purpose. I made the mistake of introducing variable remuneration for executives – I would not do this again, but would favour a discretionary remuneration pool which could be shared amongst good performers – a reward for the good work shared, rather than a few taking home the lion share of the financial reward.
There are less politics and game-playing amongst the executive and leadership teams. I have found my leaders more honest and straightforward than in the corporate world, this has facilitated rapid decision making and adapting the company to changing conditions, recently we experienced this with bushfires and the COVID-19 pandemic. We also experienced this being able to deliver a large technology change on time and under budget – a rare event in Corporations.
2. Regulation in Human Services is as rigorous and onerous as Banking
This was a surprise, coming from Banking and interacting regularly with APRA and ASIC, thinking Banking would be more regulated than Human Services – not so. Most of our services are financed directly (DES, Mental Health) or indirectly (NDIS, RTO) by Commonwealth and State governments. Those governments are keen to have assurance that we deliver to contractual expectations. Audits and Acquittals are at least annual for each area, if not more frequent – DES assurance is quarterly. The sector also deals with vulnerable people who need to be protected by risk and reporting measures.
A further surprise was noting in such a regulated environment, risk ownership by the service/program managers was poor. The risk function is under-resourced. Other than customer satisfaction and financial results, this has been a key area of progress over the last 2.5 years.
3. Politicians can be helpful
Yes, really. Prior to being in the Human Services sector, I took little interest in politics, other than maybe federal elections and policy changes by the treasurer or the RBA. The nature of our business and its funding make politics important – Ministers must know you, understand your value proposition, you must reach out to them when needed to suggest policy change.
Local MPs, both State and Commonwealth are committed to their electorates and whatever their affiliation, work hard for the interests of the people of their electorates. They have proved valuable allies to advocate to government for change. Writing to 27 MPs about ensuring NDIS Participants received funds to afford the Temporary Transition Payment (TTP) was a very interesting exercise!
I was also impressed how accessible most MPs can be, and noted some are good listeners and can galvanise support for disability services effectively.
4. Managing the Board is a full-time job
Previously to this role I had interacted sporadically with Boards, generally at Committee level, reporting on risk oversight of change or mergers and acquisitions. I discovered a whole new world.
My mantra with the Board was honesty – something I had not always seen in the Corporate world, with senior executives “messaging” the Board to minimise the gravity of issues and minimise damage to their own image/career.
On joining breakthru board papers were minimal and the quality of information Directors were getting was insufficient and infrequent. We changed all that – along the lines of Corporate Board papers with a clear purpose (Approval, Discussion, Noting), and a short 1-2 page summary. Rambling papers are avoided, financial information is delivered weekly, monthly or quarterly as required.
All this does take a lot of effort, more than I would have thought necessary for a small Board (7 directors initially, 5 when I left the Company). Directors have their own areas of focus, such as mergers, detail orientation, environment-friendly decisions, opinions about executives, etc. In the recent months where we have been in daily crisis management, the Board has looked further than their governance role.
5. Government agencies and institutions are complex – but key stakeholders
Disability management and funding is spread over Commonwealth and States and even Local Councils can be involved when it comes to transport and accessibility.
Understanding responsibility, taking decisions, and how these levels of government share information is a challenge. Having said that, Minister Robert and Martin Hoffman, the NDIA CEO have been much more responsive than I would have imagined.
Tender processes – our tender for a PARC in Victoria, tendered by a Primary Health Network (PHN) took over a year to decide and transition to the new service provider.
6. Employees feel engaged more to the purpose than the company itself
In the corporate world an employee of turnover of 25% is considered high. We experienced close to double that. I was and remain disappointed by these figures. Analysis of employee survey data and working directly with employees led me to understand this better. These are not the figures I would want, the reason they are what they are:
Some employees indeed work for the remuneration and will go to the highest bidder. It is understandable in these cases that people move on, especially where they feel they can continue to relate to a strong company purpose.
Employees build relationships to the clients and if clients change providers, employees sometimes move too, this is especially the case where casual workers service clients.
The NDIS model drives casualisation of the workforce and the Disability Worker Cost Model has some flawed assumptions. One of those is that 70% of the workforce are permanent. Not so – we experienced 56% and many of our peers have fewer permanent staff than that.
The NDIS price guide does not leave room for Learning and Development (L&D) although it states it does. Employees need to be paid while on training and services still delivered, so casuals or locums need to be used at a higher rate. Training in the sector is generally only maintained at the mandatory level.
Most employees work in the sector because they believe in what they are doing, it is critical to put focus on the working environment, values and advertising the impact the company has with clients. The more the sense of belonging is promoted, the better the retention.
7. You can work with Unions
The Australian Services Union (ASU) is the main union active with our employees and indeed the sector. The company's relationship had always been oppositional with the Union, and it took an underpayment matter, the change of IR legal advisors and the words of my CEO Forum colleagues to encourage me to approach them on a different, non-legalistic footing.
I have always respected unions. It maybe comes from a brief stint as General Secretary of the University of Geneva Student Unions (CUAE) many years ago. We may not always agree, but we must talk.
It is the Union that called out our underpayment issue - it was the right thing to flag it and I’m happy that we have addressed this issue “on my watch”.
Finally, many aspects of both worlds are the same and transferable; I found that my experience in Leadership, Strategy, Risk, Finance and Transformation was absolutely relevant to the role and helped me make significant contributions to making breakthru a better, more efficient place.
