Integrated Reporting practices based on findings from 100 JSE-listed companies

I have provided an introduction below to a publication (which applies to all members of the C-Suite) prepared by the Deloitte Integrated Reporting and Sustainability team, which discusses the state of Integrated Reporting practices in South Africa. The publication contains the key findings of the empirical research conducted on 100 companies listed on the Johannesburg Stock Exchange.

The analysis covered 7 subjects, 58 principles and 160 questions seeking to assess actual performance against good practice. The publication includes practical observations on certain topical subjects which appear to be a challenge for companies. I have provided an excerpt below and will send you the full report upon request.

If you would like to discuss the contents of the report in more detail, please contact Bertie Loots (bloots@deloitte.co.za), Nina le Riche (nleriche@deloitte.co.za), Johan Erasmus (jerasmus@deloitte.co.za) or Jaco Pretorius (japretorius@deloitte.co.za).

Integrated Reporting: Navigating your way to a truly Integrated Report

Integrated Reporting is the new kid on the block … and like many new kids there are great hopes for its future including the ultimate achievement of embedding a strategy that preserves long-term value, simplifying reporting and adding more meaningful information to a wide range of users. But where does the idea come from? What is it trying to do? And what is the current state of development?

And before you think this is just for the accountants, think again. Integrated Reporting aims to incorporate everything from strategy through to risk management; from financial reporting to the inclusion of usage of other capitals (think societal and environmental impacts). And it aspires to meet the needs of a wider group of stakeholders – employees, customers, suppliers and others. So everyone associated with an organisation in a significant way is likely to be touched by it.

At Deloitte, we see Integrated Reporting as enabling a process which enhances and preserves long-term sustainability in all its dimensions, without unduly sacrificing short-term performance. The Integrated Report is in turn an annual report that comprises a holistic and integrated representation of the entity’s efforts to enhance and preserve long-term sustainability in all its dimensions, without unduly sacrificing short-term performance.

Deloitte has released its second quarterly report on the state of Integrated Reporting in South Africa. The report reveals that Integrated Reporting standards have been adopted by more than half of South Africa’s listed companies. Although it is now necessary for these JSE-listed companies to include a statement of compliance with the principles set out in the King Code on Governance Principles (King III) in their annual reports, many companies are still scoring surprisingly low on corporate governance matters.

Download the publication . . . .  Integrated Reporting – Navigating your way to a truly Integrated Report

We value your comments and feedback. If you have any questions, do not hesitate to contact us!

Filed under: Executive Leadership, Finance, Information Technology, Risk Management, Talent & Human Capital, Deloitte, financial reporting, governance, Governance Principles, integrated reporting, JSE, JSE-listed companies, King III, South Africa, sustainability

Building the recovery together-What talent expects and how leaders are responding

The second report in Deloitte’s Talent edge 2020 survey series features results from a survey of more than 350 employees at large companies worldwide and examines employee attitudes to provide insights into the forces that will drive the talent market over the next decade.

Now that the economy is growing again, corporate executives and talent managers may be tempted to believe that the talent market has returned to normal and that they can go back to “business as usual” leaving them on the losing side of the competition for talent.

However, the report finds that many companies are not addressing the critical needs and potential frustrations of their employee—and often do not have a realistic picture of how employees see them.

The report’s key findings include:

• Employers may risk losing the hearts and minds of employees: With a stronger economy, employees are now actively testing the job market. Only 35% of employees surveyed expect to remain with their current employers while nearly two out of three employees surveyed (65%) desire to leave their current employers.
• What do the 65% of employees looking for the exit sign see that their employers don’t? Among employees surveyed who are actively or passively seeking out new employers, 53% report the prospect of job advancement or promotion would persuade them to stay with their current companies.
• Targeting talent strategies to generations helps keep teams intact: Based on the survey results both turnover triggers and retention incentives vary significantly across employee generations.
  • Baby Boomers expressed the strongest discontent with their employers and the greatest frustration that their loyalty and hard work has been neither recognized nor rewarded. 32% of Baby Boomers surveyed cited lack of trust in leadership as a key turnover trigger—making it their top-ranked reason to leave and the highest selection of any generation.
  • Generation X employees are far and away the most likely group to be looking at exit strategies from their current jobs. Only 28% of surveyed Gen Xers expect to stay with their current employers with lack of career progress a clear top exit trigger at 65%.
  • Millennials have a sharply different idea of what makes for a strong corporate culture than other generations. Survey responses indicate that they are more likely to consider their employers’ commitment to “corporate responsibility/volunteerism” and call a “fun work environment” important compared to Baby Boomers.

Companies that lift their games to deliver “World-Class” talent programs will likely be rewarded: Very few employees define their employers’ overall talent efforts as “world-class” or even “very good” – and the same lack of confidence holds true when it comes to key talent retention strategies. However, survey results indicate that employers that do lift their talent efforts will likely be rewarded with employees who are more satisfied with their jobs and career prospects and who are far more likely to remain with their current employers.

Download the full report . . . . Talent Edge 2020 – Building the recovery together

We welcome your feedback and comments and please share with your network!

Filed under: Executive Leadership, Talent & Human Capital, career, Deloitte, employees, talent, talent programs, talent strategies

How to use blended learning to add value to the growth of your business

by Stephan Freysen, Deloitte South Africa

If you have any questions, require additional information or would like a more detailed discussion, contact Deidre Gouws at dgouws@deloitte.co.za or Leana du Plessis at lduplessis@deloitte.co.za

Knowledge is a successful business

A very famous legend of a conversation between Einstein and a colleague goes where the colleague asked Einstein for his phone number. Einstein then reached for the telephone book, looked it up and repeated the number to his colleague. Startled at the genius’s “lack of memory”, he asked Einstein: “You don’t even know your own telephone number?” “No,” Einstein replied. “Why should I memorise something I can so easily get from a book?”

While this episode happened about 70 years ago, the information age has kept expanding. Due to the incredible rate that knowledge is constructed, we now find ourselves in a maze of information sources that we struggle to navigate efficiently.

Knowledge equals power, and knowledgeable human capital equals a successful business. In this light, those involved in training employees often utter the need for bigger, simpler, better and faster learning solutions. In the search for the epitome of learning solutions, organisations often turn to blended or multi-modal learning as the panacea (ultimate truth).

The main reason for this is that efficient blended learning is not only Einstein’s “telephone book” where you can look up knowledge and refer back to concepts time and again, but also a GPS that assists you in navigating the maze of information sources we find ourselves lost in. The learning component, if supported with solid instructional design (learning design), assists the learner in selecting important information that is in fact required to memorise.

What is blended learning?

Since there can easily be a misconception about the term “blended learning”, let’s discuss exactly what we mean by it. Blended learning implies the strategic mixing of technology-enhanced learning methodologies and face-to-face learning methodologies in order to achieve a holistic learning methodology that caters for all learning styles and learner types.

With the term “blended learning”, we simply mean that the learner now learns with the computer as source of knowledge, and the facilitator facilitates the knowledge construction process and mentors the learner on those areas where the computer cannot.

Can you afford not to invest in blended learning?

It is imperative that we understand the challenges that we need to address and overcome. Traditional face-to-face learning poses a number of challenges, whereas blended learning not only addresses these but also transforms these challenges into benefits.

Benefits and learning in the same sentence? Below is a list of benefits associated with blended learning weighed up against challenges associated with face-to-face learning.

Benefits associated with blended learning

1. Better knowledge retention because individual learning styles are catered for
2. Less time spent training, more time spent working (self-paced and to the point)
3. Better employee productivity because of better knowledge retention
4. Since the e-learning component can be done anywhere (wherever there is an internet connection), at any time, employees can spend less time away from home and more time with their families.
5. Blended learning can be used as a Just-In-Time intervention, e.g. if you need to give a presentation, you can do a quick course on “How to do a presentation” the night before.
6. You can easily return to a course to look up information that you have learnt before but don’t quite remember that well. The lesson will be exactly the same as the previous time.
7. Consistency of learning material and its delivery

Challenges associated with traditional face-to-face learning

1. Individual learning styles cannot be catered for in one class.
2. Peer Group paced and often elaborate; The slowest learner sets the pace.
3. Employees often struggle to retain information, and productivity does not show a marginal increase.
4. Employees often have to travel to training institutions that are far from home and subsequently spend their nights in a guest house instead of with their families.
5. Have to be scheduled for set dates; Often, information is shared too late for the need; Not always easily accessible
6. Learners often have textbooks or manuals from the classes they attended, but these are sometimes not self-explanatory enough.
7. Inconsistent delivery of training due to the human factor, as well as other factors where more than one facilitator is involved

Is the delivery of your organisation’s training truly consistent?

Although face-to-face classrooms work well for the purpose of training knowledge, skills and attitudes, there are often circumstances in which facilitators have to stand in for each other for certain classes. As you can imagine, this can potentially pose problems because people have different ways of transferring knowledge. Facilitator A could potentially have a passion for a certain subject, whereas Facilitator B just doesn’t feel the same way about that subject. This causes an inconsistency in the depth and experience of knowledge transfer.

A facilitator could also easily forget to tell a class something that he has told the previous class; and sometimes, facilitators are just not in the mood to deliver knowledge and attitudes consistently to each class. Fatigue, the time of day, group dynamics, as well as interaction and personal mind-set all play a major role in affecting consistent knowledge delivery.

Since we can safely say that e-learning programmes are programmed with subject content, we can assume that all content is presented at the same pace and at a consistent level every time, to each learner that takes part in that learning experience. We can also assume that all nuances are presented in exactly the same way, thereby eliminating the age-old challenge of training continuity.

With blended learning, every assessment (formative and summative) can also be tracked electronically and automatically. This implies that a facilitator, manager or supervisor can rest assured that all assessments are presented consistently and in compliance with the relevant unit standard’s requirements.

In the case of face-to-face training, there is also a quality assurance challenge, as it is just not practical or financially viable for many institutions to effectively monitor the quality of training over multiple sites, whereas an electronic learning management system monitors the quality of training automatically.

When it comes to blended learning, it is important to note that the computer is a supplement to the facilitator and that the computer and facilitator are in a partnership to enrich learners’ experience, while they integrate the newly constructed knowledge into their world views. In other words, the computer functions as the source of knowledge while the facilitator facilitates the knowledge embedding process by acting when (s)he identifies (with the help of an administration system) that the learner struggles to construct meaning of certain abstract concepts.

What about the learner?

Have you ever been in a classroom situation where you experienced a teacher or facilitator’s frustration with you or a classmate because you just didn’t “get” what the person was trying to explain?

Since a computer does not have emotion (yet), it cannot become impatient. Depending on how the e-learning programme was configured, a learner can have as many tries with assessments as they need, until they get it right – no impatient growls, despondent sighs or rolling eyes from demotivated facilitators.

Learners are all the same in the sense that they are completely different from one another. Every person has a learning preference different from the next person’s, be it the balance between visual stimulation, auditory input and kinaesthetic participation or just the level of interest in the particular subject. The learner’s paradigm (worldview and experience) determines the pace at which he/she learns in a group.

It takes a very skilled, dedicated and experienced facilitator to cater for all these learning styles and to keep learners engaged across, and despite of, their preferred learning styles. Catering for all these learning styles implies that each outcome is explained by talking about it, providing the learner with visual cues for conceptual cognitive modelling and letting the learner act out on his/her newly constructed cognitive model in order to apply his/her understanding.

Blended learning can cover all these learning styles (auditory, visual and kinaesthetic) by means of multi-sensory stimulation achieved through rich multimedia. The application of rich multimedia also allows for the optimised training of semi-illiterate and illiterate people.

The upside of this multi-sensory stimulation is that the instructional designer can explain complex abstract concepts at the hand of detailed audio, visual cues like graphics, animation, photographs and video, as well as planned tasks that the learner can physically explore.

With the blended-learning approach, the instructional designer can cover all six levels from Bloom’s Cognitive domain taxonomy (knowledge, comprehension, application, analysis, evaluation and synthesis). Further to Bloom, the instructional designer can also underpin the learning experience from behaviourism, cognitivism and constructivism, thereby delivering a design that covers all the bases of differentiation techniques.

508 Compliance (catering for people with disabilities) is another large factor that one should consider as a benefit of blended learning. While the facilitator would normally be unable to accommodate a disabled learner in the classroom due to the extra attention required, blended learning technology enables the learner to hear and see things that (s)he would normally not be able to do in the classroom.

Based on the premise that the techniques as discussed are followed in the design of the learning experience, learners will have much higher retention of content learnt than with traditional face-to-face learning. This is because the learning experience is mainly self-paced and unpressured, and affective filters are not raised through the interference of negative human behaviour.

Learning has its own culture

In South Africa, we have a vast number of diverse cultures and sub-cultures mixed into an exquisite rainbow nation. It should be no other way, but it undoubtedly poses some challenges in the training context, since the facilitator needs to have a deep-seated understanding of the vast number of diverse cultures in order to adapt, not to offend anyone and to drive the nail home with metaphors and similes used to explain abstract concepts.

In comparison, designers of blended learning (instructional designers) go through a whole process of understanding not only the ethnic culture, but also the entire organisation’s culture and sub-culture in order to efficiently adapt learning material in such a way that the learner “feels at home” when s(he) goes through the learning material.

Some other challenges that facilitators face are gaps in learners’ memory retention, learners’ attention span, facilitator schooling, and facilitator motivation and class interaction levels.

What does this all come down to?

The business of learning is as intricate as a business itself, and for this reason the person(s) responsible for learning should onsider a methodology that can cater for the dynamics of learning, especially if the organisation is striving for sustainability through optimal people development.

Barbara Sher said “Isolation is a dream killer”. If the dream is to design the perfect learning solution, one could certainly not design this learning solution with little packets of isolation. The solution has to be designed using the best parts from different methods, learning from the past mistakes that educators and trainers have made again and again, and focusing on the balance of the key elements in good design that make learning efficient.

A lesson that the training industry can keep in mind is one from the architectural genius Mies van der Rohe, who said “Architecture starts when you carefully put two bricks together. There it begins.”

Did you find this useful? Do you have anything to add? We would love to hear from you!

Please share with your network!

Filed under: Executive Leadership, Talent & Human Capital, assessment, blended learning, business, Deloitte, growth, human capital, knowledge, learner, learning, people development, training

South African Annual Budget Infographic : Deloitte SA Budget Insights

Deloitte South Africa takes a look at the financial, figures and industries that contribute to both government’s revenue, and expenditure. Taken from the audited 2009/10 results from Treasury, the infographic assists in showing insights into a highly complex set of numbers.

Download the full infographic here: Annual Budget Infographic

Follow @DeloitteSA on Twitter for more on the 2012 SA budget and use the #sabudget hashtag to contribute to the conversation.

Filed under: Government & Public Sector, Annual Budget, Annual Budget South Africa, Deloitte Annual Budget, SA Budget, South Africa Annual Budget, Tax Budget South Africa

PPI can bring benefits to those corporates which comply

JOHANNESBURG, January 26, 2012 – Saturday, 28 January 2012 marks international Data Privacy Day. The day highlights the impact technology is having on our privacy rights and underlines the importance of valuing and protecting personal information. While the day is recognised internationally by business professionals, corporate South Africa is grappling with our privacy legislation.

As South Africa’s Protection of Personal Information (PPI) Bill looms over the county’s corporate sector, many companies are racing against time to grasp the compliance demands of the legislation.  Unfortunately, in their haste many are underestimating the benefits that compliance could bring to their operations.

“The PPI Bill is a natural progression for South Africa. At its most basic, the legislation reinforces every South African’s constitutional right to privacy. At the other end of the scale, it brings the country into line with most of its significant international trading partners, a factor that builds confidence when information is transmitted across borders,” says Deloitte Legal Director, Dean Chivers.

Looking beyond compliance, effort and cost, there is substantial value for those implementing PPI. The value of the corporate brand will increase with customers and business partners having more trust in the organisations with which they do business. According to Chivers, this customer value can translate into financial benefits.

PPI’s value for a brand is incalculable. The recent announcement that about R41 million had been stolen by hackers infiltrating the PostBank database illustrates perfectly the reputational and monetary loss involved when customer information is hacked.

The recent case where Zappos in the USA was hacked and had to notify in the region of 24 million customers of the breach and implement preventative measures further indicates some of the potential downside. Indeed data events like hacking, data loss, unauthorised data use, insufficiently regulated outsourcing and cross border data transfers all present significant value risk.

Added to this, on January 25, 2012, the European Commission proposed increased penalties for data privacy breeches, which envisage penalties of up to 2% of a company’s global annual turnover.

“While companies will need to reassess their data management process, analyse their security, amend processes and change their contracts, companies should not look at the PPI Bill as purely an inconvenience. Rather by aligning the requirements of the Bill to existing projects and reporting structures, PPI can offer a sustainable and measurable return on investment” concludes Chivers.

Contact:

Luleka Mtongana
Magna-Carta PR
+27 (0)11 784 2598
Luleka@Magna-carta.co.za

Lana-Jane Pike
External Communication
Deloitte & Touche Southern Africa
+27 (0)11 209-6214
lpike@deloitte.co.za

 

Filed under: Market Solutions, Uncategorized, Data privacy; Dean Chivers, PPI

Deloitte TMT Predictions 2012 Infographic

What are the Deloitte TMT Predictions?

What started in 2001 with ten predictions about mobile telephony has evolved and grown into one of the Technology, Media & Telecommunication industry’s most anticipated research publications, covering all three industries individually. Launched in 46 countries, translated into almost 10 languages, downloaded and viewed by tens of thousands of people around the world, the Predictions have a significant medium and long term impact for organisations in the industry.

Forecasting on topics like Social Gaming, Tablets, Mobile, Online Ads and 3D printing, the 2012 TMT Predictions highlight immediate trends, future possibilities and industry changes within these fast paced and ever-changing environments.

Download the Predictions here

Deloitte also presents its first ever South African hosted 2012 TMT Predictions seminar with global research director of Technology, Media & Telecommunications, Paul Lee. Over and above producing  the Deloitte Global Mobile Consumer Survey, Paul has written five books, including Convergence Conversations and Digital Dilemmas. A TMT Predictions eventis to be held on Tuesday 31 January 2012 at The Michelangelo Hotel in Sandton, and will provide practical insight into the very real challenges facing the industry.  The discussion will no doubt include discussions on the broad and often complex area of TMT and key issues all businesses should be aware of. This will be followed by an interactive dialogue with a panel of experts , clarifying important business considerations that the Deloitte TMT Predictions raise. Follow the conversation on Tuesday on Twitter. The official hashtag is #TMTPredictions or follow @DeloitteSA.

Deloitte 2012 TMT Infographic

Click here to view the full infographic

 

 

Filed under: Technology, Media & Telecoms (TMT), Business Infographics, Deloitte Infographics, Deloitte Predictions, Infographics, Media Predictions 2012, Technology Infographics, Technology Predictions 2012, Telecommunications Predictions 2012, TMT Predictions

Why does strategic sourcing not enjoy the focus it deserves?

Supply Chain Management – Unlocking the true value of your time

by Tania Davey-Smith – Deloitte

If you would like a more detailed discussion, feel free to contact Tania  at tdavey-smith@deloitte.co.za

Strategic sourcing of non-core products – a treasure waiting to be discovered

Strategic sourcing is a management process used to systematically assess purchasing requirements across a company and identify opportunities, both internal and external, for total cost reductions. This process is widely practised within organisations that require large volumes of raw materials to effect their manufacturing operations. This is normally the largest component of cost of sales and enjoys executive focus to drive costs down.

However, organisations often overlook the cost reduction opportunities to be found in some of the other cost-of-sales items, possibly because they are not the big cost items. These could include packaging, clearing and forwarding, and maintenance spare parts. Even further removed on the radar of cost reduction opportunities, are expense items such as marketing, printing, travel, legal services, IT and professional services. Yet, these expense items, individually and collectively, add up to a significant portion of overall expenses.

Why does Strategic Sourcing not enjoy the focus it deserves?

Procurement has traditionally been tasked to process purchase orders effectively, negotiate contracts and expedite delivery. The procurement function has been treated as an administrative function (and therefore acted as such) and not as a strategic partner able to drive down costs in a meaningful manner. The reason for this is possibly that the procurement leader has not enjoyed the executive status that would give him the clout he needs. It is also true that procurement practitioners are often not closely aligned with the needs of the business, nor do they have an intricate understanding of the commodities they are purchasing. More often than not, corporate procedures governing the sourcing and purchasing processes are not adhered to, resulting in maverick spend by line managers who do not have the patience to wait for Procurement to do the job and who believe they know better (and probably do).

We have accumulated statistics over decades, having assisted our clients in strategic sourcing projects. We are therefore able to state confidently that strategic sourcing does work. In our experience, organisations tend to overlook the importance of the role of a Strategic Sourcing manager, and this role – more often than not – does not exist. This results in procurement practitioners being sucked up in the daily demands of their jobs and in keeping their internal customers satisfied. There is no time to research the supply market, let alone do site visits at supplier sites, get to know your supplier, do price and quality comparisons and move to the next level of effective sourcing, which is to understand and negotiate supplier contracts that will reduce your own risk and cost of ownership.

Similarly, procurement practitioners seldom have the time or skills to develop a deep understanding of the commodities they source. Whether these commodities are core raw material products or non-core commodities such as legal or IT services, it is necessary to understand the cost drivers of each commodity in order to effectively procure. Every item that is sold has undergone a process of production, during which value and cost were added. A deeper understanding of the value chain that underpins each product or service, and the drivers of cost in that value chain, will enable a procurement professional to make meaningful comparisons between possible suppliers.

The table below provides an indication of potential savings companies can achieve:

We recommend that you work with an organisation  that has experience in sourcing indirect categories, which enables them to provide category-specific strategies and market insights.

You also need to develop a deep understanding of the supply industry, including the cost drivers of the commodity, so as to enable meaningful comparisons between suppliers. A key element of strategic sourcing is the establishment of cross-functional sourcing teams who are collectively able to develop specifications for products and services, as well as adjudicate tenders, bids and quotes. Strategic sourcing continues to unlock meaningful value to organisations, and it needs to expand its reach from core spend items to the non-core commodities – a treasure waiting to be discovered.

For more information contact Tania Davey-Smith  –  tdavey-smith@deloitte.co.za; Gitesh Mistry  –  gmistry@deloitte.co.za;  Lerato Sithole  –  lesithole@deloitte.co.za or Riana Bredell  –  rbredell@deloitte.co.za

Please provide comments and share! 

Filed under: Executive Leadership, Finance, Industry And Consumer, cost reductions, Deloitte, procurement, purchasing, strategic sourcing, supply chain management

How to reduce your company’s clearing and forwarding costs by up to 23 percent

by Tania Davey-Smith, Deloitte

Clearing and forwarding – Clearly not that straight forward!

For a more detailed discussion, contact Tania Davey-Smith at  tdavey-smith@deloitte.co.za, Gitesh Mistry at gmistry@deloitte.co.za, Lerato Sithole at lesithole@deloitte.co.za or Riana Bredell at rbredell@deloitte.co.za

Organisations that use import and export as a primary channel of supply and distribution know that clearing and forwarding constitute a major expense item in this process. A large portion of spend in this category includes landside costs, customs examination, duty and VAT, which sadly are not very controllable. However, freight, forex, haulage, storage (port and depot) and agency fees do leave some room for manoeuvring.

The clearing and forwarding industry in South Africa consists of hundreds of agents who manage the supply chain and facilitate the associated services and costs on behalf of their importing or exporting clients. “There are approximately 500 registered members of the South African Association of Freight Forwarders (SAAFF), and many more out there who are not registered, who work out of their boot and cut costs and margins in this highly competitive industry”, says a spokesperson of SAAFF. Like most industries, the clearing and forwarding industry is dominated by a handful of large players, who stay in the game by providing their customers with value-added services, such as the placement of their staff at client premises (thereby ensuring efficient document flow and developing intimate knowledge of the client environment, its products and its unique needs). Inefficient document handling and incorrect tariff codes are cited as two of the primary causes of increased storage times, in turn causing delays at the tariff office, and hence escalating costs.

A web-based tracking system that allows the client to see at all times exactly where the goods in transit are, together with estimated arrival times, is another invaluable service supplied by certain agents, differentiating them from their boot-operating competitors. Close management of costs – by careful selection of the various service providers in the supply chain operation – is required if tabs are to be held on your clearing and forwarding spend. In our analysis of this process, we have been able to consistently reduce spend by 5 to 23% across various industries. In our experience this is achieved by the renegotiation of rates of both service providers (e.g. freight and haulage) and to a lesser degree the agents (who are already on margins of as little as 2%), as well as improved processes and reconsideration of sourcing options. The switching of agents is seldom a recommendation, as the embedded knowledge of the client environment creates a switching cost and added risk to the clearing and forwarding process.

Whilst clearing and forwarding appears to be a cut-throat industry with little room for cost saving, a deeper look into rates and efficiencies, as well as sourcing from different countries, and resultant reduced tariffs can unlock significant expense reduction.

Did you find this useful? Do you have anything to add? Do you have any questions? We would love to hear from you! Oh, and please share with your friends!

Filed under: Consumer and Industrial, Executive Leadership, Finance, Industry And Consumer, Information Technology, Risk Management, Taxation, agency fees, clearing, customs examination, Deloitte, distribution, duty, expense, export, forex, forwarding, freight, haulage, import, landside costs, SAAFF, South African Association of Freight Forwarders, storage, supply, supply chain, supply chain management, VAT, web-based tracking system

Out with the old, in with the old

By Simon Holland – January 05, 2012

In his first-ever blog to start the new year, Simon Holland, Global Head of Strategic Change and Organizational Transformation, argues that it’s time for a radical review of leadership development programs

Most leadership development programs do little more than maintain the status quo. Long-term organizational change depends on behavioral change—and that depends on in-depth understanding of individuals and what motivates them

Happy 2012. Given up giving up smoking/chocolate/drinking yet? Don’t worry. You’re not alone. According to research by British psychologist Richard Wiseman, often quoted at this time of year, more than four-fifths—88 percent to be exact—of all New Year’s resolutions end in failure. At this rate, the only resolution worth making is not to make a resolution.

Why is change so difficult for us? Why can’t we stick at things—even when we know they’re good for us?

I’ve been thinking about these kinds of questions a lot lately as colleagues get to grips with the problem of leadership development—and how it can be solved. Didn’t think leadership development needed fixing? Think again. Research by LEAD—Leadership Excellence at Deloitte—finds that only a puny 4.3 percent of leaders rate their organization’s leadership development as “very effective.” Most corporate efforts to make us better at our jobs fail to make a difference in the long term—much like those resolutions. Back at the office, lessons learned during a development program disappear faster than needles from the Christmas tree.

Some loss of momentum is probably inevitable. Confronted by a backlog of emails, etc, and the resistance of colleagues to new things, enthusiasm wanes. But it’s not just the daily grind and an “inhospitable” culture that are to blame. The plain fact is most leadership development programs are misconceived—and that they’d have patchy results whatever the circumstances.

The LEAD team has highlighted four critical design flaws. Number one is a failure to link programs to the needs of the individual—or to integrate them into CPD (continuous professional development). Too many leadership development initiatives are ad hoc, begun not because an organization is thinking about the future of its executives and managers but simply because it’s planning a new strategy and wants to limit the risks it will misfire. Consequently, participants’ personal motivation to learn—and, crucially, to change ineffective behaviors—is poor. Give the development needs of the individual level pegging with the development needs of the organization and you’ll get a program much more likely to succeed and to meet long-term strategic goals.

Number two is the wrong environment. Facilitators need, says LEAD, to create the conditions for “constructive challenge,” where participants feel able to admit to and face up to personal weaknesses. Leadership development must not be an ordeal, but it shouldn’t be about anodyne messages either—few things get done in the comfort zone.

The third flaw concerns content and structure—and is related to the first. Most programs are too generic. Force-feeding people information from a standardized training script will seldom work. Learning has to be relevant to the specific needs of the individual and to the problems an organization confronts. It has, says, LEAD, to be based on finding solutions to real issues. Common sense tells us that lessons learned in practice—rather than theory—make most impression on people. There’s a big difference between knowing a thing intellectually and knowing it emotionally or through experience.

The final problem is follow-up—or lack of it. Nearly a third of respondents in a survey commissioned by LEAD from independent UK organization IEDP said that coaching was the key factor in their “most powerful learning experience.” The opportunity to reflect on what you’re doing, provided by coaches and mentors, makes learning more secure/embedded. Given the pressures and competing demands on leaders, support needs to be formalized. Time for follow-up needs to be factored into development programs. It’s an investment that will pay off in the long term.

Again this is common sense—not sophisticated psychology—but if you want some kind of scientific proof it works, consider the following story, which featured in a Fast Company magazine article, “Change or die,” by Alan Deutschman in 2005.

The number of heart bypass patients who change their ways—eat healthier foods, take regular exercise, etc—is notoriously low. According to the medical school at the John Hopkins University, 90 percent revert to their old behaviors within two years of surgery.

To try to combat the problem, in 1993, Dr Dean Ornish, a professor of medicine at the University of California at San Francisco, trialed a new post-operative care program. A holistic approach, it included not only dietary advice and fitness regimes but also twice-weekly group support sessions, led by a psychologist. Three years later, 77 percent of participants had stuck to their new, healthier lifestyles. Group support works, coaching works. In fact, as an incentive to change, it seems they beat fear of death.

To summarize, then, if your New Year’s resolution is to be better at leadership development, you need to remember the four Ss:

Synergy—make sure individual and organizational needs are aligned.
Stretch—provide constructive challenge.
Solutions—engage people in problem-solving, the real-life stuff.
Support—provide time for reflection and coaching.
Follow this four-point plan, and you could avoid being one of the 88 percent.

Simon Holland, Global Head of Strategic Change and Organizational Transformation for Deloitte Touche Tohmatsu Limited, specializes in people performance and leadership and has guided the design, development, and delivery of many change programs, helping organizations lead people in new ways of thinking and working—for the long-term benefit of shareholders and stakeholders.

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Filed under: Executive Leadership, behavioral change, Deloitte, leadership development, organisational transformation, strategic change

Building Enterprise Risk IntelligenceTM through Smart Learning and Development

Posted by Josh Haims on January 6, 2011

The pressure on organisations to address enterprise risk is unlike any we’ve seen before, perhaps because the scale and scope of risk is unprecedented. Certainly, in the wake of the financial crisis and ensuing reforms, regulatory and compliance risk looms large in the financial sector, as well as in health care, with its similarly sweeping reforms. We also anticipate supply chain risk for manufactures, competitive risk for retailers and brand and reputational risk virtually across the board, given the rise in social media and the potential power of global social networks to rapidly shift large groups of people for or against a product or company.

In response, many organisations are reengineering processes, implementing policies, putting controls in place, introducing new technologies — and fine-tuning and adapting all of these as the rules evolve — to manage, avoid and mitigate risk. But with these new ways of working comes the need to consider building new employee capabilities. And that means many companies are challenging their status quo training approaches and designing, developing and delivering truly developmental and experiential learning — not check-the-box training programs.

Simply providing training about how to follow a new process or procedure or explaining how to use a new technology may not be enough. The key is to create and foster a risk-intelligent mind-set throughout the organisation and to build that into how work gets done. So, along with building risk intelligence into structured compliance and regulatory adoption training programs, organisations should step back and reassess learning opportunities holistically and the various channels and mechanisms for employee understanding and growth.

Many organisations are devoting considerable expense and time to manage and mitigate risk in their business, so to consider taking steps to increase the effectiveness of that investment is prudent.

In a recent publication, Bridge the gap between “knowing” and “doing,” we take a closer look at the link between effective learning programs and risk intelligence. Learning can be a critical bridge between an organisation’s heightened awareness of the importance of risk mitigation and the behaviors employees need to exhibit to effectively mitigate risk.

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Filed under: Executive Leadership, Risk Management, Talent & Human Capital, competitive risk, compliance risk, Deloitte, employee capabilities, enterprise risk, experiential learning, financial crisis, learning programs, mitigate risk, reforms, reputational risk, risk intelligence, risk mitigation, risk-intelligent mind-set, social media, social networks, supply chain risk, training