As an alumnus of Macquarie Graduate School of Management (MGSM), I attended the first Alumni and Corporate Relations Business Connect event this week. The guest speaker was entrepreneur and independent director David Carlick who provided some very thought provoking insights which led me to question do we need new approaches to leadership or maybe even return to some past models that have long been abandoned?
According to David, reports show that wages growth is minimal and is likely to remain that way for some time in many so-called first world countries. David indicated that in the USA over 25% of the workforce live ’pay check to pay check’ and that a high percentage of people had less than $1,000 saved for emergencies. He suggested that the case is similar in Australia.
We are unable to find any data in relation to the number of Australians living ‘pay check to pay check’ however we did find research that offered the following findings:
- 30% of Australians have less than $1000 available in ‘rainy day’ savings to deal with an emergency,
- Almost one in eight (12%) have less than $100 on hand for a setback.
This is alarming, to say the least, and must surely have implications for companies, irrespective of size, if some of their people are experiencing this level of financial stress. I have never heard of employee financial stress raised as a link to reasons for people taking sick or stress leave. Neither am I aware of organisations providing simple money management and budget education for their staff to be better able to manage their financial wellbeing.
We could hypothesise that with continuing growth in artificial intelligence (AI) and machine learning the working landscape will change quickly and for certain groups and industries it is unlikely to improve and in fact could worsen. Oxford University suggests the first jobs to be impacted by AI include aspects of middle management, health care, and bookkeeping/accounting.
Do we need courageous leadership and followership to be willing to explore alternative business models that have a more equitable focus on the needs of all stakeholders, not just the interest of one group, shareholders, and the need to deliver returns and value to shareholders above all else?
Do we need courageous political leadership willing to abandon the current adversarial approach in favour of a stronger bipartisan approach to address major issues affecting all stakeholders and their future wellbeing? For example, industry and environmental and community groups are currently calling for such an approach on energy policy in Australia. Do our political leaders have the courage to change?
We collaborate closely with a number of private and family businesses and their attitude is quite different to corporate attitudes. In fact, one client we work with has walked away from an IPO as an option because, as they said, “we have a number of stakeholders who all rely heavily on us and we are not about to abandon them in favour of increased short term focus to satisfy the needs of one group, shareholders”. Maybe it is one of the reasons why this sector accounts for around 40% of employment in Australia.
A closing thought, as we suspect this debate is far from over. Steven Peralstein’s article When Shareholder Capitalism Came to Town provides an interesting historical perspective and one we think is worth reading.
Viventé Australia enables leaders and managers develop the bond between people and performance, creating a powerful advantage: the synergy between people, leadership, management, and culture, produces performance that allows your business to achieve its best.