ADDRESS TO UTS: Engage - Productivity and Future

26 July 2012


 Thanks very much Ross and my apologies for being a few minutes late. I understand that you’ve been here since 7.30 this morning or there abouts so congratulations on your productivity. I’d like to acknowledge the traditional owners of the land upon which we meet. I’d also like to acknowledge the more contemporary leader of the land here, which is of course is Roy, he’s done a good job of pulling people together here, which is great – and of course his talented staff.

 I’m deeply interested in everything you’re talking about today. I consider it a privilege to be a Member of Parliament. No one in my family has ever been a member of parliament before. I consider it a privilege to be in the Government, to be a Minister and to have amongst my portfolios workplace relations and employment.

 The reason why I particular like workplace relations, I like all my portfolios, but the reason why I like workplace relations is because for just about all my adult life I’ve been interested in and working in how do you improve relationships at work. Work is such a fundamentally important part of the lives we lead. It’s so important. Again, we are all, I suppose victims of our past and we are subject to the experiences, but I had the opportunity to visit 10,000 workplaces in my time. I’ve had the opportunity to negotiate, or be part of, 1,000 agreements while I was with the union.  

 I also come from a family which was probably more modest in background than some. And I saw what happened when my Mum didn’t get the opportunity to do law and had to take the teachers scholarship because of the circumstances of the family in the early 50s. I know at every level, my father worked in the docks, bright fellow but left school at 14. I know personally what happens if the value people have in workplaces isn’t utilised. I know from that work experience what happens when you’ve got unconstructed relationships.    

 What drives me is that I hate to see human talent wasted. I hate to waste my own time and I’m sure you all hate to waste your time. That’s why I want to try and at least give you a talk that is more interesting and perhaps less cliché than perhaps some of the perceptions about listening to politicians is.

I fundamentally believe all people have something in themselves to offer other people. Now I know it’s a little funny to talk about elevated future industries, and transformative matters and collaboration, to set those basics about we all have family members, who given different opportunities could’ve done more. We all know that there are good workplaces and that there are bad workplaces. We all know the people have got something to offer, but it takes time sometimes to extract that value and for people to have greater control of their own lives.  

 That is at the nub of workplace relations for me. It’s about respect for each other. It’s wanting employers and employees - employers to treat employees the way which I’d like someone to treat my wife or my kids when they go to work.

 Workplace relations is not, and indeed productivity, in my way of thinking is not something which happens in a black box and is a remote magical process. Certainly, productivity and workplace relations to me, is not about a debate about if we could just get rid of all the unions in Australia we’d be productive. Or if we could just change a law in Canberra, my enterprise at my level would be ten times as profitable. Life is not that simple. Workplace relations and productivity to me are inextricably linked and it’s about people.

 Now I’ve got some observations, again about productivity. But the first two I’d make

is that industrial relations law is a part of productivity, but to my way of thinking it is a small part of the productivity debate. No doubt there are some at the Australian Financial Review editorial group that would froth at the mouth at that statement. But, the fact is I’m right. I know that in workplace relations, what adds value is the people. What adds value is the way people engage with each other and the way leadership plays a role.

 This is the second point I would make. Good leadership can’t be legislated, but bad leadership will always cost a business a dollar. There are a million Australians who occupy some sought of managerial role. There’s a million of us, in charge of other people. What is amazing is that we don’t assume that when we go to drive a car that you don’t need to at least learn how to drive a car. When you learn to swim, you do assume that you have to learn how to swim. Taxis, not so sure, but anyway - No that’s a little joke, I once had a cab licence.

 But, why is it then we assume managing people is not something which should be a skill, a learned skill. It’s funny I see it all over Australia. Great engineers are put in charge of people, lawyers are put in charge of people, journalists are put in charge of people, but it’s not as easy as that.

 I fundamentally believe that leadership is a learned skill and leadership and being a good manager happens at every level of the organisation. You need good corporals as well as good generals, you need good leading hands as well as good CEOs, you need good people in charge of the call centre as much as you need good people in charge of Morgan Stanley.

 That’s the next point I wanted to put to you. Leadership makes a difference and it can be taught and we don’t do enough about it. That’s why I think what you are doing today is so fabulous. That’s why I groaned about being late, not just because I was wasting your time, but it’s interesting when I looked at the agenda you had today, in another world I thought I’d decide to sit at the back and hear what you’re saying. So I will obviously engage with Roy and others about what’s been spoken of today.

 But to me, the next point about productivity and workplace relations is there are the things you can change and the things you can’t change. And you are much better going with the grain of the things that you can’t change necessarily and focus more on the things you can control.

 Now, I think Australia has a bright future. This is not necessarily what you’d think if you watched the news or read the newspapers. We have a very bright future. And, none of my remarks should be taken when I talk about why we have a bright future, none of them should be taken as taking the views that there are not great problems of social disadvantage in Australia. I know we have a high dollar. I know that people with disabilities will be disappointed by the NSW and Victorian conservative state governments’ approach to the NDIS this morning. Here’s a sporting bet, that by about 5 o’clock today or next week, they would’ve surrendered. It’s just a futile exercise in foot stamping opposing a good idea. But, that’s a separate debate.

 I know that people with disabilities have a hard life. I know that indigenous unemployment is unacceptably high. I know that too many Australians are living on Newstart and it’s just very hard to make a dollar. I get all that, but I’m not about to say that Australia doesn’t have a bright future.

 Unemployment is 5.2 per cent. Our headline inflation is 1.2 per cent, underlying inflation just a shade over 2 per cent. Government debt, as a proportion of GDP, is not even double digits, not even 10 per cent. You say that to the Japanese and they say what. They are looking for the next zero.

 I was recently in the United States and Republicans and Democrats said ‘God we’d like to have your problems,’ which does of course beg the question if we going reasonably well, why is the Government going so badly. I think there are reasons to explain that. But let me return to my main hypothesis, which is there are things that are happening in Australia, which are going to happen regardless and these are good things.

 We see the Internet constantly changing business models. We see the fact that our society is living longer than ever before, we’re ageing. Well that’s a great outcome, beats the alternative. We are on the cusp of the fastest economic growing region of the world - the diverse and heterogeneous economies, jurisdictions, cultures of Asia. Fantastic.

 We are talking and debating sustainability in a way which has never been discussed before.  Putting a price on carbon pollution is the same as, in my opinion, is like putting a price on water. If you don’t know the cost of your inputs and you don’t have some signals to be more efficient in your use of it, why would you bother? In my opinion, more importantly even that carbon pollution and sustainability around energy is human sustainability, it’s the way we treat each other.

 That’s what I’ll come back to. But that’s a trend; we need to be sustainable in the way we treat each other. Women will continue their march for institutions of power, although I was just in a meeting with investment banks, they haven’t quite marched their yet, but they will, I’m sure. That’s a trend. It is going to happen.

 We are living longer, the Internet, we are a diverse, modern economy. We are a services economy. I know that Waltzing Matilda is about a shearer, which is good.  But, probably now if you cared to look at it, it should be more about that – there were 35,000 knights of the blade at the time when Waltzing Matilda was written, now Waltzing Matilda would be about a web designer because now there’s about 40,000 of them and 3,000 shearers. Or personal trainers, there are about 90,000 of them.

 Although I’ll still hang on to the Aussie icon for the time being. The point about that is that we’ve got industries today, which were unimaginable 100 years ago, they were unimaginable 10 years ago or 20 years ago. And, we are a good servicing economy, manufacturing still has a future in the country, construction is fundamentally important and is likely to grow in the next five years, mining is important.

 But the reality is mining now employs about 240,000 people, which is an increase of about 100,000 in the last five years. Health and Community services have added about 260,000 jobs. Now they’re the quiet achievers of our employment numbers. Reality is Australia has created 800,000 new jobs since the GFC, whereas the rest of the OECD nations, certainly the Western nations of the OECD, have lost 30 million.

 You know things are better than what we give ourselves credit for in this nation, but that doesn’t mean couldn’t be better and this really comes to the crux of what I’d like to talk about. I think there are four or five specific measures which we could look at with productivity, which would further enhance it.

 For those of you who are looking for a particular and I’m sure you’re not particularly expecting it, but for those of you who are hoping I might give you, what’s that book called – The Secret, I can just give you the answers. I don’t have the answers in a hard fashion, but I think it’s more the soft skills we need in enterprises to enhance productivity.

 The first thing is, I think a job of the future should be reflective of the way Australians are organising their own lives. I think Australians are doing five things and you ask, test it against your own family circumstances or people you know. One – we know that we’ll have more than one job in our life so therefore we need to be constantly educating and re-educating, skilling and re-skilling. And look at you all here, that reflects that. 

 The second thing is, we know we need to manage our health better for the future. There is no point working hard for a period of time and then dropping dead young. Although I know there is at least one person in the audience has a bicycle injury. No doubt that’s a phenomena of fitness. So getting healthy does of course have its downsides. You need to monitor it carefully.

 I’m sure most of you will fit into one or two categories, either you do exercise regularly or you wish you did. I know that’s a bit cheating saying that. But, the third way that Australian workers are organising their lives is they want to smooth their prosperity. They know that they are going to have a purative retirement, so they are interested in jobs they can do for a longer. Also, they are interested in their savings profile.

 I think a fourth way is that people don’t want work to be the sum of who they are. For me, whilst we have 3.5 million people who don’t work fulltime in Australia, and some of them would like more work and some are under-utilised, there’s others for who flexibility suits them. In part, that’s because they want to get their work/life family balance correct. In part, that’s because people are downshifting and part that’s because it’s the way in which people would like to organise their lives.

 There is a fifth point, which Australian workers organise their lives around. If you accept that we live longer, catastrophe can occur. Catastrophe doesn’t have to be a bushfire or a mine falling on you. It can be something as mundane as a divorce, it can be something as challenging as grandparents who become parents again of their grandchildren because their own immediate children have fallen to drugs or can’t cope.

 We know that if we live longer sometimes bad things will happen, so it is resilience becomes part of who we are. It’s being able to cope with that. It’s finding that nursing home unexpectedly when your parent can no longer look after themselves after they’ve loved and looked after you for 80 years.

When you do that seventeenth interview to find someone which provides a bit of dignity. So we know that we need flexible work for that. You see work intertwines all of these things and that’s my first tip about productivity or my first personal observation based on 25 years. It is that workplaces which respect that tendency of Australians and the way they are organising their own lives. They get it.

 Now you don’t need to pass a law to work out that. You don’t need to deregulate the labour market or have a debate about penalty rates on Saturday to work out that issue. If employers are attuned to how people seek to organise their lives and they respect that, all of a sudden you are ahead, I think, of some other employers or enterprises.

 The idea that we need to study and skill, some employers say to me, “but if we train our workers, they’ll leave us.” You know, so what. It’s not my great great sought of power of eight uncle Thomas. He got to spend seven years in one place in Australia and then he was set free. You know people aren’t convicts anymore, people are allowed to go.

 What I generally find is companies that who invest in the training of their workforce, keep their workforce longer, not shorter. If you workforce is living that life they want 100 years of good life, a century of life. If they want to have long lives full of quality and meaning it’s not just hard in workplaces to grasp that and respect that.

 I think there’s something else in Australian enterprises, we should stop blaming someone else for our problems. You know, unfair dismissal laws, spare me. Do you know in every 70,000 people who get dismissed, one has a successful reinstatement. It use to be 3 and 4 in every hundred when they apply for unfair dismissal remedy they would get their job back.

 But someone made this point to me the other day, but look at all the people who never bother applying for unfair dismissal. So chances are that if you were terminated from your job one in 70,000 is going to be reinstated because most don’t bother trying to get reinstated and those who do it’s a difficult remedy to get. 

 So please don’t tell me that unfair dismissal law is some sought of massive cross on the back of business because with those numbers, you’d want to have bigger problems than that. You’re more likely to get bitten by a shark, that’s probably not right but you’re heading out to those examples.

 I also think that when you look at organisations and productivity there are some simple tests, which show you how this enterprise is going. What’s your OHS statistics like? It’s a pretty good test. If people are going to work safe and coming home safe then chances are you’ve got more productivity than if you don’t. 

 But another variation on that and worker’s compensation. See I’ve got my test whenever I went to an enterprise. Sometimes you go to an enterprise and I’m sorry if you have this, if you have a fish tank in the front of you office, unless you are an aquarium I don’t know why you are doing that.

 Flagpoles, tennis courts in front of the factory, generally a lot of migrants work in factories. Generally, tennis not their biggest sport. Anyways, these are just anecdotes from the real world. But what I did notice, more seriously, when I looked at productive enterprises, not just OHS, but workers comp and the third leg of that was rehabilitation. Were people really welcomed back when they got hurt, or was it just get them off the books.

 Another test simply used is bad news. I never saw an OHS disaster where afterwards where the company didn’t say to me if only someone had told me then we could’ve done something about it. That happened from Beaconsfield to Exxon, when Longford blew up down in Gippsland. Never saw a scenario where someone very empathetic, very committed, very upset CEO didn’t say to me “but why didn’t they tell us there was a problem.”

 Well the question for me is always, what’s the mechanism in an organisation to hear bad news up the food chain? And you’d almost mentally use the analogy do you have bad news offices in your business. Because it’s not always easy when you have an asymmetrical power balance to raise bad news, is it? It’s hard, if you’ve got a strong leader, trying to tell them what they don’t want to hear, isn’t always easy. Just ask my advisers.

 But, we need to have organisations and enterprises where you are hearing the things you need to hear, not just the things that you want to hear. If you can’t think of the mechanism where that is happening then you’ve got a problem with your productivity because you won’t be seeing the things which add value.

 Another observation, I think, for productivity, I know that someone will say does everything apply to a small business or a big business, I think these principles are sound. How you implement them, you’ve got to give a bit of room for the size of the enterprise. But, does your company, as I said does your enterprise have a bad news officer or a function, does it have an historian? Now my skill, not my skill but my background, I did a BA before I did my law degree. I loved history. I’m not saying history is an infallible predictor of the future, but it’s certainly a reliable guide.

 You know, after Beaconsfield, I got a historian to look at 12 mining warden inquiries into mine disasters from 1900 and I could pretty much do the stencil for what the Royal Commission. The next mining Royal Commission that happens I will tell you now what it’s going to say because we don’t learn.

 I look at the terrible coal disaster in New Zealand and I’ve been talking to the Minister for Labour over there and I’ve got some views about what has happened there. Now of course there are always different circumstances. But my point is that history, who is the historian in the enterprise because there is not a lot that is new under the sun sometimes about people. Is there is someone that has the function of knowing the history of that enterprise because that does matter.

 Also, I have to say based on a recent trip several months ago, who is in charge of the science of an enterprise. Now science doesn’t have to be a Bunsen burner and dissecting frogs, obviously. But, who is thinking about the research, do you have a chief scientist in your organisation? You don’t have to use such a fancy term as the bad news officer, the historian or the chief scientist. But these are organisational strengths. Do you know in Israel every government department has a chief scientist. We don’t in Australia. The science agenda definitely neglected.

 What I would also submit is, do you have a ‘what’s in it for me’ test. I know that Roy has certainly been very strong on this. Do you have a sought of democratic education agenda. He would use a much more elegant term. What I mean is who is accessing the training in the organisation? Are the best dollars going to the highest paid people or are lower down in the organisation getting any training advantage? People want to know what’s in it for them.

 I’ve always had a rule with my staff that if you can give me three or five years of your time that’s excellent, but I also want from the staff I employee and I did this at the union when I employed employees and it’s been done in my ministerial office more contemporaneously. I want people’s time working with me to set them up for their next job.

 Some people will say it’s not my job to create a productive relationship to worry about the person’s next job - just do their job I’ve asked them to do for me now. That’s what I’m paying them for I’m not paying them to think about their next job. The more that I can identify and align with my employees what’s in it for me, meaning them, then they’re just coming to work thinking about it.

 I’d also submit that another test on productivity is diversity. Now some people in organisations will say I’m sick of political correctness, sick of diversity, sick of reporting, it’s too hard to interview someone with a disability for a job. Yet, if the recruitment agency just sends me five people that look the same, then that’s okay. I actually think that organisations who reach out and understand that if they employee people from diverse background they will actually be far more engaged in their markets, far more engaged with their customers, far more engaged with their suppliers and they’ll win the respect of their employees. Diversity has never set back an organisation in my opinion.

 That’s what I look for, do all the employees look the same or is there a bit of diversity – different backgrounds, gender, migrant, older people, younger people. These are not commandments, but to me when I see things I know if we are getting the best out of people.

 Another test I always use about harmonious, cooperative, workplace relations and productivity is how often do the former employees keep in touch with their previous employer? It’s a simple test. If you never hear them or never see them chances are the relationships weren’t as high a value as they could’ve otherwise been.

 No what I’ve done and there’s probably some other topics I could’ve touched upon, but these are tests based on 20, 25 years of workplace relations and productive workplaces. And I know what I’m saying makes sense and confidence in what I’m saying, conviction and belief in what I say because I’ve seen what makes successful businesses and what doesn’t.

 But again, to return to where I started, we need to not have a fear of failure in this country. What does that mean? It means that we need to recognise that soft skills matter as much as hard skills. I ask myself, why is no Australian business school in the top 50 in the world. How is it that when we seek to be a service centre for Asia we are missing the march to North American institutions?

 What is it that we are not doing? I think one of the things we need to do in higher education is promote the teaching of leadership. Leadership and cooperative workplace relations and a workforce who is aligned with their employer - that is the sweet spot of productivity. If I had a dollar for every employer that said I just wish my employees would take some initiative. Well they probably think the same thing.

 And we do sometimes over rely on systems. I remember a safety system where we were doing an inspection they have those round mirrors which show blind corners. You know the mirrors which say if you’ve got forklifts coming up two sides and they can’t see each other, you have the mirror. And, we passed one, which had more sand and dirt on it than the Rosetta Stone, I said; “do you think this is something that needs to be cleaned.” Again, to be fair the manager said, “Oh I never noticed that.” I thought yep, which is by the way a good reason to have a union because sometimes we perform an audit role in the business.

 A fresh pair of eyes doesn’t construct, but always value adds, which is to me is the fundamental case for collective bargaining, but that’s a separate topic.  What this manager said is okay, I’ll do a joint safety analysis of the dirty mirror. I said no, just grab a little ladder, get a bucket of hot water and clean it. And, I said if you did it that’ll even impress people. He did and that was fine.

 My point about that story is sometimes we can hide behind our systems. Sometimes we look to outsource things, that doesn’t mean you shouldn’t have systems what it does mean though is that it’s about respect and be treated as you wish to be treated. I love workplace relations because it’s full of the potential of Australians.

 I have the greatest and abiding respect for people because by and large, other than a few very bad people at the margins of society, I think that most workplaces are full of people that can add productive capacity. So I think that government policy, corporate policy, education policy, community debate, needs to go with the grain of the next 20 and 30 years.   

 I’ve tried to articulate to you today some of the trends I see for the future. I’ve also tried to articulate for you the way I think people are organising their lives. And, I’ve also tried to offer you a snapshot, a stencil, some of the things which I use to judge if the productivity is working or not. The other one I use to do is inspect, where it was a larger workplace, the staff canteen and toilets. Because if the company was interested in keeping them clean and up to date then there was a bit of respect going on.

 Anyway, you all, no doubt, have got that list because that list is not complex and doesn’t require a great deal of regulation to accomplish. I don’t think productivity is too hard. I think that we can do a lot better than we do. And, I think that through sessions like this and through the promotion of leadership and skills and training of leadership that a lot of the other questions about productivity fall out.

 Because then if you’ve got people at every level feeling empowered and in control, able to feed information up and down the food chain, feeling that their organisations has a view of them as individuals, you just start to create dynamic, intuitive, transformative workplaces.

 Thank you very much for listening to my views today.