The Business of Transformational Leadership (episode 1)

Podcasts | 28 October 2020

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In this episode, we’ll explore the ‘now of work’ – and how leaders need to innovate to create organisations that are more human, creative and resilient

The events of 2020 have inspired much reflection on what the future will look for organisations. For many, it’s apparent the future of work is not on it’s way – it's already arrived. Digital transformation, with all its complexity and disruption, plays an important role in this innovation and change.

Host Emma LoRusso is joined by David Thodey, former CEO of Telstra and current Chair of CSIRO. David shares his insights into our digital future, and what business leaders need to know to lead people through this period of accelerated transformation.

We also hear from Deborah Young, founding CEO of the RegTech Association, a membership organisation facilitating the building of higher performing, ethical and compliant businesses, through innovative investment in regulatory technologies. Deborah shares her insight into how technological innovation and solutions can lead to remarkable growth and change on a global scale.

Finally, Emma speaks to Patrick Sharry, Chief Curiosity Officer at A Curious Drop and Program Director and Adjunct Faculty at the AGSM. With wide consultancy experience across public and private sectors, Patrick shares his insights and observations about how leaders need to be strategic, and continue to evolve as the business world changes.

Speakers:

Emma Lo Russo, (AGSM MBA Executive 2013), CEO and Co-founder of Digivizer
David Thodey, former CEO of Telstra and current Chair of CSIRO.
Deborah Young, founding CEO of the RegTech Association
Patrick Sharry, Chief Curiosity Officer at A Curious Drop and Program Director and Adjunct Faculty member at AGSM @ UNSW Business School.

Transcript:

Emma Lo Russo: Welcome to The Business Of.

I’m your host Emma Lo Russo, and this leadership podcast is brought to you by the Australian Graduate School of Management at UNSW Business School.

The events of 2020 have inspired much reflection on what the future will look like for the organisations we lead. For many of us, it’s apparent the future of work is not on it’s way – it's already arrived.

In this episode, we’ll explore the ‘now of work’ – and how leaders need to innovate to create organisations that are more human, creative and resilient.

Digital transformation, with all its complexity and disruption, plays an important role in this innovation and change.

Joining me is David Thodey, former CEO of Telstra and Chair of the CSIRO. David’s expertise and signature leadership style make him the perfect guest to discuss today’s digital landscape and how it’s shaping the organisations of tomorrow.

I’ll also speak with Deborah Young, founding CEO of the RegTech Association, an organisation facilitating the building of higher performing, ethical and compliant businesses, through innovative investment in regulatory technologies.

And finally, I chat with Patrick Sharry, Chief Curiosity Officer at A Curious Drop and Program Director and Adjunct Faculty at the AGSM. Patrick has wide consultancy experience across public and private sectors, and he shares his insights and observations about how leaders need to be strategic, and continue to evolve as the business world changes.

First, let’s hear from David Thodey.

David, welcome to The Business Of.

David Thodey: Thanks, Emma. Great to be here.

Emma Lo Russo: I think if anyone can talk on the minds of board members and C-level executives and how they might be thinking about the future of work, it would be you. What do you think, given the challenging times. Has that been accelerated, those conversations?

David Thodey: Definitely they have been accelerated. And I think we're still working through it, to be honest, Emma.

I think it's caused me to think about how we communicate effectively. I was going back to thinking about the introduction of the telephone. The telephone allowed us not to have to go physically see someone, and now with document sharing, video conferencing, shared whiteboards, being able to interact in different ways I think it has signalled a whole different way of how we communicate, and we've got to be careful in that, because some of it's good and some of it may not be as conducive to innovative, creative thought.

Emma Lo Russo: That's a good point, because I think a lot of that change happened rapidly for organisations. They might of been talking about it, but they had to go straight into implementation mode. To balance the human element and that creativity, where do those ideas come from and that real future-think that means we'll survive. How do organisations ensure that? What do you think the right conversations should be? What are the priorities or a focus lens that could be placed around that?

David Thodey: The way that we have been approaching it is not with necessarily a recipe as a solution, but trying to work out how we can make effective decisions or have effective engagement to get to good decisions. Very disciplined, rigorous board meetings or just manager meetings. And maybe we need a bit more asynchronicity. Maybe we break up the discussion from the decision making.

We're only limited by our creativity in using the technology to help us be more effective in our communication and decision making and don't get caught, the worst thing we can do is just continue to work and make decisions the way we used to, just on the screen, just moving it. Change it up. Think about it.

I think that's the critical thing. And use the technology to be more effective.

Emma Lo Russo: And you have so much exposure between CSIRO and your role there and Xero and Tyro and all the many things that I haven't mentioned but I know that you're part of. What do you think the skills of the future need to look like? How do we look to leadership to lead and bring in that human and creativity element so that they challenge the way things are done? What do you believe is required, or at least the discussion that will drive this is what we're looking for?

David Thodey: I think that the nature of work and how we lead does need to continue to evolve and change. As you know, leading people is a very human element. There's great ideas and there's great thought leadership and we can be inspired, but at the end of the day, leadership is about bringing a collective group of people together to achieve more than they would as individuals. That's what a great leader does, and somehow they enable you to do beyond what you thought you could do. And hopefully that involves doing things differently because the fundamental value in people working with people is to create differentiation, do things differently, that then creates some value, hopefully economic, social, or maybe environmental. So I think we need to keep thinking about what great leadership looks like.

There's some things I don't think will change. I think the art of self awareness is really important. That's foundational. But the days of hierarchical, dictatorial, command and control, probably weren't even appropriate before COVID, but even more so is not appropriate now. So it's about how you provide vision and purpose that allows people to really exceed in their particular area of responsibility. So it's creating a climate of creativity, of ingenuity, of enablement, rather than doing task-oriented things. I think that's the nature of work.

But I think it's going to be different, doing it remotely. I think there's good and bad, doing it remotely with people work from home. Because you still need that human interaction. Even now, I need to be able to look at your eyes, see how things going. But there's other elements that people can work when they feel it's appropriate for them to work, with children and other pressures in their life, so I think that's a really positive thing. So I do think leadership needs to be flexible. I'm trying not to use the word agile. But it is true.

I can even remember at Telstra, it's a while ago now, I should be careful to use examples that are five years old, but we did try to go to a principle that all roles flex. To redefine, even if you're in the contact centre or in a shop, that if you could work with your team to determine when it was appropriate for you to work and you could still trade off, then that created a far better working environment. And this idea of having to be at your desk to determine how you're doing work, it's just archaic. But we do need to think about giving people flexibility, but there are times we need to be together.

The question of creativity, how do you do creativity in a virtual world? Well hopefully it's not always virtual, first. Hopefully we can come together. But I haven't really nailed that one, Emma. I think you've got to go slowly. You've got to give people the opportunity to talk and express views. I read this morning that some people prefer doing a brainstorming session on video because they feel they get more airtime than some dominant individual who just takes up all the time.

Emma Lo Russo: I know just as a personal, how we hire now, it's just brought down to smart, talented, get things done, infinite learner, not an asshole. Because what they studied and what they done before does not apply. You talked about flex, but it is the only way. But then you need to also be outcomes-focused and remember, and particularly I think it needs time, again it's an observation, but I think these care from the well-being of your team is probably become much more front and centre than it has in the past because this period has impacted people greatly.

David Thodey: We've got to. I think it was Gary Hamel wrote a book just recently called, or he's a part author on, Humanocracy, putting the human back in to business, and relationship with the customers. I do hope that that continues. I think great companies have always had that, to be honest. I mean it's hard as you grow and you become more diverse and global, to keep that sense of human connection. But I also agree, I love your, I can't quite recite it, but your outcomes-driven, kick-ass, let's get on with it. That's great. Because you still need that edge. You still need to get stuff done, but you need to do it in a way that appreciates human personalities, characteristics, etc.

Emma Lo Russo: For Australian businesses in particular, I know you've been a champion of this innovation coming from here and thinking global and those opportunities. How does what's happened just recently help set us up to think differently. Have you been more introspective or have we been able to actually think a little bit differently about our place in the world? And what would you hope for there?

David Thodey: That's a big one. Let me just take it in two parts. One is our place in the world. We've got to remember, Australia is what? 1.6 trillion GDP? We're 1.2 per cent of the globally GDP. We're a small nation.

Emma Lo Russo: .33 per cent of the global population, that's the one that I always remember.

David Thodey: And .33 per cent, that's right. All 25 million of us in a federation, states can't be competing with each other. We've got to remember our place there, but we do have an incredibly well-educated community. We have a can-do attitude, I think Australians generally if you look right across the board, are willing to give it a go and step up. And I think that we're blessed with a wonderful resources sector, great agriculture, etc., but what we've not done is build our, I'll call it services, but what I mean is software-driven, biotech, healthtech. It's all those big domain thought leadership, building global industries and, except the resources sector, only a few companies have truly gone global. Love CSL, love Cochlear, the banks have tried it. They've come back home.

But when you start getting down to those mid-corporates, we're not as externally focused as we need to know, and I think we need to both get into the tech-driven big services, knowledge-based information driven sectors, and have a global perspective on it, and say, "Why not?" Especially with the connected world. Tyranny of distance does not apply as much. You're still going to have to travel. I hope that that is what is going to happen going forward. I do think that's a big change.

I trust, we've seen the take up of technology, be it eCommerce, just trading online, other skills, has definitely risen. You know that the tech sector, this is whether you call it Industry 4.0 whatever you call it. This technology driven change across every sector, it's probably at best 25, 30 per cent of the way through. This is a seismic change in every industry. And when you look in Australia, of that .33 per cent of the population in Australia of the globally population, the tech sector is less than 5 per cent and most European countries are up around 7 or 8 per cent and the US is over 10, and in terms of GDP contribution, at best we're 6 per cent, and we should be at 10 per cent.

We need to, I think, pivot to that technology, knowledge-based industries. Not to throw resources away, not to throw ag away, and we do ag-tech, etc., but we've got to build this other leg to the stool. And I'm worried that we're not going fast enough. I think there's so much opportunity and we're starting to see a little bit in Melbourne in the biotech area. Seeing some here in Sydney. You got a few technology, software driven areas. But nowhere near as big as we need.

Emma Lo Russo: By the way, you're preaching to someone who's in violent agreement-

David Thodey: I thought so.

Emma Lo Russo: And a super-champion of the same message. But I'd love to hear, and I'm sure our listeners would like, what do you think needs to be unlocked? Is that just the role of leadership? Is it government? Is it policy? Is it our education system? Does at start at kindergarten on? How much has to change to make this happen?

David Thodey: Like everything, it comes back to leadership, and I'm not one of those people to say that it's all around government policy, because I think government's saying, look, get on with it, and we've got some great companies that are getting on with it. Now, there are a few impediments along the way that they need to tidy up as we go forward, but I do think we need to make it really attractive. To me, if I talk around science and the whole research area, science is nothing more than trying to discover how our world works, isn't it? Be it chemistry or biology or genetics. It's so exciting, and we just need to make it more exciting, and I think people will come.

I first will go to us and say, "Look, we need to step forward and say this is great." And I know there are a lot of people who do that. I do think that there is some responsibility for government where there's market failure. I think we can step in more. I mean, that's why I think New South Wales government setting up the tech centre around central, tech central, is really exciting. I think they're putting in 50 to 60 mil just to get it going and I think we as industry and we as leaders need to step into that. I know it won't be perfect, there'll be lots of things wrong with it, but let's take the 80 per cent that's good and really make it work.

In terms of education, I think that we're not teaching exciting software skills at schools, unfortunately. We're making it more by rote than anything else. We need to make that come alive and that's why coding for kids and all those programmes are so good. But we need to make it exciting and relevant to life, back to the humanity. If it's something that's too theoretical, people'll tune out. We got to make it really live about what we're doing, purpose-driven, etc. So that's what I would say.

Emma Lo Russo: You talked about mid-corporate and it starts with us as leaders. If you could say to everyone who's listening and to every leader, what should they do to challenge themselves and challenge their organisation and be that leader of change that leads to that innovation and that global thinking and competitiveness and make it exciting and purpose-driven? How do you break that down? I know, people who've worked with you, they are inspired by you, so what is your secret?

David Thodey: Number one is to care. You've got to care. The first thing I've always done, I look at my own backyard and say are we living what we talk about? Are we practising it? And so you've got to do that. But then you've got to be willing to stand up and talk about it and step out and put yourself at risk a bit. And too often, a little bit of Australia tall poppy syndrome, not so much in this area, but a little bit. Step out and have an opinion, put it on the table, and go and make a difference and invest a little bit back into the community from where you come from. I think if we all did that just a little bit more, then the multiplier effect would be enormous.

The other thing I get very frustrated with in Australia is, and it comes back to this thing around, I don't know what it is, it's sort of the tall-poppy syndrome, but supporting each other. Emma, I think what you're doing is great. I want to see you grow ten times in whatever way you want to grow, whatever you define that.

Emma Lo Russo: Hundred times, David. Don't limit my growth, please.

David Thodey: That's right. Exactly, a thousand times. But we need to lift each other up, and too often I hear, states competing with each other, people saying, "Yeah, David's a nice guy, but did you know? He doesn't do this," or whatever. Build people up. The US go a little bit over the top on it, but we need to encourage each other, step up and change the attitude and so every day find someone to support or say something good about and encourage them on the way, because it's too easy to be critical. And then go do something about it.

Three things, make sure your backyard's okay, doing it. Step out and make a difference and encourage other people to make a difference. There are three things and we'll be all a lot better off going forward.

Emma Lo Russo: I also heard you saying that, have the courage, right? Be uncomfortable. You talked about putting your opinion and maybe teasing out what things could look like? When do you feel uncomfortable, just out of interest? How do you put yourself into it?

David Thodey: I feel uncomfortable often. I think the trick is to know how to put ideas out and not be offended if someone's got a better idea. It's like having this constant learning attitude that it's great to learn and you may be wrong, you may be right. When down in Canberra with COVID Commission and Steven Kennedy, Secretary of Treasury is talking around economic modelling around the impact of job keeper, I'm not an economist. I sort of know what's going on in the economy and I feel decidedly out of my depth in terms of econometric modelling. But I can put an attitude out there about getting people back into work, how will that work, asking open-ended questions, being involved.

But it's putting yourself at risk and you have courage to do that, that you learn and hopefully you contribute to a better outcome. Because that's what, you want the truth. It's not about me being right, not about you being right, it's about getting to the truth that will make a difference and are better for our nation and the greater world.

Emma Lo Russo: When you've seen organisations make that transition, and Telstra would be a case in point. Amazing innovation in that period of time. Where there frameworks that you adopted? Was it creating that question-based, let's be driven by purpose? What does that look like? I guess one of the outcomes I would love for this, post this talk, is that people actually go, "I feel inspired. I have got the courage. But I know I need to bring my team along with me." Here's maybe a way that we can talk about it or set some context or here are the views that we could be thinking about. Have you seen something that creates that start that you have observed change and maybe fast change?

David Thodey: I do. But I'm not sure it's as formulaic as the textbooks would like us to think. I am a great advocate for purpose-driven companies. I think purpose transcends economic return, self introspective behaviour. Being driven by something that leaves a mark on our society or in some way, is really important, because that's what gets us all going. Yes, I want to work hard, I want to do well, but you've got to know what you stand for and finding that can be very hard. And doing it in a way that opens up opportunity, doesn't close it down.

That's a little bit of a contradiction in terms, because any business needs to be good at what they do, but how you do it needs to be open and be able to get there in many different ways. Look, I know it's popular these days, but culture plays a critical role in there. And the culture needs to be real to who you are as an organisation, just like any society or nation, you're a product of your past but you have choice for the future. You can't deny your past, but you can create your future. You got to work off what is instinctively and innately you, and then move it forward.

We spend a lot of time thinking about our purpose. Telstra was not just being a telecommunications company, it was about creating a brilliant connection with people. So we got this human element, and by the way, if we had of thought about that earlier, we might of built WhatsApp. We might of even done things like, I don't know if we would of done Twitter, but we could of done communication and how we communicate in a completely different way. But we lost that because we were too slow in that. I think in that process of purpose and culture, it redefines who you are and then gives people the freedom to go and do things differently.

But also, the reality of large, complex organisations is you do need some guard rails. Let's talk around diversity, you can talk around diversity and I can say about gender equality, but until you go look at the policies that you have, you can be just absolutely talking out of the side of your mouth. And you need to have integrity in that, so you've got to go and say, "Look, are there policies or behaviours that are impeding us achieving what we want to do?" And be willing to change them.

It's not just all pie in the sky, it's actually hard, disciplined work. And it's the same with innovation. I wish that I could say to the CSIRO as well, "Just go and have a really good creative session and come back and tell me how we're going to change the world." But the truth is, in science and in innovation and research, you may have to do things a thousand times before you get to the thousandth-and-first time and hey, presto, you do something differently. Innovation and finding new ways to do things can be incredibly disciplined and hard work.

I love it if you do sort have that moment of brilliance when you decide something or see something, but often it's just hard work. I think it's from the visionary purpose, culture, alignment, all the way through the discipline and rigour of running a company differently. And I think how you keep that balance is really important, because it can get out of kilter really quickly if you don't watch it.

Emma Lo Russo: I think that's a really brilliant point is making sure it's congruent. What you're measuring is not in conflict to what you're asking and, like you said, you called them the rail bars are there, but not the cap.

David Thodey: Exactly.

Emma Lo Russo: They can go as far as they want, just as long as you're not putting at risk or maybe there's the parameters.

And I do wonder if, you talked about asking the hard questions, and it is hard to make that change, but is critical thinking part of that? Is it the art of saying no to the too many things that you're saying yes to create the space for the right things? Is that part of what you think is both the rigour but where organisations go wrong? Or where do they go wrong when they are trying to do this? What have you observed?

David Thodey: I thought you're talking to me, because I tend to say yes to too many things, Emma.

Emma Lo Russo: I've observed it in many places. It's something you have to hold yourself to check as well.

David Thodey: Yeah, absolutely.

Emma Lo Russo: There's lots of good ideas and business cases that could be built, but is this the one we want our limited resources to go after.

David Thodey: I really agree. Yeah. And you've got to know how, I do get enthusiastic and want to try new things, but I'm also very conscious execution is 96 per cent of success and so you got to do the vital few. I do think prioritisation, which includes yes and no, but being very clear on your priorities, because you can't do everything, is really important. And actually using good methodologies to think through what is most important so that when you come back it's not just, my idea's better than your idea. We've thought it through and put the parameters against it and be, as much as we can, data driven. Because then it allows you to go back and review that decision about why you make. Because you have made a wrong decision, got wrong data. At least you can go back and say, "Well we made that decision because ..." Well that was different, okay, well let's go do something different.

What have I seen that people, companies do wrong? I listen to a lot of companies have great ideas and then two years later they pivot, they go do different things. One point I was quite critical of that, but actually think that is a really good sign. You've got to have an idea, pursue it, but be willing to change it. It does come back to this flexibility and being absolutely ruthlessly honest about whether you are succeeding or not. We all have this incredible ability to believe our own drivel and be willing, not in a critical way, but just what truth tells you, and be able to get that data and then if it's not working, to change. Which is coming back to your point around focus and yes and no. And then be willing to move forward. And I think the companies who don't do that are the ones who do fail, because they stay true to something that is not going to yield the value that they want it to.

Now that's different to something being really hard but right to do, and you've just got to stay the course. And sometimes that is really hard and there'll be a lot of people around you saying, "No, you're never going to succeed, David." And you've got to be strong internally to say, "No, we can do this. We're going to find a way through it." That's slightly different again.

There's sort of two parts there, one is be ready to change if it's not working. And two, have enough resilience, resilience, old word in leadership, but stay the course and believe in yourself and have the courage to go do what you got to do and then use all the methodologies and the help you can get along the way.

Emma Lo Russo: So much food for thought. Thank you for joining us today on The Business Of.

David Thodey: My pleasure.

Emma Lo Russo: It’s always a pleasure to speak with David Thodey. It’s clear from our conversation that in order to lead progressive, future-ready organisations, leaders require clarity, calm, confidence, and compassion. And I loved the examples he gave of how this translates to better business outcomes.

My next guest has mobilised all these characteristics to build an organisation critical to the digital landscape we’re operating in. Let’s hear from Deborah Young on the story behind the RegTech association, and the reasons it’s grown from having just 8 members, to 150, in just 3 years.

So Deborah, welcome to the Business Of.

Deborah Young: Thank you so much. Emma, so good to see you.

Emma Lo Russo: And such an amazing journey. So, let's start with, tell me about RegTech Association that you founded and are CEO of?

Deborah Young: Yeah, so it was founded in 2017 as a nonprofit association. And the small group of founders were pretty focused at that time around they had to ... I guess a vision and a mission, and they were to accelerate adoption of RegTech and to create a global centre of excellence. And I must say back in 2017, that seemed black an enormous mountain to climb because it was just such a small group of people who had the passion behind it. So we created the association three years ago and we're now 150 organisations, which is simply massive from where we started at my kitchen table.

Emma Lo Russo: So first of all, for those that don't know what RegTech is, can you just unpack it for them? And then what's driven that amazing growth in just three years?

Deborah Young: So we would say RegTech is defined as any technology that supports better regulation and better compliance. So it's really that simple. And of course it's really that complicated then because that is actually a very broad range of solutions. But I think, you know how they say in life that timing is everything? And certainly at the time that the association was founded was right at the beginning of the announcement of the Hayne Royal Commission.

And so that was the early wind beneath the wings as regulators and regulated entities were looking at how they could do things better. And so the association was able to ride the crest of that wave. What we were offering was actually a curation of the technology like had not been seen before. So, in other words, we were able to bring everybody together to have a more meaningful conversation than everybody trying to do it individually, door knocking and speaking to the wrong people at the wrong times.

So, I think it was about timing. And then certainly over the last six months, the pandemic has actually driven this next significant wave in interest in RegTech, and it's mostly because this is now impacting government, and when something will actually impact government, then we will start to see things happening as we've seen over the last six month period.

Emma Lo Russo: So what drives that awareness around needing to plan against risk, and have this regulation and understand the governance and the importance of it? Why do organisations need it?

Deborah Young: They need it for a number of reasons. And yes, it's definitely for good governance. It's definitely for compliance to regulation. They're some of the big ticket items because we've seen the size of the fines for non-compliance. But actually RegTech, this is why I love RegTech because it can actually improve the way people are doing their jobs every day. So if you're working in compliance or in regulation in some way, these are tools that can actually help you focus on higher order tasks, and not focus on all of the perhaps lower level risks, but actually to get some visibility over what the risks are to begin with.

So this is actually about tools to actually help equip people to do their jobs better. And actually further along, this is actually securing trust for the whole of the regulated ecosystem. So that's why it matters, then further on even from that, this is actually about people, and about people needing trust in their life. Like you and I want to feel that when we're interacting with our institution, irrespective of what that institution might be, it could be a bank, it could be an energy company, it could be a telco, you are assuming that you're operating in 100 per cent trustworthy environment.

And what RegTech can do, is back that up all through the value chain to ensure that you can have that experience and that trust.

Emma Lo Russo: And you touched on government too and particularly with COVID that this has been another period of growth. Can you explain why and how are they engaged and how fast can change happen?

Deborah Young: Well, I think we've just proven over the last six months that change can happen really quickly when everybody's pulling in the right direction. And I think it touched the government in a number of ways. So for example, I think digital identity went up the importance chain, and we remember seeing the news reports of thousands of people standing outside Centrelink offices queuing up.

And this was simply because they needed to be identified and there was no other way of doing it except to ask them to actually risk probably catching COVID probably standing in a very long queue to go and have their identity verified amongst other things I've no doubt, but it was certainly one of the things. So, being able to identify people. Then we look at some of the other things that have happened during the pandemic, like the early release of super. And so I think KYC, or Know Your Customer, has also gone up the food chain as well.

So if I worked for a bank or financial institution and I was operating from home, have we covered off the security and the trust especially if I'm in a regulation or a compliance based role, I've got lots of sensitive data coming to me as an example? So I think that the safety around how we collaborate and the transfer and flow of information, has been heightened as well. So I think that there are three really good reasons why the government wanted to focus on RegTech and it felt like one day the phone didn't ring and then the next day the phone was ringing hot.

Emma Lo Russo: That last statement is really about that opportunity. Why are we doing it? It's to serve our customers better or to serve our people better. How do you help organisations see that planning against risk versus opportunity? And who's the leader that you're talking to that needs to think about that differently and make that change.

Deborah Young: That's a really interesting question. I think first and foremost, I'll go back to government just for a second. I think that the government has actually just recognised what their role is in RegTech, because the government potentially two years ago were treating this as a new and exotic thing, not quite sure what to do with it. But in actual fact when you think about the very top of the tree, is actually the government. Because the government are creating the requirement for RegTech.

They're making the policies, they're making the laws, that get handed to the regulators to administer, the regulated entities that then are needing to report to those regulators, and RegTech is trying to get in the middle to reduce the friction. Now when we talk about who's actually responsible within organisations, RegTech has probably moved around a little bit in areas of responsibility, but more and more we're starting to see leading institutions actually having Chief Data Officer, Chief Compliance Officer.

So no longer would it just sit with the Chief Risk Officer as it may have traditionally done, but there are new roles that we can see being created, and one of the very powerful things ... in fact, I heard a bank say this the other day, "They're no longer a place that you'd go to get money." Banks have become these big organisations full of data for all kinds of reasons and for all kinds of things. And so, we can see that a Chief Data Officer is going to have a very big interest in RegTech so, I think it's still emerging as to where RegTech will rest and maybe it won't ever be with one area of responsibility, but certainly we're seeing other financial services regulators in particular are running active RegTech programmes. So they're about educating, they're about surfacing what are the solutions, and whilst they don't endorse any particular solution, they want to surface that and make sure that education is there, so that people can see the potential of what's possible, so that they can monitor the risks more actively.

Emma Lo Russo: And Deborah, because I've seen you personally bring about change, right? You've done it in many organisations even before the RegTech, and I've had the privilege to view and see this. What advice do you give people when they do need to think differently or to lead change or to introduce something that might require investment, but of course the outcome is so great? How have you personally led that? What's your journey been to realise that as an outcome?

Deborah Young: Well the first thing is I think, you have to recognise that people ... despite the fact that I represent a tech, like an area of the tech sector and some people might say, "Well, is that really about people?" Absolutely. This is actually about investing in people. It's about investing in the people that you have now. It's about investing in the people that you're going to need in the future. And it's actually about creating a pathway. I mean all jobs have an evolution, from where I first started in my career is definitely not where I've ended up. And so we will evolve over that.

And what we're also going to see is organisations. There's going to be a blurring of the lines and we're already starting to see it. Technology companies becoming banks, banks becoming technology companies. And so, all of a sudden we've seen the blurring of these lines. We must be nimble. It has to be making better business decisions based on having the facts and the information and the data for you to do that. And so that's my message.

Invest in your people, take a data first strategy, and also, stay positive. Try and stay positive. Go for a walk every morning. And if you have to go for several walks a day. Take the time, take the time out. Because I think especially during this time my mental health has been very important.

Emma Lo Russo: Yes. More so than ever. Absolutely. I think there's a lot of change that has happened to your point. We've accelerated, right? COVID's created this acceleration. How do organisations need to be thinking about their investment in technology to embrace every aspect, including the RegTech compliance component of it?

Deborah Young: So I think organisations need to have a very deep understanding of their problem statements or their challenge areas. And I think they need to take all areas of their business, their people, their tech, and align against what those problems are, and then also they've got to make some pretty important decisions about whether to buy or build. And one of the interesting things for large institutions right now, they may even have access to investment capital through a corporate venture arm or something like that.

And so there may be some interesting things about, should they actually be using some of the investment capital from that fund to invest into technology companies that can help the overarching parent address some of the greatest compliance or regulatory challenges that they have. And the other thing I would say is that organisations should reach out to their peak body or their industry association. It's a wonderful way that they can roll up their sleeves, get involved.

They will have a natural peer group within that community. And being able to harness that sometimes is the greatest way that you can get wholesale change made across a very diverse group of organisations in my experience. And I think this is like my sixth industry association that I have worked for, and I am genuinely passionate about harnessing the power of everybody to create the change in momentum that's needed.

Emma Lo Russo: You talked about investment in this technology and some of those decisions that get made around that, what are some of the returns? What should they be looking to when they're considering this for the future?

Deborah Young: So, one of the case studies that I learned about just recently involved a RegTech company, a UK regulator, and a couple of banks. And they ran a trial, a manual process that took 1000 hours, and they put it next to the process that the RegTech was able to do and was able to achieve the same result in two and a half minutes. So when you're talking about a return on an investment, it's pretty clear that there's a lot of productivity and efficiency that can be achieved in a shorter amount of time.

And then imagine you would have all of that additional time to look and analyse that data. So those results that you've just been given, what else could you achieve having being given all of that time back. So I think that is a great example of RegTech at its finest, brings you the productivity, efficiency, bang. You've already made five business decisions based on that information that you didn't have to invest that 1000 hours.

Emma Lo Russo: The power of making better decisions, more informed decision is keen in how we're going to operate into the future. So Deborah, because you're an amazing leader, I'd love you just to give your best piece of advice to other people leading change in their organisations. What would that be?

Deborah Young: Well would it surprise you to know that you must bring diversity to your table? I see it so often. I see it so often, and it's almost like because we've had the pandemic, we don't need to worry about plastic bags anymore and we don't need to worry about diversity anymore because we've got bigger fish to fry, and we just should be grateful for whatever we get. Don't be afraid. Don't be afraid to say, "Look, certain groups here are not represented." Because the organisations that I see that are thriving, really have good diversity or have made a commitment to better diversity.

And that doesn't just mean gender diversity, that can mean diversity from a whole host of other things as well. It could be people with different abilities. All kinds of things. So I think diversity is the one thing that I feel most passionate about and you will get better business outcomes if you can be a more diverse organisation. And it will actually help you in some way to actually better serve your customer as well.

Emma Lo Russo: Well Deborah, thank you very much, it was lovely interviewing you and learning the opportunities for businesses and the acceleration that's happened, and to your success, congratulations.

Deborah Young: Thank you so much Emma. It was lovely to talk to you today.

Emma Lo Russo: Fascinating to hear from Deborah on how leaders can manage the risk and compliance issues unearthed by this period of digital transformation, and the importance of investing in your people as well as technology.

An oft-repeated mantra is that a good crisis should never go to waste, and that’s something my final guest has observed in his consultancy work during this period of digital acceleration.

Let’s hear from Patrick Sharry on how organisations are responding to the 'now of work' and the technologies shaping new products, services and business models.

So Patrick, welcome to "The Business Of".

Patrick Sharry: Yeah. Nice to meet you.

Emma Lo Russo: So, I mean, you work closely with a lot of senior executives in organisations, particularly around leading digital transformation and using that for innovation for their organisation. What do you see as the common challenges, adoption, opportunities and how is that being viewed today?

Patrick Sharry: So, there is a particular lens on this from a COVID-19 perspective. And there are, if a lens, well a lens has two sides. There are two sides to that lens.

One is that people are really struggling to make sense of what they need to do, and what's the right direction to point any transformation. But also, I'm doing a lot of work with organisations at the moment and they're saying that, you know like a good politician would never waste a good crisis, they are leaping into the opportunity that the uncertainty the Coronavirus world has provided. And what they're doing is, in some cases accelerating by two, three, five years the way that they thought they needed to change their organisation, their business model, their structure, all of those sort of things and they're doing it now.

And so there is a real intensity in that, with people recognising that while the initial moments of the uncertainty were unpleasant and its not completely wonderful now it also provides an opportunity to drive a whole lot of change while everyone is more open to change than they might ordinarily be.

Emma Lo Russo: And I think that's a bit of the secret right? It's the open to change, and then maybe using technology and seeing how they serve their customers.

Who is doing it well? Where do you see organisations? What questions do you ask to accelerate or to use this as the opportunity hidden into this hardship?

Patrick Sharry: So without a doubt, the big change is around digitization of business models. And there is a number of different aspects to that, but one of the main pieces would be automation and its cousins, machine learning and those sorts of things. And those changes then drive structural changes in the organisation and require new skill sets to keep that automation moving, because it's not a once off thing. It's a journey that you are on and you need to keep working at that. And that, as I said requires new skills, and organisations are getting better at recognising that.

Emma Lo Russo: Is it all organisations that you are working with? Do you think that some of the urgency that was there at the start is sustainable and leading to continuous change looking further enough into the future?

Patrick Sharry: So the change won't stop in the next six months. This is a journey that we have been on and all that has happened is that we've accelerated it.

One of things that I'm conscious of organisations in different spaces is, particularly in a time when we are acutely aware of the impact of Coronavirus on employment or unemployment. The automation process actually can make that a lot worse, in that, you know you automate a process and it's not a 1-for-1 match by any means, but you often end up with a smaller workforce, or a different workforce. So you know in all of this there are also ethical challenges. There’s the need to recognise the societal impact that you have as an organisation. And there is a balancing out here of how do we reduce the cost of the business as much as we can, but still keep a place as a contributor to the broader societal need to have employment and people engaged in meaningful work.

Emma Lo Russo: So how do you help organisations get far enough ahead to see what the future can look like to be able to effectively balance that?

Patrick Sharry: Yeah so one of the things that I am doing quite a bit with organisations at the moment is building scenarios about what the future might look like. So we would be foolish to think that we can with laser-like accuracy pinpoint what the future is going to be. What good scenario planning does is it acknowledges that and says that we should be building a series of plausible futures about how our broader business environment might play out, and then thinking about how we need to manage our business model in order to remain viable in those different settings. And that's useful because of sort-of takes the blinkers off the belief that we could just have that one view, and importantly, cognitively, what it does is it leverages a thing called "The Availability Heuristic" and that means that people in the management team for example become a lot more aware of the things that are happening out there in the environment and they bring those back to the management table, to have more meaningful conversations about the future and our business model.

If you tie that with a deep sense of purpose in an organisation then you can start to get that balance, because these things are not in any way straightforward. There are always a series of trade-offs. Not just one trade-off. Making those things exclusive means that you can actually make sensible decisions in really difficult environments.

Emma Lo Russo: I'm really glad you talk to that kind of scenario – look far enough into the future to try and put some context around it.

Does technology drive strategy sometimes or should strategy always drive technology? I am curious. What have you seen and when does one play a more important role than the other?

Patrick Sharry: If this was a multiple choice Emma the answer would be E, all of the above.

So it absolutely goes both ways. The technology can drive the strategy, the strategy can drive the technology. The quality of that loop is dependent in no small part on the calibre of the executives that you've got. Ones who are actually able to do that forward thinking, and are open to ways of working that they might not have grown up with. So particularly for those of us who have grey hair and have been around for a little while it can be easy to sort of ignore all of the technology things, but good leaders know that it is actually critical to engage with that stuff.

Emma Lo Russo: Two good points there. Bringing the right people to the table and good leaders will be putting themselves in uncomfortable situations going into spaces that they don't know. What do you think are the characteristics for leadership? What's required of organisations? Because as you said, change is going to happen anyhow. So what do you think are the right leadership qualities or the culture of an organisation to think about digital transformation and innovation?

Patrick Sharry: Like all good questions, the answer Emma is "it depends".

Emma Lo Russo: I learned that when I did my MBA.

Patrick Sharry: Part of this is to acknowledge that different approaches to leadership work more effectively in different settings or to turn that around that different settings require different leadership styles, or the exercising of leadership in a different way.

If you think of what we have seen in particularly the early days, although it is continuing, of the Coronavirus situation, in that sort of chaotic setting what matters is really clear direction. Ideally with some expert justification for that, and I think our State Premieres have done a great job of that at the Federal level, we've done a great job of that. Could it be better? Yeah, we could, it's a bit difficult to be perfect in those settings, but we've done a pretty good job of that. If you look at other jurisdictions that hasn't happened and you can really see that difference.

When we begin to move out of this and so I think the way that Jacinda Adern is talking about this is really constructive. She is not talking about bouncing back, she's talking about bouncing forward. The river changes. We can't recreate stuff. And so we've got to acknowledge that and say that we can't bounce back we've got to create some new thing. To do that, the effective exercise of leadership there is about being much more consultative, which is not to sit back and let other people make the decisions, but rather to know that there is no silver bullet that an individual leader is likely to have. Rather getting the right people around the table and really listening to what's being said, being comfortable that at least in the early stages of that there will be a whole lot of tension and paradox and ambiguity that needs to be resolved and entering into that therefore with a strong sense of humility is what’s going to be important.

But again as we've seen I think really powerfully with Jacinda Adern the fact that you are consultative, the fact that you are humble doesn't mean that you are weak.

You need to maintain the pressure on the system to drive the outcomes, but you can do that from a sense of humility in a consultative way because it is important as an organisation or a society enters these times of change that we try and bring people with us. And the more we engage them going into that journey the more they'll stay engaged when we're on the way.

Emma Lo Russo: I think the other beauty in that bounce forward is it is yet to be fully-defined right? Whereas, if you say bounce back you think somehow you can control what was there, and as you say everything changes around it.

Where have you seen emerging technologies help an organisation? Whether its helped them align to their strategy or hint to the future. What does that look like and when is it done well, in your view?

Patrick Sharry: So that the thing that comes to mind immediately. An organisation that I'm working with who recently bought onboard some new technology leaders and they have made incredible improvements in the turn around times for, and the quality of customer service by using Bots of various types. In the fairly common way, where the Bot over time learns to be able to answer 30, 50, 70, 80 per cent of inquiries, and they get dealt with really quickly and that therefore frees up the time of staff members to provide better quality customer service because the pressure is not on to those customers who actually need a more detailed and thoughtful response. And that sort of thing I think works really really well. Let the robots do what the robots are good at, Chatbots in this sense. Let the people do what the people are really good at, and bringing those together is what's successful.

Emma Lo Russo: Are there a set of questions leaders could use to help them understand technology, emerging technology, disruptive technology to see where it sits?

Patrick Sharry: That is a really difficult one Emma! That is a really difficult one.

One comment that will make is that all of these conversations including the ones that are driven out of Coronavirus with the technology added in, are causing organisations to reflect on their identity. So who really are we? And what I try to encourage organisations to do in that space is to think about what's their real social purpose. Because if an organisation can be really clear on its social purpose that becomes the guiding light for decisions that you make about technology and a whole lot of other things as well.

I'm enjoying very much conversations that I'm having with organisations that are around that.

Many of us have experienced through this whole iso-life time a lot of reflection about what do I really want to do in that bouncing forward sense. And organisations are doing a lot of the same things. Good organisations are using that as a chance to think about what their social purpose is and then to use that reinvigorated sense of social purpose to drive business decisions as they navigate into that uncertain future.

Emma Lo Russo: Patrick I love that you said that because its almost like the guiding first principles for decision making, or leadership frameworks. If you can know who you are and who you serve then maybe you can ask the right questions of what they need in the technology.

So thank you, that was great to hear and I think you've made it less scary and more about that future state. I love the scenario planning. That feels low risk for people to start there, to have these conversations and tie it to business.

Thank you so much for joining us on The Business Of.

Patrick Sharry: Thank you.

Emma Lo Russo: I hope you enjoyed my conversation with Patrick. I particularly liked his point about scenario planning, and the idea of linking it with a deeper sense of organisational purpose, to create meaningful dialogue and change throughout an organisation.

It’s clear that talking about ‘the future of work’ is no longer an option for leaders. Leaders have to lead their organisations into the future – and do so now. In fact, talking can be a barrier to immediate action for a lot of organisations. The future of work is 'now', and leaders need to be investing in new skills and industries, to grow our organisations – and help them thrive in this time of change.

Remember, technology is critical, but people remain the smartest investment.

I’m Emma Lo Russo, I’ll talk to you next time on The Business Of.

For more information please listen to AGSM's The Business of Transformational Leadership podcast or read BusinessThink's David Thodey on three essential qualities of a transformational leader.

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<h1>The Business of Transformational Leadership (episode 1)</h1>

<figure><img src="?w=1320" /><figcaption></figcaption></figure>
 The events of 2020 have inspired much reflection on what the future will look for organisations. For many, it’s apparent the future of work is not on it’s way – it's already arrived. Digital transformation, with all its complexity and disruption, plays an important role in this innovation and change.
Host Emma LoRusso is joined by David Thodey, former CEO of Telstra and current Chair of CSIRO. David shares his insights into our digital future, and what business leaders need to know to lead people through this period of accelerated transformation.
We also hear from Deborah Young, founding CEO of the RegTech Association, a membership organisation facilitating the building of higher performing, ethical and compliant businesses, through innovative investment in regulatory technologies. Deborah shares her insight into how technological innovation and solutions can lead to remarkable growth and change on a global scale.
Finally, Emma speaks to Patrick Sharry, Chief Curiosity Officer at A Curious Drop and Program Director and Adjunct Faculty at the AGSM. With wide consultancy experience across public and private sectors, Patrick shares his insights and observations about how leaders need to be strategic, and continue to evolve as the business world changes.
Speakers:
<ul>
 <li>Emma Lo Russo, (AGSM MBA Executive 2013), CEO and Co-founder of Digivizer</li>
 <li>David Thodey, former CEO of Telstra and current Chair of CSIRO.</li>
 <li>Deborah Young, founding CEO of the RegTech Association</li>
 <li>Patrick Sharry, Chief Curiosity Officer at A Curious Drop and Program Director and Adjunct Faculty member at AGSM @ UNSW Business School.</li>
</ul>
Transcript:
Emma Lo Russo: Welcome to The Business Of.
I’m your host Emma Lo Russo, and this leadership podcast is brought to you by the Australian Graduate School of Management at UNSW Business School.
The events of 2020 have inspired much reflection on what the future will look like for the organisations we lead. For many of us, it’s apparent the future of work is not on it’s way – it's already arrived.
In this episode, we’ll explore the ‘now of work’ – and how leaders need to innovate to create organisations that are more human, creative and resilient.
Digital transformation, with all its complexity and disruption, plays an important role in this innovation and change.
Joining me is David Thodey, former CEO of Telstra and Chair of the CSIRO. David’s expertise and signature leadership style make him the perfect guest to discuss today’s digital landscape and how it’s shaping the organisations of tomorrow.
I’ll also speak with Deborah Young, founding CEO of the RegTech Association, an organisation facilitating the building of higher performing, ethical and compliant businesses, through innovative investment in regulatory technologies.
And finally, I chat with Patrick Sharry, Chief Curiosity Officer at A Curious Drop and Program Director and Adjunct Faculty at the AGSM. Patrick has wide consultancy experience across public and private sectors, and he shares his insights and observations about how leaders need to be strategic, and continue to evolve as the business world changes.
First, let’s hear from David Thodey.
David, welcome to The Business Of.
David Thodey: Thanks, Emma. Great to be here.
Emma Lo Russo: I think if anyone can talk on the minds of board members and C-level executives and how they might be thinking about the future of work, it would be you. What do you think, given the challenging times. Has that been accelerated, those conversations?
David Thodey: Definitely they have been accelerated. And I think we're still working through it, to be honest, Emma.
I think it's caused me to think about how we communicate effectively. I was going back to thinking about the introduction of the telephone. The telephone allowed us not to have to go physically see someone, and now with document sharing, video conferencing, shared whiteboards, being able to interact in different ways I think it has signalled a whole different way of how we communicate, and we've got to be careful in that, because some of it's good and some of it may not be as conducive to innovative, creative thought.
Emma Lo Russo: That's a good point, because I think a lot of that change happened rapidly for organisations. They might of been talking about it, but they had to go straight into implementation mode. To balance the human element and that creativity, where do those ideas come from and that real future-think that means we'll survive. How do organisations ensure that? What do you think the right conversations should be? What are the priorities or a focus lens that could be placed around that?
David Thodey: The way that we have been approaching it is not with necessarily a recipe as a solution, but trying to work out how we can make effective decisions or have effective engagement to get to good decisions. Very disciplined, rigorous board meetings or just manager meetings. And maybe we need a bit more asynchronicity. Maybe we break up the discussion from the decision making.
We're only limited by our creativity in using the technology to help us be more effective in our communication and decision making and don't get caught, the worst thing we can do is just continue to work and make decisions the way we used to, just on the screen, just moving it. Change it up. Think about it.
I think that's the critical thing. And use the technology to be more effective.
Emma Lo Russo: And you have so much exposure between CSIRO and your role there and Xero and Tyro and all the many things that I haven't mentioned but I know that you're part of. What do you think the skills of the future need to look like? How do we look to leadership to lead and bring in that human and creativity element so that they challenge the way things are done? What do you believe is required, or at least the discussion that will drive this is what we're looking for?
David Thodey: I think that the nature of work and how we lead does need to continue to evolve and change. As you know, leading people is a very human element. There's great ideas and there's great thought leadership and we can be inspired, but at the end of the day, leadership is about bringing a collective group of people together to achieve more than they would as individuals. That's what a great leader does, and somehow they enable you to do beyond what you thought you could do. And hopefully that involves doing things differently because the fundamental value in people working with people is to create differentiation, do things differently, that then creates some value, hopefully economic, social, or maybe environmental. So I think we need to keep thinking about what great leadership looks like.
There's some things I don't think will change. I think the art of self awareness is really important. That's foundational. But the days of hierarchical, dictatorial, command and control, probably weren't even appropriate before COVID, but even more so is not appropriate now. So it's about how you provide vision and purpose that allows people to really exceed in their particular area of responsibility. So it's creating a climate of creativity, of ingenuity, of enablement, rather than doing task-oriented things. I think that's the nature of work.
But I think it's going to be different, doing it remotely. I think there's good and bad, doing it remotely with people work from home. Because you still need that human interaction. Even now, I need to be able to look at your eyes, see how things going. But there's other elements that people can work when they feel it's appropriate for them to work, with children and other pressures in their life, so I think that's a really positive thing. So I do think leadership needs to be flexible. I'm trying not to use the word agile. But it is true.
I can even remember at Telstra, it's a while ago now, I should be careful to use examples that are five years old, but we did try to go to a principle that all roles flex. To redefine, even if you're in the contact centre or in a shop, that if you could work with your team to determine when it was appropriate for you to work and you could still trade off, then that created a far better working environment. And this idea of having to be at your desk to determine how you're doing work, it's just archaic. But we do need to think about giving people flexibility, but there are times we need to be together.
The question of creativity, how do you do creativity in a virtual world? Well hopefully it's not always virtual, first. Hopefully we can come together. But I haven't really nailed that one, Emma. I think you've got to go slowly. You've got to give people the opportunity to talk and express views. I read this morning that some people prefer doing a brainstorming session on video because they feel they get more airtime than some dominant individual who just takes up all the time.
Emma Lo Russo: I know just as a personal, how we hire now, it's just brought down to smart, talented, get things done, infinite learner, not an asshole. Because what they studied and what they done before does not apply. You talked about flex, but it is the only way. But then you need to also be outcomes-focused and remember, and particularly I think it needs time, again it's an observation, but I think these care from the well-being of your team is probably become much more front and centre than it has in the past because this period has impacted people greatly.
David Thodey: We've got to. I think it was Gary Hamel wrote a book just recently called, or he's a part author on, Humanocracy, putting the human back in to business, and relationship with the customers. I do hope that that continues. I think great companies have always had that, to be honest. I mean it's hard as you grow and you become more diverse and global, to keep that sense of human connection. But I also agree, I love your, I can't quite recite it, but your outcomes-driven, kick-ass, let's get on with it. That's great. Because you still need that edge. You still need to get stuff done, but you need to do it in a way that appreciates human personalities, characteristics, etc.
Emma Lo Russo: For Australian businesses in particular, I know you've been a champion of this innovation coming from here and thinking global and those opportunities. How does what's happened just recently help set us up to think differently. Have you been more introspective or have we been able to actually think a little bit differently about our place in the world? And what would you hope for there?
David Thodey: That's a big one. Let me just take it in two parts. One is our place in the world. We've got to remember, Australia is what? 1.6 trillion GDP? We're 1.2 per cent of the globally GDP. We're a small nation.
Emma Lo Russo: .33 per cent of the global population, that's the one that I always remember.
David Thodey: And .33 per cent, that's right. All 25 million of us in a federation, states can't be competing with each other. We've got to remember our place there, but we do have an incredibly well-educated community. We have a can-do attitude, I think Australians generally if you look right across the board, are willing to give it a go and step up. And I think that we're blessed with a wonderful resources sector, great agriculture, etc., but what we've not done is build our, I'll call it services, but what I mean is software-driven, biotech, healthtech. It's all those big domain thought leadership, building global industries and, except the resources sector, only a few companies have truly gone global. Love CSL, love Cochlear, the banks have tried it. They've come back home.
But when you start getting down to those mid-corporates, we're not as externally focused as we need to know, and I think we need to both get into the tech-driven big services, knowledge-based information driven sectors, and have a global perspective on it, and say, "Why not?" Especially with the connected world. Tyranny of distance does not apply as much. You're still going to have to travel. I hope that that is what is going to happen going forward. I do think that's a big change.
I trust, we've seen the take up of technology, be it eCommerce, just trading online, other skills, has definitely risen. You know that the tech sector, this is whether you call it Industry 4.0 whatever you call it. This technology driven change across every sector, it's probably at best 25, 30 per cent of the way through. This is a seismic change in every industry. And when you look in Australia, of that .33 per cent of the population in Australia of the globally population, the tech sector is less than 5 per cent and most European countries are up around 7 or 8 per cent and the US is over 10, and in terms of GDP contribution, at best we're 6 per cent, and we should be at 10 per cent.
We need to, I think, pivot to that technology, knowledge-based industries. Not to throw resources away, not to throw ag away, and we do ag-tech, etc., but we've got to build this other leg to the stool. And I'm worried that we're not going fast enough. I think there's so much opportunity and we're starting to see a little bit in Melbourne in the biotech area. Seeing some here in Sydney. You got a few technology, software driven areas. But nowhere near as big as we need.
Emma Lo Russo: By the way, you're preaching to someone who's in violent agreement-
David Thodey: I thought so.
Emma Lo Russo: And a super-champion of the same message. But I'd love to hear, and I'm sure our listeners would like, what do you think needs to be unlocked? Is that just the role of leadership? Is it government? Is it policy? Is it our education system? Does at start at kindergarten on? How much has to change to make this happen?
David Thodey: Like everything, it comes back to leadership, and I'm not one of those people to say that it's all around government policy, because I think government's saying, look, get on with it, and we've got some great companies that are getting on with it. Now, there are a few impediments along the way that they need to tidy up as we go forward, but I do think we need to make it really attractive. To me, if I talk around science and the whole research area, science is nothing more than trying to discover how our world works, isn't it? Be it chemistry or biology or genetics. It's so exciting, and we just need to make it more exciting, and I think people will come.
I first will go to us and say, "Look, we need to step forward and say this is great." And I know there are a lot of people who do that. I do think that there is some responsibility for government where there's market failure. I think we can step in more. I mean, that's why I think New South Wales government setting up the tech centre around central, tech central, is really exciting. I think they're putting in 50 to 60 mil just to get it going and I think we as industry and we as leaders need to step into that. I know it won't be perfect, there'll be lots of things wrong with it, but let's take the 80 per cent that's good and really make it work.
In terms of education, I think that we're not teaching exciting software skills at schools, unfortunately. We're making it more by rote than anything else. We need to make that come alive and that's why coding for kids and all those programmes are so good. But we need to make it exciting and relevant to life, back to the humanity. If it's something that's too theoretical, people'll tune out. We got to make it really live about what we're doing, purpose-driven, etc. So that's what I would say.
Emma Lo Russo: You talked about mid-corporate and it starts with us as leaders. If you could say to everyone who's listening and to every leader, what should they do to challenge themselves and challenge their organisation and be that leader of change that leads to that innovation and that global thinking and competitiveness and make it exciting and purpose-driven? How do you break that down? I know, people who've worked with you, they are inspired by you, so what is your secret?
David Thodey: Number one is to care. You've got to care. The first thing I've always done, I look at my own backyard and say are we living what we talk about? Are we practising it? And so you've got to do that. But then you've got to be willing to stand up and talk about it and step out and put yourself at risk a bit. And too often, a little bit of Australia tall poppy syndrome, not so much in this area, but a little bit. Step out and have an opinion, put it on the table, and go and make a difference and invest a little bit back into the community from where you come from. I think if we all did that just a little bit more, then the multiplier effect would be enormous.
The other thing I get very frustrated with in Australia is, and it comes back to this thing around, I don't know what it is, it's sort of the tall-poppy syndrome, but supporting each other. Emma, I think what you're doing is great. I want to see you grow ten times in whatever way you want to grow, whatever you define that.
Emma Lo Russo: Hundred times, David. Don't limit my growth, please.
David Thodey: That's right. Exactly, a thousand times. But we need to lift each other up, and too often I hear, states competing with each other, people saying, "Yeah, David's a nice guy, but did you know? He doesn't do this," or whatever. Build people up. The US go a little bit over the top on it, but we need to encourage each other, step up and change the attitude and so every day find someone to support or say something good about and encourage them on the way, because it's too easy to be critical. And then go do something about it.
Three things, make sure your backyard's okay, doing it. Step out and make a difference and encourage other people to make a difference. There are three things and we'll be all a lot better off going forward.
Emma Lo Russo: I also heard you saying that, have the courage, right? Be uncomfortable. You talked about putting your opinion and maybe teasing out what things could look like? When do you feel uncomfortable, just out of interest? How do you put yourself into it?
David Thodey: I feel uncomfortable often. I think the trick is to know how to put ideas out and not be offended if someone's got a better idea. It's like having this constant learning attitude that it's great to learn and you may be wrong, you may be right. When down in Canberra with COVID Commission and Steven Kennedy, Secretary of Treasury is talking around economic modelling around the impact of job keeper, I'm not an economist. I sort of know what's going on in the economy and I feel decidedly out of my depth in terms of econometric modelling. But I can put an attitude out there about getting people back into work, how will that work, asking open-ended questions, being involved.
But it's putting yourself at risk and you have courage to do that, that you learn and hopefully you contribute to a better outcome. Because that's what, you want the truth. It's not about me being right, not about you being right, it's about getting to the truth that will make a difference and are better for our nation and the greater world.
Emma Lo Russo: When you've seen organisations make that transition, and Telstra would be a case in point. Amazing innovation in that period of time. Where there frameworks that you adopted? Was it creating that question-based, let's be driven by purpose? What does that look like? I guess one of the outcomes I would love for this, post this talk, is that people actually go, "I feel inspired. I have got the courage. But I know I need to bring my team along with me." Here's maybe a way that we can talk about it or set some context or here are the views that we could be thinking about. Have you seen something that creates that start that you have observed change and maybe fast change?
David Thodey: I do. But I'm not sure it's as formulaic as the textbooks would like us to think. I am a great advocate for purpose-driven companies. I think purpose transcends economic return, self introspective behaviour. Being driven by something that leaves a mark on our society or in some way, is really important, because that's what gets us all going. Yes, I want to work hard, I want to do well, but you've got to know what you stand for and finding that can be very hard. And doing it in a way that opens up opportunity, doesn't close it down.
That's a little bit of a contradiction in terms, because any business needs to be good at what they do, but how you do it needs to be open and be able to get there in many different ways. Look, I know it's popular these days, but culture plays a critical role in there. And the culture needs to be real to who you are as an organisation, just like any society or nation, you're a product of your past but you have choice for the future. You can't deny your past, but you can create your future. You got to work off what is instinctively and innately you, and then move it forward.
We spend a lot of time thinking about our purpose. Telstra was not just being a telecommunications company, it was about creating a brilliant connection with people. So we got this human element, and by the way, if we had of thought about that earlier, we might of built WhatsApp. We might of even done things like, I don't know if we would of done Twitter, but we could of done communication and how we communicate in a completely different way. But we lost that because we were too slow in that. I think in that process of purpose and culture, it redefines who you are and then gives people the freedom to go and do things differently.
But also, the reality of large, complex organisations is you do need some guard rails. Let's talk around diversity, you can talk around diversity and I can say about gender equality, but until you go look at the policies that you have, you can be just absolutely talking out of the side of your mouth. And you need to have integrity in that, so you've got to go and say, "Look, are there policies or behaviours that are impeding us achieving what we want to do?" And be willing to change them.
It's not just all pie in the sky, it's actually hard, disciplined work. And it's the same with innovation. I wish that I could say to the CSIRO as well, "Just go and have a really good creative session and come back and tell me how we're going to change the world." But the truth is, in science and in innovation and research, you may have to do things a thousand times before you get to the thousandth-and-first time and hey, presto, you do something differently. Innovation and finding new ways to do things can be incredibly disciplined and hard work.
I love it if you do sort have that moment of brilliance when you decide something or see something, but often it's just hard work. I think it's from the visionary purpose, culture, alignment, all the way through the discipline and rigour of running a company differently. And I think how you keep that balance is really important, because it can get out of kilter really quickly if you don't watch it.
Emma Lo Russo: I think that's a really brilliant point is making sure it's congruent. What you're measuring is not in conflict to what you're asking and, like you said, you called them the rail bars are there, but not the cap.
David Thodey: Exactly.
Emma Lo Russo: They can go as far as they want, just as long as you're not putting at risk or maybe there's the parameters.
And I do wonder if, you talked about asking the hard questions, and it is hard to make that change, but is critical thinking part of that? Is it the art of saying no to the too many things that you're saying yes to create the space for the right things? Is that part of what you think is both the rigour but where organisations go wrong? Or where do they go wrong when they are trying to do this? What have you observed?
David Thodey: I thought you're talking to me, because I tend to say yes to too many things, Emma.
Emma Lo Russo: I've observed it in many places. It's something you have to hold yourself to check as well.
David Thodey: Yeah, absolutely.
Emma Lo Russo: There's lots of good ideas and business cases that could be built, but is this the one we want our limited resources to go after.
David Thodey: I really agree. Yeah. And you've got to know how, I do get enthusiastic and want to try new things, but I'm also very conscious execution is 96 per cent of success and so you got to do the vital few. I do think prioritisation, which includes yes and no, but being very clear on your priorities, because you can't do everything, is really important. And actually using good methodologies to think through what is most important so that when you come back it's not just, my idea's better than your idea. We've thought it through and put the parameters against it and be, as much as we can, data driven. Because then it allows you to go back and review that decision about why you make. Because you have made a wrong decision, got wrong data. At least you can go back and say, "Well we made that decision because ..." Well that was different, okay, well let's go do something different.
What have I seen that people, companies do wrong? I listen to a lot of companies have great ideas and then two years later they pivot, they go do different things. One point I was quite critical of that, but actually think that is a really good sign. You've got to have an idea, pursue it, but be willing to change it. It does come back to this flexibility and being absolutely ruthlessly honest about whether you are succeeding or not. We all have this incredible ability to believe our own drivel and be willing, not in a critical way, but just what truth tells you, and be able to get that data and then if it's not working, to change. Which is coming back to your point around focus and yes and no. And then be willing to move forward. And I think the companies who don't do that are the ones who do fail, because they stay true to something that is not going to yield the value that they want it to.
Now that's different to something being really hard but right to do, and you've just got to stay the course. And sometimes that is really hard and there'll be a lot of people around you saying, "No, you're never going to succeed, David." And you've got to be strong internally to say, "No, we can do this. We're going to find a way through it." That's slightly different again.
There's sort of two parts there, one is be ready to change if it's not working. And two, have enough resilience, resilience, old word in leadership, but stay the course and believe in yourself and have the courage to go do what you got to do and then use all the methodologies and the help you can get along the way.
Emma Lo Russo: So much food for thought. Thank you for joining us today on The Business Of.
David Thodey: My pleasure.
Emma Lo Russo: It’s always a pleasure to speak with David Thodey. It’s clear from our conversation that in order to lead progressive, future-ready organisations, leaders require clarity, calm, confidence, and compassion. And I loved the examples he gave of how this translates to better business outcomes.
My next guest has mobilised all these characteristics to build an organisation critical to the digital landscape we’re operating in. Let’s hear from Deborah Young on the story behind the RegTech association, and the reasons it’s grown from having just 8 members, to 150, in just 3 years.
So Deborah, welcome to the Business Of.
Deborah Young: Thank you so much. Emma, so good to see you.
Emma Lo Russo: And such an amazing journey. So, let's start with, tell me about RegTech Association that you founded and are CEO of?
Deborah Young: Yeah, so it was founded in 2017 as a nonprofit association. And the small group of founders were pretty focused at that time around they had to ... I guess a vision and a mission, and they were to accelerate adoption of RegTech and to create a global centre of excellence. And I must say back in 2017, that seemed black an enormous mountain to climb because it was just such a small group of people who had the passion behind it. So we created the association three years ago and we're now 150 organisations, which is simply massive from where we started at my kitchen table.
Emma Lo Russo: So first of all, for those that don't know what RegTech is, can you just unpack it for them? And then what's driven that amazing growth in just three years?
Deborah Young: So we would say RegTech is defined as any technology that supports better regulation and better compliance. So it's really that simple. And of course it's really that complicated then because that is actually a very broad range of solutions. But I think, you know how they say in life that timing is everything? And certainly at the time that the association was founded was right at the beginning of the announcement of the Hayne Royal Commission.
And so that was the early wind beneath the wings as regulators and regulated entities were looking at how they could do things better. And so the association was able to ride the crest of that wave. What we were offering was actually a curation of the technology like had not been seen before. So, in other words, we were able to bring everybody together to have a more meaningful conversation than everybody trying to do it individually, door knocking and speaking to the wrong people at the wrong times.
So, I think it was about timing. And then certainly over the last six months, the pandemic has actually driven this next significant wave in interest in RegTech, and it's mostly because this is now impacting government, and when something will actually impact government, then we will start to see things happening as we've seen over the last six month period.
Emma Lo Russo: So what drives that awareness around needing to plan against risk, and have this regulation and understand the governance and the importance of it? Why do organisations need it?
Deborah Young: They need it for a number of reasons. And yes, it's definitely for good governance. It's definitely for compliance to regulation. They're some of the big ticket items because we've seen the size of the fines for non-compliance. But actually RegTech, this is why I love RegTech because it can actually improve the way people are doing their jobs every day. So if you're working in compliance or in regulation in some way, these are tools that can actually help you focus on higher order tasks, and not focus on all of the perhaps lower level risks, but actually to get some visibility over what the risks are to begin with.
So this is actually about tools to actually help equip people to do their jobs better. And actually further along, this is actually securing trust for the whole of the regulated ecosystem. So that's why it matters, then further on even from that, this is actually about people, and about people needing trust in their life. Like you and I want to feel that when we're interacting with our institution, irrespective of what that institution might be, it could be a bank, it could be an energy company, it could be a telco, you are assuming that you're operating in 100 per cent trustworthy environment.
And what RegTech can do, is back that up all through the value chain to ensure that you can have that experience and that trust.
Emma Lo Russo: And you touched on government too and particularly with COVID that this has been another period of growth. Can you explain why and how are they engaged and how fast can change happen?
Deborah Young: Well, I think we've just proven over the last six months that change can happen really quickly when everybody's pulling in the right direction. And I think it touched the government in a number of ways. So for example, I think digital identity went up the importance chain, and we remember seeing the news reports of thousands of people standing outside Centrelink offices queuing up.
And this was simply because they needed to be identified and there was no other way of doing it except to ask them to actually risk probably catching COVID probably standing in a very long queue to go and have their identity verified amongst other things I've no doubt, but it was certainly one of the things. So, being able to identify people. Then we look at some of the other things that have happened during the pandemic, like the early release of super. And so I think KYC, or Know Your Customer, has also gone up the food chain as well.
So if I worked for a bank or financial institution and I was operating from home, have we covered off the security and the trust especially if I'm in a regulation or a compliance based role, I've got lots of sensitive data coming to me as an example? So I think that the safety around how we collaborate and the transfer and flow of information, has been heightened as well. So I think that there are three really good reasons why the government wanted to focus on RegTech and it felt like one day the phone didn't ring and then the next day the phone was ringing hot.
Emma Lo Russo: That last statement is really about that opportunity. Why are we doing it? It's to serve our customers better or to serve our people better. How do you help organisations see that planning against risk versus opportunity? And who's the leader that you're talking to that needs to think about that differently and make that change.
Deborah Young: That's a really interesting question. I think first and foremost, I'll go back to government just for a second. I think that the government has actually just recognised what their role is in RegTech, because the government potentially two years ago were treating this as a new and exotic thing, not quite sure what to do with it. But in actual fact when you think about the very top of the tree, is actually the government. Because the government are creating the requirement for RegTech.
They're making the policies, they're making the laws, that get handed to the regulators to administer, the regulated entities that then are needing to report to those regulators, and RegTech is trying to get in the middle to reduce the friction. Now when we talk about who's actually responsible within organisations, RegTech has probably moved around a little bit in areas of responsibility, but more and more we're starting to see leading institutions actually having Chief Data Officer, Chief Compliance Officer.
So no longer would it just sit with the Chief Risk Officer as it may have traditionally done, but there are new roles that we can see being created, and one of the very powerful things ... in fact, I heard a bank say this the other day, "They're no longer a place that you'd go to get money." Banks have become these big organisations full of data for all kinds of reasons and for all kinds of things. And so, we can see that a Chief Data Officer is going to have a very big interest in RegTech so, I think it's still emerging as to where RegTech will rest and maybe it won't ever be with one area of responsibility, but certainly we're seeing other financial services regulators in particular are running active RegTech programmes. So they're about educating, they're about surfacing what are the solutions, and whilst they don't endorse any particular solution, they want to surface that and make sure that education is there, so that people can see the potential of what's possible, so that they can monitor the risks more actively.
Emma Lo Russo: And Deborah, because I've seen you personally bring about change, right? You've done it in many organisations even before the RegTech, and I've had the privilege to view and see this. What advice do you give people when they do need to think differently or to lead change or to introduce something that might require investment, but of course the outcome is so great? How have you personally led that? What's your journey been to realise that as an outcome?
Deborah Young: Well the first thing is I think, you have to recognise that people ... despite the fact that I represent a tech, like an area of the tech sector and some people might say, "Well, is that really about people?" Absolutely. This is actually about investing in people. It's about investing in the people that you have now. It's about investing in the people that you're going to need in the future. And it's actually about creating a pathway. I mean all jobs have an evolution, from where I first started in my career is definitely not where I've ended up. And so we will evolve over that.
And what we're also going to see is organisations. There's going to be a blurring of the lines and we're already starting to see it. Technology companies becoming banks, banks becoming technology companies. And so, all of a sudden we've seen the blurring of these lines. We must be nimble. It has to be making better business decisions based on having the facts and the information and the data for you to do that. And so that's my message.
Invest in your people, take a data first strategy, and also, stay positive. Try and stay positive. Go for a walk every morning. And if you have to go for several walks a day. Take the time, take the time out. Because I think especially during this time my mental health has been very important.
Emma Lo Russo: Yes. More so than ever. Absolutely. I think there's a lot of change that has happened to your point. We've accelerated, right? COVID's created this acceleration. How do organisations need to be thinking about their investment in technology to embrace every aspect, including the RegTech compliance component of it?
Deborah Young: So I think organisations need to have a very deep understanding of their problem statements or their challenge areas. And I think they need to take all areas of their business, their people, their tech, and align against what those problems are, and then also they've got to make some pretty important decisions about whether to buy or build. And one of the interesting things for large institutions right now, they may even have access to investment capital through a corporate venture arm or something like that.
And so there may be some interesting things about, should they actually be using some of the investment capital from that fund to invest into technology companies that can help the overarching parent address some of the greatest compliance or regulatory challenges that they have. And the other thing I would say is that organisations should reach out to their peak body or their industry association. It's a wonderful way that they can roll up their sleeves, get involved.
They will have a natural peer group within that community. And being able to harness that sometimes is the greatest way that you can get wholesale change made across a very diverse group of organisations in my experience. And I think this is like my sixth industry association that I have worked for, and I am genuinely passionate about harnessing the power of everybody to create the change in momentum that's needed.
Emma Lo Russo: You talked about investment in this technology and some of those decisions that get made around that, what are some of the returns? What should they be looking to when they're considering this for the future?
Deborah Young: So, one of the case studies that I learned about just recently involved a RegTech company, a UK regulator, and a couple of banks. And they ran a trial, a manual process that took 1000 hours, and they put it next to the process that the RegTech was able to do and was able to achieve the same result in two and a half minutes. So when you're talking about a return on an investment, it's pretty clear that there's a lot of productivity and efficiency that can be achieved in a shorter amount of time.
And then imagine you would have all of that additional time to look and analyse that data. So those results that you've just been given, what else could you achieve having being given all of that time back. So I think that is a great example of RegTech at its finest, brings you the productivity, efficiency, bang. You've already made five business decisions based on that information that you didn't have to invest that 1000 hours.
Emma Lo Russo: The power of making better decisions, more informed decision is keen in how we're going to operate into the future. So Deborah, because you're an amazing leader, I'd love you just to give your best piece of advice to other people leading change in their organisations. What would that be?
Deborah Young: Well would it surprise you to know that you must bring diversity to your table? I see it so often. I see it so often, and it's almost like because we've had the pandemic, we don't need to worry about plastic bags anymore and we don't need to worry about diversity anymore because we've got bigger fish to fry, and we just should be grateful for whatever we get. Don't be afraid. Don't be afraid to say, "Look, certain groups here are not represented." Because the organisations that I see that are thriving, really have good diversity or have made a commitment to better diversity.
And that doesn't just mean gender diversity, that can mean diversity from a whole host of other things as well. It could be people with different abilities. All kinds of things. So I think diversity is the one thing that I feel most passionate about and you will get better business outcomes if you can be a more diverse organisation. And it will actually help you in some way to actually better serve your customer as well.
Emma Lo Russo: Well Deborah, thank you very much, it was lovely interviewing you and learning the opportunities for businesses and the acceleration that's happened, and to your success, congratulations.
Deborah Young: Thank you so much Emma. It was lovely to talk to you today.
Emma Lo Russo: Fascinating to hear from Deborah on how leaders can manage the risk and compliance issues unearthed by this period of digital transformation, and the importance of investing in your people as well as technology.
An oft-repeated mantra is that a good crisis should never go to waste, and that’s something my final guest has observed in his consultancy work during this period of digital acceleration.
Let’s hear from Patrick Sharry on how organisations are responding to the 'now of work' and the technologies shaping new products, services and business models.
So Patrick, welcome to "The Business Of".
Patrick Sharry: Yeah. Nice to meet you.
Emma Lo Russo: So, I mean, you work closely with a lot of senior executives in organisations, particularly around leading digital transformation and using that for innovation for their organisation. What do you see as the common challenges, adoption, opportunities and how is that being viewed today?
Patrick Sharry: So, there is a particular lens on this from a COVID-19 perspective. And there are, if a lens, well a lens has two sides. There are two sides to that lens.
One is that people are really struggling to make sense of what they need to do, and what's the right direction to point any transformation. But also, I'm doing a lot of work with organisations at the moment and they're saying that, you know like a good politician would never waste a good crisis, they are leaping into the opportunity that the uncertainty the Coronavirus world has provided. And what they're doing is, in some cases accelerating by two, three, five years the way that they thought they needed to change their organisation, their business model, their structure, all of those sort of things and they're doing it now.
And so there is a real intensity in that, with people recognising that while the initial moments of the uncertainty were unpleasant and its not completely wonderful now it also provides an opportunity to drive a whole lot of change while everyone is more open to change than they might ordinarily be.
Emma Lo Russo: And I think that's a bit of the secret right? It's the open to change, and then maybe using technology and seeing how they serve their customers.
Who is doing it well? Where do you see organisations? What questions do you ask to accelerate or to use this as the opportunity hidden into this hardship?
Patrick Sharry: So without a doubt, the big change is around digitization of business models. And there is a number of different aspects to that, but one of the main pieces would be automation and its cousins, machine learning and those sorts of things. And those changes then drive structural changes in the organisation and require new skill sets to keep that automation moving, because it's not a once off thing. It's a journey that you are on and you need to keep working at that. And that, as I said requires new skills, and organisations are getting better at recognising that.
Emma Lo Russo: Is it all organisations that you are working with? Do you think that some of the urgency that was there at the start is sustainable and leading to continuous change looking further enough into the future?
Patrick Sharry: So the change won't stop in the next six months. This is a journey that we have been on and all that has happened is that we've accelerated it.
One of things that I'm conscious of organisations in different spaces is, particularly in a time when we are acutely aware of the impact of Coronavirus on employment or unemployment. The automation process actually can make that a lot worse, in that, you know you automate a process and it's not a 1-for-1 match by any means, but you often end up with a smaller workforce, or a different workforce. So you know in all of this there are also ethical challenges. There’s the need to recognise the societal impact that you have as an organisation. And there is a balancing out here of how do we reduce the cost of the business as much as we can, but still keep a place as a contributor to the broader societal need to have employment and people engaged in meaningful work.
Emma Lo Russo: So how do you help organisations get far enough ahead to see what the future can look like to be able to effectively balance that?
Patrick Sharry: Yeah so one of the things that I am doing quite a bit with organisations at the moment is building scenarios about what the future might look like. So we would be foolish to think that we can with laser-like accuracy pinpoint what the future is going to be. What good scenario planning does is it acknowledges that and says that we should be building a series of plausible futures about how our broader business environment might play out, and then thinking about how we need to manage our business model in order to remain viable in those different settings. And that's useful because of sort-of takes the blinkers off the belief that we could just have that one view, and importantly, cognitively, what it does is it leverages a thing called "The Availability Heuristic" and that means that people in the management team for example become a lot more aware of the things that are happening out there in the environment and they bring those back to the management table, to have more meaningful conversations about the future and our business model.
If you tie that with a deep sense of purpose in an organisation then you can start to get that balance, because these things are not in any way straightforward. There are always a series of trade-offs. Not just one trade-off. Making those things exclusive means that you can actually make sensible decisions in really difficult environments.
Emma Lo Russo: I'm really glad you talk to that kind of scenario – look far enough into the future to try and put some context around it.
Does technology drive strategy sometimes or should strategy always drive technology? I am curious. What have you seen and when does one play a more important role than the other?
Patrick Sharry: If this was a multiple choice Emma the answer would be E, all of the above.
So it absolutely goes both ways. The technology can drive the strategy, the strategy can drive the technology. The quality of that loop is dependent in no small part on the calibre of the executives that you've got. Ones who are actually able to do that forward thinking, and are open to ways of working that they might not have grown up with. So particularly for those of us who have grey hair and have been around for a little while it can be easy to sort of ignore all of the technology things, but good leaders know that it is actually critical to engage with that stuff.
Emma Lo Russo: Two good points there. Bringing the right people to the table and good leaders will be putting themselves in uncomfortable situations going into spaces that they don't know. What do you think are the characteristics for leadership? What's required of organisations? Because as you said, change is going to happen anyhow. So what do you think are the right leadership qualities or the culture of an organisation to think about digital transformation and innovation?
Patrick Sharry: Like all good questions, the answer Emma is "it depends".
Emma Lo Russo: I learned that when I did my MBA.
Patrick Sharry: Part of this is to acknowledge that different approaches to leadership work more effectively in different settings or to turn that around that different settings require different leadership styles, or the exercising of leadership in a different way.
If you think of what we have seen in particularly the early days, although it is continuing, of the Coronavirus situation, in that sort of chaotic setting what matters is really clear direction. Ideally with some expert justification for that, and I think our State Premieres have done a great job of that at the Federal level, we've done a great job of that. Could it be better? Yeah, we could, it's a bit difficult to be perfect in those settings, but we've done a pretty good job of that. If you look at other jurisdictions that hasn't happened and you can really see that difference.
When we begin to move out of this and so I think the way that Jacinda Adern is talking about this is really constructive. She is not talking about bouncing back, she's talking about bouncing forward. The river changes. We can't recreate stuff. And so we've got to acknowledge that and say that we can't bounce back we've got to create some new thing. To do that, the effective exercise of leadership there is about being much more consultative, which is not to sit back and let other people make the decisions, but rather to know that there is no silver bullet that an individual leader is likely to have. Rather getting the right people around the table and really listening to what's being said, being comfortable that at least in the early stages of that there will be a whole lot of tension and paradox and ambiguity that needs to be resolved and entering into that therefore with a strong sense of humility is what’s going to be important.
But again as we've seen I think really powerfully with Jacinda Adern the fact that you are consultative, the fact that you are humble doesn't mean that you are weak.
You need to maintain the pressure on the system to drive the outcomes, but you can do that from a sense of humility in a consultative way because it is important as an organisation or a society enters these times of change that we try and bring people with us. And the more we engage them going into that journey the more they'll stay engaged when we're on the way.
Emma Lo Russo: I think the other beauty in that bounce forward is it is yet to be fully-defined right? Whereas, if you say bounce back you think somehow you can control what was there, and as you say everything changes around it.
Where have you seen emerging technologies help an organisation? Whether its helped them align to their strategy or hint to the future. What does that look like and when is it done well, in your view?
Patrick Sharry: So that the thing that comes to mind immediately. An organisation that I'm working with who recently bought onboard some new technology leaders and they have made incredible improvements in the turn around times for, and the quality of customer service by using Bots of various types. In the fairly common way, where the Bot over time learns to be able to answer 30, 50, 70, 80 per cent of inquiries, and they get dealt with really quickly and that therefore frees up the time of staff members to provide better quality customer service because the pressure is not on to those customers who actually need a more detailed and thoughtful response. And that sort of thing I think works really really well. Let the robots do what the robots are good at, Chatbots in this sense. Let the people do what the people are really good at, and bringing those together is what's successful.
Emma Lo Russo: Are there a set of questions leaders could use to help them understand technology, emerging technology, disruptive technology to see where it sits?
Patrick Sharry: That is a really difficult one Emma! That is a really difficult one.
One comment that will make is that all of these conversations including the ones that are driven out of Coronavirus with the technology added in, are causing organisations to reflect on their identity. So who really are we? And what I try to encourage organisations to do in that space is to think about what's their real social purpose. Because if an organisation can be really clear on its social purpose that becomes the guiding light for decisions that you make about technology and a whole lot of other things as well.
I'm enjoying very much conversations that I'm having with organisations that are around that.
Many of us have experienced through this whole iso-life time a lot of reflection about what do I really want to do in that bouncing forward sense. And organisations are doing a lot of the same things. Good organisations are using that as a chance to think about what their social purpose is and then to use that reinvigorated sense of social purpose to drive business decisions as they navigate into that uncertain future.
Emma Lo Russo: Patrick I love that you said that because its almost like the guiding first principles for decision making, or leadership frameworks. If you can know who you are and who you serve then maybe you can ask the right questions of what they need in the technology.
So thank you, that was great to hear and I think you've made it less scary and more about that future state. I love the scenario planning. That feels low risk for people to start there, to have these conversations and tie it to business.
Thank you so much for joining us on The Business Of.
Patrick Sharry: Thank you.
Emma Lo Russo: I hope you enjoyed my conversation with Patrick. I particularly liked his point about scenario planning, and the idea of linking it with a deeper sense of organisational purpose, to create meaningful dialogue and change throughout an organisation.
It’s clear that talking about ‘the future of work’ is no longer an option for leaders. Leaders have to lead their organisations into the future – and do so now. In fact, talking can be a barrier to immediate action for a lot of organisations. The future of work is 'now', and leaders need to be investing in new skills and industries, to grow our organisations – and help them thrive in this time of change.
Remember, technology is critical, but people remain the smartest investment.  
I’m Emma Lo Russo, I’ll talk to you next time on The Business Of.
For more information please listen to <a href="https://www.unsw.edu.au/business/our-schools/agsm/about-us/the-business-of-podcast/the-business-of-transformational-leadership" data-new-window="true" target="_blank" rel="noopener noreferrer">AGSM's The Business of Transformational Leadership podcast</a> or read BusinessThink's <a href="https://www.businessthink.unsw.edu.au/articles/david-thodey-three-essential-qualities-transformational-leader" data-new-window="true" target="_blank" rel="noopener noreferrer">David Thodey on three essential qualities of a transformational leader</a>.

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The Business of Transformational Leadership (episode 1)

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