In our fourth and final part of our Modern Slavery Reporting Series, we provide our practical recommendations for moving into the third reporting season to ensure your organisation has a compliant and robust modern slavery Statement and reporting framework.

Organisations should now have established frameworks for how they aim to combat modern slavery within their organisation. It is important to remember that your modern slavery obligations extend beyond preparing a well-written Statement each year and ticking the box. Entities should ensure that they regularly identify the risks of modern slavery within their operations, assess the steps taken to combat these risks, and periodically review the effectiveness of these steps.

From our review of the first two tranches of modern slavery Statements that have been submitted, we have collated the following recommendations to help your organisation develop an effective response to modern slavery:

  1. Create entrenched organisational change and training: Companies cannot rely solely on certain teams, such as procurement and legal, to address the risks of modern slavery. Everyone within the organisation needs to be abreast of their modern slavery responsibilities and how to identify and address risks.
  2. Mitigation and leading from the top: Your organisation should ensure modern slavery is being considered and implemented via various mechanisms, including at board meetings, committees, working groups and management plans. Entities should ensure they are embedding risk management and integrating respect for human rights across the organisation, starting at the top.
  3. Collaboration and engagement: A complete modern slavery response goes beyond the parent company’s actions. A wide range of stakeholders should be engaged, and their feedback should form an organisation’s response to modern slavery risk mitigation. Organisations should communicate and engage with a range of stakeholders on these risks and mitigation strategies, including employees, unions and key suppliers.
  4. Establish a risk identification and response mechanism: Ensure you have the proposer procedures and reporting processes in place to maintain the capability to identify risks and respond to these quickly. Accountability should be assigned to individuals within your organisation to ensure ongoing due diligence and risk management. Employees and stakeholders should feel comfortable identifying and reporting risks.
  5. Actively monitor, review and adjust your supplier relations accordingly: Organisations should continuously monitor high-risk suppliers and countries and meaningfully review their supply chains and operations. Practically speaking, organisations should ensure that all supplier agreements have a code of conduct or compliance terms.
  6. Assessing and demonstrating effectiveness: During the first and second reporting seasons, many organisations focused solely on the actions they are implementing to combat modern slavery. However, organisations should set up long-term processes, including measurable KPIs, to assess the effectiveness of these actions.

Getting it wrong

Whilst there are no penalties for non-compliance under the Act (yet), the consequences of inaccurate or misleading disclosure extend beyond the Act and may include:

(a) Regulatory action:

(i) Regulatory action may be taken in respect of breach of directors’ duties (for example, a failure to exercise skill, care and diligence by appropriately managing and disclosing modern slavery risks).

(b) Consumer action:

(i) Consumer claims and consumer class actions are a potential risk (for example, ACCC complaints about misleading Statements about ethical sourcing).

(c) Shareholder action:

(i) Requisitioned resolutions (for example, solutions requisitioned seeking a review of the company’s supply chain practices) and shareholder class actions are also potential risks of which entities should be aware.

Next steps and how we can help

A comprehensive and compliant modern slavery program extends beyond a yearly Statement.

Now is the time for organisations to comprehensively review their approach to combatting modern slavery. To avoid the ‘race to the middle’, organisations need to ensure modern slavery risk management processes are embedded into their end-to-end supply chain process and across their organisation.

Given the absence of financial penalties for non-compliance with the Act, society groups and non-governmental organisations are stepping into the role of ‘naming and shaming’ non-compliant organisations. Modern slavery is becoming an increasingly important ESG metric for consumers, investors, employees, Governments and activists in pressuring businesses to ensure the ethical security of their supply chains and operations. As a result, these stakeholders will critique the comparative quality of modern slavery Statements and rely on these Statements as a benchmark to measure an organisation’s year-on-year performance and improvement.

Contact our team if you would like to discuss how your business can improve its modern slavery risk management and reporting.

In Part 2 of our series, we set out our insights on what differentiates the few organisations who are noticeably leading the pack in their disclosure obligations under the Modern Slavery Act 2018 (Cth) (Act) – how they are going above and beyond the minimum requirements of the Act to understand their supply chains and the modern slavery risks within and taking measured steps to identify and mitigate these risks.

Key stakeholders such as investors, employees, customers and suppliers increasingly demand corporate efforts to address their modern slavery risks and broader human rights and environmental, social and governance risks. As such, modern slavery Statements are proving useful tools to monitor corporate compliance and improve this space.

In Part 3 of our series, we highlight our observations of some gaps in reporting by businesses who are taking a ‘race to the middle’ approach and only meeting the bare minimum of the Act’s requirements. This is designed to assist our clients in improving their reporting for the upcoming third reporting season if they want to join the organisation who are leading the way.

Areas for Improvement

From our review of the first two tranches of modern slavery Statements submitted to date, we have identified below the key issues and gaps:

(a) Limited operational and supply chain awareness

One of the predominant reporting gaps was mapping and addressing potential risks in the reporting entities’ operations and supply chains. The “laggers” only provided a very brief description of their supply chain, demonstrating a superficial understanding of the source of exposure to modern slavery risks.

Our review revealed that many companies had only a basic understanding of their supply chain at the contractual level but not of the risks beyond this. Most companies could not identify or assess the risks beyond their tier 1 suppliers and lacked visibility of their supply chain as a whole. Additionally, many organisations failed to evaluate and address risks within their operations (such as through recruitment, procurement, investments, customers etc).

Statements should adequately disclose, at the minimum, which the entities’ suppliers are and the risks of modern slavery present along the entire supply chain and within their operations.

(b) Inadequately identifying and assessing risks

This criterion appears to be the most difficult for organisations to grapple with. Whilst organisations are not required to report specific individual risks or actual cases of modern slavery (although they can voluntarily include case studies or examples), they are – at least – required to identify how risks of modern slavery practices may be present in the organisation and their supply chain. The Government Guidance provides that:

risks of modern slavery practices‘ means the potential for your entity to cause, contribute to or be directly linked to modern slavery through its operations and supply chains.’ 

The concept of risk in this context means risk to people rather than risk to the entity. However, these risks may often intersect. The terms ’cause, contribute to or be directly linked’ stem from the UN Guiding Principles on Business and Human Rights, with which all reporting entities should ensure they familiarise themselves.

Most Statements merely described how risks of modern slavery are being identified, rather than properly identifying and describing the present risks.

While in some instances, non-disclosure of actual incidents may be for a legitimate reason (such as to avoid compromising ongoing investigation), reporting entities should aim to provide as much practicable information on the present risks to promote transparency and disclosure in accordance with the UN Guiding Principles.

(c) Inadequate disclosure of actions taken to assess and address modern slavery risks

The UN Guiding Principles make it clear that entities must provide for, or cooperate in, remediation if they identify they have caused or contributed to adverse impacts. Whilst some organisations detailed their whistle-blower procedures, additional information could be provided on how organisations monitor their grievance processes and ensure they effectively receive and resolve incidents of modern slavery. Most entities failed to disclose information about the use of their grievance mechanisms and the extent to which they are responding to modern slavery risks identified through these mechanisms.

Some specific actions for entities to consider implementing and disclosing in their subsequent Statements include: disclosing responsible procurement practices, enforcing a commitment to ensuring workers in their operations and supply chains are paid a living wage, taking responsibility for and remediating the harms occurring in supply chains and implementing proper grievance mechanisms (such as a hotline, online complaints system or a disclosure app).

(d) Failure to assess the effectiveness of actions and reporting results

In both tranches of Statements, we saw an incomplete picture of how entities assess their actions’ effectiveness in addressing the risks of modern slavery.
Many organisations provided a summary of the processes they have implemented to oversee, monitor and report on their actions to address modern slavery risks (such as internal reporting channels, accountabilities and working groups). Still, they failed to disclose or assess the results of these processes.

Entities should ensure they are disclosing the steps they are taking to assess the effectiveness of their actions in addressing modern slavery risks. Reporting entities should enhance their tracking of the effectiveness of their responses and communicate how impacts are addressed. This can include disclosing the specific key performance indicators or other metrics used to measure their efforts.

Conclusion

Our review of the Statements submitted by the entities sitting in the middle of the pack, or lagging, reflects that there is a significant improvement to be made in disclosure moving into the third reporting season. Entities wishing to improve should aim to provide a deeper assessment of the risks of modern slavery in both the operations and supply chain and draw on specific examples and case studies. Additionally, transparency needs to improve in assessing the effectiveness of the steps taken to address these risks. As part of this process, entities should consider consulting with a broader range of stakeholders, including working groups in all owned and controlled entities, unions and suppliers.

In our next and final part of this series, we will explore practical recommendations moving into the third reporting season to ensure a compliant and robust modern slavery Statement and reporting framework.

The Modern Slavery Act 2018 (Cth) (Act) was developed with the intention to drive a ‘race to the top’ by organisations to properly identify, address and report modern slavery risks in global supply chains.

However, our review of the modern slavery Statements submitted to date and consideration of various reports commentating on these issues (including from the Australian Council of Superannuation Investors (ACSI) and Monash University) indicate a large proportion of organisations are taking a ‘race to the middle’ approach – only meeting the bare minimum of the Act’s requirements and failing to undertake an in-depth analysis of the issues.

In the second part of our series on modern slavery reporting, we share our insights on what leading businesses are doing to meet their obligations under the Act and to implement robust modern slavery reporting frameworks.

What are the reporting requirements?

The Act sets out strict criteria that must be reported in a Statement. Unlike in other jurisdictions (such as the UK) the reporting criteria in Australia are mandatory. The reporting criteria are:

(i)            the identity of the reporting entity

(ii)           the structure, operations and supply chains of the reporting entity

(iii)          the risks of modern slavery practices in the operations and supply chains of the reporting entity, and any entities that the reporting entity owns or controls

(iv)          the actions taken by the reporting entity and any entity that the reporting entity owns or controls, to assess and address those risks

(v)           how the reporting entity assesses the effectiveness of such actions

(vi)          the process of consultation with any entities the reporting entity owns or controls or is issuing a joint modern slavery statement with, and

(vii)         any other information that the reporting entity, or the entity giving the Statement, considers relevant.

What are the leaders reporting?

A noticeable group of organisations are leading the pack, going above and beyond the minimum requirements under the Act to understand their supply chains and the modern slavery risks within, and taking measured steps to identify and mitigate these risks.

Below, we set out our insights on how the “leaders” comply with the Act’s mandatory reporting criteria.

Structure, operations and supply chains

The strongest Statements:

  • described the nature of their business, provided detail of their workforce arrangements and types of business relationships;
  • provided details as to the specific number of employees, direct hires, labour-hire contracts and the coverage of Enterprise Agreements, and
  • importantly, identified the steps they are taking to obtain greater visibility beyond tier 1 in addition to explaining their tier 1 supply chain.

The leaders provided a clear description of their supply chains in terms of the suppliers by number, their specific regions/countries and the dollar spend.

Actions taken to assess and address modern slavery risks

The leaders disclosed how they are assessing and addressing modern slavery risks within their own operations (such as thorough recruitment, procurement, investments etc.), not just within their supply chains.

Only a small portion of organisations provided sufficient detail around the implementation of key actions to minimise modern slavery risks faced by their organisations and how these key actions are implemented. The majority of statements simply identified the categories of risk and high-risk countries in their supply chain, which is not sufficient.

The best Statements were those which drew on case studies and specific examples to illustrate how the company was mitigating risks, their efforts to engage with and educate suppliers, highly detailed risk assessments and transparent disclosure of policies and an assessment of the effectiveness of these policies. They followed the Government Guidance in disclosing their detailed risk assessment of individual suppliers and risk assessments deeper into supply chains.

Many organisations provided details of training programs, internal committees and working groups relating to human rights and modern slavery; however, the most comprehensive Statements provided details of the specific steps these groups were taking to identify and monitor modern slavery risks and specific details of the training provided (to whom, how many people etc.)

Assessing the effectiveness of actions

The leaders not only set out the steps they have implemented to oversee, monitor and report on their actions (such as internal reporting channels and working groups), but also disclosed the results of these processes. They set out their specific key performance indicators and how they assess these KPIs to determine whether they decreased the risk of exposure to modern slavery.

Consultation with owned and controlled entities

The leading Statements showed meaningful collaboration between the reporting entity and each entity it owns or controls (such as regular meetings between each entity’s procurement teams and working groups and cross-board briefings).

Additional information

The best Statements used this section as an opportunity to report on other collaborations, beyond the Act’s minimum requirements, such as industry and strategic partnerships. The better Statements also set out what progress had been made in the previous reporting period and outlined their commitments and focus for the following year. Usefully, some organisations also annexed an index that cross-referenced the mandatory reporting criteria to references within the modern slavery statement and attached other reports containing useful information (such as sustainability reports).

Only a few organisations are actively engaging with stakeholders in a way that informs their modern slavery risk management approach to go beyond just asking suppliers to fill out a one page survey. The leaders demonstrated how they regularly engage with their stakeholders and suppliers and use the feedback from these external sources to assess effectiveness.

Conclusion

Our analysis of the leading entities’ first two Statements indicates they are carrying out detailed risk assessments and due diligence across their entire organisation and supply chain operations – not just producing the same bare-bones Statement each year. The leaders are those who are actively ensuring modern slavery risk management processes are embedded into their end-to-end supply chain process and across their organisation.

In the next part of our series on modern slavery reporting, we will be sharing our insights on the disclosure gaps we have identified and what Australian businesses can learn from the first two reporting seasons.

The beginning of 2022 has marked the commencement of the third reporting season under the Modern Slavery Act 2018 (Cth) (Act). All eligible entities operating on the Australian financial year should have submitted their second modern slavery statement by the end of December 2021. Those operating on a calendar financial year are due to submit their second statements by 30 June 2022.

The Act requires organisations registered or carrying on business in Australia, and with a consolidated revenue of at least $100 million, to report annually in a modern slavery statement on how they are addressing the risks of modern slavery in their supply chain and operations (Statements). These Statements are lodged on a publicly accessible register held and managed by the Australian Border Force.

Snapshot of Statements submitted to date
We have conducted an analysis of the modern slavery statements submitted thus far. As at the date of publishing, 6,222 entities and two Commonwealth bodies have submitted modern slavery statements (3,799 mandatory and 528 voluntary) headquartered across 42 different countries. Below are pictorial snapshots we have prepared showing the origin countries of the organisations reporting in Australia and their industry sectors.

Countries where headquartered:

 

Industries of reporting entities:

Over the coming days, we will be sharing our insights into best practice reporting against the mandatory criteria and where further work by Australian reporting entities is needed. In our next post, we will share our analysis of what leading businesses are doing to meet their obligations under the Act and to implement robust modern slavery reporting frameworks.

In our last blog post in this series, we outlined a model for developing strategy in two different processes: developing an ideal state and grappling with a key decision. Both invariably require an evaluation of options and an assessment of the balance of consequences as between the various options. Often, there are “downsides” or risks with these options.

Perhaps now more than ever, employers need to engage with “risk” as it relates to the workplace. In making a connection between the workplace and risk, we speak broadly. For instance, there are:

  • health and safety risks
  • other compliance based risks, whether under the Corporations Act 2001 (Cth), the Fair Work Act 2009 (Cth), the Competition and Consumer Act 2010 (Cth), and the myriad of other laws that impact a business, and
  • the risks associated with poor service, such as loss of customers, reputational risk, and market risk.

It’s people that make a business and, on one view, all risk is about people.

More broadly, the types of risk that an organisation may face fall into one of three categories:

  1. preventable risks (internal controllable risks)
  2. strategy risks (here some risk is tolerated in pursuit of business objectives), and
  3. external risks (arising from events outside the control of a business).[1]

According to one study, if you ask ten different people what they imply by the meaning of risk you will likely get ten different answers.[2]

Whatever label is applied, risks need to be identified and identified as an outcome. The identification of cause is a separate, albeit obviously necessary, exercise.

Risks are typically examined and understood in the following ways:

  • Risk as exposure: that is, what will or may happen
  • Risk as impact: that is, what is the harm that will follow, and
  • Risk as a probability: that is, how likely it is that this will occur.

Many readers will be familiar with a risk matrix that plots the likelihood of an event against the degree of severity.

What can be done about “risk” is another exercise again. As General Stanley McChrystal observes in his book Risk – A User’s Guide, “to study risk is to reconsider what we know about being prepared.”

When we work with employers on their enterprise bargaining strategy, the bargaining risks are often central to any planning. Those risks can range from industrial action to an increase in sick leave, lower productivity, and certain pressure being placed on customers.

As noted above, the evaluation here calls for a degree of judgment and hence perception about the nature, degree, likelihood and impact of the various risks, together with an assessment of what can be done to mitigate them. Interestingly, employers who are most confident about their capacity to deal with bargaining risks are the ones often prone to capitulation in the bargaining when they arise. The risks were effectively ignored. A lack of planning followed, and with it something more fundamental: the lack of mental and emotional preparation that seemingly makes matters worse. As the great Stoic philosopher Seneca observed, “What is quite unlooked for is more crushing in its effect, and unexpectedness adds to the weight of a disaster”. In effect, the organisation has been taken by surprise. Flight or fight kicks in amongst the leadership. Panic and anger. What was organisational becomes personal. “Now my job is on the line” becomes just one interpretation of these events.

Hardly the best time to close out an enterprise agreement.

Conversely, there are those so concerned about the risks they are all too willing to make an agreement, putting their business at risk in the medium to long term. There is an overestimation of risk and a degree of catastrophising that masks clarity and true perspective. The opposite can also occur. An employer is so obsessed with bargaining risk that upon facing and dealing with its manifestation, they become emboldened and their bargaining position strengthened. Their attitude to perceived risk changes having better understood the reality of it.

In advising many employers over many years who are about to embark on a challenging change or enterprise bargaining project, the following has been instructive: the more they countenance risk, and the more preparation they put into leveraging what’s in their control, the better is their experience with the project and outcomes.

[1] Johansen, I.L and Rausand, M, ‘Foundations and choice of risk metrics’ (2014), Safety Science pp. 386–399.

[2] Kaplan RS and Mikes A, ‘Managing Risks: A New Framework’, Harvard Business Review, (June 2014).

Employee burnout is high, with one recent survey reporting that one in three participants say they experienced this in the last 12 months. This can lead to disengagement, high staff turnover and claims connected with mental illness or injuries.

To mark the fact that today is World Day for Health and Safety at Work, we will look at how leading employers can help their workforces to be mentally well and avoid feelings of burning out.

One issue to consider is the role that subjective employee perceptions about work can have in affecting their mental wellbeing. Known psychosocial risk factors include the following perceptions:

  • Under-utilisation: they are not using their skills or training
  • Unpredictable or unrealistic: work hours are unpredictable or deadlines are unrealistic
  • Not meaningful: tasks are not regarded as meaningful or are monotonous
  • Lack of engagement: not being able to address issues constructively with supervisors or peers
  • Role confusion: a lack of clarity about objectives or accountabilities
  • Underappreciation: lack of recognition for the work they do
  • Poor change management: anxiety or ambiguity regarding the impact of changes, and
  • Unfairness: a failure to treat people fairly, with dignity and respect.

These risk factors are consistent with the findings of a joint research project between Harvard and MIT, which highlighted that some of the best ways to support wellbeing for workers is to provide them with more control, reduce excess work demands and improve social relationships at work.

One option is to adopt a psychosocial approach to reducing the above risks and create an environment that best supports wellbeing and avoids burnout. Practical strategies include:

  • Resilience programs. Numerous studies show the mental wellbeing benefits associated with offering workers training in how to be more resilient.
  • Consider disconnection strategies. We have previously written about union claims and global legal reforms regarding a ‘right to disconnect’. This is increasingly adopted as good business practice, with many companies encouraging employees to set boundaries on out of hours contact and communicate this clearly (e.g. via a message in email signatures).
  • Look at ways to give people autonomy, control and recognition. Think creatively about how to embed a sense of ownership and independence in everyday tasks and show appreciation (which does not necessarily depend on pay).
  • Monitor work hours and resourcing. Check to see how much people are working and, where there are excess overtime hours, try and understand why. This will also assist with Fair Work Act 2009 (Cth) record keeping and award compliance requirements. If there is a resourcing crunch, how can this be addressed in both the short and long term?
  • Explain and clarify, as often as needed. Ensure people understand what they are supposed to be doing, what they are accountable for, and what their objectives are.
  • Create good working relationships. Look for opportunities to support positive team interactions at all levels – and embrace small wins. Do people feel comfortable asking each other for help and grabbing lunch or coffee together? Where people are working remotely this may require more effort but such efforts can provide huge returns for productivity and culture.
  • Set a safety based culture from the top down. Letting the workforce know that wellbeing and safety are priorities, and consulting with employees about safety measures will assist to demonstrate the genuine commitment to finding sustainable solutions as well as discharge work health and safety obligations.
  • Continue to support responsive measures. Programs such as EAP and mental health first aid are important to help employees respond to stressors as and when they arise.

There is no one size fits all approach when it comes to preventing employee burnout. Instead, employers have lots of opportunity to create an engaged and productive work culture while also reducing the risk of burnout.

Have a happy, healthy and safe World Day for Health and Safety at Work!

There’s been a lot of debate in mainstream and social media in the past week about major Australian corporates removing pay secrecy clauses from their employment contracts. The Financial Services Union is keeping sustained pressure on employers in that industry to remove the clauses from their employment contracts. The Labor Party has made it known that, if elected, it intends to amend the Fair Work Act to prohibit these kinds of clauses, as part of their commitment to achieving gender pay equity.

The Australian position on pay secrecy clauses is different to that of other leading economies. Pay secrecy clauses have been made legally unenforceable in the United States of America and the United Kingdom, with the worthy aim of decreasing discrimination and disempowerment of employees. In 2021, the European Union also announced a proposal to make pay transparency a binding measure for its member states.

But there are sound reasons for employers to include pay secrecy clauses in employment contracts. As with all complex issues, there are trade-offs that must be considered in arriving at a balanced final position. Requiring employees to keep their pay levels confidential can assist with preventing workplace tension and conflict, particularly in sectors where a significant proportion of pay is discretionary. Pay secrecy clauses can also provide an easy ‘out’ for employees who aren’t comfortable divulging their remuneration to others.

Before making any decisions about removing pay secrecy clauses from your employment contracts, there are some important practical considerations to work through:

  1. What exactly are you prepared to allow? Whilst an employer may be open to removing pay secrecy clauses, there may still be good reasons to moderate employees’ public statements that could potentially damage the employer’s brand or reputation. If appropriate, set clear boundaries around when and with whom employees are permitted to discuss their pay.
  2. Protect employees who don’t want to disclose. How will you ensure that workers who don’t wish to share their private pay information don’t feel pressured to do so? Consider developing a communication policy to guide behaviours and expectations around disclosures.
  3. Quarantine employees’ choices about disclosing their pay from other decision-making processes. Employees must not be dismissed or subject to other adverse action because they have made complaints or enquiries about their pay, or (if pay secrecy prohibitions are introduced) because they have exercised, or propose to exercise, any right to disclose or withhold their pay details. Be clear on the proper process and channels for raising genuine complaints. Consider training your leaders on effectively separating an employee’s disclosure (or not) from other decisions about their access to promotions or other opportunities, disciplinary action or termination, and handling sensitive pay discussions, queries, and complaints appropriately.
  4. Be prepared to answer tough questions about pay gaps. There are good reasons to remove pay secrecy clauses if that is the only way to ensure transparency about pay. Employers can also consider alternative approaches such as providing detailed information about pay that does not identify individual employees. Whichever policy position is taken – arm yourself with knowledge – do pay differentials exist in your workforce? Are there sound merit-based reasons for the gaps, or is gender (or another protected characteristic) the underlying reason, and if so, what is being done to address this? Understanding the reason for gaps in pay, whether based on gender or any other attribute, requires a detailed analysis of data and a regression analysis which can help to flush out causal relationships between gender or other attributes and variable matters such as percentage pay rises or discretionary pay.
  5. Be mindful of privacy obligations. Disclosing details about an individual’s pay data for purposes other than those directly related to the employment relationship with that individual (for example, as part of broader pay equality initiatives) without their informed consent may expose the employer to a privacy complaint. If you need to share pay data, can this be done at an aggregated, anonymised level?

It’s unlikely that removing pay secrecy clauses will resolve gender pay gaps in and of itself – the question is whether it is a necessary step along the way in light of alternative measures that may not have the same unintended consequences. And when well-executed, pay transparency might also be leveraged as a powerful motivational and cultural factor.

In our first blog of this series, we highlighted that strategic thinking is a skill and one that can be improved and developed.

So, what is strategy? What does it mean?

The word “strategy” comes from the ancient Greek word strategos meaning “general or leader of the army”, being a union of the words stratos “army” and agein “to lead”.

From the Oxford Dictionary, a modern definition is “a plan designed to achieve a long-term aim.” Synonyms of strategy include “plan; grand design; game plan; policy; scheme.”

Learnings on strategy, strategic thinking, and strategic decision making are ubiquitous. A plethora of academics and theorists have conjured their own meanings and applications of the term, making the search for a universally accepted definition illusory.

The military context provides many perspectives perhaps best described in Robert Greene’s classic book, The 33 Strategies of War, distilling learnings from Sun Tzu (孫子) and Niccolò Machiavelli to modern-day references.

In business schools, you’ll likely learn about: Michael Porter and his “5 forces framework”; Henry Mintzberg and his “5Ps of strategy” – plan, ploy, pattern, position and perspective; Benjamin Tregoe and John Zimmerman and their view that strategy is “the framework which guides those choices that determine the nature and direction of an organization”; Michael Treacy and Fred Wiersema and their “three value disciplines”; Igor Ansoff’s “Ansoff Matrix” – a two-by-two depiction of how a business can grow; and Kenneth Andrew’s view of corporate strategy as “the pattern of decisions in a company that determines and reveals its objectives, purposes, or goals, produces the principal policies and plans for achieving those goals, and defines the range of business the company is to pursue, the kind of economic and human organization it is or intends to be, and the nature of the economic and non-economic contribution it intends to make to its shareholders, employees, customers, and communities.”

Then there’s Frank Rothaermel, who, according to one study, is amongst the world’s top 2% most cited researchers, formulating “good strategy” for a company as involving a:

  1. diagnosis of the competitive challenge – accomplished through analysis of external/internal firm environment;
  2. guiding policy to address the competitive challenge – accomplished through strategy formulation; and
  3. set of coherent actions to implement the firm’s guiding policy – accomplished through strategy implementation.

Clearly, there is no one meaning or application of the word. That said, there are some core elements that can provide a useful framework.

In the workplace context, we consider there to be two common strategic processes.

The first is around developing an ideal future state. What resourcing is needed to deliver on our five year plan? How should our HR function be structured? What should our next enterprise agreement look like, and do we need one? These issues, we would argue, are genuinely strategic.

The second is grappling with key decisions of a more narrow compass. Perhaps not strategic as such, but their importance calls for strategic thinking. Do we terminate the employment? Do we engage contract labour here? Do we now allow working from home, and if so, how regularly?

Both processes rely on getting the correct information to the table and, often, difficult choices to be made, which call for an assessment of the balance of consequences which might follow.

For either process, a similar strategy framework can be readily applied. It is summarised in our Seyfarth Strategy Framework (below) based on the “rational decision making” model.

Seyfarth Strategy Framework
Click to enlarge

The framework:

  1. is not intended to be applied rigidly. Rather, it serves as a guide; and
  2. prompts a first layer of analysis only. For instance, a risk matrix might be needed to identify and better examine the risks. A RACI matrix might be developed as part of the “implementation”. A nine-box SWOT (as opposed to a simple four box) might be developed to populate the “plan”.

As mentioned in Part 1 of our series, “inquiry” is key to sound strategic thinking. The Seyfarth Strategy Framework poses high-level questions. Asking the right sub-questions having regard to specific context ought to precede the irresistible urge to proffer a solution.

Cell four of the framework, the “inputs”, is the key fact-finding part. Here, it is necessary to identify the information needed. Let’s use the example of deciding whether we should allow work from home. Anecdotal feedback from one manager about their views on what the team are thinking, or feeling, might be useful, but is it reliable enough to make the decision you are about to make? What more might be needed here before steps are taken?

Finally, decisions cannot be sensibly made in a vacuum. Hence the need for criteria or guiding principles. A debate about a course of action can often be resolved by asking, “what are our priorities here?” To take our work from home scenario again, are we aiming to justify our lease expense? Do we care to balance the interests of those who want flexibility with those who don’t?

In Part 3, we will turn our attention to “risk”. More than ever, risk is a feature of workplace thinking and hence a key variable impacting strategy.

We talk a lot about “strategy” in our day jobs. There’s certainly plenty of talk about it in the workplace. There’s a workplace strategy, a human capital strategy, an employee relations strategy, a strategy for rolling out an initiative, a change strategy, even perhaps a strategy to end someone’s employment, a negotiation strategy, and an enterprise bargaining strategy…the list goes on.

So, what is “strategy” as it relates to the workplace? Despite the constant references to “strategy”, there’s little by way of commentary on how it can be effectively applied in the workplace. In this series, we are going to do just that.

What is strategy?

Strategy is about making decisions that matter. This is true of the workplace as it is in any domain.

It might be about which roles are the best organisational fit. It might be about how best to service the HR needs of a business. It might be about how to define and improve culture. With a more narrow lens, it might be about how to manage a particular issue such as: workplace bullying; the future of an employee; or an enterprise bargaining campaign.

Classic notions of strategy come from business and the military. Business strategy typically concerns itself with answering questions of significance to the overall business. Are we in the right market? Do we need to pivot our service offering, and if so, how? There is a general acceptance that strategy is distinct from tactics and, in the view of some, a plan is not a strategy but rather a function of the strategy.

It’s easy to get distracted by definitional debate, and if we indulge in this too much, we will lose the opportunity to create the sort of practical insight that we aspire to provide here.

We cannot explore strategy without dealing with risk. More and more, those responsible for the workplace are concerned with risk due to increased regulatory demands and the perceived damage to one’s brand – both personal and business. The call for organisational moral perfection that social media now demands makes this all the more acute.

What is strategic thinking?

Strategic thinking is about problem solving in a particular domain of importance. It’s about defining the problem as a first step. The problem then needs to be analysed from different perspectives and sometimes needs to be broken down. Options are then generated and tested applying one or more frameworks or models to help generate the answer. The result is often a plan, or a series of objectives that then enable a plan to be made. It demands an eye on the “big picture” without missing key details.

How can we improve our strategic thinking?

Like most things, the more focus you give to your strategic thought process, the better your output. So the idea here is to treat strategic thought like a skill or a muscle to flex. The more attention you bring to it, the better you will be.

In this series, we will explore these themes further with insights aimed at helping you become more “strategic”.

As always, we welcome your comments which you can leave below to share your thoughts with us.

The World Economic Forum’s Global Gender Gap Report 2021 estimates that at the current rate of progress it will take more than two and a half centuries to close the worldwide gender gap in economic participation and opportunity, with Australia ranked 70 out of 156 countries. Although the proportion of skilled women in the workforce continues to increase, in 2020 the Australian Government’s Workplace Gender Equality Agency reported that women occupy only 32.5% of key management positions in Australian workplaces.

Based on these statistics alone, it would be easy to view the task of edging our way toward gender parity as practically unattainable, especially as the COVID-19 pandemic largely hobbled global progress. However, there is real hope. According to Saadia Zahidi, Managing Director and Head of the Centre for the New Economy and Society, employers now have a unique and unprecedented opportunity to contribute to gender parity by “investing in inclusive workplaces…advancing women’s rise to leadership positions, applying a gender lens to reskilling and redeployment and embedding gender parity into the future of work.” There is plenty of work to do, and with genuine, coordinated effort by employers, both the gap and the time it takes to achieve parity can be shortened significantly.

To celebrate International Women’s Day 2022 (IWD) we asked Seyfarth Australia’s female leaders to offer their insights on what we can do to #BreakTheBias in order to achieve equality and inclusivity.

How employers can play a role in forging gender parity

Erin Hawthorne, employment law partner in Seyfarth’s Melbourne office, says it’s important that employers take a hands-on approach to parity. “Leading employers who have moved past male/female same-work-same-pay concerns have the opportunity to commit to what ‘gender parity’ looks like in their organisation and set concrete steps to implement it.” This will look different to different organisations, for example, Erin notes that “for some organisations, it might be reflected in short term quotas at senior levels. Other organisations might look to change behaviour so that factors that can drive longer-term unequal outcomes (such as work specialisation, career breaks, part-time work or flexibility) have a much more even distribution among workers of all genders.” Erin acknowledges that “these issues are complex, but regardless of whether the ‘parity’ objective is based on equal treatment or equity of outcome, leading employers can take a stand to create momentum for real change.”

Sarah Goodhew, workplace health and safety partner in Seyfarth’s Sydney office, recognises that “gender parity isn’t a female-only issue. Gender parity and flexibility in the workplace is often needed for reasons beyond parenthood, by all genders.” This goes to IWD’s focus on ensuring all genders are involved and engaged, too. “Once leading employers recognise and support this, and have systems in place to entrench gender parity in their working arrangements, such as rewards systems and processes generally, then all genders will be able to achieve their personal and professional goals.”

Rachel Bernasconi, employment law partner in Seyfarth’s Sydney office, says “we at Seyfarth pride ourselves on asking ‘is there a better or different way to do something?’ not just approaching problems with a mindset of ‘this is how it has always been done’. We call this No Sheep, which is shorthand for not following the flock. Ask the equivalent of ‘the Seyfarth question’ in your organisations to help tackle these issues.” Taking an out-of-the-box approach is the mark of true leadership and courage – as Rachel points out “when you apply this thinking within your organisation to these issues, as we do often at Seyfarth, real and lasting change can come about.”

Advice for females aspiring to leadership in the workplace

Our partners have some very sage advice for women looking to become our future leaders.

Penny Stevens, workplace health and safety partner in Seyfarth’s Melbourne office, says to focus on your strengths and learn from those who inspire you. “Learn from other leaders you admire. Be confident in your own ability and tell yourself every day you are great at what you do. If you focus on what you do best you will succeed.”

Erin’s advice is to have a bold goal – it’s vital to “start small and dream big.” Erin suggests that being clear on your goals is also key and that by “thinking about the kind of leader you would like to be will give you the vision to pursue goals by utilising strategic stepping stones whilst staying true to yourself.” Erin also suggests that unnecessary self-doubt can inhibit progress. “Do not assume you are ‘doing it wrong’ unless you have data to back that up and, if you do, course-correct with those goals in mind.”

Sarah believes that it’s important to know the journey won’t always be smooth and advises future leaders to “be prepared for inevitable setbacks, but don’t let that mean you take ‘no’ as the answer.” A network of genuine supporters is also important. “Surround yourself with supporters who align with your values, your goals, and who also understand your context.” Sarah also warns that “the best advice that doesn’t work for you, won’t work for you. Be comfortable with the fact you might be doing something differently to the way ‘it’s always been done’ by others in your network – changes will happen, even if incrementally.”

Rachel advocates for courage and resourcefulness. She says, “If you’re given an opportunity grab onto it with both hands rather than questioning whether you are good enough or ready enough.”

IWD’s theme for this year is #BreakTheBias. For more IWD information and resources, please visit www.internationalwomensday.com.