The Solution to VUCA in Business

By Lee Murray, current student of the University of Sydney Business School MBA program and Business Leader Postgraduate Scholarship recipient.

On the 15th of May, I had the opportunity to attend an event by the Australian Financial Review’s (AFR) Boss Magazine at the Ivy Ballroom. Hosted by AFR’s Tony Boyd, the event featured a panel of guest speakers to discuss strategies on finding the solution to VUCA (volatility, uncertainty, complexity and ambiguity) in today’s business world.

The keynote speakers were Dr Catherine Ball, known as the ‘The Dame of Drones’ for her work in environmental protection using drone technology, and Dr Lisa O’Brien, Chief Executive Officer of the Smith Family. Joining them for a panel discussion was Professor Kai Riemer, Professor of Information Technology and Organisation at the University of Sydney Business School.

Dr Catherine Ball opened the night with her speech focusing not so much on VUCA, but the speed of change in today’s business environment. Technology continues to progress rapidly and changes the way people live their lives, opening new opportunities for the agile entrepreneur. To stay ahead of the change, Dr Ball stressed the importance of being creative and acting fast. To be creative, a different point of view is required. By simply sitting somewhere different, one has a different point of view and can observe what they hadn’t before, opening the door to opportunity. This simple analogy can transform the way we see problems and lead to creative solutions.

Dr Lisa O’Brien provided three key strategies for individuals to succeed in a VUCA business world:

  1. Utilising personal experiences to make you stronger and more resilient allows an individual to advance through uncertainty.
  2. Reflect on yourself and experiences to develop your leadership, it is about knowing yourself better.
  3. Focus on building capability not just skills by taking on new opportunities as they come and to feel challenged.

A panel discussion rounded off the formalities for the night and several engaging topics were discussed. The challenges for young people and their future workforce characterised by VUCA was discussed at length, and the panel provided their advice on how to succeed. STEM (science, technology, engineering and mathematics) skills were identified as being highly desirable to secure a broad range of jobs in the future due to rapidly advancing technologies. An example is the advancement in robotics and artificial intelligence which potentially threatens future employment. The panel voiced differing views on the level of threat to employment by robotics and AI (artificial intelligence), however all agreed that AI ends when human creativity begins. This reaffirms the importance of creativity in a VUCA world.

The panel event was an excellent opportunity to hear from exceptional thought leaders on how future leaders can succeed in a VUCA business world. Strong leadership developed through reflection, creativity leveraging different points of view and agile positioning will allow a faster response to the fast-paced change that lies ahead.

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Closing the gap – a commitment to gender equality

Our partnership with UN Women National Committee (NC) Australia has made it possible for six inspiring women to undertake the MBA through a full scholarship since we launched the collaboration in 2014.

The calibre of our recipients is a true testament to the work being done by these women to advance gender equality and make an impact in their communities through their expertise and influence. They also highlight the strength of students in our MBA cohort.

Applications are closing soon for Semester 2, 2017! Find out more about the scholarship, and meet our previous recipients.

NancyNancy Nguyen was our inaugural recipient in 2014. A Perth based Commercial Manager for Woodside Energy with 11 years in the oil and gas industry, she is helping to transform the future of green energy, as well as further empower others on issues of gender diversity in a largely male-dominated sector.

“My aspiration for applying for the scholarship was to hone my leadership and entrepreneurial capability to influence and establish clean energy options through use of technology and innovation.

“The MBA program provided an immersive experience which pushed me outside my comfort zone and helped accelerate my thinking. It has been fundamental in realising my goals and purpose.”

4702 un WOMENS SCHOLARSHIP AMNOL SAINISenior Manager at Ferrier Hodgson, Anmol Saini, among her many other accomplishments, was influential in establishing the “Women at Ferriers” initiative to provide greater networking opportunities for female employees within her firm, as well as their clients, in the hope of breaking down gender barriers in what remains a male dominated industry.

“I found myself researching this MBA scholarship program after being inspired by Emma Watson’s HeforShe launch campaign speech. What I discovered was a newly created MBA focused on personal transformation, self-awareness and self-management, together with the opportunity to support the UN Women NC Australia – it was exactly what I was looking for.

“To me, this MBA scholarship has been more than just an academic qualification. It has been the opportunity of a lifetime – a chance to question, challenge and re-define who I am and who I want to be, as a woman, a professional and a member of society.”

5124 MBA StudentsDr Kim Johnstone, NSW Department of Planning and the Environment’s Principal Demographer, is helping plan for the future by providing population insights. She has worked tirelessly to support women through her paid and volunteer work.

“I’ve always been an advocate for women, starting when I was 12 and wanted to do woodwork instead of sewing at school, and continuing through my work.  When I applied for the scholarship I was at a bit of a crossroads in my career. The scholarship provided a wonderful opportunity to expand my skills and reframe how I used my skills in my work and volunteer roles as non-Executive Director.

“It is a wonderful opportunity, and for women who are thinking about doing an MBA, you have nothing to lose by applying.  I also found that the application process itself really invigorating, because it made me think about my career and how to improve women’s representation at senior levels.”

GalinaA lawyer and economist with experience in international relations, Galina Barret, is passionate about making further and more effective contributions to advancing the cause of women’s economic empowerment and gender equity by making the most of every opportunity.

“The most rewarding part of the journey has been recognising change – my own and that of my colleagues – in the way we approach different problems.

“There are many reasons the past year has expanded my world view; it has challenged me, required me to learn new ways of thinking and problem-solving that were not previously in my field of vision, and most of all, it has inspired me to go beyond the pedestrian. So if you’re thinking of further study, consider the UN Women NC Australia MBA Scholarship – you won’t regret it.”

AdeleAdele Langton, Vice President, North America at CMAX Advisory, and former ministerial advisor, has devoted her career to improving the lives of women faced with adversity through her work in private volunteering, board representation, public policy and advisory services in the United States.

“After a decade of focusing broadly on policy, I wanted to gain insights into different business models and a better understanding of leadership, and develop frameworks for a new way of looking at the world.

“The calibre of the other students is incredible. I am studying with game-changers working in roles I didn’t even know existed, as well as alongside thought leaders and CEOs I had read about in the press.

“I would absolutely encourage others to apply. Make sure you park any reservations or hesitations about your likelihood of success, and also make sure to enjoy the process.”

Sydney Business Connect Magazine photo shootEmma Brown, our most recent recipient, and Finance Manager for the Cerebral Palsy Alliance, is working in the midst of a critical and sector-defining time, with the introduction of the National Disability Insurance Scheme (NDIS). She is passionate about empowering her staff through authentic, effective communication and recognition of their individual value, and preparing the way for future generations of workers.

“I was absolutely thrilled (if not a little surprised!) to be awarded the scholarship. I will be able to draw upon a deep pool of knowledge and experience to ensure that I have the resources to make the greatest impact I can in my role. I would encourage anyone who is passionate about diversity, equality and positive social change to set self-doubt aside and apply. Regardless of the outcome, both the people you meet as part of the application process and involvement in the discussion forum will be truly invaluable.”

About our MBA

Women average between 30 – 35 percent of MBA participants in Australia and worldwide. With the support of UN Women NC Australia, we aim to address this gap, further women’s education and promote gender equality in leadership. In 2015, we were proud to become the first MBA program in the country, and one of the first in the world, to admit more females than males.

The MBA has been designed to unlock personal and professional ambitions, and as a Business School, we are consciously searching for those people who have a passion to use their leadership skills for good and drive social change.

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Do algorithms make better decisions?

By Professor Kai Riemer, Unit Coordinator, Managing with Technology, The University of Sydney Business School MBA program

5256 Sydney Business Connect academic photographyRecently, we have heard a lot about algorithms, machine learning and artificial “intelligence” (AI), and the promise these technologies hold for improving decision-making. The argument for the power of algorithmic decision-making rests on two assertions: Algorithms are said to be able to digest greater amounts of data than humans, and thus make more informed decisions. And algorithms are said to be unbiased, and thus make objective decisions. But how realistic are these assertions?

Are algorithms better informed?

First, let us look at the claims about data. Recent research has indeed demonstrated the efficacy of algorithms that implement an advanced form of machine learning, so-called deep learning, for making decisions that rely heavily on pattern recognition. For example, algorithms have been shown to find cancerous cells in vast amounts of images from CT scans faster and with greater precision than human diagnosticians. Microsoft sales agents use deep learning algorithms to decide which lead to contact next, and self-driving cars rely on similar technology for navigating in traffic.

However, in order to judge what such algorithms can (or can’t) do for business decision-making it is important to gain some understanding of how they work. Unlike traditional algorithms where the decision logic is implemented as explicit if-then rules, self-learning algorithms have to be trained with existing data, from which these algorithms learn to infer relevant patterns when later presented with new data of the same kind. There are no rules. The algorithm learns by adjusting a complex, layered network of “neurons” to respond to patterns.

What then are the implications? First, such algorithms only work where the problem domain is well-understood and training data is available. Second, they require a stable environment where future patterns are similar to past ones.

It is easy to see, however, that many business decisions are not like this, in particular not those that matter for the future of a business. Once we realise that the future is rarely an extrapolation of the past, but actively created, we can see that algorithms that lock us into the past are not appropriate when it comes to forward-looking decision-making.

Consider hiring decisions: algorithms will have to be trained with data on which past hires were successful. A learning algorithm would then allow identifying candidates with the same traits as those successful previously. Yet, often hiring more of the same is not what will be best for the company going forward. It will also compromise diversity and be detrimental whenever the organisation has to respond to change or wants to venture into new areas. Also, let’s not forget that such training data relies heavily on hindsight and by its nature is incomplete, because it does not include data on those candidates that were not hired.

Are algorithms unbiased?

Machine-learning algorithms are as unbiased as the data with which they were training. The above example shows that if simply trained with past hiring data, the algorithm would merely perpetuate past biases. Of course, we could ‘clean up’ the training data to remove biases. But who would we entrust this task to? Whoever gets to decide on the training data will embed their biases in the algorithm.

And crucially, no-one knows, not even the creators of these algorithms, how exactly these algorithms reach their decisions. They resemble black boxes that cannot explain themselves and answer the all-important ‘why?’ question in justifying decisions. What we are left with is: “the computer says no!” Entrusting decisions to such algorithms would mean that we transfer accountability for decisions to those in charge of training them, effectively outsourcing our ethics.

So, where does this leave us?

To be clear, machine-learning works for operational pattern-recognition problems, in particular those involving high volumes of unstructured data. But these algorithms require conditions of ‘business as usual’. Ironically, because of the grounding in past data, this supposedly disruptive technology cannot cope well with disruptive change.

As for decision-making, most situations that matter do not present clearly delineated options to be weighed up. What is needed rather is human judgement and expertise. Decision-makers need to commit to a particular course of action, guided by a clear purpose and a shared story of what we want the future to look like, and to motivate and convince others to follow, rather than mechanistically entrusting algorithms to make decisions based on the past.

And regarding bias let’s remember that every decision, by definition, involves enacting preferences, valuing some criteria over others. A decision is always biased in some sense; we might not hire on the basis of gender or race, but we might value some personal traits, degree programs or education institutions more highly than others. Rather than black-boxing decisions in an entity that cannot be held accountable, we should seek to have an open and transparent conversation about which distinctions are in play in making decisions.

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On the case

By Myrophora Koureas, current student of the University of Sydney Business School MBA program

I wanted to get an insight into management consulting as a possible career path, when I first entered my first case competition, last year. I also saw it as the perfect opportunity to get to know some of the other students in the program. It was great to be able to work on a project without the added pressure of assessment requirements because team-work is a large component of the assessments in the MBA and an important part of most roles.

Working on the PwC Case for Change Challenge with Matthew Ting, Liana Porihis, Pete Lead, and Lee Murray, was a rewarding experience which exceeded my expectations. It was really exciting to see our idea evolve into something that met the client’s needs and brief. The process of solving a real business problem by harnessing our idea, within a tight deadline was invaluable.

On the caseWe wanted more and decided to keep working together when opportunities presented themselves.

We jumped at the chance to participate in the Asia-Pacific Challenge in last December 2016. This was the inaugural APC MBA Case Competition coordinated by the AGSM at the University of NSW. For two days Matthew Ting, Liana Porihis, Thommy Arena, our coach, and I were working on the MBA case competition. The time pressure was intense. Understanding the business problem, finding a solution and presenting the pitch in as little as two hours is an effective pressure test. It was competitive with teams from the Asia-Pacific region.

We quickly began to understand the power in applying frameworks to find, and pitch, solutions to clients and judges. Frameworks such as: a business impact analysis (BIA); building a hypothesis that is mutually exclusive and collectively exhaustive (MECE); or comparing the current and future state of a business using the business model canvas (BMC). In some instances there was no one framework to apply to the case and this is where we could develop our own measures and criteria. It wasn’t enough to just have a good idea, although that helps, especially when the client likes it. The judging panels wanted to see the rigor applied to developing our solutions accompanied by the risk analysis and the implementation plan.  It was easy to forget the client’s needs under intense time pressures but it was imperative to deliver client centric solutions. Frameworks kept us focused.

Managing question time was as critical as formulating the pitch. Judges were quick to identify gaps in a pitch and responding with a ‘less is more’ approach was a good way to avoid magnifying any limitations in the presentation. It was also good to remember to respond rather than react to the questions being asked.  An important thing to remember for any presentation.

On the case imageAs we discovered, case competitions often have a rich social program with drinks! This is the ideal time for networking and to meet students from other Business Schools. It was insightful to speak to other MBA students and to understand their backgrounds. The diversity of the student cohort is by-far what differentiates our MBA program from others.

Although I remain undecided about a career in management consulting I’m still on the case. I think the skills utilised during case competitions are transferable to many roles, personal and professional, and help deliver effective solutions and outcomes.

Don’t let the next case competition go by. The experience is about more than management consulting and winning. It is a platform for accelerated learning.

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The Playground Matrix: a tool to help you determine the extent to which your business is strategy driven

By Professor Marc Jones, Unit Coordinator, Strategies for Growth, The University of Sydney Business School MBA program

marcjones1One of the key findings in a recent major study of Australian leadership was that it was common for senior leaders to not seek strategic advice from qualified parties when making major decisions about the future – therefore ‘baking in’ a lack of insight into their actions and undermining the formation and roll-out of coherent strategies. We often speak in the normative sense that organisations should be ‘strategy driven’, but what exactly do we mean?

Inspired by the Playing to Win strategy framework appearing in a 2013 book by the same name by A.G. Lafley and Roger Martin, over the past couple of years I’ve developed what I call the ‘Playground Matrix’ to assist clients to diagnose the extent to which they are – or aren’t – strategy driven.

The Matrix is structured along two dimensions: Market Attractiveness and Ability to Win. The level of Market Attractiveness depends on growth ambition (which defines risk appetite, or vice versa) and profit pool size. Ability to Win fluctuates according to competitor moves, new entrants or exits, and the client firm’s efforts to strengthen its position. In the context of the Matrix, being strategy driven is defined as focusing your time and resources in the Northern Arc region of the Matrix (composed of the Sweet Spot, Ballast and Capability Gaps zones).

When working with clients, the process I use with the Matrix is (1) populate – with businesses, business units, products or geographies; (2) validate; and then (3) redirect resources from the Southern Arc region (composed of the Fool’s Gold, Graveyard and Revenue Trap zones) to close Capability Gaps and grow the Sweet Spot. The Matrix is thus both a diagnostic and decision support tool.

The various zones of the Matrix are defined as follows:

Sweet Spot: you want as much activity here as possible, as this is business you have qualified as being attractive and in which your competitive position is strong.

Capability Gaps: this zone should be sucking in resources (financial, technical, managerial) that are diverted from the Southern Arc (particularly the Revenue Trap zone) as various ‘babies are killed’ (see below)*.

Fool’s Gold: you can see the bags of gold on the horizon which is very exciting, but your current ability to field a competitive offer is weak or nonexistent. Perhaps consider an acquisition; otherwise cool your jets and focus on closing Capability Gaps.

Graveyard: you really don’t want to be active here, except for two potential situations. First, there are synergistic linkages between activities here and those in the Northern Arc. Second, if you are expecting business conditions to improve markedly in the future and are willing to make additional investments to improve your competitive position now – I call this strategic optionality.

Ballast: these are existing activities that fall below the attractiveness hurdle (e.g. because margins are too low or profit pools too small) but in which you are highly competitive. Particularly for businesses that are capital/infrastructure intensive and cyclical, retaining a degree of ballast can be strategically justified as it can keep factories running, workers employed and their skills up to date, and cash-flow ticking along. Beyond a certain point, however, Ballast transforms into the Revenue Trap.

Revenue Trap: the key concept here is opportunity cost. As you pursue or persist with activities deeper and deeper in this zone, you forego options in or proximate to the Capability Gaps zone. The prescription is to ‘kill babies’* that cannot justify themselves in terms of either synergistic linkages with Northern Arc activities or with respect to strategic optionality. As a rule of thumb, the denser the Capability Gaps zone is populated with promising activities, the narrower your Ballast band should be. But here’s the rub: eliminating existing income streams in the hope that future, more attractive income streams will eventuate is easier said than done, particularly when time horizons are short.

*Before closing, I should explain the use of the rather harsh phrase ‘killing babies’. Decisions to exit markets, close sales offices, and terminate relationships with existing partners and customers can manifest highly charged emotional impacts on executives, managers and employees. Each item appearing on the Matrix is, quite literally, somebody’s ‘baby’ in the sense that careers, reputations, and livings rely on the continuation of existing activities. Pretty much every conversation between the corporate or BU centre and activity managers in the Southern Arc will play to the same script, with managers pleading that they need more time or resources to deliver on commitments – or they will invoke claims of synergistic linkage or strategic optionality. In my experience, more often than not the centre lacks the clarity and courage to make the tough decisions that are necessary to cull Southern Arc activities and become more strategy driven.

So then – how strategy driven is your business?

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An afternoon with Andrew Liveris

By Alison Husain, current student of the University of Sydney Business School MBA program and Business Leader Postgraduate Scholarship recipient

One of the benefits of undertaking the MBA at the University of Sydney Business School is the program’s designated Careers Services, and the numerous opportunities to attend a variety of events such as talks, case studies and workshops. These add immense value to the program and present unique insights into diverse areas, opening up opportunities for additional engagement and the chance to meet interesting people from around the world, which otherwise would not be possible.

Most recently I was fortunate to attend a talk by home-grown Andrew Liveris, CEO of Dow Chemical and author of ‘Make it in America: The Case for Re-Inventing the Economy’. Andrew was also recently tapped by U.S. President Donald Trump to head up the American Manufacturing Council.

The event was sponsored by the University of Sydney’s United States Studies Centre and held in the stylish historic surrounds of the Westin Hotel in Martin Place Sydney. Whilst enjoying a sumptuous mid-week silver service luncheon, Liveris delivered an American view to a packed audience on how Australia needed to respond to the current evolving trends in globalisation.

Liveris’ speech met my expectations in that it was delivered from an American Corporate perspective. Liveris touched on areas ranging from Saudi Arabia’s Wahabi ‘Vision 2030’ reforms to China’s New Silk Road and One Belt One Road policies, emphatically denying an American retreat from globalisation. Liveris advocated the view that Australia needs to adopt an inclusive capitalist approach via multiple-stakeholders across energy, manufacturing, training and innovation, to pivot away from the commodity cycle and lift the blanket ban on natural gas pipe systems encouraging land owners to be part of the reward system – an interesting viewpoint which appeared to have a few people shaking their heads.

Many of the issues raised aligned with my MBA studies and were experienced first-hand whilst undertaking the MBA International Business Project unit in Shanghai. It was overall very thought-provoking and a good opportunity for discussion with people from varying sides of the debate.

Other benefits in attending such events are the opportunities to socialise. I am always amazed at the range of people I am fortunate to meet; as a result my network has grown to include heads of industry and people with unique backgrounds and experiences which have enhanced my professional and personal development. At the Liveris event I was able to chat with Professor Bruce McKern, Visiting Fellow at Stanford University’s Hoover Institution, who also accompanied my cohort to Shanghai; one of Australia’s wealthiest women; an expert in nano-technologies; a member of the NSW Business Chamber; and Director of the Australia-Taiwan Business Council.

The great thing about the variety of events the Career Services have on offer is they allow for a deeper absorption of lessons acquired through the MBA journey, which when mixed with work and life experiences, create additional value and greater depths of understanding which may then be applied in real time.

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How footy builds an inclusive Team Australia

By Peter Giurissevich, Senior Legal Counsel – NRL, BOSS Emerging Leaders Scholarship recipient and current student in the University of Sydney Business School MBA program.

_SYD0230The importance of grassroots participation to rugby league cannot be understated.

Without it, the next generation of stars and fans will not emerge and the elite level game will not survive. Without it, rugby league will not benefit the community and provide a platform for social inclusion, change and opportunity. Which is why grassroots programs should receive a bigger slice of the $1.8 billion broadcasting rights fee.

Consider the wonderful story of the under-14s Guildford Owls in Sydney’s western suburbs, whose rugby league team is comprised of boys of Australian, African, Middle Eastern, New Zealand, Samoan, Tongan and Turkish heritage. Their motto is “Brotherhood. Effort. Discipline.”

Before each game they form a circle and say an Islamic prayer and a Christian prayer. The prayers ask for the same thing: that they all play well and that their “brothers” play safely.

Rugby league is their common language and by participating in the game these kids break down the racial, ethnic and religious barriers that would otherwise divide them.

The inspiring stories don’t stop at the playing of the game. This year, the National Rugby League’s School to Work Indigenous mentoring program helped a young woman become the first Indigenous captain of her school (in Sydney’s south-west). It has also helped a young man, in foster care since the age of five, pursue his dream of becoming a cabinetmaker.

This is the power of rugby league. These are the types of stories that make the sport great.

Big business
These stories also demonstrate how rugby league creates hope and opportunities, unifies people and the extraordinary reach it has into diverse communities.

The numbers don’t lie: there are 725,000 registered participants (born in 115 countries) playing the traditional form of the game across Australia. Of those, about 3000 are elite-level players in the NRL Premiership and top flights in the state leagues. Add in modified forms of the game, including touch football, tag and school competitions, and the total number of participants jumps to nearly 1.4 million. There are also 400,000 women playing the game, a figure that has grown 27 per cent year on year.

Modern sport is very big business. The State of Origin series has consistently attracted the highest ratings on free-to-air television over the past few years: game one in 2016 had nearly 4 million viewers and an average 4 million viewers watched each round of the 2016 NRL Premiership regular season.

That many eyeballs allowed the NRL to pen a $1.8 billion deal in late 2016 with Fox Sports and the Nine Network for the rights to broadcast the State of Origin and NRL Premiership matches in the 2018 to 2022 seasons. It’s one of the richest television deals in Australian sports history.

These vast coffers of gold create challenges. The recent negotiations between the sport’s peak governing body, the Australian Rugby League Commission, state leagues and the NRL clubs on how to carve up the broadcast fees illustrates the difficulties faced when deciding funding levels between grassroots programs and the elite level. The NRL clubs and state leagues ultimately received a record level of funding, which impacts on the amount of money that finds its way to the grassroots.

Avid fans
There can be no denying that the elite level allows the NRL to grow the funding pie; after all, the fans want to see Johnathan Thurston magically put someone through a gap with deft hands, or James Tedesco’s almost alien-like fleet-footedness, or the gladiatorial battles between Matt Scott and Aaron Woods.

However, the high profile of the elite game has a limited future without the people who watch or participate at a grassroots level.

So, while the participation metrics are encouraging, it’s imperative that the NRL, state leagues and NRL clubs strive to encourage more participation and not lose focus on the grassroots as the epicentre of this great game. That is only possible by ensuring grassroots funding continues to grow.

This article was originally published in the Financial Review BOSS Magazine, February 2017.

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