Category Archives: Investment

Spot learning profile, Westpac Banking Corporation, based on WBC 2018 Annual Report

This is a summary Learning Economy analysis based on key Google searches about the company, and on counts of the number of pages on which the listed keywords appear (page mentions) in the document concerned. Please note that at this point this summary is strictly quantitative and not qualitative in any way. (That is coming.)

Google searches yielded: 

Learning report: no

Learning statement: no

Learning officer: no

Sustainability report: yes

Page mentions found in report of: 

Learning strategy: 0

Transformation: 12 pages.

Agility: 1 pages.

Learning: 2 pages.

Learning and development: 1 pages.

Collaboration: 2 pages.

Knowledge: 7 pages.

Knowledge management: 0

Capability: 9 pages.

Capability development: 0

Continuous improvement: 0

Innovation: 11 pages.

Teamwork: 0

Organisational development: 0

NOTE

Please note the limited context of this report, but consider, in brief summary, that:

• If you are an investor, while you may back past performance, it is the future growth of your shareholdings that will most interest you.

• At a time of massive, fundamental structural change in the digitising economy, you will want to know that the companies you’ve invested in are fit for the future, and are ready and constantly preparing for whatever change comes at them next.

• In the age of pervasive digitisation, there is no possible single array of set and forget positions, and all companies will now be on a constant path of “becoming,” that necessitates persistent learning of how to sustain their capabilities and relevance.

For further information on a possible future form of investor reporting we consider better suited to its times, on which the above is based, please contemplate: “The annual learning economy report shareholders need,” at this link: https://thelearningeconomy.com/the-annual-learning-economy-shareholder-report-we-want-to-see/

Spot learning profile, National Australia Bank, based on NAB 2018 Annual Financial Report and Review

This is a summary Learning Economy analysis based on key Google searches about the company, and on counts of the number of pages on which the listed keywords appear (page mentions) in the document concerned. Please note that at this point this summary is strictly quantitative and not qualitative in any way. (That is coming.)

Google searches yielded: 

Learning report: no

Learning statement: no

Learning officer: no

Sustainability report: yes

Page mentions found in report of: 

Learning strategy: 0

Transformation: 20 pages.

Agility: 1 pages.

Learning: 10 pages.

Learning and development: 0

Collaboration: 2 pages.

Knowledge: 22 pages.

Knowledge management: 0

Capability: 14 pages.

Capability development: 0

Continuous improvement: 1 pages.

Innovation: 12 pages.

Teamwork: 0

Organisational development: 0

 

NOTE

Please note the limited context of this report, but consider, in brief summary, that:

• If you are an investor, while you may back past performance, it is the future growth of your shareholdings that will most interest you.

• At a time of massive, fundamental structural change in the digitising economy, you will want to know that the companies you’ve invested in are fit for the future, and are ready and constantly preparing for whatever change comes at them next.

• In the age of pervasive digitisation, there is no possible single array of set and forget positions, and all companies will now be on a constant path of “becoming,” that necessitates persistent learning of how to sustain their capabilities and relevance.

For further information on a possible future form of investor reporting we consider better suited to its times, on which the above is based, please contemplate: “The annual learning economy report shareholders need,” at this link: https://thelearningeconomy.com/the-annual-learning-economy-shareholder-report-we-want-to-see/

Spot learning profile, ANZ Banking Group, based on ANZ 2018 Annual Report

This is a summary Learning Economy analysis based on key Google searches about the company, and on counts of the number of pages on which the listed keywords appear (page mentions) in the document concerned. Please note that at this point this summary is strictly quantitative and not qualitative in any way. (That is coming.)

Google searches yielded:

Learning report: no

Learning statement: no

Learning officer: no

Sustainability report: yes

Page mentions found in report of:

Learning strategy: 0

Transformation: 8 pages.

Agility: 0

Learning: 0

Learning and development: 0

Collaboration: 2 pages.

Knowledge: 10 pages.

Knowledge management: 0

Capability: 3 pages.

Capability development: 0

Continuous improvement: 0

Innovation: 3 pages.

Teamwork: 0

Organisational development: 0

NOTE

Please note the limited context of this report, but consider, in brief summary, that:

• If you are an investor, while you may back past performance, it is the future growth of your shareholdings that will most interest you.

• At a time of massive, fundamental structural change in the digitising economy, you will want to know that the companies you’ve invested in are fit for the future, and are ready and constantly preparing for whatever change comes at them next.

• In the age of pervasive digitisation, there is no possible single array of set and forget positions, and all companies will now be on a constant path of “becoming,” that necessitates persistent learning of how to sustain their capabilities and relevance.

For further information on a possible future form of investor reporting we consider better suited to its times, on which the above is based, please contemplate: “The annual learning economy report shareholders need,” at this link: https://thelearningeconomy.com/the-annual-learning-economy-shareholder-report-we-want-to-see/

Investor reporting for the age of internet-driven learning and knowledge capitalism

A background for interviews

The flawed nature of modern-day ASX annual investor reporting remains locked in alignment with views of organisational management that are past their prime in adapting to the realities of the learning age’s post-industrial businesses.

These businesses’ underpinning enterprise logic, and that of industrial capitalism, was originally built on structural foundations of bureaucracy and functional hierarchy. 

Based on military precedent, the traditional leadership model for business became that of command and control.

Under this model, power resided with the board and chief executive and devolved downwards through the senior executives and their reporting managers.

It filtered down through the hierarchy to the lowest rungs of the organisational structure, with those at the coal-face charged with interacting with the market, with customers, suppliers and rivals typically being excluded from decision making and strategy setting.

Against this view of the world, in hierarchical organisations, for those armed with it, the need to retain and lock down management control, can present a more powerful need and entrenched mental model than even the requirement that they produce profitable results. 

Moreover, the change it is imposed to counter is not now just quicker but also unpredictable and discontinuous. 

The challenge of an increasingly uncertain future

Insightfully, pre-internet even, in 1991, Charles Handy* contrasted discontinuous and incremental change in the following manner:

Thirty years ago [that company] saw the future as largely predictable, to be planned for and managed. Today they are less certain. Thirty years ago, most people thought that change would mean more of the same, only better. That was incremental change and to be welcomed. Today we know that in many areas of life we cannot guarantee more of the same, be it work or money, peace or freedom, health or happiness, and cannot even predict with confidence what will be happening in our own lives.

All these years on, such discontinuous, constant upheaval is clearly presenting ever greater disturbances for corporations and, as a consequence, on the theoretical frameworks we must apply to understand and operate in today’s organisations.

Moreover, there are those who still perceive digital innovation as a wave, when in reality the ride we are in for is most likely much more disruptive and as wild and capricious as the as yet unexplored edges of the collective commercial human imagination.

The “wave” view of digitisation suggests that once it subsides, everything will resolve to a new and predictable normal. Others, however, ourselves included, view internet-driven digitisation as a tide that is in perpetual and powerful motion, exacerbating precisely the discontinuity of which Handy wrote. 

Through the combination of constant network connections, colossal cloud-propelled computing power, constant data streamed and marshalled by predictive analytics and the endless attraction of apparently infinite investment capital is emerging a new era for business, whose essential quality is of consistent innovation, pervasive data-driven insights and ever-faster cycle times.

As a new commercial force, pervasive digitisation is therefore not a wave that will pass, but a surge of enabled, connected human imagination which is picking up intensity as technology evolves. And, alongside this reality, the definition of managerial work must evolve. 

Like Handy, even 30 years ago, in 1989, Rosabeth Kanter** argued that contemporary managers needed to rethink the ways in which they conceived of managing in the post-industrial era. 

She wrote that:

  • Strategy is no longer the exclusive province of top management and limited to officially sanctioned strategic plans. All organisational participants are now expected to think and act strategically in their day-to-day work.
  • Position within a hierarchy has become a tenuous basis on which to build authority and power. Increasing numbers of organisational participants are expected to be – and expecting to become – empowered and responsible for their work. Moreover, many organisational participants have significant intellectual capital and expert forms of power.
  • A master-servant mentality has little relevance for many management issues that now involve spanning and regulating inter-organisational boundaries, regulating transactions with long-term partners, contract workers and external stakeholders. Collaboration is becoming a new form of control.

As Kanter pointed out, the “distinction between managers and those managed is diminishing”; second, career paths have become “less intelligible”; and, third, “carrot and stick” models of motivation are no longer seen as the way forward. 

Consequently, as the power of hierarchy and command and control structures are undermined by changing conditions and attitudes, managers need to re-evaluate their tool kit of resources for managing.

Efforts to put a lid on this force for change are unlikely ever to work out well for those who attempt to do so.

The reality is of managerial resistance to change

Against this, in established organisational cultures, in denial of the need to change, standard enterprise logic remains organised to reproduce itself at all costs, with executives aiming to protect their salaried self-interest through hierarchical status and position, and by adopting risk-averse and conservative positions and practices.

Where they exercise it, the primary source of effective resistance to change by managers remains the functional hierarchical structure, even when it may no longer make profit-generating, shareholder value-maximising commercial sense to do so.

The consequence is that structural and cultural inhibition of change persists in many organisations.

It is by adhering to established processes, so often undiscussed and beyond discussion, that even when they proclaim themselves to be changing, organisations defy the need for necessary root and branch adaptation to patent emerging circumstance.

Even when the world itself is transforming dramatically beyond the walls of the business, managerial articulation of change may remain rhetorical only. 

In many organisations, such entrenched enterprise logic has become so deeply taken for granted that it is no longer visible. 

And thus, when shared mental models of “how the world works” become embedded, and without curiosity being exercised and with orthodoxies remaining unchallenged, neither managers nor workforces are likely to question assumptions they no longer see.

This is even worse for external investors and owners who see even less.

This legacy model of organisation seemed fixed and eternal until the arrival of the internet and its accompanying technologies enabled the success of completely new and unimagined business disruptors – Amazon, Google, Facebook, Airbnb, Uber and so on – over the past 20 years or so.

Shareholders deserve better

Annual shareholder reporting, taking the unquestioning rearward view of congratulating such old style hierarchical behaviours, is still stuck in a bygone age.

And, just as those legacy structural forms, it too reflects an outmoded backward-looking form of enterprise logic, when change had the appearance that it was just more of the predictable same and an incremental extrapolation of the familiar past that could be controlled.

In spite of the increasing signs that functional hierarchical structures are inhibiting mission-pertinent learning in organisations, this organisational form persists.

Investors simply need to be warned that this thinking is clearly no longer appropriate to the current age.

In the new world of knowledge capitalism, such blockages to learning can not endure without killing the organisation they are designed to protect. In this world, it is the cancer of ignorance that is going to kill any business.

At a time of massive, fundamental, structural change in the digitising economy, any investor will want to know that the companies they have invested in are fit for the future, and are ready and constantly preparing for whatever change comes at them next.

As the world changes unpredictably and discontinuously around them, without a better expression of how companies are preparing for where they are going than of where they have been, investors are at risk of being shortchanged.

Just as the hierarchical structure is a legacy of past times, investors now need to understand how the companies they will invest in are preparing through learning for the structural upheavals and persistent evolution required to compete in the years of full-bore knowledge capitalism ahead.

Except for those that fail, the future for investors really does look nothing like the past.


* Handy C, 1991, ‘The Shamrock Organization’, The Age of Unreason, Century Business, Great Britain, ch. 4, pp. 70– 92.

** Kanter R M, 1989, ‘The new managerial work, Harvard Business Review, vol. 67, no. 6, pp. 85–92.

A request to interview you for this site and as part of a program of continuing research on the necessity for shareholder-focused declarations of organisational learning

Dear Allan

Apologies, as I contacted you via LinkedIn and you replied, it was inappropriate for me to ask you to send me an email address, as even though you know who I am by my LinkedIn profile, I could be anyone wishing in some way to scam you. 

This is not my intention at all, which is why I wanted to post this message here, where nothing is hidden.

To explain, I am of the view that Australian shareholders are in great potential jeopardy and in need of protection as the economy shifts to one that is entirely digital, presenting new and certain impacts of whose potential risk most investors will still simply be unaware.

The scale of the problem makes this an issue of national vulnerability and competitiveness, not least given the consistently growing amount of funds Australia has invested in superannuation.

My aim through this site is to bring to the awareness of all investors, mum-and-dad retail and professional alike, the need to invest only in businesses that have a strategy for learning they can articulate and declare to their shareholders about how they intend to address this unknown future.

Without such conscious and deliberate preparation, businesses’ failure is almost certain, taking their investors’ funds with them.

To this end, I’d like to interview you to seek your views and opinions on the best way of alerting your members to their need to invest only in companies of whose plans and undertakings for this now-certain future they are confident.

In this, I’d like also to seek your views concerning the form and nature of reporting ASX-listed businesses can offer their shareholders to provide them with the comfort they seek that those in which they invest are taking the necessary steps to survive.

My interest in this is not driven solely by pessimism, but also the opposite. This is also a time of great promise and unprecedented opportunity for many businesses able to grasp the power of their digitally capable, enabled employees in harnessing the power and potential of such learning.

To heighten awareness of this future, my first supporter and interviewee on this subject was Robert Hillard, chief strategy and innovation officer of Deloitte.

But neither Robert nor I are alone in our fears or concerns. As this BusinessInsider piece from August, citing the work of Ken Dovey, at the University of Technology in Sydney and his academic partner, and, in turn, Bain and Company partner Laurent-Pierre Baculard and colleagues, says: 

“Many describe digital innovation as a wave, which implies that once it passes, everything will resolve to a new normal. But we see it as a tide that is in constant and powerful flux. Hyperconnectivity; massive, cloud-based computing power; streams of data tamed by predictive analytics—all are colliding with trillions in investment capital to produce a new era for business, characterized by constant innovation, the prevalence of predictive analytics and dramatically accelerating cycle times.” 

The BusinessInsider piece concludes: “That would easily overwhelm a centralised command-and-control business structure, making this kind of changed enterprise logic a must-have for a successful digital transition.”

Having studied similar matter for my own MBA (Technology) from UNSW, this is exactly my preoccupation. My belief is that neither our businesses nor the ways in which they report on their learning to investors are sufficiently set up for this inevitable future, and their shareholders, most likely without having studied this, are also mostly unaware.

However, by applying the right kind of attention to them, we can contribute to the greater chances of survival of the majority of ASX-listed businesses, rather than the few, and it is to this that I’d like to draw your own focus, and to discuss with you, if you are interested.

Thanks for reading this, and I look forward to the prospect of speaking with you.

Kind regards

Graham Lauren
0416 171724
graham@thelearningeconomy.com

Which professional investor in Australian equities wants to stand out by backing pervasive post-Facebook internet social literacy as the management innovation with the greatest power ever to drive value-growing workplace learning and transformation in the third, disruptive, fully networked, digital industrial revolution?

If the headline describes you, we should talk

If you’ve come here by following a link from another web destination, say, Twitter, Facebook or LinkedIn, and this is the first you’ve seen of this site’s work, I should explain my primary aim in this post.

My goal is to point out the opportunity open to an investor both hungry, opportunistic and prudent enough to take money and reputation from those perhaps currently better known, but less deserving of either.

And I apologise, if you subsequently read on and find some of these concepts repeated elsewhere on the site, as they are its themes up to this point.

However, for those with the inclination to capitalise on it, great opportunity now exists for such an investor to claim, in pervasive internet social literacy, its recognition of an emerging, latent management resource with, arguably, unprecedented power to drive workplace transformation for power and profit.

Let me justify that claim.

Where it used to be hard, if not impossible, to capture workplace knowledge, no one now has to be trained to use private workplace social technologies in order to contribute to the intelligence of the business in which they work what they know, believe and have experienced.

Through that universal platform of capability, the power now exists for leaders and managers to gain access to unprecedented depths of hitherto unknown, unreachable and, hence, underused, but now wholly connected, networked intelligence.

This most potent new force is now a management opportunity simply waiting to be exercised in many businesses, as in parallel, we also have in an overwhelming number of them the best private social technologies ever invented for capturing, developing and disseminating knowledge across any organisation, community or network.

Thus can be enabled the potential of distributed minds working collaboratively in unison towards a greater goal, connected at digital-network speeds, learning, self-correcting and rewriting the script as they proceed.

This is now both predictable and inevitable and those best able to manage it are now the businesses we should all know about and be investing in.

What makes this all the more persuasive and powerful is that the newly enabled individual bearing this gift is now also the only kind of employee or customer that any business has.

There will be a lot to be said for, and about, an investment business that gets out ahead by using the business and mainstream media to communicate the message of how it has seen, is on top of, and is the first to be learning and investing deliberately for this change.

And that is my invitation. Step forward, contact me, let’s talk, and I will show you exactly how this capability is enabled in businesses at the individual level.

Then, if you can see the opportunity in what I am saying, we will work on making this work to the benefit of your own company and its reputation, and for each of those in which it invests.

The power of network-driven business learning

Because the encroaching third, fully networked industrial revolution is an era in which no company yet has ever traded, those that do not adapt to its new, digital ways of competing will fail.

Against this unstoppable reality, network-driven “organisational learning” is an irresistible force that will change the world.

It will do this if only because when a commercial organisation’s knowledge is not joined up, but is seen to be in others, companies will quickly leak money, opportunities, people and value for their shareholders.

This is why this mix of technology and technique is so threatening to those businesses which have no agenda, understanding or strategy for how to use it for this purpose.

Yet, the step change in human capability and potential this represents is both obvious, foreseeable and the power of networked learning at speed pretty much a given, even in businesses that haven’t yet figured out their artificial intelligence (AI) strategies.

Organisational learning as strategy

So far, through this site, I’ve been trying to draw attention to two things.

The first is the need for all businesses to adopt strategies to learn in this way, given the ability of the available tools to boost the power of, and to organise, their collective intelligence (CI) in ways never previously possible.

The second is the profound and perverse contrast in an Australian investment community that doesn’t seem yet to get this, to the degree that not one of the ASX-listed financial services organisations we’ve surveyed declares to its investors that it has a “learning strategy” of any kind.

Why a lack of declaration on investor learning matters

I have never met an investor, nor am I one myself, willing to invest in any stock whose management isn’t telling the world how either the business it manages or those in which, in turn, it invests, intends to learn and get smarter.

And if I am to entrust my money to any party in the investment community to invest it for me, that is at the top end of my expectations.

Its annual shareholder report is its self-published communication in which any company is beholden and most likely to put its best foot forward to those who will read it.

If I read one and find no such commitments, I am bound not just to be disappointed, but also never to become an investor in that business.

Yet, I have found no evidence in the most recent implicitly declared learning profiles contained in any of the top 25 Australian Securities Exchange (ASX) Listed Investment Companies (LICs) that reports to shareholders on how they are learning deliberately to make themselves smarter.

You can find the names of these companies and a link to this research beneath at the foot of this post.

Thus, in not reporting on how either its own business, or those of its investments intends to learn to become more intellectually agile, we are witnessing how these LICs may magnify, not mitigate, risk for their shareholders.

If ever there was an opportunity for clear, public, popular marketing differentiation, here it is.

We expect our financial services organisations to lead, not lag, public expectations as to how they will look after our money by becoming ever more intelligent in doing so than we are.

We expect those same institutions to demonstrate how they themselves are future ready, and will only put money into, or lend to, businesses that are also adapting to new and emerging realities.

For such businesses, the third, fully networked industrial revolution should represent an opportunity, not the crisis they appear unwittingly to be heading towards.

Yet, in their reports to shareholders – even as their own teams, to an individual, are entirely themselves socially internet literate – they leave such a gap for a hungry competitor.

They have not seen the possibility that in a digitally connected age, both the possibility of amplifying the intelligence of the human workplace and the entire spectrum of disruptive possibility lie within the possible arc of diverse, individual, internet socially literate human workplace contribution.

Management has a new, different and better tool to play with. And if they have a learning strategy to apply it too, it will propel their business’s competitive advantage and future.

Backing collective intelligence delivers proven benefits

Over recent years, we’ve witnessed internet exercises harness and mobilise human intelligence at large scale in citizen science, with vast numbers of people scanning for new stars.

We’ve seen voluntary human “cognitive surplus” create, in Wikipedia, the world’s most trusted and used encyclopedia.

In business, products such as Google Maps employ the crowdsourced data of thousands to add value.

As an emerging field with huge potential, in any system we care about, it appears that to make the whole system intelligent, you need to combine diverse elements and perspectives.

Digital technologies may be good for observation, in enabling storage and updating a record, and in creating predictive algorithms, but they lack personal experience and perspective and human skills of judgment, wisdom, or for bringing an ethical dimension into decisions.

The combination of the human and machine is key and it may need thoughtful design to reinforce any system’s ultimate intelligence. But, it is completely within the realm of human capability to deliver that within any organisation that decides that learning deliberately to become smarter is simply in its competitive interest.

And that aside, we simply need the businesses we invest and work in locally in Australia just to get smarter, in our own collective interest.

Time to step forward

I want to begin a conversation with a professional investment body willing and interested in taking a public stand to draw to the attention of an interested media the shortcomings of its rivals.

The negligible cost of the modest package of research it may require to achieve this might even be funded willingly by someone else.

But a conversation costs nothing, so if this possible outcome is of interest, contact me now.

Graham Lauren 0416 171724 graham@thelearningeconomy.com

Footnote: The companies in our research

As the benchmark for comparison, the 25 Listed Investment Companies in our survey comprise, in alphabetical order: Absolute Equity Performance Fund Limited (AEG), Acorn Capital Investment Fund Limited (ACQ), Amcil Limited (AMH), Argo Investments (ARG), Arowana Contrarian Value Fund Limited (AWQ), Australian Foundation Investment Company Limited (AFI), Australian United investment Company (AUI), Bailador Technology Investments Limited (BTI), BKI Investment Limited (BKI), Cadence Capital Limited (CDM), Carlton Investments Limited (CIN), Clime Capital Limited (CAM), Concentrated Leaders Fund Limited (CLF), Diversified United Investment Limited (DUI), Djerriwarrh Investments Limited (DJW), Future Generation Investment Fund Limited (FGX), Milton Corporation Limited (MLT), Mirrabooka Investments Limited (MIR), NAOS Small Cap Opportunities Company Limited (NSC), Ophir High Conviction Fund (OPH), Perpetual Equity Investment Company Limited (PIC), Plato Income Maximiser Limited (PL8), WAM Capital Limited (WAM), WAM Leaders Limited (WLE), Whitefield Limited (WHF)

Find our research at: On the basis of its understanding of the Learning Economy, which of these top 25 Australian Listed Investment Companies would you give money to invest for you?

 

Which one of these non-learning Australian Listed Investment Companies’ teams will lose its Learning Economy investors’ money first and fastest?

How well are Australia’s ASX-Listed Investment Companies (LICs) representing the interests of their shareholders in preparing for the certain upheavals of the unfolding third, digital, industrial revolution’s learning economy?

I conducted research to answer this question, based on the published learning undertakings – which we now call declared learning profiles – in the most recent annual reports of the top 25 LICs by capitalisation (according to Morningstar, January 2019).

The premise of this work is straightforward.

To this point, workplace knowledge has been difficult and often impossible to capture, but things have changed, and the means to address many of the unfolding age’s challenges is now already with us, obvious, and staring us in the face.

Post-Facebook, it exists in the pervasive, connected social internet literacy now accessible in every mind in every workplace. No one now has to be trained to use social technologies in order to contribute to workplace intelligence what they know and have experienced.

In parallel with this universal behavioural footprint, we also have in a great number of businesses the best private social technologies ever invented for capturing, developing and disseminating knowledge across any organisation, community or network.

Adding those users’ familiarity with these technologies to the impetus of businesses to get competitively smarter gives managers across a workplace an entirely new resource, capability and opportunity to contend with.

It presents access to unprecedented depths of hitherto unknown, unreachable and, hence, underused, but now wholly connected intelligence.

The coming power of distributed minds working in unison towards a declared greater goal, learning and self-correcting to script as they proceed, at digitally connected network speed, is as predictable as it is inevitable.

This makes network-driven “organisational learning” an unstoppable force that will change the world. It will do so if only because when a commercial organisation’s knowledge is not joined up, but is seen to be in others, companies will quickly leak money and value for their shareholders.

This is why this mix of technology and technique is so threatening to those businesses which have no agenda, understanding or strategy for how to use it for this purpose.

This, however, doesn’t yet appear to factor into the published calculations of those LICs investing in Australian equities, and is therefore is probably not used as a criterion by which their estimation of the value of their investee organisations is calculated, refined or sold to their own shareholders.

Essentially, what investors most need to know is also precisely what these companies are not reporting to shareholders, either in the form or the content of their most recent annual reports.

The fact that not even one of Australia’s top 25 ASX-listed LICs articulates or even mentions the expression “learning strategy” in its most recent annual report, suggests that it neither possesses one itself, nor cares sufficiently to ask such questions about the propensities for learning of the companies in which it invests.

Yet, because as much as investors may back past performance, it is the behaviours and future growth of their shareholdings that will most interest them.

As such, they should be rightly cautious when not being able to articulate a strategy for learning reveals those businesses not to be attempting to master an essential survival skill.

At a time of massive, fundamental and unprecedented structural change in the digitising economy, shareholders will want to know that the companies they have invested in are fit for the future, and are ready and constantly preparing for whatever change comes at them next.

The ability to drive fast organisational learning should be a guiding managerial competency of digitisation among, at minimum, publicly offered, investment-ready companies.

Yet, the top LICs seem to be telling their investors that neither their own businesses nor those companies in which they invest are geared up to learn much from what is so evidently changing around them.

Nor do their reports suggest even an awareness of those changes.

Again, the original story on which it is based is here and some questions appropriate to interrogations of those organisations’ representatives here.

Footnote

The 25 LICs included in this list, in alphabetical order, are: Absolute Equity Performance Fund Limited (AEG), Acorn Capital Investment Fund Limited (ACQ), Amcil Limited (AMH), Argo Investments (ARG), Arowana Contrarian Value Fund Limited (AWQ), Australian Foundation Investment Company Limited (AFI), Australian United investment Company (AUI), Bailador Technology Investments Limited (BTI), BKI Investment Limited (BKI), Cadence Capital Limited (CDM), Carlton Investments Limited (CIN), Clime Capital Limited (CAM), Concentrated Leaders Fund Limited (CLF), Diversified United Investment Limited (DUI), Djerriwarrh Investments Limited (DJW), Future Generation Investment Fund Limited (FGX), Milton Corporation Limited (MLT), Mirrabooka Investments Limited (MIR), NAOS Small Cap Opportunities Company Limited (NSC), Ophir High Conviction Fund (OPH), Perpetual Equity Investment Company Limited (PIC), Plato Income Maximiser Limited (PL8), WAM Capital Limited (WAM), WAM Leaders Limited (WLE), Whitefield Limited (WHF)

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Questions for ASX investment fund leaders: Post-Facebook, it’s time to bring your reporting up to date to meet the future needs of small-scale Australian investors

The reason the investment community in Australia is leaking money, ideas and innovation opportunity is simple, and I would like someone to prove to me that it isn’t.

It is because to date in a post-Facebook, pervasively socially internet literate world, it is not obvious that this community yet understands that world sufficiently to lead its customers into it.

In its reporting to shareholders, it is also proving itself slow to declare it is adopting the practices needed to stay relevant against the certain upheavals of the coming, third, wholly digital, industrial revolution.

In this new world, new and disruptive ideas will come and go at a rate we currently find hard to imagine.

We can perceive this reporting shortcoming clearly in the behaviours even of the Australian Securities Exchange’s 25 biggest and most prominent Listed Investment Companies (LICs).

As I explained in the preceding, related post, each betrays its apparent ignorance of the need for either its own business, or those in which it invests, to demonstrate and report unambiguously on their respective preparations for the coming era through their “organisational learning” undertakings. (While obviously in some ways related, organisational learning is of far greater concern and quite separate from training, as it addresses the continuing future relevance of a business.)

Notable as they are, this small group of companies is surely just a microcosm of its industry, but, as such, contains useful specimens to hold up for examination.

This post aims to point out for the benefit of shareholders and media some possible issues of concern for non-professional investors (that is, those not paid a salary by others for their deliberations or guidance) when investing in a learning economy.

It highlights also the pressures these interested individuals can bring to bear on such professional investment institutions to drive change in those businesses’ preparations for that world which is certainly coming, but in which no one has yet traded.

In this world, companies taking money from investors owe them a learning duty of care as their future competitor, or that of their investee, is likely not the one they have, or may even have seen, today.

Thus, being seen to demonstrate how they will set a symbolic benchmark by adopting a learning mission that gets productively the most and best out of every mind they employ, and invest in, might be one necessary standard such investors must bear for future scrutiny and investor reassurance.

And, as we wrote in that piece, the pressures the coming wave of fully digitised, network-driven organisational learning will unleash will change the investment world.

It will do so, because, at minimum, when knowledge is not joined up in their own businesses, but it is seen to be in those of competitors, those unable to demonstrate this ability convincingly will quickly leak money and value for their shareholders.

This is why the mix of technology and technique perpetrators engage will be so threatening to those businesses which have no agenda, understanding or strategy for how to use it for this purpose.

If I were a shareholder in these investment institutions, or a journalist employed to hold them to account as their proxy for any investment publication, I would have many questions of the institutions’ representatives.

This post aims to illustrate for shareholders putting their money into any fund investing in Australian equities some needed changes in the future reporting and behavioural practices of those running them.

As such, if you are an interested investor, some questions follow to arm you for possible use at your next shareholders’ meeting.

It is also a tip sheet for those who’ve never before covered organisational learning in their business reporting as to items they might consider for future investment-focused company interrogations.

This list could, of course, never be comprehensive, just indicative, and there are two layers of questioning.

The first is for the investment institutions themselves, about their businesses, their employees and how they plan to equip them for this learning-intensive, networked future.

The second is for their investees, or the portfolios of companies into which those professionals put your money.

After all, if they can’t report on ways in which their own company is learning, how can customers be sure it is asking the right questions of those into which it is putting their money?

Many may indeed view the learning created and driven by this second layer as the more important, as this is where the real work is done across the economy and its value created.

If these investee companies don’t work and are not ready for investment with their own deliberate learning strategies in place, the whole system may not exactly come crashing down, but is at least likely to move much more slowly, and become less internationally attractive to investment.

This is of national concern.

All business media should, then, be interested in these questions because of the importance these publicly listed companies’ future health and successful adaptation to a learning economy portends for the whole economy.

Questions for those running LICs and professional investment institutions

  • As a listed entity, why does your company not report in its annual report of either its commitment to, or preparation for, network-driven learning, or of its internal knowledge-creation strategies?
  • What is the future for understanding digitally-driven organisational learning in your business, and how will we be reassured that it and its team has developed the required degree of competence?
  • What is the future for digitally-driven organisational learning in the businesses in which you invest?
  • What form(s) do you think future reporting on organisational learning should take?
  • What content do you believe such reporting should embrace to reassure us that your business’s team is asking the right questions?
  • What roles should an installed senior learning officer perform in a business in the third, digital industrial revolution, and for what reasons do you give your answer?
  • What are the essential qualifications of someone in such a senior learning-executive role?
  • As your organisation doesn’t publish a sustainability report, how important is sustainability reporting, what more should we expect from it, and why?
  • What, specifically, do you think should change in sustainability reporting to make it more relevant to your own business and valuable to its investors?

Questions for those running investee companies

  • What should be the expectations of your investors and shareholders of your team’s inventiveness and ability to learn and evolve in satisfying their interests?
  • What should be the expectations of your investors and shareholders of your business’s managers’ ability to learn how best to invest in attracting future talent?

Questions for those running both investor and investee companies

  • To what degree do you agree or disagree with the following, and why do you give that response to each of these points?
  • Network-driven organisational learning is a force that will change the world, because when knowledge is not joined up, companies leak money:
  • In not making the most of the intelligence they contain
  • In running sub-optimal practices and processes
  • By building sub-optimal, ignorant workplace cultures
  • In marketing opportunities lost to others
  • In missing out on the most self-motivated learning staff
  • In lost opportunities for innovation and NPD
  • In lost opportunities for favourable publicity and media attention
  • In lost reputational advantage for advances on sustainability
  • In lost opportunities for integration across divisions and successful M&A activity
  • By failing to sense the future
  • By failing to create new business models
  • By failing to capture and to feed to leaders, investors and owners key information on which they can make better decisions

  • To what degree do the following objectives guide learning within your business, and can you give illustrations?
  • Building an inquisitive, learning-driven management culture that senses and adapts to the future
  • Sensitising the business for strategic agility by understanding better the detail of the constantly shifting environment in which it trades
  • Driving objective-led learning across your business’s innovation, NPD, new value-creating and evolving value-chain processes
  • Creating, attracting and developing a smarter workforce

  • How often do you ask the following questions of those across your workplace?
  • What must we do to become the business that will put ours out of business?
  • What is the business that looks most likely to do that at the moment, and in what ways, and why?
  • On what assumptions is our business currently built, and which of these are most vulnerable to change?
  • Every business faces external forces that are disruptive or threatening, so what are those on which we should focus most clearly?
  • What will unfold as the most critical success factors in our business’s future survival?
  • In what specific ways is our business experiencing change in:
    • Consumer preferences?
    • Evolving or emerging distribution channels?
    • New competitors or forms of competition?
    • Access to factors such as materials, the right skills or people?

As I wrote, this list could never be comprehensive. But, as a concerned shareholder, you might take seriously any business leader who can answer these questions to your satisfaction.

But, what else might you add to them yourself as a priority?

ENDS