Australian investors have an unprecedented problem and my aim is to help them solve it.
The audience I address here is highly financially literate and interested in the direction in which its shareholdings are travelling and in ensuring it is backing the right horse(s).
If you are an investor, you may previously and perfectly justifiably have invested in proven past performance.
But now, when we are on the lip of a fully blown digital economy, it is the future learning-driven value growth of your shareholdings that will most interest you.
The learning capacities which companies exercise will become the single biggest determinant of any business’s future value and its ability to secure investment capital and borrowing.
So, what investors in Australian equities need most to understand is how those companies are preparing for a future so different to their past, that it is, by definition, beyond their imagination.
This is an age in which disruptive, apparently come-from-nowhere digital competitors such as Facebook, Google, Amazon, Uber and Airbnb are just the beginning.
Businesses that don’t find purposeful methods of learning to drive their transformations for this third, fully networked, industrial revolution’s digital ways of competing will fail.
Listed businesses without a focused digital learning platform will be dead in the water.
And certainly, no shareholder will be able to afford to invest in any company she or he believes isn’t getting smarter in adjusting to the changes this will demand.
So, to give every investor some of the reassurance they need, I aim to secure the minimal funding needed to establish a simple public record of the corporate undertakings on the learning strategy of every ASX-listed Australian company.
As I don’t yet know these people, but at least one interested reader will, the question I most want answered is, who will help me achieve this?
Without guidance, Australian investors are vulnerable as never before
Presently, the $1.9 trillion Australian superannuation industry appears to invest in companies of whose learning it knows little to nothing.
As long as preparations in and for organisational learning remain unreported, Australian investors have no independent means of understanding how to use it as a barometer of what is a good investment and what isn’t.
The scale of the problem of not knowing who to trust to invest in is especially acute in Australia for those dependent on their superannuation and private shareholdings.
The Association of Independent Retirees (at August 2019) reports there are more than 1.9 million Australians aged 65 years and over who in part or fully self-fund their retirement.
But, the 2017 edition of the ASX Australian Investor Study, prepared by Deloitte Access Economics for the Australian Securities Exchange, says that measure excludes:
1 The 60 per cent of Australian adults, or 11.2 million people, who hold investments outside of their institutional superannuation fund.
2 The 37 per cent of Australian adults, or 6.9 million people, who hold investments that are available through a financial exchange.
3 The growing numbers of 18-24 year olds investing outside their institutional superannuation funds, whose proportion has doubled from 10 per cent to 20 per cent over the last five years.
When they know so little of how Australian companies are preparing for the future, ASX investors must make themselves ever more aware of the factors increasing their risk.
The ASX Australian Investor Study wrote that because of decisions by British voters to leave the European Union and by US voters to elect Donald Trump, geopolitical developments and risk management [were becoming] important considerations for all investors, increasing the importance of having an appropriately diversified portfolio.
The Learning Economy’s exploration to date, largely conducted among companies making up the nation’s critical financial services sector, hasn’t uncovered even a single company on the ASX declaring it even has a learning strategy.
Every business needs learning beyond a single mind
Currently, the learning ASX-listed organisations undertake is not used well to drive share-price valuation and growth.
Organisational learning remains widely misunderstood and confused with training.
Training imbues identified individuals with new skills.
In the transition to a fully digitally networked economy, however, organisational learning must prepare a business to address the unknowns of its future.
It is a job beyond the capabilities of any single mind, or, likely, any long-established, change-resistant leadership group.
To do this, businesses must apply the collective intelligence of individuals across a workplace, using the available technologies of collaboration to stimulate fresh thinking by tapping their diverse knowledge and insights.
The addressable learning market is every business and every customer
Australia’s economy is currently underperforming because its ASX-listed businesses are sitting on an asset whose potential few if any of its incumbents have yet seen exists.
This claim may initially sound like hyperbole, but post-Facebook, every organisation now has access to the most powerful, digitally connected management force for human-centred business change the world has yet seen.
The Learning Economy describes this as comprehensive internet social literacy.
It used to be impossible to capture and transform into usable information the knowledge and insights of those across a workplace, a network or community.
However, everybody now knows how to use social media to write online, upload and share material and to make comments about those items uploaded by others.
Because its output is written and can be edited, this literacy can be used to investigate and record what is known, and direct what can and must be learned.
Offering the control to focus employee awareness and creativity, workplace internet social literacy contains an unprecedented intellectual energy simply waiting to be activated in a business’s favour.
And, available to every organisation are also the mirroring internal, Facebook-like private technologies required to transform any business’s knowledge into management action.
Thus, the bits of the puzzle and the human resources already exist and just need to be brought coherently together.
Yet, that energy is not yet showing up as increased wealth in the pockets of Australian investors, retirees and shareholders.
We aim to turn the value of this newly magnified capacity for workplace knowledge sharing and creation to their benefit, and to that of the Australian economy.
The plan is big but begins modestly, at low risk
As we look into the future, we need an index tracking undertakings on learning and innovation to guide investors.
From a deliberately modest beginning, I aim ultimately to build this index of corporate learning into a rolling, dynamic, internet-social market report.
Its reporting will aim to apply a better-focused investor blowtorch to companies, rating the plausibility of corporate response to such enquiry to reflect and guide shareholder sentiment.
To begin with, however, the support I seek starts with that sufficient to sustain the efforts of one person – initially, myself – in being able to dedicate sufficient continuous hours to build and demonstrate a (see Wikipedia definition) “minimum viable product” (MVP).
This MVP will comprise a handcrafted index of what those listed companies declare in their annual reports. (An early working model can be found here.)
These will be augmented journalistically, where they are willing, by interviews conducted with the chief executive or investor relations representative. (Willingness or otherwise to talk on this subject will tell investors its own story.)
Using this to engage with a shareholder audience, I will report what I find in The Learning Economy newsletter.
In parallel, I wish to find other market experts to work with in creating the user interfaces, data management and reporting mechanisms to develop this index’s next stage.
My bet is there is at least one fund manager both able to understand and with an interest in using the data this index will generate for promotional advantage.
It may also benefit from understanding how to make superior investments by learning how to shape better informed questions about the steps companies are taking to get smarter.
Likewise, a similarly skilled investment team working for an industry superannuation fund could benefit in similar ways.
Either of such parties certainly stands to learn a lot by getting behind this initiative.
So, what is a learning strategy, and why does it matter to every ASX-listed company?
Whatever the organisation, as it is taught in business school, the management of strategy aims to understand and define answers to four fundamental questions.
- Where are we now?
- Where do we want or need to go?
- How will we get there?
- What must we measure to ensure we stay on track to get there?
A learning strategy is therefore a platform for growing organisational capability and resilience, a means of keeping a company on its declared path to achieve a series of defined goals.
It runs in parallel with initiatives supporting the attainment of those other goals the organisation wishes to achieve in order to deliver the vision for which it was created.
In this context, we believe that integral to any learning strategy will be the sharing of knowledge within the business because many, if not most, groups learn better when information is shared.
The attainment of its incremental learning targets will be accelerated by the input of many minds across its ranks. Some will be stimulated sufficiently to create and bring their own modern, independent, internet-enabled learning to this mix.
Indeed, many will be attracted to join a business by the reputation a company builds for its efforts to learn and to engage those in its workplace to contribute to it.
Even were its components declared, any learning strategy will be competitively defensible, inimitable and unique to the sum of individuals and perspectives engaged.
And this is precisely where investigating and tapping into the widest available range of world views will benefit the strategy makers formulating the business’s direction.
Growing smarter businesses is in your own and the national interest
Building smarter companies is undoubtedly both in the shareholders’ interest, but also that of the nation, as we should aim to place Australia among the fastest learning corporate economies in the world.
Achieving this will determine everyone’s gains in both economic well-being and quality of life by leading to the creation of better products and services.
In Australia, we have both the intellectual resources and even the best locally grown technologies to export (in Atlassian’s suite of tools); they just need to be brought together for this purpose.
In delivering these benefits, understanding how businesses are learning will make Australia both more internationally attractive to investment, and also create a better, smarter, targeted, collaborative platform for national exports and exporters.
In all senses, representing the best defensive and offensive strategies, building better learning is good for the companies concerned and all who work in them.
It will deliver academic benefits, giving the country’s universities and business schools a new subject to teach, which will enable its academic institutions to become among the world’s best and our academics among the most respected in this field.
Banks and insurers can make a benefit of this by ensuring they both lend to and insure better, less risky business customers.
I want to help you grow your wealth, so who will talk with me?
Whether you invest professionally or have an interest in some other capacity, I want to do something that can help you become a better investor, so could we have a discussion about how we can help each other? If so, please contact me.
Otherwise, thanks for reading, anyway.
The value proposition for organisational learning: Why every business will want to manage its knowledge better
An effective strategy for managing its collective knowledge will ensure a business, at minimum:
- Makes the most of the intelligence it contains.
- Gets every mind in the business focused on the future more competitively than rivals.
- Defines better shared goals, determined by cultivating the narrative of what it learns and the new knowledge it creates from that learning.
- Is sensitive and agile because it understands better the details of the constantly shifting competitive environment in which it trades.
- Makes a strength of adapting to whatever the future throws at it by bringing order to the chaos of what it knows, can detect and can learn.
- Is able to build better practices and processes.
- Strengthens its workplace cultures.
- Is more nimble in seizing marketing opportunities otherwise lost to others.
- Attracts and retains the most self-motivated learning staff.
- Is better able to iterate, conceive, create and design new business models.
- Makes finding ways to stimulate creativity a purpose across all dimensions of its activity.
- Increases its base of ideas to give it a greater range of strategic choices.
- Captures more opportunities for innovation and NPD.
- Wins opportunities for favourable publicity and media attention.
- Builds reputational advantage for advances on sustainability.
- Improves integration across divisions post merger and acquisition activity.
- Builds superior ways of anticipating the future.
- Feeds to leaders, investors and owners key information on which they can make better decisions.
- Drives superior, objective-led learning across its value-creation and value-delivery processes.
- Becomes infinitely better at managing its enterprise risk, knowing its best defence is always found in a mix of perspectives, awareness, experience, knowledge and communication.
- Is better equipped to gather expertise and call on knowledge to report for purposes of compliance.
- Is more greatly valued by investors and shareholders, attracted by its mission and strategy to learn and improve.
When writing for professional purposes, every writer needs a second reader, and I extend my great thanks for reading and commenting on preceding drafts of this document to my very good friend, Jennie McLachlan, whose input has proved invaluable. So, having said that, I now have to own any howlers readers may find here, and if you do, I’d be really grateful if you’d be kind enough to let me know if and where you come across them. Thanks.