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?