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.
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)