Insight from outside delivers top team learning

AUTHOR: Deborah Tarrant   DATE: 01.05.05   ISSUE 1, 2005

Take the case of Insurance Australia Group (IAG) and its transformation from an organisation with 3,000 employees in Australian operations and two key product lines in 2001 to today’s business with 12,000 employees, operating in every class of insurance Australia-wide, in New Zealand, China and Thailand.

Participants tap into latest management thinking and research from leading overseas and AGSM educators

Illustration: Gregory Baldwin

With IAG’s business moving so fast, it is not always possible to take people out of their roles and send them offshore for long periods of time. Yet, as an organisation that recruits the best and demands high performance from its managers, the issue of how to stimulate ideas for growth and prepare them for “the next stretch” by learning from the world’s top strategic thinkers is constantly pressing, says Jacki Johnson, IAG’s Head of Organisational Effectiveness.

“Our business is growing very rapidly and we aspire to be global,” explains Johnson. “The importance of having ready access to the world’s best management educators is vital for us.”

The insurance group is one of a growing number of organisations, including Telstra, NAB, OneSteel, CSR, and CSL regularly sending teams of business leaders to AGSM’s Consortium programs to learn from management educators from some of the world’s top business schools, such as Harvard, INSEAD and London Business School, in combination with AGSM faculty.

A Consortium is in an intensive weeklong learning experience for teams of senior executives from some of Australia’s leading businesses.

“It combines the best of all the business schools – and it’s short and sharp,” insists IAG’s Johnson, summarising the program’s immediate appeal.

The Consortium program is commonly used by Top 100 companies to develop high potential general managers or to "refresh" other executives

Consortium programs were first introduced four years ago and have been honed over that time to stay relevant to the changing business environment and trends, and to meet the specific needs of the participants and their organisations, according to AGSM’s Director of Executive Programs, John Urbano.

“To compete in a global world, Australian executives need to learn from the best and have the opportunity to apply that theoretical learning in action,” says Urbano. Consortium programs deliver on both, and include the rare opportunity to learn from and network with leaders from other non-competing organisations who face similar challenges.

While the theme of ‘Driving Corporate Growth’ explores issues common to all organisations, each program is structured with a degree of flexibility, to allow the content to be influenced by participating companies.

To compete in a global world, Australian executives need to learn from the best and have the opportunity to apply that theoretical learning in action

Photo: John Urbano

Typically, six organisations send teams of six people drawn from different functional areas. Participants work together in a team of colleagues from their company on a pre-determined strategic growth project.

Through the week they tap into latest management thinking and research from visiting and AGSM educators, along with the experience of senior executives from other industries.

Networking opportunities are presented in functions, such as dinners where industry chiefs are invited to attend and engage in question-and-answer dialogue.

Participants work together in a team of colleagues from their company on a pre-determined strategic growth project

Many Consortium teams present their new ideas and strategies at board level after the course, while others – overseen by an internal sponsor – will move straight to implementation. The program includes a follow-up day with AGSM experts to review the practical learnings.

Cross-functional teams in action

Clear benefits come from the opportunity to bring together individuals from different parts of a large organisation to think, plan and work strategically as a group. IAG’s Johnson says sending a cross-functional group to learn and work as a team breaks down silos and promotes an ongoing understanding of other parts of the business, as communication among team members tends to continue after the program has ended.

The chance to work with team members from other CSR product groups in the Consortium environment is stimulating and conducive to innovation, reports Jeff Wilcox, General Manager Insulation Asia for CSR, a participant in a recent program. While the experts’ case studies delivered insights, a positive from the program for Wilcox was the opportunity to work together on a real project and hear the opinions of people from other parts of the business.

Benefits derive from the opportunity to bring together individuals from different parts of a large organisation to think, plan and work strategically

A team of six from CSR worked on the company’s growth strategy for China where it is currently the market leader in industrial insulation. A cross-functional team from different CSR business units explored ways to protect CSR’s growth strategy into the future. “The group shifted its focus during the week to look at adjacent opportunities rather than concentrating on one particular course of action,” says Wilcox. “We also considered significant tipping points to future growth into residential markets.”

Plenty of sparks for their strategic thinking came from the international educators. Professor Chris Bartlett of Harvard Business School delivered a case study examining some of the key drivers that have made General Electric one of the world’s most successful companies. “From this example we were able to examine our own internal capabilities, the enablers to our growth,” says Wilcox. INSEAD’s Professor Peter Williamson who has been working as a consultant to multinationals in China provided “exceptional” firsthand experience of dealing in this fast-emerging market.

The upshot, since the weeklong residential concluded, is that CSR’s strategy has slightly shifted direction, reports Wilcox.

The insight of others

However, it’s the broadening perspectives of other participants, as well as the educators, which has proved particularly appealing for Telstra, one of the organisations that has been part of the program since its inception. In a corporation of 42,000 employees, it’s technically possible for a senior manager to have an entire career within Telstra, thereby missing the experience of seeing other companies in operation, explains the telecommunications giant’s General Manager of Leadership, Performance and Development, Alan Bedford.

Every company is facing the growth challenge and telecommunications is, arguably, the fastest changing industry, says Bedford. “There has been the shift from monopoly to competition, our market and customers have changed, along with the way Telstra is structured… through the Consortium programs, our teams have been able to see that other companies have similar issues and can offer concepts and approaches which may be relevant,” he says. This aspect of the program sets it apart from other executive development opportunities, he believes.

It was this interactivity beyond the organisation that proved significant for Telstra’s Managing Director Voice Solutions and Data, Louis Dupe, as he worked within a team on a strategy for developing new revenue streams for Telstra from IP telephony in the business and government market. “You can learn a lot bouncing ideas off others from a variety of industry sectors who have different, but similar challenges,” says Dupe. “Other participating companies looked at Telstra from a customer perspective, so they were able to give us an honest market appraisal on our strategy. We could test it, kick it around. It was feedback that resonated.”

the sharing of ideas between organisations eliminates group think which can inhibit the effectiveness of teams

Dupe’s strategy from his Consortium participation, which involved assessing capabilities and capability gaps in IP telephony and seeking partnerships to fill these, is now in execution phase. “We spent a whole day on execution at the Consortium and lot of what came out is being used in practice. It’s a real live strategy which we’re probably doing better than we would have on our own,” he says.

Likewise, IAG’s Johnson says the insurance group’s Consortium teams have learned from sharing ideas with other market leaders who are grappling with the challenge of how to keep growing. Keeping the program “pure”, without competing players, is vital for participants to feel they can talk openly and use the other groups as sounding boards for IAG strategy.

Beyond this, say Consortium organisers, the sharing of ideas between organisations eliminates ‘group think’ which can inhibit the effectiveness of teams.

Making it fit

The ability to influence the content of an executive education program is unusual, and is sighted by participating organisations as a major factor in choosing the Consortium format as a means of refining executive talent. “Like business, the program adapts and evolves, which is healthy,” says Telstra’s Bedford.

The flexibility of the program is important for a company in the development of already high-level performers. “Many of our people already have MBAs and other post-graduate degrees and they like self-directed learning,” says IAG’s Johnson. “It’s important they are learning with people who are speaking the same language and at the same level.” Within the group, she emphasises the value of this type of development for those in shared services as well as frontline managers.

AGSM’s Urbano says the program is commonly used by Top 100 companies to develop high potential general managers or to “refresh” other executives.

In choosing participants, Telstra uses a talent management system to select the direct reports of managing directors,“people who are in strategic management roles for the first time,” according to Bedford.

The flexibility of the program is important for a company in the development of already high-level performers

At IAG, the participants are drawn from a talent pool of 48 direct reports to eight senior executives. Selection is made by the senior executives and CEO Michael Hawker. Two of the senior executives take direct responsibility as the ‘sponsor’, or mentor, for the group who work on a project that, invariably, will be implemented, says Johnson. A recent case involved developing a strategy for organic growth of IAG, a company which to date has grown substantially through acquisition, without detracting from its core business. Internal mentoring is an important part of translating the team’s learning into reality for IAG.

The growth of the Consortium program is, perhaps, a story in itself. Initially, it was an annual event, but the level of interest in the programs – with seven to be held in 2005 – reflects their relevance and uniqueness, says Urbano. “We’re consistently working with the clients to make them better, and it shows everytime.”

Certain core elements, such as finance and strategic drivers, remain constant to the program but around 20 percent of every Consortium is different. It’s a new way of developing executives which reportedly works.

Urbano reports: “Feedback about the program is telling us that quite a number of participants have been promoted after taking part in a Consortium - their organisations have directly attributed participants’ increased abilities to the new learnings gained at AGSM.”