Image of Susan Lloyd-Hurwitz

Susan Lloyd-Hurwitz

Chief Executive Officer & Managing Director (CEO/MD)

Susan Lloyd-Hurwitz was appointed Chief Executive Officer & Managing Director in August 2012 and a Director of Mirvac Board in November 2012.

Why we encourage our people to work harder at life: the game changer that helped turn around Mirvac

7th March 2019

Highly engaged people are instinctive ambassadors and a trusted source, and they are willing to go above and beyond what’s required – not because you’ve told them to, but because they want to.

We are living in an age where the revolution in customer service has brought food and product to our door, given us our own drivers and meant we no longer have to get off the sofa in order to rent a movie.

In every interaction the customer is the star – they expect the VIP treatment. They deserve it.

This is something we are seeing increasingly in retail where customer service is being reimagined through online and offline, or as our Head of Retail Susan MacDonald said recently; we are seeing the emersion of a new ecosystem which puts the customer in the centre in a way we haven’t seen before.

Of course, treating the customer well has always been a competitive advantage for business, it is just that the efficiency of technology coupled with the entitlement of youth (I say that with great affection as the mother of three teenagers) has significantly upped the game.

The pursuit of the satisfied customer as the unpaid advocate can be one of a company’s biggest successes. But at the same time, don’t overlook the true believers you have at your fingertips – your employees.

One thing stood between success and failure

Over the last seven years Mirvac has undergone a significant transformation. Between 2013 and now, earnings and net tangible assets are both up almost 50%, distributions have grown at 5% per annum and we increased our active Return on Invested Capital from below 10% to 18%.

But, amongst all the financial progress, through the execution of our strategy driven by our purpose to Reimagine Urban Life, as we have shed assets, acquired others and built still more, there is one lesson that stands out to me as the difference that made the difference.

It was the genuine recognition that our biggest asset is our people.

That probably sounds like a platitude you have heard before, one that every company declares, and it is true that staff engagement often falls into that bucket of box ticking.

There is plenty of academic research that points to the opposite: high sustained staff engagement is not corporate spin or fluffy feel-good stuff, it is in fact significantly correlated with high performance. Companies with high employee engagement have on average three times higher profit margin, 60% fewer accidents, 6.5 fewer days per employee each year lost due to absenteeism and 41% lower staff turnover.

Highly engaged people are instinctive ambassadors and a trusted source, and they are willing to go above and beyond what’s required – not because you’ve told them to, but because they want to.

With good staff engagement you have greater retention, you have interested and passionate people and you have a workplace where everyone is committed to their jobs and to the overall purpose.

However, despite the obvious wins that can come from having engaged employees, it’s easy for business to get fixated solely on profits, to focus on the ’what’ at the expense of the ‘why’ and the ‘how’.

People are more than just employees – they have lives and families and friends and exercise routines and social lives. They carry burdens not necessarily visible – domestic violence, relationship breakdowns, physical and mental health challenges, loneliness, and financial stress. Ignoring the humanity of people with all the vulnerabilities that they bring can have a devastating effect on business.

There is one lesson that stands out to me as the difference that made the difference

How do you take employee engagement from 37% to 90%?

When I arrived at Mirvac in 2012, it was a less than positive environment. At its lowest, staff engagement had dropped to 37%.

Now, our employee engagement score is 90%, which is three points above the Global High Performing Norm and 10 points above the Australian National Norm, as defined by our survey provider.

That means we are now one of the top performing companies in the world in terms of employee engagement.

How did this happen?

It wasn’t by accident and it wasn’t overnight. There was quite a bit of trial and error along the way.

But, we did put in place a deliberate and purpose driven strategy that continues to pay dividends.

There were a number of important findings from our 2013 engagement survey.

While overall engagement was low, there were pockets of strong engagement, and these pockets all had one thing in common: a good people manager. So, we set about developing consistently good people management practices across the organisation. What we did specifically to grow our people management is a post for another day.

In each subsequent survey we learnt more and more about what drives higher engagement: clearer development opportunities and career pathways, less cumbersome systems and processes and so on. Fundamentally, we set about changing the way we work and this changed the trajectory of our company. But there was one thing left to do.

We are now one of the top performing companies in the world in terms of employee engagement

Why flexibility was key to change

Australia’s current construct of work has its roots in the industrial revolution. You went to ‘work’ for a set time (usually a very long time), and then you went ‘home’. You clocked in when you arrived at work and were finished once you clocked off.

Now the lines between work and ‘not work’ are – for better or worse – intertwined, and many of us ‘punch in’ the minute we pick up our phones in the morning. We live inter-connected lives.

While the way we work has changed, so has our family structure; more women are working full-time, children stay in education and at home for longer and older parents need greater care.

Our engagement surveys gave us the data to see that flexibility was key to changing our work culture. It was the difference we needed to move the dial.
But implementing it was another thing entirely.

At the time there was an assumption that flexible working was only for mothers, and if used, would immediately consign the woman to the ‘mother track’, which was seen to come with lower pay, and fewer advancement opportunities.

We could roll out all the flexible working policies we liked – none of it would matter unless we started changing hearts and minds.

We decided the best way to do this was to start at the pointy end – construction - where working flexibly was considered an impossible task.

So, in 2013 we, along with Telstra and Corrs, signed up for a program conducted by Workplace Gender Equality Agency called ‘Equilibrium Man.’ The series of short documentaries, made for the internet, explored the journey of five men starting to work flexibly, and their experiences, along with the experiences of their families and their work teams.

There have been a few times in my career where people have looked at me like I am crazy. This was one of them. Not only were we asking these men to completely change the way they worked – we also wanted them to do it in front of a camera. Who on earth would sign up for that?

Luckily, quite a few Mirvac men thought this was a great idea and we selected two of them: a site foreman from our Harold Park development in Sydney who wanted to break the cycle of absentee fathers (his father had also worked in construction) and a development manager from Melbourne, who was also a beach volleyballer who aspired to make the Australian Olympic team. And we made a series of 5 minute documentaries. They are very moving - and although we didn’t get the external reach we wanted, what these documentaries did do was completely change the conversation inside Mirvac about flexibility. Flexible working was no longer just for working mothers. It was going mainstream.

Having changed the conversation, we implemented a Flexibility Charter and provided managers with training about how to have discussions around output, flexibility, team equity, trust, responsibility and accountability. One memorable training event included some actors role-playing a manager and their direct report discussing how flexible working could work in their team. It was highly effective and also incredibly humorous as we stumbled our way through learning how to have these conversations.

But a Flexibility Charter and training weren’t enough.

There is no point telling your people they can work anywhere and at any time if all the tools they need are at the office. So, we rolled out wifi, laptops and mobile phones and made sure everyone could access all the systems they need from where ever they were; whether it’s in an office, interstate, one of our shopping centre management offices, in a site shed, in an airport, or in your back garden.

Still, again, it wasn’t enough. Changing a culture that has been embedded over decades, and across society, was no small feat and it was the next step that was the game changer.

We could roll out all the flexible working policies we liked – none of it would matter unless we started changing hearts and minds

The Simplest Thing can shift your work/life balance

My Simple Thing is exactly as it sounds; one of the simplest programs you’ve ever heard of. It encourages employees to think about one small, achievable change they can make in their weekly work practice that will enhance their work/life quality. And then to work out how to make that work for themselves and their teams.

This is how we make that happen: A team sits down, and each person shares the one thing that will make their working week better. The team agrees (together) on every person’s simple thing and then agrees on how to make those simple things possible, maybe by covering for each other, or rearranging schedules. But always by giving permission.

It might be coaching your daughter’s soccer team on Wednesday afternoon, it might be taking your Dad to chemo, it might be being on time for that yoga class. There is no judgement. The important thing is that it’s public and agreed as a team which takes away the guilt and jealously and creates an even playing field. It normalises a new way of working. It says; ‘we care about what you achieve and how you go about achieving it, and we acknowledge that you have a richer life than just your work life’.

Everybody is encouraged to do this – from the top down. For me it’s doing pilates training twice a week during traditional ‘working hours’, for Christopher Thompsett, our Investor Relations intern, it is leaving early twice a week to get to cricket training on time. Chris Akayan, our Head of Culture & Reputation, takes his sons out to breakfast before school once a week (which, he says, is getting to be an expensive exercise). A couple of site foremen worked out how they could change the way they work on site and cover for each other on Saturdays so they each now only have to work every other Saturday – freeing up time to cheer on their children at Saturday sport.

Treating our staff like adults and respecting their decision to control how, when and where they deliver what is expected of them has been hugely positive for engagement.

Discretionary effort goes up (at Mirvac 95% of people say they are willing to go above and beyond their roles to help make us successful) and all the benefits of sustained staff engagement start to flow. Can you imagine the productivity uplift of that committed energy?

It has also been a great talent attractor. We run a new starter orientation once a month and we ask people why they have joined Mirvac. The number one answer has gone from something along the lines of ‘great projects to work on’ to ‘because you guys work differently and I want to be a part of it.’ (We still do work on great projects)

Watch your eyebrow raising

Of course, staff engagement is more than flexibility. We know that additional policies and practices are also key. Generous 20 weeks paid parental leave policies, help for those suffering domestic violence, maintaining a diverse and inclusive organisation where it is safe to speak and unlimited paid volunteer leave are about enhancing our people’s lives across all the boundaries of work and home.

But none of it would matter if the subtle signals from senior leaders told quite a different story. Jokes or raised eyebrows when you left to coach that soccer team, or if the team culture boasted about ongoing brutal hours, or if there was a subtle kudos to being the last to leave the office – these are things that destroy culture. If people working flexibly routinely received lower performance scores and pay increases, if you never heard your leader say ‘I’m working from home tomorrow’ - all of the official programmes and policies would be for nought.

At Mirvac 75% of our employees now have some sort of flexible arrangement in place – compared to 45% in 2015. Construction is still a challenge – and we keep working at it. They use a central spreadsheet in a shared location to document each team member’s Simple Thing which enables site coverage, and encourages people to participate. And in construction alone we have had a 36% increase in uptake of informal flexible working arrangements and a 5% increase in uptake of formal flexible work arrangements since 2015.

What we have found is that My Simple Thing, as basic as it is, delivers really positive outcomes.

Employees on flexible arrangements have higher overall engagement levels – particularly when it comes to Work Life Balance and Wellbeing.

75% of our employees now have some sort of flexible arrangement in place, compared to 45% in 2015

It’s not easy

Reflecting on this, I am making a challenging task sound easy. There is no -one-size-fits-all solution for any company. We are extraordinarily proud to be one of the top performing companies in the world for staff engagement but I’m also very aware that because we are now at 90% we are far more likely to go down than up. So, we can never rest on our laurels, and we can never cease working on our culture.

Measuring is a valuable exercise that helps to benchmark and gauge process. It means you can see more clearly your successes and failures and chart where you are going. But, of course the point is not to score – the point is to learn.

So, if our next engagement score falls below 90 – then we will work out why and pick it up again.

We are extraordinarily proud to be one of the top performing companies in the world for staff engagement but I’m also very aware that because we are now at 90% - we are far more likely to go down than up

The difference that makes the difference

Today Mirvac is a transformed organisation that is performing for our investors and our customers.

We still focus on quality and delivering a premium product to our customers and are working on several innovations that deliver the customer what they want- before they even realise they need it. And of course, we focus on our security holders by delivering returns that exceed our cost of capital as well as a growing dividend.

We have learned that focusing on our people is what delivers the best customer outcomes, the right returns for our security holders and makes a tangible difference to the health and well-being of our people.

The difference between companies that perform and companies that don’t is not superior strategy. It’s not balance sheet strength. It’s not brand or great products. It’s not a rock star board or political influence.

Employee engagement is the difference that makes the difference.