Procurement from indigenous-owned businesses is a powerful tool of practical reconciliation, says Leah Armstrong, who holds a range of governance positions in the indigenous sphere including a seat on the Prime Minister’s Indigenous Advisory Council.
Significant shared value has been created by the reconciliation action plans that over 1000 employers now have in place, covering about 20% of the national workforce, but their value is strongly dependent on what each organisation makes of them.“Yes, reconciliation is a big, big picture and a nation-building agenda, but it takes the individual acts of every individual Australian.”
“The goal of a RAP is to turn good intentions into measurable actions that support Aboriginal and Torres Strait Islander people to achieve equality in all aspects of life — a goal which benefits all Australians,” said Armstrong, in a recent lecture hosed by the Senate.
Armstrong chairs the board of the New South Wales government’s Aboriginal Housing Office and is well known as the foundation director of Reconciliation Australia, which came up with the RAP concept. She is also currently in the thick of indigenous procurement as chair of Supply Nation, the organisation which connects government (and commercial) purchasers with businesses with indigenous ownership.
Armstrong described the federal Indigenous Procurement Policy as a rare “good news exception” in an area where success has been “mixed” over the years. Nearly $200 million of spending went to indigenous-owned companies in the IPP’s first year of operation, orders of magnitude more than ever before. She described indigenous procurement as a “key action” in RAPs, looking at a public sector example:
“The Australian Tax Office realised a number of years ago that it could leverage its purchasing power to create positive social impact for Indigenous business owners and the communities. The concept was clear: by purchasing from Indigenous businesses the ATO can grow the personal wealth of Indigenous owners and employees, can build capacity and stoke innovation in their supply chain.”
The ATO bought $26 million in goods and services from indigenous-owned businesses this year alone thanks to a supplier diversity strategy that has been in place since 2014.
RAPs are most successful, Armstrong said, when supported by a strong business case. Even in a public sector setting, where the profit imperative does not apply, a good RAP can guide government agencies towards a workforce that is more reflective of the community, and perhaps more effective and more efficient in some areas. Armstrong made one point in particular that applies to the many agencies that work in Aboriginal communities:
“Attracting, motivating and developing talented local staff connected to local communities is efficient and effective. This overcomes costs and challenges associated with recruiting, transporting and accommodating staff from other locations and the higher turnover rates of these positions.”
Senate clerk Rosemary Laing, whose department launched its second joint RAP with the Department of the House of Representatives a few weeks ago, kicked off the post-lecture discussion with a comment on the importance of nominating a few people “with vision and commitment” to lead implementation.
Small steps make the big picture less scary
“RAPs are really about institutional change, but reconciliation needs to live in the hearts and minds of every Australian, so those small steps individuals can take [mean that] the big picture doesn’t have to be so scary,” said Armstrong. “Yes, reconciliation is a big, big picture and a nation-building agenda, but it takes the individual acts of every individual Australian.”
In a big organisation, the practical reconciliation efforts detailed in a RAP do need some staff members “to take a leading champion role” for the long term, she added. But the first step is senior leadership committing to the actions and outcomes in the plan, and importantly, setting performance measures for managers to that effect.
“Where we see the resistance mostly in institutions is not so much at the top or the bottom in the organisation, it’s actually the middle piece,” said Armstrong. “That’s where the resistance is, because it requires them to think differently, to behave differently, to perhaps go out and do things differently.”
A Centrelink staffer piped up to say Armstrong was “bang-on correct” in that observation, commenting “it is that middle layer that we really struggle with to facilitate reconciliation in, particularly in the management relationships” before asking about how large, spread-out entities could get employees on board.
The audience member said the RAP was often dismissed as yet another pronouncement from head office in Canberra and wanted tips on making it appear “less corporate” to regional and interstate offices.
“It is a common issue,” said Armstrong, and not just with government agencies.
“I guess the successful ones have actually been able to break down the RAPs and then give responsibilities out to those regions for certain actions that match that particular region,” she offered.
Armstrong favours “creating shared value” — a term coined by a 2002 Harvard Business Review article — as a guiding concept for RAPs, over a narrower focus on the organisation’s reputation. “Shared value creation is about being good, not just looking good,” she said.
Creating shared value offers the opportunity to forge “exciting and innovative multi-stakeholder partnerships between government, business, and civil society that are effective, efficient, and impactful” and government can play five roles, according to Michael Porter and Mark Kramer, who came up with the concept.
These are: acting as a knowledge broker that invests in social and technical research; by convening the key players; partnering with organisations outside government; improving the risk-to-reward profile for certain investments through loans, subsidies or tax breaks; and by creating a “supportive” regulatory system.
“Social Ventures Australia also suggest governments need to recognise that there are multiple opportunities to encourage companies to address social issues ranging from employment to affordable housing across all sectors and industries,” said Armstrong, who also once worked for the social enterprise peak body.
“This requires policies that help shape a more conducive environment for change to be sustainable and scalable.”
The IPP is a perfect example of this, she added, and she expects it could encourage more shared value creation in the private sector.