"Why do organisations need to learn to deal with complexity and uncertainty? It's because we have a perfect storm," Patrick Hollingworth says.
"A perfect storm, which is a combination of people, places and technology, is creating this VUCA [volatility, uncertainty, complexity, ambiguity] landscape, and many of our organisations are struggling."
In a video uploaded to Youtube in 2016, Hollingworth tells a room of people that today's organisational structures are outdated and are unable to respond to exponential growth. He says traditional hierarchies mean organisations are often too late to respond to changes, and are thrust into uncertain situations they are not equipped to deal with.
Hollingworth, who has climbed Mount Everest, then offers a mountaineer analogy. He refers to the traditional style of mountaineering, called "expedition style".
He says that expedition style "can be an effective way to climb mountains using lots of manpower", but, he says, when unexpected events occur, "the traditional linear system tends to fall apart".
Instead, he believes that organisations should adopt an "alpine style", which is a form of mountaineering that is more self-sufficient, faster and involves carrying less equipment.
"The alpine-style organisation is not hierarchically structured, it is network-structured. It is self-reliant as opposed to reliant upon infrastructure, it is fast to respond to change, it is embracing of the risk, it relinquishes the need for external control, it is driven by quality as opposed to quantity, and it prefers VUCA, indeed it succeeds in VUCA," Hollingworth says.
Over the past five years, Hollingworth - who describes himself as a "complexity and systems thinker" - has helped to apply this theory at the Canberra Institute of Technology, and has been awarded more than $8.5 million to do so.
But over recent weeks these contracts have sparked uproar and controversy, resulting in an extraordinary intervention by ACT Skills Minister Chris Steel, who says they have "seriously damaged CIT's reputation".
On Friday, Steel issued a ministerial direction which demanded the board address governance issues at the institute. He also told the board he was disappointed that nothing had been done to address a recent $4.99 million contract awarded to Hollingworth, especially after the minister raised concerns last year.
The board has since confirmed the latest contract has been suspended.
However, Steel's role in the matter is also being questioned, with Opposition Leader Elizabeth Lee saying he should have done more when he first became aware of the contracts. She has repeatedly called for his resignation.
How did Hollingworth come to work for CIT?
Hollingworth, who has not responded to multiple invitations from The Canberra Times to comment, was first engaged by CIT in February 2017. He was paid $8000 to give the keynote speech at the institute's all-staff development day.
A spokesman from CIT says he was approached to speak at the event following a presentation he had made at a national human resources industry event.
"Hollingworth had also published a book The Light and Fast Organisation, which discusses the topics of volatility, uncertainty, complexity and ambiguity (VUCA), which was relevant to CIT staff given the changes and uncertainty in the vocational education and training (VET) sector over the past decade," the spokesman says.
"Although Hollingworth has addressed staff multiple times throughout his contracts at CIT, this was the only time he was engaged solely as a keynote speaker."
From there, the contracts started to roll in. Hollingworth visited CIT again in July 2017 to meet with the chief executive and staff to help "guide the transformation of CIT over the next 18 months".
Since November 2017, CIT has paid more than $4.5 million in invoices to the Patrick Hollingworth Family Trust, which has traded under various names, including Think Garden and RedRouge Nominees.
The latest $4.99 million contract (just $10 short of the $5 million threshold for procurement board scrutiny) brings the total number of contracts awarded to Hollingworth to more than $8.5 million.
A former staff member from CIT has told The Canberra Times the first engagement of Hollingworth as a speaker did not attract much attention, but as "more and more costly" contracts began to be awarded, staff started to question them, especially as budgets were being cut.
But, they say, any questions were rebuffed.
"We just learnt that to speak against Hollingworth's expertise and how much it cost was forbidden," the staff member said.
So what exactly does he do?
Most of the invoices CIT has paid to Hollingworth have been for "staff development", but recent receipts have been labelled "business consultancy".
There was also one invoice for $852,000 that was for "CEO mentoring" - an amount more than two and a half times larger than the CEO's annual salary. The one-on-one mentoring services included five meetings a month, "unplanned advice" and phone calls returned within 24 hours.
The contracts awarded to Hollingworth have been criticised for their use of jargon and for having unclear terms of reference and deliverables.
The most recent $4.99 million contract required Think Garden to develop "system-wide capabilities of situational awareness, early/weak signal detection and noise sorting" and to develop "iterative capacity to cycle through adaptive/renewal processes across multiple spatial and temporal scales".
In a letter to the board on June 7, Steel wrote he was "unable to determine the specific work to be delivered through it, based on the use of jargon and an ill-defined statement of requirements".
CIT has previously defended the use of the language, with a spokesman saying: "This language is appropriate for the market for the specific technical services for which CIT required as part of operationalising the aspiration and intent of the strategy set by the CIT board."
What do CIT staff think?
CIT staff have been particularly critical of the contracts, which they say have happened during a time of budget cuts.
Staff have told The Canberra Times that the contracts created a divide at the institute, and over recent years many "well-respected" staff had left.
Figures from CIT show that over the past three years 151 staff resigned, 37 retired and 10 received a voluntary redundancy.
"During this time there were 377 separations in accordance with their contract arrangements. It is important to note that this information does not mean CIT has reduced 575 staff over this period," a CIT spokesman says.
"Many staff re-engage with CIT on other contracts, or, new staff come in on contracts. Similarly, staff who have resigned/retired could come back as casuals and/or vice versa."
The number of staff each year in June was also provided. The highest was in June 2021, when there were 872 staff; this year there were 826 staff. In June 2020 there were 804, and there were 847 in June 2019.
It's not only staff who have questioned the value of the contracts. One student currently studying at CIT's Bruce campus says: "In over 20 years' experience working with the public and private sector, and undertaking study with several training organisations, I've found CIT to be the most dysfunctional, disorganised and outdated institution I've ever come across, lacking leadership and direction.
"That over $8 million has apparently been spent over five years to improve the organisation is extremely disappointing, as there are no obvious benefits for students and staff.
"Students, staff and taxpayers all have a right to be angry about this."
How did it get to this point?
Staff have been raising concerns about the contracts for at least three years.
Chief Minister Andrew Barr was warned in June 2019 by a member of the public, but he wrote back in support of CIT's broad program of transformation work.
At that point, Hollingworth had been awarded more than $1.2 million of consulting work.
The government was warned again last year. Steel then sought information from the CIT board in March 2021 about more than $3.2 million of contracts awarded to Hollingworth.
The Skills Minister made the inquiry after a media request, however the board defended the contracts at that point.
CIT board chair Craig Sloan wrote: "The contracts relate to a service provider that has been working closely with the CIT since the Institute's Strategic Compass 2020 was endorsed.
"I am confident that the procurement processes to engage the service provider were consistent with all procurement policy and practices and that given the enormity of the transformation work, the investments in CIT via these contracts represent value for money."
The board also attached a 13-page report detailing the contracts. It showed that most of the work from Hollingworth was related to mentoring, developing business strategies and delivering workshops to staff.
Outcomes from the various contracts included:
- "Key leaders learnt about VUCA and how global digital disruption, and increased connectivity, was resulting in greater interdependencies in the world of work, and that CIT in the VET marketplace was operating in an increasingly VUCA environment."
- "CIT adopted a project governance structure to reflect a less top down/control of the projects and encourage greater connectivity between the project leads."
- "The learnings and knowledge acquired by those who participated in mentoring coaching and workshops was relevant across multiple contexts as we sort [sic] to better understand and act in our environment as a system to meet the new directions for CIT."
Steel says after he received that explanation, he told the board he did not believe the contracts were value for money.
"Both myself and my office have provided repeated messages to the CIT board chair and CIT that we thought, based on the advice that they provided in response to my letter, that these contracts weren't in line with community expectations," he says.
Steel says he has limited powers in relation to CIT, and can only offer broad directions to the board.
"I have very limited powers in relation to CIT, but what I did do is ask questions, and I acted and told them on repeated occasions that based on the information they provided in response to my letter, [that] I didn't think that their earlier contracts were in line with community expectations," he says.
Steel reaffirms that ministers shouldn't be involved in procurement processes, and he says that's why he wasn't aware of the latest $4.99 million contract until more than two months after it was signed.
But Lee says Steel has "absolutely dropped the ball", and is now scrambling to make it look like the government was taking action.
"We've heard the Chief Minister and the minister talk at length about how they don't have anything to do with this or procurement decisions are made, you know, at arm's length distance from the government," she says.
"[But] what is their role, when a member of the public or a member of the media raises significantly serious, serious concerns about what is happening? Do they not take any ministerial responsibility to look into the use of millions and millions [in] taxpayer funds?
"You can't have it both ways. You can't say on the one hand 'Arm's length distance, we had nothing to do with it, nothing to do with us,' and now come out and say 'Look at us, we're taking some really strong action.'"
We've made it a whole lot easier for you to have your say. Our new comment platform requires only one log-in to access articles and to join the discussion on The Canberra Times website. Find out how to register so you can enjoy civil, friendly and engaging discussions. See our moderation policy here.
