Spark Mag March 2017 by Spark Magazine #FuelForBusiness

spark THE FUEL FOR BUSINESS

MAGAZINE

THE PERFECT ACCOUNTING FIRM

AUSTRALIAâ&#x20AC;&#x2122;S WORSENING TRANSPERANCY RATING

A Tale of 3 Cultures INSIGHTS FOR M&A C U LT U R E I N T E G R AT I O N

ISSUE NO.9 MARCH 2017

THE KEYS TO YOUR BBG SUCCESS

The road to great learning is never a straight line...

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issue no.9 March 2017

Contents 6

Opinion Piece: The Perfect Accounting Firm

A Tale of 3 Cultures – Insights for M&A Culture Integration

Tinder for business

Australia’s worsening transparency rating

Success on the outside

The Keys to Your BBG Success

Five Business reason for getting a pilot’s license

The articles in Spark Magazine are of a general in nature only. Always seek independent financial, investment, tax and legal advice.

spark magazine

WELCOME T O S PA R K M AGA Z I N E In the last issue I wrote of the “Chicken Little” naysayers predicting the collapse of the Australian dollar, share market, and property prices. Of course none of that happened, in fact quite the opposite, and Australian business powers ahead. The doomsday “experts” are now predicting the end of the world with the democratic election of Donald Trump as President of the United States. There was some public surprise with his election win, driven by a strongly left wing, anti- business press, including here in Australia. It was reported in the Herald Sun that “At least a dozen of the ABC’s high-profile radio and television presenters, including Insiders host Barrie Cassidy, PM host Mark Colvin and journalist Annabel Crabb, expressed their disdain for the ‘nightmare’ of a Trump presidency and asked if there was an ‘off switch’ for his campaign.” No wonder the public was surprised and scared when the inevitable occurred. The ABC was not alone with its biased coverage and the mainstream press continues to run very negative coverage of Trump despite the delight of many that, rare for a politician, Trump is implementing what he promised and was elected for.

Big, smart money in the US has voted with its feet with the US share market rising significantly. Both Warren Buffett and Bill Gates have expressed positive sentiments about the US outlook and thousands of jobs have already likely been saved through Trump’s pressure on car makers. If only our politicians, who I described is the last editorial as “trying themselves up with the irrelevant,” would truly focus on what is best for Australia, rather than themselves, we might see more economic progress in the lucky = truly blessed, country. The recently released International Transparency Index for 2016 that saw Australia way down at position 13 when it came to corruption – with near neighbours New Zealand at first equal, was a national disgrace and likely to have negative long term effects on investment, tourism and educational flows into Australia. Much of the long slide from a much better score can be clearly laid at the feet of government. But we all have our part to play in turning things around. Government leadership in this area would be a good objective for 2017.

Paul M Southwick CEO and Editor paul@psfj.co

issue no.9 March 2017

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The information in Spark Magazine is of a general nature only and should not be relied upon for individual circumstances. In all cases take independent and professional investment, financial, tax and legal advice. Spark Magazine and all persons and entities associated therewith accept no responsibilities for loss or damage related to any inaccuracies, errors, or omissions in the magazine, or reliance on anything in the magazine. The views expressed in the magazine are those of the authors and do not imply endorsement by Spark Magazine, its controlling entity or associated persons. Similarly placement of an advertisement in the magazine does not imply endorsement by Spark Magazine its controlling entity or associated persons. In some cases journalists writing for SPARK Magazine may consult to or provide corporate writing for companies mentioned in articles. The journalists or Spark Magazine do not accept payment from companies to cover or include them. ©2015 ©2015 by byPow PowWow WowPty PtyLtd. Ltd.All All Rights Rights Reserved. Reserved. Reproduction Reproduction in inwhole whole or or in in part partwithout without permission permission is is prohibited. prohibited.

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OPINION PIECE

The Perfect Accounting Firm

by Rob Nixon

get asked all the time what a perfect firm looks like. I’ve never met one but I have met hundreds of firms who are doing many things right. However, never one firm that does everything right. My reasoning as to why so many firms do not work well is because they are designed by default – they just happen. Most firms are started

with very little capital input and they just grow. No plan, limited capital at the start and limited capital re-invested to make a real sustainable, highly profitable business.

to leave the firm you’re in and start anew.

Every one reading this has an opportunity to start again with a new sheet of paper and a new plan. You just need the desire to change and the courage to action. Sometimes the actioning part will never happen in the firm you are in - which might mean you need

•

If there was a perfect firm here’s what it would look like:

People and structure There would be one owner only unless additional partners / owners could demonstrate that they can sell at least $1M in new revenue per year. If a partner cannot (or will not) sell and bring in new business (all based on value based fees), then they are

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an overpaid accountant and not needed as an owner. •

Initially the owner would be the CEO but as the business got larger a full-time CEO would be appointed.

•

If from day one the primary owner did zero chargeable time and were involved in sales heavily from the start but not doing any of the work they are a client relationship manager not a client doer!

The team •

An external chair and board of directors / advisors holding the CEO and management team accountable.

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A corporate structure where every team member qualifies at some point in time for the employee share ownership program.

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A full time marketing manager. This person will build an offshore team to market the firm.

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Full time quality controller / reviewer. This person will check all client work before it goes out the door. Typically, this is the partner at the start. We don’t like that plan – it stinks of effort.

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General manager. This person runs the day to day operations of the business.

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Lead workflow manager. Someone who coordinates all the work that needs to be done.

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Client service coordinators. A ratio of 1 CSC: 3 Professionals.

spark magazine This team would be based offshore and would interact with the clients for all administration work associated with the professional work.

•

Off shore processing professionals. All processing work is done off-shore. If it can be done more efficiently for $5 $10 per hour offshore, then why on earth would anyone pay $35 - $60 per hour locally? Local client relationship managers. All local professionals will be client relationship managers (CRM’s) and they deliver client work at a high level and sell new projects. All CRM’s must have sales ability otherwise they are not needed. A revenue manager. Initially the CEO could do this task but as the firm gets larger it would need a full-time person to make sure the revenue is sold and delivered.

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Administration functions of the business would be performed by a ‘virtual assistant’ team offshore.

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Locally the business is client facing (sales and advice) and everything that is administration or processing is done offshore.

Operations The general manager is running a finely tuned instrument. Everything just works. The systems are awesome, the rules are set and every team member and client follows the rules. •

100% of internal technology is cloud based. No server required and the business can operate

from anywhere in the world on a mobile device. •

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100% of clients’ accounting systems are cloud based. No cloud accounting = no client of the firm.

assets, grow and develop revenue / cash and create wealth. The client cannot do the work themselves and they use the services from you every week, month or year. •

Bookkeeping – delivered offshore.

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Accounting – delivered offshore.

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Business advisory - cashflow, profit and revenue planning – delivered locally in person.

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Coaching - group coaching 8 businesses at a time – delivered locally in person.

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Tax Planning & Structuring – delivered locally and offshore.

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Insurance – home, contents, motor vehicle, key man, life etc – delivered offshore.

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All team members are paid 20% + above market salaries. Attract the best money can buy.

Legal services – general legal services – delivered locally and offshore.

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All team members have 5% of their salaries allocated to a learning & development fund for ‘soft skills’. Seminars, book of the month, internal speakers etc. So if your payroll is $1M then $50K is allocated to L&D.

Financial / Wealth Planning / Investment services – delivered locally and offshore.

Audit is not mentioned in this list because I believe accounting software will self-audit or blockchain technology will take a big chunk of it away.

All team members have a code of cultural ethics they live by – performance standards on culture behaviour and client service.

The marketing manager is driving the brand and generating leads every day.

All internal cloud system seamlessly interact with client cloud systems. Client trading data is visible to the firm every day. All clients are on an ‘Annual Accounting Service’ for known regular work. They pay a monthly fixed fee for a set scope on the first day of every month in advance. If there is an additional project then this is priced up front and the entire fee is collected up front as well before commencing work.

Services offered Any services that are offered need to be recurring in nature. You’re building a subscription business. The litmus test on services is that they are ‘mission critical’ meaning the client must use them to protect

Marketing

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The firm is called a snazzy name – not ‘XYZ Partners’ or ‘XYZ & Associates.’

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There will be an annual benchmarking survey of all clients.

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A book is written about your chosen niche market.

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•

Your firm is the global (national if you want to water it down) leader in your space. A database of all prospective clients in your niche is acquired, curated and nurtured – at least 50,000 names.

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Content marketing to entire database every week.

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Monthly webinar series and quarterly seminar series.

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Annual conference of all clients.

Clients The key to clients is that they are all ‘A’ class clients. Life is too short to work with people you’d rather not work with. Defining what an ‘A’ class client is for you to work out. Here are my thoughts: •

Clients would be only one industry type.

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Clients would be 100% business clients and only personal returns if it was associated with the business.

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They would be all over the world and unless they were

from the chosen niche market then they ae not accepted as a client. •

•

return on capital employed. Here are the metrics. •

All clients would go through a rigorous goal setting program • at the outset. Understanding their personal / business goals • and then matching professional services to the goals. Unless • they have goals they are not accepted as a client of the firm • Every year a Personal Performance Review (PPR) would be held with the client owners. It would encompass personal goals, business performance, wealth creation and risk mitigation. New services would come off the back of this.

Average hourly rate for client work >$500 Average hourly rate for all hours worked >$200 WIP & Receivables (Lock UP) days <10 combined Average fee per client group >$40,000 Revenue per full time person >$300,000

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Gross profit (revenue less all salaries) >75%

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Profit before owner(s) salaries >60%.

That’s what a perfect firm would look like. My buddy Michael says “A breakthrough often • Every client would have as a happens after a ‘breakwith.’ What minimum a live working and real time cash flow forecast and do you need to breakwith to breakthrough? a quarterly coaching meeting on cash flow, profit and revenue About the author improvement. Rob Nixon is the CEO and Measurement Metrics Founder of PANALITIX Helping Accountants build great The business needs to perform at businesses. He is a global thought a suitable level so you get a great leader on accountants.

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A TALE OF 3 CULTURES

Insights for M&A Culture Integration by Linley Watson

issue no.9 March 2017

hat is culture and why is it important in mergers? Culture can be described as the shared values, beliefs and behaviours that determine how people do things in an organisation. According to a recent study by Aon Hewitt, although culture integration is cited as a top priority during merger and acquisition (M&A) activity, most organisations do not have a clearly defined approach to addressing culture. Often culture issues are shied away from by the advisors and leaders as too hard, or the area they least understand. It’s a topic that “numbers people” can be uncomfortable with. Culture is hard to change, so when companies merge culture conflict can be the biggest barrier to successful integration. Gaining cultural insight, ideally during due diligence, does not have to be overly complex, expensive or time consuming and the payback is immense. Just asking the right questions to understand “how things are done around here,” can guide decision making, speed up the integration process and reduce the risk of joining the long list of M&A failures. Here are three different examples of how a Cultural Values Assessment (CVA) helped clients understand culture and manage complexities in an M&A context:

CASE STUDY 1: Demerging Company

morale were limiting progress and negatively impacting results.

This ASX listed entity is a global leader in its industry and was born from a challenging demerger. There were significant legacy systems, process and people issues that had to be resolved on the way to forging its own identity and culture. A new, first time CEO and executive team was in place and new values and behaviours had been decided upon and promoted by them.

The survey showed that lowering costs was perceived as the driving force behind the business. Employees were worried about their jobs and the lack of access to resources and knowledge to empower their efforts. There was no clear direction to guide decisions, and staff felt overworked navigating rigid systems and processes to meet immediate needs. Team members were exhausted and said they were deflated in the face of constant change, hypocrisy and condemnation.

A year into the demerger, management wanted a baseline view of culture so they could see if the espoused values and behaviours were becoming embedded, and if there was a clear vision of the future. They wanted to pinpoint where to focus resources and a way to measure progress. An extensive CVA was conducted across four international regions, in three languages, and in online and paper formats, so people working in the field with limited computer access could also participate. More than 2,000 team members completed the assessment. Crises It was clear from the assessment that this was an organisation in crisis. The size of the leadership team had doubled and the transition to a new matrix structure had taken too long and not gone well. Prevalent values including cost reduction, bureaucracy, confusion, long hours and low

People acknowledged the current values - acting profitably, continuous improvement, teamwork and being an agent of change, were on the right track. In order to become a high performing organisation they also called for open communication, customer focus, balance (home/work), positive attitude, adaptability, and employee recognition. From insights to action The survey was just the start of the culture conversation. After sharing the results the organisational development (OD) manager conducted numerous focus groups or ‘listening sessions’ to better understand the behaviours that demonstrated current and desired values. Based on this feedback the company chose to focus on a few key themes that impacted the

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whole company: Communicate, Celebrate and Simplify.

take more accountability for their results and the actions required.

There was a commercial group already tasked with simplifying systems and re-engineering processes. A comprehensive communications plan was relentlessly actioned and a working group established to improve reward and recognition.

Leaders make the difference

To lift morale and productivity, a highly visible and engaging program that celebrated and rewarded performance while demonstrating the organisation’s values and behaviours was implemented globally.

Round Two To track progress, the survey was repeated a year later. The overall level of dysfunction had subsided from a crisis situation to one still requiring attention. It showed that employee recognition had become successfully embedded but there was still a lot of work to be done. This time the company decided to ‘slice and dice’ the data to drill even further down into specific demographics such as location, business unit, role, level and brand. The 91 data cuts provided deeper insight into the many sub cultures that existed and enabled leaders to

One executive was unconvinced of the culture survey’s value, so the OD manager presented him with a colour coded, one pager ranking of the scores for each of the areas he was responsible for. He soon realised the impact leadership has on culture and commented that if he hadn’t seen the survey results and had to rank the strength of his leaders, he would have come up with the same list. The executive was able to use the data to identify the key issues for each area and work with individual leaders to come up with plans of action. This organisation started to make good progress culturally, but continued to struggle with the massive shifts required. Arguably demergers are even more difficult than mergers. It was interesting to note that the values of the entire Executive team were concentrated at the individual level, not at the relationship or organisational level. This was always going to make working collaboratively and focusing on people a challenge The consequences The culture survey stressed the dire situation and pinpointed the

urgent issues to address. However, change did not come soon enough for the Board. The original CEO departed, making way for further leadership changes and staff redundancies. The appetite for culture development diminished and the organisational development function was disestablished. Five years on, the company is happy it has stabilised both the culture and financial results. It is now moving to a focus on activities around stability and sustainability.

CASE STUDY 2: Merging Two Competitors This case study concerns the merger of two fierce competitors - leaders in a relatively small niche sector. The CEO of the acquirer wanted to understand what his company was buying and speed up the integration process on an ambitious path to an ASX listing. The acquirer did a cultural values assessment of itself, prior to announcing the merger, to give an objective baseline measure that could be used to compare both cultures. It also spent time reviewing HR policies and procedures of the acquisition target to access and ensure people and culture aspects were carefully considered in the due diligence process. A culture survey of the acquisition was also conducted a couple of months after the merger.

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A healthy result The results indicated similar values and healthy cultures with few underlying cultural issues. People across both groups shared eight of the same personal values, showing a significant degree of similarity and resonance. Both organisations emphasised working together to exceed customer expectations and people feeling appreciated. There was significant alignment in how both groups wanted to move forward, citing teamwork, customer service excellence, continuous improvement, employee engagement and accountability as their desired values to drive high performance. In this case, the leaders chose to keep the espoused values of the acquiring company and to focus on the call for more employee participation and development. The potential danger in this strategy though is that assuming values mean the same things to all people. From competitor to colleagues People within the acquiring company were excited by the growth opportunity, those in the acquired company, not so much. Despite the cultural similarities, the challenge of moving from competitor to colleague should not be underestimated. Any M&A brings

structural and operational changes that cause instability for both parties. It stretches the capabilities of leaders at all levels. In case study two, senior leaders who had cultivated strong loyalty, departed the acquired company, egos were bruised, and issues of trust and fairness inevitably emerged. Operational differences led to business development and customer service issues. On the positive side, several new roles have been created, some to provide career pathways. All roles were advertised internally and many filled from the acquired company. There has also been significant investment in training and development. Leaders were empowered and are expected and supported to have difficult conversations about performance behaviours that are contrary to the company’s values. Listing This organisation was listed on the ASX according to plan. Often cultural issues covertly contribute to a decline in business performance post merger, and this may be the outcome of these companies. One year after the merger, the opportunity is to reassess the health of the combined entity, looking at the relevant

demographics. Holding leaders accountable, and measuring and monitoring their culture to reinforce what is working well and to stay on top of any issues that are brewing will maximise their chance of successful and sustainable business growth.

Combining multiple entities Over the past two years, this company has acquired several small manufacturing businesses that make some of Australia and New Zealand’s most well-known brands. It is part of a global group owned by a U.S. based listed corporation, that is on the acquisition trail. There is a dominant culture that sometimes manifests as “us and them”. To cultivate their one team ethos they have moved head office staff to new premises. Restructuring involved rationalising their distribution centres, losing some people and recruiting others for new roles. Giving everyone a voice The acquirer CEO wanted new, shared values, for the combined entity. The challenge was that each acquired business had a proud heritage and culture of its own. The initial intent was to determine these values at the leadership level, workshop them with a representative

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group, and then roll them out to all staff in the combined entity. The company opted instead to conduct a CVA to understand the current cultures and give everyone a say in the future culture of the business.

imbalance in internal vs external focus that could potentially cause problems if not addressed. Verbatim responses to open ended questions gave further useful insights.

Despite significant change, the results showed a relatively healthy culture with some issues requiring careful monitoring such as cost reduction, confusion about strategy, and long hours. People lacked clear direction and communication had been hampered by blurred reporting lines. Some felt over stretched and disempowered. Spending restrictions may have impeded progress. Top desired values were teamwork, coaching/mentoring and accountability.

Looking to the future

The organisation had been externally focused and while there was support for this approach, there was a call for stronger leadership, employee engagement, fulfilment and recognition. This implied an

After ensuring that equitable HR policies and practices had been implemented, the priority is now to continue the culture dialogue, choose three to five core values that connect people with the strategy and clarify the associated behaviours. An action plan is required to bring the values to life and make them pervasive to underpin the long term success of the organisation. Using this survey process will enable this organisation to quickly see the cultural fit of any new acquisitions and where to focus their attention. It can potentially be adopted on a global scale to help align the group.

Conclusion â&#x20AC;&#x201C; do it well, on purpose! Leaders may be good at articulating the why, what and who in an M&A transaction but they can be challenged with the how. Culture integration is ultimately about defining how people work together to create more value. It can be done poorly and left to chance, or it can be done well, on purpose. Doing it well involves identifying the cultural health of the organisations involved. A cultural values assessment measures the current culture, gives everyone a say on the desired culture, and the results provide a roadmap for change. About the author Linley Watson is Managing Director of Peak Performance International and an authority on M&A culture integration. www.peakperformance.com.au

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by Sussie Campbell

Tinder for Business

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nderstanding customers key to survival

The Australian Bureau of Statistics reports that more than 60% of small businesses shut up shop within the first three years of trading. Being out of touch with customers is cited as one of the top reasons for these failures. Some business owners fail to appreciate that without a complete understanding of the customer, any marketing strategy is likely to fail. Cisco’s retiring CEO delivered a dire prediction in Business Insider Australia: that 40% of companies will be dead in 10 years. “Either we disrupt or we get disrupted,” said John Chambers.

What’s right for small business? Small business marketing must also be upturned, with a focus on striving for greater innovation, creativity, and in turn, tuned into customers’ demands, whilst delivering healthy returns. Some small businesses, particularly those servicing a local customer base, are shunning marketing strategies such as print advertising, social media campaigns, SEO and Google Ad words, disillusioned

with the high investment costs and poor returns. This is because for them such strategies simply aren’t delivering the returns promised by their promoters. Online business forums and business networking groups are flooded with ‘experts’ touting the latest “snake oil,” promising six or seven figure returns and huge upturns in sales, in a matter of months or even days. It is therefore hardly surprising that for every claim of attractive sales, there are many more tales of woe and marketing failure. Some SME’s are convinced to parting with large amounts of money, often not budgeted for, in the hope that the ‘too good to be true’ claim, might just work. When small businesses form 97% of all businesses in Australia, hinging success on a strategy that is either difficult to measure, or using unfamiliar technology, would seem foolhardy and too big a risk for most.

Pretenders There are no magic pills in marketing. Anyone who claims to be able to generate six or seven figures for small business overnight has not understood the business. Marketing is the simple marriage

of understanding a need and delivering a solution to that need to those in need. This involves building relationships, empathy, knowledge and deep insights of that need - the ‘target market’. Templates and cookie cutter marketing simply doesn’t work. It may have worked for the person trying to sell their wares, but each business is different, and these advisors may have never operated a similar business to those they are advising. No two businesses or marketing campaigns are the same either.

Finding the marketing strategy that suits Jason Doueihi, the founder of Workers Compensation Specialists, based in Parramatta discovered the power of partnership marketing. Jason shared how he was able to grow his business significantly using what he now describes as a lucrative, yet underrated strategy. He had identified that all his clients found him through word of mouth and referrals, and so the logical step was for him to find more loyal referrers. “I’m not a natural salesman and struggled with the popular marketing strategies of online advertising and social media. More

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traditional methods such as mail drops and newspaper advertising just didn’t fit either, and I wasted money on strategies that simply didn’t deliver, and moreover, their financial returns were not easily measured. I knew there must be a more cost effective way to market in a business to business (B2B) environment,” explained Jason. Jason’s approach will be no secret to savvy business owners. They know that by identifying another business that has the same target market and by understanding the assets of their own and the other business, a win-win situation can be created. But like any business opportunity or marketing strategy, care and planning are required if it is to be successful. Evidence shows that a well-executed partnership must meet the following key characteristics, if one element is missing, the relationship may fail:

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A clear win/win – there must be a gain for both parties, without it, one party may become disillusioned and the relationship break down;

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Value alignment – partnering with another business that does not share your values or standards is likely to result in resentment and eventual failure; and

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Aligned target market – this is essential to ensure the win/ win and for any benefit to be gained.

Execution Like all marketing strategies, a degree of knowledge is required to execute effectively and this is where many fail. “Partnerships enable you to create unprecedented growth, resilience and constructive disruption, regardless of size or the industry you’re in. It’s a solid growth strategy used by the world’s fastest growing and most successful companies. Resilience rarely happens without the support of the right partners – strategic or marketing, staff, suppliers, clients, family or friends. A by-product of creating a partnerfriendly culture is much stronger and more productive relationships with all key stakeholders in your business, cultivating greater loyalty and higher profits,” explains Simone Novello, the Founder and MD of Partner2Grow. Entrepreneurs need partners to take their businesses to the next level. Partnerships are powerful and exciting – but when businesses get it wrong, sadly they usually realise when it’s too late. Negotiating the complexity of finding the right partners and ensuring that the best possible deal is struck is crucial. In a world that is moving so rapidly, Aussie SME’s need to keep up if they are to survive and partnerships can provide the answer. The right collaborations can promote business growth, resilience and the ability to disrupt in a way that allows the business to prosper. Conversely, a misaligned, unequal or poorly executed partnership can have catastrophic consequences for SMEs.

When the marriage breaks down – partnership pitfalls A small direct wine company in Adelaide, recognising that partnerships could be the key to growth, had the smarts to approach a major bank in Australia and secure a deal to offer bonus points to members of the bank’s large loyalty credit card program. This partnership grew their business by two thirds almost overnight! Aside from the growing pains, they enjoyed a successful partnership for many years. They offered a great service, provided high service levels, and a quality product to the bank and its customers. However the industry grew more competitive and this still relatively small company was so focused on this great partnership, that they did not mitigate their risk by ensuring they had a diversified partnership plan and strategy in place should this partnership cease. That day inevitably came. A larger player in the wine sector realised what a great opportunity a partnership with a bank was and pursued it for themselves. Around the same time some of the key people in the bank that the small wine company had built relationships with, left and almost overnight their business declined rapidly. Although there are some great lessons here about what this company did right, there is no getting away from the oversight of contingency planning to protect their company from failure. Putting ‘all your eggs in one basket’ is never a good idea when it comes

issue no.9 March 2017

to partnerships - neither is spreading too thin. It’s about being methodical in taking the right steps to make the most of the best opportunities to grow and protect your business.

When budgets are tight ROI is king Tara O’Connell, founder of The Baby Diaries, a mobile health solutions App with the aim of helping new parents across the globe to keep track of their baby’s daily functions (sleep, feeds, nappies), growth, milestones and memories, embarked on partnerships as a marketing strategy almost immediately. As a single mum with a 3-month-old baby, her budget was extremely tight and having been burned by a magazine advertising campaign with zero return, she discovered partnerships. Tara described her venture into partnerships: “I think initially I struggled with understanding my assets and having a lack of confidence that any large business would be interested in a small business like mine. My first hurdle was understanding exactly what I had to offer. We all have assets regardless of our size; it may be a small social media following that is highly engaged; we may have won awards; we may have access to large networks; it may be our intellectual property that is a key asset. Knowing those assets is the first step,” explained Tara. “As soon as I realised this, I was onto a winning formula. Partnerships are fantastic. They can literally catapult your business to

hundreds, thousands or millions of your ideal customers. However, my word of warning is to only partner with others who share the same target market, the same values, and the same level of motivation for the partnership to work and an attitude of abundance. If any of these things are missing then the partnership may fail and, at best, you would have wasted your time,” warns Tara.

Small business paired with big business – does unequal spell danger? For a business at any stage and size, partnerships can provide access to the resources needed to evolve and respond to emerging opportunities and challenges, with speed and precision. It’s not only SMEs that can take advantage. Big business has been partnering for years with many famous examples such as Disney with McDonalds. But there is nothing preventing small partnering with big. Jodie Blight, writer and creator of an interactive cookbook, Summer Table and accompanying App, has been working on a single partnership for almost two years and is still a long way off from signing a deal. In the crowded world of cookbooks Jodie knew that she needed to do something different and so built an App which enabled users to scan recipes from a book to create a shopping list on their smartphone with all the ingredients sorted to the corresponding supermarket sections. It turned out, no one had done this before and therefore the next, most obvious progression was to license the App

to other publishers as well as to supermarkets and retailers. Jodie explained why her experience of partnering with larger businesses became an extremely frustrating process: “The hardest part of small dealing with large in my experience is response times. SMEs are generally responsive and nimble, as the partnership and proposition are their top priority and their livelihood depends on closing the deal. Conversely, their (SME) concept or idea is a mere smudge on the list of a large businesses’ priorities; consequently their dream is added to the to-do list but not necessarily at the top or even close!” says Jodie. Where to start, can be the cry of many SMEs. It is not uncommon for SMEs to doubt their value, lack the nerve or underestimate what they have to offer a large organisation, or simply make assumptions about how difficult it would be to find the right person to pitch to. and therefore never pursue one. “I shudder to think where my business would be without partners and am relieved that I didn’t allow fear to prevent me from pursuing them. I might be travelling around leaving flyers in shopping centre baby change rooms in the hope that someone will buy my app!” laughs Tara. There are no secret tricks to pitching to a large organisation. Of course, having a warm contact within the business being approached can help enormously, however the good old method of

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picking up the phone, can work just as well. “And being prepared,” says Susie. “By creating a one or two page Opportunity Summary, outlining exactly what you have to offer and the benefits to a potential partner, can save a huge amount of time and quickly communicate your partnership requirements that reflect your brand and values,” Susie explains. Reckon, an international Cloud Accounting Software company who Susie recently brokered a partnership with for one of her SME clients, explained why the small business sector is a key target when it comes to seeking partners: “Small businesses are a very important target market for Reckon. There are over two million small and medium businesses in Australia; they are the engine room of our economy. Aussie SME’s have a ‘can-do’ attitude and an entrepreneurial spirit, which align with our core values at Reckon. As they are on the front line of the economy, their feedback and insights can assist with product improvements and help shape new product rollouts and market messaging. The needs and strengths of a larger organisation like Reckon and a typical small business are often opposite and complementary

which make potential partnerships with them, more attractive,” describes Sam Allert, Managing Director at Reckon.

“Some of the advantages that we have discovered through our small business partnerships include their ability to anticipate market trends faster than big businesses, adopt new technology quicker and operate a leaner business structure than many larger organisations. They have their ear to the ground and understand what resonates in their local communities; their insights on trends and what drives the market, assists us greatly,” enthuses Allert.

It’s an exciting time to be in business! 85 per cent of business leaders want to collaborate more with small to medium enterprises (GE Global Innovation Barometer 2014). Strategic and marketing partnerships enable a business to create unprecedented growth, resilience and constructive disruption, regardless of size or industry. It’s a solid growth strategy used by the world’s fastest growing and most successful companies. In fact, 64% of companies collaborating with outside Partners on innovation report larger

revenues over the course of the year, according to GE’s Global Innovation Barometer 2014.

Complementary strategies There are few marketing strategies that can boast the results of marketing partnerships. Traditional marketing means being out there selling your own wares. Partnership marketing has your partners showcasing your wares to your ideal customers who already know, like and trust your partner. This inevitably reduces the time between customers ‘meeting’ a business and buying from it, in effect reducing the length of the sales funnel significantly. Partnerships are undoubtedly powerful and with the right preparation, contingency, planning and attitude, Aussie small businesses can implement this potentially lucrative strategy and reduce dramatically, marketing budgets and expenditure. About the author Susie Campbell is a marketer, speaker, writer and fan of finding free or low cost alternatives to growing start-ups and small businesses. Not one to follow the crowd, she coined he term #sheepmarketing. She had a varied career including hospitality, retail, leisure and sport, education, FMCG, customer service, HR, project management and the British Armed Forces. connect@littleblackbookmarketing.

issue no.9 March 2017

22 spark magazine

Australiaâ&#x20AC;&#x2122;s Worsening Transparency Rating

by Paul M Southwick

issue no.9 March 2017 Rank

here are few things Kiwis enjoy more than beating Australia, be it in sport, business or politics. And there are few things Aussies dislike more than being beaten by their smaller cousin. When the 2016 International Transparency Ratings were released, in January 2017, with New Zealand at the top of 176 countries (first equal with Demark), with a score of 90/100, and Australia down at position 13, eleven points lower at 79/100, there were more than a few unkind convict history jokes exchanged. There are serious long term national issues for Australia, given that it’s score has steadily fallen from 2012. With interest, investment, tourism, and “where should I send my kids?” in-bound primary, secondary and tertiary education decisions heavily reliant on Australia’s’ reputation as a safe and corruption free country, it is essential that the decline be arrested and turned around. With multiple English speaking countries rating ahead of Australia this will be not be an easy task.

Country

2016

Denmark

New Zealand

2015

2014

2013

2012

Finland

Sweden

Switzerland

Norway

Singapore

Netherlands

84 84

Canada

Germany

Luxembourg

United Kingdom

Australia

Iceland

Belgium

Hong Kong

Austria

United States

Ireland

Japan

Uruguay

Estonia

France

Bahamas

N/A

Chile

United Arab Emirates

Bhutan

Israel

Poland

Portugal

Barbados

N/A

Qatar

Slovenia

Taiwan

Botswana

Saint Lucia

N/A

Saint Vincent and the Grenadines

N/A

Cape Verde

Dominica

N/A

Lithuania

Brunei

N/A

Costa Rica

Spain

Georgia

Latvia

Grenada

N/A

Cyprus

Czech Republic

Malta

Mauritius

Rwanda

Source: Transparency International (Top 50 of 176 shown)

24 spark magazine

It is a competitive world, even in transparency ratings. Most important of all is leadership from the government, whose actions have to a large degree, precipitated the rating slip. Think the lack of protection and reward for whistle blowers (and the crushing personal consequences for them here); failure to prevent multiple financial planner rorts; attacks on welfare agencies, senators and the Human Rights Commissioner over immigration detention centres; spying on neighbours in trade negotiations; widespread abuse of politicians’ tax payer funded travel allowances; the Department of Human Services debt recovery scandal; and government’s criminalisation of journalists and doctors for reporting on serious wrong doing. Additionally the government wants to be able to spy on citizens without a warrant and force journalists to reveal their sources. Business and citizens have their part to play too. A long list of overseas bribery by companies or government owned corporations, and financial scandals have plagued Australia of recent years.

As a country, Australia has a cultural intolerance for those who “dob in” others and the concept of a “fair go” can allow wrong doers to rise back up again and repeat their misdeeds. Religious organisations, of multiple faiths, have also played their part with widespread child abuse, cover ups, and protections of the nastiest criminals – those who have harmed innocent children. As Singapore (ranked number seven and amongst a region of low scorers) has proven, where the culture changes to one of rejecting corruption and expelling wrong doers forever, real progress in transparency ratings can be made. At an intuitional level many organisations have let Australians down, be it by way of neglecting flagged wrong doing - especially in financial institutions, unions or professional associations. Australia has also been very slow, compared with other countries to enact protecting legislation. As an example, Australia’s Minster for Revenue and Financial Services has announced that existing financial planners will have all the way until 2024 to transit to new (education) arrangements!

With respect to international money laundering Australia’s legislation is also well behind more advanced nations. Some people say it is the system that is broken. It has been suggested by some cheeky Kiwis that Australia should become part of Aotearoa, rather than the other way around, and or adopt the Kiwi’s “no states, single house of parliament” form of government. Spark Magazine would love to hear from readers about the topic of Australian transparency and corruption. Your letters or articles are welcome. Please send them to paul@psfj.co

issue no.9 March 2017

26 spark magazine

issue no.9 March 2017

Success on the Outside by Karen Williams

utside - Inside

Success on the outside is not a guarantee of success on the inside. Busy business professionals work hard at ticking the boxes of life, but this can be at the expense of their own wellbeing and the closeness they enjoy in their relationships. Some managers and leaders believe that their mental strength, expertise, experience and street smart capabilities are the tools for success. Indeed, those are the very qualities that have brought them the success they enjoy. But that’s where some become stuck, at their current level of success, working harder, being tougher on themselves and others, to push past the current plateau. Growing up in a world that rewards achievement, effectiveness and productivity, people learn to project the “I’ve got this handled” façade with a smile and a firm handshake, hiding anything that doesn’t look like power and happiness. From a young age girls can be taught to be

quiet, be a good girl, behave, don’t get your hopes up. Boys might be taught to man up, don’t cry, get on with it, don’t be weak. Dr Brene Brown is a research professor at the University of Houston, three times New York Times Best Seller, with a TED Talk as one of the top 50 viewed of all time. She shares how most people grow up being taught that it is important to be courageous and brave, but on the flip side that vulnerability is weakness. She offers says that the only thing that can fit through this gauntlet between being brave but not vulnerable, is bravado. The pretence of being tough, having it handled, being right and therefore judgemental, cynical and critical of others. Some successful leaders believe that vulnerability will be their undoing. Seen as weakness, in fact defined as ‘susceptibility to harm’, it’s no surprise many people adorn their armour, barricade their lives and numb their feelings just to survive the day.

The problem though, as Dr Brown shares, is that “we cannot selectively numb.” When people avoid vulnerability, they avoid pain, hurt, heartbreak, sadness, grief, but they also suppress joy, connection, love, gratitude and fulfilment.

Resentment So, the formula that often drives success - work smart and hard, push all feelings below the surface, get on with it and show no weakness, must eventually fall short, usually somewhere between the age of 40 and 55, leaving questions, confusion, and a restlessness that is difficult to define.

Case study Richard, a successful MD of a multinational, no longer needing to work but was determined to ensure the ongoing growth of the company in the midst of an industry down-turn, reflected that he’d always known exactly who he was at work. He’d known how to get the desired result, how to motivate people into action. It

28 spark magazine

drove him, got him out of bed in the morning, and pushed all the right buttons. But it no longer gave him the same satisfaction. He felt disconnected from his team, unsettled and unsure why, uninspired by his day to day, while his relationships with his wife and children were distant. His was unsure of who he was as a man, a husband and a father. He and his wife got on with life, but they no longer felt close and it seemed to him that his most important asset to his teenage children was his wallet.

Vulnerability breeds innovation Dr Brown says “vulnerability is the birthplace of innovation, creativity and change” and so to access change, make a shift in life, move from dissatisfaction and emptiness to fulfilment, move from disconnection and a feeling of aloneness to the presence of love, connection and belonging, a leader must be willing to step into vulnerability. The way to vulnerability is courage. Business professionals are no strangers to calling on their courage, yet acknowledging feelings of uncertainty, disconnection,

loneliness and shame can be frightening for some. It is usually only when the uneasy, niggling, empty feeling inside has gotten so loud it cannot be ignored, is a change sought. Before then the predictable future seems liveable, having survived so far, more of the same won’t hurt. Sometimes it takes an illness, an injury, a major life issue, an accident or a tragedy to wake up and begin doing the work of finding fulfilment beyond success.

Fixing behaviour When change is imminent, some people hone in on ‘fixing’ behaviour. New results require new action. However, focusing exclusively on behaviour is a temporary fix, known as transactional learning. While the quick high feels good it usually doesn’t last and old habits return, bringing with them the familiar lack lustre, uneasy feeling of dissatisfaction. Ever tried losing weight or adding muscle by joining a gym? Joining the gym may prompt an immediate behavioural change, the cash invested can be a source of motivation in itself, however

unless there’s been a shift at an unconscious level, a few months will see the three power sessions a week turn into thirty-three powerful reasons why not to. What is needed is an interruption.

Coaching A coaching partnership can be that interruption. A safe and sacred space to unravel the grip of the mind, to release stuck and stored emotions and experiences from the body, to find peace beyond the uneasiness within and fulfilment in a way that a bigger, better, more of anything will never provide. There are two critical elements of a successful coaching partnership. The process begins with ‘aha’ moments – those accidental moments that happen and change night into day, black into white, and bring the previously unseen into the seen. In a transformational coaching session, these moments can be caused with intention and on purpose. Transformational learning is very different to the incremental improvement gained through schooling, training courses and programs. When a client experiences an ‘aha’ moment, seeing an area of their

issue no.9 March 2017

life in a way they’ve never seen or experienced it before, it is an awakening that can feel to them like a tectonic plate shift. It can take some seconds or minutes for the conscious mind to catch up and once it does, there can at first be resistance and minimisation, but mostly an opening to, and allowing of, the new world. It can be a sense of wonderment, a new view of life that cannot be unseen. The question then becomes ‘now what?’

this very quality that they most want from, and admire in, others to be honest, real, and open.

experiencing a sense of quiet fulfilment and joy that had been absent for many years.

Fulfilment is not possible without vulnerability and so what is needed now is a new definition of vulnerability. Vulnerability could be revered as strength, a priceless gift to others, a quality that wise, generous, wholehearted people embrace.

Success trap

Embracing the unfamiliar

Richard was someone who chose to adopt this definition of vulnerability, experiencing moments of transformation during the coaching sessions and implementing what he’d learned through tailored activities.

The new ‘aha’ muscles must be exercised to build form and strength around the fledgling transformation. Tailored activities, actions, conversations and practices are designed based on what has occurred and been revealed in the coaching session. Taking immediate action, being willing to try and fail, is critical. And here is where some business leaders discover their truest test. This is where the practice of vulnerability is called upon. Trying unfamiliar and initially uncomfortable things can trigger a fear of being perceived as not knowing, or not having it handled or being weak. And yet, as Dr Brown shares, even though leaders are often unwilling to allow themselves to be vulnerable, it is

Case study

In response, his daughters began spending more time with him, his wife began opening her heart more to him and a lightness and playfulness returned to his life. Richard realised that, before the coaching, he had resolved himself to accept that this life was just how it was. It was good, he was confident he would get by, but when he chose to listen to the restlessness within and take a leap forward, his relationships with the most important people in his life transformed and he began

The success trap leaves some professionals exhausted, depleted and disconnected, unaware that life can feel any different. Looking around, most others are doing the same. Like the frog who doesn’t perceive the slowly boiling water as a threat, it is easy for people to stay where they are. When the niggle inside gets louder, most will take a holiday, buy a bigger or smaller house or change partners. When it becomes a scream, serious action is required, although the mess to clean up then can be much worse. The only thing in the way of acting sooner is the fear of being vulnerable, yet isn’t that the very quality people find most attractive in each other? About the author Karen Williams is an interruption, a coach, facilitator and trainer who has worked in the space of transformation for over 16 years. She works with leaders in business, professionally and privately, one on one and in groups. Karen@iamkarenwilliams.com or http://iamkarenwilliams.com

30 spark magazine

The Keys to Your BBG Success An Article for Business Builder Group Members By Geoff Hirsch

o ensure the success of your BBG Chapter and maximise the value of your membership there are three simple rules that we all need to follow. These rules are literally the “Keys to BBG Success” and their importance

to each BBG Member and every BBG Chapter cannot be overemphasised: • PAY IT FORWARD. • LISTEN WITH INTENT. • REFER WITH GENEROSITY.

1. Pay it forward! The first key to you receiving a steady flow of warm referrals from your BBG group is your willingness

to supply referrals to your BBG colleagues. It works like this: Everyone joins BBG with the expectation of receiving warm referrals for their businesses. However, what many do not understand is that these referrals come out of a shared “Referral Well”. This Referral Well is filled up and replenished by the referrals supplied

issue no.9 March 2017

by you and the other members of your group. If you and your colleagues are not pouring referrals into the Referral Well it will quickly run dry. If, on the other hand, you are all pouring referrals into the Referral Well, it will quickly fill up and everyone will be able to satisfy their thirst. So, don’t stand by the well banging your empty cup against the wall. Get busy filling it up with your referrals and the law of reciprocity will take care of the rest. We call this approach “Paying it forward,” and place huge value on members who understand that this approach will ultimately be to everyone’s benefit.

2. Listen with intent At every BBG Forum, a number of your colleagues will present their business overview (or, one of their key products or services) to you and the other members of your group. When you are listening to these presentations you should have one question in mind: “Who do I know that might benefit from the product, service, approach and expertise being demonstrated here today?” As your colleague makes their presentations, scribble down the names of people you know that might be interested in, or benefit from, what is being described.

Then, during the hot seat session later in the meeting, ask the presenter for further explanation of any points you need clarified before you refer them to the prospects you jotted down earlier. You should listen to every presenter with the clear objective of referring each of them to at least one contact after your meeting. If you take this approach and listen with intent, you will be amazed at how easy it is to match your BBG Colleagues to your contact list.

3. Refer with generosity As I travel around the country attending BBG Forums, I often find myself promoting BBG’s “Culture of Generosity.” This spirit of generosity is never more important than when you make your referrals. Now I know that Referron makes it possible for you to generate a referral with just three taps. But ask yourself: “Is this a referral I would be happy to receive?” Sure, it’s better than nothing. But, how much more powerful will the referral be if - before you use the Referron app - you first call your contact and explain why you think the BBG colleague you are about to refer could add enormous value to their business? And then call your BBG colleague to provide them with some insight and context for

the service seeker you are referring to them. The process I am describing above will turn your ho-hum referrals into warm leads. It will greatly increase the likelihood of your colleagues turning your referrals into sales. Which takes me all the way back to where I started ... to the Referral Well and the law of reciprocity. Apply these three key principles diligently and you will reap the rewards: 1. Pay it forward 2. Listen with intent 3. Refer with generosity About the Author The CEO of BBG, Geoff is a marketing strategist who spent the first 10 years of his career in sales and marketing management with Cadbury Schweppes and Duracell and the next 25 developing and implementing award-winning marketing campaigns on behalf of large corporate and privatelyowned Australian businesses. Along the way he discovered that word-of-mouth was the key driver of his business growth and joined a number of established referral marketing organisations to accelerate this process. As none of them adequately met his needs he applied his mind to the development of a referral marketing process that would. The unique structure of Business Builders Group is the result.

32 spark magazine

5 BUSINESS REASONS

for getting a pilotâ&#x20AC;&#x2122;s licence

Paul M Southwick

issue no.9 March 2017

IN BRIEF 34 spark magazine • Aviation and business are often intertwined • By flying themselves, business people get there quicker, ahead of competitors, and avoid downtime at airline terminals • Flying is a discipline, and discipline suits the business mind

ust like a ‘CA’ for

chartered accountant, the designation ‘PPL’, for a private pilot licence carries a certain prestige. People know it is not as easy qualification to obtain, so it engenders respect. Aviation and business are often intertwined. Should business people add a PPL to their qualifications? Here are five business reasons that make getting your wings plane sense.

1. Make the impossible, possible With limited airline services, it can be operationally impossible for business people to get to all the locations they need to, by scheduled carrier and motor vehicle, when they need to. Examples include an Australian supplier to Bunnings Warehouse,

required to visit every store, every year; a livestock buyer purchasing cattle from interstate stations, thousands of kilometres apart; a pastor visiting isolated ‘flocks’; or an engineer servicing remote outback mining airfields. With a pilot licence, people can make their own schedule.

major airports.

Case study: A doctor who now flies, rather than drives, himself to outback clinics, saves two weeks driving, every quarter. He can now visit multiple distant locations in one day, and be home every evening with his family.

3. Opportunity cost

2. Competitive advantage In business, time, and timing, are money. By flying themselves, business people get there quicker, ahead of competitors, and avoid downtime at airline terminals. It is also easy to reach General Aviation airfields, meaning your itinerary is not restricted to the locations of

Case study: A businessman sells items for racetracks all over Australia and New Zealand. By flying himself, he gets there ahead of the competitors, and more often. By the time competitors arrive, via the airlines and rental cars, he has been and gone with the orders.

Executives and their advisors are paid a lot, because they can generate huge returns. Whenever the value of the lost opportunity from executives not being able to get where they need to be, when they need to be there, exceeds the cost of flying themselves, it’s time to get a pilot licence, and or an aeroplane. This is why billionaires use corporate jets. However, where the above equation applies, anyone in business should also consider learning to fly.

issue no.9 March 2017

4. It clears the mind Flying is a discipline, albeit not an onerous one. Discipline suits the business mind – it’s intensely relaxing and rewarding. Operating an aircraft requires a level of concentration such that you have no time to think of anything else. This clears the mind of any other worries. Despite what many think, with today’s modern aircraft, flying is easy and safe. Some light aircraft, such as the immensely popular Cirrus SR22 come with their own emergency parachute system.

5. Up where you belong It’s rare to meet the heads of large corporations. But flying offers many such opportunities. Case study: Charles Gunter, former commercial airline captain, and director of Avia Aviation at

Moorabbin Airport in Melbourne, recalls flying a customer to Deniliquin, a small town in the Riverina region of New South Wales. “In the tiny terminal were three CEOs of billion-dollar companies, including one of Australia’s largest supermarket chains. My customer struck up a conversation with one of them. Business cards and contact information were exchanged. Much business eventuated from this ‘chance’ meeting,” said Gunter. Pilots meet an incredibly wide array of other people, from all walks of life, that enrich both their business and private lives.

Time and cost Depending on where, and the aircraft you train in, it will typically cost about $15,000 to gain a PPL. In the US there are intensive 10-day courses for the required 40-hour minimum flight time and exams.

However, it’s more common to spread it out over six to 12 months. The standard for flying and the theory exams on subjects like weather, air law, principles of flight, navigation, and aircraft systems is high, but not so high that an average person who applies themself cannot reach. Where flying is genuinely business related, it will be tax deductible. Getting started is easy. Just look up your local aero club or flying school. Organise a trial flight with the chief flying instructor and ask the instructor any questions you have about learning to fly. Be careful though – before you know it you might be in possession of not only a PPL but also your own aircraft too. This piece was first published by Acuity at www.acuitymag.com

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