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On Belief and Innovation

You can’t I was fortunate to receive Tim Williams latest article “Powered by Beliefs” in his Ignition Group Newsletter.  Tim is a true thought leader in the Advertising industry and is a LinkedIn Influencer.  His article really got me thinking about whether we pay lip service to innovation in our businesses or whether we’re actually serious about it.

I have copied his article below and strongly recommend that you have a read through, think about his observations then consider how they might apply to your organisation.

Powered by Beliefs

By Tim Williams, Ignition Consulting Group

Exceptionally talented professional firms are distinguished not by what they do, but what they believe.  Their work is unique because their beliefs are unique. They create dissimilar solutions because they have a dissimilar mindset.

The idiom “I’ll believe it when I see it” is much more accurately framed as “I’ll see it when I believe it.”  We only change our practices once we’ve first changed our paradigm.  Thomas Kuhn, who studied the nature of scientific revolutions, defines a “paradigm” simply as a constellation of beliefs and values.  In a business context, our paradigm about the business we’re in is the mental map that guides our daily decisions.  So having the right paradigm — an accurate map — is essential to effectiveness.  No amount of “hard work” will compensate for a faulty field guide.

You can’t observe your way to success

A theory, not a telescope, has likely discovered the existence in our solar system of a ninth planet beyond Pluto.  In fact, telescopes haven’t really seen it yet, but a progressive group of astronomers are certain they will. In the ongoing development of everything from science to business, the theorists always lead the observers.  The astronauts of the moon mission era risked their lives based on theories.  After all, no one had ever observed a successful moon landing before.

Believers and theorists are the world’s risk takers, not only because they base their actions on a solid paradigm, but because they understand the nature of risk.  “Nothing ventured, nothing gained” is as true in business as in science.  If you and your firm want to create and capture more value, take more risk.  Peter Drucker’s truism “All profits are derived from risk” explains why the most innovative firms are usually the most profitable.  In a very real way, your firm’s beliefs predict its financial future.

Does your firm believe in innovation?

It’s one thing to profess belief in innovation, and quite another to actually invest (personally and organizationally) in developing and delivering it. Ask the following ten questions of your key client-facing colleagues and associates.

1. Despite what clients say about return on investment, the truth is that today’s clients value efficiency over effectiveness; they want efficient work more than they want effective work.

Strongly Disagree     1    2    3    4    5    6    7    8    9    10     Strongly Agree

2. One of our biggest barriers to better work is our structure.  If we were organized differently, we would be more innovative and resourceful.

Strongly Disagree     1    2    3    4    5    6    7    8    9    10     Strongly Agree

3. Most clients aren’t all that interested in innovation and added value; they just want their work done on time and on budget.

Strongly Disagree     1    2    3    4    5    6    7    8    9    10     Strongly Agree

4. In today’s environment, we risk getting reprimanded or possibly fired by our clients if we defend our recommendations with a strong point of view.

Strongly Disagree     1    2    3    4    5    6    7    8    9    10     Strongly Agree

5. Our firm can’t devote the time to innovating our services and business model because we’re too busy with the daily crush of client demands.

Strongly Disagree     1    2    3    4    5    6    7    8    9    10     Strongly Agree

6. Because so many firms and services are alike, most clients today select and retain key business partners based primarily on price.

Strongly Disagree     1    2    3    4    5    6    7    8    9    10     Strongly Agree

7. Since budgets are predetermined and controlled by our clients, the only way our firm can make more money from current clients is to improve our efficiency.

Strongly Disagree     1    2    3    4    5    6    7    8    9    10     Strongly Agree

8. Because we’re in a service business, our most important job is to fulfill our clients’ requests.

Strongly Disagree     1    2    3    4    5    6    7    8    9    10     Strongly Agree

9. It’s appropriate for client organizations to have R&D budgets, but professional services firms like us should be spending on salaries and benefits, not experimentation.

Strongly Disagree     1    2    3    4    5    6    7    8    9    10     Strongly Agree

10. Progressive client companies can support a philosophy of “fail fast, fail often” but in a professional services business failure is almost always punished, not rewarded.

Strongly Disagree     1    2    3    4    5    6    7    8    9    10     Strongly Agree


The lower the firm’s average score the better, and the more likely you and your colleagues genuinely believe in the power of “think different” as celebrated in the famous Apple campaign.

Anomaly’s Jason DeLand once remarked “Your firm will never be able to innovate as long as you believe you sell hours.”  In addition to the many other things that are wrong with the hourly rate system is the belief it creates in professional firms that we are “renting time” to our clients.  This unhealthy paradigm is supported by the belief that we’re in the “service” business instead of the transformation business.

Believing we sell “time” and “service” points us only in the direction of fulfilling orders.  You can be a waiter if you want, but there’s a much better future in being a chef.


On Recruiters – an Ethically Bankrupt Business Model?

Each week brings new challenges and, occasionally, provides illumination into a world where you wonder where a business model actually comes from and on what ethical platform it is based.

This week has got off to a great start – on return to the office yesterday, I was greeted by a chorus from the team telling me how they had been approached by a “Professional Services Recruitment Consultant” wanting a “confidential discussion” about “…some opportunities that are available”.  Based on the subsequent discussions with the crew and our GM, there is nothing professional or ethically “good” about him.

Given the apparent carpet-bombing approach to people within my business, a phone call to the “consultant” was called for.  His argument went along the lines of “that’s business”.  Fair enough.  I pointed out to him that his business model was based on trying to market and place the people he destabilises to, well, people like me.

The ironic and sad issue (for him and his employer) in all this is that he is currently wanting to speak with our GM about placing a “candidate” from another local firm into our organisation!  Great tactics Einstein!  Try and poach our crew whilst trying to “market” someone else’s staff to us.


Spectacular business model – until you get found out.

According to the firm’s representatives (spoke to the body-pusher and his Manager), their electronic communication and website, they are an “elite” brand.  It all comes down to how you define “elite”.  I note on review of the various dictionary definitions, there is no reference to ethical.  There is also no mention of the word “ethics” on their website.

Later that afternoon, I had cause to have a discussion about ethics with one of my crew.  It was interesting, engaging and high-value.  Ethics is something that is inherently about doing what is “right”.  I like the following definition from the British Dictionary:

1.  pertaining to or dealing with morals or the principles of morality; pertaining to right and wrong in conduct.
2.  being in accordance with the rules or standards for right conduct or practice, especially the standards of a profession…

If you believe it is ethical to try and destablise a person from their job to place them into another one where you are trying then to create a “gap” that needs filling by taking someone from that business, are you really any different from a slave trader? Is there really any inherent value in this process or is it just about levying fees and costs, disruption and bad feelings?  As Ron Baker, an Ethics Teacher and Founder of the Verasage Institute put it to me:

I’ve always thought “headhunters” were a notch below used car salesman

If you have staff who are unhappy, they need to let you know and you need to address their concerns or they will leave.  The culture you create in your business is critical and will serve to keep your people engaged and developing.  My view is that you should speak with each of your team regularly, one-on-one, to give them the opportunity to bring up issues they are unhappy with early rather than when it’s too late.  As I say to them “If I don’t know, I can’t do anything about it”.

In all of this, returning to the question “is this good?” is imperative,  Thinking about the afternoon and events that unfolded, my further education into ethics has been good –  I have further clarified what conduct is right, good and ethically supported and what is not.

I will be informing all of my colleagues in Ballarat as to the approach of this particular organisation to let them determine how they will ethically deal with this “elite business”.

If anyone would like to know the name of the firm, please contact me – happy to share.

On Muddle Management

The Australian Institute of Management has recently released a report on the perception v reality for middle management.

It is not pretty reading – especially if you’re a middle manager!

Now, the survey was conducted by AIM and Monash University and surveyed 1,898 people across the business spectrum and, according to the Press Release from AIM:

The survey participants said middle managers in their organisations are significantly underperforming across the range of key indicators including people management, communication and leadership


As AIM states,

Middle managers are the communication ‘gatekeepers’ in an organisation responsible for transmitting messages up and down the workforce ‘ladder’.  It is these managers who have a key role in shaping a company’s workplace culture and who help determine the success of productivity initiatives and major change programs.  Pacesetter organisations are those in which middle managers are in sync with their organisation’s vision, goals and business strategies.

It all comes back to the leadership within an organsiation – how well the goals and mission and vision of the business are communicated not only from those at the top, but through those all the way “down” in an organisation.  From my experience, there are not very many businesses that devote any time or effort to really get this information effectively all the way through their business.  Those that do are exceptionally successful, those that don’t wither and underperform.

Whilst the report encourages middle managers to take more responsibility to refine their own skill sets in the areas of  leadership, communication and staff management, the reverse is actually true – the owners/senior management within organisations need to provide their own leadership and support in this area.  “A fish rots from the head” is an apt analogy here.  Those “at the top” are obliged to provide what is needed for those reporting to them to deliver what is required.

With an effective strategy to engage and develop middle managers, organisations can truly excel.  We have seen loads of examples over the years where businesses have invested in processes and strategies that specifically address the need to communicate vision and mission and goals through and organisation (the Stages of Growth process is ideal for this and, being research based, is incredibly effective) and also to enable people within an organisation to understand and then play to their strengths (the Trimetrix Assessment is perfect for this).  The end result of undertaking these processes is that the organisation is healthier, more focussed and far more effective in what and how it does what it does.

One of the more telling components of the report states:

Our survey results confirm that now is the time to be more strategic when evaluating the contribution and capabilities of middle managers.  Certainly, if organisations are to maximise their performance in a marketplace that is becoming more global and more competitive by the day they need to ensure that middle mamagers are a positive asset, not a hindrance.

Where an organisation understands that middle management is there to provide the support, guidance and direction to the operations level of the business and then ensures that middle management has the right information, communication skills and leadership abilities, they will do exceptionally well.  Unfortunately, we often find that most organisations adopt one (or more of the following excuses – and this is not an exhaustive list):

  • we’re too busy
  • we don’t have the budget
  • our people aren’t up to this
  • we don’t have the time
  • it’s not onoe of our priorities at the moment.

Thinking such as this on the part of senior management will ensure that they won’t allow their organisation to thrive.  There will always be an excuse and there will always be the opportunity to work on the business to make it better.  By putting it off and/or ignoring the potential that exists within an organisation, the argument is that the owners/senior managers are being negligent.

So, if you want to invest and get a very solid return on the improvement that is waiting to happen within your organisation, why not get in touch?  The survey results show that most businesses are pretty crap at management of middle management.  By improving their performance in this area, they will significantly outperform their competitors and find life is a lot less stressful.

Nothing to lose, everything to gain.  It would seem stupid if you didn’t pursue the opportunity for your business.

By way of example, we did a Stages of Growth Xray with one of our customers the other month.  As a direct consequence, their gross margin increased from 34% to 51%.  Would you like to do that?

To read the report, please follow this link.


Senior Accountant Ad

OMFG! This is Going to be Huge…

enormousWe’ve just started working with a customer who has a product which looks like it is going to change an industry.  You don’t get them very often!

Put it this way – you know how Apple approached things differently because “it’s the design stupid”? 

Well, this product is very similar. 


  • is niche (good);
  • offers things the competing products in its niche don’t (good);
  • provides massively increased safety and protection for users over what is currently available (really, really good); and
  • is easier to use, more adaptable and at a better price point than its current competitors (really good too).

There is only one, final, regulatory step to go to get it ready for launch, and, given the feedback we have received from those “in the know” who have tested it, it will fundamentally alter the industry it is entering. 

If you’d like to know more, send me an email.  It’s very, very exciting!

On Getting Your Ducks in a Row

ducks in a rowTrying to “line up your ducks” is one of the biggest challenges for any leader or leadership group.

This morning I read the latest report from Deloitte Consulting titled “Business Trends 2014” and one of the sections in that report is titled “The C-suite: Time for version 3.0?”

In reading the findings from the Deloitte research, it became apparent to me that one of the major factors that senior management and Boards need to consider is the ability of their team to work collaboratively and effectively across a range of specialist areas.  The development of team building and development strategies should become an agenda item for every Board of Directors.

As they state in the report:

A key requirement for the next-generation C-suite will…be the ability to secure alignment and coherence across multiple dimensions of essential change, without defaulting to the command-and-control arrangements of a bygone era.

This all has to do with the capacity of the leadership group of any business to be able to work with and across a range of functional specialties and be able to extract the information from those specialties to enable better decision making to be achieved.  Often this can be difficult because the leaders can be subject to assumptions that cloud their thinking or limit their imagination.  This can lead to issues with limiting the imagination or creativity of the team with the result that they deliver less than optimal outcomes.

By investing in personal development and team understanding, the chances of this limiting approach can be lessened.  We have found that utilising tools such as Trimetrix and the Stages of Growth creates massive upside and allows the senior leaders in any business to see well beyond their area of specialisation.  The tools help identify opportunities and allow the establishment of highly collaborative, multi-specialist teams to further investigate and exploit the opportunities that do exist.

Having a leadership team that works effectively and can not only see but work towards delivering “the big picture” will help to keep the organisation dynamic, make a massive difference in staff engagement (they will see true leadership from “the top”) and allow the utilisation of talent that would otherwise be left to stagnate or “vote with their feet”.  The collabroative teams can be drawn from across the business and business units which increases the “team” feeling and allows those people in the organisation with particular skills and talents to be more fully aligned with the whole business.  In effect, it helps to assist develop a culture that encourages innovation, collaboration and creativity.

I encourage you to read the report which can be found here and to have a think about what it means for you and your business.

Once you have had a think, initiate action to start “herding your ducks”.

On Changing Rules for Not-For-Profits – Doctors Beware!

surgeryThe Federal Government has recently released the final report of the Not-For-Profit (NFP) Working Group relating to the tax concesssions the NFP sector is currently able to access.

It is pretty dry reading and  there is no endorsement by the government of any of the recommendations from the working group.  This then provides little in the way of guidance for us as advisors, however, we need to be aware of the specific recommendations that are in the report as released as they have the potential to change the NFP tax environment markedly.

The major items we see as impacting on the sector include:

  • removal of the Fringe Benefit Tax concessions;
  • removal of uncapped meals and entertainment facility leasing concessions (this will impact public hospitals and medical staff salary packaging);
  • removal of “serial capping” where people may work across a number of concessioned employers (eg: medical staff working at two or more hospitals); and
  • removal of “mutuality principle” where receipts from members (eg: Clubs) are not assessable for income tax purposes.

There are a number of other recommendations in the report, however these appear to be the most impactful and possibly controversial.  For instance, if the serial capping of FBT-concessioned benefits through public hospitals is removed, is this going to make it more “challenging” for hospitals to recruit and retain medical staff or are they going to have to pay more for their services?

As always, it is a matter of “watch this space”.  Where the government goes with these recommendations is anyone’s guess, however, the recommendations as they currently stand are a significant change to the current status quo.medical

On loneliness when you have heaps of friends

Richard Watson writes some very thought-provoking blogs and one of his more recent posts is especially so.

He argues that whilst we are more connected and everyone has higher profiles (especially those heavily using social media), the incidence of real friendships and support mechanisms is dropping.  We can see this with higher levels of suicide, depressive illness and “problem” relationships that are being more widely reported.  People know about it but are they doing anything about it?

I see the focus on “being connected” as a real issue whereby we are spending so much time working and dealing with inconsequential things like Facebook and Twitter, we’re missing out on the true values that make us human.  There seems to be a huge focus on the part of our younger people to get as many friends and followers on the various outlets of social media whilst fogetting about the truly important friendships and relationships that sustain, support and develop us a human beings.  It amuses me that Facebook seems to be a place where people post pithy quotes about the value of life and friendships but remit these purely via the internet rather than over a coffee table or kitchen table with friends as unique individuals properly inter-relating.

So if you have lots of friends on Facebook, how many do you have in real life?  Or are you actually lonely?

On Cashflow

“Cashflow is King” – long live the king!

In recent weeks, we have been working with one of our clients looking at the margins and debtor position of a number of their customers.  Flowing from this, we found that one of their major customers was on a far lower margin than the others and also had the longest payment terms.  In effect it was costing our client to have them as a customer!

Our client then took this information to their customer and, lo and behold, the trading terms came in by 20 days!  The information they shared was very open and honest and they presented the situation in a very frank and direct manner.  One of the really surprising outcomes from all this was that the customer actually offered our client additional work for their other businesses and has opened up new supply opportunities to enable a better relationship to be developed.

In the current times where people can find it hard to supply at a decent margin (ie: one that actually makes you a net profit!), one of the terms and conditions that can be manipulated is payment terms.  If you work out the cashflow impact of your debtors paying you in 35 days instead of 45, the difference in your bank account can be amazing.  Similarly, if your debtor days go out, you will definitely notice it!  I explain this in a bit more detail here.

So, when it comes to negotiating terms and conditions with your customers, why not review it in light of not only margin, but also payment terms?  That way, you can be king!

On Indecision

There is a consensus view that the current economic environment is one which is filled with uncertainty.  Customers aren’t spending, banks aren’t lending and businesses are finding things much tougher.

On our view of what is happening, much of this is true (especially with the banks).  We do find however that a lot of the issues within business comes from the fact that the times are uncertain.  The uncertainty they are seeing/feeling is creating uncertainty in their minds. 

The problem with this is that is leading to indecisiveness.  People just aren’t making decisions or they are putting off making decisions so much that someone else ends up making the decision for them.

So we have the situation where the perception is creating the reality and the “cautious” approach being adopted by a lot of businesses is perpetuating itself.  It then enables a vicious circle to exist where business owners and managers effectively become stuck – like a rabbit in the headlights.  They do not have the confidence to make decisions which means that they don’t.  This lack of decision making confidence is something that needs to be addressed.

Having worked with a number of businesses over the past couple of years, we have seen the impact of the differing approaches.  Those businesses that adopt the “stuff it, we’ll make a decision” approach have been doing very well.  Those that have a deep-set fear about the current environment don’t.  It is the ones who don’t that we see as falling behind (sometimes badly).

The lack of decision making in a business leads to a situation where the “bad” results actually occur which then verifies the behaviour that created the indecision in the first place.  This sounds stupid doesn’t it?

To take advantage of the economic environment that we have at the moment, try adopting a more positive, assertive and optimistic view.  This will help you make decisions.  The results of those decisions will see you move in a more emphatic way and this will seep through your whole organisation. 

You need to remember that a lot of your competitors are in the fear mode of thinking where they will be scared of making a decision.  This creates a significant competitive advantage for you and your business.  This will create improved results and deliver the affirmation that will help you make more decisions.

As always, it is up to you – your attitude will determine your altitude – by taking a more positive and optimistic view on things and actually making (and implementing) decisions, you will be so much better placed to set yourself apart from your competitors.

It is not a matter of luck.  Defy the doomsayers.  Believe in yourself.  Act.

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