So many businesses standing on the brink of failure

By Alan Moore >>

AMIDST the daily social feeds, news stories and business conversations I observe, one aspect of business is masterfully concealed. Cognizant it is a side of business that’s not so ‘grammable’, but the reality is that each quarter more than 1,800 businesses in Australia become insolvent.

Very few people are willing to admit business hardship and standing on the brink of failure – and it’s this very admission that can enable a business to turn around.

Every day we see start-ups and ventures that quickly rise to success, founders on the speaking circuit and rounds of cash injected into businesses through hopeful investors. But there comes a time where every organisation will face its tipping point that will question the very future of that venture. 

More entrepreneurs could be speaking about this – it’s a natural evolution for any business. Through admission and successful management, owners can win back employees, guide learning and enable the business to ride this cycle.

Every business will face its edge on the brink of failure. It’s those that prepare, and the business response that determines who comes out of it. Rather than ignore the situation or hide it from employees, its critical to face the brutal facts – it’s time to transform.

What we are seeing is blind-sighted failings. Entrepreneurs who have turned their brilliant idea to a lucrative commercial venture, expanded rapidly or monopolised a market position – ill-prepared or inadequately skilled within the larger-scaled enterprise, they are taken by surprise when the success bubble bursts.

Silo thinking is another barrier to corporate evolution; this is where individuals and teams undertake their tasks without question or interaction because ‘that’s how we have always done it’.

Enabling a culture of innovative thinking is critical to sustained success.

Strategy, ‘no strategy’ or ‘one strategy’ can also bring down a once successful operation. Contingency strategies are crucial to prepare the organisation for times like the loss of core clients, new competitive market entrants and products. This prevents ‘panic’ in the organisation and supports a quick recovery.


Toys R Us is an example of a business that became too comfortable in its success that it didn’t prepare for changing consumer preferences and market shifts.

Relying on its exclusive distribution with Amazon, the organisation hadn’t set themselves up for ecommerce and from 2004 the market became more accessible for players who swept in on their market share.

Borders Bookshop – set up by two passionate brothers who were avid readers – didn’t prepare for technological shifts and the entry of e-books. The Borders juggernaut had just under 20,000 employees when it went into administration in 2011.

As a business owner, I can vouch as an authentic authority, as not only do I work with business CEOs directly facing this, BUT my own business experienced the brink of failure.

The signals every business (and investor) should carefully observe are not just the financial focus of the business. If there is an obsession on growth forecasts and cash injections rather than putting your customers, employees and services at the centre of your business model and decisions, then you may set your business up for a volatile future.

Second, a business with a Teflon strategy – where nothing sticks and decisions are made on a whim – is another red flag.

A simple example is observing a competitor undertaking a marketing initiative and then adopting a copycat approach with a short-term focus, with ‘gut reaction’ only and no data driven decision-making.

Third, a review of employee and customer engagement and retention will always act as a good indicator on the confidence in your organisation.

If these are all trending downwards then this is a valid indicator to act now.


In transforming your business the key steps are to:

  1. 1.       Build a transformation plan – making sure that you have built in contingencies, so that it is flexible to be able to navigate and foresee both internal/external market conditions.
  2. 2.       Communicate – this is key. Take your team on the journey, giving them confidence on the business rationale and how it affects the organisation, creating an acceptance to change.
  3. 3.       Centre decisions on data – always make sure that decisions are driven by data rather than reactions.
  4. 4.       Set out critical success factors based on leveraging key performance indicators (KPIs) – these KPIs should be aligned to each business unit – giving your team an insight, deliverable and ownership into the overall transformation outcomes.
  5. 5.       Assess the current organisation capabilities – consider People, Process and Technology to ensure that the transformation outcomes are sustainable.
  6. 6.       Build the future organisation – plan for skills, roles, structure and capability.
  7. 7.       Make decisions – difficult decisions will always be necessary in any transformation, make and execute these in a humble and considered way.
  8. 8.       Build the transformed organisation – ensure this is undertaken with sustainability at its heart.


Transformation takes time. For us, we commenced the journey two years ago.

We went from an entrepreneurial award-winning organisation that was completely dependent on two core clients, with siloed product offerings, that forced us to build an aggressive transformation plan that was focused on delivering a fundamental change in our business paradigm, product offering and customer base, a revived business culture with international expansion, creating partnerships with our clients, implementing a bold risk-based model that centred on our client’s success and adopting a diversity and flexibility within our international teams.

Today we have transformed to operate within a global customer base and workforce, have opened in London and the Middle East and now taking our Australian business product around the world.

Our transformation will not stop, we have ensured that we have a culture embedded across all our operations to ensure that we sustain our competitive position and have the flexibility in our strategy and operating plans to ‘take action’ not ‘reaction’.

No business is immune to change.

If you can survive a fail, then you set your business and employees up towards a more resilient future.


About the author:

Digital expert Alan Moore is the international business transformation leader and director of Randem, an Australian-founded international B2B and B2C digital and e-commerce transformation organisation. With more than 20 years experience, Mr Moore has carved his expertise in the rising need for organisations to embed a strategic holistic technological platform that delivers operational excellence, strategic customer marketing, sales and relationships.

Mr Moore has been at the forefront of large-scale digital transformation programs for many prominent locally-owned and international brands. His expertise encompasses diverse sectors including financial services, telecommunications, IT, media, retail, pharmaceutical, lifestyle and food and beverage. From building a business solution and strategy from scratch, to supporting organisations in their transition to ecommerce or international markets, Mr Moore is the catalyst for corporate change with a very innovative, integrated and dynamic style.

Alan Moore works directly with business CEOs and leadership teams around the globe to reinvent their business models to deliver customer focused, efficient and profitable business structures. Prior to his consulting work, Mr Moore held a number of strategic change positions with companies including Accenture and Deutche Telkom Group.


Small business suffering from ‘regulatory overload’ – IPA

THE Institute of Public Accountants (IPA) is calling on governments and regulators to think carefully about the impact of regulatory compliance on small business through its Australian Small Business White Paper recently released in partnership with Deakin University.

“When we conducted our nation-wide roadshow to gain direct insight from hundreds of small businesses, dealing with the plethora of compliance was one of the key issues,” IPA chief executive officer, Andrew Conway said.

“We also heard of countless stories of the stress of running their businesses and trying to keep up with compliance.”

The IPA’s White Paper recommendations to the Federal Government in relation to regulatory overload include: 

  • Continue emphasising the need for ‘risk based’ regulation, so entities at a ‘low risk’ of non-compliance are not subjected to inappropriate, unnecessary regulatory scrutiny.
  • Continue contributing to the work of the OECD in enhancing global awareness of good regulatory compliance.
  • Continue periodic reviews of regulatory agencies/bodies and statutory boards to ensure the public interest is well served
  • Continue using the Office of Best Practice Regulation to ensure laws and regulations take account of small business needs.
  • Strengthen the use of small business regulation impact statements.
  • Ensure company extracts and financial statements lodged with the regulator are made freely available.
  • Facilitate the application of technology (‘regtech’) solutions, especially by small business, as a means of easing the regulatory burden.
  • Consolidate corporate and other registers, so small business owners can deal with one portal for all their compliance needs.
  • Pursue necessary measures to implement one regime for registration and regulations of charities and not-for-profits.

“We need our small business sector to be productive, to grow and to prosper; so the more we unshackle them from the regulatory burden, the better our economy will be,” Professor Conway said.


Managing longevity: it’s changing how the workplace operates

THE ANNOUNCEMENT by Prime Minister Scott Morrison that his government is dropping its policy to raise the age of pension entitlement from 67 to 70, has come as a relief to many planning for their future. But what does it mean for business managers?

By 2056 one in five Australians will be 65 or over, according to Australian Bureau of Statistics projections. Yet this conventional “demographic time bomb, silver tsunami” narrative is both limited and flawed, according to Geoff Pearman of Partners in Change, a trans-Tasman specialist in age and work. 

He said focusing just on the demographic changes taking place inevitably leads to discussions on the affordability of aged care, increasing healthcare costs and pension affordability. In a nutshell the conversation so far has centred on how society can manage many more people being older for much longer, he said.

For example, it is now projected that Australians born in 2013 can expect to live around 34 years longer than someone born between 1880 and 1890.

“We have always had ageing, what is new is longevity,” Mr Pearman said.

In his view, this is something to be celebrated. But when it comes to work, “it will require a rethink of the conventional ways we have talked about the life stages, ageing and work. We are already seeing the end of retirement as we have known it”.

A silent revolution is already taking place. The Baby Boomers are doing what they have always done: challenging the norms and transforming each life stage as they reach it. 

According to workplace wellness expert Katrina Walton from Wellness Designs, “Progressive employers are adopting age-friendly workplace initiatives, recognising that many more people are staying on at work longer through choice and in some cases from necessity. 

“They are also focusing on retaining staff to address skill shortages, including upskilling and strategies for keeping mature age employees healthy, safe and engaged.”

To help business leaders deal with these changes, the Partners in Change and Wellness Designs companies are initiating the inaugural Age and Work Symposium, to be held in Brisbane on November 27 this year.

Ms Walton said the aims of the Symposium were to challenge, inspire and give rise to new and innovative thinking and practical solutions that capitalise on longevity in the Australian workplace.


Hell or high water: protecting business from flood

By Paul May >>

AUSTRALIA is increasingly prone to severe flooding and the risk to business on the East Coast is on the rise.

Regions in Queensland, New South Wales, Tasmania and Western Australia have all been inundated between June 2016 and November 2017. Parts of North Queensland were declared a disaster zone due to flooding in March 2018.

These conditions have directly impacted businesses in affected areas, as well as other companies and consumers that rely on their products and services.  

Research indicates the frequency of flooding in coastal South East Australia – extending from Brisbane in the north down to Eden in the south and incorporating Sydney, Wollongong and Newcastle – has increased since the late 19th century. According to research published by the Bureau of Meteorology in 2016, the frequency of major floods has increased by 50 percent during that time.

Flooding is one of the most damaging and expensive natural catastrophes. Floodwaters can damage essential production machinery and stock, forcing businesses to expend considerable time, effort and money cleaning, repairing and replacing damaged items. Flood-related interruptions to production or delivery risks losing credibility with customers, investors and other stakeholders.

Now consider that about one in 10 existing industrial facilities are located in a designated flood zone. This is where 80 percent of flood losses historically occur.


Annual exceedance probability (AEP) is a key measure of flood risk. An area with a one percent AEP has a one-in-100 chance of flooding in any given year.

Contrary to popular belief, this doesn’t mean such a flood will only occur once every 100 years or that you’re safe for another 100 years after experiencing such an event.

Mathematical modelling reveals that an industrial building situated in an area with a one percent annual flood risk for 30 years would have a 26 percent chance of experiencing a flood during that period.

The Australian Government reports our most costly flooding hit parts of Queensland in 2010-2011. It cost our national economy more than $6.6 billion.

To put that in perspective, the average direct annual cost of flooding has been estimated at $943 million.


So the business case for improving flood resilience is compelling. While many businesses are potentially exposed to flood threats, this doesn’t mean damage is inevitable.

For businesses based in flood zones, taking practical and proactive steps minimises the impact of flood, maintaining operations and safeguarding brand reputation.

Planning greatly reduces the likelihood and extent of losses.

A recent FM Global study examined the effects of flood damage on businesses over a 10-year period. It discovered that companies with no response plan — or an ineffective one — suffered an average loss of more than $2 million. Companies with effective response plans in place suffered 70 percent lower losses.

Flood waters associated with Cyclone Debbie in 2017 resulted in a manufacturing plant in New South Wales being shut down for 12 weeks when up to a metre of water flowed through the plant. 

Much of the production delay was due to water damage to electrical equipment.  Raising equipment above the anticipated flood depth would have greatly mitigated the duration of production interruption.

Another business owner had a flood plan which instructed the maintenance team to place all floor-mounted equipment on top of workbenches. This didn’t consider the time it would take.

When flood waters hit at night there was only one worker on shift, so they only managed to move half the equipment before they had to evacuate the site.

The plan also didn’t identify that the anticipated flood depth was above the bench height, so all the equipment was damaged and needed to be replaced.

If the site’s flood plan had considered the time, resources and the likely flood depth this effort would not have been wasted and the one worker could have focused on moving high-value, critical equipment up to the second floor.


When plans are well developed and thought through, they keep your business running.

One business had a flood plan which was focused on moving all high-value vehicles 12km to another facility. By understanding how much warning time they would get from the council, they knew exactly how many drivers they would need to move the fleet to a safe location. As a result, there was minimal damage and normal business was resumed quickly after the waters had subsided.

Effective flood plans focus on protecting and remediating critical systems, machines and stock in the event of inundation. Businesses should also implement processes to trigger these plans promptly in order to minimise damage and disruption when flooding occurs.   

Flood is a significant risk but damage is not inevitable. You should undertake a cost-benefit analysis of modifying facilities to either prevent water getting inside your facility or by relocating critical equipment and material above predicted flood levels. Preparation is the key to taming the waters and keeping your business high and dry.


  • Have a plan with clear action triggers for when flooding strikes.
  • Implement the right combination of temporary and permanent actions.
  • Install flood barriers or improve resistance to inundation.
  • Choose building finishes less susceptible to damage from floodwaters.
  • Avoid storing valuable equipment and material below or at ground level.
  • Ensure data storage systems or critical power and control equipment is flood-proof.
  • Check out FM’s Global Flood Map when moving or expanding into new locations.

Paul May is the engineering manager of FM Global Australia


Managing the future of work and jobs: Sodexo report

QUALITY OF LIFE services specialist, Sodexo, has released its 2018 Global Workplace Trends report, offering fresh insights for global workforce leaders and decision makers on the future of work and jobs.

The report highlights the most critical factors affecting the future of work and demonstrates how an improved workplace experience is key to increasing companies’ performance – and leads to better employee engagement.

This year’s Sodexo report focuses on seven interconnected topics with an overarching theme: the need for collective intelligence across all workplace domains. 

“Since 2012, Sodexo’s Global Workplace Trends [reports] have provided companies with a perspective on the trends that are shaping the future of workplaces around the world,” Sodexo CEO for corporate services and education, Nick O’Callaghan said.

“As a global employer of over 420,000 and a national employer of over 5,000, these insights provide Sodexo with valuable knowledge to improve the quality of life for its team members.

“By using these insights to positively shape our workplace, we can enjoy the benefits of happy staff and improved performance within the organisation. These trends also allow us to assist our clients in planning and preparing their workplaces for the future,” Mr O’Callaghan said.

Key elements identified in the 2018 Global Workplace Trends report include preparing for ‘Generation Z’, the onset of the internet of things (IoT), creating an emotionally intelligent workplace, the impact of resourcing in the sharing economy, adjusting gender balance issues, new insights into ‘human capital’ management and the roles employees now clearly play in driving corporate responsibility.

Getting ready for Gen Z: With high expectations around technology and flexibility, while paying close attention to well-being and quality of life, Gen Z is reshaping the workplace in new and exciting ways for all generations.

The Internet of Things: shaping the future for workplace: IoT-supported workplace environments are an opportunity to operate and engage businesses and employees in a more effective manner by improving comfort in physical spaces, flexibility, precision in the process and ultimately quality of life for everyone. 

Creating the emotionally intelligent workplace: Emotional intelligence has become a core skillset for high-performing organisations and leaders today. The workplace itself can be emotionally intelligent – by allowing people to bring their full spectrum of emotions to work, and aligning their fundamental human needs and motivations.

Re-imagining resources in the sharing economy: Forward-thinking organisations are redefining their business models to leverage the benefits of the sharing economy.

Moving the needle of gender balance: To create a gender intelligent workplace, companies must examine the barriers that are holding back women and implement a cultural transformation driven by inclusive leaders.

Human capital management 3.0: Human Capital Management (HCM) 3.0 is bringing all the different technologies and programs (learning, recognition, wellness) together to transform the work experience into the life experience. HCM aims to enhance the employee experience and help organisations perform at their best.

Employees – New change agents for corporate responsibility: Employees are now key stakeholders when it comes to shaping corporate responsibility strategies. It is important for companies to give their workforce a voice, enabling them to feel fulfilled — while working toward a better future for all.

Sodexo employs a diverse workforce of more than 5000 employees in Australia. Sodexo  delivers a unique array of over 100 integrated services lines including catering, facilities management, concierge services, security, asset maintenance and hospitality services. These services cast nationally and globally across the diverse business segments of Corporate, Healthcare and Seniors, Education, Justice, and Energy and Resources.

Founded in Marseille in 1966 by Pierre Bellon, Sodexo has become a global leader in services that improve ‘quality of life’ – an essential factor in individual and organisational performance. Operating in 80 countries, Sodexo serves 100 million consumers each day through its unique sectoral combination of On-site Services, Benefits and Rewards Services and Personal and Home Services.

Through its more than 100 service sectors, Sodexo provides clients with an integrated offering developed over 50 years of experience, ranging from food services, reception, maintenance and cleaning, to facilities and equipment management. Sodexo has developed services and programs fostering employees’ engagement to solutions that simplify and optimize their mobility and expenses management, to in-home assistance, child care centres and concierge services.

Mr O’Callaghan said Sodexo’s success and its sustainable business model comes from the ability to continuously develop and engage its 427,000 employees throughout the world. Sodexo is included in the CAC 40 and DJSI indices.



20.7 billion euro in consolidated revenues

427,000 employees

19th largest employer worldwide

80 countries

100 million consumers served daily

17 billion euro market capitalisation (as of January 10, 2018)


Transforming your business? Do it and keep on going …

BUSINESSES that transform today, but treat their investment in new processes and technology as a ‘set-and-forget’ exercise, could easily find themselves out of date and unable to compete effectively in a constantly-changing marketplace.

That is the view of Epicor Software regional vice president for Australia and New Zealand, Greg O’Loan.

He said, in his experience of assisting organisations to adapt to new technologies such as enterprise resource planning (ERP) software , it was crucial for businesses to treat transformation as an ongoing process with no end goal but, rather, keeping a series of objectives in mind. 

“There is a lot of talk about digital transformation, which has become an industry buzzword,” Mr O’Loan said. “However, digital transformation actually refers to business transformation and it’s far from simply being a buzzword.

“Transformation is the process of change, which is essential for businesses to remain viable. Businesses that never change will quickly go out of business as they remain out of touch with their customers and unable to deliver what’s being demanded.”

Mr O’Loan said a recent Gartner survey showed how chief information officers (CIOs) were increasingly becoming business leaders. While IT is still a responsibility of the CIO, achieving revenue growth and developing digital transformation were identified most often as top business priorities for organisations in 2018.

Mr O’Loan said there were two key characteristics of a business that is successfully navigating transformation – ‘recognition that change is ongoing’ and ‘focussing on the right things’.

Recognition that change is ongoing

“While many businesses may have begun their transformation journey by digitalising a few processes, savvy business leaders soon realised that transformation couldn’t stop there,” Mr O’Loan said. “Just as technology continues to evolve and improve, companies must also grow and change as they look to leverage new and emerging technologies and compete more effectively with others in the marketplace.

“For example, artificial intelligence, machine learning, and the Internet of Things (IoT) are just starting to gain a foothold in businesses,” he said. 

“The automated processes enabled by these technologies can save businesses time and money, and help them operate more efficiently. As these technologies, and businesses’ understanding of how to use them, evolve further, companies can become even more efficient, work in even smarter ways, and focus on how the changes can support their growth plans.

Focusing on the right things

Mr O’Loan said transformation was not just a matter of adopting new technology, although technology can play a significant role.

“However, true transformation requires business leaders to examine their own business’s capabilities and resources versus the demands and opportunities of the market it operates in,” Mr O’Loan said. “Then, leaders need to consider what steps to take to position the company for growth. This could take the form of a new technology solution, a new approach to processes, or a combination of both.

“For example, manufacturers are finding new ways to bundle services with products, make bespoke products to order, and streamline the fulfilment process, to name just a few. These innovations are transforming businesses by providing new revenue streams and requiring new ways of working.

“To achieve these innovations, businesses need an industry-specific enterprise resource planning (ERP) system that delivers significant visibility into operations,” he said.

“There are also opportunities for businesses to move beyond their core offering. For example, some aged care organisations have expanded into catering or developing allied health products and services.

“This type of expansion is driven by market demand as revealed by data analysis and an understanding of the company’s capability based on information from its ERP system.

“Most businesses have only begun to explore the very tip of the iceberg of what’s possible with new technologies,” Mr O’Loan said. “While they’re right to proceed with cautious optimism, businesses that can figure out how to make these new technologies work for them sooner can outperform the competition.

“Ongoing transformation should be a given for today’s businesses. Doing so successfully depends on a proactive, visionary approach to technology that maps the business’s desired growth trajectory with possible technology solutions.”


Want a better business? Collaborate for success

IF AUSTRALIA businesses collaborated on innovative activities to the OECD average we could expect an increase to current gross domestic product (GDP) of $8 billion from productivity improvements, according to a new report by PwC Australia and Australian business alumni organisation Advance.

The report Out of sight, Out of Mind? Australia’s Diaspora as a Pathway to Innovation reveals the injection to GDP over the next 10 years would be $23.5 billion if Australian businesses collaborated to the level of the five best collaborating OECD nations. 

“Global competition is heating up as trade barriers are reshaped and improvements in tech allow innovation to be diffused and implemented more quickly,” Advance chair Yasmin Allen said. 

“For Australia, it is imperative that we utilise and leverage our network of global Australians and Alumni to collaborate and drive growth.

“Our diaspora are risk takers and adapters. This know how is critical for our success and we need to leverage and harness these connections for the benefit of Australian companies and our economy.”

The PwC-Advance report said collaboration between businesses, government, higher education and global markets were key metrics that drove innovation.

Australia is towards the back of the pack on every indicator of collaboration among OECD countries and is facing a significant collaboration deficit.

This will have a real impact on individual businesses and see the nation fall further behind our global counterparts on innovation, which is a key driver of growth.  

The report shows that a fraction of Australian businesses collaborate with international firms when they are innovating products and the same applies when it comes to collaboration with higher education or government institutions.


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