Management

Consider the physical risks of cybersecurity

By Lyndon Broad >>

CYBERSECURITY is a hot topic. Businesses of all sizes are becoming acutely aware of the damage caused by data loss, leakage and theft.

They are aware of the threat posed by malicious intrusions such as denial of service attacks and ransomware infections.

Business leaders know they need to develop strategies based on technology, processes and education to mitigate these risks. Yet many fail to make the link between digital and physical risks. 

Protecting business systems from unauthorised physical access is a vital first step in preventing malicious or inadvertent damage.

To properly mitigate cyber risks, it makes sense to adopt an engineering-based approach. This should include three levels of cyber-risk assessment – physical, information security and industrial control systems.

 

SHUTTING THE DOOR

So while businesses must be alert to the risks presented by high-profile ransomware attacks like WannaCry and Petya, or employees opening emails containing malicious code, they should also be shutting the door on unnecessary physical exposure.

A recent story in the Seattle Times highlights the cyber risks posed by physical breaches. Washington State University warned a million people that their personal data may have been accessed by thieves who stole a safe.

This contained a backup drive used by the university’s Social and Economic Sciences Research Center.

FM Global is developing a risk assessment framework to cover all aspects of cyber security risk. We currently conduct physical assessments on all commercial and industrial properties we insure, supplemented with a digital security risk assessment which is about to be released.

We’ll start assessing industrial control system risks in 2018. Our analytics team is working with external cybersecurity experts to gather intelligence and develop this comprehensive framework.

The FM Global research team then apply our proven loss-prevention approach to create thorough account-level cyber-risk assessments.

Our approach extends beyond providing insurance coverage that helps clients manage risk. We also provide coverage for loss of business due to a cyberattack.

For example, if a large manufacturer’s industrial control systems fell victim to a malware attack, we would cover loss of production as well as the hardware damage.

 

COMMON MISTAKES

We have recently started physical assessments of cyber risk at client premises. These have revealed a number of common mistakes that are easily prevented:   

 

  • Having a network port on a door intercom.
  • Unsecured server rooms.
  • Server racks installed in open areas.
  • Easily accessible cables and ports.
  • Data backups stored in accessible areas.
  • Infrequently used building entrances that are unsecured.

 

Our in-depth research and physical assessments show how the physical component of cyber risk is often overlooked.

This exposes companies to considerable financial and reputational damage.

We encourage all businesses to evaluate the physical risks inside their doors and implement solutions to protect their future.

 

  • Lyndon Broad is the operations manager at FM Global, a business insurance, loss prevention and risk management organisation that uses engineering rather than actuarial principles to help protect organisations.

www.fmglobal.com.au

 

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Start-ups don’t need money – they need customers

STEVE ARTHUR knows a lot about start-ups – successful and otherwise – and he has some unusual words of advice for those starting a new business, well informed by experience.

“You don’t need money to start a new business, you need customers,” Mr Arthur said.

In fact, Mr Arthur – who was involved with the launch of natural fruit blended producer Nudie and is the founder of Australia’s first co-working and incubator site, Desk Space – has distilled what he calls “unusual advice for start-ups” from his observations and experiences.

“So many people think that if you don’t have capital, you can’t start a business,” Mr Arthur said. 

“This is incorrect. Any new idea or concept needs to be reverse engineered initially.

“If you do this and you can work out that you have a customer, you can start a company, because this is how you will generate revenue.”

While being involved with five of his own start-ups, Mr Arthur has been involved with advising and overseeing more than 200 other new businesses. 

This vast spread of experience has largely come about through his involvement with Desk Space companies. He described Desk Space, founded in 2009, as “a hybrid between a co-working space and incubator”. He said it operated as a “transitional space – from what you are doing now to what you could be doing next”.

Today, the members of Desk Space are known to collectively turn over more than $100 million a year.

Mr Arthur said while the expression ‘cash is king’ was the most common catch phrase heard when starting up a new business adventure, it was “an antiquated view for anyone thinking about their first entrepreneurial steps”. 

His five top tips for start-up entrepreneurs may be initially viewed as unusual, but they are borne of hard experience, covering how to save money, how to attract grants, attracting investors, offering equity partnerships and moving on to licensing.

By using the five tips, Mr Arthur believes start-ups can “cut to the chase” and more rapidly drive their businesses.

www.deskspace.com.au

 

UNUSUAL TOP 5 TIPS TO START A NEW BUSINESS

Steve Arthur’s unusual top five tips to start a new business are:

 

WHITE LABEL

“Use existing technology so there is no need to spend on web developers. White labels are pre built platforms that allow you to put your brand over the top. The hard work and the bulk of the cost is already done for you.”

 

GOVERNMENT GRANTS

“The government wants to drive start-ups. Each State has its own way of funding and assisting start-ups, so don’t miss out on these opportunities.”

 

INVESTORS

“People believe this is the hardest way to raise money. If you are prepared, know your product and market, and you have perseverance, people will want to invest money with you.” 

 

DEVELOPMENT PARTNERSHIPS

“Offer equity in your business to other people. They will assist with setting up the business in the areas you are weak in and at the same time provide you with a service.”

 

LICENSING

“Look for companies abroad and offer to be their Australian arm. You can use their name, knowledge, skills. They can use your knowledge of the Australian market.”

 

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Business tip for success: Find your passion

By Rod Richards >>

WE GO into business for many reasons, following our dreams, ambitions, making a difference in the world, and hopefully a great future.

More often than not, people have compromised their futures, been bought for the money.

We can't live a limited life, where we haven't experienced the joys of meeting our objectives and our achievements.

How good would it be to find your passion, and go after the dreams and ambitions you want for yourself and the future.

Take a clean sheet of paper and write down the key things you want to do in life. Please don't limit your thinking by current or past circumstances.

Add time lines and key dates when you want this to happen. 

I often ask this question: “What do you really want to do in your life?"

We know there will be all sorts of challenges, but successful people are driven, determined, focused and meet the challenges head on.

We are only limited by our thoughts, and our fears.

A lot of owners I speak to fear failure and others fear success.

Take the time to look at the risks, the rewards, the challenges; what skills and talents do I have to meet my goals? If I don't have these skill sets, how then to attain them?

You will find them. I believe that everyone should spend time expanding their knowledge, learning and gaining new skills.

For me, learning is a life -long journey and I enjoy it. Find your passion, not just the money and commit to what you want to do in your life.

Life is a journey and I reckon we should do the very best we can with what we have, enjoy the journey and have a crack at achieving our dreams.

Find your passion, don't just do it just for the money.

www.richardsconsulting.com.au

 

 

Rod Richards is the founder and owner of Richards Consulting, a consulting firm that specialises in practical and innovative solutions for small business entrepreneurs. He is a best-selling author and well-regarded business consultant. Richards Business Success Series can be accessed at www.businesstipstosuccess.com.

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Business control is vital – or you’ll go from hero to zero says CFO Centre

AFTER the first flush of start-up, many business owners find themselves faced with common problems caused by business control.

Those problems tend to polarise into coping with potential failure or run-away success – the ‘zero or hero’ scenario, according to The CFO Centre managing director Andrew Crealy. 

“The heroes are fast-growing, successful businesses, usually with considerable drive and enthusiasm from business owners,” Mr Crealy said. “Heroes are clearly going in the right direction, and appear to be getting there rapidly.

“However, like a fast train, without good control systems, knowing when to slow down or accelerate and understanding all the signals – a hero-business can easily run out of track and suffer a spectacular crash.” 

Mr Crealy described the ‘zeros’ as “those businesses that, for some reason, are finding life difficult”.

“ These can often be potentially great businesses, but they find themselves in a situation where their viability may be threatened, again by poor business control,” he said.

“It is immaterial whether businesses fail with a huge fall or sink slowly and uncontrollably – the result is always the same.”

 

BUSINESS HERO/ZERO ISSUES

Mr Crealy said the CFO Centre often found hero-business owners to be extremely enthusiastic, have great business ideas, products or services and they were consumed with ambitions for growth.

“Such businesses, led by their highly driven business owners, are usually great to work in, customers and suppliers alike are impressed with the never say die attitudes,” Mr Crealy said.

“Prime amongst the issues for the fast growing start up is being under-capitalised – the great idea can often die as a result of just not having enough cash.

“The enthusiastic owner whose vision drives the business can suffer from a lack of vision for coping with growth.”

Mr Crealy described ‘zero’ businesses as “strugglers”.

“They can be fallen heroes; however they are usually businesses that have striven to survive almost from day one,” he said. “They often adopt a wait and see policy, hoping that things will get better.

“They are usually characterised by a lack of profitability and cash. The constant pressure of trying to juggle cash to make ends meet overshadows the viability of the business and the potential success that lies within.” 

 

BOOST ZERO, CONTAIN HERO

As with the medical profession, prevention is always better than cure. However, even business cases that may appear terminal can often be rescued, Mr Crealy said. 

“The solution lies in business-based financial support and advice,” he said. “The problem facing both heroes and zeros is finding and funding that advice.

“Frequently, business owners bemoan the difficulty in finding and sourcing affordable advice. However, in some cases they cannot afford to be without that advice.

“As with so many other things, the business owner should go for experience. Someone who has ‘been there, seen it and done it’.

“One immediate response is to hand the problem to the accountant. This can provide a solution, but in reality, most external accountants are not experienced in running a business.”

Mr Crealy said was where the CFO Centre came into the picture – outsourcing such problems to highly experienced financial and business managers

“An experienced chief financial officer (CFO) is invaluable in recognising the danger signals and providing solutions, they know how to finance a business, deal with growth, present meaningful monthly numbers and get the best deals from banks,” Mr Crealy said.

“At some point both heroes and zeros need this experience but they probably don’t need it full time – this is where an outsourced CFO provides the best solution.”

Mr Crealy said owners of hero to zero businesses were prime candidates for an outsourced part time CFO solution.

“With the outsource option, business owners can access a financial management skill set, that is experienced in dealing with problems and opportunities, able to organise both the in-house and external accounts functions, and provide the necessary business advice,” Mr Crealy said.

“The outsourced CFO has the skill set to plan and implement the controls needed to help the zero business survive and the hero business to grow positively. Additionally, an outsourced or virtual solution does not impact payroll or headcount with the business only charged for the days worked – which may only be a few days per month.

“Business owners – zeros or heroes – cannot afford to be without business-based financial advice. The outsourced CFO should be their first priority, before they hit the problems, after all the more time a business has to rectify a situation the more chance of success.”

www.cfocentre.com.au

 

EXTRAS >>

Watch a 3 minute video here to find out how you can take on one of Australia’s leading CFOs for a fraction of the cost of a full-time employee.

Watch 60 second video on how CFO Centre's outsource model works.

 

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IPA finds ATO culture ‘improving’

THE CONSULTATION  paper released by the Australian Taxation Office (ATO) proposing a ‘one chance’ rule to relieve individuals and small business of first-time tax penalties is a positive move according to the Institute of Public Accountants (IPA).

IPA chief executive Andrew Conway said it was another example of “the cultural shift that is occurring within the ATO”. 

“The ‘one chance’ rule proposal is a clear sign that the ATO recognises that in the past, it may have been too heavy handed on taxpayers trying to do the right thing, by not taking into account individual circumstances” Mr Conway said.

“In real life, mistakes can be made and people should be entitled to learn from their mistakes especially if the individual circumstances are clear that the mistakes were inadvertently made. The ATO has the luxury of time and expertise so the balance of power is heavily weighted in their favour.

 “If someone has failed to take reasonable care or failed to lodge an activity statement or an income tax return on time, this proposed rule gives a first-time offender a break. This is a good sign for a small business that is time-poor and drowning in regulatory responsibilities.

“The reality is that the ATO remits a substantial number of penalties down the track after they are disputed which normally involves a great deal of time, effort and stress,” Mr Conway said.

“Not levying the penalty in the first instance will result in a reduction in the administrative burden facing individuals and small business.\

“The ATO is to be commended for this approach and it is a positive sign that the working culture of the ATO is improving,” Mr Conway said.

www.publicaccountants.org.au

www.ato.gov.au

 

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Workplaces now ‘adult day care’?

MIKE IRVING believes “staff day care is becoming a reality” as an increasing number of business owners and manager feel forced to fix their employees’ personal problems to keep them focused on the job.

“Many workers are bringing issues at home to work – unloading to their colleagues about relationship breakdowns, financial debt and family fights, interrupting work and forcing the boss to intervene,” business mentor Mr Irving said.

“It’s a common theme I’m hearing among frustrated employers who find staff are focussed on their own problems and therefore not being supportive of the team,” Advanced Business Abilities founder Mr Irving said.

“Instead of bosses focusing on growing their business they’re babysitting workers, ensuring their mental health is ok and taking steps to reassure them everything will be fine. 

“While this is admirable, it hurts their business as it takes their attention away from the direction they’re heading.

“I’m not surprised this is happening because there is a large number of people who lack self leadership in society.

“There is so much choice and a lack of applied delayed gratification with credit cards enabling people to buy things now even though they might not have the money,” Mr Irving said.

“In school sports every child is now given a participation trophy setting them up to believe things come easy in life not necessarily through hard work.

“We’ve set up generation Y and Millennials to not take responsibility for their life, and expecting others to fix their problems as well as helping them to complete their set tasks at work.

“This is also why many in this generation of workers seem to lack loyalty, opting to stay in a job for only six or 12 months … they’re constantly wanting to move onto something bigger and better.”

Mr Irving said bosses wanting to foster a productive work environment will be best placed if they avoid hiring staff who lack self leadership. The signs to look out for, he said, were:

 

1.     Critical: These people are quick to find fault in others and let the rest of the workforce know about it.

2.     Negative: Their outlook is the glass is always half empty. They see problems rather than solutions.

3.     Blame: Nothing is their fault even if it happened on their watch. They’ll be quick to distance themselves from the work colleague they’re pointing the finger at.

4.     Dishonesty: Will happily lie about a decision or a discussion to cover their tracks.

5.     Unsupportive:  They are more interested in looking after themselves than supporting the boss or following the company’s stated agenda. They will be unsupportive in a team environment choosing to do what’s best for themselves instead of what’s best for the team

 

“With increasing rates of mental health, drug use on the rise and one in three marriages ending in divorce there is no surprise personal problems are spilling into the workplace,” Mr Irving said.

“If you’d like to build a business that works, it’s important to choose the right people to support you.”

http://advancedbusinessabilities.com.au

 

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About Mike Irving

 

Mike Irving runs Leadership Skills Accelerator workshops around the country as well as individual coaching – the next workshops are scheduled for Perth and Byron Bay in August and September. For more information visit http://advancedbusinessabilities.com.au

Fear, anxiety constricts firms – Uni Syd research

AMBITIOUS corporate incentive schemes and performance goals can cause anxious employees to lie about results – and this has a negative impact on productivity, according to University of Sydney Business School research.

Professor of accounting, Wai Fong Chua used the example of the Finnish multinational, Nokia, which suffered financially because of the fear that it generated amongst middle and senior managers.

“Shared fear was so strong amongst Nokia’s middle managers that they withheld important information about the viability of its technology from senior managers,” Prof. Chua said. “The company suffered significant losses as a result and was forced to exit the smartphone market.”

Prof. Chua’s own research relating to the Australian subsidiary of a global computer company has confirmed the need to better understand ‘affective technologies’. These she described as processes, information systems, and performance/financial goals that “have an emotional impact and economic consequences”..

“Take, for example, a billion dollar revenue target that is to be achieved within 18 months,” Prof Chua said. “This tends to produce an affective outcome. Graphic Stock image purchased by Screamer Media Pty Ltd.

“It could be anxiety, it could be fear, it could be excitement, it could be all of these things and that, in turn, affects the way people work in an organisation.

“I believe there is considerable fear and anxiety in today’s corporations, especially those experiencing financial challenges. When corporate distress is not well handled it can have quite adverse consequences.”

Explaining her interest in ‘affective technologies’, Prof. Chua said financial managers today played a key role in designing performance management systems.

“We’re fundamentally interested in ensuring that the systems we design and the goals that are set enable people to develop their potential and achieve to the best of their ability,” Prof. Chua said.

“Stretch goals can motivate staff.  But, when tied to incentive schemes that operate in unsupportive corporate cultures, this can prompt fraud.”

For example, she said, investigations were continuing into the incentive schemes at the Wells Fargo bank in the United States, where about 5000 employees were thought to have created fictitious customers in order to meet or exceed their performance goals.

While researching affective technologies, Prof. Chua has also looked specifically at innovative start-ups and the relationship between entrepreneurs and investors.

“When passionate entrepreneurs, who are really keen on developing their product, turn to venture capitalists, the focus of their project may change in an unwelcome manner,” she said. “Investors are generally interested in earning a quick rate of return and their shorter-term focus may differ significantly from the passion of entrepreneurs.”

Prof. Chua said companies “need to be aware of levels of anxiety and fear and enable folks to discuss processes and goals without being so afraid that they fabricate an answer”. 

“Organisations are emotional arenas, not just economic entities,” she said.

www.sydney.edu.au

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