Management

Why it doesn’t have to be lonely at the top for CEOs

By John Karagounis >>

LONELINESS was one of the first things I noticed when I started working closely with CEOs a decade ago, right at the height of the global financial crisis (GFC). Not my loneliness, but theirs.

Many were feeling the intense pressure that was coming to bear on the corporate world at that time. These highly intelligent and competent people, who seemingly had it all, were feeling emotionally isolated. 

Many confided in me that they felt they had no one to talk to, no one who could relate to them. 

It was an exceptional time because the GFC put an incredible amount of pressure on everyone in corporate management, especially chief executives.

However, this feeling of loneliness is about more than dealing with the external pressures of an event like the GFC. It’s something many CEOs feel at an existential level.

Over the past decade as the CEO and managing director of The CEO Circle, I have interacted with more than 500 CEOs around the country. At The CEO Circle, we bring them together in confidential surrounds to connect, share, learn, develop and grow for their greater personal, professional and organisational success. 

John Karagounis.

They tell me nothing prepares them for their role. There is no manual, no handbook, no preparation whatsoever.

When they start in the role, they soon realise it’s the loneliest job in the world. They have a yearning to connect and engage with like-minded CEOs because they understand that the best advice they could possibly receive is from their peers, who have been where they are and empathise with what they are going through.

This sense of loneliness and the need for connection is something I have explored in my new book Why I Wrote This Book: For Greater Success.

These captains of industry possess incredible skills and capabilities, have deep insights and are fully equipped to run billion-dollar companies. But do they understand the essence of connecting?

The short answer is generally no. They’re usually not good networkers. There are exceptions; those few with gregarious, extrovert personalities or those who really commit to the task.

However, the reality is most do not invest time in connecting and engaging with people on a proactive basis. They do it when a need arises, like when they lose their job.

It’s at this stage of their journey where reality hits hard. Suddenly they feel isolated and alone.

But there are three key things CEOs can do to mitigate this loneliness: learn to network properly; stay involved and active in the outside world; and genuinely appreciate people.

What does it mean to network properly? Networking has a bad name for some because social media platforms like LinkedIn have made it easy to just click ‘accept’ and believe that is the extent of it. This is networking at its most superficial.

Networking is about building meaningful and mutually beneficial professional relationships that will stand the test of time. It might start with clicking ‘accept’ or swapping cards but it has to go deeper. Think quality, not quantity.

Work on connections where you can bring real value to the table. Don’t think about networking as a means of profiting from a relationship; start thinking about it as a means of giving something to a relationship. Giving is the essence of connecting.

Why should you stay involved in the world beyond your workplace? Because this is your life support system. Your friends and your family provide the buffer between you and the often harsh realities of work. I’m not a believer in the concept of work/life balance as such; I believe it is more about integration and finding harmony. Part of this harmony is making sure you don’t shut out the people in your life who are special to you.

I would extend this to things like hobbies and community activities too. These things give you a chance to switch out of work mode and dive into another aspect of your life, connecting you to different people and having different relationships than those you would have at work.

Do you genuinely appreciate people? My wonderful friend Jon Burgess espouses this simple ideal: “Who matters? Everyone matters.” This is at the base of what it means to connect and engage, and to move beyond feelings of loneliness and isolation.

It is about genuinely appreciating not only the people in your immediate circle, but also the wider world. Chatting with a stranger in an airport lounge; making time to really hear what a client has to say; or talking to your kids and their friends to get a new perspective on the world. These interactions can bring colour to your world when it starts feeling grey.

 

Loneliness is a silent pain. By reaching out to give, share, and connect, you open the door to a community of people around you. Share yourself with these people and you will be richly rewarded in return.

 

* John Karagounis is the CEO and managing director of The CEO Circle, an exclusive peer group forum for business leaders. www.theceocircle.com

 

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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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