Seemed like a good idea at the time

Hitler’s American Gamble: Pearl Harbour and Germany’s March to Global War
By Brendan Sims and Charlie Laderman
Basic Books, 510 pages

It is a puzzling landmark in the history of World War Two: why did Hitler declare war on the US, thereby drawing America directly into the conflict in Europe, soon after the Japanese attack on Pearl Harbour? This comprehensively researched book, by two academics specialising in military history, tackles the question. They delve deeply into the thinking of all the major participants, drawing on memoirs, government documents, correspondence, and media reports.

The book cannot be classed as revisionist history, as not much about the crucial decision has been written. Most historians have put it down to Hitler going off on another unhinged jaunt and left it at that. But to Sims and Laderman this is not a sufficient answer. Crazy is not the same thing as stupid.

A crucial point here is the role played by the US Lend-Lease program, which supplied desperately needed food, fuel and war material to Britain and Russia in the years before Pearl Harbour. Churchill had (privately) declared his strategy to win the war by “dragging the Americans in” but it was proving much more difficult to do than say. However supportive Roosevelt might have personally been to Churchill he was keenly aware of the strong isolationist streak in the public and Congress. Indeed, he was stretching the limits of his authority with the Lend-Lease program, maintaining support only by emphasising that the US was extracting benefits from Britain. Even when German submarines began to sink US supply ships there was not much change in sentiment.

The isolationist view underwent an overnight metamorphosis with the attack on Pearl Harbour. Many Americans wanted to focus on Japan, ignoring Europe. Some Lend-Lease supplies were diverted to the US military, and there was a real danger that British resistance and Russian battlefield efforts would flounder. But Roosevelt was generally able to hold the line, partly by arguing that the Nazis were pulling Japan’s strings. He would have known that this was not true, as the US had broken the codes to German diplomatic communications, but Roosevelt was never one to worry about the details.

In fact, Hitler and his circle were surprised when Pearl Harbour happened. But they were not displeased, especially when the Japanese rode over British forces in Asia. The thinking was that if the British had to direct more forces to Asia, and the US had to wind back support for its allies, then this was good for the Reich.

Logical enough, but it does not explain why Hitler took the extra step of declaring war on the US (he had told Japan that he would but the promise could easily have been pushed aside). Sims and Laderman examine his statements and thinking, coming back to his view that Roosevelt was controlled by a far-reaching conspiracy of Jews and financiers. Ludicrous, of course, but it shows that his thinking was all of a piece. Given this, he believed that eventually the US would declare war on Germany, so it would be to his advantage to take the initiative.

Sims and Laderman note that Hitler had no real plan to fight the Americans, and knew that over the long term the US could simply out-produce everyone else. There was a hope that the Japanese could consolidate their gains in Asia and the Pacific and eventually force a peace with ‘spheres of influence’, and that Germany could do the same in Europe. But there was no significant co-operation between the Reich and Japan, beyond agreements signed mainly for propaganda purposes.

There were many balls in the air. What if Russia attacked Japan (or Japan attacked Russia), dividing Russia’s forces and draining strength from the battle with Germany? What if Vichy France finally declared itself on the Nazi side? What if the Japanese took Hawaii, limiting the US to the mainland? All these things were possibilities at the time. But when the Japanese were defeated at the Battle of Midway, it was clear that not only were the Americans going to win in the Pacific but they had the industrial capacity to support all the other anti-Axis forces as well.

Sims and Laderman acknowledge that it could all been very different. What if the Japanese had attacked only the British forces in Asia, so that America remained (largely) neutral? What if the isolationist forces in the US had successfully curtailed the Lend-Lease program? What if the Russian push had faltered, resulting in a prolonged stalemate? What if … what if … this game can be played in many different ways, but the point is that it only came to one ending.

In hindsight, it looks inevitable, and the authors marshal so much research material that their conclusions are hard to deny. The key question of why Hitler declared war on the US has a straightforward answer: because that was where his chain of logic, perverted as it was, led him. Strategically, there was a narrow window of opportunity to build a new system of blocs, dividing the world into quasi-empires. But the moment passed, and the rest is history.

Rounding up the business year

Appearing in In The Black magazine, December 2021

A World Without Email: Reimagining Work in an Age of Communication Overload

By Cal Newport

Penguin, $33, 320 pages, ISBN 9780241341414

Newport is a professor of computer science who has written extensively about communications technology. In this book he takes a deep dive into the way that email has taken over so much of our life and time, creating a “hyperactive hive-mind workflow”. He readily acknowledges that email was, when it first appeared in the 1990s, more productive than paper memos but now the sheer volume of information circulated by email systems has become a problem. Work has become a web of unscheduled communication threads even if much of the information is, when considered, irrelevant to our actual duties. Email requires a constant shifting of cognitive mindset, leading to exhaustion and muddled thinking.

There are software packages that can help to control the flow but the real answer is company policies to combat overload. Does that message really need to be copied to everyone, or sent at all? Can there be a schedule for particular types of information? Is there a better method of collaboration than strings of fragmentary emails? In other words, think before you send. Some of Newport’s proposals might be easier to say than do, but nevertheless he provides a new way of looking at an important issue.

Power Play: Elon Musk, Tesla, and the Bet of the Century

By Tim Higgins

Penguin, $35, 400 pages, ISBN 9780753554388

The idea seemed obvious: why not use lithium-ion batteries, already powering a host of digital devices, in cars? Simple answer: because large lithium-ion batteries can dangerously overheat. Higgins explains how a stream of engineers wrestled with this problem for years but it was only when Musk came up with a reliable cooling system that electric cars became viable. He became a major investor of Tesla in 2004 and jumped into the CEO role in 2008. As a hard-driving leader with decent tech skills he dragged the company into the spotlight, and electric cars eventually hit the road.

It could not have happened without him but Musk is a hard person to like. Known for a mercurial temper, on-the-spot firings, and astonishing self-aggrandisement, he comes across as an entrepreneurial genius with a streak of conman – or maybe it is the other way around. He managed to position the electric car as a civilisational breakthrough even as he was ruthlessly collecting subsidies.

It is not easy to separate the stories of the electric car, Tesla, and Musk, but Higgins manages to keep the narrative streams organised. Fascinating stuff, and it cannot be denied that Musk has made a dent in the universe.

Huddle: How Women Unlock Their Collective Power

By Brooke Baldwin

Harper Collins, $53, 304 pages, ISBN 9780063017443

Baldwin, a journalist and anchor with CNN, is interested in the way that women organise into groups to overcome adversity and discrimination. Such “huddles”, she says, can provide crucial support and advice, and a means to advance causes of special interest to women.

Baldwin speaks with women who have established or joined a group. One particularly interesting “huddle” is made up of lawyers who have found their way up blocked by discrimination, and are working to overcome it. Another is a group of nurses who say that mutual support has been critical in helping them deal with the pressures generated by the COVID-19 pandemic.

Baldwin believes that successful women have an obligation to help others climb the ladder. She looks at an organisation set up by actress Reese Witherspoon to assist women in the notoriously sexist Hollywood environment and speaks with the founders of the #MeToo organisation. Baldwin started out with the premise that “huddles” were a recent phenomenon but she eventually realises that there is a long, if quiet, history.

All of the cases that Baldwin explores are American but nevertheless there are universal lessons in this book about the value of networking and the power of collective action.

Shorter: How Working Less Will Revolutionise the Way Your Company Gets Things Done

By Alex Soojung-Kim Pang

Penguin, $35, 320 pages, ISBN 9780241406786

The way to increased productivity and profits is not working ever-longer hours, says workplace consultant Pang. Just the opposite: innovation comes from clear thinking and creativity. Shorter looks at many companies that have moved to four-day weeks (without reducing remuneration), with good results for the bottom line. Done properly, reducing the work week improves recruitment and retention, and employees – especially those who are parents – report improved focus, less stress and better mental health. People are less likely to experience burnout, and client satisfaction improves.

Pang’s research suggests that most companies that have moved to a shorter week are medium-sized enterprises in the knowledge sector, led by founders who are recovering workaholics. However, there is nothing to stop large corporates making a comparable transition. New-gen communications technology has a key role to play in using time efficiently. Meetings, which consume huge amounts of time, is another area to consider: putting a simple timer on the table can prevent distractions.

Pang emphasises that no single model fits all situations. But now is a good time for leaders to consider whether a shorter week is suitable for their company. Working better by working less might initially seem counter-intuitive but the idea deserves thought.

Talent, Strategy, Risk: How Investors and Boards Are Redefining TSR

By Bill McNabb, Ram Charan and Dennis Carey

Harvard Business Review Press, $49, 224 pages, ISBN 9781633698321

Between them, the authors of this book bring a wealth of experience about investment trends and corporate management to the table. They argue that the short-term metric of Total Shareholder Return is no longer relevant, as the dominant investment players are now institutional funds that look for long-term gains. McNabb, Charan and Carey propose a different kind of TSR called talent, strategy and risk, because decisions and actions around these factors  determine whether and how a company creates lasting value.

A key part of this transition is the expansion of the role of the Investor Relations Officer. Instead of a predominantly PR function, the new IRO has to have the financial acumen to explain and contribute to corporate strategy. This would include the implementation of plans as well as risk assessment and mitigation in areas such as cybersecurity and geopolitical changes. The IRO also has to be able to think like an activist shareholder, and shape company responses to emerging issues accordingly.

At the board level, the strategy of a company has to be clearly communicated to institutional investors, including the impact of recruitment decisions. None of this will be easy, say the authors, but all of it is essential.

Think Again: The Power of Knowing What You Don’t Know

By Adam Grant

Penguin,  $35, 320 pages, ISBN 9780753553893

One of the hardest things to change is your own mind. But the world is a turbulent, unpredictable place, says Grant, an academic specialist in organisational psychology, so knowing when to rethink your thinking is valuable skill. He provides a framework for determining when circumstances have changed enough to require a new approach, with examples of failure and success at thinking again. Conviction and grit are important but so is flexibility and dynamism.

It takes humility to accept that one’s outlook needs revision. But Grant emphasises the importance of maintaining an open, flexible mind. He notes the importance of systematically seeking out different opinions and testing hypotheses. A “challenge network” of people of diverse views can be a great asset, offering advice on which ideas need rethinking in the face of new evidence. This is an ongoing process but there is also value in a regular “life checkup” to avoid an escalation of commitment to an unproductive path.

Grant suggests questions to ask of yourself and of others. Unlearning and relearning require effort and time, he says, but the benefits are substantial. In the end, what got you to here might not get you to where you need to go.

Digital Finance: Security Tokens and Unlocking the Real Potential of Blockchain

By Baxter Hines

Wiley, $50, 208 pages, ISBN 9781119756309

Blockchain technology has enormous potential but so far it has not really broken through to the general public. Hines, a manager of portfolios consisting of traditional assets, securitised properties, and digital assets, believes that this will change with the broad adoption of security tokens. Such tokens, he argues, will address the security concerns of blockchain and the complexity of blockchain systems, the main constraints to date.

Put simply, a security token is a digital device that authenticates a person’s identity electronically by storing personal information. The owner plugs the security token, such as a usb, into a system to grant access to a network service. In the blockchain context, a security token can be loaded with value from nearly any source, allowing for safe, instantaneous transactions. The blockchain connectivity and security measures are embedded in the token itself.

Companies like IBM, Fidelity Investments, and AXA are already deploying blockchain and tokenised options, and many others are gearing up for the change. But there will need to be an education program to explain the system to retail investors. There is still some way to go but blockchain-linked security tokens are likely to eventually become a key part of the financial landscape.

Nothing is Too Big to Fail: How the Last Financial Crisis Informs Today

By Kerry Killinger and Linda Killinger

Simon & Schuster, $22, 568 pages, ISBN9780795353031

Even before the COVID-19 pandemic the financial system was developing dangerous cracks, according to the authors of Nothing Is Too Big To Fail. As senior bankers with experience on the regulatory side, they study the financial meltdown of 2008 for lessons. While regulators have done much to strengthen the banking system there has been an alarming growth in the ‘shadow’ finance system of pension funds, disintermediated loan providers, and even technology corporates. The outcome has been an alarming increase in debt, built around speculative bubbles in the stock market and the real estate sector. Killinger and Killinger see comparable troubles in China, abetted by a lack of transparency in government decisions.

There is also the constant problem of Washington’s spiralling spending on social programs and tax cuts. In an appendix to the book the authors discuss the stimulus packages connected to the pandemic, which might have been necessary but made the US economy even more leveraged and fragile.

Dealing with these problems will involve hard decisions, with an emphasis on paying down debt at all levels and extending regulatory oversight further into the non-bank finance sector. It will be a tough haul but it would be better than the alternatives.

Sustainability Accounting and Accountability (3rd edition)

By Matias Laine, Helen Tregidga and Jeffrey Unerman

Taylor & Francis, $105, 300 pages, ISBN 9781032023106

This book is designed as a textbook for advanced students but would be of interest to any finance professional who wants to know more about sustainability reporting. Nearly all large corporates now have some form of sustainability reporting, according to the authors, but there is a great variety of purpose, substance, format and utility. Lane, Tregidga and Unerman review the various frameworks available, especially the Global Reporting Initiative and the Task Force for Climate-Related Financial Disclosure. These are useful but each company has to tailor its reporting to the specific circumstances and the demands of its stakeholders. The authors support moves towards standards and guidelines but they argue that regulation in this area requires a light touch.

There are chapters dealing with specific issues such as accounting for climate change and weather events, biodiversity, water management, human rights and inequality. Reporting about these issues should not only deal with recent activities but future challenges and strategies for meeting them.

Lane, Tregidga and Unerman believe that there is still much work to do in this area but they see progress being made. In any case, sustainability reporting will continue to be a growing field. After all, what gets measured gets managed.

Going digital, fighting bias

Appearing in In The Black magazine, October 2021

Digital Transformation in Accounting
By Richard Busulwa and Nina Evans
Routledge, $74, 284 pages

The field of digitisation is growing fast and this book would be useful to anyone in the finance profession who wants to improve their capabilities, even though it is aimed primarily at advanced students. Digitisation adds a new dimension to the finance/IT nexus, opening novel opportunities as well as challenges for accountants.

Busulwa and Evans are senior academics at Australian universities and they keep the Australian experience of digitisation in mind. They unpack the key concepts and explain how traditional accounting information systems can be integrated with digital transformation. They illustrate their points with relevant case studies and finish each chapter with tests and exercises, as well as a ‘Google and reflect’ section.

This is important material but the real value of the book is in the concluding sections, where Busulwa and Evans take a dive into the direction of digital technologies. They examine IoT, machine learning and Big Data management, with a focus on where accountants can add value. There is also a framework for ongoing learning and tools for staying ahead of the curve. The authors write with admirable clarity, so it adds up to a good package, and a timely guide on where the digitisation path is leading.

Unbias: Addressing Unconscious Bias at Work
By Stacey Gordon
Wiley, $42, 256 pages

Building a diverse, equitable workforce is no easy task, as Gordon, CEO of a company specialising in the area, makes clear. But companies that make a point of encouraging diversity tend to perform better, especially in innovation and market response. The central problem is that recruiters and managers, like all people, have a natural ‘affinity bias’ and generally prefer those like themselves in race, gender, background and outlook. In most cases, says Gordon, this is an unconscious process, and there is a further level of difficulty due to managers asserting that they are blind to race/gender/background and just want the best person. That is a dangerous claim, says Gordon, and she suggests way to collect data on hiring and promotion decisions to get the true picture.

This can lead to conversations that are difficult but necessary. It can also mean some painful self-examination for senior executives. Gordon offers a set of tools to guide this journey, including questions to ask and procedures to establish.

A drawback with Unbias is that a good deal of it relates to the American experience, especially with race. However, there are universal lessons here that make this book useful to recruiters and managers anywhere.

Downloadable Resources

Leadership advice

Anjali Sud is the CEO of Vimeo, a global video posting and sharing platform with over 200 million users, a position she took up at the age of 33. In this TED Talk, she explains her views about balancing a formal role with informal communication, especially when providing feedback. The CEO role is more about enabling others than being a ‘doer’, although it is important to have demonstrated outstanding competence in previous roles. Another essential is to appoint good people, including ones who disagree with you. The more power you hold, she emphasises, the more accountable you need to be.

Watch at:
https://ideas.ted.com/want-to-be-a-leader-someday-leadership-advice-from-vimeo-ceo-anjali-sud

Malware warning

Ransomware attacks are on the rise, according to data from the Australian Cyber Security Centre. Corporations are the most common targets but individuals, SMEs and government agencies have also been hit. The ACSC has a section devoted to the problem, with advice on preventative measures and examples of recent incidents. Paying a ransom to unlock your devices or files is very unwise, as it will almost certainly lead to repeat attacks and further demands.

The ACSC site includes a useful video on ransomware attacks as well as practical guides on how to respond to an attack and how to report one.

Go to:

https://www.cyber.gov.au/ransomware

Working women

The Business Women Australia site provides a wealth of information and services. It focuses on leadership, business improvement, professional growth, and networking. Its services include a podcast series, an online magazine, coaching options, and a wide selection of events held around the country. There is an Insights section of articles (connected to the magazine) provided by women with specialist expertise: the pieces on book-keeping myths and supporting remote workers are especially interesting. The BWA emphasis is consistently on the useful and the practical. There is a subscription/membership service but the site offers plenty of advice for occasional guests as well.

Go to:
https://businesswomenaustralia.com.au

Tech hiring

Artificial Intelligence, blockchain and proactive cybersecurity offer quantum leaps in efficiency and productivity. The current problem is finding people with expertise in these areas. Recruitment firm Michael Page and the Economic Development Board of Singapore have released their joint report Humans of AI: Innovations and Hiring Trends in APAC which explores the issues in Australia and south-east Asia.

The report looks at the specific skills needed, noting the need for cross-disciplinary knowledge. Creativity and problem-solving is as important as technical skills. Many companies will need to improve their talent management strategies to locate, recruit and retain the people they need.

To read a summary of the report, and access the full document, go to:
Humans of Tech: 2021 hiring trends in APAC for AI, Blockchain and Cybersecurity

Depth of data

The Australian Bureau of Statistics collects and releases huge amounts of data, ranging from the national accounts to the economic impact of COVID-19. Despite the volume of material the site is easy to navigate, and there are sections dealing with industry sectors and trends. There are also tools such as Microbuilder which allow users to draw off data sets to create comparative tables or graphs. This can be used to add depth to a presentation or research report.

Aside from this, the ABS offers a Consultancy Service where specialised data and information can be requested (although there is a cost).

Go to:

https://www.abs.gov.au

Colour me entertained

Appearing in the Australian/Review – September 2021

The Colour Code: why we see red, feel blue and go green
By Paul Simpson
Profile, $28, 352 pages, ISBN 9781781256268

If journalist Simpson is to be believed, the idea for this book began when he went to work wearing a yellow suit – and was firmly told not to do it again. It started him thinking about where the social conventions surrounding colours came from, and prompted him to take a deep dive into the meaning and mechanics of colours. The result is a compendium of hundreds of stories, opinions and scientific snippets, arranged in eleven colour-coded chapters. It answers questions such as why the sky is blue (a phenomenon known as ‘scattering’, connected to the refractive wavelength of atmosphere, apparently) to where the colouring in lipstick comes from (bugs, mainly) to why white paint often contains a touch of blue (which, paradoxically, makes it appear whiter).

Simpson emphasises that the meaning of a given colour varies across cultures and contexts. In many Asian countries, for example, red is associated with money, luck and prestige. In the West, it often signifies anger, violence and evil. But not always: it is also used to highlight female attractiveness. An academic study (conducted by researchers with too much time on their hands, presumably) found that waitresses who wore red received more tips than those who did not.

Most red dye is based on cochineal, which comes from a parasitic insect found in central and South America. It is used in food, medicine – red painkillers are seen as more effective than blandly-coloured ones – and cosmetics. Simpson notes: “The fact that cochineal beetles aren’t particularly photogenic has helped prolong the trade. Imagine the outcry if pandas had to die to make lipstick.”

Green is now tied to the natural environment but that was not always the case. In the past it was associated with financial failure, and in seventeenth century France bankrupts had to wear a green bonnet. Green boats are widely believed to be ill-fated, although the reason for the superstition is unclear. In the Middle Ages, Lucifer was often depicted as green-skinned, as were aliens in  1960s sci-fi movies. The US currency, the ‘greenback’, was originally printed in green because the colour was thought to denote stability, and because green ink was cheap.

Most pigments originally came from plants, minerals or natural oxides. The first artificial pigment was Prussian Blue, discovered accidentally in 1702. The dark richness of it had a huge impact on the development of art, and Simpson tracks it from European painting to Japanese prints. A variety of other vivid pigments followed, although some had the disadvantage of being toxic.

Blue is the colour that more people name as their favourite than any other, although they usually mean the sky-ish variety. There is disagreement among colour theorists as to why, but everyone accepts that it usually makes people feel good. It is widely used in corporate branding, and the artist Wassily Kandinsky likened blue tones to the notes produced by a cello or double bass.

But strangely there is also the reference of ‘feeling blue’. Simpson thinks this might be connected to the idea of ‘blue devils’ seen during alcohol withdrawal. Blue also has an association with pornography, perhaps because smutty books were sometimes printed on blue paper in the nineteenth century.

Purple, on the other hand, is the colour of royalty, and there are many paintings of kings, emperors, and pretentious princelings in dark purple drapery. But the colour’s insipid cousin, mauve, is a different story. It was once decried as the colour of choice for women trying to look younger than their age, and Oscar Wilde quipped that a woman who wears mauve should not be trusted.

Another variety of purple, lavender, was associated with homosexuality, as a combination of girl-pink and boy-blue. Once used derisively, it was later adopted by the gay community as an ironic badge of honour.

At the other end of the preference scale, few people like brown, although artists such as Rembrandt and Rubens made good use of it. This general antipathy was utilised by the Australian government in 2012 when it decreed that cigarette packaging had to use a drab brown known as Pantone 448 C. Research suggested that it made people think of death, dirt and tar, so it was probably an appropriate choice for an anti-smoking campaign. There is not much evidence that it was successful but the affair underlines the evocative nature of colours.

The Colour Code adds up to an entertaining, surprisingly informative piece of work that might even change the way we see the things around us. And we have Simpson’s yellow suit to thank. But hopefully that garment will stay in the closet, forever. There are some things that the world simply does not need to see.

Leadership, jobs, responsibility

Appearing in In The Black magazine, September 2021

Unlock: Leveraging the Hidden Intelligence in Your Leadership Team
By Rob Pyne
Publish Central, $30, 243 pages

Many books have been written on leadership, and many on teams. But very few on leadership teams. Pyne, a psychologist who works in the field of C-level training, seeks to fill this gap, drawing on new behavioural research and his own experiences. He believes that most senior teams are under-utilised, missing some of the available talents and focusing on management rather than strategic thinking.

Making a team more than the sum of its parts requires three development steps: emotional intelligence, creative-analytical intelligence, and practical intelligence. The weight given to each can vary, depending on whether the team is new or established, but all three are needed to some degree. Pyne unpacks each of them, providing assessment tools and diagrams. He advises regular ‘pit-stops’ to review the performance of the team, noting that the role of the CEO is to ensure that the process stays on track. The team must remain focused on the goals, and there should be some space away from the daily issues to think deeply about problems, with the opportunity to learn from mistakes and achievements. None of this is easy, but an effective leadership team means the difference between a good company and a great one.

Get the Job You Really Want
By Erin Devlin
Major Street, $30, 227 pages

Devlin is a recruitment specialist with a string of qualifications and awards so she is well-placed to give guidance on finding and getting the right job. This book covers a great deal of ground, offering advice for graduates seeking their first job through to experienced managers looking to move up or on. Devlin notes that career changes are quite common – she began as a ballet dancer – so a key asset is being able to demonstrate transferable skills as well as a willingness to learn.

The essential first step is to understand what sort of job you want, and Devlin provides self-diagnostic tests to establish values and goals. She has tips for writing a CV and cover letters, and the company of which she is MD, people2people Recruitment Victoria, has a series of templates that are available through the book. She also looks at interview skills and the particular problems with virtual interviews, and addresses the necessity of building a professional online profile. Her emphasis is on practical advice, and she includes some interesting anecdotes to illustrate her points.

It adds up to a useful, well-organised package. There is also an appendix of relevant websites, sources, and references for further reading.

Corporate Responsibility in the Digital Age
By Ivri Verbin
Taylor & Francis, $85, 270 pages

Everyone agrees that responsible, ethical and sustainable behaviour from corporates is highly desirable, but for many company leaders getting there is a much harder proposition. Verbin, CEO of consulting firm Good Vision, part of the Grant Thornton group, provides a useful roadmap. He works from extensive experience and links his points to the UN Sustainable Development Goals framework as well as accounting and environmental standards. He believes that responsibility is essential in an era of digital-driven transparency and stakeholder activism, trends that are likely to increase in the post-pandemic world.

His advice ranges from creating policies on resource use to reducing carbon emissions. Engaging employees is crucial, not just with relevant, ongoing training but with good examples from the top. Collaboration with external stakeholders is also valuable, especially when addressing larger social causes such as alleviating poverty.

Verbin has worked at senior political levels – he counts former Israeli PM Shimon Peres as a mentor – and he is keenly aware of the need to balance values with pragmatism. He includes case studies drawn from Good Vision’s client list to indicate how much is possible, so long as company leaders are willing to move outside their comfort zone and embrace positive change.

Downloadable Resources

Teaming up

Survey data in the Salary Guide FY21/22 released by recruitment firm Hays shows that teamwork is the skill that employers value most in employees at present, with 96 per cent of employers rating it to be as important or more important than a candidate’s technical abilities. Significantly, many employees have expressed a desire to work more collaboratively with other people, including colleagues working remotely.

Candidates for jobs should be able to point to instances where they were part of effective teams, explaining their specific contribution, how the time was used, the communication tools, and how the goal was reached.

Read the article at:
https://www.hays.com.au/blog/insights/workplace-teamwork
The Hays Salary Guide can be downloaded from:
Salary Guide Australia | Salary Benchmarking Report 2021 | Hays

Board performance

Dambisa Moyo is an economist who sits on the boards of several large corporations. As the author of a new book, How Boards Work: And How They Can Work Better in a Chaotic World, she is interviewed by Astrid Sandoval, an executive editor with consulting giant McKinsey, for the Author Talks series. She believes that many boards can markedly improve their performance, especially in oversight, by recruiting from outside the C-suite. She also argues that a board has to be willing to use all the available levers to drive change, and to align the company’s strategy with societal values.

Watch at:
How corporate boards work | McKinsey

Anticipating growth

A survey by accounting firm EY, The CEO Imperative, has found that business leaders in Australia and New Zealand are looking forward to a period of solid growth, building on two quarters of good figures. In fact, revenue growth for many Australian and New Zealand firms is higher than the average tracked by EY’s global report. However, the future will not be a return to ‘business as usual’. Digital transformation is the key trend impacting business, although companies are increasingly focusing on purpose, culture, and people management, as well as on closing the gaps between good intentions and effective execution.

Download the report from, and watch a video at:
https://www.ey.com/en_au/ceo-imperative-study/has-adversity-become-the-springboard-to-growth-for-australian-and-new-zealand-ceos

Building trust

Marcos Aguiar is a Brazilian business consultant, and in this insightful TED Talk he lays out a model to guide companies in establishing a reputation of trust with their customers, particularly when casual or contract workers are involved (such as with Uber). The essential points are: standards of behaviour required for employees; a clear contract relationship; incentives to encourage co-operation; a measure of control over employees, which customers can see; transparency, including a system for customer reviews; a process to mitigate errors and, if there is a problem, to address it quickly. Important stuff, presented with a voice of authority.

Watch at:
https://www.ted.com/talks/marcos_aguiar_7_tools_for_building_a_business_people_trust

Why winners win

The Value Creator Rankings is a 23-year series released by the respected Boston Consulting Group, which bases its analysis mainly on total shareholder returns. Despite COVID-19, capital market performance has remained strong, which helped sector leaders move even further away from the pack. The strong performers had invested in digitisation and other technology-based enhancements before the pandemic, and they reaped productivity rewards in 2020 and 2021.

The sectors that performed best were technology, medtech, financial infrastructure, sustainable energy, and mining. The study also showed that investors are seeking companies that look to the long term in strategy and resource allocation.

Download a summary or the full report, with an interactive capacity, from:
https://www.bcg.com/publications/2021/interactive-tsr-value-creator-rankings-2021

Belling the cat

The Tyranny of Big Tech
By Josh Hawley
Regnery, $42, 194 pages, ISBN 9781684512393

Cynical Theories: How Activist Scholarship Made Everything about Race, Gender, and Identity – and Why This Harms Everybody
By Helen Pluckrose and James Lindsay
Swift Press, $23, 296 pages, ISBN 9781800750326

There was a time when tech companies like Google, Amazon and Facebook were like cute little puppies, happily knocking over the furniture and offering the prospect of a cheery future. But at some point they turned into snarling attack dogs, snapping at any criticism and enthralled by their own muscle.

They need a leash, and a strong one, says Republican US Senator Hawley. They have become the censors of our age, making apparently arbitrary decisions about who gets a gold star and who gets ‘cancelled’. It is always conservative figures that are de-platformed, according to Hawley, and he gives plenty of examples of people from the left that have said things that are incitements to violence, defamatory or just plain crackers, yet remain untouched.

Hawley notes that the book was itself almost cancelled. The original publisher, Simon & Schuster, reneged on their contract due to comments that Hawley made questioning the veracity of some aspects of the 2020 election – comments that look pretty innocuous. In any case, the attempt at censorship backfired badly, and the book has become a best-seller (through Amazon, ironically).

Hawley began his crusade when he was attorney-general in Missouri, his home state. He suggests that existing anti-monopoly legislation could be used to break up the behemoths, probably by splitting them by function. He also has interesting things to say about removing the liability protection that applies to social media platforms. None of this will happen while the Democrats hold the levers of power, says Hawley, because the leading tech figures donate billions to them. In many cases the key company figures share the ideological attitudes of the left (although they are usually laissez-faire libertarian when it comes to making money).

The problem with the book is Hawley’s tendency to undermine his case through speculation and hyperbole. In some places the book reads more like a partisan diatribe than a considered analysis. This is a pity, because the issue is an important one and his proposals for reform are sound. The idea of ‘cancelling’ is bad enough: that it can be done by mega-corporations that have shown themselves to be manipulative, aggressive and paranoid is profoundly disturbing. How did Zuckerberg and his kin get to decide who could enter the arena of public debate?

Which brings us to Cynical Theories. Pluckrose is an editor and former academic (she describes herself as “an exile from the humanities”), and Lindsay is a mathematician and writer on politics and religion. This is a good combination to examine how critical theory became so important so quickly, devouring much of the old left in the name of identity politics.

Pluckrose and Lindsay trace it back to philosophers like Foucault and Derrida, who hypothesised that social reality was a construction designed to entrench the interests of the powerful and oppress everyone else, mainly by the control of discourse. The theory had been around for a while but it got a new lease of life when traditional Marxism collapsed in the 1990s. The left needed something new to talk about, and when the idea migrated to America identity politics fitted the bill. The essential premise was that all people were defined solely by group characteristics of race, gender, sexuality, and so on. Every minority was by definition oppressed by white, male, heteronormative culture.

For a time this was limited to a few universities and academic journals but it began to go mainstream in numbers and influence around 2010. Pluckrose and Lindsay sort through the key essays and articles, noting the increasingly militant tone. Significantly, the new movement saw their enemies as not only conservatives but also liberals – Pluckrose and Lindsay are clear that they are writing from a liberal perspective – who were seen as defenders of an irredeemable system.

The crucial mechanism for putting the Theory (deliberately written with a capital by the authors) into practice was social media. It was culture, not elections, that would be battleground. Infiltration into corporations, schools, and cable television were the follow-up tactics.

It began with Critical Race Theory but it soon metastasised. It became Critical [INSERT GRIEVANCE HERE] Theory. There is now even Critical Fat Theory, which argues that doctors who advise obese patients to lose weight are actually oppressing them.

There was an equivalence of virtue with victimhood, with extra points for anyone who could claim membership of several minorities. At the same time, academic achievement and self-betterment through hard work were deconstructed and dismissed as inherently oppressive. Even maths was attacked as racist. The Theory became a meta-narrative.

Pluckrose and Lindsay let much of this silliness speak for itself but they are entirely aware of the dark undertone. Social Justice Theory soon became intolerant, tribalistic and vicious, endlessly finding new complaints and targets. There was a particular emphasis on language. A misplaced word, even if spoken years ago, could end a career. It turned into the Spanish Inquisition, and nobody expected it.

In fact, Social Justice Theory now bears the hallmarks of a religion: the True Faith of the Woke. They know what they know and will not be moved. There is no room for discussion. Dissent is heresy.

Pluckrose and Lindsay believe that liberals need to fight this, with reasoned arguments, reliable data, and personal courage. Not easy but it can be done. Someone has to bell the cat, they say.

Or have the claws gone too deep, the rot too far? We will have to wait and see, perhaps – and do whatever we can to ensure that it does not take full root on Australian shores. In the meantime, Cynical Theories is a good explanation as to how America got to its current parlous state.

Taxing times an old story

Appearing in the Australian, August 2021.

Rebellion, Rascals, and Revenue: Tax Follies and Wisdom through the Ages
By Michael Keen and Joel Slemrod
Princeton University Press, $45, 536 pages, ISBN 9780691199542

At first glance, a book on the history of taxation seems like something only an accountant could love. But as it turns out Rebellion, Rascals, and Revenue is an enjoyable romp, a fascinating mix of stories and insights.

Keen, deputy director of fiscal affairs at the IMF, and Slemrod, an economics professor, write with engaging authority, asserting that taxation has always been a defining aspect of government. In fact, the text of the Rosetta Stone, which allowed for the translation of Egyptian hieroglyphics, deals with a tax exemption for priests. So exemptions are as old as taxes, which is partly why the business of tax gets so complicated. Allowing deductions for dependents, for example, has often led to people claiming for non-existent children.

Some people will go to astonishing lengths to minimise their tax payments, even with tactics that cost more than the tax. In Georgian England, there was a tax on windows (used as a proxy for wealth) which led to many windows being bricked up. A tax on ships, which were assessed on width, led to vessels that were narrow and tall – and which, understandably, tended to capsize. Pretending to be dead was once a common ploy.

Governments have used this dislike of taxes to try various forms of social engineering. In Czarist Russia, Peter the Great levied a tax on beards, not for the revenue but to induce the nobility to shave. The same principle applies to carbon taxes: impose taxes to change behaviour. The results are mixed. Taxes on alcohol, cigarettes and gambling – ‘sin’ taxes – have done little to reduce consumption, in Australia or anywhere else.

A constant problem for the officials who create tax policy is working out who will eventually end up paying a given tax. Businesses largely see tax as a cost and will pass it on to consumers if possible. Taxes on consumption are an alternative but often lead to smuggling and black markets. High taxation has triggered civil unrest and even insurrections, although there are often underlying causes as well.

The invention of the income tax was something of a revolution. The first income taxes were connected to wars, which are expensive undertakings. In Australia, the first federal income tax was introduced to pay for World War One (there were also state income taxes at the time). During World War Two, Canberra legislated to give itself a monopoly in the field.

Another crucial step was withholding, so that tax was deducted from a person’s salary and paid on by the employer. It effectively became invisible. A stroke of genius, in its own way.

There is now a broad acceptance that income taxes should be progressive, with the affluent paying more. This is easier said than done, and there is a continuing contest between the people who write the rules and those who are generously paid to get around them. But in the past few years tax agencies have introduced data-matching systems and AI technology, so dodging taxes is harder than it used to be.

One persistent problem is the use of international tax havens, and there is no clear antidote. Keen and Slemrod suggest that a global agency for “setting and enforcing some aspects of tax rules in the way that the World Trade Organization has done for trade” might be needed. A good idea but the devil will be in the details, as it usually is.

All this is good fun but Keen and Slemrod make some serious points. Their study of history is meant to reveal how to balance efficiency and equity in a tax system, and they come up with a list of criteria. Undue complexity undermines public faith, so the law should be as clear as possible. Using taxes for anything other than raising revenue usually creates more problems than it solves. Seeing rich people manipulate the rules so they pay very little undercuts the willingness of everyone to pay, so consistent enforcement is important.

Keen and Slemrod note that “when it comes to designing and implementing taxes, our ancestors were addressing fundamentally the same problems that we struggle with today”. Certainly, no-one likes taxes. But they are, as the saying goes, an inevitable part of life.

Advantage, new work, overload

Appearing in In the Black magazine, August 2021

Rethinking Competitive Advantage: New Rules for the Digital Age

By Ram Charan

Random House Business, $35, 224 pages

With several dozen bestsellers to his name Charan is a heavy hitter in the field of business thinking. His 2020 book was a detailed examination of Amazon, and Rethinking Competitive Advantage builds on the lessons found there to establish a conceptual framework. Success no longer comes from hard assets, distribution channels, or established brands, he says, but from continuous innovation to capture, hold and develop consumer preferences. He backs this up with good case studies and data, pointing to cash generation and growth rates as the crucial metrics.

The key is to think of the company as an ecosystem which constantly responds, adapts and evolves. Leaders who are ‘born digital’ are usually better at it but even those whose early training was in the pre-digital era can make the transition, if they are open-minded about it. Charan provides a set of rules ranging from the use of algorithms to the personalisation of customer experiences, knitting them together to form a competitiveness model. He notes that this is not only for technology-based B2C companies but for B2B firms as well, and even government agencies. It adds up to a package of clear thinking, useful to managers and executives at every level.

Work From Anywhere: The Essential Guide to Becoming a World-class Hybrid Team

ByAlison Hill and Darren Hill

Wiley, $27.95, 240 pages

The authors of this interesting book are the principals of a consulting firm specialising in workplace organisation, training and coaching. Pre-pandemic, the company was based on close-fitting teams. Then, almost overnight, the company structure had to be re-configured for remote working – what the Hills call ‘work from anywhere’ (WFA). To their surprise, they found that it was actually more effective and productive. Here, they explain the model they developed, combining their hands-on experience with research and the views of experts in the area.

Getting the technology linkages right is important but the real issue is keeping people connected and on track. Creating maps with team members’ responsibilities and timelines is useful, and everyone has to understand and share the goal. Do not overuse Zoom and similar tools, advise the Hills. Instead, the team leader should maintain regular one-on-one contact and supervision. Effective teams are often a combination of WFA people and others working in a central office.

Getting the mix, the tech and the culture right takes effort and planning, and sometimes adjustments will be needed along the way. But remote working in some form is probably here to stay, so it is a skill that managers need to have.

Too Much Information: Understanding What You Don’t Want to Know

By Cass Sunstein

MIT Press, $48, 248 pages

Here is an odd piece on information: Facebook is bad for you. People who use it are, on average, more likely to become depressed, anxious and stressed – yet most would not want to give it up, even knowing that. This is one of the strange things that Sunstein, an expert in consumer law who has worked in government on regulations that require disclosure about matters like nutrition and safety, uncovers in this fascinating book. He admits that he long believed in maximum disclosure in all matters but has had a change of heart, and now thinks that authorities should focus on the question of whether a particular disclosure has a positive effect. Endlessly increasing the information burden can lead to people feeling overwhelmed, and that they are being admonished by an intrusive nanny-state.

Regulators should think about whether requiring a particular disclosure is making people happier, and recognise that there is no one-size answer. He has some harsh words for companies that bury information under jargon and volume (software providers are especially guilty of this). Keep it simple, useful and relevant, he says. This might be easier to say than do, but nevertheless Too Much Information is thought-provoking and entertaining.

Shaking on it

Appearing in the Australian, July 2020

The Handshake: A Gripping History
By Ella Al-Shamahi
Allen & Unwin, $30, 176 pages, ISBN 9781788167802

Ah, what’s in a handshake? Quite a lot, according to this sparky, well-researched book. Ella Al-Shamahi is an evolutionary biologist and archaeologist who dabbles in stand-up comedy – interesting combination! – and in The Handshake: A Gripping History she looks at her subject from a variety of perspectives. Her knowledge, enthusiasm and sense of humour make for an enjoyable mix.

She is (aside from the unique CV) well-placed to do it. She was raised as a fundamentalist Moslem (in Birmingham, UK), and physical contact between women and unrelated men was forbidden. When she moved away from her faith in her twenties and began shaking hands, she was struck by the social importance of it, as well as the sheer enjoyment of an act that can bridge the gap between strangers. The handshake used to be a male-only thing but now it extends across gender boundaries.

Al-Shamahi notes that chimps and some other primates shake hands, and it seems to have the function of ‘let’s make up’ after a conflict, similar to one type of handshake amongst humans. Isolated tribes that have had no contact with the modern word often shake hands as well.

Another purpose of a handshake is to seal a deal. Al-Shamahi points to a ninth-century sculptured relief from Iraq that shows two kings shaking hands. Even now, successful negotiations in business or politics are wrapped up with handshakes all round.

But the most common form is the handshake as greeting. It probably stems from the idea of each participant showing that they are not carrying a weapon, although it is also connected to the closeness involved. The palms are intensely wired with sensory receptors, and movement of the skin releases oxytocin, a social bonding hormone. There is, says Al-Shamahi, “no room for anything other than positivity in the handshake”.

For this reason, the coronavirus-era fist-bump or elbow-bump simply do not measure up. Al-Shamahi believes that the handshake will re-emerge once the pandemic is past. She notes that handshakes have been socially or legally prohibited in earlier pandemics, like the Spanish Flu, but came roaring back as soon as possible.

But if shaking hands is somehow rooted in our DNA, how is it that there are some cultures, such as Japan and Thailand, that do not do it? Al-Shamahi speculates that there may have been protracted epidemics in the past in those countries, and as a result alternatives, such as the Japanese bow, evolved. Well, maybe. Al-Shamahi does not feel any obligation to explain absolutely everything, and her telling of the rollicking  story is the richer for it.

Of course, Al-Shamahi devotes a chapter to the right way to shake hands, including choreography, grip, the all-important eye contact, duration, and eventual release. Someone has actually developed a formula for this but Al-Shamahi takes the view that you should largely follow your instincts, with a measure of social sensitivity. “Get in with a smile and some warmth,” she advises. “The handshake is not the endgame. Human connection is. So that is how you shake hands. Godspeed.”

There have been many occasions where a handshake has resonated beyond the act itself. The 1985 handshake between Ronald Reagan and Mikhail Gorbachev was one, signalling the beginning of the end of the Cold War. Another was that between Nelson Mandela and South African rugby captain Francois Pienaar in 1995, bringing a divided nation together. Princess Diana shaking hands with a dying AIDS patient was an intimate moment that changed how the world perceived the disease.

On the other hand, there have been some real shockers. The handshake between Neville Chamberlain and Adolf Hitler ended badly for all concerned. US President William McKinley was assassinated by someone who got close under the pretence of shaking his hand. The 2015 handshake between Raoul Castro and Barack Obama was, according to Al-Shamahi, “an unchoreographed mess”. But in terms of rating awful handshakes, she gives the award to Donald Trump, whose 29-second grip on Japanese PM Shinzo Abe set something of a benchmark.

All this is good fun as well as being insightful and informative. It makes you look forward to the time when handshakes can again be a part of our lives. Start counting down the days.

Free, money and crises

Appearing in In The Black magazine, July 2021

The Flip Side of Free: Understanding the Economics of the Internet
By Michael Kenda
MIT Press, $50, 249 pages

One of the traditional principles of economics is that there is no such thing as ‘free’. Kende, an academic specialising in Internet governance and regulation, asks a simple question: in the Digital Age, does that principle still hold?

Maybe, he answers, but it needs to be re-worked. The ‘free’ wi-fi in Starbucks, for example, is free for customers but the company pays a fee for it, which is presumably passed on or absorbed. But the real cost might be elsewhere. The sign-on contract (which virtually no-one reads) gives Starbucks the right to collect and use customers’ data however they choose. This is, Kende discovers, a common arrangement.

Kende sees data collection and its connection to targeted advertising as a key driver of the Internet’s evolution. Looking broadly, he also examines how open-source protocols have shaped the technology, and where it might be going. He is a firm believer in the benefits of the Internet but accepts that there are the downsides. Kende puts forward some options for reform, including legal mechanisms to stop uncompetitive behaviour from the tech giants and to provide privacy protection. Easier said than done, but nevertheless Flip Side is a fascinating account of how we got to here.

Preparing for the Next Financial Crisis
By Olivier de Bandt, Francoise Drumetz and Christian Pfister
Taylor & Francis, $94, 386 pages

Ever since the Global Financial Crisis, policymakers have sought to strengthen the finance sector, particularly the major banks. This book, aimed mainly at advanced students and researchers but likely to be of interest to many in the broad finance community, reviews the work that has been done. It finds that results have been patchy at best, with much of the good effort on debt reduction being overturned by the COVID-19 crisis. The US has done fairly well in improving the underlying health of its financial sector but even before the pandemic Europe remained in a shaky position. The sovereign debt crisis of the eurozone has been pushed into the background in the past few years but it has not gone away.

However, there has been some important progress on international agencies and standards, and most governments have developed more tools for macroprudential management. This is good news for the long-term outlook but the concluding section of the book discusses a number of emerging challenges, including cyber-risks, crypto-assets and climate change. All of these are daunting but the book’s authors believe that there are now avenues for global co-operation and information sharing that can provide a foundation for action.

Your Money, Your Investments: Preserving and Growing Your Wealth in Good and Tough Times (2nd ed.)
By Ben Fok
Marshall Cavendish, $26, 240 pages

Dr Fok is a very experienced financial adviser based in Singapore, and also a prolific writer of articles and columns. This book collects his articles into a coherent package, with an emphasis on the volatile financial environment of the past few years. He notes that in Singapore, as in many other countries, a significant part of the population is preparing to move into retirement, and he discusses a range of suitable strategies to ensure a comfortable future. He realises that many people like to do their own investing but suggests that a financial planner can provide useful guidance regarding retirement, including drawing up timelines and assessing the level of security needed.

The stock market can be a good way to generate wealth but he underlines the need to do careful research about sectors and companies. Leave derivatives and other complex products to the professionals, he advises, and look for long-term growth. When the market dips – as it inevitably, occasionally will – do not panic; hold your position and ride it out. A broad-based portfolio, with some investments in other areas, is a good hedge against downturns. The overall message is: know what you want, plan carefully, and stick to your strategy.

Downloadable Resources

Temp job advice

This interesting blog article on the Hayes Recruitment site provides advice on being interviewed for a temporary assignment or contract role, and how the process differs from an interview for a permanent position. The applicant needs to be able to show that they can step into the role immediately, often with minimal supervision. Questions are likely to focus on technical skills, with a discussion of past jobs and roles. Interviewers are also likely to ask the reasons for seeking a temp job as opposed to a permanent role. Useful advice, and the site has several related articles on non-permanent work.

Read at:
https://www.hays.com.au/career-advice/interview-tips/career-advice/interview-tips-for-contract-temp-roles


CFO future

The Corporate Reporting Survey from accounting giant EY uses the views of over a thousand CFOs and financial controllers to map the path ahead, with an emphasis on how reporting can be re-designed for the post-pandemic era. The critical issue is to balance resilience and flexibility with the stability needed to generate sustainable, long-term value for stakeholders. Related to this is the need to integrate social and environmental issues with financial reporting. Most senior finance leaders are willing to use or create innovative tools to generate new outcomes, although there is also an acknowledgement of the difficulties down the road.

Download from:
https://www.ey.com/en_au/assurance/how-can-corporate-reporting-connect-your-business-to-its-true-value


Female focus

Women Are The Business is an award-winning podcast series from the Faculty of Business and Economics at the University of Melbourne, focusing on the hurdles women face at work and in life. Some articles are based on academic research while others use the perspective of real-life experience. There are important pieces on the reasons for the gender pay gap, the impact of flexible work arrangements, and the expectations placed on working women. The podcast series includes interviews with prominent women in business, and the panel discussion on how to promote greater gender equality in the recovery period is particularly interesting.

Go to:
https://fbe.unimelb.edu.au/womenarethebusiness


Indonesian opportunities

Global bank HSBC is in a good position to assess the future for many Asian countries, and this report on Indonesia identifies opportunities and challenges. The Indonesian government was quick to implement a range of fiscal and monetary initiatives to combat the COVID-19 crisis, and the economy weathered the storm fairly well. The bond market is likely to do well over the next year, with large corporations, state-owned enterprises and government all seeking to raise funds to finance the next stage of the recovery.

The report includes an interview with HSBC’s Sean Henderson, co-head of debt capital markets, Asia Pacific.

Download from:
https://www.gbm.hsbc.com/insights/growth/investing-in-indonesia-a-special-report


Changes to working

Patty McCord was formerly the Chief Talent Officer at Netflix, and she now works as a consultant on workplace issues. In this Ted Talk she draws on her experience to review the changes brought about by the pandemic, discussing what is likely to be permanent. One change is that the crisis has led many people to re-consider how much of their time they want to commit to work. Another relates to the importance of good communication skills, especially if organisations are going to be flatter, more dynamic, and with a higher proportion of people working with flexible, customised arrangements.

Watch at:
https://www.ted.com/talks/patty_mccord_4_lessons_the_pandemic_taught_us_about_work_life_and_balance