Tax disputes, hybrid enterprises, and when to work

Appearing in In The Black magazine, March 2018

 

ATO Disputes

By Andrew Johnson

CCH, 232 pages, $120, ISBN (hard copy) 9781925554564; (e-book) 9781925554571

ATO Disputes cover version 2The Australian Taxation Office looms large in the lives of many finance professionals but despite its importance it is not particularly well-known. Johnson sets out to remedy this, focusing on the ATO’s dispute resolution procedures, the area in which he mainly worked in the organisation. He notes that the ATO has seen a huge cultural shift in the past two decades, moving from heavy-handed compliance functions towards customer experience. The key factor has been data-matching technology but there has also been a legislative push toward greater transparency and accountability.

This is not to say that the ATO has given up its enforcement powers. Instead, as Johnson emphasises, they are mainly reserved for those who are determined to do the wrong thing. Where there is genuine disagreement or error, the ATO first seeks facilitative and administrative remedies. Johnson explains the procedures with authority and clarity, outlining the main policy documents and discussing the “accountant’s concession”. He deals in detail with the ATO’s settlement processes, an area where there is a great deal of misunderstanding – he even provides a list of ‘myths’, and looks at some sample formulae for settlements.

ATO Disputes adds up at a comprehensive, solid package. You might hope that you will never need to know how to handle disputes with the ATO, but the reality is that one day you probably will.

 

 

A World of Three Zeroes

By Muhammad Yunus

Scribe, $33, 304 pages, ISBN 9781925322477

Yunus is an unusual creature: an economist with a firm sense of the practical. His Grameen Bank, through offering micro-loans to entrepreneurs, has done a huge amount to help poor people in developing countries work their way out of poverty. So when he takes a look at the Big Picture it is worthwhile listening to him.

The time is right, he says, to re-think capitalism. The central idea is of hybrid enterprises that blend the best of for-profit and non-profit organisations, either standing alone or as off-shoots of traditional companies. He believes that most people are natural entrepreneurs, and the remedy to poverty is to focus not on job creation but start-up opportunities. Entrepreneurship aimed at the mass market is likely to prove more sustainable than high-end goods, and more likely to spread the economic benefits, including employment.World of Three Zeroes

Yunus sees important opportunities in renewable energy, especially in emerging economies which do not have large legacy investments. He provides several case studies of new energy systems but his argument here is not entirely convincing. Still, you have to start somewhere, and the intention is good (if perhaps premature).

There is a lot to like in this book, and Yunus’ faith in the entrepreneurial spirit is uplifting. His focus is on developing countries but there are plenty of lessons for everyone, and a wealth of ideas to think about.

 

 

Beta: Quiet Girls Can Run the World

By Rebecca Holman

Coronet, $33, 240 pages, ISBN 9781473656192

What constitutes successful performance? It depends on what you mean by success, says Holman. We have become conditioned to think it in ‘alpha’ terms: the loudest voice, the heftiest paycheck, the most decisive executive on the block. But it doesn’t have to be that way: it can equally be about quietly getting the job done, communal leadership, and emotional intelligence – ‘beta’ style, in other words. Holman (who is editor of the women’s digital magazine Debrief) believes that many women in the corporate world have bought into the alpha idea, and that has made the rest feel insecure and unsure about their own work style. Her advice is to work and live in the way that allows you to be comfortable, and if that means not going to the gym at 5am and foregoing the late-night conference calls, then so be it. Performing effectively does not have to mean making other people afraid of you.

This is an interesting approach but sometimes Holman gets a bit lost in her argument. She admits that even beta leaders have some alpha traits, and she is hard-pressed to come up with examples of successful beta leaders. Nevertheless, her core message – take the energy you might waste questioning yourself and put it into productive use elsewhere – has an undeniable and positive resonance.

 

When: The Scientific Secrets of Perfect Timing

By Daniel Pink

Riverhead, $33, 256 pages, ISBN 9780735210622

Pink has written several books on self-motivation and personal organisation, and in When he takes his theme a step further by looking at new research on the best – and worst – time of day to make critical decisions and start new projects.

He unearths a wealth of data showing that people, regardless of culture and upbringing, perform best in the morning and early evening. This holds true for everyone from surgeons to judges, students to CEOs. He delves into the specific reasons, which turn out to mainly relate to biological rhythms and inherent limitations on attention spans.

There is fascinating research on the interaction between neuroscience and decision-making, a growing field in management theory. Endorphin flows and the immune system play crucial roles, and Pink suggests ways they can be strengthened. Regular exercise is beneficial but one of the best things turns out to be singing with other people. Something to remember for the next promotion interview, perhaps.

As it happens, afternoons are not a total waste. They are good for solid, practical work, where attention to detail is more important than creativity. Organised breaks can do much to lift productivity.

The aim here is to help business readers use this information to perform more effectively. The case studies are instructive, and Pink provides a useful summary at the end of each section.

When

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AI, staying relevant, and intangibles

Appearing in  In The Black magazine, February 2018

 

The Sentient MachineThe Sentient Machine: The Coming Age of Artificial Intelligence

By Amir Husain

Scribner, $50, 224 pages, ISBN 9781501144677

Artificial intelligence is emerging as a key issue for business in 2018, and this book is a good way to come to grips with it. Husain knows a great deal about the technical side although the book is aimed at the reader who needs to understand where AI is going in broad terms. He makes an important distinction between Artificial General Intelligence – human level and post-human capability, still a few decades off – and Artificial Narrow Intelligence, which is already appearing and is likely to lead to a profusion of autonomous machines. ANI points towards a revolution in transportation infrastructure, from autonomous cars to package delivery drones. Likewise, energy production is likely to move away from fossil fuels and towards grass-roots sharing systems. Large chunks of agriculture, construction, retail, healthcare and even crime will be taken over by ANI robots.

Husain clearly is a firm believer in the capacity of AI to improve the human condition but he is equally aware that it will create massive dislocations, as whole employment sectors disappear. This will be a central challenge for governments, but Husain’s point is that now that the AI genie is out of the bottle it cannot be put back. For business, the question is how to ride the wave, and the book offers some useful suggestions. It’s going to be scary, but you can’t say you weren’t warned.

 

Shift Ahead: How the Best Companies Stay Relevant in a Fast-Changing World

By Allen Adamson and‎ Joel Steckel

AMACOM, $35, 272 pages, ISBN 9780814438336

Adamson and Steckel, academics who specialise in marketing and branding, are interested in how companies form their responses to changing market conditions, and their good reputations in the field meant that they could conduct a wide range of interviews as well as draw on their consulting experience. There is no single answer to ensure relevance but there are recurring themes. Interestingly, there seems to be more to learn from the companies that failed than those that succeeded.Shift Ahead

The story of the venerable National Geographic magazine is a case in point. The people running it took the view that the brand formula had always worked, so they did nothing to change it even as sales declined. They, like Blackberry and others discussed here, were blinded by past successes and failed to see how the market was changing. ‘Digging in’ was akin to digging a grave.

The companies that have stayed relevant to their market put concerted effort into it. Hiring people with new ideas is a good start. Some ruthlessness is also required: if an old product line is dragging the brand down, cut it loose. Another lesson is to move fast, even if it means taking a chance.

This is interesting stuff, with illustrative case studies. Not revolutionary, but the book does a solid job at explaining the thinking required for surviving and thriving.

 

Capitalism without Capital: The Rise of the Intangible Economy

By Jonathan Haskel and Stian Westlake

Princeton University Press, $60, 288 pages, ISBN 978069117503

According to academics Haskel and Westlake, there was a pivot in the early twenty-first century: the point when the developed economies began to invest more in intangible assets, like design, branding, R&D, and software, than in tangible assets, like machinery, buildings, and computers. The idea that the deployment of intangible assets is crucial to a company’s success is not new; the value of this book is that it offers a detailed explanation of it as well as its wider consequences. Haskel and Westlake even go so far as to say that it underpins economic inequality and stagnating productivity. Those companies that have the right intangible assets and the capacity to scale them can overpower competitors but there is little in the way of the spillover or flow-on effects seen in an economy that actually makes things. In short, there is not much in the way of a tide that raises all boats.

Capitalism without CapitalHaskel and Westlake believe that we do not have the tools to properly measure intangible assets – not, at least, in the way they are currently being used. It is hard to disagree, but they are on less firm ground when they argue that intangible asset valuation cannot be accommodated in the current model. Either way, it is an area that needs more attention. The intangibles revolution, one feels, is just getting started.

 

 

More Important Than Money: An Entrepreneur’s Team

By Robert Kiyosaki

NewSouth Books, $29, 429 pages, ISBN 9781937832872

Through knowing his market and being clear about his message Kiyosaki has turned his bestselling 1997 book Rich Dad Poor Dad into an international brand, spawning numerous variations and updates. He has always made clear that the project has been a team effort, with specialists contributing expertise. More Important Than Money is, in fact, about how successful entrepreneurs gather teams around them, looking for countervailing strengths and people who can share a vision. Having a great idea is not enough; it is the team that gives it practical form.

At another level, the book is meant to give the team members a chance to shine (although each has written a book under the Rich Dad brand). Each provides a short biography, an excerpt from their book, and their ideas on building a team in their particular area. Kiyosaki knits this into the “8 Integrities” of a team, laid out in useful chart in the concluding chapter. The whole thing could easily have looked like a promotional gimmick but there are plenty of useful insights, especially on branding, cash flow, investing in assets, and raising funds. Kiyosaki’s contribution is on how to lead, including giving feedback, establishing the right mindset, and knowing when to say no. A good team, he says, does not just make business profitable, but also enjoyable.

More Important Than Money

‘Womenomics’, AI, and high performers

Appearing In The Black magazine, December 2017

Blind Spots

By Bec Brideson

Wiley, $28, 256 pages, ISBN 9780730345404

BridesonCompetitive advantage is where you find it, and according to Brideson the best place to locate it is in the burgeoning female market. As a specialist in the field she has advised a host of companies, and draws on her experience for illustrative case studies. Research from McKinsey and Ernst & Young shows that companies that employ more women across the business do better but Brideson argues that this is not sufficient for sustained growth. The key is to understand the female market through detailed research and modelling, preferably designed and interpreted by women.

The women’s market is no longer about traditional female-specific products but extends from travel to houses to investments. In families, the woman is usually the critical influencer. The market segment requires clearly differentiated products – not just a smaller-size shoe, as Nike found – and different advertising strategies. With high and increasing standards of education, women have a huge pool of discretionary money to spend.

Once engaged, they are more likely to stay with a company, although they expect an ongoing connection through social media. It can take time for a company to build a relationship but the returns can be good, whether it is a product line extension or something altogether new. Brideson clearly has strong views on gender equality but the point, she says, is that “womenomics” is simply good business.

 

 

It’s Alive!

By Toby Walsh

La Trobe University Press, $35, 320 pages. ISBN 9781863959438Its Alive

Walsh is professor of artificial intelligence at the University of NSW, so when it comes to a discussion of where technology is heading he is worth listening to. He can also tell a good story, and the occasional joke, as well.

Alan Turing laid the groundwork for artificial intelligence in the 1940s and many others pushed it along. Advances in maths in the 1960s were crucial, and soon various forms of AI were able to play games against human opponents. Then came the PC, and the mobile phone, and Google, and suddenly information technology was the driving force of society. AI was the hidden machinery that kept it all humming.

Walsh makes a distinction between machines that can learn (the current situation) and machines that can truly think (some distance away). Within this framework, autonomous cars are not far off, and there are AI machines that can do household tasks. The automation of basic management has already begun. Walsh also examines the development of AI-based military weapons, something he has lobbied against.

One of the next big steps will, he believes, be machines that can properly interact with users through speech. Siri and Alexa are merely primitive harbingers to what will be possible.

This is fascinating stuff, and a bit scary. But It’s Alive! is an enjoyable read. One way or another, you can’t say you weren’t warned.

 

High Performance Habits

By Brendon Burchard

Hay House, $35, 400 pages, ISBN 9781401952853

Burchard is apparently the highest-paid motivational speaker in the world, and has a legion of fans of his high-energy presentations. His past books have been written in just-do-it mode, although High-Performance Habits finds him in a more contemplative mood. He wants to establish why certain people, regardless of culture, age, gender or background, perform better than the norm, and he compiled a solid body of research on the question.

He and his team distilled the practices of high-performers into six habits. These are: clarity – definite goals and plans on how to get there; energy – regular physical exercise as well as planned mental refreshment; necessity – understanding the importance of a task; productivity – knowing what to focus on; influence – investing in relationships and communications skills; and courage – being willing to speak up for one’s ideas.

Burchard believes that these habits work for CEOs as well as they do for star athletes. He emphasises that this is not just about doing a particular job well but also about leading a life that is satisfying. This is where Burchard’s breathless brand of salesmanship comes in, and his waxing lyrical about contentment can become a bit grating. But fortunately it does not overpower his key messages about personal organisation and attitude.  True, he is not saying anything outstandingly new, but he ties it into a package that is clear, interesting and useful.

 

Best books of 2017

Appearing in Australian Spectator, 22 December 2017

Best books of 2017

When we look back at 2017 we will probably remember it as a year of minor issues that turned into major crises, peculiar utterances from odd people, and opportunities that were not so much missed as foolishly fumbled. Throughout all this there were some good books across a range of subjects.

One of the most interesting was Minding Her Own Business: Colonial Businesswomen in Sydney by Catherine Bishop (published by NewSouth). Delving deep into primary sources, Bishop examines the critical role played in women in the fledgling colony, as they established and ran enterprises as varied as schools and pubs. Even though it was legally difficult for women to hold property they often found ways around the rules. The authorities, aware of how much the colony needed entrepreneurs, usually looked the other way. Bishop provides plenty of fascinating stories as well as a chapter on ‘colourful’ characters. It adds up to an entertaining and insightful account, and it is no surprise that the book won the prestigious Ashurst Business Literature Prize.  Minding Her Own Business

Unlike Bishop, David Hunt makes little claim to be historically reliable in True Girt (Black Inc), a follow-up to the equally satirical Girt. It covers the era of bearded bushrangers and hardy pioneers, such as John Horrocks, an explorer who was, apparently, shot dead by a bad-tempered camel called Harry. It is hard to tell what is real and what Hunt has made up, but it is a good romp and reminds us that, important as history is, it should not always be taken too seriously.

Taking the vein of cultural larrikinism in another direction is Trigger Warning: Deplorable Cartoons by Bill Leak (Wilkinson). It brings together many of his cartoons from 2016, illustrating how the pomposity of the professional whingers of the Left could be punctured by a deft pen. But Leak was an equal-opportunity offender, and he was entirely happy to make fun of anyone who deserved it (ie, pretty well everyone in politics). It also required real courage to portray crazy jihadists, union thugs and nut-job bureaucrats as what they are – a quality not seen often enough. He leaves a legacy, and he will be missed. A good companion is The Bleak Picture (HarperCollins), the complete story of Leak’s 23 years at The Australian. There are interviews with some of his victims, including Philip Ruddock, Tony Abbott, and Alexander Downer (who generally took things in the spirit in which they were intended), and essays by some of Leak’s colleagues in the media. He leaves a legacy, and he will be missed.

Several of Leak’s cartoons deal with Pauline Hanson, who he depicted as one of the big winners of 2016. Anna Broinowski, in Please Explain: The Rise, Fall and Rise Again of Pauline Hanson (Viking), agrees. The book is based on Broinowski’s SBS documentary and it has similar strengths and weaknesses. When most of the commentariat are happy to abuse Hanson from their comfy chairs Broinowski got up close and personal, following Hanson on the campaign trail and doing her best to understand her strange path through the political landscape. Broinowski also realises that a significant chunk of the national electorate feels disenfranchised, ignored, and even abused, and Hanson provides a genuine connection. The book is on less firm ground when Broinowski tries to tie Hanson, Trump and Brexit together; there is a sense that she is stretching metaphors. Nevertheless, Hanson looks like she is here to stay, and Please Explain is a good attempt at finding out why.

The HarbourFinding the centre of Australia is a tricky undertaking but Scott Bevan believes that is on the edge: specifically, Sydney Harbour. In The Harbour (Simon & Schuster) he argues that as the birthplace of white settlement in Australia it has a special place in our collective consciousness. He delves into the history, examining the impact of the harbour on the city’s social development. Bevan, who has written extensively about art, also looks at it as an inspiration for painters and writers. True, on a good day the harbour has a sparkling, translucent quality, and it is no surprise that a view of it bumps up real estate prices by astronomical amounts. Bevan believes in hands-on history, and he makes a point of exploring it by ferry, barge, yacht, and kayak. He finds some odd nooks and crannies, and plenty of colourful characters as well. There are times when he overdoes the ‘true Australia’ angle – plenty of non-Sydneysiders would dispute the claim – but nevertheless The Harbour is a remarkable piece of work.

A book which has been the subject of dispute is No Front Line: Australia’s Special Forces in Afghanistan (Allen & Unwin) by Chris Masters. The result of many years of research, including lengthy periods of ‘embedding’ with the elite troops, Masters is at his best when explaining how soldiers dealt with the ambiguity of the conflict in Afghanistan. Given that the Special Forces are a tightly-knit band of brothers, it is astonishing that Masters got so close to them. Masters was required to clear the final draft of the book with the ADF but there is no sense of this being a sanitised, ‘official’ history. The controversy around the book was due to claims of mis-representation by VC-winner Ben Roberts-Smith, over the killing of an Afghan civilian who, while unarmed, was a likely spotter for insurgent snipers. Accounts vary, and if anything the incident underlines the difficulty of battlefield decisions. But this incident is only a small part of a large book, and should not be seen as something to disparage Masters’ achievement.

Compared to Masters magisterial tome, Leigh Sales’ essay On Doubt (Melbourne University Press) is a small piece of work, although not short on insights. Part of the MUP Big Themes series, the essay itself was first published several years ago; the value in this re-release is a lengthy addendum that Sales provides to take account of the growth of social media as a central driver of news, both real and fake. She has become increasingly sceptical of social media over the past few years as it has become less of a way to discuss ideas and more likely to be an echo chamber of extremism and a vehicle to shout down anyone of a different view. The role of the journalist, she says, is not to advocate one cause or another (whatever one’s private feelings might be) but to investigate and question, looking for the truth behind the PR. She readily admits that this is difficult to do but the point is that it must be attempted. Given the prestige attached to Sales’ position and seniority, it might be hoped that On Doubt will be read and digested by her colleagues in the media. But this reviewer, for one, is not holding his breath waiting for it.

An Isolated IncidentThe obsessive, pack-driven mentality of the media is a crucial point in of one of the best novels of the year, An Isolated Incident by Emily Maguire (Picador). The incident is the murder of a young woman in a country town, sparking a police investigation and a journalistic obsession with the pretty-dead-girl-of-the-hour. The story is told from revolving perspectives, the key one being that of Chris, the older sister of the victim and barmaid of the local pub. Anyone wanting a resolved, happy ending will not find it here, but Maguire has a gift for complex characterisation and an ear for dialogue. Despite the dark subject matter and the gruelling course of the narrative there are surprisingly beautiful passages in the book, lifting it out of the hackneyed crime genre.

Another outstanding novel is Josephine Wilson’s Extinctions (University of Western Australia Publishing), winner of the 2017 Miles Franklin Award. It revolves around a retired engineer, Professor Frederick Lothian, as he tries to make sense of his life, and that of his late wife’s life, through the objects that have accrued around him. It is not an easy process but eventually he begins to see beyond the secrets and lies, and moves towards acceptance of the past and re-engagement with the world. A series of odd events pushes him closer to his neighbour Jan, a practical woman who ends up as a balance for Fred’s own focus on theory. It would be easy to say that little actually happens in the novel, but it is about people, how they grow, how they look back, and how they find redemption. So in that sense, everything happens, underscored by Wilson’s lyrical, careful prose.

Incorrigible Optimist: A Political Memoir (Random) shows Gareth Evans at both his best and worst.  He is most often remembered as a minister in the Hawke-Keating governments but in fact much of this book deals with his subsequent work with the UN and a range of other international bodies. He is certainly a man of quick, organised intelligence and great energy, and he has a knack for cutting through bureaucratic obfuscation and meandering. He loves to file things, which turned out to be a useful habit when recounting the details of critical meetings. Yes, a smart fellow, but sometimes he seems to be overly impressed with himself. Saying that Australia should engage more with Asia, or that China is a rising power, or that Trump cares little for international rules and agencies is not exactly breaking new ground, although he seems to think he is making remarkable discoveries. Well, Evans does put the view that a streak of megalomania is necessary for anyone who wants to achieve anything.

This reviewer had a difficult time deciding on the winner of the Trees Are Dying For This award, for the most unnecessary book of the year; there were many strong contenders. One of the best was an overseas entrant, Hillary Clinton’s book What Happened (Simon & Schuster). It purports to be about the 2016 presidential election campaign but she continually wanders off the point to remind you that she was, and still is, the best qualified, the smartest, the most experienced, the … you get the picture. You finish this rather lengthy book with the feeling that Hillary thought the election campaign was an extended policy debate when it was really a revolution looking for a place to happen. The book should have been titled What Happened!? For a better account of how Hillary lost, readers might look at Shattered: Inside Hillary Clinton’s Doomed Campaign (Crown) by Jonathan Allen and Amie Parnes.

Making Modern AustraliaBut in the end the TADFT gong went to Making Modern Australia: The Whitlam Government’s 21st Century Agenda (Monash University Press), a book of academic essays edited by Jenny Hocking (who has made a pretty good career out of Gough, with a two-volume biography). The basic tenet is that the priorities of the Whitlam government laid the foundation for everything – at least, everything good – that followed, up to now. There are some heavyweight contributors but it seems that no-one stopped to think that the idea was just, well, silly. The Whitlam era was more than four decades ago, so get over it, guys. As much as anything, the book shows that some people have just got way too much time on their hands.

For Professor Hocking, a certificate awaits your collection. It is printed, very cheaply, on recycled paper.

Purpose, CEOs and good buys

Appearing in In The Black magazine, October 2017

 

Dear CEO

By Thinkers50 Group (Compiled by Stuart Crainer and Des Dearlove)

Bloomsbury, $30, 240 pages ISBN 9781472950680

Dear CEOOne might often wonder why anyone would want to take on the difficult, demanding role of CEO of a major company. The good news is that the fifty essays presented here, as letters from key thinkers in management and leadership, offer both philosophical guidance and practical advice.

Julian Birkinshaw and Jonas Ridderstråle see ‘analysis paralysis’ as a central obstacle, and they underline the point that the CEO job is about making decisions and seeing them through. In a similar vein, Sangeet Paul Choudary argues that digital transformation requires the restructuring of business models from resource-driven to user-centric. It will require new metrics as well as changes to governance structures. But it is coming, ready or not.

Human resources has emerged as a key issue for CEOs. Christie Arscott and Lauren Noël look at how companies can attract, retain and advance women, especially millennial women. Early targeting and tailored training are crucial, but the right mindset is also needed.

Tom Peters agrees that investment in people is essential. Go for the best people, he says, and go for the best in yourself as well.

Indeed, if there is an overarching theme in this collection it is about self-knowledge. It is easy to think, once you are in the big chair, that you know everything. Wrong, say several contributors. Listen to those around you, especially those with different backgrounds and perspectives. You’ve just started to learn.

 

Psyched Up

By Daniel McGinn

Portfolio, $30, 281 pages, ISBN 9780241310526

In terms of fear, many people rate public speaking in the same category as falling from a great height. Understandable but unnecessary, says McGinn, who has a wealth of tips on overcoming anxiety, especially in the business context. He looks at the pre-performance rituals of athletes and entertainers, uncovering a variety of techniques from the coach’s speech to support from colleagues. He acknowledges that some ‘centring’ rituals do not seem to have much logic but he notes that confidence is a feeling more than an intellectual process.

He is willing to examine the techniques he has developed for himself, such as reviewing a project of which he was proud or a goal he achieved, before plunging into a high-stakes task (this is especially good for job interviews). Some people work better in a busy environment, and like to have music in the background; those who are more introverted prefer to focus themselves in silence. The idea is to find what works for you, although McGinn interviews psychologists and marketers to indentify the underlying principles.

But he emphasises that boosted confidence is a supplement to, not a replacement for, professional competence. Getting that promotion, giving that speech, or winning that contract requires the ability to do the job better than anyone else. This book, however, is useful in showing how to communicate competence rather than jitters.

 

Top Stocks 2017

By Martin Roth

Wiley, $28, 256 pages, ISBN 9780730330134

Top StocksThis is the 23rd edition in the Top Stocks series, which surely must qualify for some sort of award. Roth emphasises consistency, analysing ASX-listed companies according to strict criteria over several years, with the study of each company complemented by a useful series of comparative lists and tables.

The key message for the past year has been that investors cannot look merely at sectors but have to delve into the statistics of individual companies. In terms of market capitalisation and after-tax profits the big four banks dominate but the best performers for return on equity are the much smaller Vita Group and Blackmores. The big players in the resources sector are handing in unspectacular but solid results, especially Fortescue Metals. Some of the best investments have been with mid-sized companies, and Roth cites some rising stars in the technology and healthcare sectors. Overall, it has been a pretty good period, with 72 of the companies in the book reporting higher profits, and 47 of those reporting double-digit profit growth. This strength has not always been apparent in a market tossed around by international events and political instability but bodes well for the future.

For investors and financial advisers this series is a crucial asset, and this edition is no exception. Think of it as a way to go beyond the headlines to understand what is really important.

 

Why Purpose Matters

By Nicholas Barnett and Rodney Howard

Major Street Publishing, $35, 240 pages, ISBN 9780994545268

For an increasing number of organisations, making profits is not enough. But finding a larger purpose is a difficult process. Barnett and Howard provide a useful guide, dividing the book into three parts. The first is an extended business fable about a company seeking to find its purpose. The second is a ‘how-to’ guide, and the third is a series of case studies, ranging from IOOF to the Geelong Football Club. The authors make clear that establishing and embedding purpose is by no means easy, and it has to be undertaken over a timeline of years, not months. The CEO has to be the clear sponsor but any attempt to impose purpose from above will fail. It needs to grow from the values of the employees, officers, and key stakeholders, and most of all there must be a genuine desire to make a social difference.

The fable explains the likely pitfalls as well as the benefits but it is the guide that provides the real value, walking through the steps of commitment, discovery, engagement and embedding. Incorporating purpose into the organisation can mean structural shifts as well as new methods of measurement, but the long-term advantages of improved productivity, employee retention and, most of all, making the world a better place, are worth the effort.

 

Remembering but not learning

What Happened

By Hillary Rodham Clinton

Simon & Schuster, A$45, 492 pages

Somewhere, there is an explanation of just what took place in the 2016 US Presidential campaign. Not here, though – although expecting it might have been too much. For Clinton to lose the election was obviously difficult for her; to lose to Donald Trump was both devastating and mystifying.

What HappenedYes, she has a long – very long – list of reasons. The FBI probes into her email server, the Russians doing something or other, Bernie Sanders taking a lot of young voters away from her, the harsh arithmetic of the Electoral College, the … well, you get the picture. It actually gets a bit silly at some point. For example, she blames the media, somehow forgetting that most of the media endorsed her and that some journalists even covertly worked with her campaign (step forward, Glenn Thrush). It begins to sound like the ‘vast right-wing conspiracy’ theory that she trotted out to explain Bill’s peculiar dalliance with Monica Lewinsky. Maybe the real answer for her defeat is a simple one: she failed to campaign in swing states like Wisconsin. Apparently, the maths model said that it wasn’t necessary.

But there is more to it than that – not so much in explaining Clinton’s defeat but Trump’s victory. Clinton, as the book makes clear, campaigned as if it was a policy debate. Trump was campaigning in terms of a culture war. And he struck a deep, visceral chord with those people who felt they had been cheated by the political class. Not just cheated but treated with disdain, even hatred. To them, Hillary was not just a product of the machine, but the machine itself.

Clinton seems a bit mystified that so many people could be so unhappy. She notes that there are many poorer people, so what are you complaining about? She does say, at one point, that she under-estimated the depth of discontent but the comment comes across not as a realisation but as something that came out of a focus group. There was a revolution looking for a place to happen but, to borrow a phrase much loved by feminists, Clinton just didn’t get it.Clinton and Trump

None of this would matter much if What Happened was a decent read. Unfortunately, it just isn’t very good. It purports to be about the campaign but she constantly veers off the point to discuss her time as Secretary of State, or education policy, or how much her mother meant to her, or … something. It gives the reader the feeling of: wait, we’re talking about this thing now, are we?

What she has to say in these diversions is not uninteresting; it’s just not what the book is supposed to be about.  It is as if she can’t stop touting the curriculum vitae, can’t stop saying that she was obviously the smarter, more experienced, better candidate and therefore should have been elected. What the book needed was a strong-minded editor to keep her on track. It would have made for a more well-organised book, and maybe would have helped Clinton herself understand what did, in fact, happen.

Those who already love Clinton will like this book. Non-Clintonistas are likely to go: meh, nothing new here. In the end, Clinton seems to have remembered everything and learned nothing. The title of this book should not be What Happened but What Happened!?

Weirdness, growth pains, bad starts

Appearing in In The Black, September 2017

 

Weird in a World That’s Not

By Jennifer Romolini

Affirm, $30, 304 pages, ISBN 9780062472724

Weird in a World Thats NotSquare pegs, round holes: they just don’t go together. In this part-memoir, part-career guide, square-peg Rolomini advises that people whose resumé is on the unusual side should embrace it rather than fight it. Her early path was marked by failures and setbacks but she eventually learned how to learn from them. She became an expert in customer relations through waitressing for seven years.

She eventually found a niche as editor for the women’s website HelloGiggles. Self-doubt and insecurity nearly wore her down, until she realised that many of those sleek, confident people were faking it. It’s a bad idea in the long term, and good bosses can spot it. Better to admit what you don’t know and can’t do, so expectations meet reality.

Romolini has a tendency to meander off in peculiar directions, and she swears a lot. Yet it is hard to not like her impatience with time-wasting meetings and pointless small-talk. She gives useful advice as well, such as how to write an email and how to drink in a professional setting. She also points out that a few odd people in the mix can be a great help to a company, working against groupthink and stagnation.

This is not a rah-rah inspirational book but there is a valuable authenticity here. It is not for everyone but has much to offer the conformity-challenged.

 

 

The Lessons School Forgot

By Steve Sammartino

Wiley, $30, 232 pages, ISBN 9780730343202

Sammartino, who describes himself as “a futurist, a technologist and a born entrepreneur” is very enthusiastic about the changes currently happening to the world of work. He believes that the disprutions caused by digital technology and globalisation raise more opportunities than problems. The difficulty is that society and the education system have not caught up yet, and are still focused on providing skills fitted to fixed work patterns and career stability. The crucial step to becoming successful in business, he says, is to stop thinking like a corporate manager and start thinking like an entrepreneur.

Significantly, he is very aware of risk, and advises that not all of one’s financial eggs should be placed in a single entrepreneurial basket. It is quite feasible to have several micro-business ideas running at once, or even have a start-up on the side while working in a traditional role. Many tech-based enterprises require little capital outlay; indeed, the key investment is not money but time. Inventiveness, energy and a capacity to shape information are the new coins.

Sammartino is more interested in mindset than mechanics, and some of the ideas for businesses he spins out sound like they would be harder to do in practice than he suggests. Nevertheless, he has important things to say about the changing skills base and how understanding the social impact of technology is more important than knowing how the machine works.

 

 

Built for Growth

By Chris Kuenne and John Danner Built for Growth

Harvard Business Review Press, $45, 288 pages, ISBN 9781633692763

Kuenne and Danner, academics with solid real-world experience, are interested in the question of what gives a company, especially one in its early stages, its character. Their extensive research tells them that the determining factor is the nature of the founder. They find four distinct “builder personalities”, each capable of creating business success but in different ways.

The Explorer is systems-centric, curious and dispassionate. The Crusader is audacious, mission-inspired and compassionate. The Driver is confident, relentless and focused on the bottom line. The Captain is pragmatic, team-enabling and direct. Kuenne and Danner provide good cases to illustrate their paradigm but they also make the point that the most successful leaders are those who can shift from one type to another as circumstances change – and if they cannot change themselves, will bring in others to lead into the next stage.

Many founders start out as Explorers or Crusaders, and their vision is a major advantage. But it is Drivers and Captains who turn the foundation into an enduring structure. This is interesting stuff, extremely useful when thinking about succession planning and cultural development. Leadership in the modern era is a tricky subject, and the framework provided here is a good place to start to understand it.

 

 

Disrupted: My Misadventure in the Start-Up Bubble

By Dan Lyons

Atlantic, $28, 258 pages, ISBN 9780316306096

This book is about what happens when people with no experience and little sense are given a huge amount of money to create … well, the author is never entirely sure. Some sort of marketing software, apparently.

Lyons had been a technology editor and thought he understood the industry. When he joined a start-up called HubSpot, he quickly realised that he was wrong. The company had burned through $100 million of venture capital and had a valuation of $2 billion but had never come close to turning a profit.

There was a ‘wall of candy’ for employees and a range of other benefits, including unlimited leave. People were hired for no clear reason and fired with equal vagueness. No, not fired: they were said to have “graduated”. Despite all the perks, when the IPO took place not much of the money trickled down.

Along the way, Lyons recounts strange practices such as taking teddy bears to meetings (to represent customers) and creating “lovable marketing content” (ie, spam). The emphasis was on revenue growth, not profits. When Lyons eventually departs, he wonders if this is really how capitalism is meant to work.

As it happens, HubSpot went on to do quite well. The founders and investors made a lot of money. So while Lyons provides a story of irony and dark humour, someone else had the last laugh.Disrupted