Change, blunders and blockchain

Appearing in In The Black, March 2021

Reimagine Change
By Ciara Lancaster
Grammar Factory, $33, 234 pages

Dealing with transformation and managing crises is the new paradigm for work but most of us have not yet adapted, according to change capability consultant Lancaster. We are trying to impose stability on an increasingly dynamic system, and the common result is mental exhaustion. Lancaster, a former executive at Deloittes, came close to burnout so she knows the signs of change fatigue, and she sets out a framework for personal reconstruction and growth. The first steps are understanding the warning signals and overcoming the defensive instincts hard-wired into the brain. She draws on behavioural science research and the views of thought leaders to illustrate her points.

In the second half of the book she examines the processes of mental change, with advice on how to slow down, develop resilience, and “re-code” thinking. Allow yourself to be creative at work and home, she says. Re-connect with loved ones and with enjoyable experiences, and make time to improve fitness (which includes getting enough sleep). At the end of the road is a sense of flow and the true humility that good leadership requires. The journey is not always easy and takes time but it is essential for survival in the modern world.

Who Blunders and How: the Dumb Side of the Corporate World
By Robin Banerjee
Sage Publications, $33, 312 pages

What were they thinking? It is a recurring question in this book, which focuses on the reasons for decisions which were undeniably foolish. Banerjee, a senior executive, casts a wide net, looking at American, European, Indian and Japanese cases. A root cause is what might be called the victory disease, when companies that experienced early success with a product line became arrogant and complacent. Kodak failed to recognise the emergence of digital technology, Nokia missed the importance of software innovation, Blackberry did not realise how fast the telco business was changing.

In other cases companies that had generated a lot of cash went on an M&A binge without examining the value propositions. Others put incompetent people into key positions because they were related to the founder.

Several, when faced with a serious public relations problem, did the worst possible thing: they denied it, and then lied. This underlines a point that Banerjee emphasises. When you make a blunder, admit it, seek ways to remedy it, and devise a system to prevent a recurrence. Everyone makes mistakes, and the real point is what you learn from them. What worked yesterday might not work today, and it will certainly not work tomorrow.

The Definitive Guide to Blockchain for Accounting and Business
By Saurav Dutta (editor)
Emerald Publishing, $72, 320 pages

Professor Dutta currently heads the School of Accounting at Curtin University in Western Australia but he also has an broad background in financial research. For this guide he has put together a strong team combining practical experience and academic knowledge. The aim is to provide both a primer for people with little understanding of blockchain technology as well as a guide to new challenges for those with more experience.

As a starting point the chapter on terminology is useful, as are the sections dealing with tokenisation and internal controls. Several contributors discuss the transparency that underpins blockchain and examine the role that cryptocurrencies play. A number of security problems connected to blockchain have recently emerged; they are serious but there are solutions available, and much depends on the robustness of the initial design.

In his concluding chapter Professor Dutta looks at future opportunities. He sees that finance professionals can make important contributions on the tax and regulatory issues around blockchain. He also identifies the health, energy and maritime sectors as areas where blockchain systems can be effectively developed. It adds up to a comprehensive package in a field which is likely to become a key element of the financial landscape.

Downloadable resources

Crisis management
Guiding an organisation through a crisis involves a number of counter-intuitive steps, according to leadership expert Amy Edmonson. In this TED talk she argues that leaders should not pretend to have all the answers but should focus on transparent and ongoing communication. In a crisis leaders must be willing to act even though they have limited and conflicting information. Edmonson believes that honesty is more likely to engender trust than a show of strength, and leaders should be able to adjust their moves as circumstances change. She points to New Zealand PM Jacinta Ardern as a good example of crisis leadership.

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Showing skills
After a difficult year companies have begun to hire professionals again but landing the right job has become more difficult. This blog post from recruitment firm Michael Page shows that while elements such as an impressive CV, a compelling cover letter and strong interview skills are still crucial, employers are also asking candidates how they can contribute to business recovery and continuity. Ways to respond to this include showing customer skills, an understanding of digital trends, and a capacity for critical thinking.

The post includes links to other articles dealing with common interview questions, salary negotiation and building a personal brand.

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Successful start
A McKinsey survey shows that only 20 percent of start-ups launch successfully and scale up, and only 24 percent of incumbents’ new ventures become viable companies. This article suggests ways to overcome the most common pitfalls, including understanding the customer base before launching, observing market preferences, and using a beta program or wait list to drive early interest.

The article also notes that successful ventures plan around weekly rather than quarterly cycles and utilise social media as well as paid advertising. These strategies can not only underpin a successful launch but also form the basis of a durable operating model.

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Tax law
Once upon a time the Australian Tax Office was a somewhat secretive organisation but that has changed radically. Its website has a great deal of information for finance professionals, and in particular the legal section provides a valuable database. It has a number of search options to find legislation, cases, interpretations and policies that the ATO uses when making decisions. There is a list of fact sheets for employers, and guidance on policy issues that are currently being developed. The ATO also offers a subscription service that allows clients to see when the database information has been updated or revised.

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Sustainable finance
The Sustainable Financing and Investing Survey 2020 conducted by global bank HSBC has found that capital market participants are attaching greater importance to sustainable finance than a year ago, even as they have had to navigate unprecedented challenges due to the COVID-19 crisis. In fact, more than half of investors and three-quarters of issuers say the pandemic has made them realise they had paid insufficient attention to social issues.

The bank has also released research showing that stocks of large companies with strong environmental, social and governance ratings have outperformed the global average by 4.7 per cent since mid-December 2019.

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In the land of the blind

Appearing in Australian Spectator magazine, February 2021

Fortitude: American Resilience in the Era of Outrage

By Dan Crenshaw

Twelve, $41, 256 pages, ISBN 9781538733301

Hate Inc.: Why Today’s Media Makes Us Despise One Another 

By Matt Taibbi

Tantor, $12 (e-book), 304 pages, ISBN 9781682192122

Somehow, American culture has got itself into a terrible mess of division and acrimony: elites against mainstream, progressives against conservatives, blue states against red states. They have always been an argumentative bunch, our American cousins, but the level of conflict has reached such heights that the whole system is starting to totter. How did this happen, and what can be done about it?

These two books, in their own ways, supply some answers. Crenshaw, for one, cuts a distinctive figure. A former Navy SEAL officer, after a close encounter with an IED in Afghanistan he now wears an eyepatch and carries some scars. As a Republican congressman for a Texas district, he has been marked as an up-and-comer. Fortitude shows that he is not just another partisan hack but a well-read person who thinks carefully and looks to his military training as a source of strength. With one eye he sees more clearly than many people can with two.

He depicts the outrage culture of the left as a critical threat to American society (although he also has pointed things to say about right-wing cable television demagogues). The kids of the snowflake generation were raised to believe that they were special and entitled, and that their feelings were definitively important. Crenshaw takes particular issue with those who equate comments they do not like with physical attacks. Merely silly, says the man who knows a few things about real violence.

A central problem is social media. Immediate and anonymous, it has become an echo chamber for vitriol and craziness. Doing some research about an issue and listening to the other side is seen as a sign of weakness. If you look hard enough for insults, says Crenshaw (quoting Barack Obama), you will surely find them. Politics becomes a matter of hunting heretics rather than seeking converts.

The extension of this is a culture of victimhood, with extra points for those who can claim membership of the largest number of oppressed groups. This would be amusing if it were not so dangerous, especially when it turns into a belief that your ends are so noble that any means – any means – are justified. There are no reasonable opponents, only enemies so evil they must be destroyed.

Where did outrage culture and victimology come from? Yes, it is certainly fuelled by social media but Facebook did not create it, and neither did Trump. Crenshaw admits that he is not sure where the circle started but speculates that ‘helicopter’ parenting had something to do with it. Over-protectiveness led to a generation without the mental toughness to move outside the little world that they know. Crenshaw, himself a parent, recognises the desire to keep one’s children safe but emphasises that coddling them is not the answer. Let them be kids, he says, even though that will include some skinned knees and bruising mistakes. Don’t be forever telling them that the world is a dangerous place and they live in a toxic culture, because it becomes a self-fulfilling prophecy.

This leads Crenshaw to advice for escaping the outrage trap. His solution is for people to look within themselves, to develop their inner resources of resilience, courage and tolerance. Before you start shouting about something find out the background and the details. Context, consideration and clarity are the antidotes to permanent anger. Be willing to agree to disagree, rather than automatically attribute the worst of motives to the other side. And do not instantly look to government for the solution to every problem. Maybe an answer is in your own backyard.

Does this make him one of the marines of morality, wanting everyone to shape up and march in lockstep? By no means. America’s long history of social innovation and progress is built on dissent, debate and a willingness to question the status quo. But, says Crenshaw, to do so with respect and compromise.

The idea of seeking out differing views brings us to Matt Taibbi and Hate Inc., a book of essays that started out as online articles. Taibbi, a contributing editor to Rolling Stone magazine, sits firmly on the left but he has considerable common ground with Crenshaw. He is likewise deeply concerned with the fractures within American society but his focus is on cable television. He notes that his colleagues wanted the book to be a hatchet-job on Fox and were horrified when he extended his criticism to the far-left MSNBC and its most famous talking head, Rachel Maddow (in fact, the cover features equivalent pics of her and right-winger Sean Hannity).

Taibbi has fun recounting some of Maddow’s more ludicrous anti-Trump conspiracy theories but he has a deeper point to make. In particular, he notes that there is now no professional penalty for getting things utterly, hilariously wrong. Even though all of Maddow’s theories have been thoroughly debunked she has never admitted to error, and her paycheques keep getting larger.

Taibbi attributes this to the corporations that run the cable networks, who have found that polarisation is good for profits. Maybe, but it does not explain why there is an appetite for extreme views in the first place. Taibbi assumes that companies can create demand but this is by no means clear. Nevertheless, he has interesting things to say about the interaction of media and politics, and he has a sense of humour usually missing from the cultural warriors of the left. His solution? Turn off the  television and do something useful instead.

Regrettably, American-style extremism is now infecting Australia. Fortitude and Hate Inc. offer important insights, so perhaps that awful road can be avoided. We can’t say we weren’t warned.

Resilience, overcoming insecurity, and Instagram

Appearing in In The Black magazine, February 2021

The Resilient Leader: Life Changing Strategies to Overcome Today’s Turmoil and Tomorrow’s Uncertainty
By Christine Perakis
Sourcebooks, $30, 168 pages
When Perakis says that she knows how to weather a storm she is not speaking metaphorically. As a former ship captain, sailor, and professional rescuer she successfully navigated through a series of hurricanes and disasters, and then applied what she had learned to business. She has developed a set of ‘barometers’ to deal with a crisis and then effectively recover.

Most crises can be foreseen, at least in general terms, so a good leader should set up contingency plans and communicate them to their team.  Foresight, preparation and planning are the key elements, and when a crisis erupts the leader must be the calm centre. Perakis advises that a leader should write a plan for themselves as well, although there might be a need to make adjustments as the situation evolves. The experience of people who have weathered their own storms can be a valuable resource.
Planning for the recovery should start well before the storm is over, not just for its own sake but to keep the team focused on the future. Getting through a storm can make a team stronger and more cohesive but it is up to the leader to communicate a sense of vision, direction, and purpose.

No Filter: The Inside Story of How Instagram Transformed Business, Celebrity and Our Culture
By Sarah Frier
Random, $35, 352 pages
Even those who do not use it would probably accept that Instagram has become a cultural touchstone of the Digital Age. Frier, a journalist specialising in technology issues, turns out to be a good person to tell the story of how it happened.
The founders of Instagram, Kevin Systrom and Mike Krieger, set out in 2010 with the intention of creating a photo-sharing app. The key feature was that it could make any picture more attractive, even a mediocre selfie. From a small community of photographers and specialists the app quickly caught fire, to the point that in 2012 Mark Zuckerberg paid a billion dollars for the company. Systrom and Krieger stayed on as managers.

This is where the story takes on a new dimension, as Systrom and Krieger fought to protect the integrity of the brand and Zuckerberg tried to wrap Instagram into the growth-at-all-costs strategy of Facebook. That battle continues but Systrom and Krieger appear to be winning, as Zuckerberg faces challenges elsewhere.
Frier manages to keep a sprawling cast of big names under control and is not daunted by the huge sums of money involved. It adds up to a fascinating story, and offers crucial insights into how the tech business really works.

Unhindered: The Seven Essential Practices for Overcoming Insecurity
By Jaemin Frazer
Jaemin Frazer and Associates, $30, 234 pages
Insecurity, says business coach Frazer, is the invisible but powerful force that keeps many people from reaching their goals. In this book he sets out an action plan for dealing with insecurity, with the first essential step being a thorough self-review – what Frazer terms ‘stepping into the light’. His program moves through the acceptance of responsibility for one’s actions and developing a vision for what you want to achieve. In most cases, he says, the help of an impartial professional is needed, to ask the right questions and act as a mentor. The central issue is how to move past the negative biases that are built into the brain and understand how to think in a positive, reasoned way.
Frazer illustrates his points with cases of people who have succeeded on their journey to overcome insecurity, as well as several examples of those who have failed (which can be just as enlightening). He emphasises that the process is likely to be difficult, and perhaps even painful, for most people, as it can mean unravelling a number of personal issues. But the rewards of confidence, self-awareness, and an understanding of your own life story is, in the end, worth the effort.

Downloadable Resources

Looking towards ‘the new normal’
After a very difficult year many CEOs are growing more optimistic about the future, according to KPMG’s Global CEO Outlook, a survey which included 50 Australian CEOs. Nearly three-quarters of Australian business leaders expressed confidence in their growth prospects over the next three years. The move towards digitisation has accelerated, with 78 percent of CEOs say the pandemic has accelerated the creation of a seamless digital customer experience.
In many cases social purpose has become a more important concern than bottom-line profit. Supply chain risks have risen up the list of priorities, and recruitment strategies are being re-thought to deal with ‘the new normal’.

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Getting creative
In this TED Talk podcast, Netflix co-CEO Reed Hastings discusses how the company has developed its growth path. He describes the key elements of a successful work culture, explaining how Netflix is designed around inspiration, creativity and honesty. The crucial step is finding and keeping the most imaginative people, even if it means paying them well above market rates. He looks for individual creativity and motivation although good people must also be able to work in teams. The company principals have to be willing to give creative people the freedom to operate, and should emphasise inspiration over process efficiency.

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Security advice
The Australian Cyber Security Centre has released the Australian Government Information Security Manual (ISM), aimed at providing a security framework that organisations can apply to protect themselves from cyber threats. The ISM includes chapters on security documentation, physical security, awareness training, the use and management of mobile devices and email, system hardening, outsourcing, database systems and software development. Companies and agencies can tailor the advice to their own systems and risk management strategies.
The ISM also provides guidance on how to detect and report a cyber attack, as well as advice on resilience and recovery following an attack.

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New workplace
This interesting blog post from Jane McNeill, Managing Director of Hays Recruitment NSW and WA, examines what the office workplace might look like when the COVID-19 crisis eases. The number of people working from home will remain high, compared to pre-pandemic, and in the office itself there will be more physical distance between people. This means that there will be less opportunity for informal communication, and formal meetings will be smaller and fewer.
McNeill suggests that office managers should create more opportunities for online interaction and phone hook-ups. They should also look at the development of hybrid teams of WFH and in-office staff.

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Banks under pressure
Research and analytics firm J.D.Power has released survey data showing the extent to which retail banking in Australia is under pressure. According to the Australia Retail Banking Satisfaction Study, based on responses from 5,584 bank customers, customer satisfaction is higher for midsize banks than for the Big 4 banks, with Queensland-based Heritage Bank ranking highest. But overall satisfaction with the sector is low.
The use of mobile wallets and payment apps continues to grow, with Apple Pay being the most popular. At the same time, younger customers have shown a willingness to change banks, with 22 per cent intending to switch during the next year.

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US Senate numbers and the ‘small state effect’

Posted as comment on Real Clear Politics site, December 2020

There have recently been views expressed by some left-wing commentators that the Republican numbers in the Senate are artificially inflated due to the number of small (by population) states where both senators are Republican. Analysis of the numbers, however, does not bear this out.

We can determine whether a state is ‘small’ by looking at the number of House members it has. There are 14 states which have three or fewer House members. Of these, Montana, Maine and West Virginia are split, with one senator from each party. These three can, in effect, be removed from analysis.

Of the remaining 11, there are five – Alaska, Idaho, North Dakota, Wyoming, and South Dakota – where both senators are Republican. There are six – Delaware, Hawaii, New Hampshire, New Mexico, Rhode Island, and Vermont – where both senators are Democrats.

It is true that the Republicans do well in the small mid-western states. But this is offset by the Democrats doing well in the New England region (counting Bernie Sanders as a Democrat). The only Republican senator in New England is Susan Collins in Maine (the other Maine senator, Angus King, can be classed as a Democrat, on the basis of his voting record). So it is the Democrats, not the Republicans, who have an advantage from the ‘small state’ effect, although it is not great.

At the other end of the size scale, looking at states that have 15 or more House members, and can therefore be classified as ‘large states’, the Democrats have both senators from California (which has 53 Representatives). The Republicans have both senators from Texas (36 Representatives) and from Florida (27 Representatives). New York (also 27 representatives, although Florida is larger on a total population basis) has two Democrat senators. Illinois (18 Representatives) has two Democrat senators, and Ohio (16 Representatives) has two Republicans. Pennsylvania (18 Representatives) has one senator from each party so it can be removed from analysis.

Overall, it might be said that Democrat senators in the six largest states (not counting Pennsylvania) represent more people than Republicans. But it should also be said that California and New York are, according to census data, shrinking in population and are likely to lose a seat, while Texas and Florida are growing and likely to gain.

It should also be noted that the highest-profile Democrat, Joe Biden, represented the state of Delaware in the Senate for 36 years. Delaware can be classified as an ‘ultra small state’; it has only one member in the House of Representatives. Bernie Sanders, the leading light of the socialist left, represents another ‘ultra small state’, Vermont. This is something that commentators of the left might consider when alleging a systemic bias tied to small states and their Senate numbers.

Bad year, good books

Appearing in Australian Spectator, Christmas issue

A decade from now, we might look back at 2020 and laugh. Then again, maybe not. It has been a difficult year but at least there has been some decent things to read while stuck in quarantine.

One of the most interesting books is The Rare Metals War (published by Scribe) by French writer Guillame Pitron. He is interested in a category of materials that underpin renewable energy and digital technology, a group known as ‘rare earth metals’. Some, like platinum and germanium, are fairly well-known while others, such as cerium, dysprosium, and yttrium, are obscure to all but specialists. Always alloyed with some other material and only available in tiny quantities they are difficult and dangerous to mine. But they have properties that make them essential in computers, cellphones, catalytic converters, solar panels, wind turbines and, most of all, batteries. Far from being clean and safe, says Pitron, renewable energy and digital technology involve a range of costs connected to these materials. But green activists in the West, obsessed with fossil fuels, have chosen to ignore those costs.

China has worked hard to hard to corner the market, accepting the terrible environmental and social damage. There are no prizes for guessing where this might lead but Pitron notes that rare earth metals occur in many places, including Australia. If companies (with government support) are willing to make the required investments they can break China’s stranglehold. Pitron is not confident this will happen but you can’t say you weren’t warned.

Former diplomat Geoff Raby takes a broader look at the rising superpower in China’s Grand Strategy and Australia’s Future in the New Global Order (Melbourne University Press). He believes that China has already achieved enough of its goals – dominance in the region through economic weight, critical influence everywhere else – that it feels it can ignore Western complaints, especially of its human rights record at home and its meddling abroad. Despite this, Raby believes that Australia should work to develop its diplomatic ties with China and with countries that share Australia’s concerns. This would probably not hurt but it is difficult to see why the hard men in Beijing would take talkfests and entreaties seriously in the future when they have not in the past.

If straight talking is needed then perhaps diplomats should read Rooted: An Australian History of Bad Language (NewSouth) by Amanda Laugesen, a dictionary specialist. It provides a colourful romp through our legacy of swearing and slang, tracing the origins and evolution. We are a creative people when it comes to finding ways to express ourselves, and coining new insults is akin to a national sport. But Laugesen notes that at some point bad language can become intimidating and even frightening, especially when it has a misogynist edge. She cites a series of harassing messages that union boss John Setka sent to his wife, and which resulted in a court case in 2019; they are undeniably disturbing. Nevertheless, Rooted is an entertaining package, although it might not suit those who are easily offended.

Someone who has the capacity to laugh at themselves is Christopher Pyne, who held a range of positions over a long political career. In The Insider (Hachette) he reveals that he started off believing he could become Prime Minister, although he eventually realised that it was unlikely for a South Australian from the minority liberal wing of a conservative party. But he pressed on and moved up the ministerial hierarchy, notching up a number of policy achievements.

Never a hater, he was happy to get along with people on the other side, and some of the funniest incidents of the book deal with sharing media platforms with opponents. He also recounts the various leadership changes of the Liberal Party, some of them ruthlessly efficient while others were exercises in Olympic-level bungling. In the end, Pyne departed at a time of his choosing and with a good amount of grace, which is more than can be said for many others.

While Pyne is moving on Tim Wilson likes to project himself as an up-and-comer. His stated intention in The New Social Contract (Kapunda Press) is to bring liberal philosophy back to the political mainstream. Conservatism, he says, is reaching a dead end and is unable to respond to emerging social issues. The generation of Millennials is drifting towards socialism, although it is a type of socialism so mushy and vague it hardly qualifies as an ideology. Liberalism can provide an alternative to both, especially if it is built around decentralisation of power, a fairer tax system, and a resurgence of home ownership amongst the younger generations.

But his project looks difficult at best. He is trying to claim ground that is already occupied, and has been for some time. Yes, home ownership and tax fairness are good objectives, but is there anyone who disagrees? Does the constituency that Wilson is aiming at, in the centre but not already held by the major parties, actually exist? Still, one must admire him for nailing his colours to the mast and daring to discuss the importance of ideas. We should wish him luck. He will need it.

This year the Miles Franklin Award and the Stella Prize were both won by the novel The Yield (Penguin) by Tara June Winch, and it has also taken a clutch of other awards. At first glance it resembles Melissa Lucashenko’s Too Much Lip, as both books feature indigenous trauma echoing across generations. But The Yield unfolds in a quite different way. One narrative stream is centred on the Wiradjuri elder Albert Goondiwindi, who seeks to record his life in the form of a dictionary of his language. Another voice is that of his grand-daughter August, returning home after an extended absence. She is forced to reflect on her life, determining where the lines of responsibility should be drawn. The third narrative is told through the letters of a nineteenth century missionary, Ferdinand Greenleaf. It ties the parts of the sad history of the Wiradjuri people together, highlighting the point that good intentions mean little when confronted with the violence of the real world.

The Yield is a carefully layered novel, written with a sense of texture and an ear for language. It is not always easy going but it repays the effort.

Another novel worth a look is the imaginative Factory 19 (Black Inc) by Dennis Glover, set in a decaying Hobart in the near future. At the instigation of a mysterious billionaire the town decides to switch off all the accruements of the Digital Age and return to the year 1948. They even set up a factory that actually makes useful stuff. It works surprisingly well, with a few wrinkles, and the idea begins to spread. But problems set in, with some people wanting to move to the 1970s. Social stratification and militant unions appear, and a couple of eco-terrorists wander in. The story runs off the rails somewhat as it goes on but the essential idea, that the present is not as good as its advertising makes out, is an important and interesting one. Yes, there was life before cellphones, and it had its advantages.

A different take on the Internet comes from the wonderfully titled Trampled by Unicorns (Wiley). Maëlle Gavet asks why so many of the heavyweights of the technology sector – Bezos, Zuckerberg, Kalanick, Musk, and so on – are such awful people. She points to the insularity of Silicon Valley society, the incredible sums of money involved, and the growth-at-any-cost strategies of the companies. There is a belief in tech culture that geniuses are always jerks, and therefore being an uncaring misogynist is simply part of the package. Gavet has no shortage of stories, some of which would show the titans to be merely comical if they did not cause so much pain to other people.

There is little to laugh about in Ben Mckelvey’s Mosul: Australia’s Secret War Inside the ISIS Caliphate (Hachette). To date only fragments of the story have come out, and Mckelvey does a good job of showing the big picture. There are two interwoven stories here: one about the militants living in Australia who eventually ended up in Islamic State (two of them became executioners for ISIS videos after showing a talent for it), and another about the Australian commandos who played an important role in the critical battle of Mosul as well as other aspects of the conflict. The soldiers did everything possible to avoid civilian casualties but the use of innocents as shields by ISIS made it difficult.

Mckelvey points out that the jihadis could be effective and innovative fighters, often led by former officers of Saddam Hussein’s army and equipped with captured US hardware. But he also makes clear that they  were vicious, rapacious thugs, slaughtering people in the territory they controlled for the fun of it. ISIS was an evil cancer that had to be destroyed. The tragedy is that the cost of doing it was so high.

From the title of How to Win an Election (NewSouth) one might think it is about the dynamics and procedures of, well, winning elections. Not so. Wallace, a former Press Gallery journalist turned academic, quickly drops any pretence of fairness to focus on what the ALP needs to do to win. One cannot help but wonder if her hatred – there is no other word – of the Coalition is a universal trait in the Press Gallery. In Wallace-world Labor governments are always elected on a wave of idealism and hope while Liberal-led governments grab office through manipulation and trickery. Morrison, who had the gall to unexpectedly win the 2019 election, makes her splutter with indignation. Conservatives in general give her apoplexy, and she almost runs out of nasty things to say about them. All this reaches a nadir with the claim that Labor often loses because it has too much integrity. Presumably, she does not recall Mediscare. Her prescriptions for Labor – get a good leader, build relationships, create better advertisements – are so obvious that they do not really get you very far. Really, is this the best that the left can do?

This reviewer’s prize for the most unnecessary book of the year, the Trees Are Dying For This Award, was a close call. Lindy Edwards’ Corporate Power in Australia (Monash University Press) examines some interesting cases, including the mining tax and the NBN. Her research is comprehensive but the notion of casting big business as the villain has whiskers on it. No-one particularly likes mega-corporations, and saying that they are nasty things is preaching to the choir.

There were books much like this around forty years ago (and probably before), and they have continued to regularly pop up. There was a slew of them when the Occupy kids – remember them? – were doing whatever it was they did. Edwards’ remedies, such as her suggestion that the government should direct super funds to not invest in companies it does not like, sound a bit silly. It is not a bad book, but the question is: why?

A Highly Commended effort but the TADFTA has to go to What Happens Next: Reconstructing Australia After COVID-19 (Melbourne University Press), a collection of essays edited by Emma Dawson and Janet McCalman. Despite the clear title and the cover having a picture of the virus the book actually has very little to do with COVID-19. The contributions are essentially re-hashes of the standard left-wing agenda, from renewable energy to the republic. Eight of the essays are from current or past ALP politicians, and they have nothing unexpected to say. Some of the contributors tack on a pandemic-related paragraph or two but others don’t bother. So: Ms Dawson, Professor McCalman, you have taken a global disaster and turned it into an opportunity for boilerplate agitprop. The award is yours. Congratulations.

Holiday reading

Appearing on In The Black Digital site, December 2020

Samsung Rising
By Geoffrey Cain
Virgin Books, $35, 416 pages

Samsung is mainly known in the West for its phones but in its native South Korea it is a huge conglomerate that dominates the economy. This rollicking book recounts its path over three generations of the founding Lee family as it grew from a modest retailer of vegetables into consumer electronics and eventually chips and communications tech.

A focus for Cain is how Samsung interacts with Apple, as both a rival and an occasional ally. Along the way he looks at the internecine conflicts within the empire, the endless parade of scandals, and the Galaxy 7 phone (which tended to explode). Through it all Samsung continues to thrive, with plans for further global expansion. Not just rising but apparently unstoppable.

Better, Not Perfect
By Max Bazerman
HarperBusiness, $63, 256 pages

No-one is perfect, says Harvard academic Bazerman, but we all have an obligation to try to be better. The task of ethical self-improvement is best taken one day at a time, and business leaders should focus on how to create as much value as possible for the most people, in a sustainable way. Getting rid of waste (especially of time) is an important part of this, and everyone should determine what they really need to lead a satisfying life – and perhaps give away the rest. Bazerman illustrates his points with interesting cases, highlighting the need to consider one’s life and continually look for a path to betterment.

A World Without Work
By Daniel Susskind
Allen Lane, $45, 336 pages

People have been worrying about machines displacing human workers since the dawn of the Industrial Revolution but this lucid book makes the point that so far the fears have not been realised. Susskind argues that technology has vastly improved society by removing back-breaking jobs, increasing productivity and generating wealth.

However, he says, a qualitative change in work is now under way, driven by AI and robotic production. As remedies Susskind favours a system of skills-based education, increased regulation of tech companies, a ‘robot tax’, and financial incentives to encourage large-scale employment. The point, he says, is not to stop technological progress but to balance it with human needs.

Money: The True Story of a Made-Up Thing
By Jacob Goldstein
Hachette, $25, 304 pages

Why does money have value? Because people want it. Why do people want it? Because it has value. This paradox lies at the core of this fascinating book. Money might be only a consensual fiction, says Goldstein, but it is the driver of economic and social structures. He traces its development from lumps of metal to paper currency, connecting it to government policies, banks and financial collapses. He identifies taxation as the means by which a particular form of money is legitimised and has interesting things to say about the adoption of the euro. He also looks at Modern Monetary Theory and the rise of cryptocurrencies. It adds up to a genial, entertaining package.

Joy at Work: Organizing Your Professional Life
By Marie Kondo and Scott Sonenshein
Little Brown, $52, 256 pages

Kondo became a cult figure with her 2014 book The Life-Changing Magic of Tidying Up, and in Joy of Work she applies the same theory to the workplace. A messy, cluttered desk is an unproductive desk, she says. Her co-author Sonenshein, a business researcher, provides the data to prove it. They advise taking a thorough inventory and getting rid of anything with dust on it. Only keep things that have a clear, helpful purpose.

The same goes for digital clutter. Get rid of all those old emails; keep no more than fifty on file and purge irrelevant contacts, links and material. Yes, this level of tidying up requires a certain ruthlessness but the eventual rewards make it worthwhile.

Behavioral Insights
By Elspeth Kirkman and Michael Hallsworth
MIT Press, $28, 248 pages

This book is meant to be a primer on behavioural science, and the authors do their best to keep it accessible. They argue that the idea that individuals, whether stakeholders or observers, act on a rational basis is often misplaced. Much of behaviour is nonconscious, habitual, and driven by cues in the environment or the way in which choices are presented. Kirkman and Hallsworth, experts in this field, offer ways to determine the real basis of particular decisions, which is useful information for managers and leaders. Another important aspect is how people can analyse their own decisions, aiming to reach the right outcome rather than the easiest one.

Office boy

Appearing in Australian Spectator magazine, December 2020

The Momentous, Uneventful Day: A Requiem for the Office
By Gideon Haigh
Scribe, $25, 144 pages

For most of us, going to work means going to an office, to sit at a desk and perform bureaucratic tasks. Haigh, an experienced journalist and author, believes that the office has been the dominant cultural institution of the past hundred years, shaping both the urban environment and the modern psyche. Office work has always been defined by forms, records and procedures, and getting it all done with maximum efficiency at minimum cost has always been the task of senior managers.

Haigh draws on a wealth of business-related thinking as well as popular books and movies to illustrate the dualistic nature of all this. On the one hand the office underpins much of the process of wealth creation but the social cost often involves dehumanisation and a particular sort of mind-deadening boredom. And, of course, the time-wasting, life-consuming commute between office and home.

In many ways, the evolution of the office has been driven by technology aimed at constant improvement, from the typewriter to the photocopier to the computer to the Net. Along the way, it drew women into the workforce, giving them an income but often locking them into subordinate roles. In the decades following 1945, office administration was based largely on a military command-and-control model, and Taylorism added an extra dimension of measurement and routinisation. By the mid-1950s the administrative corporation had truly arrived. The world changed with the appearance of the cubicle. The office became a place where not much happened, but everything happened.

It was the development of IT systems that first raised the possibility of separating office work from the office. But telecommuting remained a mere novelty for a long time. Senior managers often disliked it, as it raised the possibility of workers moving outside of their control. The Net gave the idea of remote work a burst of momentum but it remained more a theory than a practice. One crucial aspect of change as the gossamer threads of the Net spread, however, was the deformalisation of the giant tech companies, as they moved from vertical skyscrapers to low-rise ‘campus’ buildings.

Haigh is clear that deformalisation was not designed to make life better for the people working there but to extract more productivity from them. This was especially important for companies where the ultimate business objective was itself morally dubious. The idea was to separate means from ends. All the plushness, the casual clothes, the free candy, says Haigh, was “to obscure their part in the debasement of civil society. We could call it Zuckerbergism”.

Haigh follows some issues down some interesting alleyways of the Digital Era, such as a discursion into office furniture and the hierarchy it implies. The office chair, notably the type called the Aeron, was not only a sign of prestige but also an indication of how much of their life the occupant was willing to put into the job, with the people putting in the most hours to keep their jobs. In the other words: “survival of the sittest”.

Another point, in relation to non-tech companies, is the never-ending search for cost savings. This includes the amount of space available. Haigh notes that twenty years ago the average worker had about 25 square metres of space; these days it is less than ten.

But even if the office was undergoing a metamorphosis it remained an office. Working from home was increasing as an option but the trend was slow to develop.

And then there was COVID-19, and suddenly the option was a necessity. The surprise was that it worked so well, with many employees relishing the flexibility and the lack of a commute. Remote management was made possible by virtual meetings and a new level of online connectivity. Haigh cites several companies that like remote working so much they have no intention of ever returning to a physical office. After all, it is much cheaper than actually paying rent on space and buying desks. Why not pass all those costs onto the employee? Sure, they will have to foot many of the bills but they can work in their pyjamas if they want. It sounded like a fair swap.

But WFH can have a significant downside for many employees. It means that work is invading personal space and managerial control is extending into private life. Indeed, the amount of work often expands to fill the available time. At some point, working from home can blur into living at work.

The implications of widespread WFH are profound. All those CBD office towers begin to look less like statements of corporate power and more like depreciating liabilities. The inner-city cafes, restaurants and stores that depend on the lunch-time crowd suddenly look bereft of a future. The crush of peak-hour trains is replaced by an eerie semi-emptiness. What, in the end, is a city without offices? What property developer, asks Haigh, would undertake a project such as Barangaroo in Sydney or the Docklands in Melbourne in the WFH era?

So is the office as a physical place finished, and deserving of an obituary? Actually, Haigh is not so sure. When COVID-19 ends – assuming it does – there is likely to be a measure of office re-population. But it will be less intense and very different to what has gone before. Not so much a gradual evolution as a trauma-induced leap into an uncertain future. We will probably muddle through to a hybrid of work-styles and a new urban geography. Probably.

Haigh recounts the evolution of the office with imagination and fairness, and he can turn a fine phrase when he wants to. The Momentous, Uneventful Day reads like a good story – and it is, for better or worse, the story of our lives.

Vigilance, Slavery and Estates

Appearing in In The Black magazine, December 2020

See Sooner, Act Faster: How Vigilant Leaders Thrive in an Era of Digital Turbulence
By George Day and Paul Schoemaker
MIT Press, $50, 208 pages

There is not much new in saying that the business environment is increasingly volatile, uncertain, complex and ambiguous – and that was before the COVID-19 crisis. Knowing what to do about it is a different matter, and the aim of the authors of this book is to provide a roadmap for anticipating and responding to change. A key issue is being able to discern real change signals from background noise, and there is good advice on how to do that by linking pieces of information together.

At the same time, leaders have to be willing and able to delegate a range of operational tasks to others, so they can focus on strategy and building resilience into the culture. There are good examples of companies who were successful in taking advantage of shifting trends, such as Adobe’s move to the Cloud and Mastercard’s digital transformation. There are also lessons from some who failed.

A useful aspect of this book is the diagnostic tools, including checklists and templates, that it provides. The ‘vigilance assessment’ test at the end is especially interesting. Day and Shoemaker were obviously writing with American readers in mind but the lessons of See Sooner, Act Faster are universal.

Addressing Modern Slavery
By Justine Nolan and Martijn Boersma
NewSouth Books, $35, 272 pages

The current form of slavery, say academics Nolan and Boersma, is less about the ownership of people than their exploitation through deceit, intimidation, and coercion. People from under-developed countries are the most likely victims, often tricked into working in factories, on farms or in mines, because paying them effectively nothing is more cost-effective than using machinery. It is not just an overseas problem: in Australia there have been many cases of illegal immigrants or others of dubious legal status being exploited. There is now legislation in force, the Modern Slavery Act 2018, that requires large corporate entities ($100 million and over in annual revenue) operating in Australia to report on what they are doing to monitor the situation and address the problem in their supply chains, subsidiaries and contractors.

Finance professionals and others who prepare company reports need to know their obligations, as do directors. They should also understand how to report offences when found, and the legal follow-through. Nolan and Boersma clearly have strong feelings about their subject but they show admirable restraint in their writing. Nevertheless, the nightmare stories stay in the reader’s mind. This is an awful book, and a very important one.

Taxation of Deceased Estates for Estate Practitioners(2nd edition)
By Ian Raspin
BNR Partners, $25, 47 pages

With an aging population and the increasing complexity of personal finance arrangements, estate management is an area that most accountants in public practice will encounter at some point. Raspin, a senior CPA and director of the specialist firm BNR Partners, notes that this is one of the fastest-growing areas of litigation in Australia, and practitioners should understand it as part of their risk management processes. This second edition of Taxation of Deceased Estates updates and expands the first edition, and includes recent changes in regulations and caselaw. An important issue is the new ATO Practice Compliance Guidelines affecting estates, which Raspin unpacks with the systematic approach of the well-organised expert.

He clearly knows everything there is to know about his subject, and he is able to communicate his points in a straightforward, comprehensive way. The scenarios he discusses are pertinent and realistic. Anyone wanting a complete picture of tax and estates should also look at Raspin’s other books, especially The Australian Tax Pitfalls of Administering an Estate with International Connections. Another Raspin book, The Tax Obligations of a Legal Personal Representative, is available as a free e-book from Raspin’s site.

Blame game

Appearing in Australian Spectator, November 2020

Can’t Even: How Millennials Became the Burnout Generation
By Anne Helen Petersen
Penguin, $35, 304 pages

Ah, millennials. Golden children of the Digital Age or dysfunctional, over-educated slackers? Bit of both, says Anne Helen Petersen, although it might be more a case of an author who is unable to make up her mind. In the first part of Can’t Even: How Millennials Became the Burnout Generation, she recounts how many millennials – and she is one, although at 38 she is at the older end of the spectrum – have great difficulty in doing basic things, such as paying bills or finding a dentist. They seem to have a problem with the Post Office. In short, they have trouble ‘adulting’, and often seem to think they are still feckless teenagers.

Petersen has a lot of stories about this, including a few of her own experiences. Unfortunately, she never comes up with a convincing explanation for it. Instead, she points to the parents of millennials, who pushed them through over-scheduled childhoods and an endless search for credentials. The quest for certificates and pieces of official-looking paper had a point: it was so you could get into a better school, so you could get into a well-regarded college, so you could get a prestigious job.

As a result, says Petersen, millennials never learned how to do the mundane chores which are a necessary part of life but yield low returns. Well, maybe, although the connection seems a bit tenuous. But it starts the book off on a recurring pattern of finding someone to blame. Someone else. Anyone else.

This is interesting enough, in a self-indulgent sort of way. So it is a bit odd that Petersen veers off into an analysis of work, which takes up a large part of the book. The parents of millennials – invariably socially liberal, left-wing helicopters – told their children that just getting a job was not enough. It has to be well-paid employment that is socially meaningful and which connects to one’s passions. Oh, and it has to impress other people as well. And if you had to rack up a lot of student debt to get the right degree – well, someone else would pay for it, eventually. Wouldn’t they?

The problem was that as millennials were starting to enter the workforce, technology was evolving to re-define work as a 24/7 deal. Those oh-so-loving parents had failed to mention that you would have to work for a living, and that it might not always be satisfying fun. The high-prestige jobs drew more competition, which meant you had to increase both your input and your output. At the same time, millennials have to keep up their Facebook page, their Instagram accounts, their Twitter feed. So many people that have to be impressed, so much to tell the world about – that is, about yourself.

Yes, it is the road to burnout: constant pressure, too much to do, too much to think about, never enough time. Far from being slackers, says Petersen, millennials are working constantly. If not working for the company, they are building their online profile or scouring the Net for the next, better opportunity. The to-do list, once a tool confined to the workplace, became a never-ending list of tasks that infected every aspect of life.

Blame techno-capitalism. Blame unscrupulous employers. Blame … oh, why not blame Trump? True, student debt and always-on work began well before he took office, but surely, says Petersen, he must have had something to do with it.

Petersen does not offer much in the way of answers to the questions she poses. Just the usual left-wing mush, really: nothing worth repeating here. This section is a bit cursory, in fact, as if she is just walking through the standard discussion points for the inevitable talk shows. She is more interested in pointing fingers. And avoiding the idea that those millennials who are facing stress-driven burnout made their own choices. It is because of our parents, Petersen says. They made us think this way. Their fault.

Here’s a news flash for millennials, Ms Petersen. The parents may have been pushy but your choices are your own. No-one forced you to take on massive student debt – you did that. You do not have to be on social media all the time – that’s your decision. You can turn your phone off if you want, there is a little button that does it. And if you want a business card that impresses your friends – well, that’s on you. Here’s an idea: why not get an ordinary job that allows you to have a decent life? Just a thought.

It must be said that Petersen raises some interesting ideas, and she can turn a good phrase when she wants to. But there appears to be a lot of padding here, with anecdotes that do not lead anywhere and statistics that seem irrelevant to the argument. Perhaps this is to be expected, since the book began as a Buzzfeed essay (Petersen was a ‘senior culture writer’ with Buzzfeed, which explains a lot). A firm editorial hand might have helped, but millennials do not do that sort of thing.

There is also a sense of disconnection in the book. How did we get from the millennial generation having trouble mailing stuff to demands for taking workplaces back to the Good Old Days? Can’t Even is a bit of a mess, really. No doubt, millennials will love the idea that someone else is responsible for whatever troubles they have. The rest of us are unlikely to be so impressed. Our response is probably going to be: welcome to the real world, kid.

Accountants provide the steady hand in time of stress

Appearing in InPractice magazine, July 2020

The New Zealand government’s response to the COVID-19 crisis has been swift and determined, legislating a relief package of around NZ$18 billion, equivalent to about six per cent of the country’s GDP. Accountants, working as finance specialists and business advisors, are providing critical support to their SME clients, guiding them through the crisis and ensuring that government support can be accessed.

Saurav Wadhwa, Managing Director of IBBZ Accounting, a practice based in Auckland, believes that providing certainty is essential in a time of stress.

“I see that part of our job is to keep our clients from succumbing to panic,” he says. “We have been taking their calls, providing updates, and trying to give them as much comfort as possible. New businesses, and those that were already struggling, are more concerned than existing businesses. Established businesses are not too worried but that will change if the situation goes on for another six months or so.

“As for our own business, we are expecting a 30-40 per cent reduction in sales and there has been a marked drop-off in new clients. All our employees are working remotely and everyone’s hours have been reduced to 32 hours as a way of sharing the burden. We had previously invested in the technology to allow remote working and had simplified our processes, and that is now showing the benefits.”

Wadhwa notes that his firm is not charging any professional fees to clients for helping them access government support. Clients have been given extensions of payment terms for other services whenever they have asked.

Bridgette Pretty, Director of the Nelson-based practice Pretty Accounting, likewise acknowledges the crucial aspect of providing reliable information to clients.

“During the first two weeks after the relief package was announced I worked long hours to help clients with information around the subsidy applications. I turned billing off during this time as having access to answers during challenging times can greatly help to reduce stress levels,” she explains. “It’s a way of giving back to clients. And clients have shown remarkable resilience, even those who have been hit very hard.

“It’s important to be here for them, to offer answers and steadiness in a time of stress. That has extended from providing guidance on cashflow planning for the future to developing some coping skills on how not to kill family members during lockdown!”

Accessing support

Pretty identifies the wage subsidy as a valuable part of the government support package, allowing businesses to retain valued staff. Assistance has also been important for self-employed people, as it has meant the ability to plan cashflow with the assurance that some money, at least, will be coming in. This part of the support package is fairly easy to access but Pretty’s firm has been there to assist clients with applications and documentation.

Wadhwa agrees that the wage subsidy scheme is one of the most effective government initiatives, and his practice has helped many clients with it. Other aspects of the government support program are more complex, such as the re-introduction of depreciation for non-residential buildings, changes to some tax rules, and the temporary increase in asset write-offs. These usually require professional advice for clients.

Wadhwa is less enthusiastic about the loan scheme. He sees the possibility that some companies will take the loan but then not have the capacity to repay it. But he sees the overall package as very positive in the level of support it has provided.

Recovery phase

Both Pretty and Wadhwa see that the accounting profession will have an important role to play when the economy moves into recovery phase.

“Cashflow planning is going to be a big one, as well as tax planning, which was invaluable in the recovery from the previous recession,” Pretty says. “We will also provide assistance with information to give to client’s banks. That will be important as we come out of lockdown, a means of keeping relationships between clients and the banking sector open.” 

She believes that the recovery period will open up new opportunities for many businesses, and is working to ensure that her clients will be in a position to take advantage.

Wadhwa agrees, saying: “Using our expertise to look ahead is one good way we can add value to our clients. We make it part of our regular update service, and we are also providing advice on financial planning and business restructuring.

“Looking ahead a bit further, we will help our clients with disaster recovery plans, which includes contingency funds in the form of liquid cash. For some time I have been working with clients to build contingency funds – nine months of total gross expenses is a good target, in my view, and three months is the absolute minimum. This crisis underlines the value of that.

“As accountants and CPAs, we are our clients’ most trusted source of advice. I believe they need us more than ever before, and we cannot let them down.”