By Dr.Roger Firestien, Author of Create In a Flash.
The fight, flight, freeze survival response – or FFF for short – is designed to mobilize our brain and body to fight an enemy, run from a tidal wave or freeze to hide from a predator.
FFF is how humans react when they encounter a dangerous situation. It is a primal response that happens instinctively even before we are able to think about the situation we are confronting.
The FFF alarm causes our brain to focus on negative memories, probably to scan them to avoid repeating dangerous situations and negative outcomes. We get tunnel vision as our pupils dilate to increase our focus and long-range vision, but as a result we lose our peripheral vision.
Humans use the FFF response and so do organizations.
When organizations encounter dangerous situations, like, say, trying to survive a global pandemic, they can respond by either fighting the situation, fleeing from the situation, or freezing and waiting for the situation to pass.
I would like to propose a fourth strategy for organizations to deal with a danger like the pandemic. It is the fourth “F.” The farm response. More on that later.
What kind of organization is yours?
The fighter organizations were the ones that fought the idea of a global pandemic or pushed back against the research that reported how serious the virus was. Think of the meat processing plants that didn’t provide proper protective gear or the religious organizations that refused to take a break from large services.
The results were catastrophic for the organizations and deadly to the employees and worshippers.
It is pretty easy to identify the fleeing organizations. You don’t see them anymore. Unfortunately, this is the organization that just doesn’t have the resources or the energy to fight. You will recognize them by the “For Rent” signs in the windows of the buildings they used to occupy.
The organizations that freeze are a little more difficult to identify. They are still around but are frozen by fear. They are the organizations that, although they are in a position to move forward, are too frightened to take a risk or even look at the periphery of their business. Their tunnel vision blinds them to opportunity. The freezers hide and wait for the danger to pass. They are the ones who miss out on possibilities.
For example, if you are in the business of supplying concessions to sporting events, airports and national parks, your business is in deep trouble now. So, what are some ways to keep people buying food and drinks with so many venues closed?
Many national parks are now open and visitors need to eat. How can you sell food while supporting social distancing? Answer: Sell picnic meals to your patrons. And, sell a blanket that commemorates the park that diners can spread out and have lunch while social distancing with their families. Then, they’ll keep the blanket that reminds them of their visit to the park.
Sound like a good idea? It sure does. You can keep your park concession business, allow people to social distance and add to your product line with that commemorative blanket. Did the company implement the idea? Unfortunately, they did not. They froze and missed the opportunity.
However, businesses are finding ways to optimize their organization and capture opportunities. They are the farmers. The farmer organizations study the situation, just like farmers study the weather and the land. They look at the resources available to them and get to work.
Farmer organizations pivot and get creative.
Distillers, who before the pandemic, were making vodka, whiskey, gin and other spirits quickly changed their operation from distilling booze to distilling sanitizer.
Telemedicine, which had limited acceptance before the pandemic, almost immediately became the accepted way to deliver care. Now, the doctor comes to you.
Fitness trainers are conducting their sessions via Zoom or in person outside on sidewalks in front of their gyms so they can social distance.
My favorite ranch, SK Herefords, sells their beef at local farmer’s markets in the Western New York area. This spring when the large packing houses shut down and grocery stores were limiting the amount of beef customers were able to buy, my farmer friends were there at the markets with locally produced farm-raised beef. Sales soared and demand skyrocketed.
Why? The farmers were ready. They used their resources and were not afraid to optimize them in a rapidly changing and volatile environment. Farmers live with constantly changing weather conditions and market prices and are accustomed to rapid change.
To operate with constant change, all of us, like farmers, need to be constantly creative. Phil Keppler, my philosopher farmer friend from SK Herefords says, “Creativity helps you to not look at things as a problem. It’s trying to find the solution – and that’s the exciting thing about it. Things aren’t problems anymore. It’s just difficult situations and you’re trying to find a solution to that situation.”
A good mindset for what our world is experiencing now… it’s a difficult situation and we are creating solutions daily.
Fight, flight, freeze or farm. What kind of organization is yours? And, what can you learn from “the farmers?”
This is a Sponsored Feature.
Business first, not compliance only is the future for accountants
By Peter Bracey, MD at Bracey’s Accountants.
The past few months have underlined the need for better business insight to reduce risk, improve decision making and exploit new opportunities. Businesses have needed rapid access to advice, support and information – yet in too many cases the obvious ‘go to’ resource has failed.
Accounting firms with a compliance only approach have been unable to step up and support businesses that need more than the basics of profit & loss; balance sheets; and cash flow. What they require is business support, from using corporate structure to mitigate risk to undertaking robust forecasting to inform investment plans and helping to maximise business value for a company looking to sell.
From providing essential advice to protect business assets – such as property – to R&D tax incentives and VAT consultancy, whether a business requires a fully outsourced FD or support for the existing management team, Peter Bracey, MD, Bracey’s Accountants, outlines the opportunity for progressive accountants to support constantly changing business.
Whether a winner or loser during the Covid-19 crisis, businesses across every industry have had to adapt to extraordinary change. Gyms were shut but companies selling gym equipment, bikes and paddleboards couldn’t keep pace with demand. Garden centres and nurseries were trying to keep alive tonnes of bedding plants – while seeds sold out online and everyone bought a greenhouse.
For some business owners the focus was on managing job retention schemes and accessing the life-line of government finance – but now they are worrying about the repayments of deferred VAT and government loans that will be due early in 2021; about closing premises or making redundancies. For others, the challenge was in responding to customer demand for home delivery; working out new finance models and overcoming supply chain glitches. Now they are looking to build on new customer relationships and embed expansion plans.
At every step, these businesses have needed advice, support and insight. But this was uncharted territory. Forecasting is tough at the best of times. Little if any of the business’ activity pre-Covid appeared to offer any relevance during the past six months. So where could businesses turn for help?
These are decisions that require not only excellent financial and business understanding, but also excellent financial and business data. Which is where many traditional accountancy firms fall down. The majority have, of course, made the shift to cloud based software which provides shared, real-time access to business data. As yet, however, many remain committed to a service model that is predicated solely on meeting compliance requirements, not supporting critical business decisions.
Proactive firms are taking a very different approach, one that takes a business first rather than compliance only approach. Rather than attempting to mitigate risks and reduce tax liabilities after the fact, this model is about constant communication with clients to support change. By encouraging businesses to discuss plans in advance, accountants can provide vital support and insight – either working with the existing CFO or FD or providing an outsourced FD resource to those companies that cannot justify this dedicated role.
These firms are looking beyond annual accounts data to provide business insight and advice based on current, not historic – and now irrelevant, financial data. Whether the business is worrying about repaying its deferred VAT and Bounce Back loans next year, searching to minimise risk or building on new customer awareness to add revenue streams, there is a pressing need to understand the business as well as financial implications of change.
Today, that means supporting companies through a line by line approach to every item on the balance sheet. From cutting costs and chasing debts without jeopardising important business relationships; to identifying and funding new revenue streams – even creating local supply chains to mitigate the potential disruptions caused by Brexit – understanding, analysing and interpreting this data is key to making the right decisions today to support immediate goals.
But what about tomorrow? Covid-19 may have been a once in a century event but the pace of change affecting business in a digitally disrupted global economy demands this continuous level of proactive support. Few business owners or management teams have the time, resources or expertise to unravel the complexities of 21st century operations – and can become exposed to significant risk as a result.
Is it worth developing talent in house or more effective to recruit? Does the government’s latest apprenticeship scheme really work financially? What about tax incentives – such as R&D tax credits or the potential to cut corporation tax for sales of patented goods? How can the business safeguard its intellectual property?
Providing the right answers to these questions is about far more than the mainstays of accountancy: the P&L and balance sheet. It is about leveraging business understanding and knowledge to support clients through every change; about helping companies to take every possible step to build a strong foundation, maximise tax incentives, minimise risk and realise business goals.
Take the retailer that has spent 50 years building up not only a successful customer base but also a valuable property portfolio and cash reserves. At first glance, a robust business. But the company structure revealed a significant risk: the entire operation was held within one limited company. There was no separation of assets. Should the business be accused of copying a product and face a legal claim, the entire company’s assets would be at risk. The simple step of creating a group structure and transferring some of the assets to a holding company draws a line in the sand and limits a creditor’s ability to attack the entire corporate asset holding.
Or consider the business that was investing circa £1million year on year in a new software product – yet had no idea that it could claim R&D tax credits and was due a £500,000 rebate. Or the businesses that have never considered applying for a patent on a product because of the up-front costs – and are, as a result, missing out on the long term financial benefits of patent tax relief. Any company with a patent pending can apply for Patent Box relief which can reduce corporation tax on the profit generated from the part of the product that is patented from 19% to 10%.
This level of proactive support and advice is invaluable but for many companies, and accountancy firms, it has taken a global pandemic to drive a change in expectations. As the firefighting phase draws a close, businesses will continue to face extraordinary, unprecedented change – not only as a result of Covid but also Brexit. Throw in the implications of a post Covid budget, evolving environmental legislation and technology enabled disruption and the ability to adapt and respond is now prerequisite for business success.
Business owners have never had more issues to consider – or more need for rapid, trusted business advice and support.
Why Continuity and Succession Planning is Crucial for Businesses Right Now
By Chris Allen, a Chartered Wealth Planner at Arbuthnot Latham explains why it is crucial for businesses to review continuity and succession plans at this current time.
Coronavirus has created many challenges for businesses and an area of discussion that has rapidly escalated in importance is around protection. Protection should always be an area of priority for a business, but the situation we find ourselves in has understandably brought this topic to the fore.
When reviewing continuity and succession plans, you need to consider:
- How would your business cope with the death of a key person that has a direct influence on the profitability of the company?
- What would happen to the business should a director, shareholder or owner pass away?
Key Person’s Protection
53% of businesses cease trading in under a year after the loss of a key person. Why? Often the effect the deceased individual had on turnover or profit was so great, that the business can no longer continue without them. There could also be litigation, brand damage and liquidation issues to contend with which can ultimately lead to business failure.
So what can we do to help? We can help you:
- identify: key people in your business,
- quantify the financial risks of an individual passing away
- create a solution and implement it.
The typical result here is a life assurance plan, where the business receives the sum assured on a specific individual passing away.
Another area of great importance is relevant life cover. This is a tax efficient policy that allows an employer to offer a death in service benefit to their employees. Life cover policies are applicable to small businesses who do not have the scale to qualify for group schemes. This offering helps businesses offer competitive employee packages to attract and retain the right employees.
Similarly to personal life cover, the pay-out would go to the employee’s family of financial dependents, however, it is important to note that this is an employer funded policy and the premiums paid by the employer allows the company to benefit from corporation or income tax relief. This is a key area of planning for employers to protect their employees or indeed directors who are paid on PAYE.
Six out of ten business owners state that they have no protection in place to cover the cost of purchasing shares should a business owner die.
Simply put, a shareholder protection arrangement allows the surviving shareholder(s) to have the funds available to purchase the shares of the deceased shareholder from their estate and maintain control of the business and the direction they want to take it.
When discussing shareholder protection, it is important to think about the following:
- What happens if you or one of the shareholders were to pass away?
- What is the succession plan for the business?
- Would the deceased estate/spouse inherit these shares and what does that mean for the future direction of the business?
A good wealth planner can assist you by assessing current agreements you have in place, the type of business you are operating and also understand if any shareholders have medical conditions which will need to be considered.
From there they can help with the valuation of each member’s shares, work with other professional advisers to get the correct agreement in place, and structure the plan properly to accommodate the different % ownership of various shareholders.
Recent events have shown us the future is unpredictable and we should all think about getting our house in order should the worst happen. A lack of planning could have a huge impact on your business and loved ones. Having the correct advice and solutions in place is always important, but even more so in these uncertain times.
Overcoming Barriers That Threaten Your Creative Output
By Charlie Worrall, Digital Marketing Executive, Imaginaire
Working in a creative field doesn’t happen by chance. Years of study and research – not to mention a distinct disdain for formal attire – help you climb the ladder one rung at a time. But what happens when the creative tap runs dry? Amazing ideas you came up with at the drop of the hat are now replaced with crumpled pieces of paper being directed towards the bin. All while the clock is ticking as your client drums their fingers on the desk, waiting for the brilliance that you simply cannot give them.
Many barriers exist that can threaten your creative output. They are out to get us all, regardless of how many years you’ve spent working in the industry. Even if you have a really successful project, that doesn’t mean the next will follow suit. The only solution is to knock your creative barriers down as if you were playing a game of skittles.
It’s your turn to bowl and you’re required to aim the ball at the following…
Your Stress Levels
A recent survey undertaken by YouGov found that 74% of people have felt so stressed they have been overwhelmed or unable to cope. Given this survey was conducted pre-pandemic, it would be little surprise if that number isn’t more like 100% now.
Constant uncertainty and restrictions on how we carry out our everyday lives can soon affect your creativity too. After all, how can you let your imagination run wild while you are essentially being held captive in your living room, only dressed appropriately from the waist up on a Zoom call?
Stress of any origin isn’t a friend of creativity, because your brain goes into fight or flight mode and literally shuts off any non-essential processes. Then your sleep suffers and so does your diet. You don’t exercise which causes a lack of dopamine, etc. Therefore, finding a healthy output for your stress is the only way to truly rid yourself from it. Even a quick walk in the park will give you a change of scenery and will help your brain to relax, thus relieving some stress in the process.
A Lack Of Inspiration
Often, a lack of inspiration originates from playing it safe. It’s not a coincidence that ‘sameness’ and ‘lameness’ rhyme either. The likes of waking up at the same time and eating the same thing for dinner is terrible for fostering creativity. As Albert Einstein put it: “The definition of insanity is doing the same thing over and over again but expecting different results.” That’s why you need to be switching things up now more than ever.
While all of us might be experiencing physical restrictions right now, that doesn’t mean to say you can’t tap into the wealth of content that’s out there. Films, virtual gallery tours and books all exist waiting to be discovered. Just like a footballer is required to train to stay on top of their game, you are required to do the same within a creative sense too.
Sometimes no matter how much you try; the ideas just don’t flow. Anything you do come up with lacks gravitas or has been done before by someone bigger and better. The irony in this situation is that the more you try and force the idea, the worse the mental block becomes. In such a case the only thing you can do is stop. Even though it’s the very opposite of what your inclination tells you to do.
Creativity in itself is a free-flowing entity. Once you try to constrict it to some kind of production line most of us inevitably find ourselves a part of, the wheels are going to stop turning. The problem isn’t helped by the fact most of us are constantly wired to emails, notifications and bad news popping up on our phones. These in themselves can all create the mental block to begin with. That’s why restoring the balance is key and this starts by going back to the drawing board. You need to find exactly what it is that makes you tick to get the power switched back on.
Your Inability To Say No
No is such a finite word and one that Jim Carrey went to great lengths to tell us to avoid in Yes Man. Though in the end, his character realised that you just can’t say yes to everything and retain your sanity at the same time. Rather, it’s about learning to embrace when not to turn great opportunities down. Many people could do with channelling this ethos, especially as if you try and please everyone all of the time this ultimately comes at a cost to you.
How can your creativity thrive when you are constantly feeling stifled? Whether you picture a work or personal scenario here, you can’t be all things to all people all of the time. The more you continue to take from yourself the less you have to give. If anything, your creativity switches itself off as a warning sign in response to being overloaded. No is a powerful word though is one you shouldn’t be afraid to use when warranted.
The Bottom Line
Creativity has never been about following the rules or sticking to the same patterns. Yet that’s often what those who struggle with generating new or brilliant ideas often find themselves doing. The only way you can truly break out of a creative rut is to challenge yourself. It might seem like an impossible task in the current climate, but it’s one that is essential to be able to give yourself and your clients the best version of what you can do.
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