By Paul David Walker – Excerpt from the book, Cracking the Business Code
While helping CEOs and executive teams at mid-sized and Fortune 500 companies throughout the years to align strategy, structure, and organizational culture, I have observed both great and unfit leaders and realized that leaders can literally invent the future of their companies and their lives.
Today’s CEOs need teams with clear missions, a sense of urgency, the stillness of a master and explosive targeted actions. Like shooting rapids, there is a correct course in the currents of change; there are also those that will run you into rocks and those that will drown you and your company in the Business Industry.
Companies that succeed in today’s volatile business economy must conquer obstacles the way a championship basketball team does in a “FastBreak,” overcoming the insecurities that hold them back and responding instantly to the flow of the game of business.
Before leaders can accomplish anything, they must first understand themselves and the present reality, challenge their own thinking, communicate a well thought-out and concise strategic direction, and define a clear and actionable plan for execution. No matter how much research is done, a leader must make the final call. To make that call with confidence, a leader must know the answer or how to find the answer, and he or she must communicate clearly, simply, and concretely in a compelling manner. Only then will a team have the faith to follow and achieve the company’s objectives.
The following seven imperatives act as a roadmap for surpassing common business hurdles to achieve success and invent a well-designed future for your business or your life. These steps work for everything from building a porch on the front of your house to improving your life, creating a great company, or galvanizing a nation.
1. Knowing the Answer: The first step, of course, is to know the right answer. But more important, you have to know when you know the right answer in business or in life. It is not enough to say, after it is too late, “I knew that.” In any endeavor, there is a correct course to set. That course is based on the realities of the market, competitive analysis, and the true differentiation of the product, service, or team being evaluated. A leader must be fully present in the reality of the moment in order to succeed, rather than being attached to their thoughts and beliefs about that reality. The leader must know the difference between his ego’s hopes and fears and true reality. This involves a deep understanding of yourself and the flow of cause and effect. A leader must learn the art of “integrative presence,” which is like being “in the zone.” The future emerges from the present; the past is distorted by our beliefs, emotions, and the limits of our perceptual abilities. “Integrative presence” allows you to integrate the reality of the moment with your intention for the future; thus responding correctly to the flow of the game. Product cycles are shortening, business is becoming far more complex, and global competition requires speed and accuracy. Without the correct understanding of the present reality and how that it is emerging into the future, you cannot move with accuracy and speed. A leader must dance with the present while simultaneously carrying an intention for the future. As you do this, you know how to move.
2. Communicating a Clear, Compelling Picture of the Future State: You cannot create something you cannot conceive. Once a leader knows the answer or the right course, that leader must be able to conceive and communicate the opportunity and understand how the team can capture that opportunity.
Until this team can see, feel, and hear the calling of the opportunity that present reality represents, they cannot truly follow. Without this clear picture, each team member will create his or her own picture of the future, causing friction and slowing the overall progress of the team. The leader’s presence and authentic commitment to the mission draws followers within the company and in the marketplace. The more clearly the picture of the future state is, the easier it is to create. Without a clear picture of the future in the mind of each leader, chaos will ensue.
3. Creating Total Commitment: After the team can see and feel the possibility of the future, their commitment grows.
“Until one is committed, there is hesitancy, the chance to draw back, always ineffectiveness concerning all acts of initiative and creation.” — Goethe
First, the leader must be fully committed to the mission and then inspire the same level of commitment in those who follow. Part of being a leader is to challenge teams to face their fears and change their habits. What prevents them from committing is one of the greatest fears of mankind: the fear of the unknown. No one likes to walk into a dark room. As leader, you have to light the future with your vision. To move forward, you must paint a picture of a new reality to give your team confidence and keep them totally engaged. The clearer and more compelling this picture of the future state becomes, the more committed the team becomes. The same is true for the marketplace and your customers.
4. Acknowledging and Responding to Present Reality: Leaders who fall short of their goals have often skipped or distorted this step. No matter how committed a team is to a mission, having the wrong starting point can make plans useless. Knowing the good, the bad, and the ugly about any situation they’re facing allows the team to build plans that are targeted and effective. The challenge here is that people hate to be wrong, and they find ways to make reality comport with their beliefs. This is the problem with the belief in “positive thinking.” It often skips this step and moves too quickly to planning and action. Pessimists, because of their negative beliefs about life, give up at this step, feeling overwhelmed and hopeless. A plan that is not grounded in reality, no matter how clear and committed the team, will lead you over a cliff. If someone were to give you directions to Chicago and thought you were in Los Angeles, when in fact you were in Miami, you would become lost no matter how good the directions. A leader and his team must honestly face their weaknesses and misconceptions to invent the future. It is best to always come back to this imperative.
5. Developing Targeted Action Plans: Having passed through the first four steps, it becomes easier to create targeted plans, which provide a roadmap that enables teams to deliver focused execution. The problem here is often that when things are not going well, leaders change the mission instead of adjusting the action plans.
This means that they did not do the work in the first four steps. If you know and are committed to the mission, you will know to change the plan, not the mission. With the right plan, a team will surpass competitors while learning about themselves. Even at the final step, there may be obstacles, doubts, and fears to overcome. Be on guard for hesitation. A leader must not falter due to the team’s fears.
6. Having the Courage to Act Quickly: When you have all of the above steps in place, your fears are less likely to interfere—but they may still prevent you from implementing the plan. Courage to confront your fears and those of the team sets a true leader apart from someone who knows the answer but lacks the courage to act and lead. Once a leader knows the answer, that leader never gives up. With shortening product cycles and limited capital, leaders must first define the markets, enter them, and create excitement. With targeted actions that everyone believes in, the leader forms FastBreak Action Teams that are infused with clarity and confidence to reach the new reality. With good marketing and branding, the marketplace will have the same courage.
7. The Stillness of a Master: In martial arts matches, it is said that a master watching a match can tell who will win as the competitors bow to each other before the match. It is the one who has the most stillness, or the most presence. In moments of stillness, the motion around you slows and you can see, feel, and understand the right course of action. With training, your body will respond. The same kind of stillness is needed as you navigate the whitewater rapids of business and the flow of cause and effect that is challenging your business. Take time to be still and reflect. As in martial arts, presence and balance are important. You must balance all these imperatives.
Of course this is all easier said than done, but if a leader can take the time to follow through each of these steps, he or she can take full control of the future. Fears and doubts arise during each step; a leader must work to mitigate those fears with possibilities and a compelling picture of the future state with his or her role model.
After the Nazis had rolled over Europe, destroying great armies and cities and killing millions of people, Winston Churchill saw his army defeated at Dunkirk, his air force in tatters, and U-boats sinking his navy and blocking supply lanes. He still had the courage to say, “We will never surrender.” He said this with full knowledge that he and his family would be tortured and killed, should Hitler win. Addressing his divided government and the nation in 1940, two years before the USA joined the fight, he painted a clear and compelling picture of the mission while acknowledging reality.
“… I would say to the House, as I said to those who have joined this government: ‘I have nothing to offer but blood, toil, tears, and sweat.’
We have before us an ordeal of the most grievous kind. We have before us many, many long months of struggle and of suffering. You ask, what is our policy? I can say: It is to wage war, by sea, land and air, with all our might and with all the strength that God can give us; to wage war against a monstrous tyranny, never surpassed in the dark, lamentable catalogue of human crime. That is our policy. You ask, what is our aim? I can answer in one word: It is victory, victory at all costs, victory in spite of all terror, victory, however long and hard the road may be; for without victory, there is no survival. Let that be realized; no survival for the British Empire, no survival for all that the British Empire has stood for, no survival for the urge and impulse of the ages, that mankind will move forward towards its goal. But I take up my task with buoyancy and hope. I feel sure that our cause will not be suffered to fail among men. At this time I feel entitled to claim the aid of all, and I say, ‘Come then, let us go forward together with our united strength.’
Worthwhile business missions are not this dramatic or important, but the courage and clarity represented in this moment in history is a great model for any leader. Practicing the imperatives above will make teams stronger, more confident, and more effective to enhance their companies’ performance in the marketplace. Though business leaders are not at the vortex of history, as Winston Churchill was, each leader who invents new realities in business grows the wealth of the company, the people within it, and the communities they touch.
Don’t believe me. Look back on the successes in your life and see how these imperatives drove your success. Ask yourself which of these are missing from your leadership and your organization.
Permission is needed from Lighthouse Consulting Services, LLC to reproduce any portion provided in this article. © 2014
Paul David Walker is a Senior LCS Consultant and one of the few CEO Coaches who has worked with numerous Fortune 500 CEOs and their key staff members for over 25 years along with many mid-cap organizations. Some of the organizations that Paul has worked with include StarKist Foods, Von’s Grocery Stores, New York Life, Anne Klein, Rockwell International countless manufacturing, global utilities, service, and consulting organizations. Paul is the founder of Genius Stone Partners, and works with domestic and international companies to improve their bottom line today and planning for the future. Paul is the author of the bestselling book, Unleashing Genius and his new book, Invent Your Future – 7 Imperatives for a 21st Century.
Stella McCartney Transforms Financial Consolidation And Lease Accounting With Board
Board revamps financial analysis, consolidation and reporting for luxury lifestyle brand’s IFRS 16 compliance
Board International, the leading provider of the #1 decision-making platform, has today announced that luxury lifestyle brand Stella McCartney is working with Board to transform financial consolidation and lease accounting.
Board is enabling the luxury lifestyle brand to automate financial consolidation from multiple locations worldwide, replace manual and time-consuming consolidation activities, model the impact of different scenarios on financial performance and achieve full lease accounting compliance with ease, for IFRS 16.
Stella McCartney is a luxury lifestyle brand that was launched under the designer’s name in 2001, with collections available in more than 100 countries and 53 freestanding stores including London, New York, Los Angeles, Paris, Milan, Tokyo, Hong Kong, Shanghai and Beijing.
“The Board platform’s ability to streamline our finance consolidation activities, whilst preserving the accuracy of financial data from Stella McCartney locations across the world and ensure IFRS 16 compliance, has been vital to the management of the brand” said Sandra Federighi-Oni, Chief Financial Officer, Stella McCartney.
“Board’s expertise in automating and analysing key financial reporting to obtain new insights, by simulating what-if scenarios adds a new dimension to our strategic financial planning,” said Federighi-Oni. “We can plan for future progress and model multiple scenarios to inform our decision-making, with a fully holistic view of our latest financial data and metrics and ensure all accounting calculations generated are IFRS 16 compliant.”
“In today’s fast-paced, data rich and evolving business environment, modelling for effective financial scenario planning, whilst ensuring the latest compliance is critical to compete,” said Gavin Fallon, Managing Director for UK, Nordics & South Africa at Board International.
“Board transforms financial decision-making, saving time through the automation of repetitive activities, creating full visibility of vital data, to enable the big decisions global
luxury brands like Stella McCartney make daily to thrive in today’s economy” continued Fallon.
Financial closing, financial consolidation, and other accounting activities require high levels of manual, repetitive work and the collation of data from a multitude of spreadsheets and data sources. These activities must also meet strict requirements in terms of compliance to corporate internal control systems.
IFRS 16 specifies how an IFRS reporter must recognise, measure, present and disclose leases. Introduced in January 2019, this new standard will affect most companies reporting under IFRS and will have a major impact on the financial statements of lessees of property and high-value equipment. Under IFRS 16, if a company has control over, or right to use, an asset they are renting, it is classified as a lease for accounting purposes and, under the new rules, must be recognised on the company’s balance sheet.
Can your company data make you famous?
By Kerry Gould, Associate Director, Speed Communications
Businesses gather and generate reams of data every day on everything from purchasing habits to customer behaviour. But too often, it gets ignored or restricted to ‘internal use’. Is this a big opportunity missed?
Perhaps more than in any other sector, finance and banking companies hold a goldmine of data. Of course, individual customer transactions are highly sensitive and need to be kept secure. But when these are collated into trends across an entire customer base, it can paint a compelling picture of people’s changing priorities. What are people spending money on? How are they using credit cards differently? Are they shifting their savings goals or looking at mortgages differently? And it’s not just consumer-facing businesses that can use their data to tell stories. It’s a growing area in the world of B2B marketing, especially for firms targeting the UK’s 5 million+ SMEs.
Insight in the COVID-19 era
Appetite to share data is increasing since the start of the COVID-19 pandemic, too. We’re already seeing companies step up and share this intelligence; barely a day goes by when there’s not a report on how people are changing and adapting. In an era when everyone is trying to be a ‘thought leader’, having this unique insight can really set a company apart and elevate its public profile.
There are some great examples out there. Barclaycard revealed in its SME Barometer that the number of small businesses actively taking payments has increased by 24 per cent since the start of lockdown, an indicator of recovery. Meanwhile, Bottomline revealed in its Business Payments Barometer that 89% of firms continued to pay its suppliers late and £164,000 was lost by the average mid-sized business to payment fraud.
These reports achieved media coverage in print and online, and likely to have been shared widely over social networks, been promoted in email newsletters, discussed in online webinars and provided talking points in customer meetings. In today’s multi-channel world, there are a plethora of ways to reach customers (and potential customers) and we know that a ‘layered approach’ to these communications stand the best chance of getting you noticed and remembered.
Commissioning a survey through an independent research agency is a tried and tested method for marketing and PR teams to gather insight to use for content marketing and news generation. But often, your company’s own proprietary data can be even more compelling. It’s based on actual facts and behaviours, immune from the public’s continually fluctuating opinions. Plus, it doesn’t cost you thousands of pounds to commission. If your company has a strong enough dataset that can tell a story or indicate a trend, it should absolutely be used.
Like all well-meaning initiatives, data-led PR doesn’t come without its challenges. Here, we tackle three.
- Getting buy in to go public
Sometimes, business stakeholders can be nervous about releasing data that may be deemed commercially sensitive, revealing market share or insight that competitors could take advantage of. In this case, it’s about considering risk versus reward. The marketing benefit for making yourself known could be offset by competitive intelligence that your rivals may have through other sources anyway. Ultimately, there’s often a compromise to be stuck and there may be some data that you can’t disclose. Bringing stakeholders on the journey with you from the start is often the best way to ascertain this.
- Organising reams of data
It can be overwhelming to organise complex data sets, gather trends from different silos, departments and platforms. Many finance companies have in-house data analysts and insight teams whose job this is, but for others, outsourcing to a specialist provider like Data Cubed or Beyond Analysis can be a helpful move. By building a dashboard that collates everything in one place, teams from across the business, and external PR or marketing agencies, can get access in real time.
- Not having enough data
It may be that your business doesn’t generate reams of data or lacks a large enough sample size of customers. In this case, you can partner with an organisation that does. In the Jobs Recovery Tracker developed with the Recruitment and Employment Confederation, we partnered with EMSI to tap into their database of live job vacancies. This helped to track the employment market amid COVID-19, generating masses of media coverage, insight to inform its content marketing and talking points for its upcoming REC 2020 conference. This can sometimes be treated as a commercial arrangement but often considered a joint PR opportunity that’s win-win.
Data journalism is a growing discipline in the world of media, with news outlets dedicating talented people and resources to telling stories with numbers. The BBC and Guardian do it particularly well. With marketeers – particularly in data-rich industries like finance – waking up to the power it can hold for true thought leadership, the future is likely to be one ever more governed by data-led insight. How long before ‘data-PR’ becomes a discipline in its own right?
Advice for contractors closing down their contracting company
By John Bell is Director of insolvency firm Clarke Bell, which he founded in 1994.
Contractors with a limited company/Personal Service Company (PSC) have been going through more than their fair share of turbulent times recently.
In the last two years contractors/PSCs have been bracing themselves for the impact that the new off-payroll legislation (IR35) will have on their lives and livelihoods, as the Government ploughed ahead with its plans to roll out the reforms to the private sector; as it, wrongly in many cases, believed some contractors should be deemed as employees and not genuine self-employed contractors. Then came Covid-19 and once again those self-employed workers were dealt another blow as the pandemic left many without work overnight, albeit there was some relief as Off-Payroll was paused until April 2021. And let’s not forget Brexit and all the uncertainty around it which is having a huge effect on a lot of businesses in the UK.
It has been a bumpy ride for businesses of all sizes over the last few months and, despite the emergency measures announced by the Chancellor in an effort to keep the economy afloat, not every contractor will want to carry on trading. Some will want to retire earlier than they’d previously planned – to get away from all the turmoil and ‘cash in’ all their hard earnings. Others, however, will have seen their income falling to such an extent that they are now having cash flow problems and are unable to pay some of their bills. Some may be considering taking up a PAYE role for job security whilst others may be forced to put their retirement plans on hold and continue working until they feel confident that their pension pot will serve them well.
The combined effects of Brexit, Covid-19 and the new Off-Payroll tax have hit businesses hard and some company directors now think that closing down their company is the best course of action for them.
A Members’ Voluntary Liquidation is the best option for contractors
If a contractor is planning on moving into an employee/PAYE role, retiring or pursuing some other life or career plan then a Members’ Voluntary Liquidation (MVL) is likely to be the most tax-efficient way to close a solvent company – particularly if the assets of a company are more than £25,000.
An MVL is an HMRC-approved process and a licensed insolvency practitioner must be appointed. While it may have a negative-sounding ring to it – with terms like ‘liquidation’ and ‘insolvency practitioner’ – there is nothing negative about it. Quite the opposite, in fact. By placing a company into an MVL it is a clear illustration that someone has been running a successful company.
An MVL allows a contractor to draw any remaining profit as a dividend, paying income tax on the dividend amount. With the help of the licensed insolvency practitioner who will liquidate a company, the reserves can then be distributed as capital, which are then subject to capital gains tax (CGT) at either 18% or 28%.
Through an MVL, a contractor can also take advantage of Business Asset Disposal Relief, formerly known as Entrepreneurs’ Relief before 6 April 2020. If someone qualifies for this relief, this can mean that CGT will be paid at a rate of 10% on qualifying assets, which can translate into considerable tax savings. Each shareholder of the limited company could also benefit from a tax-free allowance of £11,000, the Annual Exempt Amount. If there are multiple shareholders, this can be highly efficient.
To ascertain eligibility for Business Asset Disposal Relief / Entrepreneur’s Relief, contractors should speak to an accountant and also look at the Gov.uk website.
Off-Payroll (IR35), Brexit and Covid-19 are all things that are likely to have a huge impact on contractors and their limited companies and most firms of Insolvency Practitioners will offer free and confidential advice.
My advice to contractors is to talk to their accountant and help decide whether an informal strike-off or an MVL is the best option. If a contractor is having serious cashflow problems then an insolvent liquidation might be the best option.
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