Nov 29, 2023 | Governance, Innovation, Leadership
Of the many objections to the inequity and shortcomings of the tax system I harbour, the most egregious is the seduction by the fossil fuel industry of governments of all persuasions over the last 30 years.
I have two profound objections.
The first: They have known of the impact of CO2 on the climate for at least that long, and have not only not addressed it, but have aggressively sought to ensure that regulators and the general public do not get the facts, just bilious dystopian stories of what they are preventing from happening to us in the absence of their visionary management. The public are therefore unwilling to demand of regulators and lawmakers that the hard choices need to be made.
Scientists have been telling us for 30 years that the longer we wait, the harder and more costly the necessary changes will become, but what would they know?
On top of that, the fuel companies pay no tax on the billions of revenue generated in this country as a result of quite legal, but in my view absolutely immoral structuring of their tax affairs.
This avoidance is well known, they hold an honoured place in the top 40 tax avoiders list, collated by Michael West media. Along with property developers and various lobby groups, the political donations add up to 6 or 7 million dollars.
The second: Clearly, the fossil fuel industry has bought their favoured place in the political arena, but I am astonished that the price has been so low. A few million dollars in donations, and I would be pretty sure an equal amount in various tactical ‘softening’ of politicians and their advisors, and the threat of adverse advertising, in return for billions in tax free revenue.
What a great wicket they are on, paying for a cheap scooter and being rewarded with a Ferrari!
Another way of looking at it is that if you are going to be a whore, you may as well be an expensive one so you can be properly comforted for the loss of dignity. Clearly, there is very profitable leverage being wasted.
Obviously, the pollies and hangers-on need a bit of marketing and image building in order to properly leverage the key position they hold in the generation of tax free cash flow of fossil fuel companies.
The 20213 Budget delivered 9/5/23 amended marginally the PRRT and promised to impose the 15% minimum tax rate on MNC revenues in line with the OECD recommendation, a good start. Sadly, it does seem that the 15% minimum will not be imposed for some time, if ever. The power of the large multinationals with tax bases scattered around idyllic islands across the globe, does not reside just in Canberra. It hides in plain sight in London, Brussels, Dover (capital of Delaware), Reno, and many others.
Meanwhile we struggle with investment in the future productivity of the economy we are leaving to our children due to lack of public funds.
Nov 15, 2023 | Collaboration, Leadership
As a kid I was a reasonable tennis player, having been coached by an expert and playing competitively from a relatively young age. Nothing outstanding, just competitive at a district level.
Aged about 16, my father who had been an outstanding player and myself started coaching on a Saturday morning on two local courts for a bit of pocket money. I discovered to my surprise, that breaking down, simplifying, and articulating to others the lessons I had absorbed from my coach, to enable me to communicate with those I was in turn coaching, made me a better player.
Recently in a (business) coaching session with one of my clients, we discussed for the 3rd or 4th time the concept of break even. How a break-even point is calculated, the discrimination between fixed and marginal costs, and the management value it delivers. The conversation started because it became evident that despite the previous conversations, my client did not understand sufficiently well to be able to implement in his business.
Therein lies the secret.
The discussion involved him explaining the concept of break-even back to me, while drawing a typical break-even diagram. It took prompting and discussion, but by the end it was clear he understood the meaning and value of calculating his break-even point.
The secret was him explaining it back to me, and demonstrating that he understood by drawing an illustration of how and why it worked. It required him to break down in his mind the elements of a break even into its simplest form. Then, explaining it back to me, as if I was someone who had absolutely no understanding of the idea. Drawing the diagram, enabled the understanding.
This simple act of writing down an explanation is the value that writing this blog delivers to me. I often start a blog with an interesting idea which requires research and building of understanding before writing it down in its simplest possible form. Through that process, understanding builds.
If you cannot explain something in a way that a 10 year-old can understand, you probably do not understand it well enough yourself. The greatest exponent of this technique of using illustrative metaphors to explain complexity in simple ways was Albert Einstein.
Oct 16, 2023 | Change, Leadership
There is a notable omission amongst all the verbiage, finger-pointing, hollow triumphalism, and handwringing emerging after the predicted result of the referendum became a reality.
That omission is the failure of marketing, at least by the ‘Yes’ supporters.
The ‘No’ campaigners did get something right, in the ‘If you don’t know, vote No’ slogan. It was very effective, but was never truly tested in the public arena. It was just left to gather momentum.
Any student of marketing knows that facts and data by themselves struggle to gain and keep the attention of most. If you have ever sat in a presentation where the presenter was reading densely packed PowerPoint slides, you know what I mean, no matter how relevant, intriguing, or important the information being imparted, it fails to be engaging. Telling a story gains the initial attention of an audience, but that attention will be lost in the absence of a connection created by a few facts relevant to that audience. That connection is most powerful when it is both emotional, and quantitative.
Such a combination of the quantitative and personalised qualitative creates empathy that changes minds and generates action.
The ‘No’ campaign had a very good headline, gaining attention, and for many, was enough in the absence of any contrary facts or emotional magnet from the yes campaigners.
The ‘Yes’ campaign failed on both accounts. It did not have a headline, so failed to gain attention, and it did not use any facts to back up the weak and non-personalised emotional connection it set out to make.
At the disposal of the Yes campaign were plenty of facts. They needed to go no further than the statistics articulating the size of ‘the gap’ between education, health, and incarceration rates of first nations people and the general Australian population. What stopped them asking the question if these differences were acceptable to Australians? how would they feel if their child was statistically 14 times more likely to end up in gaol than a white kid, and would die 8 years before the average Australian? They failed to use these emotional doorways at all, at least in my line of sight.
It is easy in hindsight, but the foregoing has been obvious to any serious marketer for a considerable time. The politicians on both sides, and not only the elected ones, allowed the whole ‘debate’ and I use that word cautiously, to become a binary choice. Yes or No, argued in the absence of any basic marketing discipline or strategic thinking.
As an aside, it is my view that the referendum had reasonable odds of being the first in our history to pass despite the lack of bi-partisan political agreement. Australians are in general tolerant of difference. We could not be otherwise, and still be a reasonably successful multicultural and multi-religious nation. Those odds crashed to zero at the recognition that among the Aboriginal leaders, there was not only disagreement, but quite emotional and deeply held disagreement. Those in the electorate who had no strong pre-existing view, or base from which to create one, simply felt that if those who the referendum was about could not agree, who am I to vote for change?
Header photo courtesy SMH
Oct 11, 2023 | Governance, Leadership, Marketing
These two words are often wrongly used as similes.
Complicated implies interdependence, you cannot pull it apart, and then put it back together in exactly the same form. Think of a knitted jumper.
Complex implies it can be simplified, much as you unfold a sheet of paper, then are able to refold it and end up in the same place.
Complex and complicated are at either end of a continuum, and rarely is something just complex, or just complicated.
Depending on where a situation or question sits in the continuum, you may be able to simplify somewhat, but not completely before you alter the form of the problem or task. It is rarely a binary choice.
Another way of describing this is the commonly used phrase ‘Think from first principles’.
Our brains have evolved a range of heuristics to deal with variables. However, depending on the people and the context of the variables, our brains can deal with only 3 to 5 at any one time before overload kicks in and confusion, procrastination, and poor choices result. By simplifying, we remove the need to consume cognitive capacity for those things we have classified as benign, to be allocated to the unexpected variables that present either danger or opportunity to us.
Simplicity enables optimisation, repeatability with little or no thought, as it is stable, and predictable. However, we are then tuned to miss the very things that can harm us, and sometimes offers opportunity.
Think about that first time you drove to a new destination. You are following a map or instructions, looking for street signs, and hazards of various types, you are concentrating on the drive. Now consider the same drive when you have been doing it every day for a while. The car seems to be on autopilot, and you are thinking of other things, only superficially aware of your surroundings. Your cognitive capacity is being used for purposes other than navigating you safely to your destination.
Therefore, the state we should be seeking is resilience. The fine line between optimised, but still vigilant to the unexpected variables and able to react to them in ways not locked into the way we did it before.
We need to be able to adjust quickly in a world of constant change, just to keep up.
Header credit: Hugh McLeod at gapingvoid.com
E&OE October 21. It has been pointed our to me that I got complex and complicated the wrong way around in the post above.
Dumb mistakes not picked up by editing do occasionally slip through. When you read the post, just reverse the meaning of the words Complex and Complicated. I considered rewriting the post, but am prepared to wear my mistakes, so left it as written. Also, I cannot help but wonder if Seth Godin saw the post, shook his head, and wrote a better one.
Oct 6, 2023 | Culture, Innovation, Leadership
Metrics increasingly drive our commercial lives.
We need the metrics to ensure that we are focused on the outcome, it drives the resource allocation choices that must be made.
Usually, we face a series of binary choices, do A or B, then X or Y. This is comfortable for us, our brains are triggered by binary, friend or foe, run towards or run away, is it a stick or a snake? Evolutionary psychology at work.
In the short/medium term this works well, it ensures focus on what is deemed currently to be important. However, it actively excludes stuff that is ‘interesting’ but not necessarily useful now. Those require us to accept risk, experiment, be comfortable with failure, all the things that our evolutionary psychology has bred out of us. Next time you want to spend some resources on something because it is ‘interesting’ but outside the plan, good luck getting that formally approved. You will have to be prepared to be an outlier, renegade, argue against what has gone before, and you know what happens to many of those who do that.
Breakthroughs only occur when someone forges a path towards the unknown because it is for some reason, interesting to them. It will always be inconsistent with the status quo, it will always be out in the fringes, messy, usually unseen by most, but that is where the breakthrough gold hides.
To see these outlier factors requires critical thinking, a disapproval of the safe optimised way forged by the status quo. By definition, you cannot plan for the unexpected. However, you can create a culture where critical thinking is encouraged, and fed into the processes that together can become a renewed status quo.
These interesting things do not comply with the way we create plans and budgets. They are long term; they do not accommodate the plans associated with most of the daily activities we undertake. They are the source of long-term breakthrough; they are often the result of serendipity. Penicillin was not developed because Fleming had an objective to develop an antibiotic. The product category ‘antibiotic’ did not exist. Serendipity took place, then it took 15 years and a war to become commercialised.
How many breakthroughs can you think of that emerged from a plan? They always come through long experimental slog, underpinned by critical thinking.
My conclusion is That critical Thinking and planning are not mutually exclusive, but are uncomfortable bed-mates. in the absence of the encouragement and culture that makes uncomfortable relationships possible, they will not survive together.
Header credit: It is a reproduction by Hugh McLeod of the wonderful copy written by the creative team at Chiat Day advertising for Apple after Steve Jobs returned.
Sep 27, 2023 | Leadership, Strategy
Intuition is widely misunderstood, often it is seen as a ‘gift’, a rare ability to generate ‘insight’ into a situation.
Over my long commercial life, I have come to a different conclusion. Intuition can be generated and managed when it is recognised that it is the outcome of a process, like most things. This process may be qualitative, and cumulative over a long period, but it remains a process. Again, over that long life I have seen it as the result of ‘environmental research’.
This is the combination of directed qualitative and quantitative research, thinking, wide reading, and engagement with people from as wide a palette as you can find. About the best source of what most would call ‘wisdom’ will come from talking to customers and consumers. Why are they buying product X instead of product Y , understanding the usually automatic trade-offs made subconsciously. What are they buying it instead of, how will it be used, how do they measure the ‘value’ of the purchase. I call it ‘Environmental research’
Do the data thing first, which avoids, or at least moderates and minimises the confirmation bias, seeing only the things that conform what you already believe.
Do this well, and your intuition will improve, while you may not even be aware of the improvement. It is a process, data first, hypothesise, test, look again to reform the hypotheses, and test. Looks a lot like the scientific method!
