Aim higher. Innovate faster. Embrace disruption. Throw away your limitations. The big ideas at CPA Congress 2015 came with even bigger ambitions.
Stories by Adam Courtenay, Lynda Dugdale, Hall Greenland and David Walker
Audiences were treated to inquiring minds and high achievers from around the world, not just sharing their knowledge but inspiring members to meet the challenges of the digital age and the endless upheavals in the business landscape.
They were urged to harness the extraordinary abilities of the brain in order to achieve great things, and to give themselves permission to ignore their fears and have a go. They learned of the megatrends that will shape our future and gained a map to pilot their business through disruptive waters.
CPA Australia chief executive Alex Malley declared that finance professionals need to move up the value chain and take on the challenges of globalisation and a changing regulatory environment.
The world has rarely thrown more at business leaders. Here are some ways to fight back.
Build a better brain
Advertising executive and TV presenter
“The difference between an ordinary brain and an extraordinary one is all within our grasp,” says Todd Sampson. “You just have to reach for it.”
Sampson, the host and writer of television series Redesign My Brain, told CPA Congress delegates that the brain is highly adaptable – “plastic”, in the language of neurobiology.
“You can change your brain through tools and processes that have been tested and retested by scientists for 30 years.”
Best known as a T-shirt-wearing, barely shaven television pundit on Australian TV’s Gruen, Sampson looks and sounds like a Canadian surfer dude. In fact, he chairs ad firm Leo Burnett Australia and sits on the boards of Qantas and the Fairfax media group.
Sampson’s big idea is a series of small, mindful applications – brain-training exercises masquerading as feats of physical endurance, to prove mind beats body every time.
Sampson has climbed Everest unguided, but in Redesign My Brain he was asked to climb a sheer Utah rock face blindfolded, to escape padlocked chains underwater and to walk a tightrope 21 storeys above the ground.
"As we age, we question less and we defend more."
The blind rock climb tested mental flexibility when one of the five senses was withdrawn; the underwater Houdini-style escape was about applying mental imagery to improve memory (to unlock multiple padlock combinations); and the tightrope walk was about deploying focus through rigorous meditation.
We all tend to think the brain ossifies with age, he told CPA Congress, but actually we become more functionally fixed.
“As we age, we question less and we defend more. Functional fixedness increases along with arrogance.”
While explaining the mental imagery used to memorise a pack of playing cards (the scientists call it mnemonics), Sampson gave a series of tips.
“When you lack sleep, you are cognitively impaired; when you sleep well, plasticity happens. Without sleep, tests show the IQ can drop 20 per cent.”
As far as focus is concerned, he recommended we all work in 20-minute chunks without any interruptions. Multi-tasking, he said, is a fallacy and scientifically disproven: “Only 2 per cent of the population has the unique ability to process two rich inputs at the same time.”
He also advised delegates to practise “mindful meditation”, using measured breathing as a form of attention focus. When a hot iron was applied to his body, Sampson’s brain signature showed a 70 per cent reduction in pain after meditation.
There are, he concluded, three big processes that can change the brain – forced brain adaptation (the rock climb), visualisation (the Houdini escape) and attention control/meditation (the wire walk).
“I am no different from you,” he told the delegates. “With the right training, the right conditioning and experiences, we can achieve anything in our lives.”
Rise above the crowd
Alex Malley FCPA
Chief executive, CPA Australia
The CPA Australia chief executive believes the accounting profession must continue to move up the value chain, selling its professional judgement to clients.
Accountants are in a wonderful profession, he told CPA Congress, but “it’s very competitive, it’s very noisy and a lot more people less qualified than professional accountants are entering the market”. The accounting profession needs to stand above the crowd through innovation, bold leadership and a focus on staying relevant, he argues.
Malley listed the many forces changing the accounting profession: globalisation, which alters the profession’s governance model; regulation, where CPA Australia must push back against solutions designed for foreign circumstances; and digital technology, which empowers individuals.
“CPA Australia must position the profession as contemporary leaders.”
“Whether you want to be global or not isn’t so much the issue,” he told his audience.
“It’s that your user is becoming global, and your user is able to make immediate comparisons around what should happen and what decisions they should make.”
In this changing environment, CPA Australia must position the profession as contemporary leaders representing both their clients and the public interest, Malley told CPA Congress. He firmly rejected any suggestion that the profession can still be cast as bean counters.
“That’s not who we are,” he said. “It was who we are. We’re proud of it. It’s not who we have to be in the future.”
One expression of that changed approach is the creation of CPA Australia Advice, to challenge Australia’s financial planning status quo. Malley himself famously spent his school days being described by teachers as disruptive. He sees the irony that, decades later, being disruptive has suddenly become cool.
Play to your strengths
Former CEO Guardian Media Group
The internet has spread news and media like never before, but it has also proved itself the media industry’s greatest disrupter. The UK-based Guardian Media Group is one player that has, to date, navigated the choppy waters.
Andrew Miller moved from the CFO to CEO’s chair in 2010. He oversaw the transition of the Trader Media Group from a print business to a digital one, streamlined operations in the broader group and established a huge new digital audience for long-established newspaper The Guardian, partly through expansion into the US and Australia.
Miller argued the keys to such a digital transition are to see yourself through the eyes of the future consumer, and to know your business.
“If you face disruption, stick to what you’re good at; know your DNA,” he told Congress.
For The Guardian, that meant quality journalism that challenged governments and informed the population. However, news itself and how people consume it has changed fundamentally.
The Guardian now rates as number three among global news sites, read daily by seven million people. It’s had 17 consecutive quarters of revenue growth, noted Miller, and digital revenue now accounts for close to 50 per cent of overall revenue. He says the distribution channel of the future is social media.
- Know what your business is and stick to it.
- Use digital to grow.
- Invest in technology but keep that technology in house.
- Know your consumer.
- Structure your team correctly and don’t fall into the trap of disrupting the disrupter.
- Avoid business plans and consultants.
- Change the leadership team to meet generational needs.
- Stick to your guns.
MD Google for Work, APAC
Clever collaboration that harnesses connectivity in the burgeoning digital world is adding billions to national economies, said Kevin Ackhurst, managing director Google for Work at Google Asia Pacific.
Collaboration is already adding more than A$46 billion a year to Australia’s GDP, according to Deloitte.
“That’s about the same amount that the agriculture sector contributes to our GDP,” added Ackhurst.
Failure to anticipate digital disruption can be fatal, he said, citing the classic cases of Kodak and Blockbuster. On the other hand, digital opens up new ways of doing business, as in the case of Airbnb and Uber.
“When people create, reason and think together, they create outcomes that make their companies stronger.”
Today, the world has more than five billion smartphones, and Google forecasts there will be 50 billion connected devices in the world by 2020.
“In this digital world, on average, we interact with our smartphones 150 times a day,” said Ackhurst.
“In that connected world, collaboration is beneficial to organisations. When people create, reason and think together, they create outcomes that make their companies stronger and they create better outcomes than organisations which don’t facilitate digital collaboration.”
The businesses that take advantage of the digital world share five characteristics:
- They engage at scale by leveraging the web to grow their business.
- The collective intelligence of the organisation is available to every employee.
- Work processes are collaborative, mobile and in real time.
- Data is at the core of innovation and is available in formats that are digital, shareable and structured.
- Intuitive technology is employed that allows people to work the way they live.
Reach all the way to China
BRIC economy expert
Consultant David Thomas has a simple message for Australian businesses: get busy building a bridge to China. A cultural bridge, that is, that can enable Australia to deal with investment demand, and to export as well.
For Thomas, an expert on the BRIC (Brazil, Russia, India and China) economies, Australia’s biggest challenge is to engage with an increasingly wealthy China that wants to deepen its commercial ties with the outside world. He sees “a very high wall of money coming from China to Australia”, and said industries like healthcare, education, tourism and the broader services industries need to prepare to deal with potential investors.
To make this happen, he said, Australia needs to leverage and engage its own Chinese community.
“If you want to deal with Chinese investors, Chinese entrepreneurs, you need Chinese people. So you need to push them through the company, get them up to the front line.”
For accounting firms, he told CPA Congress, “that means we need to get a lot more Chinese-speaking people into Australian accounting firms”.
That includes not just native Australians but also Chinese students who come here to study. He fears Australia turns away too many Chinese students who would like to stay here. He also worries that firms are failing to promote accountants with Chinese backgrounds quickly enough.
For Australians, China is a hard market to grasp. Cultural familiarity and understanding need to be priorities.
Gather courage for the fight
Major Matina Jewell
Retired UN peacekeeper
Leading a peacekeeping convoy at speed through a city under air attack to a United Nations compound on the other side took more than just courage from Major Matina Jewell.
“I could have died so many times,” she reflected of the episode.
Nevertheless, the UN peacekeeper guided her convoy to the relative safety of the UN compound with what she said was a combination
of leadership, the ability to make crucial decisions under stress and a commitment to deliver on her responsibilities.
”I could have died so many times.”
That fateful day also ended the 15-year military career that had seen her command troops in the Gulf and work alongside US Navy SEALS. During the convoy’s perilous sprint through the ancient Lebanese city of Tyre, she was thrust into the bulletproof windscreen of her UN vehicle.
She broke her back in five places and ruptured her diaphragm. She was eventually evacuated to hospital, only to learn that her teammates back at the UN compound had been killed in a subsequent air strike.
For a while the event played havoc with her spirit. Post-traumatic stress disorder, flashbacks, the confines of a spinal brace, depression and a protracted fight for benefits with the Department of Veterans’ Affairs and the Army all rattled Jewell’s resolve. While the story still brings tears to her eyes nine years later, Jewell has a few lessons to teach about leadership and being our best.
“It’s 100 per cent natural to feel fear,” she told CPA Congress.
“The best learning opportunities come from challenges outside our comfort zone. We are guilty of placing limitations on ourselves. Give yourself permission to have a go.”
Out of periods of adversity come opportunities, she added – and when they appear, we must gather the courage to pursue them.
Surf the change wave
Dr Stefan Hajkowicz
Megatrends – sweeping changes in the business and social environment – have become a popular device for explaining the changes businesses will face over the long term. CSIRO principal scientist for strategy and foresight Dr Stefan Hajkowicz likened a megatrend to a wave coming into the beach: “It can either wipe us out or we can surf it in neatly all the way to the sand.”
US futurist John Naisbitt made megatrends famous with his 1982 book Megatrends, a surprisingly accurate vision of a future global information economy. Now, more than a dozen organisations publish “megatrend lists”.
Hajkowicz’s own book, Global Megatrends
, lists seven megatrends for the next 20 years:
- rising demand for limited natural resources
- a final “window of opportunity” to protect biodiversity, habitats and the global climate
- rapid economic growth and urbanisation in Asia and the developing world
- an ageing population with rising healthcare expenditure
- digital technology changing how we work and how our cities are shaped
- changing consumer expectations for commercial experiences
- the need to innovate more as new markets appear and old ones shrink
Hajkowicz argued that leaders in government, communities and industry should be taking these megatrends into account. He also said that to exploit his megatrends, businesses need to use ideas and innovation much more deeply than they have before – something he calls “an innovation imperative”.
As Hajkowicz acknowledged, exploiting megatrends can be tough. In particular, knowing we need to innovate more does not tell us what to do.
“We don’t yet know which of the many ideas being developed will be the ones that reshape the world,” he writes in Global Megatrends.
Guard your privacy
Journalist and author
Drawing on his many years as an investigative reporter for Four Corners and Foreign Correspondent, Australian television journalist Andrew Fowler has been exploring the control of digital information. His new book The War on Journalism looks at governments’ restrictions on the publishing of information they regard as security-related, and the massive harvesting of data that flows through modern telecommunications systems.
His information-age heroes are WikiLeaks founder Julian Assange and National Security Agency whistleblower Edward Snowden, who challenged the US Government’s right to secretly harvest it in the first place.
Fowler’s message for anyone who wants to keep their information private: it’s harder than you think.
“Everything you send on the internet you should basically treat as though anyone could read it,” he writes. If you want your messages to be private, you should encrypt them. If you want them to be truly free from scrutiny, keep them off the internet entirely.
Developing the strategic thinking skill of seeing the big picture: this course aims to help you develop strategic thinking.
For any professional with data in online storage, these are confronting messages.
Fowler added that if you have to store data online, you should prefer an Australian server to a US one. There is no such thing as complete security, he said. If the US Government wants your data, it will get it – no matter how hidden or encrypted (in part due to security agreements between the US and Australia).
You can minimise your risk by locating data locally. If a US company subpoenas your data, it will be easier to defend Australian-based data than data located in the US.
Fowler warned against thinking that you won’t be affected by the new data environment.
“This is a game-changer,” he said. “At a time when information flows more freely around the world than ever before, the controls are tightening.”
Celebrate the growth
HSBC Australia chief economist
Australians have many reasons for optimism, said HSBC chief economist Paul Bloxham. Since the global financial crisis, Europe’s economy has actually shrunk slightly, while the US has grown by just 9 per cent and the Australian economy has grown by 19 per cent.
The difference, of course, is driven by Asia: Bloxham noted that the Chinese economy is 80 per cent larger than it was at the end of 2007. China’s economy is slowing, of course, but after 30 years of growth averaging 10 per cent per year – growth that has created the world’s second-largest economy – China is now just too big to grow as fast as it once did.
China has grown so much since 2008 that its 7 per cent growth for 2015 has boosted the world economy more than its 10 per cent growth of 2007 did.
So, Chinese growth will continue to drive Australian growth. Meanwhile, boom-time investments like liquefied natural gas (LNG) plants are still coming online. Australian investment has moved from mining to housing, a lower Australian dollar is encouraging both tourism and overseas demand for education, and demand for other services is picking up, too.
By historical standards, Bloxham noted, 2015 has seen a remarkably successful end to the Australian mining boom.
Choose to pioneer
The new “collaborative economy” is empowering consumers to more easily pick and choose their service providers – at the push of a smartphone button, no less – and it’s spreading.
“If you can hit the Uber app to get a ride when you want it, why wouldn’t you do the same to find the right lawyer or accountant at the push of a button,” said Rachel Botsman, the leading-edge theorist of the collaborative economy.
Botsman wrote the 2010 best-seller What’s Mine Is Yours: How Collaborative Consumption Is Changing the Way We Live.
The concept was hailed by Time magazine as one of the “10 Ideas that Will Change the World”. Botsman believes traditional firms, particularly in financial services – “should be worried, very worried”.
She said that traditional firms generally respond to digital disruption in one of three ways: ostriches, fighters and pioneers. Ostriches bury their heads in
the sand and pretend it isn’t happening; fighters try to use regulation to eliminate the threat; pioneers realise they can’t beat the innovators and try to join them.
Botsman cited multinational conglomerate GE as a pioneer: it has opened up its unused patents to entrepreneurs to see what they can make of them. Likewise, some car makers are creating online car-sharing services.
For pioneers, the advantage is that finding and engaging talent online can provide flexibility and a larger talent pool, as well as eliminating the costs of providing office space, infrastructure and benefits for permanent staff.
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