Fifo Capital Q2 2018 NZ

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Thinking ahead for success QUARTER 2 I 2018

Richard Branson: making the World better Card fraud is a growing problem for SMEs Howard Schultz: conquering the World with coffee Successful leaders take time to reflect Diversity drives innovation and performance in business Tony Hsieh: rethinking corporate culture

When expertise counts Not all business finance needs can be solved with vanilla solutions. When an expert sounding-board is needed, Fifo Capital can help: • One-on-one consultancy (complimentary) with a business finance specialist • Fast response and approval of finance (24 hours) to meet changing business needs • Consultancy in partnership with your financial advisers and with banking facilities • Solution-solvers for short term needs, and long term sustainability. When your business finance needs demand expert thinking and purpose-fit solutions, call Fifo Capital on 0800 86 34 36

is a leading provider of business finance solutions, specialising in solving short term finance needs fast with purpose-fit solutions and one-on-one expert consultancy. With over ten years supporting clients across all industries, our specialists work with the unique complexities of business clients, to identify finance solutions that are appropriate for both short term needs and long term sustainability. Working alongside clients’ financial professional advisers and in harmony with their existing banking facilities, our finance solutions are very often bespoke to each client and designed to fit their specific need at that point in time. Since launching in 2004, Fifo Capital has established more than 70 offices across New Zealand, Australia, United Kingdom, Ireland and Canada, and provided business owners $1 billion growth capital finance.


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Welcome to this quarter’s issue of Headway.

Transparency is good for business

I recently analysed Fifo Capital’s continued growth in all the markets we operate within. I concluded that our success story is due to the strength of our relationships—both internally with business colleagues, and externally with associates, partners and clients. One of the most valuable traits anyone in business can possess is transparency. This of course goes hand in hand with trust, which is necessary for any relationship to be successful. The relationships you develop and nurture with your stakeholders—especially your customers—are the lifeblood of any business. There are many reasons why customers move on: Budget, Value, Trust, Politics, Apathy, Personnel, New Needs, Competition and more. But getting the fundamentals wrong shouldn’t be one of them. According to recent business statistics, approximately 82% of people end their relationships due to being dissatisfied with their service, a poor attitude or indifference on the part of the service provider. Which brings me back to Transparency. In our high-touch business this is incredibly important

because we are dealing with finances that can change lives, with wide ripple effects. When our relationships are based on trust and open communication, there is no second-guessing the other party’s true intentions, or what they’re not disclosing. Because in an environment where information is readily accessible, withholding or massaging information is no longer an option. This goes deeper than finance, into brand reputation. Fifo Capital seeks to deeply understand the people and businesses we deal with, and how certain decisions—not just financial— can help them succeed in business. We can effectively do this when all cards are on the table. What might first feel like an uncomfortable conversation, can be the difference between winning and not. Fifo Capital is here to be an extension of the team, to help promote business success. I hope you enjoy this issue of Headway. Best regards, N igel Thomson Fifo Capital Founder and CEO

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Richard Branson: making the World better


C ard fraud is a growing problem for SMEs


Successful leaders take time to reflect


A focus on flexibility can make your business more successful


Howard Schultz: conquering the World with coffee


Diversity drives innovation and performance in business


Inadequate management leaves workers bored, stressed, and unproductive


Tony Hsieh: rethinking corporate culture


Short term financing relies on excellent communication


4 things to look for in your financial institution


Published by Fifo Capital International Ltd. Headway magazine is published four times a year. Copyright Š 2016 by Fifo Capital International Ltd. Email Visit All rights reserved.



Richard Branson: making the World better Over the course of his long career, Richard Branson has made himself a singular figure in the world of entrepreneurship. With a net worth of over $5 billion, the founder of Virgin Group is one of the wealthiest and most consistently successful entrepreneurs of all time. Entrepreneurs at every stage of their careers can learn a great deal from Branson’s experience, philosophy, and wide-ranging approach, as well as the way he has pursued humanitarian initiatives and community engagement.

“ My general attitude to life is to enjoy every minute of every day. I never do anything with a feeling of, ’Oh God, I’ve got to do this today.’”


Early Career Unlike many of his contemporaries, Branson didn’t attend university, relying more on raw talent and his entrepreneurial spirit. He started his career by launching Virgin Records in 1972, soon after which he was caught committing tax fraud. Despite this initial hiccup, the business grew to be highly successful, and largely made his later, more unconventional enterprises possible.

This initial success story is a fairly common start for many successful serial entrepreneurs. Unlike most other entrepreneurs, however, he didn’t continue building his business in a linear, predictable fashion. His next big enterprise, launched in 1984, was Virgin Atlantic Airways, shifting into an entirely different industry. To the surprise of many, Branson proved to be just as successful running an airline as he had running a record company. Starting in the 90s, and going on till today, the serial entrepreneur has broken into many other industries, including the railway industry, clean energy, space flight, telecommunications, healthcare, and even comics. Today, Virgin Group is made up of over 400 businesses, and that stunning success is largely due to Branson’s unique talents.

“ You don’t learn to walk by following rules. You learn by doing, and by falling over.”

Inspiring others by thinking big Traditionally, success in business is about taking well calculated risks and developing projects that promise a steady return for investors. Branson, on the other hand, believes in dreaming big, and building projects that investors and the public can get excited about in their own right. He once famously said, “There is no point in starting your own business unless you do it out of a sense of frustration.” Great businesses aren’t just about generating a return, they’re about resolving problems that we can all identify with. This approach is ultimately responsible for the way that Branson’s career has progressed. Virgin Airlines was catalysed by a cancelled flight, while Virgin Galactic was founded out of a sense of frustration with the world’s progress on spaceflight. These frustrations aren’t unique to Richard Branson, they’re shared by the public and his investors. This is key, because it allows him to offer

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value to investors that goes beyond simple profit. It offers investors the sense that they can help to change the world, and to move society forward to a better future. It inspires them to reach for more than great returns.

Taking a stand Even when he’s not launching a business to do so, Richard Branson doesn’t believe in leaving problems

“ Do not be embarrassed by your failures, learn from them and start again.”

unaddressed. He is directly involved with a very wide variety of humanitarianinitiatives ranging from the development of clean energy, to rescuing missing and exploited children, to fighting climate change, to denuclearization. Besides this, he invests heavily in startups that he feels “will make a positive difference” in the world, with more emphasis on the purpose of the business than its ultimate profitability He also isn’t shy about getting involved with global political issues, and taking stands that business leaders typically avoid. In 2013, Branson urged business to boycott Uganda over an anti-homosexuality bill, and has actively campaigned against the use of the death penalty in the United States.


This bold approach has had the side effect of keeping the entrepreneur in the public eye for years, even outside the context of his business activities. The result of this, besides the direct effect of his work, is the celebrity that he enjoys in addition to his considerable business success.

We can learn from Branson’s bold approach Branson and a few other broadspectrum entrepreneurs, like Elon Musk and Jeff Bezos, don’t just do business for profit, they do it to directly change the world. Each of them is engaged in businesses explicitly designed to solve the problems they see in the world, occasionally the same ones. For example, all three are competing to deliver space access to the private sector.

What sets Richard Branson apart from the other two is his very broad involvement with a wide array of issues, regardless how controversial they might be. Branson takes serious risks, both in terms of the businesses he has launched, and in how he presents himself to the world. This boldness sets him apart from his competitors, and has played a major role in building and maintaining his success over the last four decades.

Successful entrepreneurship is about more than a sound business plan and solid investment, it’s about solving common problems, inspiring consumers, and taking a stand.

When expertise counts Not all business finance needs can be solved with vanilla solutions. When an expert sounding-board is needed, Fifo Capital can help: • One-on-one consultancy (complimentary) with a business finance specialist • Fast response and approval of finance (24 hours) to meet changing business needs • Consultancy in partnership with your financial advisers and with banking facilities • Solution-solvers for short term needs, and long term sustainability.

When your business finance needs demand expert thinking and purpose-fit solutions, call Fifo Capital.

0800 86 34 36

Card fraud

is a growing problem for SMEs In recent years, small businesses in Australia and New Zealand have increasingly become victims of payment fraud. Due to changes in both consumer and criminal behavior, businesses are becoming more vulnerable, and losing more money to fraud every year. Smaller businesses are often poorly equipped to contest fraudulent chargebacks or to detect fraudulent purchases, and don’t take necessary preventive steps to protect themselves. In addition, they rarely have the financial flexibility to absorb significant losses resulting from criminal behavior, or even to operate while waiting for a contested charge to come through. To survive in this emerging environment, businesses need to develop preventive measures and find short term cash flow solutions to help them keep the lights on when they become victims.

Chargebacks and fraud are growing Chargebacks and card fraud have been a fact of life for businesses for decades, but in recent years things have become far more serious for many types of businesses. This is because the proportion of credit purchases that are made without a card present is growing every year. Moreover, fraudsters in Australia and New Zealand are increasingly becoming aware of how vulnerable potential victims are, and are taking advantage. CNP (card-not-present) transactions are primarily made through online purchases, and offer relatively little in the way of built-in fraud protection. As of 2016, CNP fraud made up three out of four card related payment fraud incidents. Fraudsters typically make a purchase, and then contest the charge directly with their financial institution,


whose primary interest is in protecting their customer. This makes it fairly easy for criminals to operate, and creates a major headache for the defrauded business.

Regulators are caught unawares The Australian Securities and Investments Commission (ASIC) is the body responsible for regulating card fraud in Australia. Unfortunately, when asked about the issue late last year, they did not indicate that any steps were being taken to manage the issue with regulation, instead pointing business owners to the terms and conditions of the individual agreements between merchants and relevant financial institutions. This means, unfortunately, that businesses don’t have much hope of a regulatory solution coming to their rescue any time soon. Further, individual small business owners don’t have any real negotiating power to modify the terms and conditions to which they’re bound with their payment providers, leaving them vulnerable. Because of this, businesses need to find workarounds to protect their cash flow.

Businesses need to take measures to protect themselves There are a few things that businesses can do to reduce the likelihood of being targeted, and to improve their chances when fighting back against illegitimate chargebacks. The most powerful preventive measure that businesses can take is simply requiring secondary verification from their customers. The most common requirement is to require that the billing address match the address that the credit card is registered to. This is a nice additional layer of security, but

What’s most important is that you take steps to protect your business well ahead of time to ensure that card fraud can’t interfere with your business’ ultimate success.

a moderately determined identity thief can often find this information online. By additionally logging customer IP addresses, or requiring users to log in through a social media profile, business owners can protect themselves much better. IP addresses can verify approximately where the user is located when the purchase is made, while social media login information isn’t publicly available in any phone book. Armed with this additional verifying information, business owners are far more likely to succeed in reversing a chargeback and recovering their funds in the event that a legitimate cardholder is attempting fraud.

Keeping cash flow steady Disputing a chargeback takes time, and even businesses that do everything right still suffer some losses to fraud. Whether your business can recover its revenue or not, you’ll need a short term cash flow solution to keep the lights on while you deal with the issue. Since the hardest hit businesses are generally ecommerce businesses that don’t issue invoices, the easiest form of short term financing, invoice financing, often isn’t a great option. Instead, businesses can take out unsecured business loans to come up with additional cash, or defer outgoing payments with supply chain finance. There are a wide variety of cash flow management solutions out there, and the best options differ according to your industry and specific situation. Because of this, it’s a good idea to work with a representative from your financial institution, or another financial expert, to come up with the ideal solution for your business.

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Successful leaders take time to reflect As an entrepreneur, it’s easy to get mired in a sea of emails, phone calls, and operational and personnel problems, leaving almost no time for your regular responsibilities. This hectic day-to-day scramble won’t just run you ragged, it’ll ultimately also hold your business back, and keep you from developing and implementing your best ideas.


Improving time management The missing resource that leaders at every level lack is time. This is because, before business owners can make time for themselves, they need to get control of their schedule, which becomes increasingly difficult as responsibilities grow.

To turn their business into an industry leader, entrepreneurs need to not only do the job of running their business, they need to personally dedicate the necessary time to think bigger. Leading an industry is about becoming the cutting edge of innovation in your field, and being the disruptive force that sets the pace for your competitors. This is a big responsibility, and requires a comprehensive understanding of the needs of your markets and the capabilities of your industry and your business. Making that innovative leap is about taking that knowledge and using it to dream up a better future.

Time for reflection allows for higher quality thinking Business owners spend most of their day in a neverending rush of activity. When there aren’t clients, employees, and suppliers to talk to and manage, lenders to negotiate with, bills to pay, taxes to do, and meetings to run, there are thousands of emails to sort and answer. Individual tasks are allotted just a few seconds of focus before the next issue comes up. In this type of environment, it’s very easy to lose sight of the forest for the trees. This is a serious problem, because business owners need to have a larger scale view, and the opportunity to build and develop larger and longer term goals and strategies. They need time to dream about what might be, and how to make the impossible achievable. Dreams are the engine of innovation A business owner that is always focused on getting through the day will ultimately only ever build a business that’s focused on, and perhaps good at, survival. An entrepreneurtakes time to think deeply about their business, their industry, and what their place in the world is and what it could be. Without this larger vision, growth targets and strategies lack a unifying purpose, and can’t spur on the kind of targeted innovation that a business needs to set itself up as a leader in its industry.

All too frequently, business owners become a sort of jack of all trades, handling all the miscellaneous tasks that their employees aren’t responsible for. That might include everything from administrative tasks like payroll and accounting, to customer relations or sales, to menial maintenance tasks like cleaning and emptying the garbage. Inevitably, these day to day tasks crowd out longer term and less well-defined leadership responsibilities, like setting the long term goals and overall trajectory of the business. Stabilise your cash flow Small business owners spend an average of 8 hours per week chasing late payments. This doesn’t include the time spent acquiring financing, and dealing with the inevitable issues with suppliers and employees that tend to come with unexpected cash flow interruptions. To reduce or eliminate this unnecessarily wasted time, businesses need ways to eliminate the issue of late payments, and to get the funds they need when they need them. While there are a wide variety of tools available to help businesses stabilise their working capital, the most common and easiest to use tool is invoice financing. Invoice financing allows businesses to trade in outstanding invoices for most of their value up front. The payment is later collected from the client by the financial institution, entirely eliminating the need to personally chase down late-paying clients. Delegate tasks While greatly reducing the time spent on dealing with cash flow issues is a big improvement, entrepreneurs frequently work as much as 80 hours per week. To reach a point where they legitimately have free time to dedicate to higher order, long term planning, business owners usually need get control of their schedule and to bring their working hours down to reasonable levels. Ultimately, this means learning to delegate some responsibilities to employees, or outsourcing tasks another way. This is tough, because business owners tend to take a lot of ownership over their business, and feel the need to be in control of every aspect of their operation. Making time means making tough decisions about which tasks really need and deserve their attention, and which can reasonably be delegated. Ultimately, however, making these choices is for the best. By taking their eyes off short term issues that can be handled by others, they can take the time to dream up a better future for their business, their customers, and their industry.

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A focus on flexibility

can make your business more successful


As important literary figures and military commanders alike have famously noted, plans usually don’t work out as they’re supposed to. This observation doesn’t just apply to regular life or war, but also to the business world. Being able to plan well, to execute those plans, and to budget predictably are all enormously beneficial to entrepreneurs in terms of managing growth and maximising the productive potential of their working capital. Unfortunately, the real world is messy, and plans can rarely be neatly executed on time, and on budget with all goals met as initially projected. Because of this, successful businesses often aren’t the ones that create the most detailed and comprehensive strategies, or those with the smartest and most knowledgeable teams, but rather those that can competently adapt to constantly changing circumstances to best achieve their end goals. Successful businesses are fundamentally flexible.


Avoid overplanning

Overplanning represents an enormous inefficiency for many businesses. Endless planning meetings are held to come up with a highly detailed action plan, intermediate goals, budgets, and metrics to track, often consuming hundreds of hours of your management team’s valuable time in the process. When those plans are interrupted by unforeseen circumstances such as cash flow issues, market disruptions, or equipment failures, much of that time investment becomes wasted. When putting together any strategy, whether it’s for growth, process improvement, product optimisation, or anything else, businesses need to plan for flexibility. That means setting more general objectives, and

trusting the professionals that are responsible for specific objectives to find the most appropriate way to get the job done.


Accept sunk costs

One particularly harmful symptom of overplanning is overcommitment to an existing strategy. When existing strategies become non-viable as a means of reaching your end goals, it’s often difficult to accept the invalidation of such a massive amount of already completed work. As a result, leaders will often resist change and attempt to move forward regardless, short-sightedly sacrificing their objectives for the sake of their carefully planned strategy, instead of changing the strategy to meet their objectives. This inevitably results in more wasted time and effort, and ultimately partial or complete failure to meet the project’s objectives. The only way to avoid this is to consciously accept the loss of sunk costs, and to adapt the execution of your plan with a focus on realistically achieving your end goals.


Keep budgets flexible

Being flexible can mean a lot of things in different circumstances, from making tweaks to your strategy, to changing objectives, to adding new ideas, to going back to the drawing board and starting over. What all these have in common is that they’ll inevitably break your budget. Budgeting is a fact of life in any business, but it’s important not to be so married to the idea of staying on budget that you miss important opportunities. Budgets provide an important baseline for what a project can cost, but business leaders also need to be able to access additional cash flow when it’s appropriate to the situation. A good way to do this is to work with your representative at your financial institution. They can offer a variety of short term

financing solutions, such as invoice financing, unsecured loans, supply chain finance, and others, which you can use to access additional capital as needed.


rack progress in a T more generalised manner

Many longer term projects, such as multi-year growth plans, are defined by a host of metrics, intermediate objectives, and milestones. When things are going according to plan, these provide a good sense of how things are progressing. Unfortunately, they can quickly become obsolete if the plan changes, or if milestones aren’t functionally traceable. For example, innovation and creative development aren’t predictable processes where a set amount of labour will generate a desired output. Over the course of a project, strategies can, for a wide variety of reasons, change so significantly that the metrics used to track your progress are no longer sufficient or meaningful, even if they were fairly solid to begin with. Leaders need to track progress in a meaningful way, that, depending on the project, might also include difficult-to-quantify metrics like innovative development, or team cohesion. By doing the work of understanding their progress in this less quantitative, but more generalised way, leaders can more readily adapt to changing situations. Flexibility comes at the cost of certainty, but that’s acceptable because that certainty is an illusion. Acknowledging that initial planning won’t hold through to the end, and that changes are inevitable, allows businesses to plan for flexibility, and gives leaders the room to adapt to changing circumstances to make their project, and their business, the best that it can be.

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Howard Schultz: conquering the World with coffee

“ Entrepreneurs must love what they do to such a degree that doing it is worth sacrifice and, at times, pain. But doing anything else, we think, would be unimaginable.”


Great entrepreneurship isn’t always about driving humanity or an entire industry forward on a grand scale like Steve Jobs or Jack Ma, and innovation doesn’t always mean creating something entirely new. Howard Schultz, and other great entrepreneurs like him, are able to recognise the potential of great ideas that are already out there, adapt them, and take them to the next level. Armed with the right inspiration, and the skills to realise his vision, Schultz built a global business empire and a personal net worth of $3.1 billion on the back of the humble coffee bean.

Early career Schultz began his career relatively innocuously as a salesman for the Xerox corporation. After some success there, he moved on to take a position as the general manager of the US offices of the Swedish coffee maker manufacturer, Hammerplast. Through his position there, a small

coffee business called Starbucks Coffee Company of Seattle caught his eye, and eventually he joined them as their new Director of Marketing. This experience, first in sales, and then in administrative roles, provided him with a different skill set than many of the entrepreneurs we’ve written about in the past. Rather than starting his entrepreneurial life with unique technical talents and a passion for a particular idea or industry, Schultz did so primarily with the solid foundation of his business experience.

Seeing the potential in old ideas During his initial stint at Starbucks, Schultz went on a business trip to Italy, and discovered something revolutionary: Italy’s coffee culture. Millions of Americans visited Italy and experienced it before Schultz, but he was the first to realise the business potential that it represented back home. Coffee shops in Italy are

Marketing head of Starbucks in 1982

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Schultz believes strongly that employees who are treated well will, in turn, treat both customers and their employer in kind.

integrated into daily life. They’re located on every street corner, and people sit and socialise over their drinks. Seeing this, Schultz knew that there was no reason a similar culture couldn’t be introduced to the US. While Starbucks entertained the idea, they ultimately rejected Schultz’s vision, prompting him to leave the company in 1985. With the help of a few investors, he launched his own business, Il Giornale, to pursue his idea. Two years later, in 1987, he returned to purchase Starbucks for $3.7 million. The key lay in understanding inspiration for the pure potential that it is, and using it to fuel his own creativity. Under Schultz’s eventual leadership, Starbucks did not introduce Italian coffee culture to the US. Instead, it used Italy as an inspiration to create a new and uniquely American coffee culture that has come to represent the US to the world as effectively as Hollywood movies or McDonalds.

Schultz’s management philosophy Unlike most similar global businesses, Starbucks directly owns the vast majority of its own locations. Independently owned Starbucks franchises only exist in EMEA 13

markets, or operated through specific partnerships with other larger businesses such as airports. To Schultz, this was a deliberate choice that enabled him to maintain a more unified vision for the business, and to help him shape the company’s culture. Starbucks applies what it calls an “Employee First” philosophy, meaning that the interests of its employees are prioritised and pursued by the business as a whole, and that it works to develop a strong trust relationship with its workers. Schultz believes strongly that employees who are treated well will, in turn, treat both customers and their employer in kind. In practice, this means providing full healthcare benefits to both full and part-time employees, which is rare in the US, as well as stock options and discounted stock purchase plans. Schultz’s philosophy in regard to building employee trust also extends to his leadership team. Fighting a personal inclination to micromanage, he works to hire competent and independent leaders, who often bring forth and defend their own ideas to help move the company forward. This willingness to listen and make changes on Schultz’s part has helped to shape the company’s development over time, and gives Starbucks an innovative depth that large businesses often lack.

What we can learn For other entrepreneurs, Howard Schultz represents an important lesson. Success isn’t purely built on personal genius and innovative passion. Instead, it also comes from a willingness to accept inspiration from any source, and to work with others to collaboratively create something new and better than what came before. Lastly, it means developing the humility to accept the knowledge and insight of subordinates, not just to grow and develop, but also to correct previous mistakes for the sake of a more successful future.

Trust Fifo Capital to sort your seasonal cash flows A standby working capital facility ready to access when you need it most.

Simple preapproved facility sitting alongside existing finance arrangements. • Pay only if you use it • Fast and simple to activate • Peace of mind for unexpected cash flow interruptions • Small and large exposures • Treated on a case by case basis, and tailored to your needs

Contact Fifo Capital today for more information. 0800 86 34 36


drives innovation and performance in business

The value of innovative thinking and embracing a diverse set of solutions when it comes to dealing with cash flow issues is fairly easy to understand, if not necessarily simple to implement, for most business owners. The benefits of embracing diversity in other ways, however, hasn’t been as universally accepted. Australian businesses still have an enormous wage gap, with women earning neary $27,000 less on average than their male counterparts. Beyond that, management positions across the entire economy, are dominated by white male industry insiders. This has long been considered problematic as a simple matter of fairness, but, as it turns out, it’s just as much a financial issue as it is a social one. Boston Consulting Group (BCG), working with the Technical University of Munich, has found that many types of diversity all contribute to drive innovation and financial success for businesses.

All types of diversity matter The study examined 6 different dimensions of diversity (gender, national origin, education, age, industry, and career path) in 1700 businesses across 8 countries. What may be surprising to many is that in all 8 countries and across all 6 dimensions of diversity, the researchers found statistically significant correlations between increased diversity and innovation-related profits. The specific way in which management teams were diverse was less significant than how diverse an organisation was overall. The most diverse enterprises were also the most innovative, with businesses that ranked above average


Most different kinds of diversity are additive, meaning that each provides exclusive benefits that businesses can benefit from.

earning approximately 19 per cent more in innovation related revenues than non-diverse enterprises. This does not mean, however, that different types of diversity are fungible. Most different kinds of diversity are additive, meaning that each provides exclusive benefits that businesses can benefit from. Even very diverse enterprises can benefit just as much by focusing on a single, previously neglected, dimension as a very nondiverse enterprise could doing the same.

More diversity means more insight and more options While being recognised as a social issue, there has been some vocal concern about perceived risks of creating diverse workplaces. These include the idea that diverse groups will be more fractured and less able to communicate effectively, resulting in an less productive and potentially toxic environment. However, this BCG study shows that making the effort to create a highly diverse work environment has a net positive effect on productivity and revenue.

The universal benefits of diversity are clear, and it shows that it’s this diversity itself that directly generates this additional productivity. Homogenous workforces generate homogeneous work. This might be good for creating a consistent product, but it’s terrible for innovation and creative development. Diverse teams potentially have access to the combined knowledge and skills of multiple industries, age groups, cultures, social groups, and professional backgrounds. This allows them to collectively examine problems from more angles and to share and combine their knowledge to come up with new and unique solutions.

Building a more diverse workplace For most businesses, the problem isn’t so much understanding that diversity is beneficial as it is knowing how to foster diversity at work. Becoming a meaningfully diverse workplace requires planning, work, and investment. Foster diversity through policy While many businesses want to become more diverse, only 40 per cent actually actively implement enabling conditions like fair employment practices and participative leadership. In practical terms, that often means implementing fair and transparent compensation practices, and actively promoting diversity by consciously putting more diverse candidates in positions of leadership and power in your organisation. Businesses often balk at the idea of giving “unnecessary” raises, or hiring job candidates based on their diverse backgrounds, but the fact is that their diversity is a valuable asset in and of itself. Break down barriers to entry Many very non-diverse businesses have a lot of structural requirements for specific jobs. For example, if top level managers are all required to have very specific academic degrees and 10 or more years of management experience, plus a variety of specific certifications to qualify for an interview, your management team will all be of similar age, molded by essentially the same educational and professional backgrounds. This and other kinds of barriers deter people with gaps in their work history, people switching industries, and other kinds of outsiders that might bring a fresh perspective with them. Finding and lowering these barriers can greatly increase a business’ opportunity to discover the people they need to grow and develop. It has long been widely accepted that the business world should embrace diversity as a matter of fairness, but this study gives business leaders a much more practical incentive. Diverse workforces, specifically diverse management.

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Inadequate management leaves workers bored, stressed, and unproductive In the UK, 40 per cent of workers report feeling bored at work. In Australia, a study found that the average worker spends 6 hours per week bored and unproductive.

At the same time similar proportions of workers report suffering from stress, anxiety, and overwork. All of these combine to reduce productivity and to create a high-strung and toxic work environment.

surveyed cited a lack of work as the reason for their boredom. Instead, they overwhelmingly indicated that tedious work, poorly executed meetings, and a lack of task diversity caused the problem.

What may not be obvious to employers is that all these problems are often part of the same bigger issue. Boredom, stress, anxiety, and a sense of being overwhelmed are not mutually exclusive, and are often the result of the same set of symptoms. Those symptoms all trace back to the ultimate problem: poor management.

Meeting fatigue Workers commonly report being bored due to an excessive number of mandatory and unnecessary meetings. Studies on workplace stress also cite workers being kept away from their responsibilities by unnecessarily long meetings that often don’t merit the attendance of many of the people present. This perfectly illustrates the problem. Workers in these meetings have little to contribute, little to gain by being there, and are left feeling bored with nothing to think about except all the work that they can’t do during this

What causes boredom, stress, and anxiety at work? We know that workers mostly aren’t bored and unproductive just because they have nothing to do. In fact, only 27 per cent of workers


Good managers serve both their lost time. By the time they finish their meetings, they feel mentally exhausted and stressed, and aren’t as productive as they could be.

business and their team. They shape

Lack of meaning Nearly half of workers surveyed stated that their work simply wasn’t interesting, while a third indicated that the work wasn’t challenging enough. This is often because workers don’t see the meaning or the value of what they do at work. Employees need to know how their work is connected to the company’s overall objective, why they are important, and what doing good work means for themselves, the business overall, and their clients.

whilst also ensuring engagement by

Lack of diversity and scope Monotony can turn even an interesting job into a tedious chore. Workers need a variety of responsibilities and tasks to keep them occupied, and to allow them to build a relatively rounded view of the company and how they fit in. Overly one-sided jobs can be mentally and emotionally taxing, and make it ultimately more difficult for employees to stay fresh and focused throughout the day.

Good management is key At the end of the day, all of these symptoms trace their way back to the ultimate problem, which is poor leadership. Managers and business owners are responsible for how their workers spend their time, and what their responsibilities are. Even in relatively flat hierarchies, they create the culture that allows these inefficiencies

their team’s work lives in a way that maximises productivity for the company, fighting boredom and stress.

to emerge. While great management is something that requires extensive study and experience, there are a few relatively simple things leaders can do to begin to alleviate these issues. 1. Clearly define the scope of every job Not only is it difficult to describe individual jobs very clearly, entrepreneurs may also find it convenient not to. An employee with very vaguely defined responsibilities can more easily be shuffled around and loaded up with with a wider variety of tasks. This is problematic, however, because it can prevent managers from spotting problems. If you can’t define what someone’s job is, it’s unclear exactly which meetings are relevant, how meaningful their job feels, and how monotonous their actual daily tasks are. A more rigid approach is initially more labour intensive, but also gives managers a clearer picture of what their employees’ workdays are like, allowing them to spot and address potential problems sooner. 2. Educate employees about your industry It’s surprisingly common for low-level employees to understand relatively little about their business beyond their specific job. This makes their jobs less interesting, and directly reduces the quality of your work. For example, a human resources employee at a medium-sized IT company may very well know relatively little about IT, while finding themselves responsible for talent acquisition. Without much industry background, the best this employee can do is to run down a checklist of the qualifications a given department is looking for. This leads to a tedious search that will most likely result in a list of candidates that reasonably matches what the company needs. A well informed employee that is well educated about exactly what the business does and how it works, on the other hand, will actually understand what they’re looking at when reading applicant resumes or actively scouting for candidates. They’ll be able to make much more nuanced and complex decisions about different potential candidates, while also feeling far more engaged in their task. Good managers serve both their business and their team. They shape their team’s work lives in a way that maximises productivity for the company, whilst also ensuring engagement by fighting boredom and stress. By understanding what causes these issues, business owners and managers can build healthier company cultures, and a more productive business. Fifo Capital Headway


Tony Hsieh: rethinking corporate culture Tony Hsieh started his career as a corporate employee at Oracle. Like many college graduates entering the workforce, he found himself disillusioned and disappointed in the reality of corporate life. Unlike most of his peers, he decided to do something about it. Only 5-months into his new job, he quit to co-found his own business with Sanjay Madan.

“ Businesses often forget about the culture, and ultimately, they suffer for it because you can’t deliver good service from unhappy employees.”


This first venture, LinkExchange, was an Internet advertising network that was later sold to Microsoft for $265 million dollars.

than the wealth he has generated for himself and his businesses.

Relationships over profit Hsieh believes strongly in putting relationship first in business. That means relationships between businesses and customers, relationships between businesses and employees, and relationships between employees.

Next, he co-founded the investment firm Venture Frogs, and also became the CEO of Zappos, which would go on to grow unimaginably under his leadership and ultimately define his career so far.

This view is especially reflected in Zappos’ hiring process, in which employees are gauged explicitly not only on their general fitness for the job, but also on their personality. Hsieh wanted all his employees to be the kind of person that he himself wanted to get to know better and to sit down for a drink with.

With a net worth of nearly $900 million dollars today, Hsieh’s business success is considerable. However, his biggest contributions are to be found in the innovations in corporate culture that he has trail-blazed more

Building real personal relationships allows people to communicate more effectively, to apply themselves more fully, to be happier, and to simply work better. He doesn’t just support this view verbally, it’s reflected in his

business practices, and validated by his success.

Work-life integration Instead of advocating for keeping our personal and work lives separate, he advocates for making work rewarding and fulfilling on its own merit.

In his book, “Delivering Happiness”, Hsieh repeatedly addresses the issue of work stress, burnout, and work-life balance. He states “…when people dread going to work on Monday morning, it’s because they know they are leaving a piece of themselves at home.” Hsieh believes businesses should empower employees to pursue personal growth, and encourage them to find their purpose and apply themselves to their task in their own way.

Fifo Capital Headway


Return on collisions

Customer service In an era when businesses have increasingly switched to automated messages, emails, and chat support, Hsieh swears by the power of the phone call. Zappos lists their phone number at the very top of their website in bright bold lettering, and encourages customer service representatives to engage with and build relationships with customers. The focus is not on solving a problem and getting to the next call, but rather on representing the business in a personal and meaningful way.

By going out of their way to make a connection during that one phone call, Hsieh believes they can cultivate the happiest and most loyal customers in the world.

According to their figures, only about 5% of Zappos’ sales are made by phone, but a much larger portion of repeat customers will call the company at some point in their time as a customer. Phone calls, unlike written communication, are a direct human interaction, which offers an important opportunity. That single phone call is likely to inform that caller’s relationship with the Zappos brand in all their future purchasing decisions, regardless whether they ever contact the business again. By going out of their way to make a connection during that one phone call, Hsieh believes they can cultivate the happiest and most loyal customers in the world.


In 2009 Hsieh organised a revitalisation project for downtown Las Vegas, where Zappos is headquartered. Among other things, the initiative provides free office space and funding for a diverse set of creatives and entrepreneurs. Rather than focusing on the return on investment of individuals, Hsieh instead made it the project’s mission to bring various wiz kids, “change makers”, and creative thinkers into close proximity with each other. The purpose of this is not to empower individual projects, but to encourage “collisions”, or serendipitous encounters. Increasing the odds that interesting individuals like this meet, connect, and exchange ideas with each other gives them what extra something that they need to to spark innovation and to bring disruptive ideas to life. This approach is less about finding and investing in great businesses so much as it is about “institutionalising return on luck” to turn great potential into great businesses. In Hsieh’s view, the relationships that individuals have, the way they connect to other people, and the chance encounters they expose themselves to make people more creative, happier, and more productive at work. His personal success, the reputation of his ventures, and the vibrant cultures he has nurtured show that businesses of all sizes stand to learn something from his unique approach, both to create a better working environment, and to create a healthier and more innovative corporate culture.

We’re here to help. Business finance when you need it. Working capital to support and grow your business We know that the working capital your business needs to support and grow can easily exceed what other financiers can approve. And that’s where we can help, with flexible financial options from $10,000 to $1 million. We understand, because we’re business owners like you When you talk to us, you’re talking to a business owner like you. We’re a privately held finance company, which means we can be innovative in our approach and work closely with our customers.

Contact Fifo Capital today for more information. 0800 86 34 36

We’re all about keeping things simple – from a single point-of-contact who’s also the decision maker, to a 24-hours turnaround time… all with minimal paperwork. We don’t require long term contracts or property security – and it’s up to you when you choose to use our services and when to stop. All with no impact on your existing lending arrangements In fact, banks often recommend us as preferred short-term funding option. And because we work as a complementary service, there’s no need to refinance your current funding facilities.

Short term financing

relies on excellent communication





Businesses rely on a variety of types of financing to launch, maintain, and grow their operations. Starting capital is often accessed through large bank loans or investors, while ongoing cash flow demands can be managed using a variety of shorter term financing solutions. While different kinds of financing might look relatively similar on the surface, the mechanics of where funds come from, what they can best be used for, and what kind of financing is most appropriate for a given situation are very different. Because of this, short term finance providers like Fifo Capital work very closely with customers to apply the right solutions to particular problems in order to ensure their success in both the short and long term.

Short term financing fills a critical gap Large financial institutions do offer finance solutions that SMEs can use to cover relatively small cash flow interruptions. Unfortunately, because they’re designed to primarily work with large business and large amounts of financing, those products aren’t always the most appropriate solution to a given situation. For example, a business line of credit could be used to deal with a wide variety of cash flow problems, but it also puts the business directly into debt, and could result in fairly significant interest payments. A business that can afford to take on some debt still also needs other solutions. Large institutions typically prefer to issue large loans in excess of $1 million, which often take weeks or months to process. This is a serious problem, since SMEs often need much smaller loans to pursue short term growth opportunities, to upgrade equipment, or to cover other costs from one day to the next. Financial institutions that specialise in working with small businesses address these and other problems with very specific products. They can offer financing much more quickly than larger institutions, often within just a few hours, and can work with businesses that may not qualify or be denied financing by their primary lender. They can do this because they work with SMEs much more closely to ensure the success of their clients, and to help manage their own risks.

Entrepreneurs need expert support Finding financial solutions that will meet a business’ immediate needs efficiently while also helping to ensure their long term success isn’t a simple task. Is it better to take out an unsecured loan, to use invoice financing, or

to defer outgoing payments with supply chain finance? The answer depends on the situation, and a wrong choice could result in inefficiencies in the future. Unlike their much larger counterparts, small and medium sized enterprises usually can’t afford to hire a team of experts to manage their finances and to help them make these decisions. By working closely with a financial representative from their alternative finance institution, however, they can get access to the expertise they need on an ongoing basis. Because businesses work with and build a one to one relationship with a single expert, the likes of Fifo Capital is able to build an increasingly nuanced understanding of individual client businesses and their needs and capabilities. This is critical, because it allows us to offer financing to businesses who otherwise might not be able to access the funds they need from their primary bank without jeopardising the health of their own business.

Financial institutions need to manage risk A fair question that a business owner might ask at this point is, “Why would a financial institution like Fifo Capital invest this much effort in their clients?”. The answer is simple: It’s how we make our business work. Issuing small amounts of funding through any financial product, whether it’s invoice financing, supply chain finance, small business loans, stock loans, or anything else is labour intensive and risky compared to how larger institutions work. By working very closely with clients, your financial representative helps to ensure that the business succeeds, and that any issued funds are successfully recovered. More importantly, it means that client businesses become more successful, and stick around to do more business in the future. In this way, short term finance institutions like Fifo Capital become long-term partners with their clients, and are able to facilitate and share in their success. Small businesses need long term support in dealing with inevitable everyday cash flow issues, whether it’s to keep their operations running through a cash flow interruption, or to pursue a growth opportunity.

By building and maintaining a close, long term relationship, alternative finance institutions can provide both the funds and the financial expertise their clients need to facilitate both their clients’ and their own ultimate success.

Fifo Capital Headway


4 things to look for in

your financial institution Cash flow management is a headache for small business owners everywhere. Not only do clients inevitably pay late (or not at all), but clients come and go, equipment breaks down, and random, unexpected expenses crop up at the least convenient of times. To keep the lights on and business running smoothly, businesses have to rely on a combination of careful money management and third party financing. Unfortunately, choosing the right financial partner for your business is no easy task. Different types of institutions offer different kinds of financing that may be better suited to some businesses than others. Moreover, every financial institution you work with will operate in its own somewhat unique way. To ensure that you’re getting the best service possible, there are a few specific things you’ll want to look for when you’re shopping around for a business finance solution.



In any healthy business relationship, it is in the best interest of both parties to share relevant information and ensure that they understand exactly what the relationship means for each of them. When you first meet and speak with a representative of a financial institution, it’s a good idea to ask exactly how their services work, and what the costs and benefits are for both parties. Working with someone who is unwilling or hesitant to explain their business practices is risky at best. Similarly, hidden fees or an unnecessarily convoluted application process are reasons to proceed with caution. Like any other business with a great product, a great financial partner should have no trouble justifying the cost of their services and has no 25

need to rely on underhanded tactics to drive up their own revenues.


Rapid response

There are a lot of situations in which your business might need some extra cash. Perhaps you unexpectedly lost a major client, or you are dealing with late payment issues, and need some funds to cover operational expenses at the end of the month. Perhaps you need to replace some equipment, to acquire some extra stock, or to hire and train some new employees in order to facilitate growth. What most of these issues have in common is that they’re time sensitive. Business owners can rarely wait days or sometimes weeks to get access to the financing they need. More often than not, problems that are discovered today need to be fixed tomorrow. While not all kinds and amounts of financing can be immediate, it pays to research your options ahead of time and find out who can help you soonest. Fifo Capital, for example, can process most applications within 24 hours, ensuring that customers can get access to the financing they need in time to address their problem without falling behind on their own bills or missing a growth opportunity.


High touch service

Small businesses can’t afford to hire a team of financial consultants to advise them on the best financing options for them, or on what the risks associated with different financial decisions might be. A good financial institution will take the time to understand your business and the situation you’re in, and work with you to come up with a good solution. A great financial institution, however, will continue to offer that same level

of service with a dedicated financial representative who understands your case and will help you adapt your strategy as your situation changes. Others might simply delegate calls from existing clients to a call center, which often means working with generic support personnel who may or may not have any real expertise in regard to your issue.


Long term relationships

That dedicated professional support is particularly conducive to long-term relationships. Cash flow interruptions aren’t rare events, and small business owners don’t have time to shop around for a new financial institution every time they need something. Because of that, it doesn’t make a lot of sense to work with an institution that doesn’t take a long term approach to its clients. Those that take the time to develop that long-term one-toone relationship stand to gain a lot by working with you to grow your business and to help you succeed. As your business develops, your financing needs become more diverse, creating a more lucrative source of revenue for your financial partner. This symbiotic relationship is one that’s worth encouraging, and those who already understand its value are going to make more reliable and useful partners for small business owners. Financial institutions that specialise in working with SMEs have a lot to offer; not just in the sense of offering financing to stabilise cash flow, but also in facilitating their long term success. At Fifo Capital these values shape the core of our service philosophy. If you’re looking for the right financial partner for your business, we encourage you to get in touch with us today.

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