Fifo Capital Q3 2020 New Zealand by Headway magazine

FIFO CAPITAL

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Thinking ahead for success

QUARTER 3 â&#x20AC;˘ 2020

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Navigating the post-Covid Era

Emmett Shear: Turning amateur gaming into an interactive spectator sport

Page 5... Trade finance can help businesses stabilise shaky supply chains Page 11... Use alternative finance to improve short term cash flow during the coronavirus crisis Page 13... Six steps to build a more resilient business Page 17... Fixing gender balance could be the key to improving your company 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

About Fifo Capital Fifo Capital 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 clientsâ&#x20AC;&#x2122; 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, and Ireland, and provided business owners $1 billion growth capital finance.

Welcome Welcome to Fifo Capital’s Spring edition of Headway magazine. I know these are unprecedented times and 2020 is definitely a year to remember. Few, if any of us, could have anticipated a disease like Covid-19 disrupting the planet like it has. Whether COVID-19 is here for years to come or it is squashed with the release of a new vaccine in future, I believe the best way forward is to accept what is happening now, and adapting and navigating our way through to a post-pandemic world. Resilient business owners are always thinking strategically about their businesses and look for opportunities, no matter the operating environment. Times similar to these, including recessions and major economic meltdowns, present great opportunities because they force new thinking. Fear not, for some of the world’s most successful companies – General Electric, General Motors, IBM, Disney, FedEx, Microsoft, Google, Facebook and more – all launched during uncertain times. Financial and operating environments will always change. Everything is cyclical. The key is to step outside of your standard day-to-day operations and plan for your future.

At Fifo Capital we’re ideally placed to support the business community with tools to stabilise your supply chain, and improve any short-term cash flow issues you might be experiencing. The good news is, off-balance sheet financing tools can fully finance your production without relying on credit. This issue of Headway is packed with informative, relevant and inspiring articles to help you get to the other side. These include: Navigating the post-Covid era; how Trade Finance can help businesses stabilise shaky supply chains; how Emmett Shear turned amateur gaming into an interactive spectator sport with Twitch; how fixing gender balance could improve company culture; improving productivity by promoting deep work; six steps to build a more resilient business; best practices for working remotely; and more. We’re here to help you with bespoke financial solutions to help you move forward. Best regards, Nigel Thomson Founder & CEO, Fifo Capital

Contents 01

Six steps to build a more resilient business

Improve productivity by promoting deep work

Communicating leadership

Best practices for working remotely

Navigating the post-Covid Era Trade finance can help businesses stabilise shaky supply chains Emmett Shear: Turning amateur gaming into an interactive spectator sport Use alternative finance to improve short term cash flow during the coronavirus crisis

Fixing gender balance could be the key to improving your company culture Use off-balance sheet financing to fully finance production without relying on credit

Published by Fifo Capital International Ltd.

Navigating the post-Covid Era

Lasting shifts in social attitudes, policy, work, and consumption are likely to emerge from the COVID-19 pandemic. It’s hard to predict precisely how it will shape our perspectives on society, but it’s plausible that we could see a greater focus on crisis preparedness, systems resilience, social inequality, social solidarity, and access to health care. It’s also easy to see how the crisis could accelerate nationalistic tendencies, and some commentators are already talking about the possibility of a “great decoupling” of international interdependencies. At an individual level, it’s also possible that we may adjust how we view the balance between work and family life, having been reminded of what is truly important to us.

Attitudes, policies, and the direct experience of the pandemic are already changing how we work, including greater emphasis on remote working, digital collaboration, workplace hygiene, and protections for temporary workers, for example. Practical steps companies can take to sense, exploit, and shape the post-COVID-19 reality:

EXPECT CHANGE AND LOOK AHEAD

Organisations tend to become myopic and insular when under threat. But crises often mark strategic inflection points, and a necessary focus on the present should not crowd out consideration of the future. The key questions become, what next, and with what consequences and opportunities?

UNDERSTAND BROADER SOCIAL SHIFTS

Addressable opportunities are often born out of new customer needs and frustrations, so listening to customers is vital. However, traditional surveys tell you only about existing product and category needs and uses; consumers may not be explicitly aware of their emerging needs. Companies need to look more broadly at how social attitudes are shifting to understand which observed changes in behavior and consumption could be lasting. For example, if leaders’ and workers’ attitudes toward remote working shift after a few months of experiencing it, that could have significant consequences for office equipment, office real estate, home remodeling, transportation, and other sectors and segments.

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SCRUTINIZE GRANULAR, HIGHFREQUENCY DATA

Aggregates, averages, and episodic statistical data will not reveal the weak signals of change. Companies need to access and analyze highfrequency data, such as data on credit card transactions, at a very granular level in order to spot emerging trends.

IDENTIFY YOUR OWN REVEALED WEAKNESSES

The crisis will undoubtedly expose needs for greater preparedness, resilience, agility, or leanness in different parts of your company. Those weaknesses also signal opportunities to renew your products and business model and serve customers better. They may also help you understand broader customer needs, since others are likely to be experiencing similar stresses.

STUDY REGIONS FURTHER AHEAD IN THE CRISIS

China and Korea are many weeks ahead of Western countries in their experience of crisis and recovery.

By studying what happened in these markets, leaders can better predict which changes are likely to stick or could be shaped. A geographical fast-follower strategy may be available to agile players.

SCAN FOR MAVERICK ACTIVITY

Some companies, often smaller players on the edges of your industry, will be making bets predicated on new customer needs or behavioral patterns. Ask yourself, who are these mavericks, and which potential branches and leaves on the tree of possible shifts are they betting on? Are those bets gaining traction? What are you missing? From there, you can decide on the appropriate response to each opportunity or threat: ignore, investigate further, create an option to play, replicate and exceed, buy the maverick, or act with high priority.

LOOK AT WHICH NEW PATTERNS REDUCE FRICTION

Frictions are unnecessary delays, costs, complexities, mismatches with needs, or other inconveniences that a customer experiences in using a particular offering. Forced habits that entail more friction than the traditional alternative are likely to be temporary: we may be forced to eat only canned food from our pantries in a crisis, but many are likely to return promptly to consuming fresh food when it is over. On the other hand, forced habits that reduce friction are more

likely to stick: how many of us relish the thought of carving out a couple of hours each day to reach our workplaces? High-friction areas are also ones where it is logical for mavericks to innovate and where they are more likely to succeed.

MAINTAIN HOPE AND A GROWTH ORIENTATION

It’s almost inevitable that we will face a deep postcrisis recession. This is not a reason to postpone innovation and investment. Counterintuitively, 14% of companies grew both their top and bottom lines during recent economic downturns, and our analysis shows they create value mainly through differential growth. This is true across all industries. The evidence is clear: the best time to grow differentially is when aggregate growth is low.

“Flourishers” in a downturn do reduce costs to maintain viability, but they also innovate around new opportunities, and they reinvest in growth pillars in order to capture opportunity in adversity and shape the postcrisis future.

Trade finance can help businesses stabilise shaky supply chains With many Asian manufacturers suspending their operations due to the spread of the coronavirus, businesses at home are faced with an unprecedented challenge. Industries that rely on imported materials and products from China are scrambling to deal with interruptions to their supply chains. For some, that means finding alternative suppliers, while others seek to stockpile what they need to get through the crisis.

Building new supplier relationships, however, can be expensive, and many businesses don’t have a great deal of liquid capital to work with. This is, in part, the result of recent natural disasters, which have kept consumer spending down for months on end. In order to adapt to changing supply conditions, businesses need to be able to make new supplier arrangements quickly. To help them get this done, Fifo Capital’s trade finance facility offers a unique solution. It allows businesses to fully finance supplier purchases, allowing them to get back to business as usual as quickly as possible. Not only does this help them to avoid potential setbacks, it offers a unique competitive advantage to those who can maintain their operations as competitors struggle.

Businesses risk lost revenue if they can’t adapt quickly Businesses that rely on Chinese goods need to respond to the potential interruptions to their supply chains as soon as possible. Traditional retailers otherwise risk running out of stock, while auto manufacturers, for example, might be forced to interrupt production because they can’t get one or more of the parts they need. Every day that production is halted, or customers can’t find what they’re looking for on store shelves, translates to losses for those businesses. Because of this, it’s critical that they find alternatives as quickly as possible. Businesses who have already suffered interruptions will need to immediately find new suppliers in other countries. Others might opt to stock up from existing suppliers now to hedge against possible supply interruptions in the future. For already cash-strapped businesses, that means finding financing that is comprehensive, fast and readily accessible. Fortunately, Fifo Capital’s trade finance facility is designed to accommodate this type of situation perfectly.

How trade finance works

Financed deposits are the key

Most businesses don’t have the working capital on hand to pay for supply shipments up front. To get the financing they need, they use trade finance. This type of financing provides procurers with funds secured against the stock that they purchased with it. As soon as the stock is in hand, the payment can be issued to the supplier. The procurer can then use the purchased stock to pay back the financier and generate profit.

Fifo Capital’s trade finance facility is designed to allow businesses to finance the entire purchase, including the deposit. This allows businesses to acquire the supplies they need, even if the recent economic conditions have left them out of pocket. It’s possible to do this, because Fifo Capital lets procurers finance the deposit separately, without using the purchased stock as security. Instead, the funds are secured against outstanding invoices or other business assets.

Suppliers, however, can’t risk shipping goods over international borders to a customer without first receiving payment. This is particularly true for new relationships, where no trust and little rapport has been established. The procurer can’t pay for a shipment until it after arrives, and the supplier can’t send the shipment until some kind of payment is received. Traditionally, this issue is resolved by paying the supplier a deposit up front. Sometimes, however, poor financial circumstances mean that procurers can’t afford that deposit, either.

Fifo Trade Finance 3 easy steps 1 Seller provides invoice

2 Fifo Capital pays the supplier on agreed terms

3 Choose to extend your terms to ease cash flow pressure

Use trade finance to boost your business’ recovery The businesses who respond to the current situation most effectively stand to do more than simply avoid potential disruptions to their supply chains. Instead, they might be able to boost their competitiveness while others in their industry are struggling. Customers who were previously loyal to competitors will be faced with empty shelves, and looking for alternatives. At the same time, temporary scarcity resulting from unsteady supply will likely lead to higher prices. This represents a significant growth opportunity, and the chance to earn greater profits. Businesses who can maintain their supply chains during this time, or who can adapt quickly, will be able to capture new customers simply by virtue of availability. Moreover, those using trade finance to preemptively purchase and stockpile larger quantities of supplies will be able to negotiate for better pricing, benefiting from economies of scale. This, in turn, allows them to price their own products more competitively. As China races to manage the coronavirus outbreak, its manufacturers are suffering unprecedented challenges. While this will inevitably affect economies all over the world, it also represents an opportunity to those who react quickly and decisively.

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Emmett Shear:

Turning amateur gaming into an interactive spectator sport A goal of Twitch is to be wherever gamers are, whether it's on laptops and handheld devices or integrated into gaming consoles and software. Professional gaming has been around for a decades, however its appeal remained confined to a relatively small demographic in the early 2000s. Emmett Shear, together with Justin Kan, changed that forever when they founded Twitch in 2011. Just 3 years later, the streaming service was purchased by Amazon for US$970 million. Now, in 2020, the company’s estimated value is $5 billion.

Unlike many entrepreneurs, Shear’s success didn’t rely on disrupting any existing industries. Through their creativity and willingness to experiment, Shear and his cofounders developed a unique product and a platform that could be used to advertise to a demographic no one else could effectively reach —young techliterate men.

a live streaming platform in 2007, where users could live stream whatever they wanted. Unlike a simple live stream of Justin Kan’s life, this idea caught on like wildfire. Justin.tv grew rapidly, with users live-streaming a wide variety of content. The largest category, gaming, eventually gave rise to Twitch.tv, which was spun off in 2011. When it was shut down in 2014, Justin.tv had 30 million unique visitors per month, making it one of the world’s biggest live video platforms.

Taking over the internet with Twitch

The early Twitch team including CEO Emmett Shear.

Early Career Shear studied computer science at Yale, graduating in 2005, before launching his entrepreneurial career in 2006. Together with Kan, Michael Seibel, and Kyle Vogt, he developed and launched Justin.tv, which was simply a 24/7 live feed of Kan’s life. Building on this idea, they launched

Twitch became its own website in 2011, and continued to grow. In 2014, before its acquisition by Amazon, it was the fourth largest source of peak internet traffic in the world, comprising 1.8 per cent of all traffic with 55 million unique visitors per month. Today, Twitch hosts 2.2 million broadcasters, and has 15 million daily active users. In order to achieve this incredible success, Shear leveraged a new type of product to reach a previously unreachable online market.

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A new way to engage an audience At first glance, Twitch might have seemed like a competitor to YouTube. This, however, turned out not to be true. Live-streaming provides a different type of content from the more polished and choreographed content offered by YouTube. This has less to do with the quality of the content, and more with the fact that it allows viewers to engage directly with streamers in real time. This was important, because the primary audience for gaming-streamers are their peers — other gamers. Viewers who can directly interact with streamers can build social connections and share ideas and tips with the audience and other streamers. Moreover, they can engage with others in the audience, allowing streamers to build communities around their channels.

Advertising to an unreachable audience Most Twitch users are techliterate young adult men, who are notoriously hard to reach with advertising. They tend to use adblockers, and typically don’t watch television. Twitch is one of the only platforms that can effectively and reliably advertise to this audience, because they occupy a niche that is, at this point, still dominated

by this particular demographic. By placing short ads in front of video streams, Twitch has found a way to advertise in a way that users can’t circumvent. Moreover, relying on user generated content means that the burden of getting users to stick around to watch the entire ad is on streamers, not the company itself.

What we can learn By finding a way to capitalise on amateur gaming, Schear developed a unique product that catered to a non-monetised audience. Unlike many entrepreneurs, who start a business with the aim of solving a clear problem, or disrupting a particular industry, Twitch was born out of an arguably ill-conceived social experiment —live-streaming Justin Kan’s daily life. This shows us how imagination and a willingness to experiment can be as useful in business as corporate experience and careful market research.

The value of creativity By simply taking a shot in the dark with Justin.tv, Shear and

his business partners discovered a virtually untouched market segment. Justin Kan’s “lifestream” didn’t turn out to be viable, because of the way viewers interacted with him by pranking him, and even calling the police to his house, a practice now referred to as “swatting”, potentially putting him in physical danger. Through this experience, though, they discovered the unique potential of live streams and direct interaction as a way to attract an audience. Shear’s entrepreneurial experiences show us how to not only build on existing ideas, but how to find new and unexpected ways to capitalise on them.

While neither the technology, nor the basic concept of a livestream was new, the way he deployed it and developed it into what would become Twitch, allowed him to build a business with a secure source of revenue, and no significant competitors.

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 fifocapital.co.nz ask@fifocapital.co.nz

Use alternative finance to improve short term cash flow during the coronavirus crisis Governments around the world are taking extreme measures to slow the spread of the coronavirus pandemic, forcing many businesses to temporarily shut down, and keeping consumers at home as much as possible. While many businesses have been able to continue operating by allowing employees to work from home, many face significant revenue shortfalls in the short term. Some businesses need immediate financial support to help them avoid operational interruptions as much as possible.

To get the liquidity they need, businesses are turning to supply chain and invoice finance as a cash flow solution. These allow businesses to quickly and easily access funds, without taking on any additional liabilities. In this way, companies can minimise the impacts of cash flow interruptions, ensuring that they’re positioned as well as they can be to recover when the economy is allowed to return to business as usual.

Often, the financier will be able to issue the initial payment for a financed invoice within just a few hours. Better yet, there’s no need for credit checks, because it’s not a loan. Because the financial institution holds the invoice it needs no security, and simply collects payment from the customer when the invoice is due.

INVOICE FINANCE IS A CRITICAL CREDITFREE EMERGENCY MEASURE

During and after the coronavirus crisis, businesses can expect to find themselves out of pocket at inconvenient times. That’s particularly problematic when it comes time to seize a growth opportunity, or to begin to drive growth as a way to recover. A great way to deal with this is to make use of Fifo Capital’s supply chain finance facility.

Many businesses have lost access to their usual credit options due to the crisis. Falling stock values and shrinking revenues can quickly get in the way of a business’ ability to borrow. Moreover, banks are acutely aware of the situations that many businesses find themselves in. While governments are working to encourage banks to offer emergency loans to businesses, lenders have little incentive to do so. That’s because it’s still entirely unclear how long governments will maintain the economic shutdown, and businesses who borrow money today might well go bankrupt in one or two months. Until the shutdown has a clear end date, it’s impossible to project exactly how much support businesses will actually need. In the near term, however, businesses are not without options. Invoice finance allows businesses to bring in outstanding revenues sooner. Rather than waiting for a client to pay, they can finance the outstanding invoice for cash up front. Those funds can then be used to deal with immediate shortfalls. In effect, this buys time for companies, allowing them to continue to operate without interruptions until the government’s financial support measures come through.

Accessibility is key Invoice financing is of particular importance because of how easy it is to access, and how quickly it allows businesses to get their hands on the cash they need.

SUPPLY CHAIN FINANCE PROVIDES BUSINESSES WITH SHORT TERM GROWTH CAPITAL

Supply chain finance is primarily a way for businesses to defer outgoing payments. For example, a business dealing with an unexpected cost could use supply chain finance to defer a supplier payment, so that it can redirect existing working capital to deal with the problem. However, it can also be strategically applied to finance short term growth. A business lacking growth capital can use supply chain finance to cover supply costs, provided that it can convert those supplies into revenue before the deferred payment date. For example, a retailer could use supply chain finance to purchase stock from a supplier. Then, when the supplier issues the invoice, the business can defer payment by up to 90 days. Provided that the supplies are received, processed, and sold before that deadline, the business will be able to use the revenues earned from those sales to pay for the initial supply shipment. This allows even businesses with very limited access to capital to boost revenues during a difficult time, and to begin to recover. Alternative finance tools like this provide businesses with critical financial options when traditional lenders and investors are out of reach. When it comes to managing the fallout of the coronavirus pandemic, they will play an indispensable role in getting people back to work, and getting businesses running normally again.

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Six steps to build a more Crises are opportunities for change. With Covid-19, companies have a unique opportunity and necessity to revisit their business models to build greater systemic resilience, starting with the following six actions. We can usefully define resilience as a companyâ&#x20AC;&#x2122;s capacity to absorb stress, recover critical functionality, and thrive in altered circumstances. Resilience is especially important today because the business environment is becoming more dynamic and unpredictable. There is no better example of system stress than the coronavirus crisis. Humans impinging on the natural environment have enhanced the risk of cross-species infections. Dense urban populations facilitated the rapid initial outbreak of the disease. International travel facilitated its global spread. Extended global supply chains have broken down. Economic activity has been massively disrupted, and inequalities and social tensions have been exacerbated.

SEEK ADVANTAGE IN ADVERSITY Donâ&#x20AC;&#x2122;t merely endeavor to mitigate risk or damage or restore what was; rather, aim to create advantage in adversity by effectively adjusting to new realities.

LOOK FORWARD In the short run, a crisis many appear tactical and operational, but on longer timescales, new needs and the incapacitation of competitors create opportunities. Crises can also be the best pretext for accelerating longterm transformational change. One of the key roles for leaders is therefore to shift an organizationâ&#x20AC;&#x2122;s time horizons outward.

resilient business

TAKE A COLLABORATIVE, SYSTEMS VIEW

MEASURE BEYOND PERFORMANCE

In stable times, business can be thought of as performance maximization with a given business model in a given context. Resilience, by contrast, concerns how the relationships between a businessâ&#x20AC;&#x2122;s components or between a business and its context change under stress. It requires systems thinking and systemic solutions, which in turn depend on collaboration among employees, customers, and other stakeholders.

The health of a business is not captured only by measures of value extracted, which tend to be backwardlooking. Measuring flexibility, adaptation, and other components of resilience is critical to building a sustainable business. This can be done quite simply by looking at either benefits or capabilities.

PRIZE DIVERSITY Resilience depends on being able to generate alternative ways of reacting to situations, which in turn depends on the ability to see things with fresh eyes. Resilient businesses prize cognitive diversity and appreciate the value of variation and divergence.

CHANGE AS THE DEFAULT Alibaba founder Jack Ma sees change, not stability, as the default. Resilience is less about occasional adjustments under extreme circumstances and more about building organizations and supporting systems predicated on constant change and experimentation. This is partly to avoid rigidity and partly because iterative incremental adjustment is far less risky than a massive one-shot adjustment.

With the mainstream of business education and managerial practice focused on managing performance, resilience represents not just an opportunity to mitigate risk but also an opportunity for competitive advantage for enterprises who choose to focus on it. Andy Warhol famously said that in the future, everyone will be famous for 15 minutes. In todayâ&#x20AC;&#x2122;s business world, transient high performance is commonplace; it is sustained performance by resilient companies that stands apart.

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Improve productivity by promoting deep work

In many ways, businesses structure themselves around the idea of promoting employee productivity. This is unsurprising, as more productive employees inherently create more value for businesses at a lower cost, making them more profitable and more competitive. We implement new technologies, actively develop company cultures, and provide specific employee training in the name of optimising performance. Most often, however, these efforts are centered around boosting communication and collaboration between workers. Sharing information is fundamentally a good thing, however businesses often fail to consider what they might be giving up by breaking down the barriers between us. Over the past several decades, offices have become poor places for more demanding deep work. Productivity isn’t just about communication and collaboration. Once employees are well informed and up-to-date, they still have important, demanding tasks to perform to meet their responsibilities. In today’s constantly distracting work environment, this kind of deep work is virtually impossible to perform, and that may be impacting your business’ bottom line. To ensure that employees are able to do their best work, employers need to take steps to ensure that they provide the right conditions for it.

layouts are designed to promote interaction and collaboration between coworkers. However, the constant availability this has resulted in isn’t necessary for good communication. Many of the tools businesses have embraced to improve communication have, instead, resulting in endless and unavoidable distractions.

Modern workplaces provide too much of a good thing The modern workplace is an inherently distracting place. Email notifications, buzzing phones, interruptions from coworkers, and the simple constant movement of the people around us in an openplan office can make it virtually impossible to retain any real focus for an extended period of time. As a result, we spend all day managing distractions instead of doing the most important parts of our jobs.

Distractions keep us busy without making us productive While we are surrounded by distractions, it’s easy to feel like we’re working hard. After all, we often feel extremely busy when we’re trying to answer emails while managing an open chat window, a ringing phone, and questions from a coworker at the same time. However, business does not make us more productive. A data analyst in this type of environment, for example, could easily get through an entire day without addressing any of their core responsibilities. To do that, they need to be able to concentrate for an extended period of time without distractions.

Businesses rely on great communication

Promote deep work without sacrificing interconnectivity

Effective communication is the cornerstone of any effective business. It promotes innovation, improves morale, and makes businesses more productive. Because of this, our modern workplaces are centered around interconnectivity and collaboration. Everything from our technology, to our company policies and office

Businesses need to provide their workers with the conditions necessary to allow for deep work. That means allowing them to eliminate distractions when they need to so they can focus to get important work done. At the same time, it’s important to keep up good communication within an organisation.

A good way to do this is to provide employees with places and times at which they can be free of distractions, while maintaining the high-interconnectivity environment the rest of the time. Most workers can only concentrate intently enough for deep work for up to 4 hours a day, so there is inherently room in the workday for less intense distractiontolerant shallow work. To provide that distraction-free environment, businesses can even reach for some of the same technologies that otherwise distract us.

Eliminating distractions for deep work Flexible work arrangements can be very helpful for providing workers with a quiet place to get things done. Employees can, for example, be encouraged to silence all electronic notifications and to telecommute from home to complete deep work, deferring all communications for a few hours. Alternatively, businesses can set quiet times during the work day, during which others aren’t to be disturbed, or provide quiet areas in the office, where people can go to avoid distractions. Bringing deep work back into the workplace isn’t a matter of rolling back the past several decades of progress. Instead, it’s about adapting to the challenges that have arisen from yesterday’s progress.

Deep work isn’t just about making employees more productive, it’s about giving them the work environment they need to do the most demanding — and important — parts of their jobs. By addressing this issue, businesses can make their employees and themselves fundamentally more effective.

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Fixing gender balance could be the key to improving your company culture

Despite decades of slow improvement, gender balance is still a serious problem for businesses in many industries. While women represent over 47 per cent of Australia’s workforce (and a rough average globally), a recent survey by Adecco group found that the workforces of more than half of businesses consisted of fewer than 40 per cent women. Many industries are still heavily male-dominated, particularly when it comes to leadership. Only 20 per cent of ASX 200 executive management positions are held by women. Even more surprisingly, fewer than 5 percent of their CEOs are women. This exposes a fundamental problem for businesses: They’re failing to take advantage of a critical resource. According to multiple studies by Harvard Business Review and BI Norwegian Business School, women tend to be better leaders than their male counterparts. More importantly, research shows that women tend to exhibit traits that promote healthier company cultures while also boosting innovation and productivity. While traditional corporate culture often keeps women from meeting their potential, businesses need women at every level to ensure their competitiveness in the future.

Traditional corporate culture is in need of an upgrade Studies have long shown that the cutthroat, takeno prisoners, competitive culture that dominated businesses in the 20th century was as unproductive as it was stressful. This type of toxic culture encouraged employees to focus primarily on their personal success, rather than that of their team, or their employer. Employees who are primarily competing against each other can’t communicate effectively, or work together to innovate solutions for fear of being taken advantage of by their coworkers or superiors. Moreover, this type of culture frequently results in a hostile work environment for women, driving them out of industries that already suffer from serious gender imbalances. To combat this issue, many businesses have been actively working to dismantle toxic cultures, and to promote a healthier, more inclusive, and more productive environment for their employees. First and foremost, this means working to improve communication and cooperation in their workplaces. This promotes the exchange of ideas, helping people to share knowledge and skills to become more efficient, while promoting collective success over individual accomplishments. A key factor in addressing this cultural problem is gender balance.

Women disproportionately exhibit critical cultural skills and qualifications A study of 3000 managers by BI Norwegian Business School found that women outperformed men in 4 out of 5 assessment categories. A survey of over 7000 leaders by Harvard Business Review found that women scored higher than men in 12 out of 16 categories. While these studies didn’t agree on all points, some decisive differences stand out clearly. Women are significantly better than their male counterparts when it comes to communicating clearly, networking, developing their own skills and those of others, and exhibiting sociable and supportive behavior toward coworkers and subordinates. On top of this, they displayed greater initiative than men in setting and pursuing goals. These are, incidentally, all skills and qualities that business leaders are pushing to advance within their organisations to build a healthy, innovative, and productive company culture, as well as stronger client relationships. This suggests that addressing the issue of gender balance within an organisation, particularly regarding leadership roles, could have a significant impact on a business’ culture.

Promoting more women is the key to progress Women are still underrepresented in most industries. This is due to many factors, ranging from broad and subtle societal influences to straightforward gender discrimination. In some cases, entire industries have developed a reputation for misogyny, to the point where few women even attempt to pursue careers in them. Regardless of the cause, the solution is the same. Businesses need more women in leadership. This allows them to identify and deal with the systemic issues that are keeping them from achieving a healthy gender balance at all levels of their organisations. While male-led businesses may be aware of gender discrimination on an abstract level, they are rarely confronted with the effect this has on female employees and their larger company culture. The result is a gender balance that becomes ever more skewed. Female leaders, on the other hand, often have personal experience with the issue at hand, and can more accurately judge what to do about it in order to create a positive work environment for women. Businesses have been struggling to address cultural issues for decades, despite the proven benefits of diversity, whether that’s in terms of gender, race, nationality, or age. While developing a healthy culture is typically a slow process, addressing gender balance is one key way to get started. Not only does it help businesses to address one particular diversity issue head-on, it also provides teams with more of the skills they need to improve their cultures going forward.

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Use off-balance sheet financing to fully finance production without relying on credit

A business can’t make money without first spending it. Traditionally, that means using saved working capital, a line of credit, a business loan, or investor support to fund operations. Those funds are then invested in the business’ operations, purchasing supplies, paying for labour to create products, and spending to market and sell those products. Then, once the products or services are sold, the business can collect its revenues and earn a profit. Getting this working capital is, unfortunately, a major limiting factor when it comes to a business’ production capacity, and it’s ability to grow. A company that doesn’t have enough ready funds, for example, might not be able to expand its production capacity to accommodate a major new client. To get around this problem and unlock their full potential, businesses can use off-balance sheet financing like supply chain finance and invoice finance to grow their operations, and even to fund their entire production process.

Getting the funds your business needs to grow with supply chain finance A long-term growth strategy requires a great deal of investment, usually sourced from investors or a sizable business loan. Those big injections of cash, however, are best suited to large efforts, like building

and outfitting new facilities, or expanding into a new international market. However, growth happens every day, with every new client that a business can acquire. This type of growth requires more limited, but also much more immediate investment to allow the business to purchase additional supplies, and to hire and train new labour resources in the near term. Traditional loans, however, can take several weeks or months to get, making them unsuitable for supporting this type of marginal growth. When taking on new clients, a great way to get this type of additional financial bandwidth is to use supply chain finance. This type of financing allows businesses to avoid paying suppliers immediately. Instead, the supplier’s financial institution will make payment to the suppliers, and receive payment from the procurer as much as 90 days after the supplier invoice was originally issued. In effect, this increases the business’ payment term to 90 days. As a result, by the time the payment to the financial institution is due, the business’ growing production capacity has had a chance to catch up and begin generating additional revenue.

Fully financing the production process with invoice financing While supply chain finance is a great way to finance growth, it can also be used to finance all of

a business’ production. This is best done in conjunction with invoice financing. Rather than delaying outgoing payments, invoice finance allows businesses to give themselves an advance on future income. They do this by trading an outstanding invoice to their financial institution, who will pay them up-front for most of its value. Then, when the client pays the invoice, they’ll issue the remainder of the funds, minus their fee. Together, both of these financing tools can be used to eliminate a business’ cash conversion cycle, meaning that it will pay for its inputs only after it has already been paid for the products and services those inputs generated.

The result is a fully financed production process, using none of the business’ own working capital to keep operations running. Best of all, this type of financing is offbalance sheet, meaning that the business can finance itself without using any debt.

The benefit of off-balance sheet financing Off-balance sheet financing is any type of financing that doesn’t involve taking on any new assets or liabilities. In the case of invoice and supply chain finance, businesses don’t take on any liabilities because they only either convert an existing asset into liquid capital, or extend a payment term on an already existing liability.

How it works The business uses supply chain finance to fund its supplier purchases. This gives the business 90 days after the supplier issues its invoice to process those supplies, create products, and sell them to its customers. Then, provided that its own invoices to its customers are issued within those 90 days, it can immediately finance them to receive most of their value up front. Those early revenues can then be used to pay for their supplies at the 90 day mark.

By using this type of financing, businesses can keep their balance sheet clean while preserving any existing working capital for other uses. Moreover, it makes them more attractive to investors, and makes it easier to qualify for traditional loans from lenders. This way, they can more reliably access traditional sources of funding when it comes to making more major investments into growth and innovation.

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The ongoing coronavirus pandemic has severely constrained economic and social activity in all countries, creating a defining challenge for corporate leaders as they make plans to restart their companies and value chains, reengage their workforce and stakeholders, and renew the confidence of customers and markets. Much hinges on leaders’ ability to function as active, authentic, and trusted communicators. Events will unfold quickly, and surprises will be inevitable. Missteps will be costly. Consequently, as companies map their actions over the next months, the underlying communication plans must be agile and capable of dealing with uncertainty. Leaders need cohesive, scenario-based communication and engagement strategies designed to maintain flexibility and to maximise their companies’ credibility with stakeholders through the ups and downs of rebuilding.

Effective strategies

• Consistently reinforce corporate purpose and its

meaning in the post-crisis period, to offer a longterm perspective, inspire the organisation, and create continuity in messaging, while retaining flexibility in how to get there.

• Anchor on communication principles that

reflect core values, serve as guideposts for decision making, and establish a uniformly high standard for effectiveness and quality, to ensure that leaders consistently keep their big-picture objectives in mind.

• Employ a creative platform and approach to

engage the hearts and minds of key stakeholders, moving people emotionally to drive explicit action that supports recovery, renewal, and change for the future.

• Prepare detailed communication plans against

various scenarios, each with critical messages and custom content for key stakeholders and investors, including guidance on how to choose the most appropriate predeveloped module to deal with emerging circumstances.

These scenarios should closely match the anticipated realities involved in fully bringing the business back online, including the many hard calls that leaders may need to make along the way and the significant behavior changes that employees,

suppliers, consumers, and other stakeholders must adopt. Thinking all of this through in advance will allow leaders to respond to changing dynamics quickly and with confidence, and will give leaders foresight and depth in their connections with stakeholders, thereby reinforcing trust and confidence.

Reflecting your company’s values The following principles—or a similar set of principles customised to reflect a particular organisation’s unique values and context—are essential to shape the tone, content, and positioning of communications from leadership:

What we want employees and other stakeholders to feel:

• Solidarity, as we are in this together and no one is alone.

• Trust in the business, its purpose, and its potential. • Confidence in the company’s leadership and its ability to manage risk.

How we want to communicate to achieve these goals:

• Emphasise continuity with a shared past and

with shared values that won’t change during this tumultuous time.

• Use down-to-earth language that shows humanity and compassion as well as professionalism.

• Deploy nuanced messaging for relevance across different mediums and stakeholders.

• Provide clarity and resources as the situation evolves, keeping stakeholders informed and putting updates in proper context.

• Set realistic expectations for the future, so people

can prepare mentally, financially, and emotionally.

• Understand the actions, beliefs, and aligned

efforts that we want to drive, and ensure that we repeatedly reinforce these critical themes.

Although the months ahead are unpredictable, the intention of leaders to build back better is not. Executives face a critical agenda of tasks to reengage their workforce and stakeholders and to renew the confidence of their customers and markets. Using a communication strategy anchored in purpose and proactively built to respond quickly and effectively to different potential scenarios can help leaders remain effective champions of the future.

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Best practices for working remotely In light of the COVID-19 pandemic, businesses everywhere are transitioning to a completely remote work environment. Many employees are working remotely for the first time. And this sudden transition, paired with the news and the impact of the coronavirus, can cause anyone’s stress and anxiety levels to skyrocket. Highlighted right are a few of the best practices to help enhance your experience working from home, and making this transition as smooth as possible.

Have the right equipment and software If you are responsible for gathering and maintaining equipment for your home office, it’s crucial that you try to obtain the following resources.

Fast and reliable internet A speedy and stable internet connection is a necessity for working at home. Before working remotely, it may be easy to dismiss sticky internet connections that occasionally drop out. However, any connection or speed issues will only grow in size as you work from home full-time. It’s imperative that you have an internet connection that will support all the functions you need to work remotely.

Appropriate software Since you will no longer be working in a physical office environment, face-to-face communication will most likely take place over video chat. Therefore, you will need to download the telecommunication software your company has selected if you have not already done so.

Transitioning to a remote work environment can be a stressful experience, especially during these troubling times. However, following the tips listed here can help make your transition easier and set you up for a more pleasant remote working experience.

The essentials include a video conferencing solution (eg. Zoom or GoToMeeting), messaging service (Slack or Microsoft Teams) and a work collaboration tool.

Easy access to relevant files Since you will be away from your desk at work, it’s vital that you ensure that you can access any documents available on your office computer through your computer at home. We recommend contacting your manager or IT department about accessing these documents from a remote location, as you may need to follow specific procedures to gain access. These procedures may include downloading specific software or logging into a portal using information assigned to you.

Know what works best for you Everyone works differently, and it’s imperative that you figure out where you work best within your home, given your job responsibilities. For example, many people work well in a room with a door where they can be alone and also close the door as needed during periods of deep work or for meetings. Meanwhile, employees who engage in light research or creative writing may find that they perform their best while sitting on their family room couch. While either option is fine, it’s important that you’re honest about where you are (and are not) capable of producing your best work.

Find or create your ideal workspace

Choose furniture and supplies that will enable your productivity

Creating a work environment that will foster productivity and garner great results is also a crucial component of successfully transitioning into a full-time, remote employee. With that said, we recommend doing the following.

Electing to invest in office furniture and supplies like an ergonomic chair or a laptop stand for your desk can significantly benefit your productivity by giving you the capacity to work for extended periods at your chosen workspace.

We recommend checking in with your employer to see if their current workers’ compensation policy will allow them to reimburse you for any office equipment or supplies you purchase.

Try to track your time diligently Having employees track the time they spend working while at home is often required by companies. Non-exempt employees are most likely accustomed to tracking their time since they work for an hourly wage. When it comes to tracking time, your company may want you to log your time in a specific way. For example, if you’re a consultant, your firm may request that, along with recording how much time you spend working, you also detail what client work you’re working on so that they can bill clients accordingly. Therefore, try to pay close attention to any guidelines your company has provided regarding tracking time and follow them accordingly.

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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. We’re all about keeping things simple – from a single point-ofcontact 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. Contact Fifo Capital today for more information 0800 86 34 36 fifocapital.co.nz

Global Directory New Zealand PO Box 137375, Parnell, Auckland 1151 P +64 (0)800 863 436 E ask@fifocapital.co.nz W www.fifocapital.co.nz

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Wales Mobile management team P +44 (0)13 4438 8084 E wales@fifocapital.co.uk W www.fifocapital.co.uk

Ireland Suite 5338, 26 Upper Pembroke Street, Dublin 2 P +353 (0)1 6917 515 E ireland@fifocapital.ie W www.fifocapital.ie

Scotland Mobile management team P +44 (0)330 808 8009 E scotland@fifocapital.co.uk W www.fifocapital.co.uk

Australia Level 16, 390 St Kilda Road, Melbourne, VIC 3004 P +61 (0)3 9866 2930 E info@fifocapital.com.au W www.fifocapital.com.au

New Zealand Head Office PO Box 137375, Parnell, Auckland 1151 P 0800 86 34 36 ask@fifocapital.co.nz www.fifocapital.co.nz

Fifo Capital Q3 2020 New Zealand

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