Finance

Solvent and illiquid

A year ago, I predicted there would be a wave of bankruptcies sweeping across Australia.

It didn’t happen. In fact, the reverse happened. There has been a sharp decline in bankruptcies over the past 12 months.

Why has caused the opposite? Aside from the obvious – my poor prediction skills – the answer lies in the definition of bankruptcy.

Bankruptcy is when a company becomes insolvent. This is not quite the same as having no cash. Companies suffered a liquidity crisis (no/low cash) during the pandemic. This didn’t make them insolvent.

Read More »

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Finance

Solvent and illiquid

A year ago, I predicted there would be a wave of bankruptcies sweeping across Australia.

It didn’t happen. In fact, the reverse happened. There has been a sharp decline in bankruptcies over the past 12 months.

Why has caused the opposite? Aside from the obvious – my poor prediction skills – the answer lies in the definition of bankruptcy.

Bankruptcy is when a company becomes insolvent. This is not quite the same as having no cash. Companies suffered a liquidity crisis (no/low cash) during the pandemic. This didn’t make them insolvent.

Read More >>
Leadership

Witch hunts and accountability

At first, I was going to write about post mortems and their benefits.

But as I delved into my experiences, I realised there was a bigger matter to discuss first. How culture plays a big role in conducting post mortems.

There is an unpleasant consequence arising from accountability, i.e., blame.

Conducting a post mortem is a useful and proper exercise for uncovering the failures of a project. By discovering what were the problems encountered, we can improve going forward. In reality, many post mortems descend into finger pointing exercises. This renders acrimonious relationships between staff. Which can take a long time to heal.

After all, we are human not robots.

Read More >>
Performance

Gaming the system

Officials penalised a hospital as its waiting time was too long.

Subsequently, the hospital reduced its waiting times and avoided further penalties. Without any changes to its operations. Instead, they made the ambulance drivers slow down to shorten wait times.

“When a measure becomes a target, it ceases to be a good measure.”

Read More >>
Growth

Blinkered Optimism

You’ve decided to launch a new offering which will complement your current product suite. Yay! As with the other offerings, the new one has a similar production process. You know what resources are needed and you also know what will be the likely costs of bringing that offer to the market. The missing piece is figuring out the likely topline.

Read More >>
Finance

Throwing Good Money After Bad

New projects are always exciting. You get the nod from management with much fanfare. Everyone is frothing with anticipation. We are going to be a world leader in [product/technology/services]. This will generate spectacular [revenues/efficiency/customer experience/automation]. Choose the appropriate item!

One year later. None of these benefits have come to fruition. There are delays (always unexpected) due to [technical/resource/compliance/macroeconomic] factors. After another cost blowout, the business reaches a crossroad.

Read More >>
Finance

Being anchored

Being in lockdown reminds me of anchors. The anchor being this heavy weight which keeps me rooted to the spot. Despite a lot of activity, at times it feels as if there is little progress.

This reminds me of budgets. Oddly enough. I reflected on all the budgets I had prepared in the past. The spreadsheets, horse trading, presentations, grilling and being grilled. And yet, at the end of the day we often ended up not too far from the initial numbers we proposed at the beginning.

Read More >>
Leadership

Witch hunts and accountability

At first, I was going to write about post mortems and their benefits.

But as I delved into my experiences, I realised there was a bigger matter to discuss first. How culture plays a big role in conducting post mortems.

There is an unpleasant consequence arising from accountability, i.e., blame.

Conducting a post mortem is a useful and proper exercise for uncovering the failures of a project. By discovering what were the problems encountered, we can improve going forward. In reality, many post mortems descend into finger pointing exercises. This renders acrimonious relationships between staff. Which can take a long time to heal.

After all, we are human not robots.

Read More »
Performance

Gaming the system

Officials penalised a hospital as its waiting time was too long.

Subsequently, the hospital reduced its waiting times and avoided further penalties. Without any changes to its operations. Instead, they made the ambulance drivers slow down to shorten wait times.

“When a measure becomes a target, it ceases to be a good measure.”

Read More »
Growth

Blinkered Optimism

You’ve decided to launch a new offering which will complement your current product suite. Yay! As with the other offerings, the new one has a similar production process. You know what resources are needed and you also know what will be the likely costs of bringing that offer to the market. The missing piece is figuring out the likely topline.

Read More »
Finance

Throwing Good Money After Bad

New projects are always exciting. You get the nod from management with much fanfare. Everyone is frothing with anticipation. We are going to be a world leader in [product/technology/services]. This will generate spectacular [revenues/efficiency/customer experience/automation]. Choose the appropriate item!

One year later. None of these benefits have come to fruition. There are delays (always unexpected) due to [technical/resource/compliance/macroeconomic] factors. After another cost blowout, the business reaches a crossroad.

Read More »
Finance

Being anchored

Being in lockdown reminds me of anchors. The anchor being this heavy weight which keeps me rooted to the spot. Despite a lot of activity, at times it feels as if there is little progress.

This reminds me of budgets. Oddly enough. I reflected on all the budgets I had prepared in the past. The spreadsheets, horse trading, presentations, grilling and being grilled. And yet, at the end of the day we often ended up not too far from the initial numbers we proposed at the beginning.

Read More »
Strategy

Vaccine nationalism is a trillion dollar bet

Vaccine nationalism is a result of first order thinking, i.e., not looking beyond the first step. The problem is you often end up with only short term gains. A better way to tackle problems is adopting second order thinking. By this, I mean to consider the secondary impact of our actions. The consequences of the initial consequence.

Read More »