Ep.44 – BOTH Success AND Integrity. Guest Bessi Graham.

@12:06 – Nate Leslie (nateleslie.ca)

Bessi Graham, in Melbourne, Australia, you have seen and done a lot. You are a lot of things.

are a thinking partner to leaders all around the world, a serial entrepreneur, a global traveler with time with the United Nations in Geneva, background in politics and counter-terrorism.

And here we are going to explore for leaders around the world, business owners and executives. What is behind and sometimes in the way of people being able to do work that matters and make a great living while they do it.

@12:58 – Bessi Graham (Benefit)

Welcome to Leading with Curiosity. Thank you. So much, I’m very much looking forward to this one.

@13:02 – Nate Leslie (nateleslie.ca)

This has been on both of our books for months, and we’re so excited to be here together, and I’m already intrigued by our pre-interview.

So here we go. So there’s two types of people that you find yourself working with in the work that you do.

Share with me those two groups that you often see.

@13:24 – Bessi Graham (Benefit)

So it’s interesting because the overarching message, if you like, that has been consistent in all of the different work I’ve done over many years and businesses that I’ve founded and run is this concept of bringing doing good and making money back together.

And when we think of what are the two most common responses to that, as you’d probably guess, when things tend to be either or, people pick a side, the responses can either be a really deafness.

Pushback of that’s ridiculous, not possible. Business is about profit maximisation. If you’re trying to run a charity, that’s a very different conversation.

Those two things shouldn’t connect. Some people very strongly just think that that is naive or a romantic notion. Then for other people, there can be, it’s usually a gentler response, but it is, yeah, of course, I think that’s really, I believe that that’s at the heart of how I do business.

want to be operating in a way where doing good and making money are together. And yet what is interesting when you go a little bit beneath the surface with those things is that even in the category where people say they agree with me, that you can do good and make money, it doesn’t take long in a conversation or when you start to get

I’m to about the two camps in business. The external camp is where when you think about your business itself, it still sits in that category of we need to make sure that this stacks up financially.

It’s got to make more money than it spends. It is a focus on revenue and profit and growth. And then outside of the business, you have the ability to contribute or make a difference or work on those projects that are important to you.

And people will still say, yes, you can do good and make money, but it’s more what I would say is enabled by the business.

So it’s that you’ve made enough money that you can give a donation or your business is come. It’s enough that you feel able to give some pro bono time or allow your team to go into some volunteering while you’re paying them.

So people are seeing that as doing good and making money. But for me in terms of if we go beyond this just being something that makes us feel good and we move it into the category where I want it to sit for business leaders, which is around it actually being a competitive advantage.

And it actually being embedded in your strategy and how the core business operates. For that to happen, the good can’t just sit on the outside of the business.

We need to move into what I call the internal cap where we’re actually deeply examining those decisions we make, how we spend money, how we treat our team, how we make those decisions about supply chain or packaging.

Any of these types of core decisions that are ours to make as a leader where we’re We either have direct control and decision making rights, or we at least have some kind of influence over them.

That is where the powerful combination comes in. And so when I start to work with people, identifying that aspect of other components that they would put in the doing good categories, still sitting outside of the business is a really important thing for me to pick up on as quickly as possible.

And then also just the level to which there may be unconscious beliefs in there that are driving their behavior.

And so obviously, you know, that’s a much bigger conversation. But it is a fascinating one because so often for those of us that run businesses, we have just taken on without questioning these concepts of what is the role of business.

And even the most evolved lovely human who is trying to be a good person will at times I’m slip up and make comments and I think, oh, that’s interesting.

So if we’re talking about their strategy or when making decision around pricing and customer segmentation and then suddenly they say to me, well, Bessi, you know, you need to remember, I’m running a business here, not a charity.

I’ll go, oh, that tells me something. Like, so what do you think the difference is? What decision would you make if you were running a charity versus a business?

So those types of giveaways or comments that people make are the second part that is interesting when they’ve sat in that category where they said they agree with me, but I need to sort of unpick that a little bit more because, as you would know, for all of us as humans and it’s amplified when you are leading others, it’s those unconscious, unexamined things, our own bias, the lack of self-awareness that will catch us off guard.

@18:57 – Nate Leslie (nateleslie.ca)

On the internal camp, you talked about how they How they treat their people, supply chain, packaging, decisions that they make.

And then there’s this also, this emotional connection to money and that bias that you’re just coming to know. I think I describe it for myself, the internal struggle.

Sometimes I blame it on my middle class prairie roots, know, town, farming community. I’m supposed to feel a certain way about large sums of money.

You’ve just touched on it here. Dive a little bit more into that below the surface here on that relationship that people do have with money that sometimes you uncover in this process.

@19:42 – Bessi Graham (Benefit)

Yeah. So like you, many of us have those aspects that might be, you know, they do they’re a Christian influence or different versions of you should have work ethic and work hard, but it shouldn’t be this displays of wealth or you shouldn’t be greedy with.

We’ve attached these ideas and judgments to what it means or how you achieved that. About a week ago, I was visiting some friends of my parents and it was interesting because they were talking about someone they knew and they said, well, you know, he was able to retire before he was 40.

So clearly he was robbing people blind. It wasn’t possible that that person could have through honest means been delivering something of such value that they made a lot of money.

So there’s all of these pieces and again, when we go back to the unconscious, the unquestioned aspects of that, the piece that I find fascinating, if we look and just stop and reflect for a moment.

While we have just swallowed whole this lie, think it’s a lie, that business is about profit maximization or shareholder value creation.

So it’s this. Very one-dimensional description of what it is. We’ve taken that on as if it’s this long-standing gospel truth.

And yet it was only in the 70s that Friedman and others brought in these notions around the purpose of business being profit maximization.

And when you actually track shareholder returns over that time, shareholder returns went down when we became obsessed with that one-dimensional approach.

So, there is evidence that proves it. It hasn’t even played out, as it promised. There is massive evidence that shows that in the process of creating what we now think of as externalities, so no longer thinking about the flow-on effects or the consequences of our actions as a business owner, we have rapidly created the levels of consumption that cannot be contained within the scope of the earth’s resources.

We’ve created environmental damage. All of these flow-on effects are from the… Taking as truth this idea that we only take into consideration shareholder value maximization and that very focused approach around profit being the decision making filter and tool.

Yet, if we were honest with ourselves and if we actually looked at what we began our business and we looked around at all the businesses we know, it’s deeply human to trade and barter, commerce is in us.

It’s part of how we operate as humans. And very rarely if ever does someone start a business by thinking, how do I make as much money as possible by taking advantage of people, by, you know, charging more than worth.

That’s not a driver. as you said, people want to be comfortable. They want to be feeling that they don’t need to be apologetic for wanting to be paid well for the value that they’re creating or for the skills that it’s taken decades to build up.

You know, learn over time. Yes, we should be paid properly for that. And there is recognition and achievement and aspects that can inspire and incentivize us, but it’s not the one and only driver.

And so I think when we are honest with ourselves about that, and when we look at and question some of those pieces, we actually can both feel freer and start to honor ourselves as a business leader more and not have that judgment or guilt around our desire to grow or scale our business.

But also, as I said, then ultimately build something which is more multi-dimensional and taking into account all of those, the connectedness really of how we don’t operate in a bubble in isolation when we run a business.

@23:58 – Nate Leslie (nateleslie.ca)

What can you? I share about the generation that we’re in right now where consumers are demanding more sustainable practices as we make a purchasing power.

know on your podcast, there’s an episode about ESG. And I imagine that’s a space that you often live in.

Yeah, about where we’re at in the state of entrepreneurship and consumers really being able to influence that they want more from the companies from whom they’re purchasing and dealing with.

@24:42 – Bessi Graham (Benefit)

Yeah, I think it’s interesting because it goes back to that shift from this one-dimensional, not very human approach to business to broadening that out.

so when I talk about something like ESG, so environmental, social and governance considerations, again, I’m always trying to encourage people

I encourage leaders to demystify that, to not put it in a category that’s simply about saying, oh, there’s these external pressures on me now around compliance and regulation.

I need to just tick that box and have an environmental policy. Put it in the bottom drawer and never look at it again.

The pieces and the shifts you’re talking about there around consumers, it’s actually also employees. Now when you’re looking for staff, they’re interviewing you as much as you’re interviewing them.

Looking for this alignment in what do we care about? What are we actually contributing to? What is this business fundamentally about?

Those things no longer sit in a ticker box category. There has been a period. So back in 2000, I worked for Ethinvest, was the first ethical investment company here in Australia.

And if we look at the decades of track record that there is in areas like Ethical. investment or what would now call impact investment.

There has been this maturity, if you like, you could for a period just have good intentions and not really back it up with any measurability or demonstration of that.

And so there was a time when if you had those external pressures from consumers saying, I would like to understand your supply chain or, you know, what are the conditions of the workers that have made this product for me.

Or what is the packaging, recyclability, had all of those questions. There was a time when you could give a very surface level answer.

@26:40 – Nate Leslie (nateleslie.ca)

Often people talk about things like green washing.

@26:42 – Bessi Graham (Benefit)

So it’s this, you could make a statement that sounded lovely and engaged and not actually back that up with the demonstration or behaviors that needed to follow.

Part of why I am so passionate about trying to really Help translate some of the world of something like ESG, environmental, social and governance factors into business in a meaningful way is that we actually don’t have that luxury anymore.

If businesses start to engage with these ideas now as embedding it in their strategy, then I feel confident that they actually still have time to do a bit of the trial and error to learn what works for their business and to do that over period of time.

My concern and why I am pushing quite hard to make sure we’re connecting the dots and trying to do this as the strategy, not a little add-on and to do it in a way that is unapologetically trying to have competitive advantage connected to it is that it’s actually going to be very difficult if people continue to ignore these things or think that’s not really relevant.

Bessi at the moment trying to break even, trying to stay afloat. can’t think about that until, like if it gets pushed off.

Then we will be in a category where those external pressures, whether it’s around consumers, employees, compliance and regulation, the insurance policies going up, all of these factors that are very much affecting your ability to run your business.

The longer you ignore those things, the more you’re going to be in a position where you have to be reactive and you have to make very big changes quickly.

All of us know that that is going to be far more damaging and harder to manage as a business leader than if you’re able to jump in now.

So the curiosity piece there is to say if consumers are asking you different questions, or if your employees are putting pressure on, let’s not just see that as an annoying distraction,

We’re an expensive thing that’s taking us off track. Let’s use it to say, OK, if we actually said we’re no longer just looking at shareholders, we’re now saying, so I’ll give you an example of a broadening of shareholders.

In 2019, the business roundtable threw out their previous definition of what the purpose of a corporation was, which was this piece of the shareholder value maximization.

And instead, they moved to a very intentional articulation around business needing to take into account five stakeholders, which is your customers, your employees, your suppliers, the communities you operate in, and your shareholders.

So if we start to use filters like that where we say, OK, we’re making this decision in the business, I’m just going to sit for a moment and think about the flaw and effect of how would that affect?

The community we operate in or how would that affect my employees? What it does is instead of just simply going, does that stack up financially?

Yes. Okay, we will do it. It provides you with the opportunity to actually see your environment in terms of the business environment, the competitive landscape, risks and opportunities.

You start to see the world differently. And I have seen that. Those pieces of, if you can spot a risk sooner, you can mitigate that risk.

You can start to shift and adapt how you operate because you now have a more honest understanding, for example, around things like on the production side.

If you were previously treating something like water as an externality and you were saying we can use as much as we like.

If we pollute it and then put it back in the river, not my problem. The aspect. The cost of what do I have access to?

If you start to take that approach by just setting, said, okay, now I need to look at this in terms of the community I operate in.

What are the flow and effects for that? What are the flow and effects for my staff, my employees who live in that community and the water is now polluted and they’re dealing with chemicals that have health impacts.

If you start to think about these things, the aspects that you will start to realise are, oh, there’s actually changes happening in government where they’re going to be charging us massive compensation bills or as we pump water back into the river, it’s now going to cost us 15 times more than it used to.

There is a scarcity of water available even on that input end and so we are now paying more for that.

That taking those things into account isn’t a soft gentle little distraction from your strategy, it’s you realising your costs are about.

to the confidence of whether you can consistently access at the level of quality you need, those inputs is going to be affected.

So you need to now start to think differently about your water consumption, and you need to think differently about the purification of water after you use it.

So some people, and particularly in the world that I’ve operated in for over 20 years where it has been more driven from that.

So I think really genuine thing about the social and environmental consequences of our work. Some people still are operating in a very purist approach where they would say, well unless someone is motivated and really committed to the change I care about, I don’t want to work with them.

I don’t think that that is a helpful approach because in my mind, you don’t actually have to be motivated by the same things I am motivated by.

I care about the outcome we achieve. if we end up getting cleaner water because you’re You now realized it was going to cost you more money.

That’s fine. You don’t have to be driven by the same thing. I can be very pragmatic and come at this for many angle.

But I think that’s just one very basic example of how actually seeing risks that you previously ignored because you didn’t think it was your responsibility will lead to you being able to actually run a bit of business, a stronger business.

So whether it’s in those aspects of risks, whether it’s about opportunity, it’s different that are engaging with stakeholders in a different way.

All of those pieces are part of puzzle of you like, of shifting to a more strategic engagement with this work and starting to say anything I do in this space, I’m not finished designing the business model for my organization unless I’ve created a win-win.

Because if you land at something that feels like a, oh yeah, that’s a good decision. It’s stuck up. So, if you’re going to win at the expense of someone else, I would say you haven’t finished designing business model because we don’t have a win-win yet.

So, how do you do that? if we go all the way back to your earlier point around some of the unconscious discomfort that people can have.

The reason why I see the starting point for any work I do with a business leader being around shifting that mindset from an either-or approach that says, you know, we have to choose one.

Is about, are you doing good or are you making money? Are you running a business or are you running a charity?

I need for people to shift into what I call that both. And mindset, understanding that two things that seem like contradictions can be equally true.

When you move into that place of getting more comfortable sitting in the grey messy spaces, then you will be able to wrestle with any discomfort that might be there and say, no, I am going to also unapologetically make sure this makes sense for the business financially, because that doesn’t make me a bad person or a selfish person or greedy.

The two can coexist. I can actually grow my business and grow the positive impact having in the world. That is possible.

So that is at the heart of how I would think about that problem.

@35:48 – Nate Leslie (nateleslie.ca)

I am so glad we got to there. And podcast, both success and integrity and this idea of both and is really a paradigm.

It’s a way of seeing the world that two things that appear. Here at First to Be, contradictory can coexist.

I hope I’m not putting you on the spot here, and I respect the confidentiality of clients that you have.

But if you could think for a moment of a client that you’ve worked with that you’re really proud of, the transformation, the changes that they made and their paradigm, and the way they were viewing their business at one time when you arrived, two a time later when maybe you were exiting, tell us a little bit about that project.

@36:31 – Bessi Graham (Benefit)

So I think I’ll use a dramatic one because often when we haven’t had this kind of mindset shift when we haven’t connected dots, these assumptions that are just sitting beneath how we grow a business are actually, they have this interesting effect.

So I say to people, if you haven’t embraced the doing good and making money piece or the both end, you are actually limited.

Both the good you can do in the world and the sense of purpose and meaning that will come from that for you, but you’re also limiting how solid the growth and strength of your business can be.

And often people aren’t connecting those things. they’re thinking, as we talked about earlier, that it’s still just in this category of it’s a nice thing to do or that would help me feel more fulfilled.

The example that I’m thinking of with a client was where this organization had spent serious amounts of cash and time building up a product and as often happens when organizations have any kind of technical component to it, they can kid themselves that, oh, it’s just profitable at the moment, but it will get profitable.

@37:57 – Nate Leslie (nateleslie.ca)

So they don’t ask questions they should be asking because all the

@38:00 – Bessi Graham (Benefit)

Big tech companies didn’t make profit for a long time.

@38:02 – Nate Leslie (nateleslie.ca)

So there’s kind of these excuses that get played into the business.

@38:07 – Bessi Graham (Benefit)

And what was interesting was that by coming in and starting to really question some of their work, so as an organization, there was a real desire to have a positive impact in the financial inclusion area that their products were able to be to be used by people.

Who would otherwise not have access to finance in the same way. And yet what was interesting was things had stayed too woolly around what would success actually look like.

How would we know whether we had achieved that? It had stayed in the category that I mentioned before, of like good intentions, but not really measurability.

So there was some desire and commitment to make a difference. But on the business side, because they weren’t really that

Looking at the world in the way that I like to where you’re saying, let’s design our business model where these two things are mutually reinforcing.

They kept adding customers and growing this business in a way that was actually making it harder for the business to work well.

And so I don’t know if you’ve ever used this concept with your clients, but where we landed was I said, you’re currently bleeding.

If we scale this and if you keep adding customers, you’re going to hemorrhage.

@39:28 – Nate Leslie (nateleslie.ca)

Like scale doesn’t fix these problems.

@39:31 – Bessi Graham (Benefit)

And so what was really exciting was being able to get in there at the level of the business model.

I use the business model canvas. not sure if you’re familiar with that as a tool. It’s my favorite tool to help people to conceptualize all the elements of their business.

But by helping them come back to realizing that they had to design an organization where we made the, we incentivize things in a way where the good good.

And the money were mutually reinforcing. So we weren’t able to design a business model where they were only growing if they were having, delivering more value and actually achieving the outcomes around very specific targets for their customer segments.

And what I find fascinating is when you do that you start to use the tools that are actually available to you but that you were ignoring.

So for example, when I think of doing a business model in this way and helping you get to that design where they’re mutually reinforcing and those are hard moments come, something like IDO, the design firm, I always use their overlay on a business model campus around.

have these three areas, desirability, feasibility and viability. most powerful thinking tools or heuristics, as they used to be called, are

Very simple, but they’re not simplistic, right? So just having a frame like that and working with this organization to help them say, we need to do a bunch of work to better understand the customer.

But when I looked at the design work they had previously done, all they focused on was desirability. So they got excited about adding in features and all of these things that customers said they wanted.

This goes back to that one-dimensional piece. If we ever run our business in a way that’s just taking a one-dimensional view, it weakens the whole overarching business.

And so because their design work, when they tried to be customer focused, only looked at desirability, they then had a business model that didn’t stack out.

And so by introducing this idea of both end and by deeply embedding that the good they wanted to do in the world had to stack up commercially and actually help reinforce the business.

The business model, not be seen as something that was going to just cost money and make it even less financially stable.

They could then drill into those components of the feasibility in the back end of the business model. How would we, okay, someone might say they want that feature.

Can we actually build and deliver that to them at the viability level? what levers do we have to play with to actually make sure our revenue streams and our cost structures add up?

Those types of shifts for me are exciting, where you see an organization that otherwise, through not asking the right questions, was literally wasting millions of dollars and going to scale something that would sink them.

You can instead completely reshape how they conceptualize the business model itself and reframe Frame in their mind. That this piece that they felt connected to and wanted to be part of from a contribution side, actually by bringing it more closely into the strategy, they could strengthen their business.

That piece for me is always exciting, where someone starts to realize the piece that I am so passionate about, which is it can genuinely be a competitive advantage.

It’s not just a nice thing to do one day when you retire or when you’ve got enough money.

@43:34 – Nate Leslie (nateleslie.ca)

We’re close to wrapping up your Bessi and three things have really jumped out for me with this example of one.

And one of them I think I let pass Bible to you quickly. This idea that business models are simply not finished yet, that there’s a business owner or an organization listening to this right now saying, oh, we missed the boat on that one.

No, you’re just not finished yet. It’s this future focused thinking. The example you gave fixed. The very large challenge hit on this idea of both and you’ve shifted their paradigm for future events.

your work with them has put this layer on it, this canvas on it, of this kind of decision tree of when we’re faced with something like this again.

@44:19 – Bessi Graham (Benefit)

Have we captured all that? And the piece that I always, the way I frame those things is, say with a business model, I never want to sit with someone and design their business model full stop.

We now laminate it.

@44:34 – Nate Leslie (nateleslie.ca)

It’s on the wall and done.

@44:36 – Bessi Graham (Benefit)

I love the ing, the ING on the end of any of these things that I’m working with a client on.

I need to help you understand and teach you to master business modeling or business planning because you’re never done.

Like, if we go to this aspect of how quickly the world is changing, all the things that are being thrown at us constantly to have to filter through, make

You need tools that you can come back to again and again. You will be wrong. I mean, the amount of business models I have built for my organizations over the years, just constant because it doesn’t matter how good you think it is and, you know, how clever you think you are, you will be wrong.

There will be things that won’t play out as you anticipate. So, yes, I think adding the in on the end is important and saying, no, Not only is it okay if you’re not there yet, none of us are.

This is an ongoing emergence and should be a lifelong exploration. That’s what makes it exciting if you can actually learn these skills and put yourself in a position where you don’t need to be embarrassed about that.

It’s okay and not only is it okay, I think you should celebrate it. And again, use it as one of your competitive advantages.

@45:59 – Nate Leslie (nateleslie.ca)

Go to the curiosity piece.

@46:00 – Bessi Graham (Benefit)

Go to there like, what could this look like? How could we think about this differently? When you engage like that, a whole bunch of things become possible for you as a leader that were just not there.

If you thought your job was to present this pulled together person with all the answers that had it sorted.

If you’re trying to present that, good luck because this next few, if it hasn’t already undone you, it will undo you.

So the quicker you get comfortable in that sort of messy space, the better I think for every business leader out there.

@46:35 – Nate Leslie (nateleslie.ca)

Adopting it, becoming a learning organization. We are learning, we are growing, we are evolving. And there’s forgiveness and permission to admit mistakes and move on and be constantly refining.

It’s an optimistic view of the road ahead regardless of where it began, any organization that’s a huge competitive advantage.

And we didn’t even get to core values, which I know is a lot of work that you do, but it’s fulfilling, yeah, fulfilling the purpose that you can have both success and integrity intact and be a learning organization.

One last question we don’t have a lot of time but what did you learn in counter terrorism that you can apply in the work that you do now if anything.

@47:28 – Bessi Graham (Benefit)

Oh yeah, I mean, I think, and that might sound a bit like a stretch, but as a leader, particularly if you are wanting to work in very complex spaces.

So I love, I do lot of advisory work, I work with governments and large international funding bodies, so there’s complexity in a system that I often operate in.

But even if you’re running an organization, the aspects that I think are relevant there from a counter terrorism. If you don’t tune into, how does change actually happen?

How do I sell a vision enough and articulate that so people will follow? How do I get to a place where I am tuned in and can read timing, read the room, read shifts, understand what is motivating people and tap into that to achieve the purpose How of the that I care about?

That can sound manipulative, and people can use any of those skills in terms of persuasion and things in manipulative, negative ways.

But if we come back to that aspect of, let’s not be black and white about it, but let’s say there are skill sets and aspects around understanding humans and tuning into them, and tuning into yourself, that are critical precursor to being able I’m able to lead well.

I always say if you want to lead, you can’t lead others unless you lead yourself first. so the components that I learnt in particularly examining and deeply looking at other leaders, so there was a lot of things in the theoretical space around the psychology and different aspects of that that are helpful as a leader.

But the most informative pieces were drilling into and understanding other people’s leadership styles, watching how they adapted or didn’t, how they knew themselves and their strengths and weaknesses or didn’t, and then using those myself.

I think that from a leadership perspective, yes, experience and your expertise, all of those things are important. But if you can from an early age or if you haven’t done it yet as quickly as possible, get alongside people.

The people and learn by exposure to their own life lessons, then you can fast track some of that. And I would say in the counter-terrorism space and in the leaning into understanding aspects like charisma and different leadership styles, that has been helpful because I’ve been able to be more intentional about preemptively deciding how I want to behave or show up in a situation.

@50:25 – Nate Leslie (nateleslie.ca)

So very relevant would be my answer. Bessi, where can leaders of organizations, consumers of podcasts about wonderful topics like we’ve been exploring today?

@50:39 – Bessi Graham (Benefit)

Where can they find you? The most straightforward way to find me is to go to Bessi Graham.com to my website because when you go there, you will find links to the podcast, YouTube, etc.

So head to the website and I would love to have a chat with anyone who’s just wanting to understand how does this play out in your life.

Those more strategic embedded ways in their business because it’s worth thinking about that now. Don’t put it off for another 18 months.

@51:09 – Nate Leslie (nateleslie.ca)

I feel smarter for having met you and spent 40 minutes with you here Bessi and I have really enjoyed this idea of growing and learning as we venture in this journey of entrepreneurship and business and leadership.

@51:25 – Bessi Graham (Benefit)

Thank you for your time. My pleasure. Thank you.