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NO B.S. FRIDAY: Am I the first human to think this?

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Many people overestimate their intelligence

I think we can avoid a lot of trouble in life if we stop and ask ourselves, “Am I the first person to think this?”

Particularly if you’re on a break-away from the mainstream, thinking that you’ve discovered something that the herd just doesn’t see. Take a minute, sit down and ask yourself, “Am I the first person to think this?”

It’s funny how weeks have themes sometimes, hey. Well, this was a theme for me this week. I met a few people who have landed themselves in hot water and probably should have asked themselves this question before they gambled everything on a long-shot.

Let me give you some examples.

So think about someone who sold up their property in 2003/4, thinking that a crash just had to be around the corner.

Sure, it was possible to tell the story at the time, but if they had asked, “Am I the first person to think that this major asset class is about to go down in flames?” they might not have been so confident.

Because the answer, if they had been honest, would have been no. Not at all. At any point in time, there are decent chunks of the population who expect that housing/stocks/gold/whatever is about to collapse.

And how many of them turned out to be right? A staggeringly small percentage. Crashes do happen, but much less often than we actually imagine. And across time, the chances of being one of the doomsdayists, at the right time to be a doomsdayist, is actually very small.

We’re not good at balancing statistics in our minds, which is why we’re such terrible gamblers, and this is another example.

So if you’re thinking, yep, housing is about to crash, you’ve got to keep it in mind that you are not the first human to have this kind of thought, and at least statistically speaking, the chances of you being right are very, very small.

And if the chances of you being right are very, very small, then you shouldn’t gamble everything on your hunch. You shouldn’t sell your lovely terrace house in Surry Hills for example

What are some other examples I’ve seen recently?

“Money is a scam, therefore I’m throwing everything into Bitcoin.”

There’s another example. People have known money is a scam for centuries, but how many of them lived to see a currency actually collapse? Practically none. So tipping everything into Bitcoin is a wild gamble.

(I’m still a fan of Bitcoin, but I’m not putting 100% of my wealth there. No way.)

Another variation on that is
“The stock market is one giant bubble. I’m putting everything I have into gold.”

Literally, thousands of people have lost fortunes on that gamble over the years.

Or what about,
“Civilisation is about to collapse. I’m retreating to a bunker in the hills.”

That one is very common too. Many humans have had that thought over the years. And many humans have had to wander out of the forest as they approached retirement age and they realised that they were getting too old to live off possum meat.

Now I’m not saying that everything’s rosy and will always be rosy. I’m just pointing to this tendency we have to overestimate our ability to pick massive shifts in the human story.

And if we’d stopped to think about it – If we had asked ourselves ‘Am I the first human to think this’, we would have realised that a great many humans had had very similar ideas in the past.

And when we looked at what had happened to them, we would have realised that the majority were proven to be wrong.

And that should have given us a moment of reflection. Hmmm. Maybe selling everything to buy canned food isn’t the right strategy here.

So today I’m asking humanity to check themselves and not overestimate their intelligence

… because I like banging my head against walls.

I Love To Empower Talent

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I once had a conundrum.

I needed someone to manage the sales team. But the most qualified person was also my top-gun.

What could I do? If I took him off the frontline, it would take someone with pretty solid skills to fill his shoes.

But he was also the one who had the full picture of what the team needed, and the only one really capable of training anyone up into the role.

Some business owners will be tempted to leave your gun on the front line, and promote someone less capable into management, because “management’s not the real work.”

This is a very dangerous idea. Maybe you can get away with it, but you risk breeding resentment in your most talented employees. If they see talentless hacks promoted ahead of them, and into roles where they become the ‘boss’, how motivated do you think they’re going to be?

Second, you risk creating a culture where incompetence is rewarded.

And the incompetent will tend to promote other incompetent people because they don’t like to feel inadequate.

Suddenly, your executive suite will be full of douche-bags, and your best staff will keep on leaving.

There are a number of organisations out there like that, and somehow they seem to survive, but that's not the kind of leader you want to be, right?

And so, I promoted him.

I think you just have to accept that in hierarchical or team-based organisations, the people most capable of doing the work often aren’t the ones who actually end up doing the work.

It can be hard to let that go. You want results, you want to see runs on the board.

But your job here is to find ways to empower your team leaders to lead. To help them find a way to transmit their skill and levels of excellence to the entire team.

And you want to be the kind of organisation that rewards competence. There is a natural pull of talent towards the top. The most capable ones in an organisation are generally pretty easy to pick.

You need to get out of the way of that. Let capacity have the power it naturally attracts.

Let talent rise to the top, and push the skills and expertise back down the line.

What you absolutely must not do is push talent back down the line, and let incompetence rise to the top.

You might get short-run results, but you’ll create a massive mess for yourself down the line somewhere.

Empower talent at every opportunity.

Property Planning Gone Mad

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A textbook case of politics driving house prices.

Ok, so I wanted to look at an amazing policy backflip in NSW planning this week, but first, I know a few of you are interested in the art of persuasion, so let’s start with this gem from Opposition Finance spokesman Jim Chalmers. He’s complaining about the way the CBA activated a bunch of kiddie accounts without telling them, in order to juice their sales stats.

“These are appalling revelations and unfortunately also the sort of behaviour Malcolm Turnbull wants to reward with a $17 billion tax handout.

Labor wants to see the victims compensated for the rorts and rip-offs which are being uncovered, the Liberals want to compensate the perpetrators. Banks shouldn’t be rewarded for fiddling with kids’ bank accounts, they should be punished for it.”

Yep, he really went there. “Perpetrators”. “Fiddling with Kids”. The subtle cues are not so subtle. Banks = child rapists.

You might have thought that subtly evoking people’s anger at paedophiles was a step too far over the line. You’re probably right. But welcome to politics in 2018.

But while it’s poor taste, it’s brutally effective persuasion. Banks = kiddy fiddlers. The government (and the tax cuts) are their enablers.

Ouch.

As I’ve said before, it’s going to take something special to get these tax cuts through in this environment.

Malcolm, Morrison, I’m looking at you.

(…but not holding my breath.)

But let’s leave Canberra now for the Capital of modest and sensible, Sydney.

You might remember a few weeks ago that the NSW state planning body gave itself power over certain local government decisions in Ryde.

(Effectively it turned certain higher-density modifications into ‘complying developments’, fast-tracking their approval.)

Called ‘The District Plans’ they were only released in March this year and they called for 7,600 new homes in Ryde over the next 5 years. They also championed the ‘missing middle’ approach to providing terrace houses and duplexes as a way to increase density that is compatible with detached houses.

The 7,600 extra homes sounds like a lot, but we’re still barely scratching the surface of what’s needed. Still, it was a recognition that Sydney is growing fast and the housing stock simply isn’t keeping up.

And this is a point that everyone accepts. Sydney needs more houses. The only problem is, no one knows where to put them.

And Ryde certainly wasn’t happy about being the sharp-tip of the spear in the agenda to density Sydney. Nor was Canterbury-Bankstown.

The Mayor of Ryde was complaining to the papers that there’d be developers and “bulldozers of every block”. The Canterbury-Bankstown Council discussed the proposed changes just over a month later under the agenda item: ‘THE MISSING MIDDLE – A TRAIN WRECK OF A POLICY TOTALLY MISSING THE POINT’.

(Hard to tell what they were really thinking there.)

The local governments rallied hard on their constituent’s behalf.

The state government, facing a tricky election, decided to do a backflip. Now the whole thing’s on hold.

It’s just so classic.

Sydney’s population is booming, thanks in large part to an immigration intake that’s set at the Federal level. The greenies don’t want the city sprawling outward into bush and farmland. Existing residents don’t want to see their leafy streets being built upward, and everyone wants to complain about affordability.

Can you see a way out of that one?

Nope, you can’t. Because there isn’t one.

Unless one of those policy levers is shifted, higher and higher prices are baked in.

It’s driven prices over the past twenty years. It will drive prices over the coming twenty.

And we’ll still be complaining about housing affordability in 2040.

Isn’t that hilarious?

NO B.S. FRIDAY: Perfection Is Coming

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One day, it’s all going to be easy.

There will come a time when everything will be in its flow.

It’s not going to come with a trumpet, or even a ping in your inbox letting you know. One day, you will just look up, and realise that everything is in its flow.

You will realise that you are the general of a wind-up toy army, and all the toy soldiers and cars and dinosaurs and ducks, will be doing exactly what they need to be doing.

They’ll still need coaxing from time to time to keep them pointed in the right direction. But the gears will be turning, they will have their own steam, and your job, your only job, is to sit back and watch it unfold.

This will come after a lot of work and planning and preparation. You will have been applying yourself for so long, that you won’t really know how to sit back and watch it unfold. It will feel foreign and unfamiliar to you.

But this is the new challenge in your life. To learn the art of light touch control.

Maybe it’s like the theatre director, who having trained up his actors, now has to get off the stage and let the actors them do their thing. All he can do is watch it from the lighting desk, heart fluttering every time an actor nails their line.

In time though, this state will start to feel familiar to you as well. It will become a relaxed way of being. You will trust in your systems and your people, and you will be amazed how easily things come now – things that used to feel hard will now have a lightness to them, and you will know the joy of applying your talents to cool things, just now without any of the stress.

And it will be lovely.

I think it’s a very elevated state. Not all that many humans achieve it in the West.

In time though, you will start to get a little bored. The novelty of contentment will wear off, and you will remember those days where you had your nose to the grindstone fondly.

You will start to think that, perhaps, it’s time to reenergise things. Grow the business, build the empire, tackle bigger more ambitious projects, challenge the dominance of Facebook.

But don’t rush this stage. Make sure you honour the work and the journey by taking time in that beautiful valley of easiness. Let it recharge and replenish you, and let it become familiar. Let it become your default expectation of how productive activity flows.

Now maybe your reading this and it all feels a long way off. That’s ok. It is for everybody at some point. What I’m describing is not something you can just click your fingers and make manifest.

This is about being a carpenter learning how to work with the timbers of life. There are different grains, different qualities. There’s dozens of tools in your shed.

It takes a while to get to know it all.

But it can happen.

And right now, if you find yourself slogging up the mountain of getting sh#t done, you should know that there is a valley of easiness on the other side. This slog-fest doesn’t last forever.

Just keep this in the back of your mind. Just know that one day you will wake up and everything will be easy. All your toys will be on the march. No worries.

And if you want to call it in, as fast as possible, try this. Wake up every day and say to yourself. Maybe today is the day I will come to the valley of easiness. Maybe today is the day that everything will be in its flow, doing exactly what it needs to do, and I’m just going to have a lot of fun.

Maybe that’s today.

Do this every day, and one day it will be.

Promise.

Why financial planning is seriously stuffed… ( my opinion)

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Our financial planning system was always going to fall over eventually.

Everyone’s acting all surprised that the Banking Royal Commission has unearthed a graveyard of dodginess and financial abuse.

Probably not my readers since I’ve been banging on about it for years now. And the reason that I’m not surprised in the slightest is that the concept of financial planning, as it plays out in Australia is fatally flawed.

It’s a mess of misaligned interests that was always doomed to fail.

Let me explain.

The key confusion is around whether financial planners sell a product or a service.

Imagine you engage an interior designer. They offer you a service and that service is a interior design for your home. You expect them to be working with your home’s needs first. Maybe they then help you go out and get the individual elements, maybe not. But they’ve given you a service – a design.

Now imagine you walk into Ikea. They offer you a bunch of products. They will try and tune into what your needs are, find the right product for your circumstances, but at the end of the day, they’re trying to sell you something off the showroom floor. They’re not going to recommend you go down the road to the bespoke vintage homeware store, no matter how much your open plan entertaining area is calling out for it.

But that’s ok, because you know that. You’re going to them to have a look at the products they have on offer.

Now what does a financial planner do?

Well, if you look at their marketing, they’re a service. They’re there to design a bespoke financial strategy just for you.

But if you look at how they get paid, particularly by the banks, they get paid as if they’re a product showroom. They get commission based on how many units of certain financial products they sell.

When you look at the remuneration structure, the planners interests align with the banks’, not yours.

But of course, there’s some mechanism that brings those interests into alignment right.

Well, actually no. Not really. There’s codes of conduct and blah blah, but at the end of the day, the only protection you’ve got is your planners’ own ethical sensibilities.

And you know, most of the time, let’s be honest, that’s enough. Most people do the right thing.

But the law isn’t there to protect us from most people. It’s there to protect us from the worst of us.

And as the Banking Royal Commission has shown us, right now, the law is failing miserably.

So in my mind, the only way you can bring financial planning into alignment is to stop financial planners from also selling products.

Make them do what their marketing says they’ll do – design a strategy based on your unique circumstances.

Then we can have financial product showrooms – what the banks used to do. Somewhere you can go to get the right financial products for your needs, once you’ve nutted out what your strategy is.

But there needs to be a firewall between them.

Sure, financial planners can recommend particular products off that showroom floor, but as soon as they’re being paid based on how many units they sell, then there’s a misalignment of interests.

And at some point, somewhere, that’s going to break down.

And this is why financially planning, as it currently exists, is fatally flawed. It’s set up to fail.

But don’t expect to see change come from the financial planners or the banks. The system is set up to serve them. The fight needs to come from the customers.

You up for that?

Nah, me either. That’s why I walked away.

NO B.S. FRIDAY: The Inner Sea-Sickness

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Gambling on moving through the pain.

There are two types of pain, I reckon. There’s like an outer, punching pain, and then there’s like an inner sea-sickness.

The first is what we usually talk about when we’re talking about pain. It’s like you burn your skin. You’re aware that there’s something painful happening to the outer extremes of your body.

Or you’re playing sport. You’ve been running so hard your legs are burning. Your stomach is cramping. Your opponent has kicked the crap out of your shins.

To be honest, this pain is kind of fun. It’s kind of a game. It’s kind of fun to roar into it and let the pain meet the storm of your toughness.

Roaarr.

Some people even take it to extremes. Like Arnold Swarzenegger. He trained himself to get off on the pain of lifting weights… like literally.

“When I'm lifting weights and it's burning and it's hurting to push, that's like an orgasm. It's even better than an orgasm for me.”

Yeah, ok. I kind of look like Arnold Swarzenegger doing weights when I have sex, but I never have that kind of reaction to a work out.

But it is definitely possible.

And I think it’s because that kind of pain – the pain that is isolated and has an easily identifiable cause – is easy to externalise. You can detach from it. You can see the pain, you can see your ‘self’ in relation to it.

It becomes just a sensation.

But there’s another sort of pain, and it’s something I don’t think we’ve really developed the words for yet. It’s kind of like an inner sea-sickness. That’s how I experience it.

And this pain, rather than being outside coming in, is inside and… well, going nowhere because it is you.

This pain is really hard to be with, because it’s right in your face. It’s closer than your face.

It’s behind your face. Aaaaghh!

It’s kind of horrible, but I think it’s the price of being truly alive.

Because what I think that pain is, is the consciousness waking up to the reality of having a body.

Now, everyone knows they have a body. But they think of it kind of like this cold robot they control with their mind.

That is not the reality. Your body is a living animal. It’s doing an incredible amount of things, every second. Can you imagine if you had to do everything your body does, consciously?

Like, if you had to consciously regulate your breathing, your blinking, your digestion, your hormones etc. Just no way possible.

So your body is alive. Wherever your consciousness ends (there’s a defined point right?), a living body begins.

And that body has a lot to say. It feels pain and trauma and fear and doubt and love and bloating and poor circulation and blocked meridians.

There’s a lot it wants to tell you.

And when you listen. Oh my god. It’s overwhelming. All these horrible feelings. Aaggh. Yuck.

Even just the realisation that you are so intimately connected to a living organism is cosmic-level weird.

No wonder most people retreat back into their heads and stay there.

To me the sum of all that is a kind of inner sea sickness. A kind of nausea that I can’t escape from. I can’t lean into and go Roaarr, because there is no separation from it.

It is me.

It’s not fun and its definitely not orgasmic.

So what can you do?

I think my challenge is to stay still long enough, to stay present to that sea-sickness long enough, that I move through it. That the body says what it needs to say, and then settles down again.

That’s my hope anyway. It’s hard for me to sit still. I’m a man who likes to get a lot done.

But there’s a promise there – that if I can heal that relationship with this weird organism I’ve ended up in, I can move from a deep place and really tap the full potential of my power.

Worth a gamble, right?

Roaarrr.

OPE – She lived in an Incompetency Bubble

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Leveraging OPE (other people’s energy) for fame and fortune: The incompetency bubble.

Some people live in an incompetency bubble.

It’s a weird quantum field that completely inhibits their ability to get anything done.

I don’t know if you’ve met anyone like this. It’s a strange thing.

I used to have a woman working for me, Teri, who was just amazingly incompetent.

But the weird thing was, she had the skills. She had the capacity. She interviewed well and looked great on paper.

And yet, when stuff entered her psychic field, it didn’t get done.

And it was really hard to hate her. She was actually really genuine and lovely. She actually really wanted to help get stuff done.

The incompetency bubble just prevented it.

“Hi Jon, I can’t come in to work today. I’ve been locked inside my house by my cat.”

“Hi Jon, I’m really sorry but I got on the wrong bus this morning, and now there’s some strange men yelling at me in a language I don’t understand.”

“Hi Jon, I’m really sorry but I think I have to go home now. I got concussion playing Frisbee on the weekend and the doctor said I should lie down if I start seeing stars again.”

She wasn’t making excuses. (You should of seen the bruise on her head). I genuinely felt sorry for her each time one of these things happened.

But they just kept happening. For weeks on end.

And I’m there waiting for my star recruit to land and start kicking goals, but it just didn’t happen.

And the longer she stayed, the more people she pulled into the bubble. It took three staff over an hour to get her out of the stationary cupboard.

So what could I do? I had to let her go. I had to recognise the reality of the situation. Through no fault of her own, through no ill-will, she was just incompetent. She lived in an incompetency bubble.

As I work with people, I’ve come to recognise this more and more.

There are achievers. There are people who get stuff done, and punch way above their weight. Stuff just seems to happen for them. The right tools land in their laps at the right times… they always seem to deliver.

Not that they recognise it. They just think they’re doing their job, and of course doing the job involves getting the job done. Duh.

And then there’s people who live in an incompetency bubble.

But as a leader, there is nothing you can do about it. I could have taken Teri on and tried to coach her into the habits of success and achievement, but 1. That’s a huge investment with no guarantee of success. And 2. The role just wasn’t worth it.

Better to cut my loses and try and land an achiever next time.

If only there was some kind of branding that lets you know which is which… like, you know, a massive bruise on the forehead?

More money in your pocket… thanks ! ( I think ?? )

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Tax is looming as the make or break issue. Is that a good thing?

It’s looking like tonight’s budget will be the last before the next election – that means we can expect something thick with sweeteners.

So I’d be looking for tax cuts. I’d expect the Coalition to make one last push for company tax cuts, as well as introduce some personal income tax cuts as well.

That’d be nice, but can we bake it in? Would Labor fight them on it?

Already tax is looming as a key battle ground, and one of the few areas where you can separate tweedle-dum from tweedle-dee these days.

If Labor’s smart, I think they’d roll with the personal tax cuts – match them more or less – and thereby kick that ball completely out of bounds. That would then leave company tax cuts as the only issue – a debate where they seem to be enjoying the run of play.

Bill Shorten is already framing the narrative:

“Unless Mr Turnbull takes his multi-billion monstrosity, his reverse donation to his buddies, out of next week’s budget, the next election will be a referendum on the Liberals’ tax handout to the big end of town.”

‘Tax hand-out to the big end of town.’ Ouch.

And so far, the cross-benches and most of the public, seem to agree with him.

It’s one of the key tricks when talking about tax. Everyone thinks that they personally, should pay less tax. But it’s another thing altogether to think that ‘everyone’ should pay less tax.

Many people also think that rich people should pay more tax, though no one thinks of themselves as rich.

(I personally think of myself as rich, but that’s because I actively cultivate that mindset. I know a lot of people with a larger net worth than me still labouring under a poverty mindset.)

And that’s why Morrison’s response is swing and a miss:

“At this election there is a clear choice between lower taxes under the government and higher taxes under Labor.”

“Higher taxes under Labor” isn’t electoral poison, unless people know that we’re talking about higher taxes for them. Higher taxes in some general sense aren’t really going to move the needle.

It’s going to annoy people like me who are philosophically in favour of small governments, but how many of us are there. A couple of dozen?

And so the Coalition has it’s work cut out for it.

The first thing I would say (I know there’s some political strategists reading this blog), is that you have to neutralise the ‘big end of town’ attack. And the truth is that for most people ‘big end of town’ means ‘banks’, and they couldn’t possibly more on the nose than right now.

And the way you limply stalled and blocked the Royal Commission is too fresh in people’s minds.

Solution? Go hard on the banks. Kick ‘em while their down. They’re too shell-shocked to do anything about it, and people will be literally cheering from the grand-stands.

The bank-levy is probably the mechanism of choice. That was popular when it came in last year.

So ramp it up just as the company tax cut is taking effect, leaving the banks no better off.

(They can’t complain too much.)

That way you get to be the hero, and dodge the criticism that these tax cuts are a hand-out to those who deserve it least.

The other thing I’d do is go hard on personal tax cuts. A recent Per Capita survey found that people in every income group above $80,000 now believe they pay too much tax. That’s up from almost none a year ago.

And that’s a reality. The effective tax rate is increasing.

 

So you’re speaking to a lived experience there – a real pain point in the community.

And then as much as possible, let the corporate tax cut ride on the coat tails of personal tax cuts. As much as you can, bundle them together. Make it clear they’re coming from the same philosophical place.

(Though it would have been good if you started with personal first, but oh well, what’s done is done.)

I’m still not convinced that the government can sell this one. They don’t have an amazing track record.

But tonight’s budget will give us a sense of how they’ll do.

Let’s see.

NO B.S. FRIDAY: This scared me out of my pants

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Big Brother is here.

Came across these two stories out of China this week, and to be honest, I’m alarmed.

The first is a story from the South China Morning Post about Chinese companies using Brain Surveillance devices on their employees:

On the surface, the production lines at Hangzhou Zhongheng Electric look like any other.

Workers outfitted in uniforms staff lines producing sophisticated equipment for telecommunication and other industrial sectors.

But there’s one big difference – the workers wear caps to monitor their brainwaves, data that management then uses to adjust the pace of production and redesign workflows, according to the company.

The company said it could increase the overall efficiency of the workers by manipulating the frequency and length of break times to reduce mental stress.

Hangzhou Zhongheng Electric is just one example of the large-scale application of brain surveillance devices to monitor people’s emotions and other mental activities in the workplace, according to scientists and companies involved in the government-backed projects.

Concealed in regular safety helmets or uniform hats, these lightweight, wireless sensors constantly monitor the wearer’s brainwaves and stream the data to computers that use artificial intelligence algorithms to detect emotional spikes such as depression, anxiety or rage.

The technology is also in use at in Hangzhou at State Grid Zhejiang Electric Power, where it has boosted company profits by about 2 billion yuan (US$315 million) since it was rolled out in 2014, according to Cheng Jingzhou, an official overseeing the company’s emotional surveillance programme.

Yes, you read that right. “Emotional Surveillance Programme”.

But wait there’s more. CBS news is reporting that China is rolling out a “Social Credit Score”.

https://youtu.be/rHe2u0gSFBg

The idea is that if you do pro-social things, like community service and buying Chinese goods, your score goes up. If you do anti-social things like crime, tax-evasion or smoking in undesignated areas, your score goes down.

And what is the score used for? Well, if your score goes too low, you can’t buy property or send your kids to private schools.

And how is the government collecting all this data? Through millions of AI powered surveillance cameras.

I mean FFS!

Does this sound like hell to you? It does to me.

Cameras tracking everything you do, brain sensors tracking you at work. Oh my god.

What’s more, Australian academic Clive Hamilton writes a book on the shadowy influence of Chinese money on Australian politics, and not one but two publishers refuse to publish it?!? Out of fear of reprisals?!?

Now I know some lefty somewhere is ready to call me a racist and write a stingy critique to their local independent theatre company, but this is ridiculous.

And this isn’t about Chinese people. Race has nothing to do with it. This is about totalitarian states, not just in China, but everywhere.

This is about poor ol' Jon in Australia being scared out of his pants because we have god-like powers being given to a monkey-like species. What happens when robot-arms with AI targeting start flinging the poo? What happens then, Brian?

I think this really is crunch time for our species. It really hangs in the balance.

Either we sort our governance structures out now, and let technology usher in a golden age of miracle and wonder.

Or we stick with the crap we’ve got now and let technology deliver us into a living dystopian hell.

It really feels like this is the choice we’re facing right now.

The time is coming. Sitting on the fence is no longer an option.

OPE – I hate these guys…

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Leveraging OPE (other people’s energy) for fame and fortune: The captain and his ship.

Watching the Royal Commission into banking unfold, it was a bit of a poignant moment watching the CEO of AMP fall on his sword.

Not that I have a shred of sympathy for financial planners ripping off their clients – absolutely none. The whole industry gives me the craps.

But there was a moment where I realised that, as CEOs, we share a similar fate. If the ship is sinking, we go down with it. If someone needs to take a fall, it has to be us.

For the media its black and white. He allowed financial planners to rip off their clients. He covered it up to the regulators.

But I’m worldly enough to know that there could be some shades of grey in there. It’s unrealistic to think that a CEO has full knowledge of everything that every one of their staff are doing.

It’s also unrealistic to think a CEO can totally change a corporate culture, no more than a Prime Minister can influence the culture of their country. I can allow space for the idea that Craig Meller just inherited a dodgy corporate culture – one that might take decades to change. Maybe, just maybe, he was a good apple in a rotten barrel.

Probably not, but we’ll never know for sure.

But at the end of the day, the CEO has to take the fall. It’s the only way. It’s a foundational rule of leadership.

You cannot ask the people who follow you to do something you wouldn’t do yourself.

But hang on. We can kind of get the idea of this, but what about the army general who’s asking his men to fight on the front-line and possibly die?

The general is not putting himself in the firing line.

Some generals were despised by their men, but many were loved with fierce devotion.

The key thing is that there has to be an equivalence of commitment. There has to be an equivalent amount of skin in the game.

So the soldiers need to know that the general is as invested as they are. They can live with different risk profiles, so long as he’s giving as much of himself to the task as they are.

The soldiers give themselves to the battle. The general gives himself to the war.

And so if there’s a problem with certain divisions, staff can take the hit. But if the problem is with the whole organisation, then the CEO has to take the fall.

If the CEO tried to pass the buck, their staff would feel that they didn’t have the same skin in the game.

That breeds resentment. That breeds difficult-to-lead-ness.

So if you want to inspire people to follow you, you need to lead with your commitment. Put your skin in the game.

And be willing to go down with the ship.