FULL EPISODE TRANSCRIPT
Mitch: (00:05)
Welcome back to count me in, IMA's podcast about all things affecting the accounting and finance world. I'm your host Mitch Roshong and today you will hear from Sylvana Caloni, as she joins us for episode 142 of our series. Sylvana is a former equities fund manager, a professional certified coach and author of the book, Humble Crumbles. She was an executive vice president when she was privileged to partner with an executive coach. She is now a leadership consultant committed to paying it forward by enabling clients to make an impact at their companies and in their communities. In this conversation, you will hear Sylvana discuss the value of failure, the benefits of clear communication and ways to propel business. Let's head over and listen to her now. 
 
Adam: (00:57)
Sylvana, I just want to thank you so much for coming on the count me in podcast today. 
 
Sylvana: (01:01)
Thank you, Adam. I really appreciate the opportunity to speak with you and to explore failure and entrepreneurship and all sorts of different ideas coming from our book, Humble Crumbles.
 
Adam: (01:13)
So speaking of your book, Humble Crumbles, you say in that book, failure has a purpose and failure's a part of the process. So can you just start by giving us some more insight into that statement? 
 
Sylvana: (01:25)
Yeah, absolutely. So I guess we see across different cultures and across different types of businesses, if you like and academia, that there is a fear of failure. And we, as individuals often are constrained in what we do because of that fear of failure. It may be so great that we prevent ourselves from jumping in taking the leap and starting up a business, or perhaps we have started the business, but because of that fear of failure and because of a fear of not meeting the commitments we've made to our stakeholders, et cetera, again, it constrains what we can do. So if you look at tech companies, for instance, you'll often hear the phrase fail fast, fail often, or if you look at scientific revolutions and innovations and how things have pivoted during this pandemic, actually, if there had not been failures, there wouldn't have been learning. There wouldn't have been multiple iterations. There wouldn't have been new responses to the challenges that are out there. So for Paul O'Donnell my co-author and I, the idea that failure is part of the process is that we do need to sort of remove ourselves from that view that it's first time only time, and we're going to be successful from the get go, because in fact, most successful businesses have started out in some other form in their initial iterations. And it's the ability of the business owners and entrepreneurs to be flexible and to pivot and, you know, take on constructive criticism or take on impartial advice to modify their product or service, which means that ultimately it is successful. 
 
Adam: (03:15)
So when you look at these leaders who are having to transition and fail and become more successful, how do you, you know, how do you understand what makes them tick? What do you, what, what can we do to, to look at these people and see what can, what can cause you to fail and keep coming back and keep coming back? 
 
Sylvana: (03:34)
It's a great point that I think one of the key points we're trying to make in Humble Crumbles it's that the failure of the business is often attributed to external factors. So someone will say, well, you know, the economic environment deteriorated or technology changed or legislation was too prohibitive. And that's true. I mean, absolutely there can be external factors that impact the success or failure of a business. But what I found when I was an equity analyst and funds manager, was that more often than not the failure of a business was to do with the owners or the leaders, the management of the companies and the problems I often saw were whether they were not self-aware. So they didn't have a sense of, okay, well what makes me tick? What, what are my drivers? What are my motivations? How do I make sense of my world? And in having that lack of self-awareness, they're not then able to engage successfully with others because they take the view that well, it's my way or the highway, or this is the way the world works. So they don't have an appreciation that their own norms, standards, practices, ways of behaving are not universal. They could differ with other people because other people have different cultural backgrounds, ethnic backgrounds, gender backgrounds, it could be a different set of, drivers within an organization. And if at what we show in the book, Humble Crumbles, and it's full title is Humble Crumbles: Savoring the Crumbs of Wisdom From The Rise and Fall of Humble Pie. We share Paul O'Donnell's story. So Paul is my co-author and Paul like me had come from the financial services world. We had both worked at Bankers Trust. So BT co. Us company. In fact, even though we were both Australians and you can hear that in my accent. So we were working in Bankers Trust in Sydney, Australia, and Paul eventually left BT and started up a couple of his own businesses. So he's a serial entrepreneur and his first couple of businesses were in what you might call financial adjacent. So they were similar types of businesses, you know, financial advisory or publishing a financial material, fundraising, that type of thing. And then he wanted to go into a business that was more real in the sense of making something so humble pie was a business that manufactured pies for the retail sector. And then ultimately also he got into wholesale. So it was, it was pies that we eat sweet and savory pies that we eat. And he came from that financial services background with the number of ways of seeing the world behaving and business traditions, if you like, or business practices that certainly worked for him, but there were others that were more relevant to financial services, but not so much to a factory where he had people in the factory kitchen making the pies or sweeping the floors or delivering the pies to the shops, et cetera. So what we found Paul was blindsided in that he just assumed for instance, that the factory workers would, like him, have a view around equity as a way of incentivizing behavior or around bonuses as a way of, you know, promoting work, et cetera. Whereas these people had different concerns, different cares, you know, for them the weekly pay pack. It was what was really important, not some notion of equity or a bonus at the end of the year. So the blind sidedness or the lack of Paul's self-awareness, which he courageously, I have to say. I mean, he fesses up basically in the book and looks at some of the errors he made with. I think, I think he's very generous and very courageous in doing that because what he's doing is he's demonstrating how sometimes the very things that we think are our strengths, if taken to an extreme can actually turn into a weakness or can turn into a vulnerability in a negative sense. 
 
Adam: (08:00)
That almost makes me think of too much of a good thing, becomes a bad thing when you say that. 
 
Sylvana: (08:06)
Absolutely. Absolutely. And to your point earlier, and I guess I went a little off base, but you're asking me, how do we know if managers or leaders are likely to have failures or create phase? And my point about the self-awareness was that often what I would see when I was an equity analyst is when a manager or leader of a company got onto the front pages of Newsweek business week, wall street journal, quite frequently, thereafter, the company would go down the tubes or at least would not do as well. And that was because those leaders were very egocentric. They were very much about, you know, puffing their own chests and they weren't necessarily engaged with their own teams and succession plans and understanding the different communication styles or the different working styles, or, you know, what were the values of the firm? How did the employees feel aligned with the firm, et cetera? So where there is a high likelihood of failure, because as I say, the leader or the business owner, the entrepreneur isn't sufficiently self-aware to know that his or her way of seeing the world is not universal. Other people respond differently. Other people have different standards, different norms, different practices. 
 
Adam: (09:29)
That's really interesting that you say that, there's even in the sporting world, there's a video game called Madden and the person who would be highlighted each year, the next year after they were highlighted on the cover of that one would have a very bad year as in terms of their performance in the game. And I wonder if it's that same kind of, thing that you're mentioning about that, where they're so focused on themselves that they lose sight on what they're supposed to be doing from day to day. And that, that self-awareness. 
 
Sylvana: (09:57)
Yeah, I think so. And sometimes they can generate a sort of a false sense of security or a complacency actually, often you find that people become, and we mentioned it earlier about too much of a good thing. Sometimes people become so confident in their strengths that they just think they're infallible, you know, that they walk on water or that, that particular way they've done something works in all situations. But again, going back to that key point of self-awareness, if you're self aware, you'll recognize that the model you use or the way you solve a problem is relevant to a specific set of circumstances and may not be relevant across the board. And if you are self-aware, you're more likely then to be curious and ask other people, well, how do you see it? You know, how would you approach this problem? What am I missing out on? Where am I blind here? You know, I've been successful in this thing before, but tell me what you think might be different this time around. And, in fact, that's another point we make frequently in the book, Humble Crumbles is that, you know, for you to succeed, you need, you, you clearly need conviction. You know, entrepreneurs believe their stuff, right? They believe that their product or service is going to solve a problem that exists out there, and they can become again, too much of a good thing in that they can become so stubborn about that idea, that they don't do the testing, learning, and tweaking, or the, you know, the shifting in, well, how could this product be better? Or how could this service not be working here? You know, what are the nuances of this particular market or this sub segment of the market? So that idea of continually testing and tweaking, being curious, asking for impartial advice, not being offended, if someone sort of mentioned to you that there's some aspect of your product or service that, you know, just doesn't work or it's complicated, or, you know, doesn't really meet the demand. 
 
Adam: (12:06)
So it's almost like I hear you saying that, like, things like clear communication and connections are like a very essential part of business. So how can you like nurture your network to make sure that you have those people that you can have those almost fierce conversations with to, to be brutally honest, to help your business succeed and go further? 
 
Sylvana: (12:25)
Yeah, absolutely. That's, that's a great point. So the networks are really critical and, you know, often people talk about someone's who self-made millionaire or a self-made entrepreneur, or self-made something else. And I get that point to the extent that they may not have inherited their business or, or whatever the successes they're millions, but they're not self-made in the sense that they don't do it on their own. Nobody does things on their own. They will have been someone who's advised them, someone who's supported them, someone who's championed them, or for that matter, there may be someone who's been an obstacle who's criticized. And, you know, sometimes we hear of great leaders or great entrepreneurs who sort of had a grudge match as it were, it was a teacher, maybe in their youth or a, you know, a stern dad or someone who sort of told them that they were never going to succeed. So they went out of their way to prove them wrong. And that gives them the catalyst or the impetus to go out and, you know, keep working at it and improving the product or service. And as you say, you need a network, you need to cultivate a network. And I mean, that from a positive sense, I don't mean it from an manipulative sense, but ideally what you would do within your network is it you'd go out and find people who sure, are like you, because it's easier to communicate with people who have a similar view of the world or a similar sense of values or similar things that they're passionate about, but you also want to find the naysayers or the people who have very different lived experiences from you, because that will actually help you in terms of testing your idea and testing your blind spots and helping you with risk. Because if you're only mixing with the people who had the same ideas as you, then you're like, it's like group think, right? The financial crisis of 2008, 2007, 8, 9, to me, a large part of that was everybody was on the same merry-go-round and people weren't listening to the signs that things were going astray. And there were too many yes people. So the idea of cultivating a network and making sure that you find people who are very different from you and have very different lived experiences, I think is critical to success and minimizing failure, or more importantly, finding that failure much sooner, because you can, you can rebound if you like from a smaller failure, like a series of small failures, rather than a massive failure, you know, where you put your house at risk or you've put your business completely at risk. 
 
Adam: (15:07)
So I have to ask, was Paul able to rebound from his failure in his blind spots, in the factory floor? 
 
Sylvana: (15:16)
Yes and no, I mean, I guess in some cases it's tough when your business fails. I mean, we can't take away from it. It, it, you know, it does deflate your sense of self-worth or your sense of what you can do next. What I'd say has been a real strength for him in a real rebounding is that he purposely used those experiences to share his story and then write this book. And in this book, we do a sort of, he says, she says, in a way, so Paul narrates the story from A-Z or soup to nuts to some of your compatriots might say. So he gives that story of starting up this business from having previously a financial services background to moving into the retail pie, making business. And then he, through sharing those experiences starts to eliminate or reveal some of those blind spots. And then I use my lens of both that equity analysts background, and also the coach and mentor to dig a little bit deeper. One of the examples we use is that, you know, clearly Paul could do spreadsheets. In fact, he had amazing spreadsheets. He did the three scenarios of positive, negative, and neutral. What he wasn't aware of was that he has a tendency to be incredibly positive. He's always looking on the bright side and, you know, as a previous salesman, he has what some people might call happy years. So even when he did his spreadsheets, the negative scenario, frankly, was still very positive. You know? So the sales that he had projected even in negative or neutral environments were still overly optimistic. And so again, that opportunity to dig deep and start to notice, okay, so frankly, I'm always positive. So who could I go to? Who could I ask? Where could I get some impartial advice or a different set of eyes to look over my plans, to look over my assumptions, to sort of poke holes in the argument and not take it as I say, as an offense, or become defensive or become even more convicted in terms of your stubbornness around your idea, but taking it on the chin and sort of thinking, okay, all right, well, what could I do differently? And where might that chink in the armor be? 
 
Adam: (17:41)
So as we wrap up our conversation, I wanted to come back to that word failure. It's clear that you embrace that word. So can we just talk about why should we not be scared to fail? And, you know, what are some things we can learn from it? And, you know, cause there's gotta be some positives in the actual failure. 
 
Sylvana: (17:58)
Yeah, absolutely. And, and so I personally call myself a recovering perfectionist. So I'm someone that historically would have, you know, revised a piece of work 12 times, you know, wouldn't have wanted to put out something that had typos in it, or wouldn't want to lead a group until I had the argument inside out upside down, and I was the expert, et cetera. But what I've found is that if you look again at some of the greatest successes, be it in science or in business, they often did start from what were failures or from an idea that didn't reach its completion in its first iteration. So the thing about failure is if you start to see failure as just part of the process, it's, you know, part of the, the tweaking and the finessing, if you like of the idea, it's just, it comes with the territory there. If you look at Netflix, Netflix, these days is so phenomenally successful, you know, the pandemic obviously has helped. And people being glued to box sets has definitely been a positive for them, but Netflix in its current iteration is not how it started out and its founders and CEO's and management. We're able, again, to tweak, we're able to take advice or at least test the market and make adjustments, modifications, et cetera. So if we can look at failure as part of the process and the more we fail in a managed sense, right? So again, not put the whole house at risk, but you know, grow our capacity, grow our comfort zone and take it on the chin. Then we're more likely to have longer, longer success down the track. And we go to build in, in ourselves and in our businesses, a resilience that you don't have if you always been successful. You know, if you see that with university students, for instance, Paul and I mentor a number of students at entrepreneurial schools or in entrepreneurship, and they may be a star students and they're so frightened of not getting it right. That again, they don't get out of their comfort zone. They don't have resilience. So learning to take small steps coming back from the failure learning well, okay, so I didn't get it right. What could I have done differently? What have, what do I now see was the thing I missed out on? Or what do I now have experience on, or who could I go to, who can give me a different set of eyes that builds resilience that builds a new way of adapting. 
 
Adam: (20:50)
It sounds like it does. And you know, you mentioned Netflix was able to adapt itself. And then you think of the opposite of Netflix, which is blockbuster, which didn't adapt itself and ended up not being able to continue or redevelop into a new company. 
 
Sylvana: (21:03)
Yeah, absolutely. And see to me, and it's, again, something we speak about in the book is that, you know, being a successful entrepreneur or business person is about managing opposites in some ways, right? Because you have to have conviction, you have to have a sense of competence in the idea. So in a way you're stubborn, but you can't be so stubborn that you're blind and that you don't take on new information or you don't take on legitimate concerns or things that people point out to you. So it's that balancing if you like of, yes, I have conviction, so I'm not going to be swayed from my idea just from, you know, someone who doesn't believe I can do it because they don't know me very well because they're fearful, you know, they wouldn't put themselves in those shoes versus well, actually what they're pointing out to me has some real legitimacy because they have a different experience. They've seen some risks that I'm not aware of. They have had a similar business or whatever. So again, you, you know, you want to reach for the stars, but keep your feet on the ground. You want to have conviction, but not be stubborn. You want to pivot, but you also wanted to develop more in one line as well. So again, it's balancing those opposites. 
 
Closing: (22:26)
This has been count me in IMA's podcast, providing you with the latest perspectives of thought leaders from the accounting and finance profession. If you like, what you heard and you'd like to be counted in for more relevant accounting and finance education, visit IMA’s website at www.imanet.org.