Governance Bites #161: Engineering Upward Economic Mobility, with Steve Bambury

Why do so few companies capture the majority of economic profit — and what separates the winners from everyone else? In this episode, Seve Bambury joins Mark Banicevich to explore how governance can become a genuine engine of value creation rather than simply a system of oversight. They unpack the “5 Big Moves” framework, why boards often avoid bold decisions, and how organisations can engineer upward economic mobility through smarter capital allocation, strategic execution, and future-focused governance. Essential listening for directors, founders, and executives who want their boards to drive growth, not just monitor it.
Steve Bambury is a Strategic Growth Catalyst and Faraday certified chair with over 33 years of hard-won commercial experience. Specialising in transitioning purpose-led organisations from founder-dependency to system-driven leadership, Steve helps businesses shatter the "complexity ceiling" through high-performance governance. He specialises in establishing Professional Advisory Boards that shift focus from mere compliance to forward-looking, strategic performance. Currently serving as a Non-Executive Director and Board Chair, Steve implements proven frameworks that drive exponential growth and commercial rigour. He is passionate about engineering an "engine room" built to last where leaders reclaim their freedom. By integrating applied neuroscience, he provides the strategic clarity required for teams to execute "unreasonable" goals.
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Transcript

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Hi, my name is Steve Bambury and I am a very proud certified Faraday advisory board chair. I have had 33 years of commercial experience in business. I guess I am a bit of a serial entrepreneur. I started my first business as a young fellow with a lawnmowing round back in the '70s, and started my first real business in 1993. I have been through the highs and lows of business, those hard-fought commercial experiences that come from being in the trenches. I have achieved exponential growth. I 10x'd my first venture over a period of time, and exited for multi-million dollars. I went into my second venture, made a mistake, and lost the lot. And I got a lot of experience from that, and had the challenge of stepping back up again. There is a lovely saying:"Get knocked down seven times, stand up eight." I stood back up again, started my next venture and, over the GFC [Global Financial Crisis], took an organisation and grew that by just under a thousand per cent over the GFC years. So, another 10x growth. I guess it feels, Mark, that everything that I have done in my career has brought me to this place now as a Faraday certified chair. I am pretty excited about being able to share my expierience and my skills and help support business owners. And today we are talking about engineering upward economic mobility, and helping organisations to grow. But there is a lot more to growth than just the financials. Hi, welcome to Governance Bites. My name is Mark Banicevich and, as you just heard, I have again the pleasure of spending time with Steve Bambury. Steve, thank you so much for your time. The topic du jour around engineering upward economic mobility. I am going to ask you to start by framing this topic for us, please. What are we talking about when we are talking about engineering upward economic mobility? Engineering upward economic mobility is, I guess, the ultimate sense of growth. It is growing an organisation and allowing it to grow financially. It is not just top line; it is bottom line, as well. Quite often I will come across organisations that are growing in the wrong places. They are putting all their efforts and service to an area which is really competitive. It is really hard to resource up, or there is a low profit margin in it. So, economic mobility is growth, but not just growth for growth’s sake. It is growing in the areas that matter. Right. Why do boards tend to underweight those bold, high-impact moves in favour of safe decisions? I guess because of their comfort zone. Quite often organisations are happy to stay, and it is comfortable for them. Particularly when you see organisations that are under pressure, there is so much - we talked about this previously, Mark - so much volatility with what is going on in the world right now. So much uncertainty with what's going on. And that creates a level of complexity for businesses, that just put more things on their to-do list. And sometimes the default position when that happens is that you just put your head down, and just get back to what you know. I'm just going to pretend that that's not there. But the elephant in the room is, it is there. We have got to make a decision around it, but we're procrastinating and not making that decision because we don't know how to answer it, and we're kind of stuck. We have got to be prepared to go,"Well, I am stuck. I have got to face it."I need some help." And that is one of the growth mindsets that you have to have in order to achieve upward economic mobility, is accepting that there are things that you do not know. And you do not need to know everything. You just need to know where to find the right advice. Yes, yeah, absolutely. In Faraday, you talk about the five big moves. What are the five big moves? Yeah, look, a great question. The five big moves come down to, in the first instance, you can break them down. The first three are relative to the portfolio that you are carrying. So the first one of those is programmatic mergers and acquisitions. That might be acquiring a company, it might be merging with another, or selling down some of what you have got. Once you understand what it is that you are really in service to and where you want to be going, sometimes we find organisations that are doing things that best sit with someone else. Now that might be a partnership. It might be taking a part of the business that you have got, and separating that from the rest, and on-selling it. So that you can go and accelerate the bits that have got your core competencies and capabilities internally. I know I have made that mistake myself, so I have had that experience of being able to do that. So, your mergers and acquisitions is a really important one. The second part of it is resource allocation. Where do you put your resources? And that comes back down, those two are linked together. Once we understand where we want to be going and what capabilities we have got. What are our endowments that we bring and have in the business? What are we starting with? And our strengths that we can then apply into these areas? We allocate our resources into those areas that will give us that upward economic mobility. Because without that, we can be fractured in the way that we are trying to move forward, and we're trying to do too many things. So we want to simplify that. The third one, again related to the first two, is where are we going to invest our capital? So we're going to allocate our resources, our people, and then we are going to reallocate our capital. So those three broadly sit under the portfolio. Those are those three big moves. The other two moves are really about performance and productivity increase. How do we increase our productivity? Once we know where we want to be going and where we are going to invest our resources, and our capital, we can make an acquisition, potentially. And we can then go out there and we can increase our productivity accordingly. So, that is the fourth big move. And then the final one is differentiation. How do we differentiate ourselves from our competition? How do we create a compelling reason for people to come to us, and purchase from us, as opposed to our competitors? That is the fifth big move: understanding where we compete, how we compete, and what sets us apart. And where do, in your experience, boards most often fall over when they are trying to support or challenge these big moves? Where do they fall over? I guess trying to do them without the experience. They try to do it all themselves, and not really understanding the implications of the move that they might be trying to make. Because we don't know what we don't know, right. Yes. So, it is really important that we bring in the right experience at the right time to be able to make those moves. So I think trying to do everything ourselves can undo us at the end of the day. So, make sure you have got the right capability in the boardroom. Yeah, well I guess understanding, also, deeply understanding where we are as an organisation and where we want to go, and on the way. It's an important part of the Faraday framework. Yes. It is a process that allows us to understand what we are starting with, what we have got, where we are going, and what we need to bring into that organisation on that journey. Whether it's a skill or an experience that we need to have, and retain within the organisation, that we can do through training, upskilling, recruitment. Or whether we bring in an adviser for a specific period of time to allow us to move through that particular phase of what the business is in service to doing at that particular time. Right. Many see governance as oversight. What does it mean for governance to become an engine of execution? Sorry, my computer was doing something weird then. I heard that! Did that come through on your side? I'll repeat the question. Many see governance as oversight. What does it mean for governance to become an engine of execution? Again, it comes back to - and we have talked about a lot over the last couple of episodes, Mark - is knowing where you are and what you are starting with, your endowments. Knowing where you want to be going and having your three horizons. So, your big, hairy, audacious goal, horizon three. Yes. Horizon two, taking us in that direction. And horizon one. That's what we are doing right now. What are we doing right now? Once you understand that, then you are able to execute in service to the direction that you are going. You've got a great strategy, and you execute accordingly. What changes are required to support the shift? In terms of changes to the board agenda, changes to the cadence of board meetings, or changes to the flow of information, do you need to support the shift for these big moves? I think you have got to have a framework of accountability. You have got to have the right metrics, so you need to understand where you are going. What does success look like when you get there, and how will we measure success? A lot of organisations go,"Well, we're gonna do that," but if we are not measuring it and holding ourselves accountable, how do we know when we get there? Yes. You've got to have that. You've got to understand the capabilities that you have, and the capabilities that you don't. And what capabilities are required in service to achieving those goals, whether it be in horizon one, horizon two, horizon three. If boards are to enable this upward mobility we are talking about, what different information do they need to make those decisions? You have talked a lot in the past about the use of data and the importance of data. So what information do they need to enable these upward mobility moves? Data is just so important, because an organisation typically carries a bunch of assumptions and felt beliefs. It might be the way that they have always done things. And being able to use the numbers to uncover and unpack what is actually going on. Because what we think is happening is not always what is actually going on when we start diving into the numbers. So the numbers are really vital. And then having the right advice at the right time for what the business needs. If we know what our capabilities are and where those gaps are, we can bring the right advice in, to give us the right advice in our journey. And that can be a revelation in itself. So, part of the role there is to challenge assumptions and felt beliefs. Data, people, skills, expertise, and knowledge that do not currently sit within the business are an important part of that. And there is also always going to be knowledge, experience, and expertise within the business. And it's that blend of the two. We don't sort of come in and go, "That is what you have got to do." You have conversations around it. So it is good, healthy debate that takes place. Right. In your experience, what skills or experiences are missing from typical boards when it comes to value creation? I think coming back to those big moves, and coming back to, it really does depend. Because no two assignments are the same. They're not the same, because the capabilities of a leader, and it's business, are going to be different. The competitive environment for organisations is going to be different. The skills and expertise that they need is going to be dependent on what they have, where they are going, what they want to achieve. How fast they want to go will impact the cadence. If you want to go really fast, then you may need to invest more time. You may need to meet more often. So boards where we meet, through certain periods of time, when we are going through a situation that we need to be able to work through, then it is going to be meeting more often, because it's a big situation that we're dealing with. And it could be an external factor that is impacting that. And that's impacting us in a massive way, so we need to meet more often, that cadence is. What, when you are talking about meeting more often, what sort of frequency are you talking about, in some of these cases? Sometimes it's like, as a chair, you are talking to the business owner, the CEO, the founder, on a monthly basis anyway to do check-ins. The board might meet every two months, every three months, depending on where they are based on a number of factors. Their growth ambitions are impacting them. And the complexity of market forces that are taking place at that time. Right. They may meet more often. So as a chair, Because generally you are talking about, to be very stereotypical, you are often talking about quarterly advisory board meetings, aren't you? And then, as you say, the chair talking more frequently with the CEO of the organisation. And so in the cases that you need to make a decision more quickly, you might have the whole board come together on a monthly basis or something instead. Absolutely. Right. If a situation or circumstance has unfolded, and you need to call a meeting that requires everyone in the room. So there is no, you cut the cloth according to what you need to. There's no hard and fast rule, right. Yeah, yeah, absolutely. Yeah. Coming back to these big moves, big moves come with big risks. How should boards think about failure in this context if something doesn't go to plan? Look, I think failure is a very important part of growth. If you said to me, "Look, I’ve never failed in my life," then I’d say, "Well, you’re not really being honest." Failure is part of it. If you are chasing those big, hairy, audacious goals, you are not going to get things right all of the time. It is important that you put guard rails around some of the decisions that you are making at times, because fundamentally they are going to have bigger impacts than some of the others. But it is also important to pass on that skill and expertise, whether it be internally or whether it be through delegation, to be able to allow people to step up and grow themselves. Because organisations grow when people grow. And in order for people to grow, we have got to let them fail from time to time. We've got to, as I say, make sure we have got guard rails around some of those bigger decisions. But in some of the smaller ones, we let them go and do their thing. Yeah. We're there for them and support them. We're coaching, and we're mentoring. And the guard rails then are about minimising the consequences, the poor consequences of failure, right. So as you say, when you take big risks, things don't always go to plan. But you want to put guard rails in place so that the consequences of things not going to plan aren't dire for the business. Yeah. And, as you have said before, get up and do it again. Yes. I think you have got to have a culture of being able to take responsibility. You've got to go, I think a couple of the fundamentals that I have always embraced is, there's no such thing as a bad idea, and you need to encourage creativity. If you are in service to economic mobility, and to growth, and to big, hairy, audacious goals, you have got to be able to accept that there is no such thing as a bad idea. There are going to be some ideas that do not work as well as others. It doesn't mean to say you have to take all of those ideas. But the other element that sits with that, Mark, is that mistakes are okay. Yes. It is okay to make a mistake. And if we make a mistake, and it impacts others, take responsibility, and bring those people in who might have been impacted by it, own it, and then work through how we are going to put it right to the satisfaction of the people that might have been impacted. Can you think of examples from your career of organisations that have successfully created this upward mobility? And in those cases, what have boards done differently to be so successful? I think it is the willingness to accept that they do not have to get it right, and being prepared to bring in around them people who know more than they do themselves. I think one of the key elements of leadership is to, you don't have to be the smartest person in the room; you just need to know where to find the smartest person. We talked earlier, the concept of 'who, not how'. You do not need to know how to do everything; you just need to know who are your best 'whos', that know the 'how' of that. And that's a great thing with the Faraday framework. Is that we've got some very, very seasoned chairs that have got experience in different areas. And we have got, I think, over 200 advisers now that we can bring in relative to what the business needs. It is about being aware of what their gaps are, getting expertise in when it is needed, and being prepared to fail, and then just being able to get up and get back on with it. Yeah. Having the courage to take responsibility, and to move forward, and to stand back up again. Great. Can a company pursue aggressive value creation without eroding trust or their social licence? Yes, totally, absolutely. That comes back down to the culture of an organisation. You build trust by being transparent, by being authentic, and to having a great culture that embraces that. So yes, you can have tremendous growth while building cultures. I have done a lot of work on cultures, and you can use culture as a key differentiator from a sales perspective; it sets us apart. You can use a culture for hiring. You can use a culture for holding people accountable, and having core values accordingly. I have developed core values, purpose, and mission for a number of organisations. If you have got that culture as the foundation in place, and then you have got that growth that comes from that, it is a great asset, to have a tremendous culture, because you can use it to attract incredible talent, to retain incredible talent, and to grow an organisation accordingly. Yes, yeah. very much. You have talked over the course of our conversations a number of times about this concept that we are living in a VUCA world, right, with your Volatility, Uncertainty, Complexity, and Ambiguity. And that's, the pace of decision making, the pace of business, the complexity of business is really increasing. So what will distinguish boards that can successfully engineer upward mobility over the next decade? What is different about the boards that is going to be required in the next 10 years? I think agility is really important. I think it comes back down to having the right understanding of where the organisation is at, and what impact that volatility, uncertainty, complexity, and ambiguity is having on the business. To be able to work through frameworks, as we do, to identify what the impacts really are on a business, and then have those courageous conversations. Have a strategy that has got those three horizons, and bringing in the right advice to deal with what is going on. We have got day-to-day complexities and uncertainty that cross the business. We've got, business is changing, and it is changing fast. So, being able to be mindful of those changes, be open to change, and having the agility to adapt and adjust moving forward. We have seen so many of the big enterprise Fortune 500 companies that are no longer around anymore. And one of the things that tipped them over, they haven't had that agility. And with the speed of business getting faster and faster, we have got to be prepared to continue to look at things, and challenge our traditional thinking. Bring the advice in relative to what we need. How does that concept of the speed of decision-making and the agility affect the three horizons that we are talking about? You just talked about examples,and we can think of the BlackBerries and things of thie world. And Nokias, that used to dominate markets and then fell by the wayside because they weren't agile enough. So how do the three horizons have to be adaptable, and how do you keep your eye on the ball to ensure that the company doesn't collapse? Great question. You have got to continue to look at them. You do not set your three horizons and, you know, lock it up and put it away. You have got to look it, so there may be a situation that takes place. You know, we've got the uncertainty with fuel prices, right at the moment. With the supply chain. And that will impact different organisations in different ways, and we need to be able to adapt. If we have something taking place like the impact on us right now, then we need to be able to talk about that. We need to put a framework around, okay, what is the impact of that? And then what is the impact, what are the decisions we need to make and how does that impact our three horizons. Yes. One of the key things with organisations is not trying to do too much. When you give an organisation 20 things to do, invariably they won't get any of them done. But if you simplify it, and you come back down to three to five things that you want to be doing in the next 60 days, then you will get all of those done. So you've got your horizon, for your short-term horizon. Something comes in that we hadn't seen; it comes in, we sit down, we talk about it, we unpack it, we look at what decisions we need to make. Then we can look at horizon one, horizon two, and horizon three. What is on horizon one that we can put on hold while we deal with this because it is more important? You have got that agility all the time to complete, to constantly look at, and have that agility, to make changes, and adapt as the business moves forward. Superb. Again, I have got one final question for you. What's one lesson that you would like all board chairs to prioritise or learn? One lesson for board chairs, is being prepared to have courageous conversations with both themselves and the people that are sitting in front of them. As a chair, we do not have to have all the answers; we just need to know where to find those answers. So I think it's important for a chair that might have a whole bunch of experience to challenge their own assumptions and felt beliefs, and to be willing to adapt and change accordingly. Magic, Steve, thanks so much. It has been a really cool conversation with you, and I really appreciate it. I look forward to catching up, hopefully at some point in person if you are over this side of the ditch. Well, I dare say I will see you at the Faraday conference coming up. I look forward to it. Yeah. Yeah, indeed. Cool, thanks so much. Thanks for having me. And we will see you next episode. Okay, thanks, Mark. Thank you for watching this episode of Governance Bites. We have more episodes on YouTube and your favourite podcast channel where I interview directors and experts on various topics relating to boards of directors and governance. We would love to see you back, and please like, subscribe, and share the videos and podcasts.