From XU Magazine, 
Issue 24

Interview with Trent Innes, Managing Director Australia & Asia, Xero

XU: Trent, can you start by telling us a little bit about yourself and how you came to be the Managing Director for Xero Australia?

TI: I’m a qualified accountant by trade, I call myself a non-practising CPA. I started my career in the early days working a little bit in practice, but then quickly found my way over into the private sector and worked as a management accountant. I always had a love for technology and for systems.

One of the early jobs I had was for a large architectural company and all their systems at that point in time were manual. I looked at it and thought this is crazy! How do we actually get bills out? How do we pay people? I convinced them to put in a computerised accounting system and we chose a product called SunSystems, which was actually a product out of the UK. I quickly appeciated what technology could do to give you insights and help with running your business.

For the past 25 years I’ve always worked in business application software, apart from that really early stint in accounting. I ended up working at Systems Union who were the developer of SunSystems in Melbourne and then in the UK, based out of Hammersmith, London for a while. I had a variety of roles from consulting to technology and eventually found my way into Microsoft in their business applications software team, not unlike Gary Turner. We both worked in Microsoft business solutions, ironically. I worked there for a number of years and found my way into sales, management and leadership, but always in business application software.

I met the MD of Xero, Chris Ridd, at Microsoft and knew him quite well. He asked me a couple of times whether I would be interested in going to work for them. At that stage Xero was pretty small and unknown, they would have been lucky to have 10,000 customers. When I first spoke to them they had about 10 staff in Australia and when I joined in the beginning of 2013 they had just over 30 staff. My role at that stage was building up the go to market channels. How do we scale this business? How do we bring more partners into the programme? How do we actually help partners digitise their businesses and get them onto the cloud? We were explaining what the cloud was and about security, all of those things... So I did that ‘go to market’ role for a couple of years and we started to see some great momentum.

At the end of 2015, Chris decided that he’d been the MD for five years through that startup scale-up phase and wanted to move on and I was lucky enough to be chosen as the next Managing Director. We had about 300,000 subscribers at that time and probably about 300 staff in Australia. That was about four and a half years ago now, and that’s how I got there! Overarching the whole thing, I genuinely love technology and accounting and when you combine the two together there are amazing insights we can give to business. One of the great things about Xero is the ability to give access for small businesses to technology and insights that previously just wasn’t possible. I’d argue that today small business has better access to technology than big business does.

XU: Yeah, I’d agree with you on that, especially at the moment. It’s far more crucial.

TI: Exactly. Can you imagine if we were in a pandemic 15 years ago? What would we have done? Only big businesses had access to some levels of video conferencing, but nothing else was accessible remotely. If there’s anything fortunate to be taken out of the scenario we find ourselves in at the moment, at least we can exist and operate with the technology available to us.

XU: You just mentioned you’ve been Managing Director for four and a half years now, and with Xero for over seven years. How has your role developed and changed over this time?

TI: My time at Xero has definitely changed dramatically since I first joined. Very few people knew who Xero was, the only real partners we were working with were the ones who really saw the benefits of the cloud. Seven years ago we were explaining who is Xero - what is cloud technology? Is my data going to be safe? What are the benefits of it? Xero has gone from people confusing us with a photocopy sales company, to one where we are becoming an aspirational company to work for in this part of the world. People strive and want to work for Xero.

In part, that is because the brand has a great presence about it and there aren’t that many companies in this part of the world that build and export software. We have a lot of companies here that import software from the US and Europe but there’s not a lot built here, so we’re actually building and exporting which I think is pretty cool. The biggest change is going from a brand that nobody knew, to a real aspirational brand which is something I’m really proud of.

XU: How different has 2020 been for you?

TI: I think 2020 is massively different for all of us. Whether you’re running a listed company or running a small business, there is a level of uncertainty that has been brought upon us that we could never have prepared for.

One of my favourite sayings is that there is no leadership handbook on managing a pandemic. I’ve looked in all the bookshops and there is nothing there. There’s a leadership book on almost every topic but there is nothing out there that could prepare you for managing in a pandemic. It puts a lot of pressure on leaders, on your business, on your customers, on the way you exist and of course on people’s personal worlds. It’s really an impact we’ve never seen before.

What I’ve learnt throughout this period is the importance of the basics when you don’t know what to do. The basics are more important than they ever have been. Leadership at this point in time is just doing those basics really well - caring about your people as best you possibly can and setting them up for success in this environment, serving your customers and just taking a real customer and partner centric view. I think if you get those things right as best you possibly can, then the rest kind of takes care of itself. The only thing I’ve consistently said to people is to just do the best you possibly can. We empower each other in these scenarios and I think it’s important that you’re kind to yourself and you’re kind to each other.

Everyone has unique circumstances, whether it’s people who have young kids at home, to people who are living by themselves, to those who are trying to homeschool alongside work at the same time. I have three children - one at university, one at high school and one at primary school, so I’ve ticked all three boxes. They’ve all got their own needs and challenges. Even as a leader I think it’s really important you share that, so it makes it okay for other people as well. We’re all going through things and we need to focus on the basic stuff that you can control, don’t worry about the stuff you can’t control. The reality is we have no ability to control the situation going on out there at the moment, so it’s more about the stuff you can control; how you deal with people and how you manage your business.

Just keep it simple, that’s what I keep saying to all of our leads at the moment. Another lesson I’ve learnt is that you can’t over communicate with people. We’ve been heavily communicating with our teams, letting them know what’s going on as best as we possibly know and being 100% transparent.

XU: That’s great. Can you share how Xero has responded to supporting its partners and customers during the pandemic?

TI: Around the markets we operate in each government that I’ve looked at has dealt with things in similar yet unique ways, but the overarching themes seem to be how can they help from a stimulus perspective and how do they help to protect jobs as best as they possibly can, especially during lockdown. There was so much information coming through from governments and lots of confusion,  So we launched the Business Continuity Hub which was a global approach built with very specific content for each location. It was designed to filter through all the information available to our customers and partners that is relevant to them, making it easily readable and digestible.

The idea is to work very closely with governments. We have a very strong relationship with the Australian government here so we worked closely with them to allow our customers to connect with the best stimulus available to them. One of the most prevalent in Australia is called JobKeeper, which is a programme distributed through employers to employees, so we had to make some pretty dramatic changes to our payroll system to allow our customers to distribute those payments to their employees. We had to turn that around really quickly. There’s also eligibility tests we built into the system as well, because there are guidelines you had to meet. A big one was that businesses turnover had to have dropped by at least 30% to be eligible for JobKeeper. So we configured the software to take away the pain of having to manually calculate it to try to make it easier to access.

We’ve had lots of webinars and updates too, with thousands of people watching and joining to gather information. We found that accountants and bookkeepers were just inundated with queries from their clients. As the reality started to hit of what this actually meant, our partners were dealing with not only financial queries, but other questions and issues such as mental health. We wanted to try and help as much as we could. We have a partnership with a mental health organisation in Australia called Beyond Blue, so we do quite a lot of work with them. We were really concerned about the mental health of small businesses, as well as the accountants and bookkeepers that serve them.

XU: That’s amazing. As Xero has grown rapidly throughout Australia in the last 7 years, how do you carry on that growth and make sure that buzz is still around Xero and it’s community? Also, what differences have you seen in doing this during your time in the role?

TI: We’ve still got a lot of market share to go, there are still a lot of businesses out there and a lot of partners that have not made the journey to the cloud. If anything, COVID is accelerating digitisation. If you’re an accountant or bookkeeper trying to exist now without online access, you’re probably kidding yourself. The reality is all of those connections are digital now, so they need to be connected. It’s accelerating the digitisation journey for them. Equally, if you look at the next generation of small businesses that are coming through and the ones that already exist now, so many of them have had to pivot off of services via digital. So there’s still a lot of growth, we’re not at the market share of New Zealand yet which you can see from our public numbers. There’s a long way to go with the growth of our core products. Steve Vamos mentioned this - there are still opportunities to add value to small businesses over time as well other growth factors we’ll look into as well. He mentioned areas like low end, opportunities around sole traders and connecting small businesses to financial services. I’d say we’re still at the beginning to a certain degree.

XU: One of the major things that makes Xero stand out is their amazing staff. I have been very fortunate to meet lots of Xero staff around the world.

TI: Thank you, that means a lot.

XU: One of the things we’ve missed this year is travelling and bumping into your team. How important are the Xero team to everything you do and achieve? Also, how has the team grown and developed since you have been Managing Director?

TI: I look after Australia and Asia, we had around 30 members of staff when I started and now it’s well over 700, so it’s been very rapid growth which has been amazing. Giving people jobs is one of the best things you get to do as a leader, I actually get to see jobs being created. We’ve run graduate programmes and vacation programmes, and allowed people to get their first job which always makes me smile. I think the overarching thing we’ve always prided ourselves on is that unique Xero culture that we have. People get to see the way that we portray ourselves externally is what we’re like internally as well, we make it very transparent. That really permeates through your products and the service you provide.

As we’ve grown and developed we get asked how do we maintain that culture, and I actually don’t like talking about the word ‘culture’. Culture is an output, it’s a bit like when you measure a business by looking at the profit. You’re missing the story that got them to a profit or loss in the first place. Culture is a bit like that as well; you can have a negative culture or a positive culture and just focusing on that isn’t the best thing. It’s all the things that make up that culture which make it important. All those little things, the small moments of truth. It takes a long time to build it, there’s no secret sauce you can’t fake it, it takes a long time to build and it can be destroyed very quickly.

We’ve been very fortunate, we’re very purpose and very values led. If you have great purpose and great values that gives you the guard rails to work with and those behaviours determine your culture. If you’ve got negative behaviours, you end up with a negative culture. You can’t just focus on the culture itself, you have to focus on the little things over time in a genuine way.

When I first started my career it was a much more controlling environment as opposed to empowering. I believe that 99% of people go to work to do good, they go to have a good day. They want to come home and talk to their loved ones and say they had a good day. Why would you set up an environment where they have a bad day? It makes no sense.

XU: One of the last times we saw you face to face was at Xerocon Brisbane (2019). I can remember you walking around with the letter X shaved into the side of your head. Showing just how epic Xerocons are. How important have Xerocons and roadshows been to the Xero AU journey and how much have they been missed this year?

TI: I’ll tell you a little about the X. I didn’t even know what hair art was, I didn’t know it was a thing. Somebody said to me I should shave an X into my head for Xerocon. I said fine, I’ll do it and then kind of forgot about it. When I got there the film crew was there, the social media team was there and I couldn’t get out of it. They said it would grow back in three or four days, but it actually took about three weeks! I went home and my wife just shook her head and walked off. It was a bit of fun at my expense and I think it was the most viewed tweet off the back of Xerocon last year and quite a few other people ended up having hair art done as well.

Xerocon is a great way to be out sharing and distributing information and connecting with our community. We were lucky to get some roadshows done in January and late February here in Australia. We had over 10,000 registrations this year which gives you an idea of the scale. We went to 16 locations this year so we get out on the road for quite a few weeks. They’re definitely going to be missed but it’s not only the right call, it’s the only call at the moment.

We have to connect with people in other ways and we’re doing that through lots of webinars and we’ve got Xero On Air coming up on the 14th - 17th September which is a great opportunity. It’s not going to have the same feel as Xerocon, which is as much about the experience and as the content… But we have an amazing events team who are doing a great job at making Xero On Air something very special, so we’re looking forward to doing that. We’ve actually already started filming some of it already. I think there’s about 30 episodes or so. Some are of relevance to a global audience d and some are regionally focused. We’ll have product announcements, customer stories, economy updates, motivational speakers etc... it’s going to be a lot of fun and it’s designed to be short, sharp sessions that you can watch whenever you have time.

XU: An amazing part of Xero is their passion to see small businesses succeed. I recently heard the great news about the new “Rebuilding Australia” report which has been produced in partnership with Bernard Salt AM and The Demographics Group. Can you tell me a little more about this report and how important it is to small businesses in Australia right now?

TI: Absolutely. We’ve done a bit of work with Bernard Salt before, he’s one of Australia’s leading commentators and he’s really carved himself out as an expert in demographics. He’s very well known here. He writes for The Australian newspaper weekly and he’s an amazing keynote speaker. He takes data insights from one or multiple sources and looks for long term trends. So in the Rebuilding Australia report, he worked  with three different data sets. He looked at Xero Small Business Insights and looked at some of the insights that we’re tracking during COVID with what’s happening out there at a high level.

We’re also going to start looking at a lot of insights around employment and what the impact has been to small businesses, once again by industry, location and so on. We’re quite fortunate because we can look across multiple regions and compare some of the various different approaches governments have taken in different parts of the world and see what that’s meant to recovery phases. I wouldn’t say we’ve recovered from COVID, I’d say we’re living with COVID. So the  Rebuilding Australia report looks at that data set and the Australian Bureau of Statistics data, and a survey off the back of that to track how people feel about their prospects as a small business. Bernard has produced an amazing report which I’m not going to do justice in two minutes because there’s a lot of detail, but it’s trying to highlight which industries have been most impacted and also where there are opportunities from an employment perspective and an industry perspective.

We did another report with Bernard in February this year just before COVID hit, which was called ‘Boss Insights’. It looks into the last 30 years of business creation in Australia. What’s fascinating is that any time there has been an economic downturn, right back to the recession in the early 90s and .com crashing in the early 2000s, to GFC in 2008… when the economy came under pressure for a variety of reasons, after that we see a spike in business creations. We think that’s formed because of necessity, people are looking for opportunities to pivot into something else. But there’s also innovation, which comes out of economic impact and downturn, because new ways of doing business are created.

So what we’re looking for is what are those businesses and industries that are going to come off the back of the current situation. For example, if you’re a web developer in Australia between March to May, the demand for your services went up 270%. Moving to digital has sent it through the roof. Manufacturing is the one of the only industries that grew over that period and is up 9%. Historically manufacturing has been on the decline in Australia for quite some time. We think that’s for a number of reasons: businesses pivoting to sanitisation products and face masks, or just because the global supply chain has been interrupted. The factories are firing back up again and we’re creating things.

That’s just some examples, but the report was created to show all these data sources. And then to see how people are feeling, their options, the future… What are they leveraging? We’ve definitely found the businesses that had pivoted or created are actually thriving in some cases, which is hard to believe. 68% had invested in digital tools to help them, such as the local pub who is now doing take away food and had to invest in a menu ordering system. A lot of them pivoted and utilised technology.

XU: And can you tell us what that report has said about how small business is fairing right now?

TI: So Xero Small Business Insights was actually kicked off back in 2017 initially in Australia. It was something I really wanted to do as there’s not a lot understood about the small business economy. There’s a lot of discussion about it and in most countries it’s actually the single largest employer. If you aggregated all of the small businesses in Australia, it is actually the number one employer. I strongly believe it’ll be the sector we need to invest in to get thriving and create jobs following the pandemic.

So small business insights are showing some really interesting trends at the moment. We did a comparison between global approaches acrossAustralia,New Zealand and the UK as they’ve all taken slightly different approaches. As soon as COVID hit New Zealand they were in a stage four straight away. They went into a dramatic lock down and the revenues dropped 40% in a couple of weeks. They were growing at about 6% before COVID hit and as of the 30th of June, they were back up at 0% even once again and recovering. The UK’s lowest point was -30% of growth for small business and they’re at about -18% now, so they’re starting to recover too. By comparison, lockdown measures in Australia weren’t as strict,    so the impact to revenue is nowhere near as high. At the country’s worst point it had dropped by -12.8% and it’s now -6.8%. They’re recovering slightly slower.

For one of the first times ever we’re looking at such a large data set. This is not a survey of 1000 businesses, this is hundreds of thousands of businesses that we’re able to look at and break down. Whilst there is a lot that is the same between countries, each government worked slightly differently and we’re just trying to work with them to best inform them and help small businesses recover from this.

XU: A very exciting announcement from Xero this year was the E-Invoicing. Could you share why you feel this is so exciting and how this will really impact the future of accountants, bookkeepers and SMEs digitally?

TI: I’m glad you’re excited about e-invoices, because I am as well! I think it’s the next step in digitisation of small businesses. If you think of small businesses they are surrounded by layers of friction, that friction causes inaccuracies, security concerns, manual work that has to be done from getting a piece of data from one system to another… e-invoicing is going to streamline that entire process and make it easier for people to submit invoices and to be paid on time, which is one of the biggest problems for small businesses.

It really streamlines the entire flow from one customer’s system to another and goes through the Peppol network in a standardised way, which allows them to receive that clean information and get it straight into the system and in theory get paid faster. I think for accountants, bookkeepers and small businesses it really helps with that next level of digitisation and connection.

XU: One of the positives that 2020 has brought, is that we are able to focus on ourselves more and slowdown. I wondered if you have picked up any new exciting hobbies during this year or learnt anything which you never knew about yourself?

TI: Because we’re really in a really tight lockdown in Melbourne at the moment, we’ve got a Slack channel going at the moment called ‘bored in iso’, where we post things we’ve done that are the most boring thing you could possibly do. It’s actually turned into a bit of fun. We had someone post about straightening their rug, something you’d probably never usually get to. I found myself rearranging the labels in the fridge so they all faced forwards and I’ve never done that in my life before.

I don’t know if I’ve picked up any new hobbies, but I’m getting through some of the small tasks I would never have gotten done and I’ve found more time to read. I’ve got a pile of books next to my bed at home, but I never usually tend to prioritise reading things, so I’ve been really interested in reading again. I’m reading a book at the moment called ‘What Measures Matters’ which is all about OKRs rather than KPRs, which I quite like. I travel a lot too so it’s been nice actually having dinner with my kids, as I don’t do it as much as I probably should. It’s just getting back to the basic stuff which is important, but you sometimes forget when you are busy. COVID has allowed us to do that since we’re all working at home. I get to spend more time with my loved ones.

XU: It would be great if you could finish by sharing some advice that has helped/inspired you over your career?

TI: I think the big one is to be kind to yourself. These are unusual circumstances. It’s hard to be kind to others if you’re not kind to yourself, and that’s probably the most important thing. Look after yourself and your health.

XU: Is there one bit of advice or an inspiring quote that’s helped you in your career?

TI: One of the big ones I use is Knower/Learner, which is thinking about whether I’m being a ‘knower’ or a ‘learner’ in different circumstances. Great leaders ask questions, they seek to learn. Whereas the weaker leaders I’ve worked with over time are ‘knowers’ and they make statements. It’s a really simple mind model that I use quite a lot.

Another one is Victim/Player, which is more of a behavioural one. In every scenario when you’re presented with a scenario or a problem, you’ve got a couple of different behaviours you can exhibit. You can either be a victim, or a player. Generally, when I act like a victim I’m not very happy with myself and not happy with my response, so I’ll try not to do that. I’ll lean in and try to be the player in a scenario and work on an outcome. It’s another simple mind model.

The third that I use a lot is an internal saying, it’s basically about juggling your life. You’re always juggling glass balls and rubber balls. You’ve got to define what your glass balls are as opposed to your rubber balls. If you drop a glass ball it will shatter, so glass balls are things like your health, your loved ones, your friends… the things that are really important and you can’t afford to break. In my view, almost everything outside of that is a rubber ball so it will bounce and recover. As you work through your career it’s important not to lose perspective and to get that juggling act right.

They’re the three mind models I use. People sometimes over complicate things in leadership, but it should be simple.

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