Navigating Challenging Business Environments: The Importance of Commercially Astute Leaders
Debbie Morrison • July 13, 2023

Organisations are facing numerous challenges that can impact their growth and profitability. The Bega Group's recent property deal with Charter Hall serves as a stark sign of the times, highlighting the critical role of commercially astute leaders in successfully navigating these challenges. This blog explores the implications of the deal, sheds light on the dairy industry's challenges, and emphasises the significance of hiring the right leaders to steer organisations towards success.


Challenges in Australia’s Dairy Industry

The Bega Group operates in the dairy industry, which is currently facing several significant challenges. Firstly, Australian milk production has been on the decline, with a reduction of over 700 million litres in the past two years alone, amounting to a 9% decrease. This decline in milk production has a direct impact on Bega Group's operations, necessitating strategic decision-making to mitigate the effects.


Secondly, the intense competition for raw milk within the industry poses long-term challenges. With limited industry rationalisation, Bega Group expects this competition to persist beyond the current year. This scenario necessitates proactive measures to secure a reliable supply of raw milk and maintain profitability.


Lastly, the potential non-cash impairment of bulk dairy ingredient assets further adds to the industry's challenges. As the dynamics of the dairy market continue to evolve, commercially astute leaders must make informed decisions regarding the valuation and utilisation of these assets.


The Importance of Commercially Astute Leadership

In the face of these challenges, having the right commercially minded leaders in place becomes crucial for organisations like the Bega Group. These leaders play a pivotal role in reducing debt, supporting strategic direction, and ensuring sustainable growth.


Debt Reduction and Strategic Direction 

The Bega Group's property deal with Charter Hall is a prime example of how commercially astute leaders can bolster the company's balance sheet. By divesting the property at 1 Vegemite Way in Port Melbourne for $114.6 million and leasing it back, Bega Group can reduce its debt while continuing operations. This deal was likely identified, structured, and brokered by leaders who possess a deep understanding of the financial landscape and strategic business opportunities.


Implications on Financial Performance 

The successful execution of the property deal has positive implications for Bega Group's financial performance. The injection of funds aids in paying down debt and supports the company's strategic transition to a brand-focused organisation. Leaders with a keen eye for financial opportunities can identify such deals, evaluate their potential impact, and negotiate favourable terms that align with the company's objectives.

Overcoming Input Cost Increases

Commercially astute leaders are adept at navigating input cost increases, such as rising prices of raw milk, packaging, logistics, and energy. Bega Group's investment in continuous improvement programs, technology, and successful price increases demonstrate their ability to mitigate these challenges. Through effective cost management and strategic initiatives, leaders can maintain profitability even in the face of cost pressures.


Beyond Customer Loyalty

While customer loyalty is valuable, relying solely on it is not a sustainable strategy for success in most industries. Commercially astute leaders recognize the importance of continuously evolving and strengthening brands, diversifying product offerings, and exploring new markets. Bega Group's success in growing its white milk brands, convenience, and food service channels highlights the strategic vision and innovation required to remain competitive.



Attributes of Commercially Astute Leaders

Boards of directors seeking commercially astute leaders should consider the following key attributes and characteristics:

  • Financial Acumen
  • Leaders must possess a strong understanding of financial concepts, including cash flow management, investment strategies, and risk assessment. This expertise enables informed decision-making in complex financial environments.
  • Strategic Thinking
  • Leaders must demonstrate the ability to develop and execute long-term strategies aligned with the organisation's goals. They should be forward-thinking, adaptable, and capable of identifying opportunities amidst challenges.
  • Market Insight
  • Having a deep understanding of market dynamics, industry trends, and consumer behaviour enables leaders to make informed decisions and stay ahead of the competition.
  • Collaboration and Influence


Effective leaders foster collaboration across departments, build strong relationships with stakeholders, and influence decision-making processes. This skill set is vital in navigating complex negotiations and driving organisational growth.


Identifying Commercially Astute Leaders

Organisations can identify commercially astute leaders by expanding their networks and partnering with executive search firms. These firms specialise in identifying top talent and can provide access to a diverse pool of executives with the desired attributes. Furthermore, organisations should prioritise comprehensive assessments, including interviews, reference checks, and behavioural assessments, to evaluate candidates' suitability for the role.


The Right Time for Talent Pooling

Given the dynamic nature of today's business environment, organisations should proactively talent pool for commercially minded executives. This approach enables them to stay ahead of emerging challenges, capitalise on strategic opportunities, and maintain a competitive advantage. By developing a strong talent pipeline, organisations can ensure a smooth leadership succession process and minimise disruptions during critical transitions.

The Bega Group's property deal with Charter Hall serves as a powerful example of the critical role commercially astute leaders play in navigating challenging business environments. The dairy industry's decline in milk production, intense competition, and potential impairments underscore the need for leaders who possess financial acumen, strategic thinking, market insight, collaboration skills, and influence. By hiring the right leaders, organisations can reduce debt, support strategic direction, overcome input cost increases, and build sustainable profitability. In today's fast-paced business landscape, organisations must prioritise the identification and development of commercially astute leaders to ensure long-term success.


At ELR Executive we have over 20 years of experience helping FMCG and Food and Beverage organisations identify and attract the right talent to help achieve better business outcomes. If you'd like to learn more about how we can help you identify commercially astute leaders, speak to us today.


By John Elliott June 6, 2025
On paper, they were fully resourced. No complaints logged. No formal red flags. Delivery metrics holding steady. But behind closed doors, the signs were there. Delays. Fatigue. Silence in meetings where pushback used to live. And a growing sense that key people were leaning out, emotionally, if not yet physically. When the cracks finally showed, the conclusion was predictable: “We need more people.” But that wasn’t the real problem. The problem was trust. And most organisations never see it until it’s too late. The Hidden Cost of Disengagement In Gallup’s 2023 global workplace report , only 23% of employees worldwide reported being actively engaged at work. A staggering 59% identified as “quiet quitting”, psychologically detached, going through the motions, doing only what their job description demands. Source: Gallup Global Workplace Report 2023 Disengagement is expensive. But it’s also quiet. It doesn’t show up on a balance sheet. It doesn’t send a Slack message. Disengagement isn’t new, just silenced. And in executive teams, it looks different. It looks like polite agreement in strategy meetings. It looks like leaders shielding their teams from unrealistic demands, instead of confronting the system causing them. It looks like performance metrics still being met… while people emotionally check out. The issue isn’t always capability. It’s safety. Psychological, political, and professional. Many senior leaders don’t raise concerns, not because the problem isn’t real, but because they don’t believe they’ll be heard, supported, or protected if they do. And this is where the failure begins. The Leadership Lie No One Talks About We talk a lot about leadership capability. About experience, commercial acumen, execution strength. But we don’t talk enough about context. Every leadership hire walks into a culture they didn’t create. They inherit unwritten rules, quiet alliances, and legacy power structures. If those dynamics are broken, or if trust is fractured at the top, no amount of capability will compensate. According to a 2022 Deloitte mid-market survey, 64% of executives said culture was their top strategic priority. But only 27% said they actually measured it in a meaningful way. We say culture matters. But we rarely structure around it. And so new leaders walk in with pressure to perform, but little real insight into what the role will cost them emotionally, politically, or personally. We Don’t Hire for Trust. And It Shows. In executive search, the conversation is often dominated by pedigree and “fit.” But fit is often a euphemism for sameness. And sameness doesn't build trust, it maintains comfort. We rarely ask: Does this leader know how to build trust vertically and horizontally? Can they operate in a low-trust environment without becoming complicit? Will they challenge inherited silence, or unconsciously uphold it? Instead, we hire for confidence and clarity, traits that often mask what’s broken, rather than reveal it. And when those hires fail? We call it a mismatch. Or we cite the usual: “lack of alignment,” “wasn’t the right time,” “they didn’t land well with the team.” But the truth is often uglier: They were never set up to succeed. And no one told them until it was too late. The Cultural Infrastructure Is Missing One of the most damaging myths in leadership hiring is that great leaders will “make it work.” That if they’re tough enough, experienced enough, skilled enough, they’ll overcome any organisational dysfunction. But high-performance isn’t just personal. It’s systemic. It requires psychological safety. A clear mandate. The backing to make hard decisions. The freedom to speak the truth before it becomes a PR problem. When that infrastructure isn’t there, when the real power dynamics are unspoken, good leaders stop speaking too. And the silence spreads. What Trust Breakdown Really Looks Like Often, the signs of a trust breakdown don’t show up in dramatic ways. They surface subtly in patterns of underperformance that are easy to misread or excuse. You start to notice project delays, but no one flags the root cause. Teams keep things moving, quietly compensating for the bottlenecks rather than surfacing them. Not because they’re careless, but because they’ve learned that early honesty doesn’t always earn support. New leaders hesitate to make bold calls. Not because they lack conviction, but because the last time they did, they were left exposed. Board reports look flawless. Metrics track nicely. But spend five minutes on the floor, and the energy tells a different story. These are not resource issues. They’re relationship issues. And the data backs it. According to Gallup’s 2023 State of the Global Workplace report , just 23% of employees worldwide are actively engaged. Worse, around 60% are “quiet quitting.” That’s not just disengagement. It’s people doing only what’s safe, only what’s required, because trust has quietly eroded. Gallup also found that managers account for 70% of the variance in team engagement, a staggering figure that reinforces just how pivotal leadership trust is. When people don’t feel psychologically safe, they shut down. Not dramatically. Quietly. Invisibly. What’s breaking isn’t the org chart. It’s the ability to speak plainly and be heard. And by the time it’s visible? The damage is already done, and someone calls for a restructure. “Low engagement is estimated to cost the global economy $8.8 trillion, 9% of global GDP.” Gallup, State of the Global Workplace 2023 So What’s the Real Takeaway? If you’re seeing performance issues, before you jump to headcount, ask a different question: Do the leaders in this business feel safe enough to tell the truth? Because if they don’t, the data you’re reading isn’t real. And if they do, but you’re not acting on it, then they’ll stop telling you. Leadership doesn’t fail in obvious ways anymore. It fails in the gap between what people know and what they’re allowed to say. And the price of that silence? Missed opportunity. Reputational damage. Cultural decay. Sometimes, the problem isn’t who you hired. It’s what you’ve made it unsafe to say.
By John Elliott May 27, 2025
Why Culture Decay in FMCG Is a Silent Threat to Performance It doesn’t start with resignations. It starts with something much quieter. A head of operations stops raising small problems in weekly meetings. A sales lead no longer defends a risky new SKU. A team member who used to push ideas now just delivers what they’re asked. Nothing breaks. Nothing explodes. It just... slows. And from the outside, everything still looks fine. The illusion of stability In food and beverage manufacturing, where teams run lean and pressure is constant, performance often becomes the proxy for culture. If products are shipping, if margins are intact, if reviews are clean, the assumption is: we're good. But that assumption is dangerous. According to Gallup's 2023 global workplace report, only 23% of employees worldwide are actively engaged, while a staggering 59% are "quiet quitting ", doing just enough to get by, with no emotional investment. And in Australia? Engagement has declined three years in a row. In a mid-market FMCG business, those numbers rarely show up on dashboards. But they show up in other ways: New ideas stall at the concept phase Team members stop challenging assumptions Execution becomes rigid instead of agile Everyone is "aligned" but no one is energised And by the time the board sees a drop in revenue, the belief that once drove the business is already gone. The emotional cost of cultural silence One thing we don’t talk about enough is what this does to leadership. When energy drains, leaders often become isolated. Not because they want to be, but because the organisation has lost the instinct to challenge, question, or stretch. I’ve seen CEOs second-guessing themselves in rooms full of agreement. Seen GMs miss red flags because nobody wanted to be "the problem". Seen founders mistake quiet delivery for deep buy-in. The emotional toll of unspoken disengagement is real. You’re surrounded by people doing their jobs. But no one’s really in it with you. And eventually, leaders stop stretching too. We train people to disengage without realising it Here’s the contradiction that most organisations won’t admit: We say we want initiative, but we reward obedience. The safest people get promoted The optimists get extra work The truth-tellers get labelled difficult So people learn to conserve energy. They learn not to challenge ideas that won’t land. They learn not to flag risks that won’t be heard. And over time, they stop showing up with their full selves. This isn't resistance. It's protection. And it becomes the default when innovation is punished, risk isn't buffered, and "alignment" becomes code for silence. Boards rarely see it in time Boards don’t ask about belief. They ask about performance. But belief is what drives performance. When culture begins to fade, it doesn't look like chaos. It looks like calm. It looks like compliance. But underneath, the organisation is hollowing out. By the time a board notices the energy is gone, it’s often because the financials have turned, and by then, the people who could've helped reverse the trend have already left. In a 2022 Deloitte study on mid-market leadership, 64% of executives said culture was their top priority, yet only 27% said they measured it with any rigour . If you don’t track it, you won’t protect it. And if you don’t protect it, don’t be surprised when it disappears. The real risk: you might not get it back Here’s what no one likes to admit: Not all cultures recover. You can try rebrands. You can run engagement campaigns. You can roll out leadership frameworks and off-sites and feedback platforms. But if belief has been neglected for too long, the quiet ones you depended on, the culture carriers, the stretchers, the informal leaders, they’re already checked out. Some have left. Some are still there physically but not emotionally. And some have started coaching others to play it safe. Once that happens, you're not rebuilding. You're replacing. So what do you do? Don’t listen for noise. Listen for absence. Absence of challenge. Absence of stretch. Absence of belief. Ask yourself: When was the last time someone in the business pushed back? Not rudely, but bravely? When did someone offer an idea that made others uncomfortable? When did a leader admit they were unsure and ask for help? Those are your indicators. Because healthy culture isn’t silent. It’s alive. It vibrates with tension, disagreement, contribution and care. If everything looks fine, but no one’s really leaning in? That’s your problem. And by the time it shows up in the numbers,t might already be too late.