Grow your business faster by becoming a better leader

Change is now rapid and relentless, presenting many business opportunities for growth. Harnessing that opportunity requires effective leadership. This whitepaper presents practical steps you can take to become a more effective leader.

Recently Grant Thornton Australia conducted a survey to evaluate business growth rates in Australia, examining the differences between the growth rate “tortoises” and “hares”.  This survey revealed that the leaders of slow growth “tortoises” saw their businesses as stable (72%), while far fewer “hares” (52%) viewed revenue as stable. This highlights a fundamental difference in attitude towards business strategy and risk.

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The end of work is closer than we think

Subsequent industrial revolutions have resulted in radical social and economic changes. Today the term “disruption” is ubiquitous, and the consequences of the changes continue under the “digital revolution” banner. We are now on the cusp of another workplace revolution – one that will inevitably lead to seismic changes in humanity’s social compacts and economic flows. These changes are likely to be profound, impacting how leaders lead and we work.

Each successive industrial revolution has forced changes to the way we lead, and how people work. Rapid shifts in technology suddenly complicate a once binary and linear world. Leaders who adapt and apply new ideas to old problems thrive, while those who are complacent face decline.

In 2016, the situation in which Australians are living bears the hallmarks of three earlier phases of the industrial revolution: rapid technological change, dramatic shifts in wealth, and disruptions to the way we work and lead. This has led to wealth being concentrated dramatically into the hands a tiny number of dominant global businesses and individuals.

The competitive gaps that now exist between these globalised automated services and “normal” businesses are starting to lead to high impact social problems in “developed” countries across the globe. Anti-globalisation and anti-business political movements and politicians such as Donald Trump in the US, Brexit and UKIP in the UK, and One Nation in Australia are at least partly fuelled by anger caused by widespread economic pain being generated by the current phase of industrial change.

Reframing how we work and lead

In a recent survey conducted by Grant Thornton with over 100 Australian CEOs and leaders with growth of more than 5% per annum, we noticed that their businesses had similar attributes and outlook on how they lead. These attributes included:

  • Setting ambitious growth targets
  • Establishing and maintaining a culture of innovation and entrepreneurship
  • Establishing dynamic, flexible and agile business models & work practices
  • Focusing on exports and global markets

Leaders of fast growing companies appear to focus on the external or market facing perspectives. This invariably presents some differences on how leaders lead within this changing economy.

Fig 1.0 – What leaders of fast-growing companies are focused on?
Fast Growth

 

 The leader of the future

Research conducted by Grant Thornton Australia into high growth companies highlights similar trends emerging. Leaders and CEO’s of fast growing businesses appear to be focused on.

  • Working with their customers to actively invest and manage their product development strategy, pipeline and process
  • They are investing in new technology in a timely way and staying abreast of technology as a competitive edge.
  • They are thinking differently about new markets. In an increasingly digital world, companies can make a leap from local to global much earlier and easier
  • They are leveraging the benefits of acquisitions such as new resources, business synergies, risk diversification, economies of scale and talent acquisition.

Along with all this comes a new mandate for leaders.

  • Decision-making will become more transparent, as affected communities expect to understand how decisions are arrived at.
  • A more consultative mindset will become the new normal.
  • Products and services will increasingly be developed in consultation with customers or citizens in the case of Governments.
  • Leaders will more rapidly rise up from communities in response to crises.
  • Leaders with global appeal will find their influence heightened and the speed of their impact accelerated.

In today’s fast-changing, knowledge-based economy, a static, top-down concept of management will become redundant; it wastes the talent, creativity, and energy of most people organisations. Arguably, the skills and competencies required to lead in this future world will be significantly different to the ones we currently lead with .

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Don’t rock the boat – the new budget innovation

2016 has already proven to be a tumultuous time for Australian business. High profile and large Australian companies have collapsed with corporate debt loads and the vagaries of the global economy being blamed. The tax affairs of global corporations, wealthy individuals and multi nationals have become a political issue, and are now routinely the subject of breathless media coverage. Little wonder then that the Turnbull Government is arguing that the 2016 federal budget will focus on driving jobs and growth, whilst steering the Australian economy away from the traditional mining investment towards a stronger more diversified “new economy” centred on intensive service sectors.

Corporate Tax rates

Whilst shareholders will probably welcome reductions in corporate tax rates, CEOs and leaders running mid-sized businesses typically plan based on demand for products and services rather than corporate tax ratios. Therefore tinkering around the edges of corporate tax rates is unlikely to transform competitive market reality for most Australian CEOs within mid-market or big end of town. Arguably direct government programs to support the recently signed free trade agreements are far more likely to yield revenue growth for Australian businesses. It’s hard to imagine business leaders suddenly revising their client demand forecasts upwards and hiring decisions after the budget.

Recently announced innovation measures and infrastructure projects are welcome, and could have a subtle but positive influence over multi-year business investments. The reality however, is that the major outcomes of these types of government interventions can be quite limited to specific regions and industry sectors, with larger firms most likely to be in a position to quickly adapt. Undoubtedly investment in new skills and capabilities centred on the “new economy” are likely to be at the top of the shopping list for most businesses.

Superannuation changes

Changes to superannuation tax concessions were a clear attempt by Scott Morrison to inject some fairness back into the budget, particularly for woman. These changes will see workers earning less than $37,000 exempted from paying more tax on their superannuation than they are on their income. The federal government will also introduce a Low Income Superannuation Tax Offset from 1 July 2017 which will allow individuals earning up to $37,000 to receive a refund into their superannuation account of the tax paid on their concessional contributions, up to a cap of $500.This will assist around 2 million low income women to build their superannuation savings and encourage others to re-enter the workforce.

Delivering efficiency & innovation across the Public Sector

This budget sees a notional $18.8m allocated to further reducing duplication and improve efficiency across government. One wonders whether the Government’s commitment to the Digital Transformation Office will go any way to truly delivering better government services for Australians. Another key consideration is the government’s commitment to strengthening cyber security with the allocation of $2.7 million for a “Cyber Ambassador” and $10 million for a public education campaigns unintended consequences of releasing malicious web links.

A focus on transport & infrastructure

The Government has committed $50 billion in infrastructure investment between 2013-14 and 2019-20 for transport and infrastructure. Clearly the Federal Government’s Asset Recycling Initiative is recycling more than assets, with the federal government restating earlier commitments, allocating $2.19 billion to New South Wales and $2.4 billion for Victoria. This funding is clearly designed to reduce criticism of government funded infrastructure programs, using the argument that travel times impact economic productivity, and infrastructure improvements generate wealth for property owners in nearby areas. No doubt some of the more creative funding models being discussed will help preserve government credit ratings, despite long term government debt funding costs being at historic lows.

Organisations that intend to leverage the Government’s infrastructure programs will need to think differently about how they justify return on investment, and how they package and fund their own projects.

A focus on business improvement rather than red tape reduction

Every budget in recent history has also promised changes to regulatory environments to reduce red-tape and the elimination of government waste. Reducing red-tape is a laudable goal but as always, the devil is in the detail.  A change to any regulatory environment creates a ripple effect through an organisation, even when it is a reduction in that burden. Work practices and organisational cultures need to be redesigned, people retrained. Business practices and ways of working that previously worked smoothly under the old economy will need to change to support Australia’s new economy.

Click here to download Grant Thornton’s Federal Tax Review

Leadership, Talent & Culture, Grant Thornton’s newest offering

 

This week sees the launch of Grant Thornton’s newest service offering, Leadership Talent & Culture. In today’s globalised and volatile business environment Australian organisations need to be smarter and leaner than ever before. It’s also essential that leaders remain focused and responsive to market demands. Leaders also need to ensure they attract and retain the very best people for the right roles to remain competitive and innovative. Grant Thornton’s Leadership, Talent and Culture specialist engages with business leaders to build and foster a resilient and collaborative workforce equal to the task.  We have extensive experience working with leaders to shape and deliver on their employee strategy.  We also bring a deep understanding of the complex issues leaders face in achieving the right outcomes.

What we do?
We help our clients grow by designing and facilitating leadership, talent and cultural transformation programs that bring out the very best in people. Using our unique combination of business and organisational transformation skills and experience, our team:

  • Designs and delivers cultural transformation programs to help organisations thrive and grow by building values-based  cultures aligned directly to their strategy
  • Designs and delivers innovative, highly experiential and Transformational Leadership programs building the confidence and capability of leaders for today’s challenges and tomorrow’s opportunities
  • Places their leaders, team members and customers at the heart of the strategic and business planning process
  • Delivers affordable and professional HR solutions and advice when it matters most
  • Helps you to attract and retain the best leaders to achieve your firm’s strategic goals.

Click here for more information about our service offering and how we can assist.

Could Design Centred Thinking be the solution to Australia’s innovation conundrum?

 

Everything in our world is touched by “design” and therefore can be redesigned, a concept like design or human-centred thinking (DCT) provides leaders with a low-risk option for moving beyond the traditional mindset of “what can’t be done.”

Prime Minister Malcolm Turnbull’s Innovation Statement clearly signalled the need for Australian business leaders to rethink their attitudes towards risk taking, particularly when it comes to product and service innovation. Prime Minister Turnbull argues that when compared to countries such as the US and Israel, Australian business leaders are trailing behind when it comes to “innovative risk taking”. The prime minister’s statement suggesting Australian business leaders need to “embrace a culture of innovation” is undoubtedly hollow rhetoric unless Australian business leaders are prepared to embrace a more innovative and “risk centred” mindset to growth.

At last year’s Workforce Productivity Conference, which featured a diverse selection of international and local business leaders that included Richard Dobbs, Director, McKinsey Global Institute, Richard Umbers, CEO for the Myer Group, and Tim Fung, CEO of Airtasker, it became abundantly clear that the speed of disruption is outpacing the rate of innovation resulting in a widening gap in Australia’s capacity to remain globally competitive. For many business leaders, this new paradigm combined with the government’s commitment to review outdated insolvency laws should create the perfect opportunity for Australian business leaders to rethink their entrenched attitudes towards risk taking. The question however is whether Australian business leaders are willing to put aside their conservative attitudes towards risk and make the necessary changes in order to become globally competitive.

Whilst the significant majority of Australian business leaders continue to focus on keeping their heads above water, Australia’s largest organisations including Telstra, Optus and CBA are quietly turning to Design-Centred Thinking (DCT) in an effort to remain globally competitive and shake off entrenched attitudes towards product and service redesign. A strategy which is proving to be highly effective in helping them better understand their customers whilst minimising the risks associated with product innovation

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