Australian Financial Review
Too few Australian CEOs understand how to achieve, let alone accelerate growth, and not enough aspire to become global companies. If we want our economy to grow, we need to teach CEOs how to grow by avoiding these four barriers.
1. Inward focus
Many CEOs micromanage their people or spend more time working on the product than studying their markets, customers and the world around them.
CEOs need to be externally focused, study the trends impacting their industry and assess the implications for their company. Opportunities for growth are often related to shifts in customer demographics, behaviour, and new technologies.
Understanding how quickly these trends will change the landscape for customers, vendors, suppliers and even employees can give your company a substantial competitive edge.
RedEye Apps for instance, provides ‘version control’ of blueprints. After the Brisbane floods, RedEye’s CEO had first-hand experience with architects, contractors, plumbers and electricians using different sets of blueprints to re-build his house. Market research indicated that mines, refineries, and cities in many countries had the same problem. Developing a software product that many different kinds of customers need all over the world, storing the blueprints in the cloud to enhance their accessibility, and changing the pricing algorithm have enabled RedEye to grow rapidly.
2. Underestimating the importance of speed
Australian companies cannot hope to succeed by moving more slowly than the rest of the world. The race is no longer between the tortoise and the hare; we are competing with hundreds of hares, and we need to learn to hop faster. Quality is important for competing in the global marketplace. But speed of market entry and execution are essential for growth. CEOs who develop decision frameworks, have reliable data, clarify responsibility and accountability with their employees, and practice the ‘five levels of delegation’ have a chance of winning the race. “She’ll be right” is no longer an appropriate response. Everyone needs to be worried, do more faster and execute more quickly.
3. Not aligning your culture, people and plan
Peter Drucker’s first question of a CEO was “who are you?” In other words, what is your company’s mission, values and three-year vision? The CEO needs to communicate the company’s mission, articulate the values that define how he/she expects people to interact with each other, and share a vision for the future. One of the companies in our program rolled out its values, and a few weeks later a key employee resigned; two months later a second one left. Today, their replacements are a much better fit with the company’s values, and they have been instrumental in helping the CEO and the management team develop a plan for growth.
4. Not playing the right leadership role
In order for the company to grow, the CEO must evolve from the doer and decision-maker to delegator and direction-setter, then team leader and coach. CEOs need to stop thinking they are the font of all knowledge. In order to grow, they must hire people to whom they can delegate, and concentrate on positioning the company for the next stage of growth. Too many CEOs get “stuck in start-up”, thinking they need to continue making all the decisions. In order to grow, CEOs need to change, to hire people more knowledgeable than they are, and then delegate. One of our CEOs was trying to divide himself into smaller and smaller slivers and was frustrated that there wasn’t enough of him to go around. During the program, he realised he needed to bring in a CEO who could take the company to the next level, which freed him to focus on R&D – what he most enjoyed.
In order for the economy to grow, CEOs must learn how grow their companies. Australia is currently number 54 on the world’s Economic Complexity Index and, unless we change, we’re slated to have the worst GDP in the Australasian region. Avoiding these pitfalls and learning to grow diverse companies is one way to make sure this prediction does not come true.
Professor Jana Matthews is ANZ Chair in Business Growth and Director of the University of South Australia Centre for Business Growth.