Australian businesses need growth mindset

Recently, Treasurer Josh Frydenberg called for Australian businesses to invest more in growth.

Although he had large corporations in mind, the key opportunity for Australia is to grow our 252,000 small and medium companies.

Let’s look at the facts.

Of Australia’s 2.3 million companies, 88 per cent are sole operators or are micro (1-4 employees), 10 per cent are small (5-19 employees), 2 per cent are medium (20-199 employees) and less than 1 per cent are large (over 200 employees).

Not to mention, that nearly all Australian companies (93 per cent) have less than $2 million in revenue and less than 4 per cent have revenue of $5 million or more.

By comparison, half the companies in Germany are considered ‘medium’.

Put simply, Australia needs more of its companies to grow from small, to medium, to large.

So, what’s going on? Well, there are many reasons why founders, owners, CEOs, managing directors and boards aren’t leaning into growth: risk aversion, fear of failure, lack of knowledge, lack of confidence, lack of capital, and more.

But whatever the reasons, it’s imperative we replace our ‘small business mindset’ with a growth mindset.

With appropriate leadership, management, and investment, a company can become a rapidly appreciating asset, delivering outsized returns.

However, achieving this outcome will require many CEOs and boards to change their thinking and behaviour.

That’s where our Growth Clinics can help.

Since 2015, we’ve had over 850 CEOs through our Growth Clinics. I’ve seen CEOs of companies with massive growth opportunities focus more on risk and tax minimisation than how to capitalise on those opportunities.

And when families, owners, and their accountants are deciding how much profit to distribute to shareholders, they need to consider what amount they need to leave in the company for expansion, hiring, higher-level managers, more marketing, new facilities and so on.

Plus, boards need to explore the upside of opportunities and risk mitigation strategies, not turn away from growth simply because risk is involved.

In one of our programs, the CEOs, managing directors and their executives review a case study then have two hours to develop a plan to grow that company — ‘10X’ — in five years using our Knowledge Growth Framework.

That simple exercise enables them to think bigger about someone else’s company — and opens possibilities that they would never have considered on their own.

A 10X mindset plus growth knowledge will enable South Australia to address the problem of our ‘missing middle’ and grow the small and medium-sized companies we need in South Australia.

There’s something in that for all of us.

Dr Jana Matthews
Original Article