A Blueprint for Economic Success
Jana Matthews, Enterprise Magazine
Professor Jana Matthews explores the future of South Australia’s economy.
In recent decades Australia has witnessed a steady decline in manufacturing. South Australia has felt the contraction of the industry more than most states, given its economy relies more heavily on the industry than Australia as a whole, with manufacturing accounting for approximately 10 per cent of Gross State Product. Against this economic backdrop, Professor Jana Matthews, ANZ Chair in Business Growth and Director of the UniSA Centre for Business Growth, explores the future of South Australia’s economy.
I came to South Australia in 2012. Soon after, BHP Billiton announced it was indefinitely postponing the Olympic Dam project. Holden then revealed it would cease manufacturing in SA by 2017. Finally came the news that the SA economy contracted in the 2012-2013 financial year.
Fortunately this isn’t like baseball – three strikes and you’re out! Rather than spend time arguing about who is at fault and analysing ‘whether the glass is half empty or half full’, let’s look instead at some signs that lead me to believe we can refill the glass.
A recent Deloitte Economics Access report noted that growth is forecast to average two per cent annually over the next decade. While that’s not as fast as some of our neighbours – or as fast as we’d like – it is a turn-around from negative growth.
Overall South Australia employs about 800,000 people in 146,000 companies. If we can get five per cent of these companies to grow and add just one job, it will more than compensate for the job losses we will experience when Holden finally closes in a few years’ time.
The business community and government have realised they need to work together to solve South Australia’s economic problems. As the old saying goes, ‘If you aren’t part of the solution, then you’re part of the problem’. I see business, university and government leaders more focused on collaboration and working on solutions to our economic problems.
The UniSA Centre for Business Growth has been recently established to teach chief executive officers (CEOs) how to grow. One of the simple reasons more companies don’t grow is because the CEO just doesn’t know how. Through the right training and education, CEOs of companies which have hit a speed bump and stopped growing, can find their way back on track. The Centre has held one-day clinics with 35 companies around Australia, nine of them in South Australia. Several of those companies have already shifted gears and are back on the growth curve. If we can help more of these companies grow, we can push the economy way beyond the two per cent forecast.
When I was working in the United States, I helped hundreds of CEOs unlock their growth potential. The first requirement is the desire to grow. The next is the willingness to change, to learn what to do, what not to do, and how to do it.
There is a reason why serial entrepreneurs have repeated successes – they have learned the science of growth. The good news is that growth, like any other science, can be mastered.
With the right leadership skills, strategic approach, execution and follow through, I believe every company can grow – if the CEO really wants to grow.
Some argue that the new economy will have more robots and need fewer workers. No doubt there were similar concerns when Henry Ford developed the automobile – what would happen to all those who worked in stables and the livery business? In reality, many new and far more interesting jobs were created by the switch from equine transportation to automobiles.
In South Australia traditional labour-intensive industries such as manufacturing and resources have accounted for the lion’s share of our economy. In fact, this over-reliance on traditional, labour-intensive industries is one reason that Australia now ranks so low on the Economic Complexity Index, sitting at 74th out of 124 countries.
If South Australia is going to achieve long-term economic prosperity, we need to transform from a state that digs things out of the ground to one that creates new ideas and exports them to the world.
We need more people like Henry Ford who identified a need and then built a company to commercialise an innovation – more companies like RedArc, Codan, Detmold, Vinomofo, to name a few South Australian companies already leading the way.
I have often said that South Australia is on the cusp. There are some fantastic local companies with tremendous growth potential and brilliant business leaders among us. If we can teach more of them to grow, we will transform the economic future of the state.
Connect with the Centre for Business Growth: @UniSA_CBG
Connect with Prof Matthews: @JanaMatt
BOOSTING BUSINESS GROWTH THROUGH EDUCATION
The UniSA Business School launched the Centre for Business Growth in September last year with ANZ as the Foundation Partner, Sponsor of the ANZ Chair in Business Growth and Sponsor of the ANZ Business Growth Program. The Centre is focused on unlocking the growth potential of Australia’s Small to Medium Enterprises (SMEs) – companies with $5m to $50m in revenue and five to 200 employees.
The Centre has already delivered a number of clinics for CEOs of Australian SMEs. In November, the Centre also hosted its first Visiting Growth Entrepreneur, Jeff Katz, who recently sold his company Mercury Payment Systems for $1.65b.
Early feedback from participants of the business growth programs reveals the important role the Centre plays in unlocking growth opportunities that will boost the Australian economy. David Worth, Managing Director of Go Natural Australia Pty Ltd says the clinic was a tremendous opportunity to reflect on the future of his business, vision and impediments to growth.
“Rather than just completing the program with an idea of what the company needed to do to grow, I left with an action plan to proactively approach new partners,” he says.
“As the leader, I realise that I need to spend more time on business strategy, work with my team to re-set our company’s vision, and make bold decisions that will lead to real growth as opposed to incremental growth.” The Centre for Business Growth programs are based on the science of growth. In 2015, the Centre will
be running public programs that will enable executive teams to develop as leaders and unlock their company’s growth potential.
Find out more at the Centre for Business Growth website.
SIX KEY INGREDIENTS FOR BUSINESS GROWTH
- CUSTOMERS, MARKETING AND SALES: understand the customer and make sure you are reaching them through the right channels and with the right messages.
- PRODUCTS AND SERVICES: ensure that you have a product that customers really want, a product roadmap and a finely tuned production process.
- COMPETITORS AND EXTERNAL FORCES: know the market forces, risks and opportunities for your business.
- BUILDING AN ORGANISATION: have the right culture, people, team, plan, infrastructure and leadership in place to drive growth.
- BUSINESS MODEL AND FINANCING: know where your profits are coming from and have the right approach to invest in growth.
- MANAGING YOURSELF AS A LEADER: develop a CEO personal plan to manage yourself through growth.