When you can’t go to the CEO, where do you go?

By TEC Chair, Dawn Russell

Succession-planning-key-executivesAs a key executive in an organisation, you want to make your mark. You want to contribute significantly to the overall mission and growth of the organisation and earn the respect of the CEO or Managing Director, as well as the respect of the people who report to you.

Chances are you’ll be shouldering considerable responsibility and making decisions that affect the future of the organisation and the lives of the people who work with you. And, as with any leadership position, there are always challenges.   The thing is, you can’t go running to the CEO every time there’s an issue. To start with, they’re more than busy enough without having to weigh into your issues; and secondly, what aspiring leader wants to be seen as incapable of handling situations that leaders face every day?

Perhaps you have a prickly staff member whose performance has dropped significantly over the last six months and you need to tackle an honest conversation with them. Perhaps you have a progressive idea for meeting your sales target, but want to test its robustness before you pitch it higher up. Perhaps one of your peers is making it difficult for your team to deliver to the expected standard and you need to “call” their behaviour. Or perhaps there’s a new process that is impacting negatively on your department, but challenging it is politically sensitive because its owner has the ear of the CEO.

Whatever the issue, you need a sounding board. As an influential CEO once said to me, “The worst decision I ever made was the one made by a committee of one – me!”

You need someone (or several someones) who will challenge your thinking and play Devil’s Advocate to help you see things from a different perspective. You need to tap into others’ experience when you’re faced with a situation you’ve never encountered before. It makes sense to call on the wisdom of others. The trouble is, whose wisdom do you call on?

You may decide to talk it through with your significant other or a family member. They may or may not have the necessary business acumen, but two things are for sure: they want you to succeed and they don’t want you to get hurt. But the trouble is, they have a natural bias. And because they love you, frequently they won’t tell you it the way it really is. They don’t want to hurt you; they don’t want to hurt your feelings. As a result, they’re not likely to really challenge your thinking or look for the flaws in your argument.

Alternately, you may feel safe enough bouncing ideas around with your colleagues…until the day something confidential finds it way into the greater populace at work, or until your idea is served up to the CEO by someone else as their own. And what will they think of you if you keep going to them for advice?

You may chat to your friends and mates outside of work about it, but do they really understand your role, your industry, your politics or the particular sensitivity of the issue? Besides, you won’t be considered such good company if they have to listen to you talking about work all the time!

Being in a leadership position is a challenge and it can be isolating. It’s also very easy to miss opportunities or reap a sub-optimal result when decisions are made by that “committee of one”. We are often best served by bouncing ideas around with others, but when you can’t go to the CEO, where do you go?

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Struggling to Align Company Strategy with Innovation?

Innovation has become an area in which CEOs cannot afford to ignore. The importance of innovation has become a major area for senior executives to address as they look to improve their performance.

The result is that many executives now see the ability to formulate and implement an effective innovation policy as one of the most important aspects of their leadership development.

According to the Australian Bureau of Statistics (ABS), investments in innovation are now widespread throughout the country’s economy. In most recent figures, the ABS revealed 36 per cent of companies had introduced new innovations in 2012-13, while a further 22.8 per cent stated they were still in the process of developing new products and services.

However, innovation is also an area senior executives are struggling to align with company strategy, making it harder for companies to combine their development efforts with internal processes.

This was the finding from a recent study from Strategy&, formerly Booz and Company and part of PricewaterhouseCoopers.

The organisation’s research found that aligning company strategy with innovation is a major concern for companies in coming years, with 20 per cent stating this is the largest obstacle for a successful innovation policy.

A further 14 per cent are concerned about trying to incorporate company culture into their innovation policies, while 13 per cent are looking to build an external innovation network that could improve their performance.

The research found that product innovation is no longer the main area for companies to address, with the majority of research and development spending set to shift away from goods and towards services in the future.

Organisations are also beginning to prioritise radical innovations amongst new products, rather than investing in incrementally improving an existing product or service, according to Barry Jaruzelski, senior analyst at Strategy&.

“With the healthier market conditions, it is not surprising that business leaders say they plan to focus more on big breakthroughs. This will require companies to build new capabilities, an effort which they must not underestimate,” said Mr Jaruzelski.

“It’s not by planning or shifting spending alone that they will achieve this.”

Clearly there are weaknesses in the current approach towards innovation, meaning CEOs are going to need to spend more time aligning strategy with the development of new products and services.

How do different organisations approach strategy and innovation?

Innovation is usually assumed to be a single process, but in fact it will take different forms depending on the composition of an organisation and the different strategies that are in play.

That is the finding from a further research project from Strategy&. The organisation has formulated three unique forms that businesses can take when developing an innovation strategy.

These are:

  • Needs seekers – companies that use customer insights to drive their performance, finding innovative products that are specifically tailored to the needs of the customer.
  • Market readers – companies that are adept at reading shifts in their industry, and will then invest their research and development efforts into areas that are consistent with shifts in the marketplace.
  • Technology drivers – companies that are the most committed to out-of-the-box innovation strategies, relying on new developments and product offerings to offer something new to their customers.

Each of these different approaches to innovation require organisation-wide cohesion, which can then be applied to the specific product innovations that a company is pursuing. Strategy& also suggested that each of these models comes with a unique approach to the innovation process, with each being driven by different stakeholders within a business.
Strategy, not financing the key to effective innovation

Finally, one of the biggest mistakes CEOs can make is to assume that innovation is simply a financial exercise and that by increasing funding into a certain area they will be able to develop new products and services.

A study from the Harvard Business Review (HBR) suggests that the opposite is actually true – organisations that reduce their expenditure in research and development can actually see a greater return from their investments than those with a large budget for pursuing new products.

Using the case study of CISCO, the research suggested that innovation within an organisation consists of two different processes – explorative innovation and exploitative.

The first relates to a company’s ability to pursue big-picture thinking and develop products that are radically different to anything currently on the market. Exploitative research on the other hand, focuses on commercialising existing processes and driving new growth within an organisation.

Importantly, exploitative innovation doesn’t require a significant investment, and can often yield a greater immediate return for a business than explorative research and development.

In the case of CISCO, the researchers found that although overall investment in innovation declined in the early 2000s, the company’s output of patents – i.e. its exploitative innovation – actually increased.

Even more, successful organisations are those that can quickly change gear between these two different forms of innovation. By quickly shifting between philosophies, organisations were able to pursue the greatest number of new products and services.

Strategy underlying innovation

So how does organisational strategy factor into these findings? Well, firstly it illustrates how important company processes and management styles are for supporting research and development within a business.

Building and embedding this flexibility into the way a company approaches its internal processes is a major challenge for CEOs, especially as they look to develop a competitive organisation. Fortunately, the HBR research shows that developing the right strategy is more effective than simply expanding the budget for further innovation.

The research emphasised that effective leadership was essential for managing the strategic shift between the two forms of innovation.

“Visionary leadership is also about helping the company overcome inertia so that it can shift effectively from one frame of mind to another when the time comes. Few companies pivot easily, but those that do position themselves to ride wave after lucrative wave of exploratory, then exploitative, R&D,” stated the HBR authors.

As innovation becomes an increasingly important business function, effective CEOs are going to have to consider how they can align company strategy with innovation initiatives to drive greater value in their company.

Implementing change in your organisation without risk

We work with a lot of great leaders, but even the most confident among them feel the heat when attempting to execute a serious change agenda.

What makes leading change so demanding?

From your own personal efforts to change a habit or transition from the top of the curve to the next, you know the effort and personal commitment required to make change stick. When you extend that across your organisation and through to your customers, the increased complexity of the groups combined history and entrenched views of the world makes the process much harder. At the same time, your people are instinctively assessing where they will win or lose.

Your executive team may engage and debate the direction you want to take, but it’s easy to confuse agreement and head nodding with a commitment to take the action that delivers real change. If you have good people in your organisation, the chances are they aren’t willing to adapt to every new initiative that comes along.

The pace of change can also be frustrating and non-linear. People need time to absorb what it means for them personally. Teams need additional time to plan how supporting processes, tools, behaviours and culture align to ensure change is embedded.

Let’s assume you have mastered the basics. You have a strategy that tackles key pain points, shaped a vision through consultative engagement, people you trust lead the change and you’ve defined the metrics that will determine success.

These are all essential ingredients, but not a guarantee for success. As you’ll see from the two stories we selected, even with a focus on driving change and some basic principles in place, things can still go wrong.

We have a problem in Houston

We arrived in Houston in the middle of summer. The first mistake was venturing out on foot. Sidewalks often stop for no reason and crossing a parking lot can feel like crossing a desert.

We were implementing a new system and thought most of the challenging engagement work was behind us. We were starting testing when someone had said, ‘you should reach out to the team in Houston’.

We discovered they only had a team of 25, but importantly a team that would be responsible for 95% of all transactions and the majority of data input for the next year. With tight timeframes, the design team had focused on future state, so we had a patchy view of what really happened today. The reality was that this small team was critical to the current stage of the process, but was not a part of the future state vision, hence their limited involvement.

The agenda for the meeting in Houston was to outline the six-week schedule to go live and get commitment for testing. The response we got from a team that had no input to the scope or design was rather abrupt.

In the end, the IT team had to build additional infrastructure and migrate an extra 100,000 documents to ensure that the implementation didn’t cause massive disruption across the organisation in the medium term. The project not only blew out the budget, it was delivered 6 months later than planned.

What was the cost of overlooking a small middle office team that was going to be a phased out in 18 months time? Two of your scarcest resources – time and money.

We’re shutting it down

We were asked to look at the health of a joint venture of two financial firms. The risks posing a threat to the success of the change were flagged to the executive team – culture and leadership. Because both organisations were steeped in years of service guided by the principle of ‘client first’, the leadership team viewed these as internal issues and low risk.

We spent some month’s road showing a combined set of business and leadership principles, including the need to lead by example, and that’s just what happened.

Shortly after the launch of the new business model in the largest division, one of the smaller offices walked out. The media took hold of the story reporting rumours of two other offices at the door. The Chairman took matters into his own hands. He decided the firm’s reputation was at risk, called an ad hoc meeting and announced there would be no new financial model or change to the reward structure, and that the new business model was merely a guide. The CEO was forced to stand in the shadows and watch.

If key metrics rather than instinct had been applied in that pivotal moment, they would have discovered that they were only halfway towards achieving the target size of the new enterprise in line with their strategy – a strategy that depended on voluntary attrition.

But that wasn’t the real price paid. How does one value the cost of leadership that is undermined?

What’s the true cost of getting change wrong?

The senior sponsors in both cases underestimated the complexity of the change and the need to honour a process. They ignored key transition activities, didn’t take the time to consider potential change risks and were unable to hold steady in the storm. Ultimately, they paid a price.

How do you implement change in your organisation? Do you expect your CIO, head of people or project management officer to have the capacity and skill set to anticipate and act upon potential change risks? Do you seek an independent perspective or regularly monitor the health of the change itself to ensure you haven’t missed something that could de-rail the process?

When the cost of change to your organisation, your team and your own legacy is potentially so high, it might be time to take a fresh perspective and re-evaluate the cost of getting it wrong.

Written by Tiffany Jones and Adam Sanford.

Tiffany is a master speaker for The Executive Connection, with twenty years of experience advising institutions and family offices in the art of leading with confidence and building momentum. Adam is a strategic change advisor, with significant experience leading complex, large-scale transformation programs.

Adam and Tiffany work at Momentum Advisory Group, an advisory boutique aimed at helping individuals, teams and families in business to lead with confidence.

Building an agile company: the case of McDonalds

Every business needs to be able to keep up with market changes in the face of widespread upheaval. Maintaining this organisational agility isn’t easy, especially for large companies with an international outlook.

Building an agile company the case of McDonaldsbWhile there are plenty of examples of industries that have been up-ended as a result of new competitors and changing conditions, there are also many that have managed to respond to these changes.

Among these is McDonald’s – one of the world’s largest and most iconic fast food brands that has reinvented itself in recent months by focusing on agility and innovation.

Meeting the challenge of a competitive marketplace

The food sector, and fast food in particular, has traditionally been one of the most competitive industries. The relatively low barriers to entry and large customer base have seen organisations compete on price, convenience and the shortest possible wait between ordering and eating.

While these factors have traditionally underpinned the industry, evolving market conditions and increasing competition from “fast casual” dining experiences that focus on quality have changed the industry.

For companies like McDonald’s, international economic conditions, such as slow spending in Europe, have affected sales while a generational shift away from fast food has decreased the number of young consumers dining beneath those iconic golden arches.

In the case of McDonald’s, the result has been slumping revenue and profits. The company’s revenue has dropped 11 per cent, resulting in a 30 per cent decline in profit, according to a report in Fortune Magazine.

To address this, the company has embarked on a strategy to become leaner. This year alone, the company will close around 700 under-performing stores around the world – double the original predictions. However, this shift is going much deeper than simply closing stores – the company is moving quickly to redefine its dining experience.

Reimagining the consumer experience

To reinvigorate global sales, McDonald’s has unveiled a number of new dining experiences that aim to reconnect with younger patrons, while also creating a higher-quality and more personalised product.

One such innovation has been the introduction of the Create your Taste experience in Australia, giving diners the opportunity to build their own burger from a range of 30 different ingredients. This new way of ordering uses touch-screens in participating stores that patrons can use to customise their meal.

This innovation is currently available in around 30 stores, but will be rolled out to 700 stores over the next nine months – underscoring how quickly this service is being scaled across the business.

While the Create your Taste product has been adopted across a large number of stores in Australia, other innovations have also been launched.

In Sydney, McDonald’s has launched The Corner, a redesigned McCafe that is styled to resemble an independent cafe rather than a chain. The design plays down traditional McDonald’s branding like the golden arches in favour of gourmet, personalised offerings served with metal cutlery and a range of cafe style hot beverages.

While the company has no plans to roll The Corner out nationally or internationally, it highlights the creative directions the company is pursuing in an attempt to reinvent its dining experience. This isn’t the first time Australia has seen the trial of new experiences from the company either – the first ever McCafe opened in Melbourne back in 1993.

Has this shift worked?

Transforming one of the world’s largest fast food services into an agile company that embraces modern trends is no easy undertaking. For McDonald’s, it’s too early to tell whether these organisational shifts will reverse the company’s financial position.

At an organisational level, there are signs this move is being embraced, with the company’s Australian CEO Andrew Gregory stressing these changes are designed to build a more transparent and responsive dining experience.
For other business leaders, the McDonald’s experience underscores how it is possible for even the very largest enterprises to become more agile and innovative. As market conditions continue to challenge organisations, developing, testing and implementing new strategies across multiple branches and departments will be a defining feature of successful companies.

From West to East: Australia’s Window into Asia

Introduction

The focus of the world has shifted east in recent years – the 21st century has been hailed as the ‘Asian Century’ and the center of trade for the world has moved from the Atlantic to the Pacific.

This is certainly not a new trend; however recent events have highlighted increasing strategic options for Australian SMEs to explore.

For instance the internationalisation of the Chinese Yuan is an example of the new economic strength that is found in the Asian region, with foreign companies now experiencing unprecedented access to Asian markets, and vice versa.

With the recent signing of the China-Australia Free Trade Agreement, after a 10 year negotiation period,  it is expected that trade will double from the existing levels as the local tariff barriers have been lifted between Australian exports and the Chinese Markets.

For Australian and New Zealand SMEs, this presents exciting new opportunities being the best-positioned, geographically and in business to make the most of this shift in the world economy.

Of course, with these opportunities comes a new set of challenges. Small businesses will need to start thinking internationally if they want to capitalise on the opportunities presented in coming decades. By being agile and taking the time to truly engage with the new powerhouse economies of the Asia Pacific, businesses will be well-placed to grow throughout the Asian Century.

Opportunities

In recent article released by ANZ, Mark Whelan Managing Director of Global Commercial Banking stated “all too often there is a difficulty in translating such a huge opportunity into success for individual firms or even industries. Today, only a small fraction of our small and medium-sized businesses in Australia export and a recent report by the Economist Intelligence Unit tells us only 19 per cent of businesses have taken advantage of recent FTAs”.

Without a doubt, Asia is the most dynamic and rapidly changing part of the world. Backed by almost half the world’s population, economies in the region are responsible for some of the highest expansion rates globally and will continue to be a major source of global growth into the future.

China is Australia’s largest export market of goods and services, accounting for approximately a third of total exports.

According to a recent report by PricewaterhouseCoopers (PwC), Asian countries will continue to see dramatic growth in coming decades; by 2028 the report suggests that China, which has already become the largest country in the world by purchasing power parity, will be overtaking the US in market exchange rate.


An Expert’s Insight

TEC BRIC Speaker David ThomasDavid Thomas, TEC Speaker and BRIC expert on global hotspots,  suggested  “the Australia-China relationship is about to enter a ‘Golden Phase’ with the signing of the China-Australia Free Trade Agreement, the visit to Australia by President Xi Jinping, and the increasing awareness of Australia’s agricultural resources and services capabilities in particular sectors”.

David regularly works with many wealthy Chinese entrepreneurs, investors and business leaders who are building links into Australia for a combination of business, investment and migration purposes. He highlighted that this is creating opportunities for local financial services providers (wealth managers, insurance brokers, accountants, banks, lawyers etc.) to provide support and services for them on the ground in all of our major cities and regional centres.

“Many arrive with limited or no knowledge of Australia’s complex tax, superannuation, insurance and business environment. Many of them are looking to set up local businesses, local companies, superannuation funds, bank accounts and to insure themselves against a combination of personal and business risks,”

“They also have to decide where to live, whether to buy or rent, where to send their kids to school and how to develop a local network of personal and professional contacts. This is creating enormous opportunities for local SMEs to provide the relevant services, support and advice, and to upgrade their capabilities, language and cross-cultural skills to service this lucrative and rapidly growing market,” said David.

“China’s ‘Going Out’ strategy is in full swing. Nearly half of China’s wealthiest people are planning to move to another country within the next five years and there is already evidence of a sharp increase in numbers, interest and motivation amongst those who have Australia in their sights,” Concluded David.

Clearly East Asia’s importance is only going to increase in the future. For SMEs, though, the question still remains: How can this expansion drive business growth locally?

Why SMEs need to get involved

The rise of new economic superpowers in Asia is going to create radical changes for SMEs in Australia and New Zealand. While the biggest changes will be for exporters that are looking to earn a share of new consumer demand for the Asian region, this change will affect businesses at every level.

Free trade agreements are just one example. The recent deals signed with Japan, South Korea and China – three of the largest economies in East Asia – means the door has already opened for enhanced trade and market access.

Of course these agreements and engagement is a two-way street. SMEs have greater access than ever before to these economies, businesses can now compete directly with local businesses.

This means that competitors are no longer confined to the same town or state. Now, competition is on a global scale, with many innovative Asian enterprises looking to unlock new opportunities throughout Australia and New Zealand.

Hitting the export trail

China is the world’s largest food and beverage consumer in the world with a population of 1.3 billion, capitalising on the ‘dining boom’ across Asia is an increasing trend for Australian businesses.

Recent events in the F&B sector are providing more opportunities for Australian exporters than ever before.  China’s strong economy and wealthy cities are in demand of sanitary high quality meat, dairy, fruit and other products from Australian exporters.

One example of this is TEC member and Managing Director of Beerenberg Farms, Anthony Paech who has expanded his family business into a global operation, exporting an increased percentage of their products overseas. Their premium products are 100 per cent Australian, sourced directly from their farm in Adelaide. This particularly appeals to Asian customers and the five star hotels they supply.

Another shining example is award winning TEC member company Craig Mostyn Group, a leading diversified food and agribusiness with revenues in excess of A$310 million, who operate locally and throughout Asia. With close to 30 per cent of pork products exported to Singapore and the recent investment into abalone farming exporting over 95 per cent of its high value product into Japan and China.

Once you begin exporting into another country you are scaling your business to a much higher level, it is strongly advised to have a formal strategy in place. HSBC states that 73 per cent of Australia’s exports go to Asia and estimates that by 2020, it will increase to 80 per cent.

Many SMEs find it difficult to determine where the best point of entry for their products is. The best approach is to do your homework, undertake research and then approach Asian countries that have the right market conditions and infrastructure aligned to your products and services.

Risks and operational challenges

Cultural differences are also an important factor in effectively approaching business engagement in Asia. Even within a single country, markets conditions are incredibly diverse and present their unique operational challenges, having a strong cultural understanding will prove beneficial and minimise the risks.

According to TEC Chair Max Robertson, “the risks in most of Asia will be from the ‘unknown unknowns’ or the things you are oblivious to. SMEs need to get educated about the characteristics of the individual countries they are interested in. For example, within Indonesia, pork has a good market in Bali but not in Java due to the different religions in the two areas.”

“You need to be aware of the differences between countries and that most countries are not homogeneous. There are enormous cultural and linguistic differences you need to understand. You need to be sensitive and aware of the differences and how they can impact upon business opportunities.”

Cultural factors aren’t the only risks that organisations will need to overcome when approaching a foreign market either – there are also bureaucratic obstacles for companies to navigate.

Tax is just one example. Even as western taxation and accounting standards become widespread in the Asian region, these areas are still less developed than SMEs will be used to in Australia and New Zealand. The same is true for legal practices and many other structural factors that underpin a successful business.

“Get advice from accounting firms on tax and don’t make assumptions about the rule of law and payments. You can’t generalise.”

“There are terrific opportunities in Asia, but there are also major risks if you get the wrong joint venture. There can also be problems in some countries with repatriating profits, as some of the universities have found. Companies need to be acutely sensitive of how difficult it is to move money around,” explains Max.

TEC member and Managing Partner of WMS Chartered Accountants, Aaron Lavell is an example of how Australian expertise is training Malaysia’s accountants. “As Malaysia is currently rolling out the implementation of a new GST, we’ve found there is a market for Australian expertise and training on this topic,” Aaron explains. The training covers areas such as tax rules, legal requirements, cash flow and system issues that arise when a country transitions to a GST regime, as Malaysia will in April 2015.

Businesses looking to address strategic risks when entering Asian markets must remember to expect the unexpected. Often the best way around this is to build partnerships with local companies and embark on joint ventures in order to enter Asian markets.

Not only does this make financial sense for Australian companies, it is also a good strategy for reducing the risk posed by entering a new market.

Offshoring for cost reductions

The potential of Asian markets isn’t limited just to exports – SMEs can also benefit from moving their business processes to East Asian markets in order to become true multinationals.

Currently manufacturers have been the most prolific users of outsourcing to the Asian region, with mainland China firmly established as the ‘factory of the world’. However, the next step is going to involve moving services and other business processes to overseas markets in order to make the most of lower input costs.

While lower costs might be a major advantage, this shift in labour will also allow Australian companies to invest more in their local staff, keeping high-value processes in Australia, while moving low-skilled work overseas.

Many SMEs may never have considered the possibility of outsourcing their processes to another country, especially if they are still focusing on building a strong business. But, with cost pressures rising, it is now more important than ever to look for new growth opportunities.

Here are some of the core benefits:

  • Lower costs
  • Accessing skilled experts
  • Reduced overheads
  • Greater flexibility among staff
  • Increased efficiency

Shorter turnarounds

Of course, offshoring part of a business isn’t a process that can be completed overnight. SMEs in Australia and New Zealand will need to invest time in understanding everything that’s involved and finding partner organisations that can assist with their outsourcing efforts. As with any major development, a strong plan and comprehensive risk management strategy are essential.

There are clearly obstacles that organisations will need to undertake, regardless of whether they are looking to export to Asian markets or outsource their business processes. However, companies in Australia and New Zealand are better placed than many in other countries to capitalise on the coming Asian Century.

For those who commit to this process and truly engage with these markets, the potential for future growth is virtually limitless.

About the Author

David is well known in Asia Pacific for his experience, credibility and passion for identifying, building and facilitating business and investment relationships between developed and emerging countries. David brings personal insights, anecdotes, stories and observations to every presentation to show business leaders and forward thinking organisations how to profit from a fast changing world.

2015 Modern leadership: working smarter not harder

As a C-level executive do you have a clear vision of what you want to achieve both personally and professionally this year? What about over the next 18 months to 5 years? You may have general ideas, however once you return to the daily operations of the business it’s likely they get buried in the demands of the day-to-day.

But how important is it to get specific and strategic about goal setting?

Many leaders feel as though they work very hard both in and on their businesses and yet they don’t achieve the results they want or the work life balance they need. A key reason is they haven’t dedicated time to think clearly and strategically about what it is they want to achieve. There is also a lack of accountability and follow through on implementation. An important step is to have a clear vision of what your leadership priorities are, and what you want to achieve; having a clear vision.

“More than 80% of the 300 small business owners surveyed in the recent 4th Annual Staples National Small Business Survey said that they don’t keep track of their business goals, and 77% have yet to achieve their vision for their company,” writes Peter Vanden Bos for Inc.

What if we told you the solution is to work smarter, not harder?

In New York Times bestseller What They Don’t Teach You at Harvard Business School, Mark McCormack shares an interesting study that was conducted in 1979 on Harvard MBA students revealing the real impact of goal setting.

He asked students whether they had clear, written goals for their future and made plans to accomplish them.

84% of students admitted they had no goals at all, while 13% had goals that weren’t written down. In fact, only 3% had specific goals in writing.

When interviewed 10 years later, the 13% of students who had goals were earning on average twice as much as those who had never established clear goals.

However, the 3% with written objectives for success had salaries that were a staggering 10 times as much as the other students put together

Goal-setting paybacks

Identifying effective goals and setting a plan to achieve them helps leaders organise resources, streamline knowledge acquisition and raise motivation, particularly on long-term projects and objectives.

This has a significant impact on productivity that is difficult to ignore, both on a personal and professional level. Whether you’re a business leader, a top athlete or a high achiever in any other field, establishing goals provides the additional focus that is essential to reaching the top.

American business consultant and author Jim Collins offers similar advice, which is why he’s famous for coining the term ‘Big Hairy Audacious Goals’ – or BHAG.

The phrase refers to the long-term proposals that are the hallmark to some of the world’s most successful business leaders. “It is about goal setting. It is about picking a goal that will stimulate change and progress and making a resolute commitment to it,” Collins explains. “This is not about writing a mission statement. This is about going on a mission.”

Working smarter, not harder

The SMART format for goal setting has been around for many years and it’s a common practice among high achievers, as it establishes a helpful framework for gauging the effectiveness of goals and objectives.

Specific – target a specific area for improvement.
Measurable – quantify or at least suggest an indicator of progress.
Achievable – specify who will do it.
Results orientated – state what results can realistically be achieved, given available resources.
Time sensitive – specify when the result(s) can be achieved.

Goals that meet this criteria have a much better chance of positive outcomes, in Peter F. Drucker’s popular HBR article What Makes an Effective Executive he states  ‘executives are doers; they execute. Knowledge is useless to executives until it has been transformed into deeds. But before springing into action, the executive needs to plan their course’.

‘Without an action plan, the executive becomes a prisoner of events. And without check-ins to re-examine the plan as events unfold, the executive has no way of knowing which events really matter and which are only noise’.

Ultimately, leaders who set goals both personally and professionally have the direction and focus required to pursue powerful strategic objectives. Modern leaders have the ability to set and achieve progressive goals and distil this into business metrics.

So how do you drive strategic goal setting? Every leader has business obligations whether it’s focused on innovation, becoming the premier distributing vendor, taking your company public or creating the best consumer experience. TEC Goal Setting is an effective way to incorporate this into your personal and professional life through a highly customised learning experience, credible resource of content and accountability.

Different leadership styles from around the world

Businesses are operating in an increasingly global environment, which requires careful consideration of cultural differences when marketing goods and services worldwide.

This is particularly true for Australian organisations hoping to take advantage of growing opportunities in Asian markets, with the country ideally placed to strengthen trade relationships on the continent.

Whether you are dealing with international partners or setting up an office in an overseas location, understanding typical leadership styles in that country can be extremely beneficial to bolstering smooth-running relationships.

So what are the main leadership styles exhibited worldwide? British linguist Richard D Lewis explored the nuances between a number of countries in his 1996 book ‘When Cultures Collide‘, which is now in its third edition.

Here is a summary of some of the common characteristics outlined in the book.

Australia

Australian leaders are thought to be fairly democratic, with Mr Lewis pointing to Swedish egalitarianism models as a close comparison.

However, Australian organisations are also guided by the more aggressive American way of doing business, which favours quick thinking and fast decision-making.

According to Mr Lewis, Australian executives must be considered ‘one of the mates’, but once they have achieved this status they often exert important influence.

Research by the Australian Institute of Management has previously found that the country’s leaders are supportive, preferring coaching and mentoring rather than focusing on individual mistakes.

UK

Diplomatic, tactful and casual, British managers are often fair and willing to compromise.

Under the surface though, UK leaders have a pragmatic streak that ensures they can be resilient and ruthless, but in a subtler manner than is stereotypically seen in US counterparts.

Where British employees can falter is in international communications, with an adherence to tradition and inward-looking perspective that can prevent cross-cultural learning.

Japan

Japanese businesses are more likely to have a bottom-up approach to innovation and change, Mr Lewis claims.

Top executives may harness substantial power, but new ideas typically come from workers on the ground. These are then filtered up through middle management to senior executives and are put in place when they gain enough support.

This process involves the circulation of a document called a ringi-sho, which is annotated and amended by various departments as it makes its way up the leadership chain.

China

Like in Japan, Chinese leadership is often geared towards consensus decision-making, which Mr Lewis describes as the Confucian model. This means a leadership group is usually in charge of policy implementation.

However, unlike in truly democratic leadership styles, there is a respect for unequal relationships. Organisational structures are similar to families, with age and seniority being greatly revered.

A benevolent autocrat is considered the ideal boss, and subordinates expect to be given instructions.

The US

US leaders are often assertive, aggressive and goal orientated, which Mr Lewis says is a result of the country’s frontier beginnings shown since the 18th century.

“They are capable of teamwork and corporate spirit, but they value individual freedom above the welfare of the company, and their first interest is furthering their own career,” he stated.

Leadership positions are usually allocated based on merit and Americans are not shy about pursuing wealth as their main motivation.

India

Nepotism is a key feature of Indian leadership structures. Decision-making is often made between family members holding senior positions within the organisation.

Trade groups exert a significant influence in the country and strong inter-personal relationships can develop between these organisations.

Germany

German efficiency is commonly referred to when discussing businesses in the country – and while it may be a stereotype, there is truth to the notion.

Clear chains of command exist in each department, with information passing through the hierarchy in a top-down fashion. However, despite this autocratic approach, there is room for consensus in German leadership models.

Germans often gain the respect of subordinates by showing a willingness to work hard, obey the rules and play fair. Horizontal communication between department leaders is less common than in US and British firms.

France

France’s leadership models are among the most autocratic, although Mr Lewis says this may not be particularly evident at first glance.

CEOs often have skills across a wide range of areas, including marketing, production, accounting and personnel – shifting gears as and when required.

Due to this comprehensive coverage, management blunders are more accepted in French businesses, as leaders are responsible for a large number of decisions across many departments.

Netherlands

The Netherlands values merit-based appointments, so Dutch leaders can often point to many achievements and competencies.

While managers in the country are decisive, consensus is important and there are commonly a number of key individuals involved during new policy implementations.

Mr Lewis adds that ideas have free flow throughout Dutch organisations, suggesting bottom-up creativity is encouraged.

Identifying opportunities in the Asian Century

Asia has experienced rapid growth in the 21st century, which has driven a need for goods and services as its burgeoning middle class begins to expand.

Australia is well placed to take advantage of this growth. In fact, the country has already enjoyed a steep rise in demand for its natural resources over the last decade, helping to strengthen the mining sector.

However, as the resources boom begins to taper off, Australian companies must shift their efforts in order to continue benefiting from the multitude of opportunities available in Asia.

A 2012 whitepaper by PricewaterhouseCoopers (PwC) noted that while the majority of Australia’s trade is with Asia, the country only spends 6 per cent of its overseas direct investment in the region.

PwC said this figure is far too low for businesses to take full advantage of potential growth opportunities.

Similarly, a Deloitte report last month urged organisations to become ‘first movers’ rather than ‘fast followers’ when it comes to commercial deals abroad. This means firms must establish themselves as innovators rather than settling for second best.

Selwyn D’Souza, lead strategy partner at Deloitte, said: “Strengthening our already strong relationships with the new global giants such as China and India will become more important than ever as we seek to establish a stronger presence in their markets and their companies continue to enter ours.”

Opportunities in Asia

According to Deloitte, a billion people are expected to enter the middle-class globally within the next 20 years – and a significant proportion will be in Asia.

The OECD estimates 66 per cent of middle-class people will be Asian by 2030, compared with just 28 per cent in 2009.

This increase in consumption provides opportunities to Australian companies across a wide range of sectors, particularly financial services, telecommunications and retail.

Businesses that seek cross-sectoral collaboration between other companies, governments and non-profit organisations are likely to perform better, as this creates a greater social impact.

“It will be the forward-looking Australian businesses that proactively take opportunities to innovate and serve the needs of low-income consumers in the Asia-Pacific region which will enjoy the benefits of increased market share, profit growth and brand differentiation,” Ms D’Souza stated.

However, PwC said organisations must be willing to invest in Asia to have the best chance of gaining market share and forging ongoing relationships with businesses in the region.

Australian CEOs will also require a keen understanding of the many different Asian cultures in the region. The conflict between Western and Eastern values could be a stumbling block unless enterprises are adequately prepared.

Building an Asian presence

Despite the challenges businesses will face growing market share in Asia, the positive outcomes and expansion opportunities are significant.

Here are some strategies that PwC noted could help your company make the transition a little easier.

Invest in human capital: Recruiting or promoting people with extensive Asia expertise is vital.

Not only will this help your business to better understand the marketplace, it also facilitates relationships with Asian firms, which are typically built in person rather than over long distances.

Assess market potential: Review your existing growth strategy through an Asian perspective and identify the best opportunities for your particular business.

Isolate risks, re-evaluate existing brands and products, and strengthen any existing ties you may have in Asia.

Select appropriate market entry options: Entering new international markets can be a challenge, so consider different investment vehicles.

Whether you opt for a joint venture, export-only model, licensing arrangement or other operating structure will depend on your specific commercial objectives.

What next?

Given that the resources sector is already beginning to slow in Australia, the need to build further economic drivers in other sectors becomes more apparent.

Organisations that fail to cater to growing Asian demand could find themselves struggling to succeed against more forward-thinking competitors.

However, CEOs must move fast. These changes are already underway and building for the future must begin as soon as possible, particularly when it comes to attracting and retaining the right staff to excel in new market conditions.

“While many organisations understand the need to recruit resources with the necessary skill set, the demand for this key talent far outweighs supply,” PwC stated.

“It is imperative that companies start planning now how to position their organisations and their people for the Asian Century.”