The new rules of business
There is nothing like the prospect of a global financial meltdown to concentrate the mind when you’re in business. But that’s in the past. What strategies will unlock future business success?
Monday, October 18 2010 || CEOs Uncovered || BY Mark Revington
“We are investing in the process, structural and cultural changes needed to simplify our business, reduce costs and deliver sustainable growth,” he says.
“Our approach going forward is simple, commercial and sensible, with a strong focus on the basics and achieving the outcomes we promise our clients. Innovation is now very much grounded in commercial reality.”
Over the next 12 months, that means Quin will be focused on achieving “brilliant execution” of strategy and doing things right the first time.
There’s nothing like the prospect of a global financial meltdown to concentrate the mind in that hyper-alert sort of awareness, usually accompanied by clammy palms, which you associate with a brush with danger. Maybe that’s overstating the case but there is little doubt that the new rules of business are about simple things. Not so much taking time to smell the roses, as making sure you don’t overlook the obvious.
In a recent research paper for the New Zealand Institute, Rick Boven and Tony Smale identified three behaviours they thought were essential to increase the success of New Zealand entrepreneurs, marketers and salespeople.
Be customer oriented, be prepared and be collaborative. Some may think these three behaviours are so obvious there should be no need to highlight them, but that’s the point, say Boven and Smale. They are incredibly important, but often overlooked, and they are the most important behaviours to encourage among this country’s business community to build a more effective culture and grow the economy.
It could be argued the GFC has encouraged a focus on equally obvious and often overlooked business truths. In the good times, it is easy to charge ahead on a growth path, blithely underprepared and overconfident.
But caution is the new black. That doesn’t mean huddling in the corner. Make sure you know what your customers want and value, make sure you are delivering what they want, have a strong business case and keep a close eye on costs.
Brad Duft, chief executive of biotech company CoDa Therapeutics, says the company has always been careful with its money, so that hasn’t changed. CoDa follows three immutable biotech financing rules, says Duft: raise money whenever you can, raise money even if you don’t need it, and raise more money than you think you need.
Of course the needs of a biotech company, with that sector’s propensity to burn through cash, are slightly out of sync with the rest of the business community.
Others display a caution learnt through numerous business cycles.
Bruce Gordon, chief executive at ventilation manufacturer HRV, says his approach to business hasn’t changed in the wake of the GFC, because he learnt his lessons during 25-plus years in business.
“Having managed high-profile businesses through extreme crises due to the exuberant actions of shareholders, I now take a cautious view. I have realised it is everything to build smart and loyal teams because in tough times, they make the difference as to whether growth is still achievable.”
For a software company like SMX in the throes of fast growth, the GFC didn’t really change much at all, says co-founder Jesse Ball. The greatest challenge he faces over the next 12 months is managing growth so that it happens in a controlled fashion.
“There are a lot of opportunities out in the market; the challenge is choosing the ones that are profitable and core to your business.”
