To unlock massive growth, business leaders must be comfortable with the idea of not only going global but also – when it makes sense for the company – moving beyond their initial idea and vacating the driver’s seat, according to Dr Jana Matthews, an international expert on entrepreneurial leadership and business growth.
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As the director of University of South Australia’s Australian Centre for Business Growth, Dr Matthews spearheads SME growth programs designed to equip executives, including CEOs and MDs, with the knowledge, skills and frameworks to develop as a leader and accelerate the growth of their companies. Since the Centre launched in June 2014, Dr Matthews and her team of growth experts have worked with over 400 Australian SMEs with turnover between $5m and $50m.
Dr Matthews – formerly, a director with StartupAus and the managing director of ANZ Innovyz Start Accelerator – told Dynamic Business that most of the executives entering the Centre’s programs fall into one of two camps.
“Firstly, there are the executives leading companies that have, for a variety of reason, stalled in their growth,” she said. “Either they’ve stuck to an outdated approach that isn’t working anymore or they’ve failed to understand how to take their business – whatever the case, they want to know what’s not working and what to do next. Meanwhile, the executives in the second camp are having the opposite problem – they are growing very rapidly and aren’t quite sure how to keep up with demand.”
Regardless of which camp they belong to, Dr Matthews said the Centre’s programs were an opportunity for executives to take a step back from their business and receive guidance around strategies for the business’ growth – for example, “what kinds of people need to be recruited, developed or let go, what their own roles and responsibilities are, and how to delegate tasks and activities to others”.
Pre-conditions for growth
Asked whether there were conditions executives must meet in order to unpause and/or accelerate growth and maintain a high-performance organisation, Dr Matthews identified the following four:
- They must be “comfortable” with the thought of accelerating growth – “If you really believe you have a great product or service, why wouldn’t you want to sell it to everyone in the world who might need, want or value it?”.
- They must acknowledge they cannot grow a company alone and that they need to form an executive team, learn how to delegate and hold people accountable.
- They must be clear about why their company exists, including who their customers are, the value of culture, and the importance of hiring people who can perform and match their values.
- They must keep learning and growing as leaders.
Tough decisions on a daily basis
Dr Matthews added that executives must stick to their growth strategy and set goals that align with that strategy and their vision, because levelling up a company involves making “tough decisions on a daily basis”. These might include putting the company ahead of not only employees but also themselves and the initial idea for the business. She explained:
- Tough conversations with staff: “A common problem for executives are employees who are not aligned with their values and growth goals, or who are simply not performing at the level required for the company to grow. As companies move through different stages of growth, the type of knowledge and skills required can change. New products or markets – or a change in growth strategy – will impact the knowledge and skills required, and often necessitate a change of employees. If employees want to stay in your business – your ‘bus’, so to speak – you might need them to play a different role. This would involve providing them with opportunities to be trained and developed in the areas where you need them to succeed but then they need to prove they have the capacity to perform. If they can’t or won’t, then you need to have those difficult conversations about whether this is the right job or the right company for them. While these conversations are tough, they are necessary for the company to be able to continue to grow. Having the wrong people on the bus can be a real drag on company growth. Plus, employees know when they are no longer a good fit for their role or the company, and they would be much happier in a job where they can add real value.
- An honest self-assessment: “Often CEOs need to look to themselves and realise that while they are great business starter, they may not be the leader required to take the company to the next stage of growth. As a company moves from a scale-up to a large business, the CEO simply cannot make every decision. Some of the most successful growth companies I have worked with had a founder step away and appoint a new CEO to handle day-to-day operations. For founders struggling with tasks and activities they do not enjoy, bringing on a CEO to free them from the operational headaches will allow them to do what they do best – sell, develop new products, or drive new ideas and create innovation within the business.
- Breaking old habits: “It’s not uncommon for CEOs to be very attached to their initial idea when it has been positively reinforced by the successes enjoyed. Sometimes they think they just need to keep doing what made them successful and they don’t look for new ideas… even though what made them successful in the past is no guarantee of future success. CEOs need to be across the fact that markets are dynamic, customer values keep changing, new technologies are enabling companies to do more work in less time, and new competitors are emerging all the time. So, thinking ‘if it ain’t broke, don’t fix it’, or ‘we’ll be right’ are no longer appropriate responses. CEOs need to be constantly thinking and challenging themselves about what they’re doing and how they’re doing it.”
Dr Matthews said that she and her team have found that that the Centre’s programs serve as a “circuit-breaker” for CEOs and executives.
“By stepping out of their company, by thinking strategically, by working on the business and not in it, by working with other CEOs and executives, guided by our Growth Experts, executives begin to discover strategies they never considered, which enable them to unlock their company’s growth potential,” she said.
“Based on data from the Centre’s longitudinal study, which tracks the progress of the businesses going through our clinics and programs, our initiatives are working. A sample of 140 companies reported that in the one to three years following one of our programs, they added over $400 million in revenue, $65 million in profit, and almost 800 full-time jobs. Of those companies, ten have achieved aggregate growth of 149% in revenue, 419% in profits, added 415 FTE jobs and began exporting into 15 countries.”
One of the Centre’s success stories, Dr Matthews said, is footwear company Munro Group, formerly known as Styling Services: “When they entered our ANZ Business Growth program in 2014, they had an annual turnover of around $50 million. Three years later, the Group became the largest player in Australia’s $3 billion footwear market following the acquisition of Fusion Retail Brands. Now, they have an annual turnover in excess of $300 million.
Another success story for the Centre is Ry.com.au, whose founders James Patten and Brad Carr led the health and beauty products e-tailer through seven years of growth before they – in Dr Matthews’ words – “reached the limit of what they knew as entrepreneurs and weren’t sure of the best way to move forward”. She continued, “They went through the ANZ Business Growth program in 2015, and said the experience allowed them to identify what they were doing right and what they needed to change. They then began making improvements to their business culture and hiring practices, formulated a plan and defined a set of growth goals for their organisation. They also put a new business structure in place that gave them clarity around who was responsible for what. These steps allowed the team to rediscover growth and just two years later in 2017, James and Brad sold Ry.com.au to leading global online retailer the Hut Group for an undisclosed sum.”