Big growth themes for your board's agenda

June 11 quote

Is your business focused on how it can innovate and gain first mover advantage in order to capitalise on the big global trends reshaping the business landscape?

A new report by professional services firm Deloitte, Australian Business Trends 2014: How Australian business can capitalise on the latest global trends, outlines three core growth themes which should be on your board’s agenda. They are:

New consumers

Selwyn D’Souza, lead strategy partner at Deloitte, says the growth in consumption in the Asia-Pacific region will offer huge opportunities to Australian companies, especially across the financial services, retail and telecommunications industries.

He expects the next wave of growth for Australian businesses to come from emerging Asian markets and their burgeoning middle classes.

It is projected that by 2020, 3.2 billion people will be considered “middle class”, up from 1.8 billion in 2009. Almost none of this growth will come from advanced economies. Instead, a major part of this increase will happen in Asia, Africa and Latin America.

As a rough estimate, D’Souza says a billion new people will be critical in shaping global demand over the next five years or so.

However, he says this new set of consumers will not have the discretionary spending power of traditional middle-class customers in advanced economies. “They are poorer, live in different conditions and will require different products and services. But they will provide the single biggest growth opportunity in many global companies’ portfolios.”

D’Souza believes that as a developed economy with a highly educated, technology savvy workforce, Australia is well placed to capitalise on the changing economic landscape, especially due to its proximity to the growth markets of Asia.

But he says: “The competitiveness of Australian companies will depend on a range of factors, but will ultimately come down to how quickly and efficiently we can innovate and adapt to the needs of customers in new markets and provide the products and services they will require. This will demand a greater awareness of social responsibility as we join the global race to lift vast numbers of people out of poverty.

“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.”

New collaborations

The rapid growth of second and third-tier cities in Asia is likely to offer big opportunities for Australian companies wanting to do business there. Capabilities that were once exclusive to large businesses are now available on open markets, enabling organisations to capitalise on the increased adoption of digital technologies. 

“Businesses can benefit from leveraging infrastructure developments such as the National Broadband Network, and the remote pools of talent, to stimulate invention in regional industries and locations,” says D’Souza.

New leadership

The Deloitte report notes: “CEOs have more direct reports than at any time in the past. The positions that collectively make up the ‘C-suite’ in large businesses (so named because of the tendency for all of their titles to feature the word ‘chief’) have, according to one authoritative study, doubled since the 1980s. But the trend at the top of organisations is not just a matter of numbers – it’s also about composition.

“In C-suites today, functional specialists – including chief financial officers, chief marketing officers, chief human resources officers, and more – far outnumber the generalist heads of business units.

“If the original top leadership group of a handful of general managers constituted Version 1.0 of the C-suite, the prevalence of functional specialists puts us solidly in the Version 2.0 era. The problem is that this model is ill-matched to a business environment in which companies must transform themselves, and continue transforming themselves, to remain competitive.

“In the new era of globalisation, teams of functionally oriented executives sometimes struggle to formulate and act on integrated, coherent strategies for future success. For many businesses, it’s time for another reconfiguration of the top leadership team – here comes C-suite 3.0.”