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Burgeoning business leaders need to possess more than sound economic and marketing skills for financial success, in today’s dynamic trading landscape.
Rapidly changing technological capabilities and increasing consumer demand for products and services from ethical, sustainability-driven companies are changing the business world. Here’s some of the key focus areas for future SMB leaders to consider.
Healthier practices for larger profits
Analysis from PwC on businesses implementation of sustainable development goals, illustrates that solving social problems via a company’s goods or services yields widespread benefits.
PwC says when a company makes profit while benefitting society and business performance simultaneously – it creates solutions that are scalable. In its global survey of business and consumers, PwC says 78 per cent of consumers said they were more likely to buy goods and services from companies that had signed up to sustainable development goals.
At a global level, environmental and climate change risk is seen by Australian CEOs as the number one threat to their organisation’s growth.
“There is also a growing awareness of the exposure of business models to climate risks,” says Adrian King, global chair of sustainability, climate change & ESG Services at KPMG, in the company’s annual Global CEO Outlook.
“More large companies need to engage in climate change scenario planning, as recommended by the Task-Force on Climate Related Financial Disclosures.”
King adds there’s also an increased regulatory risk due to ASIC, APRA, RBA and accounting standard-setters all issuing guidance on climate risk disclosures in the last 12 months.
“Business will itself have to drive progress on climate change, as it seems unlikely there will be any radical new government policy initiatives.”
Digital disruption
New technologies have also transformed operations for SMBs across the globe, with businesses increasingly turning to digitised solutions.
According to the EY Global FinTech Adoption Index 2019, the use of fintech [financial technology] in the Australian market continues to rise, with many SMBs already embedding new payment platforms into their operations.
However, the pace of local fintech adoption has slowed in comparison to emerging markets, with Australia now sitting slightly below the global consumer adoption average of 64 per cent.
Fintech firms are also transforming the SMB industry beyond solely providing a new payment channel, by providing improved access to capital and removing complex lending contracts.
“While starting from a higher base than many other Asian markets, Australia has dipped under the global average in this year’s survey,” said Meredith Angwin, Ernst & Young Australia fintech advisor.
“However, we expect this to change as more challenger fintechs continue to come into the local market and the major players step up their innovation agendas in order to remain competitive and address evolving consumer demands.”
Changing mindsets
Meanwhile, Accenture says business leaders need to work on achieving a more complete business mindset, in tackling the complexities of modern trading environments.
In its report, Accenture says 65 percent of the c-suite state that right-brain skills [intuition, empathy and self-awareness] are their weakest. They also state an underlying weakness in a critical left-brain – skill their understanding of new technology and having the technology skills needed to advise their teams.
The whole-brain approach is reflected on the bottom line, too. Accenture says c-suite leaders adopting a whole-brain approach see a positive bottom-line impact and realise on average 22 per cent higher revenue growth and 34 per cent higher profitability growth.
And, finally, an overwhelming 80 per cent of Australian CEOs surveyed in the KPMG outlook report, concurred with the statement, “acting with agility is the new currency of business – if we’re too slow we will be bankrupt”. Two thirds agreed that “growth relies on our ability to challenge and disrupt any business norm”.
In other words, people running a company understand the business landscape of today is always evolving; what worked before won’t necessarily work tomorrow.
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