The impact of global economic conditions are having a direct impact on how Australian leaders need to guide the people through uncertain and challenging times times
1. Leading Through Uncertain 24 October 2012
Times, what differentiates Rory Gregg
dynamic organisations Partner – Operational Advisory
Grant Thornton Australia
www.rorygregg.com
@rory_gregg
#cpacongress
2. Assurance Tax Advisory
over 120 partners &
1,500 professionals
Helping dynamic leaders
grow their businesses
3. AGENDA Global Dynamism Index (GDI 2012)
Challenges Facing Australian Business Leaders
Strategies for leading through uncertainty
Questions
4. AGENDA Global Dynamism Index (GDI 2012)
Challenges Facing Australian Business Leaders
Strategies for leading through uncertainty
Questions
5. What is it Global Dynamism Index (GDI 2012)
“The GDI is a series of performance
indicators that analyses and measures
the resilience of 50 diverse economies
and their capacity to recover from a
change in economic circumstances.”
6. Global Dynamism Index Business
Operating
Environment
Labour &
Economics &
Human
Growth
Capital
Financing Science &
Environment Technology
7. Key Findings Regional Insights (GDI 2012)
66.1
Nordic
62.9
North America
59.2
Western 55.7
Europe Eastern
Europe
51
Middle
East
and
Africa 59.3
Asia Pacific
60 53.8
G7
Latin
America
55
Growth8 57
All
Countries
8. Key Findings Country Insights (GDI 2012)
United Sweden
States Finland
China
Austria Singapore
Israel
Best - Business operating
environment Australia
- political stability (96)
Worst – Financing environment
- inbound M&A deals (6)
9. Key Findings Where Australia Stands?
66.1 55.7
Eastern
Nordic
Europe
62.9 Top 3 Ranking
North 59.2
America Western 1 - Singapore (72.1)
Europe
2 - Finland (70.5)
3 - Sweden (69.6)
Australia & New Zealand
59.3
Asia
Pacific
6 - Australia (65.6)
51.0 11 - New Zealand (63.9)
53.8 Middle
Latin East and
America Africa
Bottom 3 Ranking
48 - Greece (40.2)
49 - Nigeria (40.2)
50 - Venezuela (37.4)
10. AGENDA Global Dynamism Index (GDI 2012)
Challenges Facing Australian Business Leaders
Strategies for leading through uncertainty
Questions
11. What does this mean for Australia Global Dynamism Index
Business Labour &
Operating Human Capital
Environment (91) (64)
Top 15% of economies Aust labour productivity
Strong political stability rates and % of workforce
under 30 is low
compared to high
performing economies
Financing Economics & Science &
Environment (63) Growth (59) Technology (51)
Ranked low in growth Real GDP growth low R&D as a % of GDP
of value of inward M& compared to top was low compared to
A deals but high in performing economies top performing
financial regulatory economies
systems
12. Business
Environment
91
Challenges facing
Australian leaders
Increased focus in
compliance & risk
High corporate tax
rates
Cost of doing business
in Australia
13. Labour &
Human
Capital
Challenges facing
64 Australian leaders
Attracting & retaining
talent
Increase pressure on
wage costs
Constrained by
traditional resourcing
models
Replenishing talent
pool
14. Financing
Environment
63
Challenges facing
Australian leaders
Accessing capital for
growth
Identifying suitable
M&A targets
Appetite for risk
15. Economics &
Growth
59
Challenges facing
Australian leaders
Population size
continue to constrain
GDP growth
Low productivity rates
Geographical isolation
16. Science &
Technology
51
Challenges facing
Australian leaders
Under investment in
technology
Over reliance on
US/Europe to lead
technology innovation
Slow to adopt new
technologies & ways of
working
17. AGENDA Global Dynamism Index (GDI 2012)
Challenges Facing Australian Business Leaders
Strategies for leading through uncertainty
Questions
18. CEO Strategic Planning Areas of focus
Refocus Agility Diversity Customer
Centric R&D & Innovation
Planning Scalability Mobility
Efficiency Customised solutions
Risk
Management
Alignment Retention
Lean Flexibility
19. Dynamism and Leadership Focus on what matters to the business
Refocus Agility Diversity Customer
Centric R&D & Innovation
Planning Scalability Mobility
Efficiency Customised solutions
Risk
Management
Alignment Retention
Lean Flexibility
STRATEGY STRUCTURE PROCESS TECHNOLOGY
PEOPLE
Business partnering Business capabilities Placing the customerFocusing on what
Aligning technology to at the
business strategy heart of the process matters
Aligned to business needs
Alternative talent sourcing
Innovation (Customer & Removing barriers through the basics right
Getting
models
Outsources vs Insourced
Quality) technology Challenging the
business (innovation)
20. Dynamism and Leadership Focus on what matters to the business
80% large businesses already engaged
with Asia.
Only half of mid-sized companies have
plans to expand their connections
Only 3.4% of small to medium sized
enterprises export to China
China’s move to consumption-based
economy = more need for services and
technology where mid-market and SMEs
have good capability
21. Refocus Diversity
R&D & Innovation
Planning Mobility
Customised solutions
Risk
Management Retention
Flexibility
Leadership Myths Leadership Realities
Conquer local markets before growing Australia’s population limits growth options
offshore for many businesses
80 percent of large Australian businesses
accept the need to expand into Asia1
Don’t be afraid of doing business in
international markets
Strengthen your ties and business in Asia
and emerging economies 1 Grant Thornton Australia, 2012
22. Refocus Diversity
R&D & Innovation
Planning Mobility
Customised solutions
Risk
Management Retention
Flexibility
Leadership Myths Leadership Realities
Establishing aspirational goals is the key to Don’t mistake vision for strategy
guiding an organisation to success
Focus on iterative and rapid execution to
achieve performance improvement
Don’t be afraid to change tactics or strategy
23. Refocus Diversity
R&D & Innovation
Planning Mobility
Customised solutions
Risk
Management Retention
Flexibility
Leadership Myths Leadership Realities
Improving existing products and efficiency A readiness to adapt is the lowest risk path
is a low risk path to future profits
Fluctuating terms of trade, looming skills
shortages and new technologies are major
sources of future instability
Need to constantly question assumptions
and explore innovative alternatives
24. Refocus Diversity
R&D & Innovation
Planning Mobility
Customised solutions
Risk
Management Retention
Flexibility
Leadership Myths Leadership Realities
Skilled workers are easily hired Adopt a broader range of workforce and
resourcing strategies.
Explore outsourcing, talent retention,
flexible work models
Develop tactics for lifting use of women
and mature age workers. Women are paid
up to 19% less than male counterparts2
2 Australian Bureau of Statistics 2012
25. Refocus Diversity
R&D & Innovation
Planning Mobility
Customised solutions
Risk
Management Retention
Flexibility
Leadership Myths Leadership Realities
Training staff is too expensive, it is easier Most organisations invest far too little on
to hire someone with the right skills employee training
Demographics are working against you
Workforce and talent retention strategies
are only necessary for large complex Workforce retention has never been more
organisations important
Retain key talent by providing alternative
growth and career opportunities
Training and retaining strategies are the least
disruptive, lowest risk, and offer lower total
costs
26. Refocus Diversity
R&D & Innovation
Planning Mobility
Customised solutions
Risk
Management Retention
Flexibility
Leadership Myths Leadership Realities
Workforce productivity only relates to the Productivity is not just about wages. It
number of hours employees work divided depends on a combination of factors.
by total output
Look at end to end workflows
Consider impact of employee
empowerment and engagement, training,
workforce utilisation, output quality and
customer satisfaction measures3
3 Dept of Workplace, Employment and Education
27. Refocus Diversity
R&D & Innovation
Planning Mobility
Customised solutions
Risk
Management Retention
Flexibility
Leadership Myths Leadership Realities
We invest a lot in technology, and it is a Innovation is not linked to IT infrastructure. It is a
high priority cultural issue
IT investment has plateaued over the past 18
months. Government sector performing worst,
Energy sector highest4
IT infrastructure can sometimes make it harder
to change workflows, and stifle innovation
Focus on the customer experience, rather than
internally focused projects
4 Gartner 2012
28. Refocus Diversity
R&D & Innovation
Planning Mobility
Customised solutions
Risk
Management Retention
Flexibility
Leadership Myths Leadership Realities
New online technologies & data analytic 3.3% of Australia’s GDP is generated through
solutions are not a core part of Australian the internet compared to 8.3% in the UK. 5
businesses
Data analytic solutions is the new frontier in
helping business understand their customers
Business leaders need to invest in
technologies that support the design of
innovative solutions to customer not
business issues.
5 HBR 2012
29. Strategies for leading through uncertainty
Australian business leaders need to focus on what matters…
Manage Technology Flexible
Risk Incremental Enabled Workforce
Prudently Planning Service Delivery Planning
30. AGENDA Global Dynamism Index (GDI 2012)
Challenges Facing Australian Business Leaders
Strategies for leading through uncertainty
Questions
Good AfternoonBy way of introduction my name is Rory Gregg, I'm a Partner within the Business Consulting Practice for Grant Thornton and am based in Sydney.Next slide
Good AfternoonWe are a International Professional Services firm with offices in most capital cities within Australia.We have 120 partners and over 1500 professional services employees supporting our client across the full spectrum of Assurance, Tax and Advisory Services.More often than not we find ourselves working closely with the Board, the CEO and their executive leadership team to identify and overcome a broad range of complex problems they may face in leading their businesses.The past three years has seen unprecedented changes and realignment of the global economy. We've seen the dramatic shifts in the economic capital Eastward, whilst the West continues to recover from the sovereign debt crisis, Further more, the political instability in Syria combined with the uncertainty surrounding the future of a number of Australia's industries continues to weigh heavily on the minds of business leaders across Australia. Today I wanted to spend some time sharing with my some of the emerging tends and key challenges facing business leaders in Australia. I'd also like to share with you some of the strategies that we believe dynamic leaders should consider as they continue to navigate their way through these challenging and uncertain times….. Next slide
The Global Dynamism Index is effectively a series of economic and business related performance indicators that analyses and measures the resilience of 50 diverse economiesThe index also ranks the capacity of these 50 economies to recover from a change in economic circumstances.The Index (published earlier this month) conducted by GT in collaboration with the Economist Intelligence Unit, the Worlds Bank, Thompsons Financial and UNESCO. 406 Senior Business leaders from the respective economies also play a pivotal role in providing the business perspectives.The Index ranks the 50 economies from 1 to 50 using a weighted index. Basically the higher the number the better the resultThe reason I've included the GDI results in todays presentation is because it provides an insight into how Australia, and more importantly Australian Business leaders are performing against other economies during these uncertain times.I hope that these results will also highlight to you some of the key areas that you as business leaders need to consider as Australia begins to take it's place in the new commercial order.So lets get straight into it……
So just quickly let me take you through the key categories of performance areas.Business Environment performance indicators focus on…Foreign trade and exchange regimes and controls. These indicators focus on Policy, legal and regulatory riskAlso covers political stability Labour & Human Capital performance indications focus on….Focus on workforce productivity growthUnemployment School, life expectancy% of population under 30 years of ageScience and Technology performance indicators focus on ….Broadband subscribers per 100 inhabitantsGrowth of Broadband subscriptionR&D as a % of GDPTotal IT spending growthFinancing EnvironmentQuality of overall financial regulatory systemAccess to medium term capitalGrowth of value of inward M&A dealsPrivate sector credit and percentage of GDPInward direct investment growthCorporate Tax burdenEconomic GrowthReal GDP growthPrivate Consumption per headChange in value of stock market index
Regional InsightsRegional SummaryNordic nations are most dynamic globally followed by North America, the G7 , Western Europe and Asia Pacific above average.Eastern Europe ranks just below Latin America and Growth 8Middle East & Africa rank lowestEmerging EconomiesThere is no doubt that growth prospects are healthier in emerging economies such as china, Latin America and IndiaOver the next 5 years the IMF expects emerging economies to grow at around 7% to 8% per annum compared to 3.2% in mature economiesDespite this, emerging economies still have their challenges for example the Indian government's battle with corruption, high inflation, and the declining value of the local currencyWe see some of these emerging economies tapering off as they begin to grapple with the changing environment, China's growth is slowing as debt begins to riseMature economiesThe 10 economies that sit at the top of the rankings vary significantly and include, countries from Asia pacific such as Australia, Singapore & Korea. A further five from Europe, being Austria, Germany, Finland, Sweden and Switzerland. The US from North America and Israel from the Middle east.
Country InsightsSingapore emerges as the most dynamic economySingapore is perfectly paced to act as a gateway between west and eastBusiness and economic prospects are supported by an open and transparent financing environment and a well educated workforceFinland, Sweden, Israel and Austria complete the top 5United States ranks 10 and China ranks 20US ranked highest in Financing ahead of Canada, ranks 2 in G7 and behind GermanyNot surprisingly, China ranked highest in Economics a growth and was ranked 2 in G8 behind Korea. They ranked 6th in Asia Pacific For those of you who were wondering, the United Kingdom was ranked 32ndAustralia ranked 6th and 2 in Asia Pacific behind Singapore. Highest for political stability (96) and lowest in growth of inward M&A deals (6)
Country InsightsSingapore emerges as the most dynamic economyFinland, Sweden, Israel and Austria complete the top 5United States ranks 10 and China ranks 20Australia ranked 6th and highest for political stability (96) and lowest in growth of inward M&A deals (6)
Good AfternoonBy way of introduction my name is Rory Gregg, I'm a Partner within the Business Consulting Practice for Grant Thornton and am based in Sydney.GT is a global Professionals Services firm that specialises in providing our clients with a broad range of Assurance, Tax and Advisory ServicesMore often than not we find ourselves working closely with the Board, the CEO and his or her executive leadership team to identify and overcome a broad range of complex problems they may face in running their businesses.In Australia we have over 120 partners and 1,500 staff located in all major capital cities.Our core clients include a broad range of public and privately held companies, both Government and Non Government Today I wanted to talk to you about the role I believe CIOs can and should play in supporting the Board and the CEO in leading and managing organisationsNext slide
Business Operating Environment (91)Performed in the top 15 % surveyed (96 for Political Stability)Economics & Growth (96)Real GDP growth was low compared to other top performing economies but high in private consumption per head.Science & Technology (51)R&D as a % of GDP was average compared to other top performing economiesLabour & Human Capital (64)Labour productivity was lower than other top performing economies (eg. China 90) & scored low on % of population under 30.Financing Environment (63)Ranked well in the quality of overall financial regulatory systems but not so well in growth in value of inward M&A deals
Good Afternoon
CEO FocusLets start by looking at the CEO Focus and link this back to how we believe CIO can take a greater role in supporting the business.Standard prioritiesStrategyGrowthCustomer RetentionQualityStructureAgilityScalabilityAlignmentPeopleTalentRewardEngagementProcess Customer CentricEfficiencyLeanTechnologyMobilitySecurityFlexibilityWhat does this mean for the CIOStrategyAligning technology to business strategyInnovation (Customer & Quality)StructureBusiness partneringAligned to business needsOutsources vs InsourcedPeopleBusiness capabilitiesAlternative Talent sourcing modelsProcess Placing the customer at the heart of the processRemoving barriers through technologyTechnologyFocusing on what mattersGetting the basics rightChallenging the business (innovation)
CEO FocusLets start by looking at the CEO Focus and link this back to how we believe CIO can take a greater role in supporting the business.Standard prioritiesStrategyGrowthCustomer RetentionQualityStructureAgilityScalabilityAlignmentPeopleTalentRewardEngagementProcess Customer CentricEfficiencyLeanTechnologyMobilitySecurityFlexibilityWhat does this mean for the CIOStrategyAligning technology to business strategyInnovation (Customer & Quality)StructureBusiness partneringAligned to business needsOutsources vs InsourcedPeopleBusiness capabilitiesAlternative Talent sourcing modelsProcess Placing the customer at the heart of the processRemoving barriers through technologyTechnologyFocusing on what mattersGetting the basics rightChallenging the business (innovation)Leaders should also know their strength and the strengths of their team
Section - What Dynamic Organisations need to consider1. Findings from a recent Australian Industry Group survey show more than 80 per cent of large businesses are already engaged in some way with Asia. Only half of mid-sized companies have plans to start or expand their connections2. According To Grant Thornton, on 3.4 per cent of small to medium sized enterprises export to China3. China is moving to be a much more consumption-based economy so they've got more of a need for services and technology and that's where a lot of the mid-market and SMEs have a good capability
CEO FocusLets start by looking at the CEO Focus and link this back to how we believe CIO can take a greater role in supporting the business.Standard prioritiesStrategyGrowthCustomer RetentionQualityStructureAgilityScalabilityAlignmentPeopleTalentRewardEngagementProcess Customer CentricEfficiencyLeanTechnologyMobilitySecurityFlexibilityWhat does this mean for the CIOStrategyAligning technology to business strategyInnovation (Customer & Quality)StructureBusiness partneringAligned to business needsOutsources vs InsourcedPeopleBusiness capabilitiesAlternative Talent sourcing modelsProcess Placing the customer at the heart of the processRemoving barriers through technologyTechnologyFocusing on what mattersGetting the basics rightChallenging the business (innovation)Leaders should also know their strength and the strengths of their team
CEO FocusLets start by looking at the CEO Focus and link this back to how we believe CIO can take a greater role in supporting the business.Standard prioritiesStrategyGrowthCustomer RetentionQualityStructureAgilityScalabilityAlignmentPeopleTalentRewardEngagementProcess Customer CentricEfficiencyLeanTechnologyMobilitySecurityFlexibilityWhat does this mean for the CIOStrategyAligning technology to business strategyInnovation (Customer & Quality)StructureBusiness partneringAligned to business needsOutsources vs InsourcedPeopleBusiness capabilitiesAlternative Talent sourcing modelsProcess Placing the customer at the heart of the processRemoving barriers through technologyTechnologyFocusing on what mattersGetting the basics rightChallenging the business (innovation)Leaders should also know their strength and the strengths of their team
CEO FocusLets start by looking at the CEO Focus and link this back to how we believe CIO can take a greater role in supporting the business.Standard prioritiesStrategyGrowthCustomer RetentionQualityStructureAgilityScalabilityAlignmentPeopleTalentRewardEngagementProcess Customer CentricEfficiencyLeanTechnologyMobilitySecurityFlexibilityWhat does this mean for the CIOStrategyAligning technology to business strategyInnovation (Customer & Quality)StructureBusiness partneringAligned to business needsOutsources vs InsourcedPeopleBusiness capabilitiesAlternative Talent sourcing modelsProcess Placing the customer at the heart of the processRemoving barriers through technologyTechnologyFocusing on what mattersGetting the basics rightChallenging the business (innovation)Leaders should also know their strength and the strengths of their team
CEO FocusLets start by looking at the CEO Focus and link this back to how we believe CIO can take a greater role in supporting the business.Standard prioritiesStrategyGrowthCustomer RetentionQualityStructureAgilityScalabilityAlignmentPeopleTalentRewardEngagementProcess Customer CentricEfficiencyLeanTechnologyMobilitySecurityFlexibilityWhat does this mean for the CIOStrategyAligning technology to business strategyInnovation (Customer & Quality)StructureBusiness partneringAligned to business needsOutsources vs InsourcedPeopleBusiness capabilitiesAlternative Talent sourcing modelsProcess Placing the customer at the heart of the processRemoving barriers through technologyTechnologyFocusing on what mattersGetting the basics rightChallenging the business (innovation)Leaders should also know their strength and the strengths of their team
Despite the climate of uncertainty, Australian business (and their leaders) continue to perform.Recent results from the ABS suggest that growth of 3.7 for the Jun Quarter led by the mining, banking and healthcare sectors. Reinforcing the broad impact of our economic strength86% of ASX 200 were profitable in their most recent periodReal labour costs are trending upwards, rising 1.4% in the quarter, which is hardly surprising given a full employment scenario in an economy growing strongly.Australian Leaders should..Risk ManagementSpread their risk, and make smaller moves that can be easily completed in short time scales.Incremental PlanningAvoid maintaining the status quo however avoid embarking on any grand untested strategies and plansBe prepared to make frequent adjustments to your plans, and keep a watchful eye on both your clients and the marketTechnology Enabled Service DeliveryService Delivery should not be constrained by you technology or workforce capabilities.Flexible Workforce PlanningDiversified Workforce; leaders should working across a broader portfolios of responsibilities ( client and non client integration)Workforce Flexibility; Flexible not "casualised" workplace arrangementsWorkforce Reskilling; Reskilling the workforce especially aging workers to respond to changing needs.
Good AfternoonBy way of introduction my name is Rory Gregg, I'm a Partner within the Business Consulting Practice for Grant Thornton and am based in Sydney.GT is a global Professionals Services firm that specialises in providing our clients with a broad range of Assurance, Tax and Advisory ServicesMore often than not we find ourselves working closely with the Board, the CEO and his or her executive leadership team to identify and overcome a broad range of complex problems they may face in running their businesses.In Australia we have over 120 partners and 1,500 staff locates in all major capital cities.Our core client include a broad range of public and privately held companies, both Government and Non Government Today I wanted to talk to you about the role I believe CIOs can and should play in supporting the Board and the CEO in leading and managing organisationsNext slide