Business Game Plans For Success
A recent report released by American Express with research conducted by ACA Research (our sister company) revealed that nearly one out of four mid-sized companies do not have a game plan. Considering that more than half of these businesses predict no growth in the immediate future, it is clear that businesses can no longer afford to focus only on their short-term goals. According to the survey, companies that have a long-term game plan tend to perform the best. Growth is the most popular priority amongst game planners, and it is closely followed by improvements in technology, better operational efficiency and more skilled staff. But the fact that Australia ranks 21st amongst the 32 countries surveyed for innovation by the Organisation for Economic Cooperation and Development (OECD) shows that there is a long way to go.
An ambitious game plan is one of the primary drivers of innovation and growth within a company, but there are many businesses that are too busy focusing on short-term goals and ignoring the long-term in order to create a robust game plan. In today's market, not having a game plan is an extremely risky method of running a company, especially a small or mid-sized business. A recent survey conducted by American Express revealed that nearly one out of four mid-sized companies do not have any game plan, and half of those without plans predict no growth.
Not having a game plan makes it difficult to focus the available resources in a business. Not surprisingly, one out of two mid-size companies that do not have a game plan predicts no growth in the near future. At the same time, simply focusing on the short-term objectives of the business leads to lower growth rates, according to the survey. The ones who are able to generate the best growth rates are those who have long term plans in place, with nearly 30 percent expecting to see a double-digit growth rate by the end of this financial year.
The survey has confirmed that having long-term game plans is good for business, and there are many reasons for this effect. An organisation that knows exactly what it is working towards has a streamlined decision making process, which makes it easy to allocate the available resources for initiatives that help it achieve its goals faster. The survey found that aggressive growth targets resulted in better confidence amongst the employees in an organisation and more chances of experiencing high growth.
The role of CFOs
CFOs of today are experiencing a shift in their role in businesses, as they are expected to invest in initiatives that drive the company's overall growth. Having a game plan helps provide clarity in their role. The priorities of a business become visible in their long-term game plan, and CFOs are able to allocate the resources at the right time to foster growth and longevity. The survey shows that CFOs are more capable of using capital to fund innovation and drive growth in the short term if there is a robust game plan in place. These findings underline the urgency for Australian businesses to invest in a long-term game plan.
CFOs are now required to evolve from their roles as managers of a company's finances and think about driving growth by investing in innovation. Out of the CFOs surveyed, 80% believe that innovation is a key contributor to the growth of a company, but 40% of those surveyed claim that their company has not been able to introduce new innovations in the market in the past three years. Australian businesses will need to find ways to collaborate with the Government, academia and other industries to foster the development and commercialisation of new ideas.
Types of innovations and strategies
The study showed that more than 75% of CFOs are aware of disruptive threats in their industry and the need for an agile business. The survey showed that investing in a game plan helped CFOs identify business priorities and work towards growth and longevity. Although CFOs have different ways of classifying innovation, most of them consistently include both incremental and radical changes in their strategy. Businesses that have long term game plans tend to have invest more in radical changes within the organisation to help improve their operations or products.
Challenges of investing in innovation
Although most companies seem to be benefiting from a long term game plan, the survey found out that out 70% of the business in Australia are not investing enough towards innovation. Most of the CFOs surveys cited that the lack of access to additional capital was the primary reason that such investments cannot be made. Mid-sized companies will need to invest more funds into innovation if they hope to compete with the resources of larger companies and the agility of Australian start-ups.