Key Issues for Privately Owned Businesses
Successful businesses generally:
- Have a comprehensive plan, which considers numerous scenarios and charts a course of action for each
- Have a vision and make short-term decisions within that context
- Seek independent thinking to inject different ideas and ask the hard questions to drive performance.
These are basic and logical guidelines for success, confirmed by the ANZ Bank Business Barometer, (http://www.anzbank.co.nz/ad/privately-owned-business-barometer-2010.htm), which each year surveys and analyses 2,000 privately owned businesses.
The survey identifies some issues that affect the sector as a whole:
- A narrow perspective of planning
- 79% of business undertake long-term strategic planning, but many focus narrowly
- An independent perspective – valued but ignored
- 81% feel that outsiders can add value
- 35% are interested in engaging an advisor
- 38% of boards have an independent director
- Constraints to growth suggest some broader issues o aversion to change o reluctance to relinquish control o aversion to debt
- Succession is still a big issue
- 62% of owners are over 50; 23% are over 60
- 45% aspire to retire in the next 5 years
- 11% have a formal succession plan in place
Surprisingly, over the years these statistics don’t change. Why is this, when the surveys confirm that owners know the connection between independent, broad-ranging strategic thinking, sound plans and business success? I wonder what is about the Kiwi psyche that is so DIY, so Number 8 wire. Is it unmanly to seek advice? Is this fear of loss of control the big inhibitor? Have owners been burned by confiding in advisors who have been short of skills or integrity? Is the idea of a mentor a challenge to one’s self-image? Certainly our top sportspeople succeed in world tournaments with the support of world-class coaching. Ask our rowers and athletes! I don’t buy the view that it is complacency – the Three B’s of Boat, Bach and Beemer. Owners worry about their Businesses, and want to make wise and far-sighted decisions. Maybe it is just not finding the right person to confide in?
