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Understanding the DNA of business

 

 

Studying the DNA of successful business provides insight on New Zealand’s lagging productivity.

New Zealand needs more businesses doing more business.

That’s the very simple premise that led KPMG on a hunt to drill down into the country’s most successful businesses, understand the traits they share, analyse and distil those traits, and share them with others to build an even better and more vibrant economic sector.

At first glance, the reasons that so few local businesses excel into bigger, better and more productive concerns are hard to find. The evidence suggests New Zealand is an awesome place to do business. Constraints to trade are low, the regulatory and operating environments are generally fair and allow for growth, and we can be competitive while still attracting a premium price for our products.

On a broader note, we’re in a strong position economically, having survived the Global Financial Crisis relatively unscathed. For the last 20-30 years we’ve developed the right products in the right niches; we’re closer than ever to our markets, including critical markets in Asia, while at the same time being far enough away from chaos points in the world.

It’s a sweet spot in many ways. And yet, over that same last 20-30 years, we haven’t grown as fast as our peers and competitors. We seem to have missed the boat on driving productivity. And we have failed to increase our margins and prices in key markets.

There’s huge opportunity if we can unlock this mystery.

 

One of the points that has come out of extensive research KPMG has done in this area is identify that New Zealand doesn’t, in truth, have a productivity problem – it has a people problem.

This becomes abundantly clear when we looked at outstanding New Zealand businesses — companies that are working well beyond the domestic market, targeting a place in the global market and driving prosperity for both themselves and the country.

We have identified eight key traits we’ve named Enterprise DNA.

  • Pivotal leadership: Through consistent intensity, restlessness and relentless focus, they drive the business to greater achievements.
  • Attitude: Clear and long-term ambitions to be the best.
  • Strategic anchor: A distinctive, strategic purpose never compromised though it can evolve
  • Investment and resource allocation: Investing in world-class growth while cutting that which is not delivering expected returns.
  • Customer intimacy: Building an intimate relationship with the customer; understanding the emotional drivers key to maintaining it.
  • Capable people: Great care selecting high-performing people to fit into the company culture.
  • Connection & collaboration: Connecting and collaborating with world-class partners across the value chain and across industries to increase the pace and effectiveness of adding value.
  • Deployment discipline: Relentless focus on delivering the core mission; innovating constantly and deploying a fast-fail model when things are not working.

It is noteworthy that four of the traits relate to the leadership and people within an enterprise (Pivotal Leaders, Attitude and Ambition, Capable People, Strategic Anchor).

We need more business leaders who are not satisfied with middling results — we want those next ten percent of businesses who aim to grow by as much as 40 percent yearly. Because those are the ones that will fuel prosperity, unlock opportunity, and inspire the kind of success that will drive the country towards more prosperity.


Download the full KPMG Enterprise Report to find out more.


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