Dr Alex Maritz shows business how they can be managing challenges of a volatile and chaotic economy
James Packer, Richard Pratt, Kerry Stokes, Gerry Harvey and Kerr Neilson top the list when it comes to the Australian wealth index, but that is not the only thing they share. They are visionary leaders in business, adopting volatility leadership in a chaotic economy. But where do entrepreneurs and small business owners get advice on the leadership of their ventures? To dispel the many myths of such successful leaders, I have adapted 10 best volatility leadership practices from Leading on the edge of chaos, by Emmet C Murphy and Mark A Murphy. There is no one formula (other than hard work) but these practices go a long way to managing your business challenges in a volatile and chaotic economy.
Make hast slowly: Leadership intelligence is more important than ever – move with greater speed and precision than ever before, but take time to think. Just consider how well Lindsay Fox of Linfox moves with precision speed.
Partner with customers: Now, more than ever, customer satisfaction and retention are critical to success. You must partner with your customers, reconnect with them to create a shared future that is more secure than either could have built alone. John Ilhan of Crazy John’s certainly thrills customers with his offerings and value add.
Build a culture of commitment: Build and preserve a culture of commitment, one where employees passionately pursue your organisation's cause and mission. Strengthen your culture by providing strategic alignment, creating a shared sense of purpose and aligning rewards and incentives appropriately. I recently attended the 3rd Richard Pratt Entrepreneurship Oration and Induction into the Entrepreneurship Hall of Fame-Australian Graduate School of Entrepreneurship. Ross Brown from the Brown Brothers Milawa Vineyard was one of the Inductees; and a leader in respect of creating a world renowned reputation.
Put the right person, in the right place, right now: Create a high-performing team with a wide range of talents—assemble and align the right collection of talent to face the challenges that lie ahead. Invest your human capital to maximize individual, team and organisational success. Ernst and Young rank in the top 50 of Australia’s largest private companies, a ranking no doubt due to their investment in human capital.
Maximize knowledge assets: Your organisation's ability to harness and maximize knowledge plays the dominant role in creating competitive advantage. You must learn to identify, mobilize, and create knowledge assets to boost the value of your organisation's intellectual capital.
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Cut costs, not value: While managing costs, don't cut the muscle along with the fat. Progress means moving resources from low-value to high-value uses. Reduce expenses while protecting and enhancing the value of your business.
Outposition your competitors: Build and leverage your organisation's unique competitive dimensions. In a rapidly changing and increasingly competitive business environment, success goes to those who can understand and develop sources of distinctive competitive advantage. The old adage of Australian heritage must not be forgotten; just look how brands such as RM Williams, Weet-Bix, Vegemite, Arnott’s and Penfold have prospered.
Manage stress without losing your competitive edge: Reduce anxiety and inspire hope by stirring employees to higher levels of achievement, not shaking them with fear and negativity.
Cut through the noise: Get your message through the ‘noise’ that rises in tandem with volatility and chaos—without the ability to communicate effectively, a leader's other skills are worthless.
Focus or fail: Stay focused and on track—follow a carefully structured process that would focus your energies while highlighting and prioritising high-leverage opportunities for success. Niches are where entrepreneurs operate best.
Top private companies such as Visy Industries, 7-Eleven Stores, Mitre 10 Australia, Rip Curl and the like most certainly implement aspects of volatility leadership in their businesses, how about you?
* Dr Alex Maritz is director of the Master of Entrepreneurship and Innovation for the Australian Graduate School of Entrepreneurship, Swinburne University of Technology.
