Article by Pete McConnell, Founder and Executive Chairman of Commtract. This is a copy of his monthly column with the AFR – ‘This Start up Life’. Find the full article here.
‘Go hard or go home’ is one of those great Australian colloquialisms.
You can almost trace its origin to a beer-soaked brickie sideline at a suburban football game.
Its magic lies in the fact that it captures our approach to sport with the simplest of words.
Whether its wielding the willow or punting a pigskin the moment Australians enter the field of play they like to commit without hesitation and without mind to the risk.
It’s an attitude that has seen us succeed, time and time again.
So, more is the pity it doesn’t translates into our approach to business.
It seems when Australians enter the boardroom our brave weekend warriors become wimps and worriers. They fret and over think every decision. They exaggerate and over-egg every risk.
This may have been the right approach when successful businesses were built on slow and steady growth. However, be absolutely assured, that the innovation revolution will punish the cautious.
A truism of digital businesses is that the winner takes all.
This is because most benefit from network effects. The larger they grow the better the user experience and customer utility.
Uber works because a car is always close by. Airbnb works because it has a house in every city and at any time.
The scale of these companies ultimately provides a barrier to entry and opportunity for profit. But to build it requires lightening growth, significant investment and real risk taking.
The new generation of investors understand this. Hence, they prioritise time ahead of cost.
When they assess an idea, their chief concern is speed to market and ability to scale. It all about growth and expansion, ahead of profit and breaking even.
Despite all the rhetoric too many Australians, especially those from traditional business backgrounds, take the opposite approach.
Corporate strategy teams can reel off innovation case studies. Yet in assessing investment opportunities they obsess with investment gateways, pilot projects and further testing.
Boards make all the right sounds about embracing disruption. But few have the courage to sell a non-EPS accretive acquisition to shareholders regardless of its strategic fit or potential.
The great irony is our most successful home grown businessfolks – the likes of Lew, Forrest, Lowy, Cannon-Brookes and Triguboff – are inherent risk takers. Colourful characters not afraid to trust their gut instinct and swing for the bleachers.
Whereas too often our boardrooms are dominated by former professional service providers whose biggest career risk was choosing which firm to join after graduating from a sandstone university.
This contrast is compounded by a board remuneration model that rewards clean skins and time servers. Directors’ fees collected annually do not encourage bold decisions executed at pace.
If the Australian business establishment is going to prosper and survive in an era of unprecedented transformation, then this is going to have to change. If we don’t we will be left behind in the global innovation arms race.
Professional directors are going to have to become far more comfortable risk and fast paced change.
And companies are going to have to embrace genuine change agents.
The outsiders and unconventional. The big thinkers and big risk takers. The folks who would prefer to bet at home if they cannot go hard.
Image from original AFR article (link above) featuring SCG identity Steven Gascoigne (aka Yabba, pictured here in 1935), would have no doubt encouraged directors to swing the bat.