Let’s make it our business to become a nation with purpose

Chinese workers load cargo at a port in Lianyungang in east China's Jiangsu province.

We have an expression we use constantly at the Business Council of Australia: “Doing nothing doesn’t mean nothing will happen.” Why? Because purpose and intent really matter.

People with purpose usually lead meaningful lives. Organisations with purpose usually succeed. Countries with purpose usually have better living standards and are more resilient.

The alternative to purpose — inaction, cynicism and inertia — usually means at best muddling through, and at worst being overwhelmed by external forces or allowing others to imagine your future for you.

As a medium-sized economy in a highly volatile world, Australia is feeling many of those external forces acutely. And they are not going to go away. If we want to ensure enduring prosperity for all Australians, we must act now to ensure we foster a purposeful and competitive business community, as well as a clear, shared vision of what an Australia with purpose would look like.

Let’s start with the business community. As someone who is privileged to spend a great deal of time with the chief executives and chairmen of Australia’s top companies, I’d like to throw out a challenge. While Australian business has much to be proud of, including some true world leaders within our ranks, I’m not convinced enough of our organisations have got a genuine focus on purpose.

I’m not sure they constantly ask the question — why?

Yes, many have well-crafted mission statements. But that is not the same as a true understanding of the “why” — a clarity of direction that is shared across the organisation.

There are a few things we can do to help clarify that purpose. First, context is still king.

I am surprised sometimes that some companies do not really understand or constantly reset their understanding of the context in which they are operating.

Right now and into the foreseeable future, what happens in Asia, not just in China, matters for Australian business and, indeed, for all Australians.

It’s not a blip on the economic timeline; it’s a fundamental transformation of global economic dynamics. But I suspect some Australian companies and indeed policymakers want to believe that we will eventually return to our comfort zone: North America and Europe will drive global economic growth.

Of course we want growth in these jurisdictions to rebound. But it is time to accept that the rise of China and other emerging Asian economies means nothing will ever be the same again.

Companies who are not placing key leadership in Asian countries, who are not building real, rather than superficial, Asian capability will be overwhelmed or left out.

Entwined with this new reality of the rise of Asia is a second critical contextual issue, that of the evolution of global value and global supply chains.

All Australian business leaders should be asking: Where are the emerging markets? What are the sectors that will thrive? How is the production process transforming? What is happening in the services sector, where are the premium opportunities? And where can our company and capabilities tap in?

Australian companies often get overwhelmed by the scale of Asia. But that scale, coupled with the fragmentation of supply chains, is an opportunity, not a threat.

However, to tap into those growth opportunities, you need to have a purposeful strategy. Better understanding context needs to be coupled with the right mindset to drive real purpose.

In this regard, Australian companies need two mindset changes.

The first is putting the consumer at the centre of everything they do. Consumers are more empowered than ever. They have more choice than ever. They will be the innovator, the regulator. They will overwhelm business models.

Companies that do not relentlessly pursue a deeper understanding of the consumer will fail. This must be done with purpose. Building a deep understanding of what consumers want after they have started to walk away is very hard to do.

Part of that understanding comes with a serious investment in data analytics. Companies that work with their customers — that deeply understand them and use big data to tap into trends — will have a comparative advantage. They will have an even greater advantage if they secure a trusted environment for that data.

To my second mindset change: I strongly advise all Australian companies to change how they think about the digital revolution. Specifically, we need to think constantly about service disruption and adaptation rather than about innovation programs and technology solutions.

When I had a sabbatical in Silicon Valley last year I was intrigued at how seldom people used the term innovation. Instead, they talked about disruption and adaptation, all driven by that deep understanding of the consumer.

They talked about imagining the services people wanted and removing the pain points for consumers. They did not talk about products and technologies which, as we know, are in a state of constant disruption.

So whenever I hear companies talk about innovation funds or innovation initiatives or about how technology will fix their problems, I worry. It narrows the domain, positioning innovation as a program, not part of the DNA. And it probably won’t work.

My third recommendation for companies wanting to act with purpose is about valuing and investing in skills and capabilities.

Companies that leave the development of their people to chance are taking the greatest risk imaginable. Jobs will change profoundly. The nature of work will change. We cannot predict the exact nature of the jobs at risk and the jobs that will be created. We cannot protect against much of this. But we can protect and build the skills and capabilities of our people.

We can give people those generic skills of problem solving, of design thinking, of teamwork, of effective communication. These skills will give them more resilience and durability than most specific occupational skills.

We can think about the cultures that will allow people and companies to thrive.

A crucial task now for all Australian businesses is to rethink the diversity challenge. Viewing diversity as part of the new world of work and the modern agile organisation rather than a tick box exercise on gender is essential.

I strongly believe that diversity in its fullest context — that is, not just gender diversity — is the greatest protection from disruption. Narrow skill sets, narrow mindsets and narrow gene pools will hold back organisations. Open cultures, different views, new ideas, will propel organisations forward.

Finally, regarding business, companies of all sizes must actively rebuild trust and leadership.

The business community here and overseas has lost critical trust in recent years. I strongly reject the idea that our cultures are worse; in fact, in my experience and observation, they are better.

But the rise of social media and the evolution of digitally driven campaign techniques means mass anti-business campaigns can be mobilised quickly and effectively by activist groups.

In the often hyperbolic and unbalanced world of social media, the rational truth becomes more complicated to explain than a simple lie. But it won’t be good enough for business leaders and people like me to express frustration.

Indeed the business community needs constantly to re-examine how we communicate and the way we are doing our core business, not just our corporate social responsibility. How we treat our staff, our customers and our suppliers across the long term matters to reputation.

We must ask ourselves: Are they our partners or just resources we use?

Are we prepared to face up to systemic issues that damage reputation, such as tax transparency and supplier payment terms? Do we examine how we can create more shared value from our core business? Do we get out in front of issues and explain them better? Do we mobilise our people, our shareholders, our suppliers to get out at the local level and talk about what our companies are achieving on the ground? Do we remind the community regularly that business is not just a group of executives but the 10 million Australians who work in private enterprise?

Finally, business must take an active leadership role on the key issues confronting our country.

To date, too many business leaders have been reluctant to speak out, but that can’t go on. We need every business to see thought leadership as core business.

If we do not, we are surrendering to a set of forces that will see the rise of policies that are anti-growth, anti-corporation, anti-­innovation, as well as isolationist, xenophobic and just plain dangerous.

The hardest hit victims of these policies will not be the people sitting around boardrooms. They will be the people who lose their jobs. The people whose wages don’t go up. The small business people who rely on a well-functioning business ecosystem to survive. The people whose expectations of the social safety net will not be realised because there is simply not enough to go around. The people who want a mass education system that can’t be delivered because revenue is not there to pay for it.

I don’t believe there has ever been a more important time for business to speak up.

Of course, business can’t do it alone. And so, to what a purposeful country looks like — and the leadership it will take to set a course with purpose.

Let me start by saying that, right now, I think we are at risk of losing our collective sense of direction and purpose. And I think the community senses we are in danger of drifting.

We have had five prime ministers in the past eight years. This is disruptive and costly, and has stalled reform and confused our purpose.

Think about a company that every 18 months changes the chairman, the chief executive, the chief financial officer and pretty much everyone on the board, and restructures each of its divisions. What would be happening to that company’s share price? Its reputation?

A purposeful country would not continually put off the big work needed to put the budget in order. It would not run the risk of giving future generations crippling rates of taxation because hard decisions can’t be made now.

It would not leave the safety net vulnerable to external forces, some of which we can’t predict.

Instead we would begin the careful, methodical redesign of our major programs of expenditure to make sure they are meeting people’s needs, that they are efficient and that we can pay for them in future. A purposeful country would not leave the confusion, duplication and buck-passing of the federation unchecked.

Instead, we would ask: What do we want to deliver for the citizens of Australia in areas such as health and education? What are the incentives that will drive better service delivery? And who is best placed to take responsibility? A purposeful country would not leave our competitiveness failing, stalling or declining.

We would not despair our stagnating multi-factor productivity, which we know is at the heart of living standards and higher wages. Instead, we’d encourage business investment through pursuing lower taxes, better regulation and lower costs.

We’d make our workplaces more flexible and more creative. Not to destroy the safety net but to protect it — by protecting people’s capacity to have jobs into the future.

A purposeful country would not neglect the potential of its areas of comparative advantage.

Driving our comparative advantages is about clearing the way, with purpose and intent, to maximise our strengths.

A purposeful country would not idly watch South Korea, Britain, Germany, New Zealand and much of the developed world drive through deliberate, purposeful policy, the areas where they know they can succeed on a global scale.

A purposeful country would not try to prop up unsustainable companies and jobs. A purposeful country would develop and protect the skills and capabilities of its people. It would make serious investments in them.

To that end, a purposeful country would not allow our vocational education and training system to fall into disrepair.

We would put VET front and centre of the national agenda, not as an afterthought. We would see it as a critical tool to manage the transition under way in our economy.

A purposeful country would not continue to pursue teaching methods and an approach to education, which is actually producing worse results.

Instead, we’d focus on teacher quality, science and maths, and new ways of teaching through inquiry-based learning, not just academic learning.

A purposeful country would not send multiple mixed and confusing signals on foreign investment. Instead, we would understand the strategic purpose of investment. And we would set rules that were consistent and transparent.

Foreign investment has built our economy to date and will build it into the future.

Many people call for the government to produce a plan, and perhaps they should. But maybe the starting point is to have purpose. To have intent. To act with determination.

And we are just not seeing enough of that. Australians know it. And they know one other thing for sure. They do not feel better off.

The fundamental question is: What do we need for Australians to feel, and really be, better off? That is Australia’s leadership challenge.

Finally, to rise to that challenge, people with purpose, companies with purpose and countries with purpose — all of us must have strong values.

Without values, purpose can often be a to-do list. Or it can be misdirected.

I believe in the values of citizenship: honesty, compassion, respect, responsibility, and courage.

As we advance with purpose, we must remember that values-driven people make great contributions, no matter what part of society they’re in.

Values-driven organisations with a strong sense of purpose are successful across the long term.

Values-driven governments with purpose can withstand major shocks, major disruptions and protect the living standards of their citizens.

Values are our foundation; purpose is our engine. Combined, I believe they can drive enduring social and economic prosperity for all Australians.

This is an edited version of a speech given to the Deloitte Australia partners meeting this month.