25 September 2008
Research Unveils Secrets Of Kiwi High-Growth Companies
Study on Governance in Deloitte/Unlimited Fast 50 firms released
Advisory boards and boards of directors have a significant role in managing and creating value for emerging high performing, high-growth firms in New Zealand, according to a report released today by Deloitte and Grow Wellington’s business incubator, Creative HQ.
The principal author of Managing High Growth Adventures: Putting Good Advice to Work in New Zealand Firms was Professor Mark Ahn, who chairs Science & Technology Entrepreneurship at Victoria University of Wellington. Researchers conducted interviews and case studies, surveying a database of 304 Deloitte/Unlimited Fast 50 companies to identify success factors and specific growth strategies.
The research focused on where the Deloitte/Unlimited Fast 50 firms sought advice, and how they leveraged it to manage breakthrough growth and sustainable success.
According to Professor Ahn, much of the attention of boards and directors was on compliance and regulation, but the true value was derived from complementing this with contacts and content.
“Supplier, customer, and investor networks, together with the experienced and tacit strategic knowledge on advisory boards are all crucial in creating sustainable high performing, high-growth companies. Compliance provides the basis for accessing contacts, which in turn provides the basis for exploring context or strategy development. This is all tightly bound together by a high level of collaboration between management and boards.”
Highlights of the
• 73% of companies had either advisory boards and/or boards of directors, although only a small number were required to have boards in place.
• 98% of firms cited strategic planning as “important” or “very important” roles for board members, and strategy development was ranked twice as important as any other board level activity.
• 53% of participants indicated that their boards provide a “very high” or “high” influence on creating firm value through compliance, industry contacts, and strategic advice.
• Although all participants were from high-growth companies, they were not necessarily in high technology sectors. Fast 50 firms come from a wide range of industries including IT (35%), manufacturing (21%), services (19%), retail (5%), telecommunications (2%) and finance/banking (2%).
• A productive collaboration between management and the board features an information rich environment where alternative strategies, market validation, and two-way dialogue can occur. The alternative was static, periodic, and ceremonial meetings.
Andrew Gibbs, a partner in the Accounting and Advisory practice at Deloitte said the insights of the Fast 50 were valuable. “These are the insights from an outstanding group of stellar performers over a diverse range of industries – these are the businesses that are leading by example and demonstrating the very best of Kiwi ingenuity.”
Stephen O’Connor, General Manager of the Creative HQ business incubator said building a critical mass of high growth businesses was essential for individual wealth creation and economic development in New Zealand. “These findings strengthen our resolve to connect outstanding advisors and board members with new businesses in the Wellington region to help them manage and accelerate growth.”