TORONTO, ON--(Marketwired - September 26, 2016) - The Canadian economy is stuck in neutral because Canadian businesses aren't courageous, according to new research released today by Deloitte. Most Canadian businesses -- nearly 90 percent -- lack courage and the country's economy is suffering as a result.
In the report, The Future Belongs to the Bold, Deloitte confirms with fact what up to now has only been anecdote: courageous businesses outperform their peers. They experience greater revenue growth and they create more jobs, but only one in 10 Canadian firms can be considered truly courageous.
Almost three quarters (sixty-nine percent) of courageous businesses saw revenues rise last year, compared to less than half (forty-six percent) of fearful businesses. Even more concerning, fearful firms were also twice as likely to see their revenues fall compared to their courageous counterparts.
"Courageous businesses are the high-flyers propelling the Canadian economy forward. When they reach peak performance, we all benefit. But if we truly want to succeed as a nation, we need more business leaders to be bold and test the limits of what they think is possible," said Frank Vettese, Managing Partner and Chief Executive of Deloitte. "This is how we build long-term prosperity."
Vettese explained that Deloitte defines courage as doing the right thing -- the hard thing -- for the greater good, despite being filled with fear, doubt, or uncertainty. Courage is taking a stand when doing so is difficult, not when it's easy.
Deloitte's research comes at a crucial time as Canadian companies are trying to compete globally while faced with economic uncertainty at home. Canada's recovery from the Great Recession has been slow and GDP growth remains anemic. Growth in Canada is projected at 1.3 percent versus global GDP growth projections of more than twice that. The research shows that courage is quantifiable and it matters.
"We've studied a range of issues affecting the Canadian economy and the undercurrent flowing throughout our research, whether it be on productivity or exports or preparedness for technology-driven disruption, is that Canadian businesses are deeply risk-averse," said Vettese. "Until now, we were challenged to identify how companies could become bolder. Risk-taking is but one element of being courageous, but it's a powerful means to drive growth, and propel both companies and our country forward."
The Deloitte courage report is also a challenge -- and a call for action -- to Canadian business leaders to adopt courageous practices to position their businesses for success. Deloitte believes that bold thinking, inclusiveness and calculated risk-taking must become a priority for business leaders if Canada is to dominate the world stage.
"We believe that our economic challenges can be overcome," added Vettese. "But we have to act collectively, we have to do the right thing and we have to leverage the diverse perspectives and pride in who we are as Canadians. Courage in business is a necessity, not a choice."
"What's more, we need to think long-term about developing future leaders who are ready to take the mantle; who are ready to act boldly and with the courage to take our country to new heights."
The Future Belongs to the Bold is the first in a series of upcoming reports under the banner of Canada at 175, which will present Deloitte's perspective on the future of the country.
The full report and additional resources related to these findings are available at: www.deloitte.ca/Courage2016.
About Canada at 175
With the 150th anniversary of confederation on the horizon, now is the time for Canada to redefine what it means to be a global leader.
Our ambition as a nation must be bolder -- we must aim to not only achieve economic prosperity, but to elevate our quality of life for our vast and diverse population.
Deloitte's vision is that in the coming 25 years, Canada should rank within the top 3 of the Human Development Index. To do so, we must adopt an unrelenting commitment to developing courageous leaders who embody an inclusive way of being.
Deloitte, one of Canada's leading professional services firms, provides audit, tax, consulting, and financial advisory services. Deloitte LLP, an Ontario limited liability partnership, is the Canadian member firm of Deloitte Touche Tohmatsu Limited.
Deloitte refers to one or more of Deloitte Touche Tohmatsu Limited, a UK private company limited by guarantee, and its network of member firms, each of which is a legally separate and independent entity. Please see www.deloitte.com/about for a detailed description of the legal structure of Deloitte Touche Tohmatsu Limited and its member firms.
In order to take action and propel the country forward, business leaders need to cultivate the five elements of courage. Deloitte has developed a number of recommendations within each element that will help businesses bring these guiding principles to life.
BE PROVOCATIVE AND CHALLENGE THE STATUS QUO
- Courageous companies and business leaders articulate points of view that may run counter to convention
- They're more likely to embrace disruption -- or even actively pursue it
- Courageous businesses are more likely to defy industry norms or existing best practices even in the face of outside criticism
- Example: Loblaw acquired Shoppers Drug Mart
TAKE CALCULATED RISKS
- Courageous businesses use rational analysis to develop new ideas, investments, and innovations both adjacent and transformational to current business
- They understand their risks clearly-and are more likely to look for opportunities where the risks appear greater and the rewards smaller
- Importantly, courageous businesses' decision-making is founded on thorough analysis and is grounded in data
- Example: Economical launched Sonnet, one of the first digital, direct-to-customer P&C insurance offerings in Canada
DO WHAT'S RIGHT
- Courageous businesses take actions that generate positive, long-term impacts for their firm, their people and, ultimately, their country
- They'll often defer short-term gains in order to ensure long-term success, and place a greater value on non-monetary organizational goals
- Example: TD Bank supported LGBTA community starting in 1994 as first bank in North America to provide spousal benefits to same-sex couples
START WITH YOURSELF
- Courageous business leaders are guided by their passion and are more likely to be perceived as authentic
- They have a strong moral compass, which they use to inform their organization's decisions
- These leaders are more likely to take personal accountability for organizational failures -- and share the credit for the company's successes
- Example: Paramount Foods committed to hiring and training 3-5 Syrian refugees at each location by the end of 2016; have hired 45 as of June 2016
UNITE TO INCLUDE
- Courageous business leaders surround themselves with diverse thinkers from different backgrounds
- These leaders understand the value-and importance-of establishing formal processes to solicit and incorporate input and feedback from people at all levels of their organizations
- Example: Cargill Canada launched Mentor Up, a reverse mentorship program that pairs senior executives with middle managers of a diverse range of backgrounds
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