Business advantage comes in many forms – great products or services, great connections with customers, excellent profits, or just paying attention to all the important details. The end result is that your staff and others rate you as prospering and expanding or having good future prospects.
Every time we run a shared online survey we ask people who work in the private sector to rate the business prospects of the company they work for. Over the years it has proved to be a potent indicator of the overall economic climate.
Or check out the Lay of the Land Sample Report
In our 2018 survey, as usual, we asked people who work for private enterprise firms whether their company was prospering, stable, or declining. The graphic below shows the pattern of response over the past 15 years.
Imagine how it felt in the business world in 2003, when 52% of employees could say their firm was prospering and expanding. It’s hard to remember now.
According to this graphic, three-fifths of businesses in 2018 are stable with good future prospects, while two-fifths are moving up or down in earnings. If you’re familiar with statistics – this is like a normal curve on its side. It was violently skewed towards growth in 2003, but now it’s sort of OK but not spectacular. We call this the new normal.
Let’s think for a moment what it means to say a brand is prospering. It means its audience is growing or has increased the intensity of their purchasing. That might signal some kind of competitive advantage, or a successful launch — like that of Lewis Road Creamery. Or it might reflect greater customer-connectedness — like Air New Zealand.
It can also reflect a generational change — older generations adopting new technologies, for instance, or younger generations reaching important milestones that suddenly change their preferences.
Time for Some Statistics!
But what does it mean to be stable with good future prospects? If you follow the timeline of the last 10 years or so, it’s clear that it doesn’t lead to year on year growth. The prosperity and expansion levels haven’t really budged, even though the ‘pie’ does get bigger. Statisticians talk about births and deaths of businesses – most years there are more births than deaths. There were more deaths than births between 2009 and 2013, but since then there’s been growth year after year.
Statistics NZ reports that New Zealand now has ~580K businesses and~2.2 million private sector employees. Auckland private sector employment alone grew 3.5% a year over that past 5 years. In 2017 it accounted for a third of the jobs, but half the increase in jobs.
So overall, it’s good but not great here. Or more positively it’s calm, not crazy. But imagine what could happen if we got just a little better at prospering and expanding – especially outside Auckland. Or better at staving off decay and decline. What would THAT look like?
Or check out the Lay of the Land Sample