Articles

It’s Amazing The Difference Optimism Makes.

According to ABS All Retail Sales data dollars taken at retail in this country have not taken a backward step in rolling MAT terms since the year 2000. The ‘global financial crisis’ was not global, didn’t create a reduction in Australian household income growth and most important did not cause retail sales to retreat in dollar terms. Today we are experiencing retail growth of around five percent – higher than the fifty year average growth rate for the category. GDP growth is rolling along at three point two per cent – the envy of the developed world.

Our economy is sound and has continued to experience annual growth – not decline. No reason for pessimism then.

However, since 2009 the vast majority of business investment (time / energy / capital) has been on cost reduction. This is a defensive or negative business strategy. It will deliver profit gain – for a period of time.

Today it is common to hear of increased profits being used to lift dividends to shareholders, to reduce prices in the attempt to drive volume, to pay down debt or to buy back shares. Initiatives all aimed at keeping the share price high, in line with remuneration strategy.

The companies that take the opposite view are rarer, stand out more and excite people. They are also the ones who contribute the most to the growth of retail sales.

It is optimism that drives them. They look at growth and say “how can we over-achieve relative to the natural growth rate of the category”. They look at how they can build lifetime consumer relationship profit growth by delivering better products and services that seduce consumers into buying more for more.

They attract staff that are passionate and energetically contribute to enhancing consumer relationships and business development.

They create evangelical media support through their infectious excitement and energy.

They attract investors who encourage their ambition.

They garner community support because they are seen as a source of positive energy in a sea of negativity.

You know the names – Apple, Louis Vuitton, Aldi, Tesla, Zara – to name a few.

In a world where you can see a glass half full or a glass half empty, your belief drives the outcome. The best all share the same energy. Every morning when their leaders look in the mirror they decide what kind of day it will be by the attitude they decide to take.

It is amazing the difference optimism makes.