Management June 2011 by mediaweb

NZIM’s Focus on Management p51

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Our

Our banks are playing Aussie rules

banks are playing Aussie rules What that means for business

PAGE 24

JUNE 2011 $7.10 INCL GST

Philip Burdon

JUNE 2011

On management and politics p32

Air NZ’s flight plan 9 421902 251030

Do it because it’s right p36

Generator

Powering a new business model p38

WE’RE REACHING 28% MORE KIWIS.THAT MEANS YOU ARE TOO. We’re delighted that the ONE News audience is up 28% this year (that’s an average of 207,000 Kiwis every night). And in the 25-54 year old demographic our average audience is 36% larger than our nearest competitor. Which is good news for you, because when you advertise with ONE News, our audience is your audience. TVT3822NZMA

Nielsen TAM, Avg Aud, Jan – Apr 2011, 25-54

Patriotism is good for business

friend and prominent business leader was explaining why she believed our bright young talents should be encouraged to stay in New Zealand and use their skills and energies to enhance this country’s performance in every sphere. With our changing demographic – the ageing workforce in particular – we certainly need them. And whilst I would not try to prevent any young person from gaining life experience offshore – my own daughter and my friend’s children are amongst those who are doing just that – we need to do more to encourage and celebrate high achievement within our borders. Part of that is recognising that our small domestic economy cannot support the high income potential of most other developed nations. But we should also acknowledge and celebrate the lifestyle and relative luxuries that our small population allows. It’s hard to put a monetary value on some of the advantages we have that are increasingly rare in a world compromised by population, resource and pollution pressures. In many much larger economies it’s only a privileged few who can enjoy many of the things ordinary New Zealanders take for granted; access to beautiful, uncrowded beaches, forests, parks and lakes; high quality fresh food products; tertiary education opportunities... the list is a long one. We need to stop focusing on the lack of opportunities here for ambitious young people and help them to identify and create new ones – we would all benefit from the resulting invigoration of our society and economy. Those Kiwis who are based offshore can however, be part of the solution.

www.management.co.nz a mediaweb magazine publisher Toni Myers CONSULTING EDITOR & WRITER-AT-LARGE Reg Birchfield CONTRIBUTING EDITOR Steve Best editor@management.co.nz

Sue Watson, global CEO of Kea (Kiwi Expat Association), talks about leveraging the expat network to benefit New Zealand in ‘As I See It’ on page 11. Co-founder of Meadow Mushrooms and former politician Philip Burdon says New Zealand needs to focus on its natural resources and forget delusions of a high tech and financial services-based future. You can read Reg Birchfield’s interview with him on page 32. And political columnist Colin James addresses issues of biculturalism and the economic impact of societal dislocation in his column on page 18. Following the GFC and subsequent social dislocation occurring worldwide there is some evidence of a change in attitude towards the value of life in New Zealand. And work that the New Zealand Vision 2050 project will undertake later this year to shape our vision for a sustainable future (see page 14) may support that attitudinal change. Dan Carter – who is not exactly underpaid – still probably had to say ‘no’ to a ridiculous sum to stay here and continue to lead our nation’s sporting icons. He obviously places more value on his New Zealand lifestyle than more wealth than he could ever acquire here. We need to value what we have – it’s not all about the money.

Toni Myers, Publisher

CONTRIBUTORS Scott Bartlett, Reg Birchfield, Sonya Crosby, Bob Edlin, Colin James, Graeme Norton, Peter Tynan Advertising Manager Rod Myers 09-372 6444, 027-484 8046 admanager@management.co.nz DESIGNER Jan-Michael David COPY & WEB EDITOR Gill Prentice production MANAGER Fran Marshall franm@mediaweb.co.nz NEW SUBSCRIPTIONS www.management.co.nz/subscribe Subscription enquiries subs@mediaweb.co.nz

Phone 09-845 5114, Fax 09-845 5116 enquiries@mediaweb.co.nz www.mediaweb.co.nz PO Box 5544, Wellesley Street, Auckland 1141

NZ MANAGEMENT magazine is independently owned by Mediaweb Limited and is published 11 times a year. It is the officially recognised magazine of the New Zealand Institute of Management Incorporated. Editorial material does not necessarily reflect the views of NZIM. Copyright © 2011: Mediaweb Limited. All material appearing in NZ MANAGEMENT is copyright and cannot be reproduced without prior permission of the publisher. Editorial contributions are welcomed. Letters to the editor are also welcomed, but pen names are not acceptable. NZ MANAGEMENT is printed by PMP. Subscriptions: One-year NZ subscription (11 issues) $78.15 (GST incl). Overseas (airmail only): Australia $NZ130; rest of the world $NZ250. Enquiries: Mediaweb Limited, PO Box 5544, Wellesley Street, Auckland 1141, New Zealand. Phone: 09-845 5114, Fax 09-845 5116, enquiries@mediaweb.co.nz www.management.co.nz New Zealand Institute of Management enquiries to: National Office, Box 67, Wellington; Northern, Box 26001, Epsom; Central, Box 11781, Wellington; Southern, Box 13044, Christchurch.

Vol 58 No 5 • ISSN 1174-5339 (Print), 1179-3910 (Online)

JUNE 2011

| management.co.nz | 1

contents 24 Cover Story

We’re playing Aussie rules Australia rules when it comes to banking New Zealand business. And since the global financial crisis (GFC), the relationship between their banks and our businesses has changed. Reg Birchfield asked business and banking leaders for their interpretation of what the new rules of the game mean and for some predictions on what the future score might be. Deloitte/ Management Magazine

TOP 2OO A Bold Spirit

1 EDITOR’S LETTER 4

INBOX: News and views

11 AS I SEE IT: Sue Watson 12 FOCUS: Grafton Mews, Ronald McDonald House opening 14 MANAGING SUSTAINABLY: The new agenda for business Graeme Norton 16 NZIM: Mindset & match – play global Reg Birchfield 48 EXECUTIVE DEVELOPMENT 49 EXECS ON THE MOVE

OPINION 18 POLITICS: Indigenous rights are serious business Colin James 19 ECONOMICS: The good, the bad and the ugly Bob Edlin 20 LEADERSHIP: All pay and no promise Reg Birchfield 21 THOUGHT LEADER: Content is king Scott Bartlett 22 BOOKCASE: Leaders & misleaders; The power of framing Reg Birchfield

ADVICE 46 EXEC HEALTH: Investing in health Peter Tynan 50 TOP TIPS: The holy grail Sonya Crosby

JUNE 2011 • Vol 58 No 5

features 32

Face to Face: Mushroom magic

Meadow Mushroom’s Philip Burdon on management, politics and best practice. By Reg Birchfield.

36 Responsible Governance Series: Air NZ’s flight plan

Responsible governance is not a stated strategic priority at Air New Zealand, but weaving it into the company’s organisational culture is. Reg Birchfield reports on how the airline’s “do it because it is right” approach pays off.

38 Generator: Powering a new business model

NZ Management talks to Ryan Wilson, the brains behind Generator, a new business club/serviced office model in Auckland’s thriving new business and social hub, the Britomart precinct.

42 Private schools: The cost of choice

Despite a lack of sustained government funding and the impact of the recession, the private school sector is still robust and an attractive choice for parents looking for a wide range of educational options. By Steve Best.

NZIM’s Focus On Management

New findings from Leadership Management Australasia’s latest Leadership, Employment and Direction Survey; Member comment from Greg Cain; Regional news; Upcoming management courses.

inbox

Simon Allen.

Turning around investor confidence

imon Allen, chairman of the newly created Financial Markets Authority (FMA), is fully aware of the challenges the authority faces in rebuilding investor confidence and creating and enforcing regulation to advance New Zealand’s economic outlook. “Broadening and deepening our financial markets to ensure local businesses have access to the capital they need to grow is our overriding objective,” he said. “To achieve that investors have to regard New Zealand as a good place to invest. “FMA’s intent is to establish clearer and more consistent rules

for market participants, improve market intelligence and surveillance, and be more visible and proactive in regulation and enforcement as well as raise the standards of financial advisers,” said Allen. The FMA takes over the mandate of the Securities Commission and the Government Actuary and centralises other regulatory functions from the Ministry of Economic Development. Allen said that he, the FMA board and chief executive Sean Hughes, were fully aware of the difficulty in turning around investor confidence in the current environment in which investors

Letter to the editor

’ve just read Reg Birchfield’s article (“Leaders – your country needs you” NZ Management May 2011), and straight up, I loved it. I totally agree with everything said in your article, and wanted to touch on a few key points. The fact that anyone can become a great leader is true, but what flicks the switch to get that value to the table? Of course, it’s self confidence,

4 | management.co.nz | JUNE 2011

the confidence to speak publicly, get your points and ideas across, make change where it is needed, etc. However, there is a trip point of becoming a misleader due to a lack of ethics, or values and morals etc. Keeping things simple is key. Confidence you can learn by doing, but you can speed up self confidence with good networking, so that you can benchmark in your

have suffered large losses in recent years as well as the repercussions of the global financial crisis. “We can and will set clearer rules for how markets and businesses should operate to a higher standard, and we will more consistently and strongly enforce those rules,” he said. “However, New Zealand cannot regulate its way to improved standards of market behaviour, company performance and corporate governance. “Ultimately, if New Zealand is to seriously lift its game, it requires all market participants including professional company directors running New Zealand businesses to take these new rules and responsibilities of conduct, governance and integrity very seriously.

“In that sense, we are all in this together, and I can’t overemphasise that enough,” he added. Hughes said that FMA had greater resources and a larger mandate than its predecessors. “Over time investors can expect access to more timely and better quality information and higher standards of financial advice on which to make their investment decisions. And the market generally can expect FMA to act more quickly and efficiently in market surveillance, intervention and, where necessary, enforcement if the new rules are deliberately flouted.” Lifting the standards of corporate governance is also a priority of the newly established body, Hughes says. M

Sean Hughes.

own mind how you sit against other leaders. I voluntarily run a three day leadership programme for young teenage boys annually. These guys blow me away with their worldly insights and confidence, and will likely be far better leaders than what we have today. Perhaps the issue now is that information is so available that our top level leadership is out by a generation, or as your article questions, is it the environment that is changing? Certainly!

And now organisations have to make tradeoffs between old style leadership, which usually has good ethics and new age leadership which likely understands the what’s and how’s of leadership but would surely be lacking some key ethics. Regards Shane Gordon Business development manager operations Westland Milk Products, Hokitika Abridged – Ed

Prime Minister, John Key and Wayne Howett, CEO, RMH Auckland Trust.

Charity super sizes facility for families

rime Minister John Key opened a new $7 million family accommodation facility last month that extends the capabilities of Ronald McDonald House in Auckland. Grafton Mews has 18 rooms including two transplant units, customised disabled rooms, standard rooms, laundries, living areas and a playground. In total the RMH Auckland

Trust now has 79 rooms available to referred families, the largest room capacity in Australasia, with a further 20 rooms planned. The RMH Auckland Trust provides accommodation and support for families from anywhere in New Zealand, whose children have to be in Auckland for treatment at Starship Children’s Hospital. “What the facility provides

goes way beyond just accommodation,” says Wayne Howett, CEO, RMH Auckland Trust. “The House provides comfort and a safe environment for families during what can be a highly stressful time. It enables them to be together and for families to draw strength from others who are on a similar journey.” In 2010 the Trust provided over

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23,000 room nights to families. In 2011 this is expected to increase to over 24,000 and the new Grafton Mews will assist in meeting this demand. It costs on average $120 per night to provide accommodation and some meals, however there is no charge for referred families to stay at any of the three Auckland facilities. M

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JUNE 2011

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inbox A little recognition goes a long way

esearch commissioned by talent management company SHL suggests that the productivity of over half of New Zealand employees is hampered due to lack of recognition for hard work. The research findings highlight the importance of the relationship between managers and their team, and its direct effect on engagement and productivity. Stephanie Christopher, SHL national director for Australia and New Zealand, says acknowledging the efforts of a team or individual doesn’t always have to be a grand gesture, but many managers don’t have a clue how to motivate their team. “Simple things such as recognition for long hours, extra

effort and excellent results play strongly in employees’ feelings of appreciation and belonging at work. Managers need to understand how to motivate each member of their team,” says Christopher. “For some, recognition at a team meeting with a song and dance is going to get them pumped for the next win. Others take to one-on-one recognition better. There is no standard approach, managers need to be adaptable,” she says. The SHL research also found that employees rate feedback and recognition for individual achievement as the most desired attributes of a boss.

For 70 percent of employees, their relationship with their manager impacts their overall satisfaction with the company, and 57 percent say their manager influences their level of productivity. “These figures point to the importance of good managers. Frontline managers need strong people skills, in addition to job competency, to be able to deal with everyday challenges and grow productivity,” says Christopher. “Managers are expected to solve problems, make decisions, be a mentor, prioritise tasks and achieve results. Underlying success in these areas is the ability to lead and motivate their team. “This often involves managing staff older than themselves, juggling the expectations of

three generations, and ensuring harmony between over-achievers and slackers,” says Christopher. According to the research, employees’ level of engagement at work is, as expected, influenced by satisfaction with the job itself (77 percent). Sixty-five percent also cite getting on well with other employees as a major factor. Christopher says these elements, along with level of pay (57 percent), are ‘hygiene factors’ in employment satisfaction and engagement. They are fundamental, but do not usually strain engagement levels to the same degree as poor management. M

*The Galaxy Research was conducted on behalf of SHL in March 2011. The study was conducted among 538 New Zealanders, aged 18-64 years and over, who were employed.

Emerging leaders given helping hand

his year’s NZIM Foundation Scholarships winners are all from the South Island. They travelled to Sydney last month to attend the Australian Human Resources International Convention. They also spent a day with international leadership guru Wilf Jarvis and another day visiting leading companies in Sydney for boardroom briefings by iconic New Zealanders who have succeeded in Australia. The NZIM Foundation exists to develop New Zealand management and leadership through scholarships and study programmes that provide a practical learning experience which benefits participants individually and the country as a whole. The Foundation is administered by a board of trustees selected from senior fellows of the Institute. Financial support comes from

6 | management.co.nz | JUNE 2011

donations from NZIM members and business people who support the Foundation’s aims and activities. The winners this year are: Gray Crawford – manager of social services Christchurch City Mission. Rebecca Lee – operation team manager, St John Blenheim, a crown entity emergency service providing education and risk management within the community. Danette Olsen – group manager aquaculture and biotechnology with the Cawthron Institute in Nelson. M

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Executive Pulse

ffshore oil and gas exploration is supported by 71.4 percent of business decision makers nationwide, if adequate environmental protection is provided, according to a Horizon poll. This compares with 62.1 percent support among the population overall. However, 61 percent of both business people and the general population didn’t think, at the time of polling, that the Government had adequate checks and balances in place to avoid environmental risk from deep sea oil drilling. Given adequate environmental protection was provided, do you think offshore oil and gas exploration and extraction should proceed? 2050 total responses

387 business decision makers

A. Strongly support

26.3%

36.6%

B. Support

35.8%

34.8%

C. Neutral

14.2%

9.6%

D. Oppose

9.6%

8.4%

E. Strongly oppose

12.1%

9.5%

F. Don’t know

1.1%

Source: Horizon Research, April 19-May 3, 2011. Weighted. Margins of error +/- 2.2% on the national sample, +/-5% on the decision maker sub sample. On the web: www.horizonpoll.co.nz

New chair to integrate NZIM

he New Zealand Institute of Management (NZIM) has appointed Gary Sturgess, chief executive of Hospice South Auckland, as its new national chairman. He succeeds professional director Phillip Meyer. Sturgess joined the NZIM board in 2005 and was elected deputy chairman in 2009, however his connection with NZIM goes back to 1977 when he joined NZIM’s Southern division. He joined the Auckland division in 2001 and its board in 2003, standing down in 2009 after serving on the board for six years, the last four as chairman. Sturgess is a Life Fellow of NZIM and was appointed a Justice of the Peace in 1989. In his new role as chairman, he is fully committed to the successful implementation of an amalgamation programme which will see NZIM

repositioned as a truly national organisation. The new national board of NZIM Gary Sturgess (chair), Lynda Carroll (deputy chairman), Dan Coward, Ash Dixon, Joanne O’Connor, John Sandford and Brian Soutar. Northern board John Sandford (chair), Dr Darius Singh (deputy chair), Mark Callander, Ash Dixon, Jo Tarlton, Robyn Walshe. Central board Lynda Carroll (chair), Denise Church, Mark Woodward, Dr Jo Cribb, Mark Stephens, Greg Cain, Anna Kominik, Rhys Barlow. Southern board Brian Soutar (chair), James Jorgensen, Bill Karaitaina, Tracey Paterson, Gordon Richards, Michael Weusten, Richard Whitney. M

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JUNE 2011

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inbox Most reputable in 2011?

Z Management and Hay Group are once again researching our country’s most reputable organisations. This annual survey, first conducted last year, gathers input from business leaders across New Zealand to identify what makes an organisation reputable and why. Participants are asked to nominate organisations and rate them on reputational factors. These range from having strong and effective leadership,

to the role the organisations play in contributing to the wider New Zealand community. Findings from last year’s research revealed that strength of leadership coupled with a demonstrable integrity in the approach taken to doing business is viewed as more important to building corporate reputation in New Zealand than financial performance alone. The results of this year’s survey will be featured in NZ Management’s September issue. M

Taking organics across the ditch

rganic Systems will be working alongside New Zealand Trade and Enterprise (NZTE) on its ‘Organic and Green Path to Market Programme’ which also includes a presence at the Organic Expo and Green Show 2011. The programme’s aims are to assist participants in preparing market entry strategies for Australia, to help build export readiness and to work with participants to assess future sales and distribution in the Australian market. “Australia offers a real opportunity for growth and profit for New Zealand companies. To this end we have developed a programme for small to medium sized organic/ green/natural companies to assist their market entry into Australia. Organic Systems will be the company helping us bring this programme to life,” said Jo McEvoy, NZTE business services manager.

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NZTE acknowledges the growing organics sector as one where New Zealand’s natural advantages can be ably utilised. The organics sector encompasses many different products including food and beverage, clothing and personal care. “We are committed to a long-term strategy of bringing New Zealand companies to Australia,” managing director of Organic Systems, Brendan Hoare said. “In doing so we not only expose New Zealand companies to Australian and international markets, but build capacity within the sector and give it confidence to grow. The Expo is the perfect place to do this.” • For more information on NZTE’s Organic and Green Path to Market Programme, contact Jo McEvoy on Jo.McEvoy@nzte. govt.nz. • For enquiries on the Organic Expo and Green Show 2011, contact Brendan Hoare on bhoare@organicsystems.co.nz. M

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in IT is the number one priority to help drive organisational strategy by 2015, with 83 percent of respondents agreeing, out of the local sample of 54 respondents. The study also suggested that using business intelligence (BI) and analytics to gain a competitive advantage and improve efficiency is the top priority for New Zealand CIOs. Of the study’s New Zealand respondents, 98 percent cited BI and analytics as the key tool to enhance their organisations’ competitiveness, compared with 92 percent of CIOs across Australia and New Zealand and 83 percent globally. The findings also show 60 percent of Australian and New Zealand CIOs see cloud computing as strategic and plan to implement it in the next five years, a significant rise from the 2009 study which indicated only 39 percent of Australian and New Zealand CIOs were considering the technology. M

esults from a global study of more than 3000 chief information officers (CIOs) released by IBM last month reveal that CEOs and CIOs are aligned in their thinking around future challenges and complexity. “As the world becomes more instrumented, intelligent and interconnected, the CIO role holds even more importance. CEOs and CIOs are almost identically aligned in their perception of challenges ahead, a trend reflected in New Zealand,” says Ross Pearce, senior managing consultant, IBM Global Business Services. “Our study shows that local CIOs believe they have a clear mandate to take a lead role on driving operational improvements for their organisation. CIOs will also facilitate the increasing use of business analytics tools that will enable organisations to achieve their business strategies.” For CIOs from New Zealand, investing

Photo: thinkstockphotos.com

CEOs and CIOs on same page

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AS I SEE IT M

Sue Watson Kea’s global CEO Sue Watson says active engagement with Kiwi expats will help grow the New Zealand economy. What’s New Zealand next major challenge? New Zealand’s next major challenge is to transform the New Zealand economy. Historically, we have evolved as a commodities-based, low-value economy with disproportionate income distribution. This is socially, environmentally and economically unsustainable and will result in New Zealand continuing to decline on all major international welfare indicators. The challenge is to restore New Zealand to its place amongst OECD countries with the most equal societies and to do what we have never successfully achieved – to become a highly productive economy through the internationalisation of innovation and intellectual capital. Like Sir Paul Callaghan, I aspire for New Zealand to be “the place where talent wants to live”. What do we need to do about this? My view on how we address this question is informed by my perspective as global CEO of Kea, the Kiwi Expat Association. In this role I’m privileged to be in daily contact with Kiwi expats and New Zealand-based business leaders who share similar aspirations for New Zealand and who have the connections, capability and capital to contribute to our country’s economic growth and development. What’s more, these people want to help. Kea’s role is to leverage this expat network for the benefit of NZ Inc. It is not the complete solution but Kea is a vital part of New Zealand’s innovation ecosystem and pathway to the internationalisation of export-focused SMEs. As well as the ‘elders’ who have been leading New Zealand business for several decades, we are seeing a new generation of Kiwi entrepreneurs emerge through the Kea network who are able to inspire the Kiwi business leaders of the future. M

JUNE 2011

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M focus

Official opening of Grafton Mews â&#x20AC;&#x201C; Ronald McDonald House (RMH), May 5 in Auckland. 1 Tiffany Mitchell, mother of patient Eva Mitchell with Jo Eddington (Coastal Design). 2 John Key (Prime Minister) and Sandy Moore (DDB). 3 Michael Cape, Graham McMullan, Kelly Rowe (Giltrap City Toyota). 4 Len Brown (Auckland Mayor) and Wayne Howett (Ronald McDonald House). 5 Rochelle Flint (Feltex), Mark Lovich (Lovich Flooring), Colin Ratcliff (Lovich Flooring), Jillian Grant (Feltex). 6 Evelyn Gates (Tegel), Jane Weikhart (RMH), Shona Caughey, Corrina Lee (RMH Charities NZ). 7 Niels Jaegersborg, (Hon Consul for Denmark, RMH Auckland Trust) and Corrina Lee (RMH Charities NZ). 8 Renee Wright, (RMH Auckland Trust), Wayne Howett (RMH Charities NZ), and John Key.

12 | management.co.nz | JUNE 2011

Photos: Michael Bradley, Kirsty Harkness

Vero celebrates a new era. For an organisation committed to excellence at every level, the appointment to the top executive position holds particular significance. On that note, Vero is pleased to introduce our new CEO, Gary Dransfield.

With his lessons and learnings from a market of that scale, Gary is well qualified to lead Vero as it helps in the massive task of rebuilding Christchurch, all the while delivering the highest standards of service across New Zealand.

Bringing a wealth of experience from the insurance and wider financial services sector in Australia, Gary arrives fresh from a role at Vero parent company, Suncorp. There he successfully drove the development and growth of the groupâ&#x20AC;&#x2122;s largest Australian insurance brands.

Vero is the current IBANZ Insurer of the Year, a title it has been voted by insurance brokers for six of the last nine years. Along with management and staff, Gary looks forward to further affirming Veroâ&#x20AC;&#x2122;s position as a world-class insurer of choice for New Zealanders.

BIG/VER690/5

M MANAGING SUSTAINABLY Graeme Norton

The new agenda for business

14 | management.co.nz | JUNE 2011

Photo: thinkstockphotos.com

ision 2050 was developed by the World Business Council for Sustainable Development (WBCSD) and its members to answer the question ‘What will the world look like in 2050’. It holds the vision: “In 2050 nine billion people live well and within the resource limits of the planet.” WBCSD has 200 mostly large international company members (combined annual turnover US$7 trillion, 15 million people directly employed). More about WBCSD and Vision 2050 can be found at www.wbcsd.org. The Vision 2050 project addresses three questions: What does a sustainable world look like? How can we realise it? What are the roles business can play in ensuring more rapid progress towards that world? Vision 2050 does not offer a prescriptive plan or blueprint but provides a platform for dialogue, for asking questions. Its highest value may be in the narrative of the gap between Vision 2050 and a businessas-usual world, and the questions and dilemmas that raises. The Vision 2050 report, released in 2010, records the pathway to a sustainable world in 2050 and the nine “elements” that lead to the vision. These elements were people’s values, human development, economy, agriculture, forests, energy and power, buildings, mobility and materials. It begins with a vision for these elements and then “backcasts” to today and describes the must haves, the key themes and measures of success for the next four decades. Perhaps unsurprisingly the period between now and 2020 is described as the “turbulent teens” leading on to a period of transformation. Yes it is a positive world view, one in which there are challenges and opportunities for business. Since its release in 2010 it has been used to enable engagement with governments and at international fora and has catalysed debate and action by individual companies and

sectors as they come to terms with the opportunities ahead of them. The New Zealand Business Council for Sustainable Development (NZBCSD www. nzbcsd.org.nz ), which is one of 60 plus country organisations affiliated to WBCSD, has embarked on its own Vision 2050 project. Many other individual country affiliates are doing the same. The New Zealand Vision 2050 project is a New Zealand contribution intended to help shape the sustainability agenda, catalyse action and provide relevant stakeholders with a platform to bring about positive change for New Zealand. The key questions for this project are: • Given the megatrends of climate change, global population growth and urbanisation, and given the best efforts of business, governments and society, what is the picture of the best possible outcome for New Zealanders and New Zealand over the next four decades? • And knowing this, how is New Zealand going to get there? • What are the roles for business, government, society (individually and jointly), and how can they participate in ensuring more rapid progress toward that world – locally, nationally, globally? Last year a group of “future leaders” in business, mentors and facilitators took the work of WBCSD as its base and developed a project charter which would include elements particular to New Zealand and its future. So to the list of elements were added ecosystem

and biodiversity, tourism and the EEZ (Exclusive Economic Zone). In the second half of this year a series of facilitated workshops and events involving future leaders, mentors and CEOs will help to shape New Zealand’s Vision 2050. As the process unfolds this column will give insights into particular elements and report progress. There will be opportunities for interaction and input. So what will success look like when this phase of the project is completed towards the end of 2011? • The key challenges for a sustainable future for New Zealand in the next 40 years are understood by New Zealand business, society and government. • New Zealand business is confident that we have a strategy in which we can thrive towards the middle of this century. • Individual companies and industry sectors are motivated to build on the work done for their own sustainable futures. It is fairly well understood that businessas-usual will not cut it for a sustainable future. The best news from the WBCSD Vision 2050 process was that the pathway and its elements is marked with massive opportunities; to do more with less, to create value, to prosper and to advance the human condition. New Zealand business can be a bold and active participant in this future world. M Graeme Norton is project champion and chair of the New Zealand Vision 2050 project. (Reference: WBCSD Vision 2050 Report 2010)

WORD COUNT: Approx 490 words + short heading + pic/s AD SIZE: 185w xadvertorial 20dmm

workbase heading

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2 www.management.co.nz Management april 2010

JUNE 2011

| management.co.nz | 15

NZIM

Mindset & match – play global

New Zealand’s latest slide in global competitiveness comes as no surprise, NZIM Northern’s Kevin Gaunt tells Reg Birchfield.

ew Zealand is in danger of becoming irrelevant to increasingly dynamic Asian economies, warns NZIM Northern chief executive Kevin Gaunt. “Too few of our business leaders understand what is going on in Asia and are making little effort to learn. It will be to our collective cost,” he warns. “The changes taking place in countries like China, Vietnam, India, Malaysia, Singapore, Hong Kong, Taiwan and even Mongolia, isn’t in our mindset. Some of those economies are becoming real power houses of growth,” says Gaunt. “It is way beyond anything that is happening here or even, for that matter, in Australia.” And as if to prove Gaunt’s point, the IMD World Competitiveness Yearbook has released it 2011 ranking of the competitive performance of 59 economies. And yet again, New Zealand has slipped a place and now ranks 21st. Last year we dropped five places from 15. And, while the trans-Tasman gap is still wide, Australia’s competitive performance fell four places from 5th to 9th. “It is not a happy result,” says Gaunt. “But to be honest, it is not surprising.” Countries like Hong Kong, Singapore, Taiwan and Malaysia all rank in the top 20, three of them in the top five. Others Asian economies will soon move up the ranking. It is not that New Zealand managers

16 | management.co.nz | JUNE 2011

aren’t capable of operating in the Asian market, or any other markets for that matter, says Gaunt. It’s simply that they are still not making sufficient effort to understand and gear up to meet the reality of the opportunity. “We need to understand what the market opportunity is and how we must compete to take part in it.” New Zealand must seriously consider what it takes to become globally competitive. “The lessons from which we can learn and, the evidence of what factors are critical are all there,” says Gaunt. “But the mindset is not. And this year’s IMD competitiveness survey is simply more evidence of how New Zealand’s global performance across a number of measures is going backwards.” NZIM partners with IMD to compile the New Zealand data used to build the global survey. This year, America clawed its way back to share first place with Hong Kong as the world’s two most competitive economies. The US economy slipped from top spot to third for the first time last year. Singapore, which was last year’s most competitive economy, dropped back to number three this year, overtaken by both Hong Kong and the US. The recovery of financial markets pushed the US back to the top with Hong Kong, according to Professor Stephane Garelli, director of the IMD’s World Competitiveness Centre. “Sweden jumped

to fourth place (from sixth last year) highlighting the competiveness of the Nordic model,” he added. “Germany climbed six places from 16th to 10th, thanks to buoyant exports and a more flexible labour market.” And lessons lie in both these results, according to Gaunt. This year, New Zealand’s performance slipped across all four competitive measures. Our economic performance ranking fell from 31 to 33, business efficiency dropped two places to 24, Government efficiency fell from five to eight and the country’s infrastructure performance dropped one place to rank 23rd. The cumulative result was a one point drop in our overall competitiveness. This year’s survey grew with the addition of the United Arab Emirates’ economy. It came in at number 28. Gaunt thinks the comments made this year by Professor Garelli were, from a New Zealand standpoint, somewhat prophetic. “The world of competitiveness is becoming more national,” said Garelli. “World Competitiveness 2.0 is characterised by a greater self-reliance of countries. It increasingly emphasises re-industrialisation, exports and a more critical look at delocalisation. This trend is triggered by the rise in commodity and transport prices and higher labour costs in emerging economies. National champions are favoured everywhere and borders re-surface – again!” he said.

“New Zealand’s business and political leaders must understand that no one owes us a living and, that unless we make a serious effort to earn our way by competing effectively we will continue our slide toward third world status. Listening to the other AAMO delegates at this year’s conference it was clear that, while they have great respect for New Zealand, they are out to compete,” said Gaunt. The competitiveness survey ranks countries on their ability to create and sustain enterprise competitiveness. It ranks the 59 countries on more than 300 criteria grouped into its four competitiveness factors of economic performance, business efficiency, government efficiency and infrastructure. And this year IMD and NZIM identified five challenges facing New Zealand in 2011. The first is recovery from the high costs (about $15 billion) of Canterbury’s February earthquake, which is still having a significant impact on the country’s slowly recovering economy. The other four challenges, three of which remain the same as last year, included the need to: • Initiate long-term growth by improving access to capital and world markets; • Encourage savings, create incentives and boost productivity through taxation reform; • Build a nationwide ultra-fast broadband network to underpin growth; • Address education gaps and skills shortages in a limited population environment. “Sadly, New Zealand’s international competitiveness continues to decline,” says Gaunt. “We may have improved three places against Australia but that was not of our making – rather it was because their performance slipped by an even greater margin than ours. “New Zealand’s business leadership must get its collective head around the global changes that are taking place and to realise that there are trading opportunities out there, particularly in Asian markets. We must be more disciplined and committed in our approach to finding and developing those opportunities,” he said. “The big issues for New Zealand are

still our mediocre economic performance, our inability to attract investment funds, our corporate tax rates, unemployment legislation, the brain drain and the high cost of some communication services, such as mobile technology, is an ongoing concern.” Gaunt thinks management lacks the kind of international experience needed to compete effectively. “Unfortunately we seem disinclined to help managers grow their global understanding and experiences. Organisational leaders and the government must develop more positive attitudes toward better and more sustained management education and training, starting at the secondary school level and continuing through trade training. The relationship between enhanced productivity and economic performance is linked directly to greater management capability. We now have the research in last year’s government-sponsored/McKinsey Management Matters study to verify that. What remains is to act on the study’s findings,” says Gaunt. New Zealand managers need more and deeper conversations with their Asian counterparts, says Gaunt. He wants NZIM to help build relationships through AAMO that will encourage more effective management conversations and learning exchanges. He thinks NZIM’s ethos of practicality can work to its advantage by getting New Zealand management involved with other countries and using their management organisations to facilitate the process. “I think we can share the experiences of what is and what is not working for them [management in other Asian countries] to build management capability in their markets and share that knowledge with New Zealand,” says Gaunt. “New Zealand is a small market but for some reason it is seen to be an important player in Asia. We are well respected. And Asian business people are already here. We need to better understand what opportunities all that presents.” M Reg Birchfield Life FNZIM, is a writer on leadership and management. reg@rjmedia.co.nz

LEADERS BUILDING LEADERS Our aim is to build management capability through Research, Learning, and Recognition. Our focus is to: • Research leading management trends and practice and promote a constantly developing model of best management capability for New Zealand. • Enable managers and aspiring managers to participate in learning programmes, mentoring, and events that provide the information and experience they need to develop their capability. • To identify leading management role models and provide awards that recognise the career and educational achievements of managers. NATIONAL BOARD Gary Sturgess Life FNZIM (Chairman) Lynda Carroll AFNZIM Dan Coward AFNZIM MOHS BRIAN SOUTAR AFNZIM John Sandford FNZIM Ashley Dixon MNZIM Joanne O’Connor MNZIM OFFICES National Office Chairman: Gary Sturgess Life FNZIM Box 67, Wellington 6140 Ph 0-4-473 0470, Fax 0-4-473 0479 Email national_office@nzim.co.nz National website http://www.nzim.co.nz Northern President: John Sandford FNZIM CEO: KEVIN GAUNT FNZIM, FAIM Box 6600, Wellesley St, Auckland 1141 Ph 0-9-303 9100, Fax 0-9-303 9109 Email kevin_gaunt@nzimnorthern.co.nz Website www.nzimnorthern.co.nz Central President: Lynda Carroll AFNZIM CEO : Karin Call agh an FNZIM, FIPAA Box 11781, Wellington 6142 Ph 0-4-495 8300, Fax 0-4-495 8301 Email karin_callaghan@nzimcentral.co.nz Website www.nzimcentral.co.nz Southern President: BRIAN SOUTAR AFNZIM CEO: Joseph Thomas AFNZIM Box 13044, Christchurch 8141 Ph 0-3-379 2302, Fax 0-3-366 7069 Email joseph@nzimsouthern.co.nz Website www.nzimsouthern.co.nz

NZIM Foundation Chairperson: David Moloney FNZIM Secretary: Jim Thomson PO Box 67 Wellington, Ph 0-4-473 0470 national_office@nzim.co.nz

JUNE 2011

| management.co.nz | 17

M politics Colin James

Indigenous rights are serious business

18 | management.co.nz | JUNE 2011

Photo: wikimedia.org

here are now two Maori parties, both pushing indigenous rights challenging the “mainstream” but from different perspectives. Our bicultural politics is getting more complicated. Hone Harawira forms common cause with “socialist” advocates for state action to lift living standards at the “bottom of the heap”. The Maori party often proclaims the same ambitions but also has to keep onside the Maori upper crust and power elite which, some say, often doesn’t form common cause with bottom-of-the-heap Maori. Those in the Maori power elite deal directly with the Prime Minister and top ministers and officials. Their focus is the mana and cultural and economic interests of iwi. In Treaty of Waitangi terms this is article 2 stuff, tino rangatiratanga. The living standard needs of those at the bottom of the heap come under article 3, which guarantees common citizenship to all, indigenous or not. In modern terms citizenship is the capacity to participate well in society and the economy. A crucial factor is a good start as a child. This sounds simple. But indigenous rights complicate policy initiatives to intervene in households where a child is being damaged. This came through in a day-long symposium in April aimed at finding ways to infuse into government policy analysis and development the findings of the world-renowned continual study of a Dunedin cohort born 38 years ago. A number of speakers at the symposium said “western science” and “western hierarchies” get in the way of Maori dealing with bad (the polite word is “dysfunctional”) Maori households. There was a need for “translational dialogue”, some said. The Dunedin study is “western science”. It has definitively linked defective early upbringing to higher probability of underperformance in education and employment, teenage delinquency,

addiction, mental and other health disorders and crime and imprisonment. Add in another branch of “western science”, epigenetics, the effect on gene “switches” of mothers’ (and fathers’) behaviour before and soon after a child’s birth – and it seems clear that early intervention can significantly improve a child’s capacities and opportunities. A report due soon from a team led by chief science advisor and epigenetics expert Sir Peter Gluckman will join these dots. On a simple “western” view a child’s wellbeing matters more than culture. No moral principle says an individual child deserves a bad start. Economic analysis argues that it costs less to intervene early than patch up or pay up later and there is a payback: a productive worker and taxpayer. Business has an obvious interest. An often-heard Maori view, including at the symposium, is that whanau can best see to children’s needs and “western hierarchies” get in the way. This view has overtones of article 2 indigenous rights: Maori must control and deliver intervention and help in the case of Maori children. That is at the heart of Tariana Turia’s whanau ora programme. Whanau ora presumes whanau are well-organised and fully functional or, with culturally sensitive help, become so. Most

whanau are and their members benefit from belonging to the whanau. But many at the bottom of the heap (any social heap) do not belong. They are dislocated from the surrounding society. They lack the cultural confidence even of those who just get on averagely in life. Poverty may contribute, but alleviating poverty doesn’t automatically end the dislocation. Dislocated adults are likely to produce dislocated children. Cultural correctness does not resonate with those outside the culture. It is at this point that “translational dialogue” can’t help. The child gets damaged. Its individual claim to a good life is denied. Is that “western” thinking? Or universal? If universal, what can bicultural politics offer that is superior to specific intervention, child by child? Business is universal. It needs our now deeply embedded bicultural politics to work because it needs stable politics and policy. But it also needs capable future workers, not mucked-up non-workers. So it comes about that seemingly esoteric questions are serious business. M Colin James is New Zealand’s leading political commentator and NZ Management’s regular political columnist. ColinJames@synapsis.co.nz

Bob Edlin economics M

The good, the bad and the ugly

Photo: www.sxc.hu

study of trends in incomes, inequality and poverty conducted for the Ministry of Social Development last year showed income inequality had increased substantially from 1982 to 2004, but declined from 2004 to 2007, mostly thanks to the Working for Families programme. It remained much the same from 2007 to 2009, when the top 10 percent of the population received 25.7 percent of total disposable household income and (more notably) owned 52 percent of the country’s wealth. Half the population, on the other hand, owned just seven percent of the wealth. If the have-nots are aggrieved by these disparities, they would not have been mollified by the March-quarter labour cost index. Private sector ordinary time wage rates rose 0.4 percent in the March quarter and two percent in the March year. With public sector and overtime rates included, the annual increase was 1.9 percent. Wage increases therefore were lagging behind increases in the cost of living. Some economists said people were better off than a year ago when tax cuts and lower mortgage rates were brought into calculations. But the workers’ bosses obviously were even more better off, because a Business Herald survey among chief executives of the country’s biggest listed firms and state-owned enterprises found they had received an average 14 percent pay rise in the 2010 financial year. Remuneration of the 47 chief executives investigated averaged $1.6 million. A significantly greater concentration of wealth is to be found among a small elite in the United States, where New York Times columnist and economist Paul Krugman has looked back to what happened under Franklin Delano Roosevelt. Income gaps

between rich and poor were narrowed through stronger unions, a strengthening of collective bargaining, wartime wage controls (imposing a floor to wages) and high tax rates on capital. These measures, he says, were followed by unprecedented income and output growth which persisted until the 1970s. Krugman regards wide gaps as “bad for democracy” and links income inequalities to “the ugliness” of American politics. “You start to get a society in which the elite is just not living in the same material universe as the rest of the population. The people who have the most influence are not interested in having good public services, because they don’t use them. You just get a bad society.” Maybe, although his critics note that wealthy people too drive (or ride) over publicly financed roads and bridges, use the courts, enjoy the protection of the police – and so on. Joseph Stiglitz, another economics professor with a Nobel Prize under his belt, has said increasing levels of

inequality undermine the efficiency of the economy. He argues that “one big part of the reason we have so much inequality is that the top one percent want it that way”. Wellington economists Andrew Gawith and Susan Guthrie, in a recent newspaper article, looked into those eminent economists’ views on inequality and its effects. They cited an IMF report, published in December, that proposed policies to strengthen the bargaining power of workers and switch from labour income taxes to taxes on capital, such as taxing land, natural resources and excessive profits in the financial sector. Looking at the New Zealand scene, Gawith and Guthrie said the significant income subsidy provided by Working for Families suggested our current labour market laws and institutions did not deliver the wage levels Krugman and the IMF regard as valuable for lifting output and incomes. But Working for Families has distorted market signals. Low-paid jobs – for example – are more likely to be accepted by older workers with dependents. Their living costs are higher and not normally covered by a low wage, but unlike younger workers their take-home pay (thanks to WfF) can far exceed what the employer pays. Relatively inexperienced youth are locked out of the labour market, hoisting youth unemployment rates. But ensuring families can live with dignity from the wages their employers pay them, instead of having to rely on government income subsidies, may involve giving workers more bargaining power to negotiate an increase in their share of national income. M Bob Edlin is a leading economic commentator and NZ Management’s regular economics columnist.

JUNE 2011

| management.co.nz | 19

M LEADERSHIP Reg Birchfield

s there a positive relationship between good leadership and massive executive remuneration rewards? No, no, no. An increasing array of evidence – behavioural, scientific and organisational performance based – discounts the value of multimillion-dollar pay packages and perks to anyone except, of the course, the recipient. The downsides of the race to embrace American’s most destructive organisational export are, on the other hand, increasingly apparent. Even the International Monetary Fund has acknowledged the risks of rising social inequality. New Zealand, unfortunately, is buying into the argument that we must pay megabucks to buy the best leaders. Take a moment’s dispassionate look and evidence of the truth of this claim is scant, to say the least. Defenders of the high pay practice claim that in the scheme of things (in other words in relation to revenues), executive remuneration packages are insignificant. Tell that to the average family earning around $50,000 a year. If all other justifications falter, there is the simplistic and self-serving defence that criticising high pay packets simply reflects our pre-occupation with cutting down tall poppies. Nonsense, it is about fairness and what an individual, any individual, is worth. Great leadership is not expensive or brim-filled with hubris. Great leadership has the wit to appreciate that it is greed, not need, nor merit nor hard graft that makes them worth so much. And it is perpetuated by a greedy support network. What is a good leader? Let’s start with a description by Alan Webber, a founding editor of Fast Company magazine. He recently told a class of college graduates in the US that they would soon move out into the world and be told they had “a responsibility to lead”. They would, he said, hear that the world needs more leaders and that it suffers from a lack of leadership. “Hogwash,” said Webber. “Choosing

20 | management.co.nz | JUNE 2011

to lead is one of the most rewarding decisions you may ever make. But it is not about you. Yes, you will bring your unique and much needed gifts to the world, but not for your own sake. Your job is to use your gift to help others express, make known and fulfil their potential – influencing others with a purpose, a calling, and with opportunities they never imagined they had,” he said. Leadership, he continued, “is a mindset of service. It’s a mindset of continual learning. It’s a mindset of growth. And the single biggest truth of leadership is that we build who we are, by building up others.” The payment of excessive salaries – and they are excessive no matter how much directors and employment advisors attempt to justify them by linking them to rates in other countries, to other business or to anything else they can think of – has done nothing for the quality of leadership in most New Zealand enterprises. And that does not look likely to change any time soon. Business is in a leadership bind. The best leaders come from within organisations – and if you don’t believe it read management guru Jim Collins’ book Good to Great. Or read the latest US research findings of a 20-year study that shows chief executives promoted from within their own ranks outperform those recruited from outside. And there is a raft of other supporting data if anyone cared to read it. The bind will tighten as the changing nature of enterprise and the demands for new, more relevant and responsible leadership qualities and organisational priorities shift. The outrageous pay regime was America’s self-serving response to the speculators’ obsession with growing shareholder value. That priority is, perhaps slowly but inexorably shifting however. Even Jack Welch, the former CEO of General Electric and for many

Photo: thinkstockphotos.com

All pay and no promise

years the “archpriest” of shareholder value, has declared that taken to its literal conclusions, “shareholder value is the dumbest idea in the world”. New Zealand needs Collins’ Good to Great leaders. As he said, what catapulted a company (and why not a country?) from “merely good to great” was a paradoxical mixture of personal humility and professional will. That does not, in my mind, translate into being obsessed with money and hypnotised by self image. Collins called his discovery “level 5 leadership”. The label doesn’t really matter; what it describes does. What was, and still is important, was his finding that good to great transformations “don’t happen without level 5 leaders. They just don’t,” he said. Would the level 5 leaders in New Zealand enterprise, or government, raise their hands? Hmmm. And they are not sitting in a head hunter’s office in London, New York or anywhere, waiting for the right price to show they have what it takes to lead. M Reg Birchfield is NZ Management’s consulting editor and writer-at large. reg@rjmedia.co.nz

thought leader M

Content is king

here’s much talk about a new broadband network for New Zealand, but not enough talk about a new digital future for our country. Politicians, business leaders, media, consumer groups, government agency folk – everyone is talking about ultrafast broadband (UFB). How it will be delivered, when it will be delivered, and what in simple terms is it? The Government has committed $1.5 billion of taxpayer funds to subsidise fibre being laid to 75 percent of Kiwi homes and businesses. The UFB initiative, it argues, will help business productivity and the country as a whole. But, like most national building projects, the improvements in productivity, competitiveness and standards of living will come down to how businesses utilise the new technology to their advantage. Even at the best of times, SME owners and managers find it difficult to sort out the IT fact from fiction. And when the discussion turns to fibre versus copper and 100Mbps and ‘megs’ and ‘gigs’, many business people simply switch back to focusing on what they are good at – their core business. What they really want to know is what’s in it for them. What will people use this new-found speed for? How will it benefit business? I was recently in the UK and Europe and checked out what is happening there on the broadband front. Millions of people in northern latitudes are getting very high broadband speeds, through cable and copper lines, as well as fibre. The real drivers of high speed internet look to be cloud computing and watching video over the internet. The pundits claim 90 percent of traffic growth on the internet in coming years will be video transmission – to homes and businesses – for both work use and leisure viewing.

Scott Bartlett… “The unfortunate fact is our country is behind the rest of the world and we need to catch up.”

Driven by video, internet traffic is predicted to grow 400 percent by the end of 2013 – that’s only 36 months away. The old adage that content is king in the ether has never been more true. Content is driving internet access. Consider this: In the UK, the BBC’s iPlayer radio and TV service currently accounts for between 20 and 25 percent of internet traffic. In the US, Netflix’ online TV and movies streaming service commands the same percentage of internet traffic. Locally, keep an eye on iSKY – there is nothing more certain than that it will drive internet traffic growth. But what about businesses? Surely video conferencing does not represent enough of a business benefit to justify fibre?

In the near term cloud computing is how businesses can take cost out and improve productivity through the delivery of ultra-fast broadband. While the global players such as Google, Amazon and Microsoft are offering cloud-based services, it is the local cloud providers that can provide a quality service, served and supported locally that’s designed for New Zealand business needs. The unfortunate fact is our country is behind the rest of the world and we need to catch up. But it’s not just about laying fibre; we need to add value by how we use high speed internet to promote innovation in New Zealand. We need to use it to improve efficiencies and productivity. We need to extract social and democratic benefits through better interconnected societies. A faster internet will foster the ingenuity of New Zealanders to deliver a better future. As a country we have so much to offer: we are highly educated; we speak English; we are youthful and keen for innovation, so we need to focus on our strengths, not fret about our weaknesses. We need to use the internet to improve our existing industries and build new ones. SMEs need to play a major role in this progression. It’s worth keeping in mind that of our many strengths one is we are relevant to the rest of the world because we feed people. New Zealand is a global source of protein and produce, hence we should punch above our weight in capturing the attention of key markets such as China, Australia, Europe and the US. But our SMEs need the infrastructure to do the job. The most important piece of infrastructure I believe is a bigger and faster internet pipe. When that arrives, what will you do with it? M Scott Bartlett is CEO of Orcon.

JUNE 2011

| management.co.nz | 21

M BOOKCASE

In the frame Leaders and Misleaders By Andre van Heerden • Maruki Books • RRP $39.95

Books about leadership may be commonplace, but leaders worthy of the description are alarmingly rare. In his self-published book, Leaders and Misleaders, Auckland-based organisational consultant and leadership mentor Andre van Heerden argues that the world, the Western world in particular, faces a leadership crisis. Not an unreasonable claim or surprising conclusion given the plethora of everyday evidence. The author’s deeply reflective and meticulously researched review of the history and evolution of leadership, coupled with his own diverse life experiences, leads him to conclude that the solution to the problem resides within us. And discovering our leadership capabilities has very little to do with leadership and skills training. It does, however, have much to do with what he calls “a genuine education”.

The Power of Framing By Gail T Fairhurst • Jossey Bass • RRP $45.41

It is how they say it, rather than what leaders say, that makes the difference. The process of how we communicate meaning is called “framing”. The Power of Framing, therefore, is all about powerful leadership communication. Gail Fairhurst, a professor of organisational communication at the University of Cincinnati, thinks leaders should give more attention to how they frame their communication if they want to be effective and get their messages across. The world, she argues, is full of ambiguity and crowded with choices 22 | management.co.nz | JUNE 2011

Leadership is more about attitudes, and these are significantly shaped by sound education. The ranks of management are, on the other hand, full of highly intelligent and skilled individuals. But they can’t motivate individuals or create the “harmonious relationships” on which effective team performance depends. The book is an outcome of the author’s own experiences and the development of his leadership programme, which he calls Leading Like You Mean It, the book’s subtitle. Leadership, he reasons, is not a set of skills but rather “a state of mind” that must be cultivated daily. The five critical leadership tasks van Heerden has identified and which he triggers with the mnemonic STORM are strategy, team-building, organisation, reflection and making decisions. These are, he argues, the essential daily activities of

someone who “leads like they mean it”. The book explains what constitutes leaders and misleaders, what has gone wrong with leadership, how leading like you mean it works, the power of integrity, why thinking for yourself is important, the role of education and personal growth, understanding human nature, building character and fulfilling relationships and how leaders unleash creativity. Leaders and Misleaders is not a one-sitting read. It is 225 pages of tightly argued proposition and intriguingly quotable quotes. The world’s book shelves may be staggering under the weight of books of this genre, but this one is interestingly different and as such, makes a useful contribution to our need for a better understanding of how local and global leadership seems to have gone to the dogs. Reg Birchfield

about how we see and interpret things. Framing is about how leaders characterise one set of meanings over another. Through their framing of people, situations and events, leaders shape reality and provide meaning when others can’t and, by doing so, demonstrate leadership. Fairhurst provides a simple diagnostic tool to identify how, when it comes to communication, we fall into one of three communication personality categories – expressive, conventional or strategic. It’s worth reading the book just to take the test and evaluate your style. Expressives can’t help themselves. They

use language to express their thoughts and feelings, often lacking an edit function when they get into communication. Conventionals, the category most managers fall into, communicate to cooperate. Their language is governed by social rules and customs. Strategics communicate to create and negotiate social situations. They see context from many angles and might motivate or manipulate. The book is practical, full of examples and work exercises, and easy to read. For managers, leaders, coaches and others it is very relevant. Reg Birchfield

Talk to the top executives of NZ’s top performing corporates* at the most competitive rates... NZ MANAGEMENT magazine’s full page advertising rates stack up as the most cost-efficient advertising spend per 1000 on a Net Total Circulation basis and on a Net Paid Subscription Circulation basis. Audit Bureau of Circulations Comparative Statistics as at 31/12/10 1) TOTAL NZ NET CIRCULATION COMPARISON MAGAZINE

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% CHANGE PREVIOUS 12 MONTHS

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AVERAGE NET PAID SALES

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NZ MANAGEMENT

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2058

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Cover

Weâ&#x20AC;&#x2122;re playing Aussie rules Continuing NZ Managementâ&#x20AC;&#x2122;s series on finance and the economy.

24 | management.co.nz | JUNE 2011

Australia rules when it comes to banking New Zealand business. And since the global financial crisis (GFC), the relationship between their banks and our businesses has changed. Reg Birchfield asked business and banking leaders for their interpretation of what the new rules of the game mean and for some predictions on what the future score might be.

COVER STORY

Photos: Jan-Michael David

Phil O’Reilly… “In good times banks are run by sales people. In bad times the credit managers take over.”

he contest between business leaders and their bankers is always something of a grudge match – more so if they are playing with one of our four largest Australian-owned banks. The tension heightened when the GFC hit and Kiwi managers felt the keen edge of their bank’s credit-slasher. In many cases, the umbilical cash cord was severed completely. But on one thing most New Zealand business leaders and banking experts,

including Reserve Bank governor Dr Alan Bollard, economists and government officials agree – things could have been much worse if our major trading banks hadn’t been Australian owned. “Kiwi businesses know that if they had not been banked by the Australians they would have suffered far more during the GFC,” says Business New Zealand chief executive Phil O’Reilly. “My members say, ‘thank god for the bastard Aussie banks’.” New Zealand business took a ham-

mering from the GFC. Banks closed the doors on record numbers of over-lent companies – many of which had generations-long banker/client relationships. The savage funding claw-back orders issued by the banks’ credit offices in Sydney and Melbourne killed companies, destroyed individual wealth and forced thousands out of work. Even bank employees jumped ship, unable to cope with the Jekyll to Hyde personality transition demanded of them. Australian banks had, throughout the JUNE 2011

| management.co.nz | management.co.nz | 25

Cover

John Waugh… “The Australian psyche is more robust than the Kiwi’s. They are more Irish and Italian. We are Scottish and Presbyterian.”

1990s and early 2000s, stuck to their conservative plain and purl pattern of lending. Unlike their American and many European counterparts, they gave investment banking, derivatives and other speculative financial products a miss. When the crunch came, ANZ National, ASB, Bank of New Zealand and Westpac hardly dropped a stitch, comparatively speaking, thanks to the backing of their reasonably well provisioned parent banks across the Tasman. So while the past three years have been tough for business, the Australian banks’ conservative management and lending policies meant they could, as O’Reilly puts it, “tow more Kiwi companies through the storm” than would otherwise have been the case. It was not, however, always plain sailing. According to Bollard, the Australian banks “sometimes wanted to retrench resources” more than would have been healthy for the New Zealand market. So much so that the Reserve Bank insisted on some “local incorporation and outsourcing requirement to better deal with stress events” such as the GFC (see The Director – NZ Management May). But Bollard agrees that Australian and therefore New Zealand banks, were better equipped to handle the GFC than Northern Hemisphere banks. 26 | management.co.nz | JUNE 2011

Deeper difficulties That said, at least two of the four major New Zealand banks found themselves in deeper funding difficulties in 2008 than others. It is difficult to know whether their desperate cash shortage was created by their Australian head offices’ decisions to withhold additional capital because of their negative feelings about the state of the New Zealand economy, or because of their group’s inability to source additional funds. Either way, it resulted in some New Zealand companies having a tougher time than others as they struggled to meet implacable loan repayment demands. Dr David Tripe, director of Massey University’s Centre for Banking Studies, agrees that Australian ownership of our banks was fortuitous. On the other hand, the GFC effectively spotlighted New Zealand’s underperforming business sector for the banks’ head offices back in Australia. He thinks Australian bank head offices are now questioning whether to throw more capital at their New Zealand franchises. The danger for New Zealand business is that their more critical look will see us as a long-term, non-performing market. Tripe is convinced Australia’s big four banks – the Commonwealth Bank of Australia, Westpac, ANZ and the National Australia Bank – are “looking carefully”

at New Zealand’s economic and business prospects. “And I have to say that our likely [economic] performance in the short to medium run does not look especially good,” he says. Auckland-based financial analyst and business writer Brian Gaynor recently wrote that Australia’s banks were “creaming it” through the profitability of their New Zealand operations. The four New Zealand banks reported total net earnings of $1.39 billion for the first half of the 2011 financial year, a 48 percent increase over the same period in 2010. But, says Tripe, the banks will be taking a much longer term view and their decisions will determine their attitudes toward supporting New Zealand business. They might continue to claw back dividends without advancing much in the way of development capital. Auckland-based lawyer, turned banker, turned lawyer again, John Waugh, now gives businesses, both large and small, specialist funding advice. He has worked at senior management level in both New Zealand and Australian banks. He is inclined to agree with Tripe. Short drive The banks are, in Waugh’s opinion, looking at both the state of the New Zealand

economy and the country’s historical inability to grow its businesses. “There is,” he says “a lack of drive and willingness to build companies beyond their capacity to deliver a comfortable lifestyle for the owners.” That approach does not impress the more aggressive strategists and risk analysts that populate the banks’ head offices. “The psyches are different,” he says. “The Australian psyche is more robust than the Kiwi’s. They are more Irish and Italian. We are Scottish and Presbyterian.” The observation might account for Waugh’s feeling that New Zealand business must now convince the Australian banks that they can manage their operations more professionally, that they can grow them and, through that lift in their individual performance, help build a significantly stronger economy. There are other reasons why Australia’s banks are looking more carefully at New Zealand. They are not, for example, impressed by the low standard of corporate governance in New Zealand. And they are somewhat contemptuous of successive government’s milksop approach to beefing up statutory financial rules and regulations. “Australia has much better corporate governance,” says Waugh, who at one stage headed CBA in Queensland. “Regulators

such as the Australian Prudential Regulation Authority (APRA) and the Australian Securities & Investments Commission (ASIC) have real teeth. If you cock-up in governance over there you go to jail.” Australia’s big four all now rank in the world’s top 50 by market capitalisation. They were hardly on the radar before the GFC. There is now an ambition to take on the world. What turned their fortunes around? The GFC. Australia’s banks were able to capitalise on the crisis because they were prudent and well managed, says Waugh. “Their capital structures were sound, they managed their risk, provisioned properly, were transparent and they were tough.” They taught the world a lesson about smart banking. Bolstered by the new-found confidence, would Australia’s banks like to quit their New Zealand operations? “Probably,” say both Tripe and Waugh. But only if the offer was right. That, of course, is the rub. As Tripe says: “What international bank would buy a New Zealand bank in preference to its Australian parent?” Do Australian banks really have a low opinion of New Zealand’s future economic prospects? If they do, they are not saying it publicly. And the advertising and marketing campaigns talk about supporting local businesses to grow. But as industry

insiders note, marketing and advertising campaigns have little to do with anything real, particularly when it comes to internal bank management. The risk factor Well, do they see Kiwi businesses as bad risk investments? O’Reilly doesn’t think so. He accepts that the relationship between banks and business soured when the GFC hit. “Businesses were shocked when credit dried up,” he says. “Many of them blamed the banks, but there was blame on both sides.” Businesses were too used to easy money. “In good times banks are run by sales people. In bad times the credit managers take over,” he says. “But the smart businesses have learned some hard lessons from the GFC and its aftermath. Now they are learning to work with their banks again.” But things are different. The rules of the game have changed and, says Waugh, New Zealand business better get used to dealing with the harder edge of Australian banking conditions. A tougher approach to lending and borrowing might just lift the performance of more Kiwi businesses. “The banks will demand a better performance and greater accountability,” says Waugh.“There will be less tolerance [of defaults] and more financial sophistication.”

JUNE 2011

| management.co.nz | 27

Cover

Professional director and former banker Sandy Maier isn’t yet convinced that relationships between banks and business have returned to normal. Banks might say they are “supporting worthy customers”, but in his experience “that is still at variance with the reality of customers’ experiences”. And that divergence has, he suggests, “meaningfully lowered” the banks’ credibility. O’Reilly sees things a little differently. “The relationship between banks and business has returned to normal – but it’s a new normal. It is more conservative. There is less leveraging off the balance sheet and managers have a more composite view of how they will deal with their banks.” Banks are lending again. The Reserve Bank says “credit criteria have, at least in some areas, eased”. But business isn’t showing huge interest in borrowing. O’Reilly is bothered about that. With bank deposits at an all-time high, he’s concerned the nation has been converted. “Suddenly everyone is saving. It’s like we have all got a new religion.” Lending and borrowing is a close contact sport. The banks and business just might, therefore, be feeling each other out. If the rules of engagement have changed, our local banks must learn to enforce them. Business, on the other hand, must learn to play to them. Tough on clients “The banks have been directed to be tougher on clients,” says Waugh. “The businesses I deal with have got the 28 | management.co.nz | JUNE 2011

message that things will not be as they were. A generational switch is taking place and that switch is to a more conservative approach by both lender and borrower. I see evidence of a distinct attitudinal change in my clients. Businesses and individuals are both over the debt binge.” Australian banks offer more sophisticated products in their home market. There are different versions of securitisation and factoring, asset financing and asset leasing and, there are different tax treatments. Leasing in Australia, for example, is quite different from the leasing products available in New Zealand. And while Waugh predicts a move to more “sophisticated” commercial banking options in future, he is not sure how far these will go in our significantly smaller market. The real funding problem for New Zealand business, as Gaynor pointed out in his recent commentary, is our inability to “develop other financial institutions that provide funds for start-up companies and high-risk entities that want to expand”. The major banks aren’t interested in funding business start-ups or growth stories. That’s the high-risk end of the market. Australia’s banks didn’t get where they are today by taking risks. “They are very conservative about that, particularly in the New Zealand context,” says O’Reilly. “They don’t see themselves as equity or quasi-equity players.” And if, contrary to their marketing rhetoric, Australia’s banks are reluctant to lend to New Zealand companies because

they lack confidence in our market, Kiwi businesses are left with two significant gaps in their future growth plan. There are of course banks in other parts of the world that are not so conservative. Kiwi businesses might, says O’Reilly, need to start having “more structured conversations with the Australian banks to establish what they see as their play in this market. We need to know what they are thinking so we can encourage other players into our economy. If funding growth is not in the Australians’ game plan, we’ll need another strategy.” New Zealand got into strife with its disastrous flirtation with second tier finance company funding. We saw it, at least in part, as a means of providing growth capital. “There has always been a need for growth capital in New Zealand,” says Waugh. “The banks couldn’t offer it so we turned to second tier lenders.” Asset stripped New Zealand’s home-grown solution to its perceived growth capital needs failed for several reasons, not the least of which were scandalously poor standards of corporate governance, coupled with inadequate regulation and investment oversight. A consequence of this failed experiment is shattered investor confidence and a generation of retirees stripped of assets and savings. The remaining question for New Zealand business is how will Australian bank credit committees view their lending proposals? They may be submitted to the

New Zealand branch, but loans are signed off in Melbourne or Sydney. Will the smallness of the New Zealand market, the narrowness of the economy, the policy vagaries of MMP, growthresistant small business, slack corporate governance standards and our resistance to investor protection regulation be a risk too high to take – particularly when they are presented with an alternative Australian option? Commentators like Waugh and Tripe think they might. O’Reilly articulates the contrary view. “The banks tell me they want to play a key role in backing New Zealand business. I talk to one or the other of them weekly,” he says. “They are keen to lend because the businesses that survived GFC are in good nick and ready to deliver the future. Management practices have sharpened. Balance sheets are in better shape. They are readied for growth. What sane banker would walk away from that?”

The key to New Zealand’s future prosperity turned with the changed value of the New Zealand dollar and the collapse of its parity with Australia’s, he says. “Our dollar is now much lower. We have broken that silly parity. It was a lazy parity in world financial markets. Now the Aussies have opened up a big gap on us. That gap will rise and fall, but I think it will remain in place for a long time because of the fundamentals of our respective economies.” Fish and Timber O’Reilly thinks New Zealand companies are comfortable with, and capable of, exporting more goods and services to Australia. “It is our number one export market. And it is a market that suits what New Zealand has to offer – small businesses servicing larger ones. It is not the usual fish and timber market. This is a massive opportunity for us to get access to a market that fits our smaller manufacturing businesses. “Our lower labour costs and the dollar differential enhance our ability to sell into the Australian market. Meanwhile, Asia is rapidly returning to growth. We are part of that market too and, if we play our cards

right we can boost our exports to Asia. “New Zealand is going through a major change right now. We are saving and deleveraging in our domestic economy. Therefore, if you are a retailer or a manufacturer for the local market it feels like a recession. But again, if we play our cards right, we will have an export-led recovery which is a good place to be long term. “I hear all these stories about the Aussie banks losing interest in the New Zealand market. They argue that we are over-banked. But they say that about their home market – Australia. I take it all with a large grain of salt for two major reasons. “The banks’ big Australian clients are big here too. If they don’t operate on both sides of the Tasman they risk losing market share both here and there. And for most banks, New Zealand is the equivalent of their third or fourth largest state market. The scale of the New Zealand market is still worth having to any Australian bank. “I feel pretty good about the future of New Zealand business. And I think the banks will see it that way too.” Aussie rules or not, O’Reilly thinks New Zealand businesses can learn to play the game and win. M

David Tripe... "The GFC spotlighted the underperforming New Zealand economy to the banks’ Australian head offices."

JUNE 2011

| management.co.nz | 29

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Face to face

Mushroom magic Meadow Mushrooms’ Philip Burdon on management, politics and best practice. By Reg Birchfield.

hilip Ralph Burdon can, at a healthy-looking 72, boast a full and extraordinarily successful business and public service life. He has accumulated, according to last year’s National Business Review rich list, a personal fortune of $70 million, give or take. He is, along with his long time business partner Roger Giles, the co-founder and now chairman of Christchurchbased Meadow Mushrooms. The company is, says Burdon, the most sophisticated mushroom farm in the world and with an annual turnover of around $50 million it is one of New Zealand’s largest single agri-businesses. Meadow’s mushroom business is growing rapidly. It opened a new $45 million plant expansion on the outskirts of Christchurch in March. The buildings cover almost three rugby pitches from which the company now harvests 160 tonnes of mushrooms a week and employs 500 Cantabrians to do so. It is an environmentally and commercially sustainable business that seems to fit the ‘100% pure’ New Zealand enterprise profile. Burdon is, at heart, an entrepreneur.

32 | management.co.nz | JUNE 2011

He has, however, successfully made the transition to professional manager and then on to hands-off director. Along the way he completed a successful secondary career with 15 years in politics. Burdon and Giles, an Englishman, established their first mushroom business – Mattamore Mushrooms – in the caves of the Cyprus countryside in 1968. Christchurch-born Burdon convinced his partner they should also set up shop in New Zealand. They did, and Meadow Mushrooms was officially launched in January 1971. It was a good decision. In July 1974 the Turkish Army invaded Cyprus and the tiny Mediterranean island was torn apart by a savage civil war. Its Greek and Turkish communities were irreparably divided and Mattamore became collateral damage. It was a traumatic commercial and human experience that Burdon would not forget. Burdon may be wealthy and come from well-heeled English stock, but he is very much the political liberal. He served as a National Party politician through the 1980s and much of the 1990s. As Minister of Trade in the Bolger government of the early 1990s he was deeply involved

in negotiating General Agreement on Trade and Tariff (GATT) reforms that ushered in a dramatic expansion of New Zealand’s international trade. His trip into politics was prompted by his infuriation with the conservative politics of National Prime Minister Robert Muldoon. He considered Muldoon’s infamous 1970 payroll tax the “stupidest thing” a private enterprise government could do. Rather than insults from the sideline however, Burdon joined the party and battled “unthinking” policies from inside. In addition to his chairmanship of Meadow, Burdon also chairs the AsiaNew Zealand Foundation, a non-partisan and non-profit organisation “dedicated to building New Zealanders’ understanding and knowledge of Asia” and is, among a number of other directorships, deputy chair of Singapore-based GuocoLeisure, formerly BIL International. He is still a party supporter but once again finds himself questioning the wisdom of National Government policies and practices. He heads a Christchurch earthquake recovery ginger group – The Future Canterbury Network – established to “prevent the city’s recovery from

Philip Burdon… “We need to focus on best practice and developing the natural resources we have.”

becoming mired in the bureaucracy” that characterised the post-September quake response. And he’s enlisted the support of an impressive gallery of Christchurch commercial and community leaders. What drives this enthusiastic and rather tireless business and community leader? And how has he managed his exit from the management of Meadow Mushrooms and strategised its commercial longevity? Burdon’s commercial success is, he says, based on his ability to delegate and choose the right people (to work with). “Most entrepreneurs compromise their businesses as they move from innovation to consolidation, then stagnation. They never learn to delegate and give responsibility to management,” he says. “We have successfully moved from entrepreneurial to professional leadership.” The company has, he says, “endlessly engaged” in seeking out and implementing international best practice processes and focused on employing the best people to deliver those practices. “Roger and I were a unique [working] combination with complementary abilities and a clear understanding of what we wanted to achieve. Entrepreneurs often get sub-

merged in the business detail of their creations,” a trap, he says, he and Giles managed to avoid. Burdon looks for the “conventional qualities of leadership, discipline, expertise and the capacity to inspire respect” when he appoints a chief executive. “CEOs fail when their ego gets ahead of them or because they don’t listen and consult,” he adds. “Good CEOs have a succession plan and know how to delegate.” Senior executives must be “self aware” to lead successfully, he says. “They destroy themselves and the business when they give way to personal arrogance or become obsessed with the business and micromanage. It is critical not to be overcome by your own hubris.” Meadow is a “transparent organisation” that Burdon says has always been conscious of the need to take the founding families out of the management as it grew. “As a rule, a second generation business should avoid family executives. Being family automatically carries the insinuation that a ‘first among equals’ rule applies. We have a corporate structure with a strong, independent board and all the appropriate disciplines and

accountabilities that accompany being a large corporate,” he adds. Building a business on mushrooms has helped. Many entrepreneurial businesses are, says Burdon, constrained by the limitations of New Zealand’s small economy. “We operate in a sector that allowed us to grow and achieve sufficient scale to move to a corporate structure.” Burdon now measures his personal contribution to the enterprise in terms of applied wisdom, the accumulated learning that comes with the scars of experience and the appropriate caution that goes with the reality of “having been around for a long time”. The “near misses” experienced in a career are, he says, invaluable. So will he know when he has reached his used by date? “Probably not,” he responds with a smile. “But I’ll be aware that I am increasingly overarched. Actually, I have been for a while now.” The realities of driving the growth of a sometimes tricky mushroom business plus the years in politics have, he concedes, taken some toll. “There are many reasons for being proud of what the company has achieved,” he adds “but I am no longer JUNE 2011 | management.co.nz | 33

Face to face

involved in any executive capacity. I am simply exercising the boardroom control that any corporate has. I am deeply engaged in what I believe is effective governance of the company.” Burdon takes pleasure from the success of his personal transition from management to governance. He applies the same stringent standards to leading his board as he did to leading the company’s management team. “The board rules we live by are as good as any corporate in the country and every bit as accountable. We are just as committed to best practice at board level as we have been to best practice in managing the business,” he adds. He did not, of course, serve on the Meadow Mushrooms’ board when he held Ministerial portfolios. “That would have been most irregular,” he 34 | management.co.nz | JUNE 2011

says, conceding that he also “enjoyed” his political career. His five-term stay from 1981 was, he says, a “challenging and dynamic” time in New Zealand politics. He became, according to his biography – Burdon: a man of our time – the moderate voice in the struggle between right and left economic ideologies that split the 1990s’ National Government. “I retired from politics because I thought we had achieved what we had achieved and I personally could see no further challenge,” he reflects. “It was time to move on.” Do business people generally transition well to politics? “There aren’t that many business people in politics,” says Burdon. “It is not so much a case of the discipline the individual comes from, but rather whether they have the personal qualities that enable them to succeed in politics. There are probably very few highly successful business people going into politics. If they do, they probably translate their business success into political success.” Burdon thinks his stint in politics enhanced his understanding of public policy issues. Most business people have what he calls “a pretty blinkered view” of the significance of public policy on their decisions, whether they like it or not. “Politics is a human dimension. You must work within the system and understand the nature of decision-making which many business people don’t. You must also have respect, rather than contempt,

for the complexities of society and public policy processes,” he adds. Post politics and Burdon’s decision to help establish the Asia-New Zealand Foundation and, in a sense, launch the third pro-bono leg of his career, came from a “profound distaste” for any form of bigotry and what he calls “monoculture arrogance”. He wanted, he says, to see minority communities of every kind fully included in New Zealand society. Looking ahead, Burdon is concerned about the realities of the “sub-culture of under-educated, under-achieving and under-motivated young with heavy Maori and Polynesian overtones. This represents a social failure,” he says. “We clearly have a long way to go to succeed here. But we must succeed because it is an enormous drain on the country’s capacity to achieve to its maximum potential – not to mention the social price we pay for this reality.” New Zealand, says Burdon, is a natural resource economy and needs to think in those terms. “To delude ourselves about being a high tech and global financial centre is fantasy. I am surprised that some [politicians] are still talking about it. Because of our insulation and isolation we tend to engage in some remarkably self-deluding conversations and ambitions. We need to focus on best practice and developing the natural resources we have.” He concedes, however, than when it comes to adopting best practice, New Zealand business is disinclined. M

The Busy Burdon Chairman of Meadow Mushrooms; Mutual Funds (MFL) and Superannuation Investments (SIL) Deputy chairman of GuocoLeisure Director of IAG Insurance and Argosy Property Trust Chairman of the Asia NZ Foundation and Future Christchurch Network (FCN)

Greg Cain | Partner

Clayton Kimpton | Partner

Anthony Drake | Partner

Rachel Burt | Senior Associate

Charlotte Parkhill Senior Associate

Michael O’Brien | Senior Associate

Kensington Swan boosts their market leading employment team with a new Wellington Partner Greg Cain’s experience in restructuring and dispute resolution adds to the ﬁrm’s credentials as a leading national employment team. A successful track record of work for an impressive portfolio of clients across government and the private sector, has earned Kensington Swan a Band 1 ranking in employment law by Chambers Global. ‘The ﬁrm is business-orientated and always gets to the nub of the issue very quickly. The advice is succinct and relevant.’

AU C K L A N D

W E L L I N G TO N

ABU DHAB I

Chambers Global 2011.

K E N S I N G TO N S WA N . C OM

Responsible governance

Air NZ’s flight plan Continuing NZ Management’s new series on responsible governance. Each year, the Deloitte/Management magazine Top 200 Awards and Kensington Swan, sponsor of the Responsible Governance Award, acknowledge companies that practise responsible governance.

John Blair… "Environmentally-linked decisions have both cut costs and enhanced revenue. They are also the right things to do.”

36 | management.co.nz | JUNE 2011

here is a heavy environmental bias in Air New Zealand’s approach to responsible governance. It’s understandable given the nature of the business and marketplace realities that confront it. The Air New Zealand Environmental Trust, for example, is a smarter answer to the carbon credit certification programmes promoted by other airlines when they came under pressure from the environmental lobby five or six years ago. The Trust is now reasonably popular with the airline’s passengers and customers and, says the company’s general counsel John Blair, it is environmentally effective. Instead of issuing certificates which are, at best, just a piece of paper, the scheme encourages travellers to donate to the Trust’s specified environmental programmes. The airline in turn tops up the fund by calculating the carbon-offset value of its employees’ travel and injecting “several hundreds of thousands of dollars a year” into the Trust. The Trust is independent of the airline, though Blair and the airline’s deputy chief executive Norm Thomson are both on

its board of trustees. Three independent trustees, bug man Ruud Kleinpaste, Living Earth founding director Ron Fenwick and Auckland University of Technology professor of sustainable tourism Mark Orams make up the rest of the board. The Trust is one of several environmental initiatives driven originally by the airline’s chief executive Rob Fyfe and embraced by its board. Fyfe’s environmental epiphany is reportedly attributable to an encounter with a potential customer in the United Kingdom who told him she would “love to travel to New Zealand” but flying there in a 747 was, she felt, “like turning up at a Greenpeace conference in a Hummer”. The aviation industry was, at the time, in defence mode, recalls Blair. Airlines might contribute only three percent to the world’s global carbon emissions, but they were getting bad press for their carbon air miles. And given Air New Zealand’s positioning as a business based on promoting New Zealand as an environmentally attractive and active destination, Fyfe realised the company’s strategic marketing and operational approach had to align to be credible.

“We could hardly operate within New Zealand’s global ‘100% Pure’ environmental branding and not be seen to be doing something to substantiate the claim,” says Blair. “There are limitations to what an airline can do, but when we really started thinking about it we found many things to help us improve our environmental footprint generally and not just the carbon emissions that go with air travel. It is one of those classic situations where good social responsibility governance aligns well with the commercial aspects of the business,” he adds. Other initiatives now include a Green Team of roughly 3000 employees. They get involved in a range of clean-up, planting and other environmental protection projects. Three years ago Air New Zealand successfully tested a ‘generation two’ non-food bio-fuel in flight. And it continues to test other technologies on the Auckland to San Francisco route, proving that with proper air traffic control and the use of satellite navigation systems on its aircraft it can reduce fuel burn by “many thousands of litres” on each flight. Refinements that reduce moisture and consequently the weight of an aircraft in flight have significantly cut fuel consumption, as has the decision to spend roughly $30 million attaching winglets to its 767s. “These environmentally-linked decisions have both cut costs and enhanced revenue,” says Blair. “They are also the right things to do.” It is difficult to argue his point given that last year Air New Zealand won NZ Management magazine’s inaugural Most Reputable Organisation Award. Air New Zealand’s general approach to responsible governance is, according to Blair, led by the company’s chairman John Palmer. “His view on governance, and it is one the executive team buys in to, is simply that we do the right thing. You can have the picket fence approach to governance, with all the rules and structures, but if you don’t have people with the right mindset willing to act with integrity you are wasting your time,” he adds. Responsible governance is not a strategic priority at Air New Zealand. “We

don’t list it as a big objective,” says Blair. “Rather it is a value that underlies what we do. It is now firmly embedded within the organisation’s corporate culture. Acting with integrity is, on the other hand, definitely a priority. And that has come from the chairman’s leadership, the board and the executive team.” Air New Zealand’s legal team runs an online compliance training programme called “Integrite”. And almost all the company’s 11,000 staff take it. The company has a written code of ethics and publishes a handbook on business ethics and other issues, such as workplace safety, bullying, confidentiality, privacy of information, competition, how to deal with suppliers and treat customers fairly. It is also the basis for one of the online modules in the training programme. “It gets refreshed every year and our employees go through it annually,” says Blair. “The board does the online training too.” And while it is difficult to ensure panorganisation compliance with the company’s behaviour guidelines, it constantly audits for non compliance, particularly in areas that involve workplace or operational safety. The board takes the Securities Commission’s Corporate Governance Principles into consideration when setting, implementing and reviewing its responsible governance standards and practices. “These principles were released about the same time there were significant changes on the board,” says Blair. “So, we used the legal team to create board charters, committee charters and to ensure we had the right structures and reporting processes to comply with the principles. All these charters are published on our website and they are regularly reviewed. The board members also self review their performance as directors.” The company’s whistle blowing provision, or as it is called, the “Just Culture” process, is firmly in place. Employees are encouraged to report issues, particularly safety-related matters, to their managers, the HR or the legal department, on a ‘no names, no comeback’ basis. “In a business where safety is paramount it is critical

to have a culture in which people know they can put their hand up and report a potential problem without fear of any recrimination,” says Blair. Safety is, says Blair, the genesis of Air New Zealand’s Just Culture approach. “A problem might be caused by a colleague’s actions or any number of other things. Either way we need a culture that encourages a willingness to report anything that seems to be wrong. There is quite a sophisticated process to ensure that people are comfortable in reporting, even if they have made a mistake themselves. The most important thing is for the company to be aware of the issue. The Just Culture policy says you can self report that you have made a mistake and while there may be some repercussion, the priority is to fix the issue. The individual gets credit for coming forward.” Blair is now thinking about improving Air New Zealand’s stakeholder communication options. He does not, however, want to emulate what he calls wasteful European practices of turning out massive corporate social responsibility reports. “I am a bit cynical about reporting at length on how well behaved you are. Besides, we are very visible in the New Zealand marketplace and to that extent there is pretty constant communication with our stakeholders. “And there are things we do that we don’t necessarily want to trumpet. After the Pike River tragedy and the Christchurch earthquakes for example, we helped families and spent around $10 million providing flights and on-ground support. There are things we don’t do for the media profile. We want to do things because they are the right things for a New Zealand company to do. People soon become cynical if they seeing actions as simply PR stunts. That is not why we do them.” M

Companies wanting to enter the 2011 Kensington Swan Responsible Governance Award within the Deloitte/Management magazine Top 200 Awards should go to: http://www.management.co.nz/top200/ responsiblegovernance.html

JUNE 2011

| management.co.nz | 37

The virtual workplace

Ryan Wilson… “We’re on the cusp of a phenomenon that’s sweeping the world.”

Generator: Powering a new business model

Photos: Jan-Michael David

NZ Management talks to Ryan Wilson, the brains behind Generator, a new business club/serviced office model in Auckland’s thriving new business and social hub, the Britomart precinct.

38 | management.co.nz | JUNE 2011

enerator, in the heart of Auckland city. That could conjure images of the five-week-long power outage in 1998 that brought much of the central city to a standstill. But this 2011 vintage Generator is a contemporary powerhouse facilitating the operation and networking of a new breed of businesses that needs kilowatts to power laptops rather than large office blocks. Much of the energy required for these ‘virtual’ businesses is of the intellectual kind. Generator occupies a floor of a former shipping industry warehouse on Customs Street in the revitalised Britomart precinct in Auckland central. But its success means that more space within the building is being developed. Generator – deconstructed An update on the serviced-office concept, Generator is a hybrid of a number of successful models overseas. As founder and executive director Ryan Wilson explains, it has three key components: Serviced office Generator has a large impressive reception area and, depending on the level of membership companies or individuals subscribe to, a full range of office infrastructure services including: mail service, desk, phone, wireless broadband, PA support, meeting rooms and minute-taking. Members’ club A modern take on the prestigious ‘gentleman’s’ clubs of yesteryear with its personal

services including taking care of your drycleaning. Wilson cites Soho House in London as one inspiration; “It’s the new-age version of the club. It was conceived out of the need to create a space in central London where people of a similar ilk – entrepreneurs, creatives – could meet. And there was a certain prestige in meeting at ‘my club’ in the middle of London.” Business lounge Based on the Koru Club-type airline lounge, this is the general informal meeting area with both large tables and chairs and comfortable lounge chair settings. There is both a bar and espresso coffee service and members charge purchases to their accounts which, along with membership fees, meeting room charges and other costs, are invoiced monthly. Wilson says Generator members benefit from the best elements of all three models. “It’s a members’ club and there’s four types of membership.” He explains the options: Resident membership “As a resident, you and your company can be based out of here; it’s your office and you get all essential office support including secretaries and PAs and we collect your post. Residents include Kea [the international expat Kiwi network] and Escalator [the NZ Trade and Enterprise investment training service] and they are the core of the concept.” Hot-desking membership “This is for those who work out of town,

Australia or wherever; they come in and swipe their member’s card, get allocated a desk and off they go. They have access to all the other facilities as well.” Casual membership “If you want to get out of the house for a few days a week and just want some space in our lounge [there’s wireless broadband throughout the facility] to do your emails, write proposals or whatever, this can work for you. You can have a casual meeting, meet a colleague or client for a coffee, or if you want some privacy you can book a meeting room.” Corporate membership “This is unit-based; you get a number of units, say four or five membership cards. They can be allocated to anyone in your company and you can use them however you like; for meeting rooms, beers or coffees, you just apply those units.” Wilson explains that the corporate membership was designed to facilitate growth for small businesses allowing them to network readily with large companies. “For example, one of our members is in experiential marketing and he might want to get alongside brand ambassadors at the large corporates. We’ve created an environment where they can all meet up. “We have another member who works in Kumeu, but his base is a warehouse – not a good environment to host clients. This is perfect for him; he’s got a presence in town, great choices for lunching in Britomart and he can have his private meetings. “We’re in a very virtual world now, JUNE 2011

| management.co.nz | 39

The virtual workplace

where much business is done in the cloud. It’s good to do some things face-to-face; to do business over a beer.” The success of the Generator concept is yet another indication of an increasingly mobile workforce. According to Wilson, “We’re on the cusp of a phenomenon that’s sweeping the world. The way people work is changing forever. More than 50 percent of the mobile workforce and SME sector in New Zealand spend at least two days a week off site.” And the trend was accelerated by the GFC and associated credit crunch. In many cases businesses found themselves saddled with expensive commercial leases and other high overheads – a costly infrastructure that they could no longer maintain in the new lean environment. “Those factors have played a part in the evolution of this kind of working model,” Wilson says. Christchurch’s catastrophe in February was remote-working’s gain, as businesses scrambled to set employees up to work from home. Some may never return to working from a central office as chief executives and employees alike discover the benefits of greatly diminished overheads. “We provide the infrastructure to make it incredibly easy to come in and do your work, making sure that technology supports it, so when you’re in a meeting room you’ve got wireless, you can skype, you can plug in to the AV, whatever you need. We’ve

Dennis Viehland… “Most research shows productivity increases with telework.”

40 | management.co.nz | JUNE 2011

eliminated the barriers to being involved [in the new mobile, wireless economy]. There’s no lease costs, you’re not tied in for four years, and you’re not putting up your third child as security.” Wilson’s business partner Scott Kuegler, with experience in fit-out, was responsible for creating the space. It’s a comfortable mix of the chic and the

functional, utilising many of the original features of the converted warehouse. The office spaces, meeting rooms, lounge and cafe, blend easily into a sophisticated contemporary environment that’s a natural fit for its enthusiastic full-time, part-time and occasional inhabitants. While the members are engaged in individual and separate pursuits, Wilson’s

A corporate ‘shop window’ for virtual businesses “When I first set up Mediaweb two years ago the trend to virtual workplaces was just taking off.” Auckland publisher Toni Myers is talking about the company she formed to purchase a number of business and trade titles, including NZ Management magazine, in June 2009. “We had no premises, apart from a rented cottage in Kingsland for storage and administration, and it was a bit scruffy to take business contacts to, or to interview job candidates. “I commute from Waiheke and quickly discovered the meeting spots and businessfriendly cafes within easy distance of the ferry terminal.” She followed the trail of other Waiheke ‘lifestylers’ lugging laptops and heading for the first caffeine shot of the day at the cafe on the mezzanine floor of the PricewaterhouseCoopers building on Quay Street opposite the ferries. Myers said back then there was always a spare table at the cafe to conduct interviews or make mobile calls. “But in the space of 18 months everyone else seems to have discovered this and now it can be hard to find a seat or quiet space during working hours.” Other favoured spots for mobile workers in downtown Auckland are the foyer cafes in the Vero Building on Shortland Street and the Deloitte building on Queen Street. But as word gets around such havens become popular and available table and chair settings are as rare as empty tables at the most popular restaurants on a Friday night. “Fortunately, just as I began to run out of convenient options, Duncan Stewart of cleantech company Greenhouse, introduced me to

Ryan Wilson and Greenhouse’s space at Generator. When Ryan showed me around there were two young guys sitting in the lounge area tapping intently on their laptops. These two were running a sizeable company with offshore connections; and all from their two laptops. Silicon Valley had arrived in Auckland! “I signed up for membership there and then and booked a meeting room for the following day.” Myers says the Generator concept has arrived at the perfect time to offer practical solutions for many new businesses, and older ones having to re-invent themselves in a more competitive environment. “Many new and growing businesses need little in the way of plant or bricks and mortar; they’re based on intellectual capital. It makes sense to invest in the growth areas of the business while utilising an infrastructure established and maintained by someone who specialises in that.” She believes that Generator provides the perfect solution for businesses that need a corporate ‘shop window’ for meetings etc, but no need to carry the cost of permanent reception and meeting facilities. “Generator’s presentation is very professional and the staff are excellent; providing a good impression for clients and potential business partners or employees. But it has a very contemporary look and feel with an informality in the lounge area that is particularly appealing to creatives and the new breed of young executives in fast-growing enterprises that need little other than their laptops and mobiles to run their daily business lives.”

philosophy of connecting those sometimes isolated in a virtual world has spawned a successful model. For some individuals and businesses the Generator model can be a long-term or permanent solution to the need for minimal infrastructure and office services. For others it could provide the springboard for growth that takes them to the next phase of their business. That growth could be assisted by partnerships or opportunities out of the networking and relationships that Generator facilitates. That’s a key part of the philosophy behind the concept; connecting people who work remotely – and providing the infrastructure for a company or individuals to conduct business. “Its success comes from the culture and the networking,” explains Wilson, “ending the isolation of those who work independently. Most of us thrive on new ideas, meeting new people and getting different perspectives. Here we want members to be inspired by the space and the people; by creating a culture that encourages interaction and making things happen.” Although they may be spearheading the changes, it’s not only SMEs that are embracing virtual working. Large corporates are increasingly weighing up the benefits of flexible working arrangements for employees. And aside from the benefits accruing to the business, there are significant upsides from reduction in traffic congestion and carbon emissions. The concept of teleworking is not new but its application is growing because information technology and mobile communication systems have evolved sufficiently to support it for all sizes and types of business. Mediaweb’s Toni Myers (see box story) says that she could not have set up her virtual business without the benefits of relatively new technologies like skype. “Audio and video conferencing have their place, but the instant access and no-cost skype option allowed us to have virtual meetings on a daily basis from day one.” And changes in managers’ attitudes to worker productivity – that it’s about outcomes not hours spent behind a desk – are supporting the evolution.

Homers, roamers & zoners Dennis Viehland, professor of information systems at Massey University, says that teleworking – distributed work, satellite offices or telecommuting, all have one thing in common. The central office location is no longer the sole focal point of the business. “When Vodafone opened their new offices in Auckland’s Viaduct they created fewer offices than employees and they went with a distributed work model.” He says distributed work encompasses various employee types. These range from the ‘homer’ who needs to have an assigned physical workspace, or ‘home’, that is essential to their job; to roamers and zoners who are not constrained to one space but can carry out their work in a number of offsite locales – cafes, client offices, or at home. The satellite office is a smaller commercial lease in a suburb of a major city that helps workers avoid long commutes that can sap their energy and focus. While there may be expectations workers will have to go to the central office for meetings or the occasional work days, the majority of their work time is spent closer to home and away from the central city headquarters. Telecommuters spend the majority of their working lives at home, in an office space hooked up virtually to all of the administrative and communication networks of a business. That mobility is the result of advances in information technology and mobile communication networks. “Traditionally, information would be stored in paper files, or on mainframes but networking has brought it all to the desktop,” Viehland says. “Now it’s about getting information to individuals, no matter where they are and this is greatly helped by smart phone technology and wireless.” And ‘cloud’ computing takes the mobile model even further, reducing the need for companies to have their own information storage and processing capacity. It’s not just better work/life balance and the benefits from reduced commuting and lower overheads that give virtual working its appeal. “Most research shows productivity increases with telework,” says Viehland. M

Ryan Wilson… “Its success comes from the culture and the networking, ending the isolation of those who work independently.”

US corporates abandon traditional offices An October 2009 case study from Harvard Business Review identified four critical challenges involving remote work: 1) finding the right work-life balance, 2) overcoming workplace isolation, 3) compensating for the lack of face-toface communication and 4) compensating for the lack of visibility. The study, ‘Set Up Remote Workers to Thrive’ by Jay Mulki, Fleura Bardhi, Felicia Lassk and Jayne Nanavaty-Dahl, noted that some Fortune 500 companies, including Procter & Gamble, IBM, Accenture and AT&T, had already partially or fully eliminated traditional offices. It claimed that as much as 10 percent of the workforce was then telecommuting from home – more than triple the level of 2000. Even though this trend would accelerate, it warned that remote employees as well as managers were becoming increasingly aware of the challenges associated with virtual work, relating to internal communication, social interaction and employee satisfaction and commitment.

JUNE 2011

| management.co.nz | 41

Private Schools

The cost of

choice

Deborah James… “Risk of a diminished private school sector will only make the sector more elite and exclusive.”

42 | management.co.nz | JUNE 2011

he recession and marginal financial assistance from successive governments has made things tougher for parents who choose to educate their children in private schools, say those involved with administering the sector. “Private schools are becoming less affordable to many New Zealand families because of little government support and inequitable funding across the education spectrum,” says Deborah James, executive director of Independent Schools of New Zealand. “Independent schools would reduce fees if they could but under the present subsidy they are not in a position to do so without compromising the high quality staffing and curriculum delivery. Risk of a diminished private school sector will only make the sector more elite and exclusive. “The presence of a private schools sector ultimately protects parental choice; under the Declaration of Human Rights parents have a prior right to choose the kind of education that shall be given to their children. There must be choice in an education system. Without choice we run the risk of offering a monopolistic education system, one that would produce mediocrity in education delivery and outcome.” James says that particular mythologies about private schools have made funding issues political, rather than practical, and the economic sense of increasing subsidies is often overlooked. She says that there is a misconception that “private schools are for the rich and wealthy, when in actual fact they’re not. We have ordinary families who’ve made education a priority. Many have made huge sacrifices. Arguably, there are more wealthy families in public schools than in private schools. “We’re not a drain on the public purse. It would appear that political ideology prevents successive governments from seeing the economic sense in raising the subsidy to private schools so that they can continue as independent schools. The NZ Institute of Economic Research in its report on ‘Funding Arrangements of Independent Schools in New Zealand’

provides a compelling economic argument for the Government to raise the subsidy to private schools and still remain a net fiscal beneficiary of the presence of a private schools sector,” James says. Independent Schools New Zealand currently represents 43 of the 95 registered independent schools around the country and James says that the recession and inadequate funding has affected some schools, particularly those in the Central North Island where “population growth potential is not the same as other areas. Schools are not seeing the same level of enrolments and parents are facing economic and employment uncertainty. Some people who may have considered primary and secondary may now choose just one or the other,” says James. Chief executive of Academic Colleges Group (ACG) Clarence van der Wel admits that while enrolments have been largely unaffected by the recession, he is aware that parents are finding it more difficult to pay tuition fees. “Many are making large financial sacrifices for their children to be able to attend independent schools,” he says. ACG has a range of schools and programmes in Auckland and overseas, with four schools in different areas of Auckland (ACG Parnell, ACG Senior College, ACG Sunderland and ACG Strathallan) that cater for mainly New Zealanders and three other schools for international students. Like James, van der Wel finds it difficult to accept the case for less subsidies when the benefits of increasing them make sounder economic sense, he says. “There is a fiscal benefit to the Government from the existence of private schools. Firstly there’s the net revenue gain – where the GST take on tuition fees is greater than the grants private schools receive from the Government. Secondly the Government doesn’t need to provide schools and teachers for approximately 3.8 percent of the NZ student population [those who attend private schools], which means significant savings for the Government. The reality is if the Government were to increase subsidies to private schools then more children would come, JUNE 2011

| management.co.nz | 43

Private Schools

Clarence van der Wel… “Independent schools do a great job and create a caring environment where kids are safe, happy and valued.”

meaning large savings and less to pay for in state schools.” Both James and van der Wel are further frustrated by the costs of integration of private schools into the public sphere. “Raising subsidies long term is more 44 | management.co.nz | JUNE 2011

cost-effective than the school having to integrate – integration costs a lot more. A small school in Auckland recently integrated into the state sector. In doing so it has reduced its fees from $11,500 per annum to $500 per annum. The taxpayer is picking up the cost of that private school integrating into the state sector. The Minister of Education has recently announced she will enter into negotiations with Wanganui Collegiate School. Should the application to integrate be successful it will cost the Government millions of dollars more each year in operational funding,” says James. While recessionary factors may be making conditions harder for a number of parents who choose private education for their children, the reasons for the choice have remained the same, says van der Wel. “There’s the freedom to choose the type and style of education that suits their child. There is greater accountability from the school by paying for the education. Independent Schools do a great job and create a caring environment where kids are safe, happy and valued. They are

service oriented, focusing on supporting children and families, with an emphasis on meeting the learning, social and emotional needs of the child.” Academic factors are also important van de Wel says, especially when it comes to the qualification programmes offered. Since 2002 ACG schools have only offered the CIE (Cambridge International Examinations) secondary qualification. “CIE is the largest international secondary education qualification in the world and is highly regarded. Some parents dislike NCEA and seek out private schools for different qualifications – IB (International Baccalaureate) and Cambridge. Some families feel the academic standards in private schools are better.” While the issue of funding to independent schools remains ever present for van der Wel and James, they are however, aware that higher funding levels will be unlikely in the short term. “We believe better funding would help significantly but we appreciate the reasons for no increase in funding in the current economic climate,” van der Wel says. M

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M EXECUTIVE HEALTH peter TYNAN

Investing in health

Photo: thinkstockphotos.com

ast month the Southern Cross Healthcare Group of businesses celebrated its 50th birthday. Looking back to our beginnings has been an enlightening exercise. Prior to 1961, health was pretty much something you took care of in your own time. I wonder if our forefathers would have embraced stress management seminars? In-chair massage? Quite unlikely I’d say. As recently as 1979, our in-house company newsletter marvelled at how “online computerisation, together with the recent installation of two word processing units and two inkjet printers” had achieved “remarkable economies” in administrative efficiency. However, such “remarkable economies” have come at a price for New Zealand’s working population. In general, we work longer and move less. In the workplace we now see the emergence of new health issues such as workplace stress and occupational overuse syndrome – things you never spoke about with your boss when working on the railway line. Earlier this year, a survey undertaken by the Employers and Manufacturers Association (EMA) Northern of 402 upper North Island employers found that health and wellness is now part and parcel of business operations. Nearly 50 percent of all employers surveyed had a formal health and wellness programme in place, while 93 percent offered some form of health intervention in the workplace.

This investment in health and wellness has also proven resistant to the economic downturn of the past few years. Fiftysix percent of employers with a formal health and wellness programme had implemented it in the last three years – a period which has seen belt tightening in just about every other business area. Perhaps this is not surprising. When workforces are leaner employers realise it’s even more important that employees remain healthy, productive and loyal. Reducing absenteeism was seen by 60 percent of employers as a key reason to have health initiatives. Some of the most common health activities offered were flu vaccinations (offered by 66 percent of employers) and workstation assessments and cleaning (offered by 57 percent) –

interventions that help to directly address two obvious causes of absenteeism. But while recognising the business benefits of health initiatives, the survey showed that today’s employers are equally motivated by more altruistic reasons. Sixty-two percent of employers cited ‘to encourage work-life balance’ as an important reason for having a health and wellness programme while 50 percent cited ‘social responsibility’. So what can we expect for the next 50 years of workplace health? There are already signs that employers are looking to assist employees even further. An example is The Warehouse, which won the Supreme Award in the 2010 EEO Trust Work & Life Awards for its parenting programmes for staff. What we’re witnessing is a strong awareness that physical or mental health problems can’t simply be parked at the door when we walk into work. Looking ahead, the move towards flexi-time, remote working and mobile technology mean that work and ‘life’ are likely to become ever more intertwined. But it’s here that the daily grind can offer a solution. Thanks to the generally routine nature of work, the hours spent there, and the peer support available from colleagues, the workplace is also an ideal environment to make healthy habits for a lifetime. M Peter Tynan is chief executive of Southern Cross Health Society.

Healthy staff means higher productivity Covering staff with Southern Cross health insurance means less sick days, quicker return to work1 and it’s an attractive incentive for retaining and recruiting employees. It all adds up to a more

productive and profitable business. Your profits, not ours. Because we’re not for profit, we’re for you. To find out more, call Southern Cross Health Society on 0800 323 555 or visit our website healthybusiness.co.nz

1. TNS research 2004.

Healthy people healthy business Southern Cross Medical Care Society, Level 1, Ernst & Young Building, 2 Takutai Square, Auckland 1010

46 | management.co.nz | JUNE 2011

Advertorial

Developing leaders T

o keep up with current demands and remain competitive as an employer of choice, organisations must focus on developing their talent and leadership capabilities for the future. By designing a human capital strategy in line with business goals, organisations are able to foster their Talent and Leadership potential to the benefit of the business. Leadership has been said to be about inspiring people toward achieving the vision of an organisation, and the question may be asked, “What is ‘authentic leadership’ and is it required?” Dr Stephen Drain from AUT University, director of the Centre for Innovative Leadership, is an expert on this topic and believes that authentic leadership is about being true to the self, leading from strengths and passions, as well as having respect for others strengths and preferences. Organisational culture is a separate aspect of a business strategy which results

directly from a powerful leader, influencing the procedures, processes and interaction between departments and individual employees. Johan Barton, director of People Performance and Culture at KPMG New Zealand, is a key figure who can testify that having inspiring leaders who can lead by example and engage staff to live the values of the organisation can become an essential factor influencing the success of a business. However, in every successful organisation with a strong organisational culture and leadership function there can arise issues, or areas in need of improvement. Leaders must not only influence forward-moving change and create a positive organisational culture, but review, rethink and redesign areas which may not be achieving the highest possible efficiency. Carol Home, manager of People Capability at Unitec, has been at the forefront of several targeted initiatives

to develop and build leadership capability at all levels of the organisation, assisting Unitec on a journey towards leadership and business excellence. Talent management schemes are often the most effective method in finding developing and upcoming leaders. David Belesky, organisation development and training manager at the Ministry of Social Development, has been a key player in this area, and suggests initiatives such as creating a ‘talent scout’ role, utilising ‘deep dive’ searches in the organisation to seek out emerging talent, and building in-house coaching capability. The 2nd Annual Strategic Talent and Leadership Development Forum provides an opportunity for human resources, organisational learning, talent management and leadership development professionals to come together to formulate approaches for further developing talent and leadership within their organisations.

The 2nd Annual

Strategic Talent and Leadership Development Forum 2011

Strengthening the Leadership and Talent Pipeline to Drive Cultural Change and Meet Current and Future Priorities

5 & 6 July 2011 Wellington Convention Centre Register for this event at: www.liquidlearning.co.nz, phone +64 9 363 9717 or email: marketing@liquidlearning.co.nz ASSOCIATE PARTNER

MEDIA PARTNER

PROuDLy PARTICIPATINg IN:

JUNE 2011

| management.co.nz | 47

M Executive development Sponsored by The University of Auckland Business School Short Courses www.shortcourses.ac.nz 0800 800 875

NZIM courses SEE PAGE 55 www.nzimnothern.co.nz www.nzimcentral.co.nz www.managementsouth.co.nz

June 7 Empowering Individuals and Teams. Auckland. University of Auckland Short Courses. www.shortcourses.ac.nz 7-8 Building a Successful Business Case. Wellington. Conferenz. www.conferenz.co.nz 8-9 Practical Resilience. Auckland. University of Auckland Short Courses. www.shortcourses.ac.nz 9 YouTube – Communicating with Impact. Auckland. University of Auckland Short Courses. www.shortcourses.ac.nz 9 Communicating the Vision. Auckland. University of Auckland Short Courses. www.shortcourses.ac.nz 9 Strategy Essentials. Dunedin. Institute of Directors. www.iod.org.nz 10 Management Communication - Professional Email Etiquette. Auckland. University of Auckland Short Courses. www.shortcourses.ac.nz 13-14 Business Modelling. Auckland. University of Auckland Short Courses. www.shortcourses.ac.nz 15-16 Management Fundamentals. Auckland. University of Auckland Short Courses. www.shortcourses.ac.nz

SHORT COURSES smarter faster

19-24 Company Directors’ Course. Tauranga. Institute of Directors. www.iod.org.nz

28-29 Project Management Essentials. Auckland. Conferenz. www.conferenz.co.nz

20-21 Business Skills for New Managers. Auckland. University of Auckland Short Courses. www.shortcourses.ac.nz

29-30 Negotiation Skills. Auckland. University of Auckland Short Courses. www.shortcourses.ac.nz

20-21 Time Management. Auckland. University of Auckland Short Courses. www.shortcourses.ac.nz

July

20-24 Managing Successful Programmes (MSP). Wellington. Project Plus Ltd. www.projectplusgroup.com 21-22 Negotiation Skills. Christchurch. Organisation Development Institute. www.development.org.nz 22-23 Influencing & Persuading Skills. Auckland. University of Auckland Short Courses. www.shortcourses.ac.nz 22-23 Mastering Pay and Performance. Auckland. University of Auckland Short Courses. www.shortcourses.ac.nz 22-23 Engaging for Change: Appreciative Inquiry. Auckland. University of Auckland Short Courses. www.shortcourses.ac.nz 23-24 Project Management. Christchurch. Organisation Development Institute. www.development.org.nz

4-5 Project Management Masterclass. Auckland. University of Auckland Short Courses. www.shortcourses.ac.nz 5 Managing Multiple Priorities. Wellington. Project Plus Ltd. www.projectplusgroup.com 6-7 Innovation and Collaboration. Auckland. University of Auckland Short Courses. www.shortcourses.ac.nz 6-7 Procurement Management.Auckland. University of Auckland Short Courses. www.shortcourses.ac.nz 7-8 Strategic Management. Christchurch. Organisation Development Institute. www.development.org.nz 10-15 Company Directors’ Course.Christchurch. Institute of Directors. www.iod.org.nz

27-28 Mental Toughness. Auckland. University of Auckland Short Courses. www.shortcourses.ac.nz

11-12 Event Planning and Management. Auckland. University of Auckland Short Courses. www.shortcourses.ac.nz

27-28 Business Writing Skills. Auckland. University of Auckland Short Courses. www.shortcourses.ac.nz

For more detailed diary listings, visit NZ Management’s website management.co.nz

To Darren Levy, The University of Auckland Business School p gm Short Courses has improved my business knowledge and technical skills as well as helpin helping mee +3 3 300% 00 incre 00% in ncr ccre reease ease as s yyear as e motivate and inspire my team. Applying these skills helped my division postt + +300% increases on year all throughout the recession. Dan Walker, Noel Leeming Group Limited

Make a REAL difference to your organisation 0800 800 875 | www.shortcourses.ac.nz

48 | management.co.nz | JUNE 2011

execs on the move M

Colin Christie

BDO New Zealand has appointed Colin Christie as the new chairman of its National Management Board. He succeeds Judith Stanway. A partner and chairman of BDO Gisborne, Christie has worked on government taskforces, advisory groups and local business authorities.

Raewyn Lovett

Carl Bergstrom

Frucor Beverages has appointed Carl Bergstrom as group managing director. He replaces Mark Cowsill who retired at the end of May after 18 years in the role. Bergstrom has been ceo for Frucor’s New Zealand business since he joined the company in 2000. In this role he has led a number of significant strategic projects including the acquisition of the Arano and Simply Squeezed juice businesses. He has also overseen the successful expansion of Frucor’s manufacturing operations, increasing capacity to support new product innovation and to meet domestic and international demand. Bergstrom has been actively involved in the New Zealand Juice and Beverage Association for a number of years, and held the role of president from 2004-2007.

A commercial partner in Duncan Cotterill’s Auckland office and the company’s chair, Raewyn Lovett has been appointed to the board of Quotable Value (QV), New Zealand’s largest valuation and property information company.

Roger Sutton

The Canterbury Earthquake Recovery Authority (CERA), the agency established by the Government to lead recovery work in Canterbury, has appointed Roger Sutton as its permanent chief executive. Currently chief executive of Orion New Zealand, a position he held for eight years, Sutton takes up his new role mid June.

Mark McLean

In his new executive role as general manager risk and support at SBS Bank head office, Mark McLean will oversee the good risk practices of the bank and further developing and enhance its systems. He has more than 15 years experience in the finance and banking sectors.

David Morris

Debitsuccess has appointed David Morris as group compliance manager. He brings over 20 years of expertise in the regulatory and compliance environments to this Auckland-based role having worked as a senior ministerial advisor within the Ministry of Economic Development and as director of operations for the Motion Picture Association.

Mike Dickson

Recruitment and human resource consulting business Hudson has appointed Mike Dickson as general manager – Wellington. He joins from Hudson Scotland where he has been a director leading the accounting and finance, and sales, marketing and communications practices.

Des Brennan

New Zealand Trade and Enterprise has appointed a new marketing director. Des Brennan is based in Auckland and leads NZTE’s work to highlight New Zealand’s business capability to the international market. He was previously chief executive of Yachting New Zealand and has held senior strategic leadership roles both on and off shore.

Greg Milner-White

Kensington Swan has promoted Greg Milner-White to partner in the environment and planning team. His practice includes acting for infrastructure providers, councils and contractors in relation to resource consent applications, designations, plan changes and environmental enforcement issues.

Achievement of Strategy is Fraught with Risk. Loss of focus will usually mean trouble. At Project Plus we understand the interconnection of change, projects and business outcomes. Contact us at 04 495 9100 to hear more.

www.projectplusgroup.co.nz

JUNE 2011

| management.co.nz | 49

M TOP tips

The holy grail

veryone in business wants to get closer to their customers – to understand what makes them buy, what they love about your product and what they value. The holy grail is to turn those fleeting customers into long-term, loyal ambassadors for your brand.

Connection is not a one-night stand

Every relationship demands more than a simple digital impulse. When you reach out and establish contact you raise customer expectations that you ‘want a relationship’. You can’t just cruise into view, then disappear – you have to keep connecting with them over time to get real value. So think about longerrange planning – what do you want that relationship to look like in a year’s time? How can you build depth to make it last the distance?

Think laterally

Have you got the most powerful connectors covered? Think beyond the obvious. It might be that someone who is a key influencer can reach your customers in a way normal media can’t. Recognise that key influencers, through word of mouth, can prove huge advocates for your business, helping tell your story. Is there someone out there that your target group identifies with?

Think multi-channel connectivity

Today’s consumer doesn’t operate in one medium alone, so create opportunities to connect across all channels. Map out how your customer, typically, spends their day. Check out their communication touch points, then you’ll have a good base from which to work out how mobile, office, home, web and social media can consistently reach them in the best way at the most relevant time.

Be topical

You’re more likely to get listened to if the conversation is fresh and in tune with popular discussion/current events. Look at blogs, feedback, general news and social media commentary to identify topics of interest and think hard about how you can relevantly link your message to those.

Don’t over complicate

Think really hard about what you’ve got to say and then simplify, simplify, simplify. Don’t clutter the conversation with two or three different offerings or pieces of information – it’s like trying to have several different conversations with the same person; you can lose the connection altogether and the main message gets lost in all the noise.

See beyond the words

So much digital communication is just about the message – how something looks visually is way down the list (as far as the company is concerned). Yet research tells us that people respond far more to the look of something than to what’s actually being said. Invest in good creative ideas to carry your message.

One person’s trash is another’s treasure

Not all customers value things equally so don’t treat them all the same. It’s all about creating one-to-one conversations. Create different segments of those who are likeminded. Make sure your offer then fits exactly to that segment. Technology now enables individualised conversations – use it wisely.

Size isn’t everything

There are no bragging rights just because you’ve got the biggest database. Simply because people are on your list doesn’t make them good customers. You need to understand who’s of real value. Not just the immediate high value prospects of today, but tomorrow’s emerging prospects who are already connected to your brand. Prioritise where you spend your money by understanding who you’re talking to and why. M

Sonya Crosby is general manager of discovery at Affinity ID.

• Finance & the Economy: Mergers, Acquisitions & Business Finance • The Director & Leaders magazine • Launching Top 200 2011

AUGUST

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SPECIALFEATURES • Finance & the Economy: China & Asia • Broadband • Conference & Event Management

For further information contact Rod Myers on 0-9-372 6444, 027 484 8046 or email admanager@management.co.nz 50 | management.co.nz | JUNE 2011

Advertising booking deadline 5tH OF MOntH PriOr

JULY & AUGUST 2011

JUNE 2011 Vol 06 Number 03

ISSN 1177-5815

on management

New Zealand Institute of Management IN ACTION

Engaging behaviour – a wake-up call N

ew findings from Leadership Management Australasia’s (LMA) latest Leadership, Employment and Direction (LEAD) Survey* show that far from loving their work or gaining intense satisfaction from it, almost 60% of the workforce in New Zealand and Australia – leaders, managers and employees alike – either hate their job or have a ho-hum attitude to it. One in six people (17% of business leaders and senior managers, 15% of middle and frontline managers and 16% of other employees) say they actually hate their jobs, but have to earn a living. “A predominant percentage of the workforce is performing at a level of personal productivity below their capability. With so many people either hating or being ambivalent about their work, there’s little wonder productivity is languishing,” says Grant Sexton, executive chairman, LMA. Nearly half the leaders and senior managers have only a neutral view of their jobs (48%). They look for fulfilment in other parts of their lives or find their job ‘okay’ but would prefer to be doing something else. A sizeable proportion of middle and frontline managers and employees also feel the same way. In contrast, only 28% of leaders said they loved their jobs or gained a great deal of satisfaction from the work they do. Engagement with current roles was notably higher for middle level managers (37%) and employees (37%). Work/life imbalance, difficulties finding and retaining quality staff and high staff turnover are central to leaders’ and managers’ lack of job satisfaction. However, amongst non-managerial employees, lack of job satisfaction stems from a lack of recognition and reward and, to a lesser extent, lack of opportunity to develop within the organisation. Kevin Gaunt, CEO, NZIM Northern, says while public commentary often indicates most people like their jobs, these results fit more closely with his perception of what’s really happening in the workplace. “This all fits with NZIM’s research into core management needs,” says Gaunt. “One of the most important of these is knowing how to ‘engage’ people in the organisation. Engagement is critical, as the LMA’s survey demonstrates. Engaged people are retained people and engaged people add more petrol into the employer’s tank. A major element of the modern manager’s role is knowing how to create an environment that people want to be in, where they feel recognised and that what they do is worthwhile. However, even now most management development programmes fail to understand or cover this

essential management skill. “The NZIM Management Model particularly identifies people management as a key driver of performance and productivity. The successful manager needs to know how to develop human capital to create a sustainable competitive advantage. This requires the skills and experience to attract, retain, and promote talent and to be able to implement effective measures and processes to motivate and develop employees. Delivering these is now an essential component of every modern manager’s toolkit,” he says. People choose how much of themselves they commit to an organisation, and the engagement process occurs in four stages: • Are my basic needs met? • Is what I do recognised? • Do I want to be here? • Am I developing and growing? "When a person's basic needs are met they have enough money for the basics – enough to make them want to get out of bed and go to work,” explains Gaunt. “They also have the resources to do their job, and understand what is required of them in that job. The second level relates to feeling valued and believing that – mostly – their work is worth doing. The third level is having a sense of belonging – the people around them are people they want to work with and the vision of the organisation is one they can support fully. The final level of engagement comes when the person believes he or she has the opportunity to grow and develop within the organisation. All four levels need to be present for full engagement to happen. “As each stage is met the person becomes more committed and engaged. They are motivated, enjoy being where they are, and the organisation receives increased value as the person commits more. This is an important issue for managers as baby boomers retire and competition for quality staff increases.” While needing to be able to handle all four, the critical action required from a manager is in relation to the second level – recognition. This can be achieved through effective managerial coaching, Figure 1: LEAD Survey results

simply by holding regular individual meetings with staff members and discussing what has been happening, what’s going well, or not so well, as the case may be, and then encouraging learning and forward action from the discussion, says Gaunt. “The impact on the individual is a sense that they are important in the eyes of their manager and that what they do is fully recognised and well worthwhile doing.” LMA says its findings are a reminder of the importance of getting to know and understand the people and motivations across all levels in the organisation. Leaders and managers also need to reflect on their own attitudes, as the signals they give off can affect people’s willingness to join or stay with an organisation. “Take the time to get to know and understand the motivations of the people in your team – what makes them tick, what influences their performance, what makes them want to stay and develop. With understanding comes a greater appreciation of your own role and avenues to fulfil it – to project the desired impressions to others, to lead by example ... and to be aware of and responsive to attracting and retaining quality staff. This can reverse negative attitudes to work and make the role more fulfilling for the leader or manager,” says LMA. *The L.E.A.D. survey is a survey of the issues, needs and expectations of employees, frontline managers, supervisors, business leaders and senior managers in organisations of all types, sizes, locations and industries across Australia and New Zealand.

Focus on Management

NZIM Mid-year Graduation

and the Young Executive of the New faces at Year Regional Awards NZIM Northern T T

he NZIM Northern team has continued to grow over recent months and it gives us great pleasure to announce the latest additions to the NZIM Northern team – Stacey Coulthard and Christine Tregonning. Stacey Coulthard is the most recent addition to the team having joined in April as the learning & development specialist. Stacey’s Stacey Coulthard. primary role is to work directly with clients to build leadership and management capability for organisations and their staff. She is committed to building strategic partnerships with existing NZIM clients and working with new clients to ensure that their business goals are achieved. She has over 10 years’ experience in leadership and sales positions predominantly in the recruitment industry. Her recruitment experience includes five years as a branch manager with overall business development and fiscal responsibilities. During this time Stacey held training and best practice roles which included specialist training design and facilitation. She has worked across a wide range of industries including large international commercial companies, local government as well as smaller businesses all with their own unique challenges and objectives. Christine Tregonning joined the team in March and brings a wealth of experience to her role as the Financial Accountant. Christine joins us as Sam Ning leaves NZIM after almost 10 years as finance manager to embark on a new career challenge in Sydney. Christine has come from working as a contractor across various sectors and is looking forward to getting to know NZIM. She is very experienced and capable and is looking forward to settling in with the Aucklandbased team. Both Stacey and Christine are valuable additions to the team and you will no doubt have a chance to catch up with them during the year.

Focus on Management

his coming July sees the completion ahead of them, the judges are sure to have of many qualifications that have been their work cut out for them. The Northern ongoing over the last 12 months, culminating Regional winner will then go on to be a with the reward and recognition of the hard finalist for the NZIM/Eagle Technology Young work over this period. This year’s Mid-year Executive of the Year Award 2011. The overall Graduation, 14 July, will winner will be announced see participants from at the Deloitte/ Management magazine a range of industries Top 200 Awards and sectors completing dinner in Auckland qualifications such as in late November. the National Certificate This winner receives a in Business (Levels 3 & granite and gold-plated 4), the NZIM Diploma in bronze trophy and Frontline Management executive management (Level 5), the NZIM development training and National Diploma with NZIM to the value in Project Management of $5000. (Level 5) as well as The combined Mid-year the NZIM Diploma in Graduation and Regional Managerial Excellence Young Executive of the (Level 6). Year Award ceremony are As in previous years, scheduled for the evening the graduation evening Sharon McCook , Northern Region Winner, of the 14 July. With has been combined with Young Executive of the Year 2010. close to 100 graduates, the Young Executive along with networking of the Year Northern opportunities and a wine Regional Awards. tasting, this is an evening not to be missed. Be Over the years, there has been some stiff sure to note this date in your diaries and we competition for this Award, and this year is look forward to seeing you there. no exception. With some tough decisions

NZIM Diploma in Management

(Advanced) – Level 6 I

n today’s fast paced business world, having the right skills can guarantee your future success. While many people have a wealth of experience and knowledge, many lack any formal recognition or qualifications. More often than not, there are gaps that need to be filled at an operational and, more importantly, strategic level. This is where NZIM Northern can set you in the right direction. The NZIM Diploma in Management (Advanced) – Level 6, an NZQA approved qualification, is for managers who have been in their role for more than five years and are looking for a formal management qualification, or to better prepare themselves for senior positions, as well as middle managers who need to fill gaps in their knowledge. With the ever-increasing level of leadership and technical expertise needed to successfully manage business units or organisations, leaders and managers need to be adept at finding business solutions. Not only that, they need to be creative and innovative

in their approach, meet time and budget constraints, and to influence others inside and outside their organisation. This programme will provide an entry point into advanced qualifications for middle or senior managers, wishing to provide conceptual rigour for their experiences but without the commitment of full time study or night and weekend classes. To optimise the learning experience, the Diploma is spread over nine months, with face-to-face modules approximately every four to six weeks. Participants are required to complete assessments for each module, a major project and final project report, along with a learning journal and formal presentation at the end. The next intake for the NZIM Diploma in Management (Advanced) is scheduled for a 24 August start. To secure your booking, or to talk to a consultant, call the NZIM Northern Learning & Development team today on 0800 800 694, or visit www. nzimnorthern.co.nz.

NZIM’s Young Professionals Meet NZIM’s new Young Professionals Committee members and find out why they want you to be part of the NZIM Young Professionals Network. Katrina Leather, Manager Human Resources, Dispute Resolution Services

“The NZIM Young Professionals Network is a group set up to target presentations and events to the specific needs and challenges faced by those newer to the workforce. As young professionals we are often working with colleagues who have much more work experience than ourselves, and it can at times be difficult to get airspace and have our unique skills acknowledged. We can also sometimes get carried away with our enthusiasm, and benefit from a more focused approach to providing input into the business. “So far the committee has organised two exciting speakers, Mayor Celia WadeBrown who spoke on sustainability in business practice and Diana Burns who spoke on strategies for communication. In July, Keith McGregor will speak about strategies for managing difficult behaviours from all sources. I’m looking forward to it. See you there!”

Karl Reddy, Consultant, The Training Corporation

“I’m really pleased to have joined the NZIM Young Professionals Committee. I attended the first meeting by accident but over the next few meetings I began to realise the potential knowledge growth both as an individual and as a professional. “The committee consists of talented, dedicated individuals who are very keen to establish the NZIM Young Professionals Network as ‘The Network’ to be part of. Our committee members come from all sorts of backgrounds and professions with a wide range of experiences, beliefs and strengths. Despite this diversity the group shares a passion and reverence for learning and sharing of knowledge, which I love.”

Nici Hammer, Manager, People & Culture, Wellington Zoo Trust

“When I was approached about joining the NZIM Young Professionals Committee I was excited about the opportunity to network with like-minded young professionals. In my mind, this was a chance to champion a diverse network of people across a variety of organisations, providing opportunities to discuss situations and challenges that are topical to all young professionals. “Our committee is enthusiastic and committed to delivering a programme of events, presenters and networking opportunities throughout 2011. We have a variety of high profile and engaging speakers lined up to discuss topics such as diversity, communication, networking and career planning. The key to our events is to ensure the focus is on providing practical tools and advice that can then be applied to any work situation.”

Jeremy Zwiegelaar, M.A. Psych Hons. Dip Sec. Tchg, PhD student in Management, Massey University

“I chose to work on the NZIM Young Professionals Committee because I can see that there is a need to engage with people in a similar age group to me who are interested in understanding leadership and management. I have had opportunities to engage in many networks before, but the NZIM Young Professionals Network provides a space to explore topics and ideas that are relevant to professionals wanting to become leaders. The committee work that we do helps me to explore latest thinking from speakers who are expert practitioners and/or leaders in their fields. I value the opportunity to engage with like-minded people who are looking to improve their situation. The committee work is satisfying and stretches my views on voluntary work… I don’t see it as ‘work’.” • If you would like more information about NZIM’s Young Professionals please contact Susan Mckibbin, Manager, Membership and Events, phone 04 495 8296 or email susan_mckibbin@nzimcentral.co.nz. Dates for your Diary For more information on upcoming events or seminars or to register please visit our website www.nzimcentral.co.nz.

Taking minutes and preparing meetings H

ave you been asked to take the minutes at a meeting of senior managers? Do you just need guidance in minuting an informal get-together? This programme is designed for anyone responsible for taking minutes and recording the outcomes of meetings. It’s all about meetings – but from the minute-taker’s point of view. You’ll get practical, confidenceboosting tips that will help you support the chair and make your meetings a success.

On successful completion of this programme, you will have the tools to: • Make meeting arrangements • Prepare documentation for meetings • Record and produce minutes of meetings • Learn good and bad ways to set the agenda • Archive the minutes for use as well as for legal purposes Date: June 23 Cost: Members $750.00 + GST Non-members $850.00 + GST Facilitator: Tricia Caughley Introducing Tricia Caughley Tricia Caughley has been in secretarial and administration roles for over 30 years in Australia and New Zealand. Working in a wide variety of organisations has given her experience in many office systems and business cultures. Having an appreciation of the skills and knowledge required of today’s administrators enables Tricia to train others to sharpen their skills and help bring improvements into their own business environments. Over her administration career, Tricia has learned the skills necessary to provide relevant minutes or notes for any meeting – formal to informal – filtering out the irrelevant and capturing the relevant information for recording in the minutes. In addition to working for NZIM, Tricia operates her own coach/mentoring business, Faith Factor Ltd, with a portfolio in administration for professional development support, contract minute taking and training. She has worked as a mentor, coach and facilitator since 2007. Previous roles have been held in the Ministry of Agriculture and Forestry (Biosecurity NZ), Geological and Nuclear Sciences (GNS), DSIR, and Victory University of Wellington as well as a number of contracting roles. Tricia is the Central Regional Leader of the Association of Administrative Professionals of New Zealand Inc (AAPNZ). Focus on Management

Business as usual – almost! T

he NZIM Southern team has settled well in temporary office facilities kindly provided by the Christchurch Engine Centre. We were given limited access to Management House on 22 March to retrieve IT hardware, critical paper files and documents to support business continuity. This has allowed us to set up a temporary office from which to support the delivery of both in-company and public learning and development programmes.

Arts Parder, Jessica Crothall, Peter Crothall.

Ron and Joan

Gillatt.

Michael Weusten, Cheryl Doig, Richard Whitney.

Tom Patterson, Joseph

Karen and Jim Boult, Keith Walker, Tracey Paterson.

Thomas.

Brian Soutar, Jim Boult, Joseph Thomas, Keith Walker.

NZIM Southern Annual General Meeting T

he 64th Annual General Meeting of NZIM Southern Inc, held at the Russley Golf Club in Christchurch on Thursday 28 April, attracted a good turnout of members both corporate and individual, all of whom enjoyed the opportunity to catch up with fellow colleagues. President Brian Soutar and CEO Joseph Thomas spoke positively about the much improved performance of the Southern regional office for the 2010 year over the previous 12 months but rang warning bells about what the next few years may bring. The need to change location after the February earthquake, with Management House being badly damaged and the vastly changed market as a result, are offering major challenges for NZIM Southern for the remainder of this year and beyond, with 2012 being considered even more challenging, given the vast reduction in participant numbers registering on public courses. Thanks to the excellent performance of the learning and development consultancy team, the

customised, in-company portion of the business has provided much improved returns to help counter the short course programmes. The guest speaker for the evening was Jim Boult, who joined Christchurch International Airport as chief executive in February 2009, having been a director since 2003. Jim was a former director and deputy chairman of Tourism New Zealand and has been a director, managing director and chairman of several substantial public and private companies during his illustrious career. He has had extensive business interests in many fields, including tourism, financial services, property, automotive, publishing and hospitality. In his home town of Queenstown, Jim has chaired several council-sponsored charities, working parties and community groups. Jim’s leisure activities have included motor sport (he is a past national class champion), skiing, reading, fitness, jogging and walking with his family in the mountains near his Central Otago home.

NZIM Certificate and Diploma in Practical Management T

Focus on Management

o meet the needs of our market our Learning and Development consultants have realigned the Practical Management Programme, now named the Certificate and Diploma in Practical Management.

from a choice of five management programmes. Both the Certificate and Diploma meet the management and leadership needs of today’s busy managers in our complex and sometimes challenging business world.

The NZIM Certificate in Practical Management The Certificate is aimed to meet the needs of both new and experienced managers who require a programme that is practical and flexible. Now containing a core content of six workshops, with 12 days’ learning electives, it allows managers to choose topics required as part of their role in their workplace. Managers are now able to attend workshops in any order over a period of time, to complete their certificates.

Things to note You can check your learning journey by logging on to the “My NZIM” button at www.nzimsouthern.co.nz and viewing your personal training record. You can also print this for your records or CV. If you have completed workshops associated with the Practical Management Programme, now replaced by the Certificate and Diploma in Practical Management, call our NZIM Learning and Development Consultants, Harry Fox or Gail Foster-Bohm to discuss your personal transition plan (03) 357 4738 or email gail@nzimsouthern. co.nz or harry@nzimsouthern.co.nz.

The NZIM Diploma in Practical Management As with the Certificate, the Diploma is flexible and takes a practical approach to management and leadership at an advanced level. It consists of core content of 11 days, and seven days of learning

NORTHERN

CENTRAL

All courses shown are in Auckland. For more information phone 0800 800 694 or visit www.nzimnorthern.co.nz

All courses shown are in Wellington unless otherwise indicated. For more information phone 0800 373 700 or visit www.nzimcentral.co.nz

JUNE

8-10 Project Management 9

Change (new)

Effective Use of Time

Understanding a Profit & Loss

Effective Business Writing

15-16 Assertiveness Skills 15-17 Team Leader – Operational Management

Lean 6 Sigma – Yellow Belt

Lean 6 Sigma – Green Belt

Principles of Policy Design

20-21 Sales Management 22

Emotional Intelligence

Diploma of Managerial Excellence in Engineering & Construction (starts)

23-24 Performance Management 23-24 Dealing with Difficult Behaviours 29

Principles of Policy Analysis

Ensure a Safe Workplace

Manage People Performance

JULY

4-5

Workplace Assessment

5-6

Leadership

7-8

Strategic Thinking Tools

7-8

Interpersonal Communication Skills

Effective Use of Time

Memory & Mind Mapping

Stress Management Strategies

12-13 Report Writing 13-14 Problem Solving & Decision Making 13-15 Four Quadrant Leadership 14-15 Essential Sales Fundamentals 18-19 Effective Recruitment 18-20 Project Management 18-20 Team Leader – Essential Skills 20-22 Leadership, Motivation & Team Building 21-29 Train the Trainer 27

Risk Management

Manage Operational Plan

28-29 Developing Influencing & Motivation Skills

AUGUST

13-14 Assertiveness Techniques (previously Assertiveness Skills)

15-16 Advanced Negotiation Skills (new) 15-16 Budgeting for Non Financial Managers 17 22

Report Writing

Manage People Performance (DFM Modular)

27-28 Think on Your Feet® 28

Programme Design (NCAET Paper)

Diploma in Frontline Management (starts)

JULY 1

Manage Budgets (DFM Modular)

Managing Your Time

Effective Business Writing

6-7

Confident Communicator

7-8

Negotiation Skills

11-12 Managing Small Projects (Certificate in Management)

For more information phone 03 379 2302 (Christchurch C), 03 455 5165 (Dunedin D) or 03 218 7451 (Invercargill I & Queenstown Q) or visit www.nzimsouthern.co.nz

JUNE

15-17 Four Quadrant Leadership with Wilf Jarvis C

Quality Management – An

The Generation Challenge D

Delivering Great Customer Care I

How to Handle Difficult Customers I

Introduction C

22-23 Four Quadrant Leadership Stage 2 C 22-24 How to Manage and Lead Successfully D

23-24 Lean Thinking (new) I 27-28 Strategic Planning C 28-29 Counsellor Salesperson C 30

Frontline Management Diploma C

JULY

4-6

Team Leader – Building Effective

4-6

Team Leader 1 | Essential Skills D

Effective Use of Time C

7-8

Coaching for Performance

7-8

Change Management (NZIM Dip

Teams C

Excellence I Mgt Advanced) L6 D

11-12 Building Relationship Versatility C 11-12 Negotiation Skills I 12-13 Accounting for Non Accountants – Stage I C

13-14 HR Management – NZIM Dip Mgt

Constructive Feedback Techniques (new)

Peer to Peer Mentoring Skills

13-15 Team Leader – The Essential Skills C

Developing an Internal Mentoring

Programme

Train the Trainer (NCAET Paper) (starts)

18-20 Strategic Sustainability for Today’s Organisations (new)

Manage Projects (DFM Modular)

27-28 Conducting Effective Meetings 29

(Advanced) I

Project Management Diploma C

19-20 Corporate Finance C 21

Core Business Writing C

21-22 Leading Virtual Teams C 26

Dealing with Different People and Handling Conflict C

27-28 Accounting for Non Accountants –

Having Difficult Conversations (new)

AUGUST

Stage II C

28-29 Negotiation Skills C

Emotional Intelligence

8-9

Introduction to Management

AUGUST

8-9

Interpersonal Communication Skills

2-3

Leading Your Organisational Culture

Effective Business Writing

4-5

Corporate Story Telling

Managerial Excellence (starts)

11-13 Team Leader Skills-Building Effective

Courageous Conversations C

Coaching for Performance C

1-2

Professional Reception Skills I

Art of Minute Taking I

Courageous Conversations D

13-14 Building a Business Case

Stress Management C

13-14 Assertiveness Techniques (prev

Essential Skills for the Administrator I

Successful Event Management I

Diploma in Project Management (starts)

Business Ethics C

17-18 Resolving Conflict (previously Conflict

Conducting Effective Meetings I

8-9

Accounting for Non Accountants –

Teams (Certificate in Business)

10-12 Project Management

15-17 Team Leader - Building Effective Teams

Taking Minutes and Preparing Meetings (starts) (new)

Human Resource Management

15-16 Building a Business Case

Business Plan Writing

20-22 Project Management

2-3

Management

NZIM Diploma in Health & Safety –

13-14 Building a Business Case

Think On Your Feet

Diploma in Supply Chain

Stress Management Strategies Level 6 (starts)

1-2

Managing Professional and Personal

SOUTHern

Advanced Facilitation Skills

Assertiveness Skills)

Management)

17-19 Project Management

Stage I D Focus on Management

LEADERS BUILDING LEADERS Our aim is to build management capability through Research, Learning, and Recognition. Our focus is to: • Research leading management trends and practice and promote a constantly developing model of best management capability for New Zealand. • Enable managers and aspiring managers to participate in learning programmes, mentoring, and events that provide the information and experience they need to develop their capability. • Identify leading management role models and provide awards that recognise the career and educational achievements of managers. NATIONAL BOARD Gary Sturgess Life FNZIM (Chairman) Lynda Carroll AFNZIM Brian Soutar AFNZIM Dan Coward AFNZIM John Sandford FNZIM Joanne O’Connor MNZIM Ashley Dixon MNZIM OFFICES National Office PO Box 67, Wellington 6140 Ph 0-4-473 0470, Fax 0-4-473 0479 Email national_office@nzim.co.nz National website www.nzim.co.nz Northern President John Sandford FNZIM CEO Kevin Gaunt FNZIM, FAIM PO Box 6600, Wellesley St, Auckland 1141 Ph 0-9-303 9100, Fax 0-9-303 9109 Email kevin_gaunt@nzimnorthern.co.nz Website www.nzimnorthern.co.nz Central President Lynda Carroll AFNZIM CEO Karin Callaghan FNZIM FIPAA PO Box 11781, Wellington 6142 Ph 0-4-495 8300, Fax 0-4-495 8301 Email karin_callaghan@nzimcentral.co.nz Website www.nzimcentral.co.nz Southern President Brian Soutar AFNZIM CEO Joseph Thomas AFNZIM PO Box 13044, Christchurch 8141 Ph 0-3-379 2302, Fax 0-3-366 7069 Email joseph@nzimsouthern.co.nz Website www.nzimsouthern.co.nz

M em b e r Co mm e nt:

Greg Cain

A partner at Kensington Swan, specialising in employment law, Greg is a Wellingtonian born and bred, and a member of the NZIM Central board.

fter gaining an LLB and a BA in Political Science at Victoria University, my first two years were at the Department of Labour, working on employment law policy, followed by a couple of years with a small law firm in Hawkes Bay doing a mixture of employment, civil and criminal work. I then went to London, thinking that I’d be gone for two years. Eight years later, after several years with major European law firm Field Fisher Waterhouse, I finally made it back to New Zealand, having married Clare, who comes from Staffordshire. When I came back in 2007 I joined Minter Ellison as an employment law partner and I’ve just recently moved to Kensington Swan. I’ve always enjoyed employment law. I see a broad range of management practices because we get exposed to so many clients in so many sectors of the economy, public and private. I’ve seen what works and what doesn’t, particularly when it comes to managing and engaging with staff. There are some people who do it really well and some who do it appallingly badly. Bullying is a particular issue that we deal with a lot. Bullying has had a high profile in the public sector recently but it’s equally an issue elsewhere. The law has changed significantly recently, with the extension of the 90-day trial period, allowing employers to request a medical certificate after one day, and allowing employees to cash up their fourth week of annual leave if agreed with the employer. I don’t see the 90day trial period as a negative. In the UK there was an automatic one year qualifying period for unfair dismissal claims, and it wasn’t limited to workplaces with fewer than 20 employees. Most jurisdictions around the world have something similar so I don’t see it as a major imposition on the rights of workers. I don’t believe employers take people on intending to fire them – it’s too costly to recruit people and too disruptive to fire them a few weeks later. Employers don’t do that unless they have to, so it’s unrealistic to say that it’s going to lead to abuse. There will be some who will use it more widely than they need to due to lack of good management, but at least people have a better chance of getting into the workforce. I think the key to good management is staff engagement. In this environment you have to do what you can to get an edge on competitors and if you can get your staff to go the extra mile that really helps. It’s all about motivating staff so they give their best, and that can really make the difference between success and failure. So for me it’s about involving staff in higher level work than they would otherwise do, challenging them, and not micromanaging them – giving them the space to perform, and also recognising them when they’ve done well. Most people have to work, so you might as

well enjoy it. That’s so much easier if you’re given rewarding work and encouraged to work hard and thrive. Awareness of the importance of management training in the professions is certainly changing. They say that lawyers are better at lawyering than things like managing or selling to clients, but I don’t think that’s right anymore. Firms understand that success depends on getting those broader things right, so a lot of investment goes into them. One of the reasons I came to Kensington Swan was the chance to lead my own team in a challenging environment. As a partner you are always expected, and encouraged, to play a part in appraisals, recruitment, on the job supervision, training and generally managing staff, and that’s given me plenty of exposure to different ways of doing things. I initially got involved with NZIM when I did some employment law seminars in 2008 and 2009 for NZIM Central. Last year the opportunity came up to be elected to the Central board. I see NZIM as a respected management organisation and a leader in management thinking and training. I wanted to broaden my experience to include serving on a board, and what better place to do this than at the Institute? It’s a well-run board, it’s full of talented people and I’ve learnt a lot already. The other benefit I saw was exposure to decision makers in high places in various organisations. The Institute as a whole is great for networking – they put on a lot of good functions and it’s well worth taking advantage of. NZIM in general is going through a period of significant change. I’d like to think it can become more of a dominant voice in management thinking generally in New Zealand. While there’s competition in that area, the Institute is the body with the history and the credibility to take that forward. The first step is forging the three bodies into a national organisation. Once we can do that we’ll be able to work in a more cohesive and cooperative fashion. There are also opportunities to work more closely with our counterparts in Australia and even further afield.

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