NZ Management July 2012

THE DIRECTOR: STRATEGIES FOR TURBULENT TIMES – PAGE 60

management.co.nz

THE LEADERSHIP

ISSUE NZ’S EMERGING LEADERS INCLUDING LEADERS

A PUBLICATION OF LEADERSHIP NZ

QIUJING WONG, EMERGING LEADER, SIR PETER BLAKE TRUST LEADERSHIP AWARDS JULY 2012 $7.10 INCL GST

SIX YOUNG LEADERS SHARE THEIR VISION P28

Sir Peter Blake Trust Leadership Awards winners p4 Who’s driving the building business? p38 Mark Solomon: A leadership model p42

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Celebrating leadership

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ollowing hard on the heels of this year’s nationwide Leadership Week events and initiatives we’re dedicating this issue of NZ Management to a full-on celebration of leadership.

It comes at a time of deep transition for both individual leaders and for the discipline of leadership itself which is constantly being challenged to reinvent and re-energise itself. As we have been signalling in this magazine for some time now, much needs to change for today’s leaders to be able to meaningfully address the problems of today and the future. Many of the old models – excessive executive remuneration packages spring to mind – are, rightfully, under attack. Much will continue to change.

But for now we’re celebrating the stuff that people are doing well. And we’re examining new thinking around how leadership can evolve. We’re proud, for instance, to be carrying within this issue of NZ Management the latest edition of Leaders, the flagship publication of Leadership New Zealand.

Within its pages, chair Jo Brosnahan examines and celebrates the diversity of thought and perspective that emerges when people from different generations share their ideas and inspirations. As she puts it, it’s about exploring the “opportunities in the space between the generations”.

She writes about creating workplaces flexible enough to accommodate the needs and values of each generation, and the benefits of enabling each individual to contribute in their own way.

That, surely, must be great leadership.

We’ve picked up on this theme of intergenerational leadership in our cover story in this issue of NZ Management, asking six Gen X and Gen Y leaders to share their vision for the future. Most

importantly, we wanted to know what makes them tick. What do they value and how do they view working with their Baby Boomer colleagues?

As the article notes, integrity, partnership and recognition are key.

“Respect and constructive interaction are important. Values rule. When engaged with their work these young leaders will balance flexibility with excellence. They thrive in a world that is collaborative, transparent and dynamic.”

Such dynamism is clearly to the fore in parts of our engineering and construction sector which is working hard to shuck off its historic volatility and provide the building blocks for wider economic growth. In her article starting on page 38 of this issue, writer Vicki Jayne talks with Beca’s recentlyappointed CEO Greg Lowe about leading development in green branding and how his early career in the New Zealand Navy taught him the power of teamwork and informed his leadership style. To Lowe’s way of thinking, strong and effective leadership revolves around developing and training people well, and empowering them so that when they are in places a long way from home, they make good decisions.

For another take on some of our country’s best leaders, turn to page 42 for publisher Toni Myers’ illuminating conversation with Te Rūnanga o Ngāi Tahu kaiwhakahaere (chair) Mark Solomon. Or check out the profiles of the winners of this year’s Sir Peter Blake Leadership Awards on page four. There is much to celebrate.

www.management.co.nz A MEDIAWEB MAGAZINE PUBLISHER Toni Myers MANAGING EDITOR Ruth Le Pla editor@management.co.nz CONTRIBUTORS Reg Birchfield, Bob Edlin, Colin James, Vicki Jayne, Simon Lendrum, Vivienne McLean, Iain McCormick, Toni Myers, Todd Somerville, Rachel Taulelei, Peter Tynan, Sina Wendt-Moore BUSINESS DEVELOPMENT MANAGER Rod Myers, 09-372 6444, 027-484 8046, admanager@management.co.nz ADVERTISING MANAGER Trish Day, 027-561 6556, trishd@mediaweb.co.nz DESIGNER Jennifer Adams 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

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Vol 59 No 6 • ISSN 1174-5339 (Print), 1179-3910 (Online)

Ruth Le Pla, Managing Editor JULY 2012

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contents 28 COVER STORY

Leading today for tomorrow Six young leaders share their vision How do Gen X and Y leaders see the future? What do they value and how do they view working with their Baby Boomer colleagues? Ruth Le Pla explores the changing face of New Zealand leadership.

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EDITOR’S LETTER

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INBOX: News and views

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FOCUS: Inspire Auckland 2012

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AS I SEE IT: Rachel Taulelei

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MANAGERS ABROAD: Todd Somerville

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NZIM: Slip sliding away Reg Birchfield

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EXECS ON THE MOVE

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EXECUTIVE DEVELOPMENT

OPINION

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POLITICS: Who’s leading the next normal? Colin James

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ECONOMICS: Growth? What growth Bob Edlin

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LEADERSHIP: It is wise to ask? Reg Birchfield

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THOUGHT LEADER: What’s your appetite for risk?

Simon Lendrum

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BOOKCASE: Leading at the Edge; Being Global; Leading the High Energy Culture Reg Birchfield

ADVICE 50

EXEC HEALTH: Starting from scratch Peter Tynan

JULY 2012 • Vol 59 No 6

features 38 Stories of NZ

Building a future

Enterprise Success

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It’s already helping drive the Christchurch recovery – but can New Zealand’s construction/engineering sector shuck off its historic volatility to provide the building blocks for wider economic growth?

Vicki Jayne tries to nail the vital role of leadership in this sector.

42 Face to Face: Mark Solomon – A leadership model whose time has come

Although softly spoken, there’s no mistaking Nga¯i Tahu’s Mark Solomon’s passion for his people – his iwi and all Ma¯ori – or his determination to create the best possible conditions for iwi success.

And now he’s being shoulder-tapped for leadership roles beyond Ma¯oridom. He talks to NZ Management’s publisher Toni Myers.

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46 Turbo-charged savings: Why fleet leasing makes sense

Smaller, more fuel-efficient, well spec’d and less flashy… our fleets of company vehicles are changing for the better. Vivienne McLean checks out the fleet-leasing business.

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The Director 54 Maureen Pugh: Mining for more women in local body governance

Westland District Council’s Mayor Maureen Pugh wants more women on local body boards.

56 Why boards need more women 57 Dysfunctional boards: Today’s greatest business risk 58 Six go-to’s for aspiring directors and trustees 60 Strategies for turbulent times

Including Leaders

A publication of Leadership NZ

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The Sir Peter Blake Leadership Awards: Celebrating inspirational leadership

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he Sir Peter Blake Leadership Awards took place at the Auckland Art Gallery on Friday 22 June. The Blake Medal was presented to iconic sporting and education leader Sir John Graham by the Governor General, Lt Gen Rt Hon Sir Jerry Mateparae. As well as honouring one outstanding leader, the Sir Peter Blake Leadership Awards recognised six Emerging Leaders from a range of fields. The selection panel for this year’s awards was made up of a group of New Zealand leaders in their own right: Sir Ron Carter (Chair), Sir Eion Edgar, Sir John Anderson, Glen Sowry, Dame Jenny Gibbs, Jane Huria, Hon Fran Wilde and Alison Paterson.

Emerging Leaders

Blake Medallist – Sir John Graham For more than 30 years, Sir John has demonstrated inspirational leadership on the sporting field, in the classroom and at the board table.

An exceptional All Black loose forward and captain for three tests, his mana within sport led to his appointment as manager of the New Zealand cricket team and president of the New Zealand Rugby Union.

An absolute belief in the power of education saw Sir John commit decades of his life in posts across the education sector. Famed for his two decades as headmaster at Auckland Grammar School, he taught at several other distinguished schools, co-founded the Academic Colleges Group, and achieved great things as commissioner of Nga Tapuwae College. Sir John was a member of the University of Auckland Council from 1994, and chancellor from 1999 to 2004. Having been awarded a CBE in 1994, Sir John was further honoured with an Honorary Doctorate (DLit) in 2005 at the University of Auckland.

Sir John also held a number of directorships, including with IT distributor Renaissance Corporation, The University Bookshop, and transportation company Owens Group. He is chairman of the NZ Education Scholarship Trust and numerous charitable trusts.

His reputation as one of the country’s most inspiring and formidable leaders has landed him with many accolades and in the 2011 Queen’s Birthday Honours List, Sir John was made a Knight Companion of the New Zealand Order of Merit for services to education and sports.

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Phil Keoghan Widely known as the host of US network television series The Amazing Race, 44-year-old Phil Keoghan uses his worldwide reach to motivate people through his NOW (No Opportunity Wasted) philosophy, which is grounded in the importance of making the most of every day. An inspiring and motivating leader, he shares his enthusiasm speaking to companies, youth, schools, universities and sporting organisations about the NOW philosophy.

Keoghan has written the bestselling book NOW and has won eight Primetime Emmy Awards as host and producer of The Amazing Race. He also recently won the Global Action Award for 2012 which celebrates individuals committed to addressing and solving some of the most urgent problems facing the world today.

He maintains a strong connection with his home town Christchurch and New Zealand, bringing international attention to New Zealand when it’s required.

Roseanne Liang At 34, Roseanne Liang is a leading light for modern Kiwi feature films and the filmmaking industry in New Zealand.

Achieving international success with her documentary Banana in a Nutshell and film My Wedding and Other Secrets, Liang knows what it takes to inspire a team of people to turn a creative idea into a highly esteemed work.

Her role as director has also been acknowledged, winning her the Best Director Award at the Asia NZ Film Festival and SPADA’s New Filmmaker of the Year Award. Her creative talents have also shone through in the writing and directing of a TV3 sketch comedy series A Thousand Apologies.

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Richie McCaw Richie McCaw is among the finest captains in All Blacks history, constantly demonstrating the art of leading from the front.

With a tenacious drive and determination, McCaw demonstrated to New Zealand and the world what it takes to be a leader when he faced the greatest challenge of his career – winning the Rugby World Cup at home in New Zealand in 2011.

His commitment to New Zealand rugby was recognised when he was presented with his 100th test match cap by the late Jock Hobbs after New Zealand defeated France in their round– robin Rugby World Cup 2011 clash at Auckland’s Eden Park.

Off the field, McCaw has used his profile on many occasions to raise funds for many good causes including the re-build of his home city Christchurch, and he is an inspiration to young New Zealanders.

Rachel Taulelei At 37, founder and CEO of Yellow Brick Road Rachel Taulelei has had phenomenal success in the development of an innovative sustainable supply of fresh fish to restaurants across the country.

Taulelei understands New Zealand’s need for successful business and also its need to protect its ‘clean green’ image, and has demonstrated that it is possible to marry those objectives in a commercially successful model.

Alongside chef Martin Bosley, she co-founded the not-for-profit incorporated society which runs the City Markets in Wellington. Taulelei also contributes to the growth of her city, acting on the board of Grow Wellington and as a mentor to a number of start-up companies in Wellington.

With a passion to bring younger people into governance, she supports the development of Maori commercial activities based on their natural resource holdings and is an associate director of the Wakatu Incorporation. See also page 16.

Kapu Waretini Kapu Waretini, 29, has dedicated his career to Maori improvement in the public sector, and local communities.

His work at Te Puni Kokiri (TPK), the Ministry of Maori Development, saw him lead a team which sought to highlight Maori success and achievement for the world at the 2011 Rugby World Cup. Waretini’s commitment to quality accreditation for Maori organisations has been groundbreaking. He led TPK’s Tamaki Team to enable Maori organisations to gain Qualmark Accreditation, only awarded to businesses reaching the highest standard of quality assurance.

In 2011, he oversaw the first ever accreditation granted to a marae in Aotearoa. He progressed further training and accreditation for marae across Tamaki, Waikato and Tauranga where 123 marae have now undertaken the preliminary requirements of St John’s ambulance, and the Food Safety Authority food standards requirements, in readiness for accreditation surveys.

Voucher Cards & Gift Cards Innovative features

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The accreditation initiative originally intended to prepare Maori for hosting roles with the Rugby World Cup has now positioned these marae to take up further tourism and business opportunities for the future.

As a recent addition to the executive team of the Committee for Auckland, Waretini is now responsible for bringing iwi and corporates together to collectively achieve the Committee’s goal of a better Auckland.

Qiujing Wong Qiujing Wong has a genius for turning her vision into real action and inspiring social change by addressing some of society’s most difficult issues through film. The 34-year-old co-founded Borderless Productions six years ago with a passion to create positive economic, social and environmental change, working with local and international partners.

The award-winning company has produced innovative films and campaigns in New Zealand (and around the world) and has grown into a formidable organisation which constantly pushes the boundaries and demonstrates leadership. M

telephone:

09 306 1790 email:

enquiries@taxicharge.co.nz

JULY 2012

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OPEN, CONNECTED CEOs ARE WINNERS Organisational openness and the importance of of cultivating connections are among a number of key themes to emerge from IBM’s recently released fifth biennial global CEO study.

The study is the largest of its kind in the world drawing on face-to-face interviews with over 1700 chief executives across 60 countries, including 81 CEOs from Australia and New Zealand. Ross Pearce, senior managing consultant, IBM NZ Global Business Services, says the latest study shows that CEOs, particularly in Australasia, see a need to rebalance operational control with organisational openness.

“CEOs are changing the nature of work and leadership by adding a powerful dose of openness, transparency and employee empowerment to the command and control ethos that has dominated the modern enterprise for more than a century,” says Pearce.

The IBM study shows that companies that outperform their peers place a 30 percent greater emphasis on openness – characterised by an increasing use of social media as a key enabler of collaboration and innovation as it breaks down traditional organisational walls. The study shows that while only 16 percent of CEOs are currently using social media platforms, this is predicted to rise to over 50 percent within three to five years.

Across the board, chief executives plan to forge closer connections with customers, partners and employees, with 64 percent of Australasian CEOs planning dramatic improvements in internal and external collaboration compared to 53 percent globally.

Pearce says while CEOs in New Zealand and Australia are generally aligned with their global counterparts, there are also notable areas of differentiation. CEOs globally cite collaboration (75 percent) and communication (67 percent) as the top two key personal characteristics for success, while Australasian CEOs rank flexibility (86 percent) as most important.

For the first time since the CEO study series began in 2004, technology topped the list of external forces impacting organisations over the next three to five years at 71 percent globally, ranking even higher than economic/market factors. However in Australia and New Zealand technology is overshadowed by people skills, which comes out top, reflecting the tight local labour and skills market.

For more information on the survey contact ekoller@nz1.ibm.com M

Sir Ken Stevens.

Exporters’ champion recognised Sir Ken Stevens lifelong service to business, and in particular the export sector, has been recognised in his receipt of the inaugural Exporters Champion award for exemplary services to export at the Air New Zealand Cargo ExportNZ Auckland Awards 2012.

A ‘this is your life’ presentation at the awards acknowledged Sir Ken’s contribution to New Zealand business since starting and growing his own company (Glidepath) in his late 20s. Sir Ken was New Zealand 2007 Export Champion and knighted the following year for services to export.

Since then he has led trade missions to China, Vietnam and Malaysia, and addressed many events to encourage businesses and inspire students.

Export NZ Auckland says the award “acknowledges Sir Ken’s ongoing service to business from exporters themselves, who know how hard a life of business travel can be on families, and how resilient and generous Ken himself always is”.

Company winners at the awards were: • Supreme Award and Winner of the Westpac Exporter of the Year Award 2012 (total sales over $35 million): Temperzone, which designs and manufactures air conditioning systems for commercial, industrial and residential applications.

• QBE Insurance Exporter of the Year (total sales under $35 million): Canary Enterprises, which manufactures value-add dairy and associated products.

• TNT Express Emerging Exporter of the Year: Madeblunt, which designs and markets innovative umbrellas.

• Endace Hi-Tech Exporter of the Year: Orion Health, software developer for the healthcare industry.

• Baldwins Intellectual Property Best Use of Commercialisation of Innovation: ENSID Technologies, a global pioneer of polymer RFID (radio frequency identification) transponder tracking tags.

• BDO Deal of the Year: Compac Sorting Equipment, which designs and builds turnkey solutions and equipment for fruit sorting and packing. M

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SUPPLIED COURTESY OF AUT

Dr. Geoff Perry, Dean of AUT Business School, and colleagues were at the World Class New Zealand Awards to celebrate with Tony Falkenstein and all other World Class New Zealand Award recipients. Falkenstein, who is on the Dean’s Advisory Board at AUT, received the ‘New Thinking’ World Class New Zealand Award.

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At the 2012 World Class New Zealand Awards: 1 Dr. Geoff Perry, Dean AUT Business School, and Tony Falkenstein, WCNZ award recipient and Advisory Board Member AUT Business School 2 Fiona Rotherham, Fairfax Business, and Kim Campbell, CEO EMA 3 Gavan Jackson, CEO Electrix, Dr Geoff Perry, Mark Porath, Chair of AUT Business School Advisory Board 4 Agnes Naera and Kevin Pryor, AUT 5 John Allen, CEO MFaT and Minnie Baragwanath, CEO Be. Accessible 6 Lesley Mynett-Johnson, Lifewise Big Sleepout and Andrew Edwards, Spotless 7 Mai Chen, Chen-Palmer, Peter Lennox, CEO MetService and Sarah Trotman 8 Mark Le Fevre, Head of Management Department, AUT Business, Nigel Murphy, AUT and Nevil Gibson, NBR 9 Shelley Campbell, Sir Peter Blake Trust, David McLean, Westpac and guests 10 Smita Singh, Rt Hon. Jim Bolger, Dr. Geoff Perry 11 Tex Edwards Founder of 2degrees and Sarah Trotman 12 Sir Stephen Tindall and Minnie Baragwanath 13 WCNZ award recipient Jeremy Moon and family 14 Mark Le Fevre, Kenina Court, WHK and Colin McKinnon, NZVCA.

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NEW TOP 200 JUDGING PANEL The judges for this year’s Deloitte/Management magazine Top 200 Awards have been appointed. They are professional director Sandy Maier, Forsyth Barr’s Neil Paviour-Smith and Suzanne Snively of MoreMedia Enterprises.

Reg Birchfield, former publisher and editor of NZ Management magazine, will be the facilitating judge.

The judging panel changes from year to year, and new this year are Maier and Snively. Maier is an independent director with a strong track record in management consulting. Educated at Harvard Law School and Yale University, his current positions include director at Ngai Tahu Holdings and independent chairman at Learning Media. He chairs Radius Property, Pathfinder Asset Management and GEON Group. His roles as an independent director span Click Clack, Ultimate Health Care Group, Perpetual Capital Management and McConnell Group. He is also an independent director at Fronde, Mighty River Power and Taranaki Investment Management.

Suzanne Snively, ONZM, is managing director of MoreMedia Enterprises and chairs the Agri-women Development Trust. She is a member of the Ministry of Transport’s Performance and Risk Advisory Group and director at Transparency International. Her other directorships include the Health Research Council, Whitireia Community Polytechnic, WelTec and Whitireia Community Polytechnic.

She is patron at Vincents, a Wellington community-based initiative

Sandy Maier.

Suzanne Snively.

providing access to arts and craft facilities, skilled tuition and materials within a supportive environment.

The judging panels for the Responsible Governance Award and the NZIM/ Eagle Technology Young Executive of the Year have also been confirmed.

The Responsible Governance Award will once again be judged by Doug Matheson and Rodger Spiller with facilitating judge Reg Birchfield. The panel that will select the 17th Young Executive of the Year is still to be finalised but will include long-standing judges Reg Birchfield and Jo Brosnahan.

The finalists for this year’s Top 200 awards will be announced early November and the winners in each category will be announced at the annual awards dinner which will take place at the SkyCity Convention Centre on November 29. M

Executive development creates corporate success In a nod to the critical impact of talent management and retention on organisational performance, the newest recruit to the group of sponsors for the Deloitte/Management magazine Top200 Awards, is executive coaching company ilume.

In sponsoring the Best Growth Strategy category, ilume sees an opportunity to inform the corporate community about the transforming impact of executive development on a company’s ability to grow and resolve complex issues in a challenging environment. Its focus is on specific development of the individual leading to business success.

In a relatively short time ilume has gained a reputation for results in a discipline that has a large range of practitioners. Directors Angela Neighbours and Raechel Ford have both had successful careers at senior levels of the corporate sector. They researched and identified early on what they believe is the best coach training available anywhere in the world and gained accreditation with the International Coaching Community, one of the largest global coaching organisations.

Neighbours is also a member of the faculty of the Master Coach Academy, an annual programme for qualified coaches to achieve the highest certification standard.

Combining their business philosophy, coaching skills and knowledge base, Neighbours and Ford have built a blue chip client base that includes international and New Zealand based companies, many of which feature in the Top200 Companies list.

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Ilume works from the chief executive down to many levels throughout an organisation to develop leaders, build teams and strengthen business.

“CEOs must understand that ownership of a development programme is with the individual,” says Neighbours. “The moment an individual takes ownership of their own development process, it helps to fulfil their career and personal aspirations.

“People develop fastest when they feel responsible for their own development. The company wins both in the short-term from enhanced executive performance, and in the longer term as challenged and fulfilled employees stay committed to their job and the company.

“We know that organisations are very good at measuring the competencies of a person to fit the size (capability requirements) of a role. However, there is a further opportunity to measure the size (capacity and capability) of the person beyond their current role. Bringing capacity and capability together is the ultimate measure of talent.”

Ford, coming from CEO roles at Athena Products and The Body Shop New Zealand, and senior roles within the Carter Holt Harvey group, brings to ilume first-hand knowledge of the complex challenges that leaders grapple with in today’s environment.

She elaborates: “Developing people and retaining talent is a critical skill for every CEO. In fact about 90 percent of the success factor of their role is the ability to develop others, hire well and create career pathways for their staff.” M

A year’s worth of inspiration at your fingertips.

ANZ Privately-Owned Business Barometer 2012.

The 2012 ANZ Privately-Owned Business Barometer provides insights from thousands of business owners to help inspire others. Now in its sixth year, this is the most in-depth survey into the attitudes and behaviours of New Zealand’s private business owners.

To find out how other business owners are thinking ahead, download your copy from anzbarometer.co.nz.

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GLASS HALF FULL OR EMPTY – EXPORTERS DIVIDED While New Zealand exporters have been finding it tough, with confidence at an all time low, just over half are still cautiously optimistic about the next 12 months according to the 2012 DHL Export Barometer.

The annual survey of New Zealand exporters found that only 51 percent of exporters are confident about an increase in export orders in the next 12 months significantly lower than 2011 when 70 percent of exporters were expecting growth, and the lowest in the history of the DHL Export Barometer, which has been running since 2004.

“There’s no denying business conditions for exporters have been challenging,” says Tim Baxter, DHL Express’ New Zealand manager. “While the survey result is lower than previous years and indicates difficult trading conditions in the first part of the year, there’s still some optimism going forward.”

Exporters in agriculture have been leading other sectors with 60 percent experiencing an increase in orders over the past 12 months and are expected to continue to lead over the next 12 months with services and manufacturing exporters closely following.

“We’ve been fortunate to have exports of agricultural products remain strong through an uncertain period. But farmers are less optimistic going forward so it’s promising to see the service and manufacturing sectors looking more confident than they were 12months ago,” says Baxter.

According to the survey, the two most negative factors impacting exporters’ business sales in the last 12 months have been exchange rates (58 percent) and rising fuel costs (46 percent). Other factors cited as negatively impacting sales were economic/political conditions abroad, the cost of raw materials and international competition.

“There are numerous factors contributing to difficult exporting conditions,” says Baxter. “In a complex economic environment such as the one we’re in now, there’s not going to be a single fix to make it better.”

Australia continues to be the top current export destination, followed

by North America, Europe, China and UK. The majority of exporters (59%) expect orders to China to increase in the next 12 months.

“There will only be one transition as big as China in our lifetime,” Baxter contends. “With four billion people and 60 percent of the world’s population, we are seeing a meteoric trade shift. This is borne out in the survey results that show that Asia, led by China, is where the growth opportunities lie. Economic trading barriers are being reduced in Asia and New Zealand exporters need to take advantage of this.” M

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Ian Grant (left) receives the Print Industry 2012 Outstanding Achievement Award from Newspaper Publishers Association chief executive Tim Pankhurst.

Cartoon champion The extraordinary contribution to New Zealand media, and in particular cartooning by Ian Grant was recognised at the recent Canon Media Awards.

The Masterton resident was presented with the Print Industry 2012 Outstanding Achievement Award and honoured for his influential role in preserving and enhancing New Zealand’s cartooning heritage.

Grant, a former director of Profile Publishing, previous publisher of NZ Management, is the founder of the New Zealand Cartoon Archive, which celebrated its 20th anniversary earlier this year.

He said 20 years ago one day’s newspaper cartoon was the next day’s fish and chip paper – but over those two decades the Cartoon Archive has preserved 50,000 cartoons for future generations.

“Most satisfying to me is the increasingly serious attention cartoons get

From the New Zealand Cartoon Archive, Alexander Turnbull Library, The national collection of cartoons and caricatures. Reproduced in NZ Management magazine May 2003: A Cartoon History of Management series.

from historians researching and writing the country’s history. Twenty years on, the value of cartoons as sources of valuable insights about the attitudes and prejudices of earlier eras is firmly established.”

Grant was a founding director of the National Business Review in 1970 and since then has written 15 books and is currently working on his 16th, which documents the history of New Zealand newspapers. He and his wife, Diane, are also partners in Fraser Books, which has published about 150 books including all 18 produced by the Wairarapa Archive. M

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Photos: thinkstockphotos.com

PMO SYMPOSIUM Practical insights, techniques and case studies for ensuring success are on offer at an upcoming symposium in Wellington.

Project-based management services company Project Plus is running the NZ PMO Symposium 2012: “Driving business value through maturity”.

To be held on Thursday July 19 at the Intercontinental Hotel in Wellington, the event will explore portfolio, programme and project management offices (PMOs) from basic design through to value-adding enterprise entities.

A series of interactive sessions will offer practical insights, techniques and examples of how to design, set up and run portfolio, programme and project offices that are sustainable in the value they offer.

MC-ed by Karen Clarke, general manager NZ Ops for Project Plus, the symposium will include presentations and perspectives from: • Iain Fraser, CEO of Project Plus; • An ANZ Bank economist; • Peter Reutlinger, general manager, EPMO, ASB Bank; • Rommy Musch, chair, PMI PMO Community of Practice; • Craig Bunyan, consulting programme director;

• Sean Whitaker, president PMI NZ; • Steven Cook, EPMO director, NZ Defence Force; and • Christian Carter, PMO manager, Transpower.

All participants will receive a copy of ‘The Program Management Office Handbook’ with a foreword written by Project Plus CEO Iain Fraser.

Cost: $290 per person (excluding GST). For more information and to register go to http://www.projectplusgroup.co.nz/nz-pmo-symposium M

Taxicharge launches new card initiatives Taxi billing solutions provider TaxiCharge NZ is expanding its card business to help corporate taxi users to manage and control their taxi spend.

The company has launched voucher cards which enable controls to be set on the use of the card – where, when and how the cards can be used, including the number of trips and destination.

“Greater control on the actual use of voucher cards provides improved accountability when compared with paper vouchers, which can be difficult to reconcile,” says chief executive Mark Lines.

“With voucher cards, there is no liability for the customer. The customer pre-determines the use of the card including preferred TaxiCharge taxi partner company, and can stipulate time and date of use and pick up and drop off points.”

TaxiCharge has also launched a new gift card with purchasers able to nominate a dollar value, with the card having a life of 12 months. The cards can be purchased online through the secure eTaxi account management module on the TaxiCharge website (taxicharge.co.nz).

Users can check the balance on the card online via eTaxi or through POS terminals installed in Partner taxi companies nationwide. M

Leadership Performance cp™ 2 & 3 August LP cp is a 2 day programme designed to equip leaders with the tools to drive a step change in the performance of their people using the unique technology we developed for elite coaches. If you are serious about performance, LP cp is the answer. To find out more, call us or visit our website.

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12 | management.co.nz | JULY 2012

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1 In the foreground, Paul Cameron (Booktrack) and Bridget Liddell (Fahrenheit Wellness Fund). 2 Geoff Ross (The Bakery), Ian Taylor (Animation Research) and Sue Watson (Kea NZ).

3 Sue Watson (Kea NZ) and Ian Taylor (Animation Research).

4 Matt Cutler (Active Safety NZ) and Alex Mercer (MercerPalmer). 5 Grace Wong (St Dominic’s College), Fiona Qu (St Dominic’s College), Aonghas Anderson (University of Auckland) and Sophie Jeong (St Dominic’s College). 6 Philip O’Neill, Nicky Bell and Peeyoosh Chandra (all Saatchi & Saatchi).

7 Lester Singleton and Leland Ahkit (both independent). 8 Tony Falkenstein (Red Eagle Corporation). 9 Sue Watson (Kea NZ).

10 David Slack (David Slack Communications), Tony Falkenstein (Red Eagle Corporation) and Geoff Ross (The Bakery).

Valuing People – Creating Value Astute employers create teams and workplace cultures that value and harness the variety of perspectives, backgrounds, skills and attributes that employees bring to work. Join us to hear how these employers support and develop their staff – and the benefits that brings to the bottom line.

Thursday 30th August 2012, 6.30pm Pullman Auckland Registration Early bird (by July 31)

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AS I SEE IT

Economic renaissance Rachel Taulelei, founder and CEO of innovative seafood supplier Yellow Brick Road, has just been named one of this year’s emerging leaders at the 2012 Sir Peter Blake Trust Leadership Awards.

What are New Zealand’s major challenges for 2012?

Our major challenge is to advance. If we simply maintain the social, economic, political and cultural status quo we’ll be moving backwards. We must strive to achieve progress domestically and then, perhaps more importantly, in comparison to the rest of the world.

How well prepared are Kiwi business leaders to face these challenges?

We have the potential to tackle the challenges in a well prepared manner. More than any others, the past few years have agitated conversation around the challenges, and the actions required to address them. We have the potential to work collegially towards overcoming the challenges but we need to keep our eye on the prize. There will be compromise involved, and an exceptionally positive yet realistic attitude will be required to get there. Our work ethic will need to be better and stronger than ever before and, across the board, New Zealand business leaders will need to take an intergenerational approach to business; which is to say, what can I do today that will benefit my grandchildren’s grandchildren?

What more could we do as a country to thrive in the current global economic climate?

New Zealand is awash with some of the brightest minds in the world. Science and innovation is a catch-cry currently in favour, yet we’ve always been in this space. We are by nature innovative people and we have a phenomenal pool of scientific minds. Continued focus and increased resources in this area, coupled with smart and rapid commercialisation will be needed to thrive in the current economic climate. We have a global network of stellar expatriate minds and friends of New Zealand. We need to pool the sharpest, brightest, most passionate and creative minds to lead the country’s economic renaissance. See also page 5. M

16 | management.co.nz | JULY 2012

MANAGERS ABROAD

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Offshore Kiwis a big asset Born and raised in South Canterbury, Todd Somerville is Kea director for the UK and Europe.

What prompted you to seek work out of New Zealand?

It was partly personal. My wife is English and I’d spent a few years at university in the UK, so we had strong links to England and always wanted to live here at some point. After 10 years in Auckland we decided to make the move. We’ve been in the UK for 11 years now, so it’s been a slow oscillation between the hemispheres.

Work also played a part, of course. We both had good jobs in Auckland but like many Kiwis overseas we wanted to swim beyond the breakers.

How are your experiences overseas shaping your understanding of New Zealand?

From this distance you get a good perspective on what makes New Zealand special, and it’s not the landscape or the lifestyle, which is what I’d always assumed when I lived there.

It’s the people. Kiwis are just different – more open, friendly, unpretentious, pragmatic, positive, naturally innovative. I took all that for granted in New Zealand but over here it really sets us apart. At Kea we call it the ‘NZ Effect’ and it’s a really powerful force.

Its people are probably New Zealand’s most valuable export.

How can offshore Kiwis contribute to New Zealand?

First things first: let’s drop this ridiculous assumption that ‘offshore’ Kiwis are somehow different from ‘onshore’ Kiwis. We’re all the same, all fiercely proud of our country, and we promote New Zealand to anyone who will listen. The fact that some of us live overseas is irrelevant.

And while we’re at it, let’s stop using words like ‘diaspora’ and ‘expat’, and that awful phrase ‘brain drain’. New Zealand doesn’t ‘lose’ people overseas, it gains highly valuable advocates and ambassadors.

So don’t waste time trying to lure them back to New Zealand – they’ll return when they’re good and ready. Instead, make good use of them while they’re away, because Kiwis living overseas are a huge strategic asset for New Zealand. M

Todd Somerville is a member of Kea, New Zealand’s global talent community. www.keanewzealand.com

JULY 2012

| management.co.nz | 17

NZIM

Slip sliding away The latest IMD survey delivers a serious wake-up call to New Zealand business and policymakers. By Reg Birchfield.

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he mainstream media didn’t pay it much mind but last month New Zealand’s global competitiveness fell to its lowest level ever. According to the Swiss-based IMD World Competitiveness Yearbook, we slipped three places to rank 24th out of 59 measured economies.

The country’s global competitiveness ranking has, therefore, fallen from 15th place in 2009, our highest listing, to reach its lowest point since 1989 when IMD started publishing its report on the competitiveness of nations.

The only good news, if you could call it that, is that the performance gap between New Zealand and Australia has narrowed. Australia took an even bigger hit this year, falling from 9th to 15th place. Our partners across the ditch have now slipped 10 places in two years, one slip worse than us.

We need to pay the most attention to the changes at the top of this global ranking. Hong Kong is now the world’s most competitive economy. It shared the slot with the United States last year, but the US is now in second place, ahead of Switzerland which climbed two places to third. Singapore and Sweden rank fourth and fifth while Canada, Taiwan, Norway, Germany and Qatar make up the rest of the top 10.

“America’s competitiveness has a deep impact on the rest of the world,” said professor Stephane Garelli, director of the IMD’s World Competitiveness Centre, when he released the latest findings. “It uniquely interacts with every economy, advanced or emerging. No other nation exercises such a strong ‘pull effect’ on the world. Europe is burdened with austerity and fragmented political leadership. A southern block of emerging markets is still a work in progress. In the end, if the US competes, the world succeeds,” he added.

The recession has made the world economy more fragmented and diverse than ever, according to Garelli. This is forcing companies to operate several parallel business models.

“Emerging economies are relying on domestic demand and national champion companies to insulate themselves from economic turmoil, while the submerging developed economies are turning to re-industrialisation. In both cases, economic nationalism is back and protectionism is tempting,” he said.

That might all be true. But New Zealand’s steady decline needs to be addressed both at the individual organisational

18 | management.co.nz | JULY 2012

The world competitiveness scoreboard 2012

level and also at the political policy and economic environment level. The Productivity Commission has been established and the IMD result suggests it will have its work cut out to make an impact.

Disturbingly, New Zealand’s performance slipped across all four competitive measures used by IMD. That collective fall suggests managers and policymakers alike are letting things slip.

The country’s economic performance fell from 33rd to 41st place. Our business efficiency dropped four places from 24 to 28, government efficiency slipped two places, from eight to 10 and the country’s infrastructure performance dropped one place to rank 24th. The drop in economic performance puts us close to the tail end of the field. Given our proximity to the stronger-performing Asian markets, we should be doing better.

The IMD survey ranks countries on their ability to create and sustain enterprise competitiveness. The New Zealand data for the survey is compiled by IMD in partnership with the New Zealand Institute of Management. “I can’t say I am surprised by the New Zealand results,” says NZIM chief executive Kevin Gaunt. “They point to the need for business leaders and politicians alike to do something about lifting economic activity and developing managers with the skills to deliver better organisational performance.”

IMD and NZIM identified five challenges facing New Zealand in 2012, the first of which called for a strengthening of the country’s comparative OECD productivity performance.

The other four challenges included the need to: • Return the country to a fiscal surplus by 2014; • Continue to recover from the economic impacts of the Canterbury earthquakes; • Build better public services through restructuring, efficiencies and cost reduction; and • Build a nationwide ultra-fast broadband network to underpin growth.

The IMD survey is based on 329 ranking criteria grouped into four competitiveness factors of economic performance,

government efficiency, business efficiency and infrastructure. The survey of 4200 international executives this year reveals a growing scepticism in some of the 59 countries measured toward globalisation and the need for economic reforms.

“This year’s survey results are deeply worrying,” says Gaunt. “Our performance is down in just about every critical area.

We may be just holding our own against Australia but that is cold comfort when both our economies are failing against the world’s other countries – even European countries that are wracked by economic and political problems.

“Undoubtedly the Canterbury earthquakes have impacted, and continue to impact, on our economy badly. But our eight place fall in economic performance should not also be accompanied by such significant falls in business and government efficiency. And we are not making progress in key infrastructure areas.

“We are still not attracting offshore investment, we’re not exporting enough and there’s no GDP growth. On the people front we are confronted with a continuing high brain drain, though it is slightly better than last year, and our employee training record has slipped significantly.

“There is, as I said last year, a direct relationship between enhanced economic performance and greater management capability. We must lift management capability if New Zealand is to survive the difficult times it now faces and stop this slide in global competitiveness,” says Gaunt.

“Our problems are people-problems.

Our approach to management development must change. Managers hold the key to turning New Zealand’s global and local trading fortunes around. But they need to be turned on to the opportunities. A recession is not an excuse for not performing. Non-performance is a state of mind. Think recession and managers perform in a recessionary way. It is time to be optimistic, to invest in managers and power them up to perform.” M Reg Birchfield FNZIM is a writer on leadership, governance & management. reg@rjmedia.co.nz

INSPIRING MANAGERS Our aim is to build management capability through membership, development and research.

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.

NZIM Inc CEO: Kevin Gaunt FNZIM, FAIM Email kevin_gaunt@nzimnorthern.co.nz Auckland Offices Contact: Tait Grindley PO Box 6600, Wellesley St, Auckland 1141 Ph 0-9-303 9100, 0800 800 NZIM Email enquiries@nzimnorthern.co.nz Website www.nzim.co.nz Wellington Offices Contact: Shaun Sheldrake PO Box 11781, Wellington 6142 Ph 0-4-495 8300, 0800 800 NZIM Email enquiries@nzimcentral.co.nz Website www.nzim.co.nz NZIM Southern Regional Director: Michael Weusten FNZIM CEO: Joseph Thomas AFNZIM PO Box 13044, Christchurch 8141 Ph 0-3-379 2302, Fax 0-3-357 8003 Email admin@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

JULY 2012

| management.co.nz | 19

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POLITICS COLIN JAMES

Who’s leading the next normal?

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avid Shearer’s first six months as Labour leader were not the bold, knock-em-down pollramping the traditional media measure.

So they fed off rumour-mongering right-wing and left-of-Labour blogs to roast him.

They missed the point. Political leadership has many dimensions.

Supposedly charisma-free types can win office and stay there. Helen Clark climbed from two percent as preferred Prime Minister in 2006 to the longest term of office since 1972. She proved to be strong, which voters like (for a time).

Charisma-loaded types can do three terms and leave not much more than the Cheshire cat did. That’s been National’s risk in John Key. He’s more the agreeable, attractive, unifying and plausible presenter than the decisive commander.

In politics, as in business, leadership can be from out front, from behind and even from below.

Public service specialist academic Bill Ryan sees the essence of the “Better Public Services” programme in working in new ways to maximise innovation.

That requires leadership at all levels, often in group action. And it requires managers (and ministers) to listen, adapt and adopt ideas whatever their origin – including the front line – and ministers to back them.

Bill English is the standout minister of that sort in the Key cabinet.

English has traditional Southland charisma – that is, none. But he has backed innovative ideas emerging from parts of the public service on how to be more effective and do “more with less”. He backs major changes in fiscal and asset management. He picked up the welfare working group’s recommendation for an actuarial/

20 | management.co.nz | JULY 2012

investment-based approach to welfare reform.

That longer-term, strategic focus of English’s is the anchor in the government – a sort of leadership from No 2. Coupled with No 1’s skill with public opinion, it provided formidable

gets seen around enough.

The party that has made the most of leadership from below is the Greens.

They say their policies have anticipated the “next normal” for 40 years. They offer transcendental leadership.

But 2011’s climb out of the 6-7

“Charisma-loaded types can do three terms and leave not much more than the Cheshire cat did.” leadership in the 2008-11 term.

But is it transformational? Have they been leading the first post-baby-boom cabinet?

Actually, they are transitional. The combination of 1980s-90s merchant banker Key and rebalance-theeconomy-by-2020 English (both 50) is the late-baby-boomer half of the bridge to Generation XY “new normal” policies.

Those policies will be influenced by the very different post-2008-crisis global politics and economy, and the XY generations’ different social priorities.

Shearer is older in years than Key and English. But, politically, he’s younger and he’s open to his shadow-cabinet post-baby-boomer MPs’ revisionism, in policies and in how to re-energise, reorganise, re-image and reconnect a party without any longer a broad committed vote – a project also involving younger party members outside Parliament.

That amounts to leadership from behind and below. It might cost a win in 2014 – though if the younger MPs identify the next “new normal” and generate policies to fit, a win is not impossible. Also, don’t underestimate the potential counter-charismatic appeal of decent, gutsy Shearer if he

percent zone to 11 percent was more on Labour’s weakness and Russel Norman’s shift towards economic orthodoxy than a voter rush to ecological politics – lubricated by Norman’s now consummate television style. Moreover, unless the Greens substantially lift their vote again they will be a junior partner in any post-2014 government – and at times not easy to manage, both internally and by Labour.

Potentially in their way is a different leadership: Winston Peter’s mopping up of disorientation, disillusion and anger with personal winsomeness and a mystical picture of the nation as it was and could be again.

But is that real leadership? Is it a form of leadership that is fitting us for the future? Set it in the context of a firm and you get your answer.

There is another dimension of leadership: openness. National has led the way into super-managed, controversy-free conferences.

Democracy once was otherwise. But democracy is very demanding of its leaders. M Colin James is New Zealand’s leading political commentator and NZ Management’s regular political columnist. ColinJames@synapsis.co.nz

BOB EDLIN ECONOMICS

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Growth? What growth?

Photo: thinkstockphotos.com

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o nobody’s surprise, the Government’s 2012/13 Budget affirmed a surplus would show up in its books in 2014/15. Or rather, the Treasury’s projections did the affirming, and the projections were critically based on the officials’ GDP growth forecasts.

The economy had continued its recovery from the 2008/09 recession over the past year, registering 1.1 percent growth in 2011, they said.

Strong merchandise terms of trade, good farming conditions, the Rugby World Cup and the Government’s accommodating fiscal stance (designed to underpin demand in the wake of the global financial crisis and devastating natural disasters) had done the trick, and monetary policy had been supporting activity through low interest rates.

The pace of overall GDP growth would continue strengthening, to 2.6 percent and 3.4 percent in the years ending March 2013 and 2014 respectively (and the pace of growth would be sustained at around three percent beyond that). The growth will be helped by a substantial employment and income impulse from the Christchurch rebuild, the maintenance of historically low borrowing costs and, for primary industry exporters, a continuing solid demand for our produce from key trading partners.

Not all sectors of the economy were expected to benefit equally from this growth. In the first part of the forecast period, non-commodity exporters were expected to be bruised by the strong exchange rate: which will trim their NZ dollar earnings. The tourism sector, in particular, was expected to struggle against weak income growth in several countries that traditionally have been key sources of inbound tourists, the loss of infrastructure in Christchurch, and

the effects of more New Zealanders taking advantage of the high value of the currency to holiday abroad instead of at home. The broader retail sector is expected to struggle, too, as householders moderate their spending and try to trim their debts.

Notwithstanding those assessments of the outlook for manufacturers, retailers and the tourism sector, the Treasury is more bullish than other forecasters. The Trans Tasman newsletter contrasted the official outlook with the bleaker picture painted by the Institute of Economic Research’s principal economist Shamubeel Eaqub. The economy was stagnant, he said. We were seeing little economic growth and the outlook was challenging. Low interest rates were discouraging new borrowing and investing, as debt was paid down. Periods of deleveraging typically lasted seven years, Eaqub pointed out. We still had the second half of the adjustment to traverse. Growing global risks, falling commodity prices and slowing exports portended a tough year ahead.

The NZIER expected “only 1.5 percent growth” this year, recovering to 2.5 percent in 2013. Eaqub expected the rebuild in Canterbury to ramp up gradually from mid-2012 through to 2013 but he believed persistent aftershocks, tougher building codes and

insurance issues would slow Canterbury’s recovery.

Another opinion? Let’s consult BERL senior economist Ganesh Nana. While the Treasury forecast could be termed optimistic, he said, his primary concern was the overwhelming dependence of the forecast growth on the rebuild of Christchurch. With little else to bank on, the prospects facing the New Zealand economy were one of modest economic growth over the coming three to four years. The winners, if all went to plan, would be the building and construction sector businesses and workers (although capacity constraints in these were already of concern).

More critically, Nana noted Treasury projections showing the Government achieving a surplus while the nation’s debt position – the true bottom line for the Budget – worsened (a prospect “bordering on benign neglect”). Yet in the Budget speech just two years ago the Government had rightly declared “NZ’s largest single vulnerability is now its large and growing net external liabilities”.

Another observation by Nana was that trading partner growth (the size of our existing markets) was expected to continue to surge by 3.5 percent to four percent a year. But New Zealand’s export sector would struggle to put together an annual expansion of two percent a year. In other words, NZ Inc is expected to lose market share. “So we can’t even blame the rest of the world for our problems.” M Bob Edlin is a leading economic commentator and NZ Management’s regular economics columnist.

JULY 2012

| management.co.nz | 21

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LEADERSHIP REG BIRCHFIELD

It is wise to ask?

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ould we do with wiser leaders?

It seems, on the face of it, like a silly question. But it needs to be asked. There is, you see, a paradoxical gap between the frequency of discussion about the need for better leadership and, the scarcity of literature that links the competency of leadership with the concept of wisdom.

Convention has it that leaders must be intelligent, charismatic, smart, knowledgeable or equipped with other similarly striking attributes. There is much less chatter about the importance of them being endowed with wisdom and, even less about them needing to be wise. Wisdom, you see, is one thing; being wise is quite another.

The world is packed, if not to the

Wisdom integrates personal values into knowledge-based decision-making.

And, according to Dr Bruce Lloyd, professor of Strategic Management at London South Bank University, the world needs to take the link between wisdom and leadership more seriously, particularly when we talk about tackling the issues we will face in tomorrow’s world.

He told a World Future Society conference a few years back that the world needed to move beyond working smarter to working wiser and the knowledge society needed to become the wise society. Leaders needed to be more concerned with core knowledge “distilled through the experience of history into wisdom”.

“Wisdom is one thing; being wise is quite another.” gunnels then well above the high water line, with data, information and knowledge. This is, after all, the knowledge age. Knowledge management supports a veritable industry of literature, practitioners, advocates, academics, theorists and, is an integral part of leadership learning.

With all that knowledge available, greater wisdom should be the outcome.

The standard philosophical definition says that wisdom consists of “making the best use of available knowledge”.

Wisdom, in other words, suggests an enlightened perspective.

Now take a considered look at the world around you. Only the most generous interpretation of the things you see could suggest that leaders generally are turning their rapidly expanding knowledge resources to account with increasingly enlightened perspectives of anything really.

22 | management.co.nz | JULY 2012

Wisdom helps provide meaning but leadership and futurist literature spends more time focused on recycling information and facts that “have a relatively short shelf life” and much less on knowledge that overlaps with wisdom with its long shelf life. Lloyd thinks leadership and management literature need to take wisdom more seriously. “It is critical to our understanding of the knowledge economy and society as well as strategy and leadership in general,” he says.

American futurist Edie Weiner takes a more pragmatic and personaladvancement view of why leaders should hook into wisdom. She thinks it is now important for climbing the leadership ladder, especially for women.

Smarts are becoming obsolete. Being intelligent means leveraging knowledge to make connections where there isn’t a formulaic answer. Wisdom, on the

other hand, is about “knowing what to say to whom, when and under what circumstances, and for what purpose”, she says. Hmmm.

The world needs leaders with the wisdom to understand what is happening in business, the economy, the communities in which they operate and the world at large. Too often leaders are obsessed with technology or are doggedly focused on the experiences of the here-and-now. Wisdom and what it brings to the leadership process is ignored.

Lloyd thinks it is easy to recycle wisdom. The hard thing is to put it into practice. The wise consistently put wisdom into practice.

Many of the important messages about the state of the future of the human race were delivered more than 1000 years ago. Wisdom consists of time-tested insights. It needs to play a great role in leadership development and learning. But, as one anonymous historical quote puts it: “The only lesson we appear to be able to learn from history is that we don’t learn from the lessons of history.” M Reg Birchfield is a writer on leadership, governance & management. reg@rjmedia.co.nz

SIMON LENDRUM

THOUGHT LEADER

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What’s your appetite for risk?

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all Street has made risk a dirty word, associated with recklessness, gambling and a certain moral vacuum. Yet, calculated risks are exactly what a company requires if it wants to shift from being merely good to become truly great. Whilst most companies seek steady, unspectacular growth, it is those that identify ways to create disproportionate returns that really stand out. And that requires a different mentality – not often supported by analysts and shareholder meetings.

Here’s a little test to gauge your company’s appetite for risk. Imagine your business is founded on a very simple task. Your sole purpose is to determine the outcome of a coin toss. Whenever you’re wrong, you lose your investment.

every time. Would you be allowed to survive such variance?

This is the point at which adherence to long-term strategy pays dividends.

The difference, perhaps, between good companies and great ones is that it takes nerve and determination to remain on course when the world around you does everything it can to make you doubt yourself.

Great CEOs keep their nerve, and focus on assuring those around them of the principles upon which everyone agreed before the bad run kicked in.

So, back to you. What would the appetite be in your company for this sort of business? If the prospect of delivering short-term bad news fills you with dread your company is probably culturally

“It takes nerve and determination to remain on course” However, whenever you’re right, you’ll get $2.50 in total for every $1.00 invested.

First question; is this a source of business your company would embrace? Well, in the long run it seems to be a pretty healthy business – your expected return on investment over the long run is 25 percent (50 percent of the time you’ll lose $1.00, 50 percent of the time you’ll win $2.50). So the answer should be yes, right?

Now let me ask the question another way. In the above example, 50 percent of the time, you’ll lose your entire investment. What would your appetite be for taking a strategy to the board that was certain to result in total failure every second time? Would they have faith in the long-term expectations you carefully take them through? How long would they give you to demonstrate success?

When he took over the England captaincy, cricketer Nasser Hussein lost the toss 14 times in a row, picking heads

opposed to risk. So jumping in to a strategy that incorporates the likelihood of failures along the way is unlikely to deliver anything beyond sleepless nights.

This is where ring-fencing can help.

Any company with a significant investment in R&D must inherently have a healthy respect for short-term failure.

Pharmaceutical companies, for example, understand the large payoff approach.

They’ll fail many times in the pursuit of disproportionate returns for when they hit the right formula. Tech firms follow a similar approach. Consider for a moment how you might apply the same methods to your own business.

The key to the success of any riskbased long-term strategy lies in the levels of investment you’re prepared to allow at any one time. Gamblers call this ‘bankroll management’. The long-term pursuit of the 25 percent returns guaranteed by the coin toss example is great, as long as

JWT’s Simon Lendrum.

you don’t run out of money before the positive expectations become a reality.

Putting 100 percent of your capital at risk on a single 50:50 proposition is never going to be classified as good business.

When your strategy embraces risk, and the likelihood of short-term failures, you need to be sure that you adopt the right investment strategy from the beginning.

You’re looking for a small investment/ large payoff strategy, that won’t send you broke if the losses all come at once.

So to move away from a corporate culture that fears losses more than it craves growth you need to adopt strategies that plan for risk from the outset. Second to this, you need to shift expectations around investment – away from a mindset that requires all investments to be at worst break-even.

Finally, you need to remain steadfast in your belief in the long term, ensuring that your strategy stays the course, and allowing small-scale risk along the way. M Simon Lendrum is MD of communications agency JWT NZ and author of the blog, simon-says.co.nz

JULY 2012

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BOOKCASE

Leadership by three LEADING AT THE EDGE

By Dennis NT Perkins • AMACOM • RRP $26.00

BEING GLOBAL

By Angel Cabrera & Gregory Unruh • Harvard Business Press • RRP $48.99

LEADING THE HIGH ENERGY CULTURE

By David Casullo • McGraw Hill • RRP $36.00 To understand what constitutes effective leadership, leaders should first understand themselves. That’s good advice which to some extent runs as a common thread through the three leadership books reviewed here.

The first, Leading at the Edge, was first published in 2000. This second edition telling and expansion of the compelling leadership story of Ernest Shackleton’s miraculous escape from the frozen Antarctic seas, is timeless.

The harrowing story of 28 men surviving 634 days of numbing cold and treacherous seas is an epic in leadership literature. That it was accomplished was, to an extraordinarily high degree, due to Shackleton’s own obsessive optimism and self-confidence.

Optimistic leadership can be dangerous.

In this case it was critical to survival.

A military man turned academic, Perkins wrote Leading at the Edge to show how leadership lessons “from the edge of survival” apply equally to organisations confronting contemporary challenges such as competition, economic uncertainty and the need to constantly innovate, grow and change.

The first 10 chapters illustrate how each of 10 survival strategies identified

by Perkins were used in life-and-death situations, particularly those experienced

by Shackleton’s team. In part two, the author shares his perspective on the art of leading and compares Shackleton’s leadership capabilities with those of other 24 | management.co.nz | JULY 2012

well-known polar explorers. The book ends with a toolkit. Expertly researched, practical and chillingly informative. 7 out of 10 Leaders that understand themselves should also understand the world in which they operate. Effective leaders now need to be global thinkers according to Being Global authors Angel Cabrera and Gregory Unruh.

The problem for aspiring leaders, argue the two academics, is that undergraduate institutions, employers, business schools and executive education programmes, particularly in wealthy Western countries, tack global issues on as an afterthought to their teachings.

Leaders simply aren’t properly prepared to operate in today’s global marketplace or social and cultural environments.

In fact, old global practices aren’t just insufficient for today’s world they are, the authors claim, “actively causing harm” and leading many businesses down the wrong path.

The world needs leaders who can craft solutions and bring people and resources together across national, cultural and organisational lines.

Cabrera and Unruh think leadership development needs to give greater weight to the global context of leadership.

They believe companies and academic institutions take the position that a leading global firm is not much different from a leading local or regional one. That, for example, the challenges of securing resources, building and motivating teams, creating and applying new business models, understanding and serving markets, raising and managing capital and so on, is the same the world over.

“Everything becomes more complex when

executed in a cross-national, cross-cultural context,” they claim.

And here is that thought about the value of introspective leadership again.

The intent of Being Global is to invite potential leaders “to pause and look within themselves”. The authors are “interested less … in what you want to do than in what you want to be and how you can become a truly global leader”, they add.

The book looks at specific global leaders, at the global mindset, global entrepreneurship and citizenship and wraps on what it means to be global and how to start the journey. Interesting, logical and thoughtful, if a bit US-centric. Also 7 out of 10.

Finally, a favourite American leadership theme. Leading the High Energy Culture is also self-focused but rather more predictable about what that means and brings.

It extols the virtues of hyper-active leadership and bemoans the “energy crisis” that today’s leaders and managers face and, as a consequence, of their failure to “engage and inspire their people”.

David Casullo’s book is about taping the latent energy that lies untapped in every workforce. Readers are offered the opportunity to establish “an authentic leadership presence based on powerful personal truths”. The secrets of this work, like many before it and others likely to follow, reside in how leaders communicate their vision in ways that create a sense of purpose throughout the organisation “and beyond”.

When it comes to leadership literature this one’s a bit predictable, self-focused or not. 4 out of 10. – Reg Birchfield

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SIX YOUNG LEADERS SHARE THEIR VISION How do Gen X and Y leaders see the future?

What do they value and how do they view working with their Baby Boomer colleagues? Ruth Le Pla explores the changing face of New Zealand leadership.

H

ere are six young leaders from very different walks of life. They’re all under 35 and, collectively, bridge the artificial demarcation line between Gen X and Gen Y. They span the business, non-profit, sporting and creative worlds. They work for social change, mentor, volunteer and give back. All have already made a significant impact in their own fields.

We asked them to tell us about themselves, their values and priorities. We wanted to know what they stand for, and how they try to live and work according to their own internal value sets. And we asked them to tell us what intergenerational leadership – a term which can mean so many different things to different people – means to them.

A few key themes stand out. Integrity, partnership and recognition are key. Respect and constructive interaction are important. Values rule. When engaged with their work these young leaders will balance flexibility with excellence. They thrive in a world that is collaborative, transparent and dynamic.

We wanted older managers to hear their message loud and clear. So here are these young leaders’ views about their world in their words.

JULY 2012 management.co.nz | 29

QIUJING WONG

I

’m 34 years old, live in Auckland and as I prepare this article, am five days (or less) away from the birth of my first child, which in itself makes the subject of intergenerational leadership quite relevant to me.

Culturally, I feel like a mixed bag of goodies. My father is Chinese. My mother is New Zealand European (English/Scottish). I was born in New Zealand and raised in Fiji for the first 11 years of my life. I love being with my family and have enjoyed the benefits of a close and colourful family life.

In 2005, I co-founded Borderless Productions with my (now) husband, Dean Easterbrook. We set up the company to design and produce films, digital stories and social change campaigns that we felt were important and relevant to the world.

I’ve been impacted by intergenerational relationships all my life, starting with the relationships I have with my own parents and grandparents. They were the first mentors I had and to this day still are the most important.

In the past six to eight years, I developed a strong interest in elders, particularly grandmothers, which led to me (Borderless) making a film and campaign that cast a lens on the lives of the millions of grandmothers living in sub-Saharan Africa who are raising their grandchildren after losing their own children to HIV/AIDS. The intergenerational leadership that these grandmothers showed me was beyond what I had imagined it might be.

They are wise leaders in their communi-

30 | management.co.nz | JULY 2012

ties, homes and, now, in the world. After all they have experienced in their lives, they are still so optimistic, hard-working, values-driven and show such strength in the face of great challenges.

To me, intergenerational leadership is a crucial part of both learning and sharing our experience of being human.

I value family and global citizenship. I regard the responsibilities that come with these two values as my purpose for living and the reason for my life’s work.

It’s an honour to be both a member of a family and a member of society. Family is what we make it – and isn’t only defined (for me) by those who are related by marriage and birth. To live within a family is to care for the wellbeing of others, to take interest in their life journey, to stand with them in tough times and to be there to celebrate the excitement of life with them.

Being a global citizen is about belonging to a community, society, country and world. I love thinking about the world as a “borderless” place, where we all share the same basic journey through life, where we are all connected in some way, and live with universal themes that make us all the same at the core. Thinking about the world this way makes it easy for me to see the relevance of a healthy environment to live in, of healthy communities to thrive in and of healthy relationships at every level.

We can learn and share as much from generations before us as we can from those after us. Generations before us need to appreciate the value they have to offer and be willing to share their experiences more widely. Being a bit older means you’re likely to have seen or experienced more. We can all extract some wisdom from that. And being younger means you’ve had less time to learn the wrong things… so young people need to realise they are valued for their naivety, playfulness and optimism about the world.

• Qiujing Wong has been named as an emerging leader at the 2012 Sir Peter Blake Trust Leadership Awards (see page 4).

• Gretta Mae Easterbrook-Wong was born on Friday 8th June 2012.

ANGELA GREEN

I

’m a producer for theatre – most recently at Downstage in Wellington – and am just starting a new job at Auckland’s new Q Theatre.

I’m a professionally trained actor but swapped the stage for behind the scenes four years ago. My mum, brother and stepdad live in Wellington and my dad in Auckland. I’m currently homeless. I usually enjoy my times in transition: it provokes great reflection and pushes me out of my comfort zone.

To me, intergenerational leadership means combining the experience and wisdom of those who have had time to succeed (and fail) with the drive, passion, curiosity and impatience of younger generations. It means acknowledging that every person has an opinion, and a perspective and skills to share with others.

Collaboration and relationship are important to me. I’ve had to reflect a lot on this recently as I change roles. I mean relationship in its deepest and most challenging sense: relationship that celebrates difference and diversity, that allows respectful conflict as well as agreement between sets of people rather than all trying to merge into one co-dependent, unconfrontational entity.

I also value creativity: by which I mean innovation and the spirit of entrepreneurship. As I work in the creative sector I see collaboration, problem solving and thinking without limitation every day. And every day

COVER STORY

we’re within budget, delivering huge value for money. I would like to see the creative sector more involved with leading businesses and organisations.

We’ve got a lot to offer and a lot to learn.

I try to take the long view in terms of relationship. Not everything can be hunky dory from day one, and I’m starting to value patience (though it’s not my natural inclination). I make the commitment to be there when people need me, no questions asked.

My industry is too small for people to be holding grudges over indiscretions no matter how big they are. And I believe people do change, and learn from mistakes.

As a society we’re seduced by short-term thinking, usually in terms of money and resource. This worries me especially when our society and resources are seemingly on the brink of collapse. Solving problems the same way we always have, or a ‘band-aid’ approach, will not ensure our communities thrive when we are dead and gone.

Here is where robust partnerships and creative solutions can come in.

The Leadership NZ programme has opened my eyes to how business and creativity could work together.

Much of it is about connecting with people in business who are open to even having a conversation about creativity. That’s a good start. It’s not about role-playing, trust games or arty-farty mumbo jumbo. Creativity is focused yet limitless thinking within a group or an individual. It’s about removing the blocks and resistances of entrenched thinking and saying “what if...?”

I appreciate those who hold on to their curiosity about the world and the people in it. I admire those who are generous with their knowledge and expertise but are open to learning new perspectives. But I would have that criteria for people in any generation, and I have worked with wonderful people of all ages. Children are great teachers too.

CLAIRE SZABO

T

o me, intergenerational leadership involves the varied perspectives and wisdom that people who grew up in different times represent.

My father was born in Hungary in 1939.

He spent his first six years in a war zone and the following 11 under an oppressive communist regime from which he eventually escaped as a refugee in 1956.

He is thankful I have not had to experience these circumstances. I, on the other hand, have learnt extraordinary things from his story and have drawn on his inspiration. It directly helped me lead English Language Partners NZ as its CEO for five years – an organisation supporting refugees and immigrants to learn English and pursue aspirations for their new lives in New Zealand, as my father did so successfully.

The most important thing to me is our people; the freedom and safety to practise our cultures, speak our languages, choose our religions (or choose not to believe), receive justice and participate in our democratic institutions. I think the nation’s leaders need to be constantly striking the right balance between actively engaging in the things that allow dignity and prosperity (eg, education, housing, health), and not interfering in people’s freedoms (eg, to privacy, to associate, to religion).

It is certainly a priority for New Zealand to grow the economy, reduce debt, and make the structural adjustments that our burgeoning retirement bill requires. However, it is important to pay close attention to the societal impacts of

economic changes. Do they enhance or deplete equality? Do they magnify existing social injustices or reduce them? Do they pay out to current generations at the expense of future ones or the planet?

Economic growth should be a means to our societal goals, but this requires very nuanced policy conversations, a willingness to make mid-course corrections if policies fail, and a lot of ongoing collective learning.

As leaders and collectively as a country, we benefit from a constant process of learning. For my own part, I wrote a masters thesis at Victoria Management School in 2010 on nonprofit leadership and have just completed a Masters in Public Administration at Harvard. Both have helped me answer questions and articulate new ones. Certainly we should all lift our overall managerial and governance skills if we wish to make headway on our toughest problems.

I have been the lucky recipient of much support and wisdom from colleagues and staff of older generations. As well as this, senior staff have given me breaks and allowed me to learn from my own mistakes without leveling judgement, guilt or embarrassment. I feel certain more young executives like me are out there who would benefit from this kind of relationship with older colleagues.

My father’s story has been a major inspiration in my life. However, I think it is important not to be captured by a misplaced sense of filial piety and to make decisions based on the future, not the past. Sometimes, when I am thinking about major life decisions, I find myself focused on what would make happy or proud the people to whom I owe my successes. Although I struggle with notions of disloyalty, rather than focusing on previous generations I try to think about what my (imaginary) daughters or sons would want for me, and need from me – or what story I’d like my grandchildren to hear.

Ultimately, my life’s work is all for them.

• Claire Szabo was named the NZIM / Eagle Technology Young Executive of the Year at the 2010 Deloitte/Management magazine Top 200 Awards.

JULY 2012 management.co.nz | 31

COVER STORY

DAN WALKER

I

’m a proud father, husband and friend. My wife and I both grew up in Christchurch and we moved to Auckland five years ago where I now work as national sales manager of Samsung. I’m also on the board of my iwi, Ngati Ruanui of South Taranaki.

Lastly, I’m proud to be involved in “Tuia Te Here Tangata” through the Mayors’ Taskforce for Jobs. Our focus is to identify talented young Maori across the country, support them in their learning and cultural connection and then provide mentorship from the mayors of NZ. To me, intergenerational leadership denotes an authentic desire, regardless of age, to ensure knowledge, ideals and responsibility are transferred up and down the age spectrum.

An example of this is the “TuakanaTeina” principle that is a Maori philosophical approach based on mentoring, value alignment and conveying social norms between older and younger people. Intergenerational leadership is an opportunity to pass on a legacy of the things I value to the following generations, an opportunity to effect change in a permanent way within my culture, family and country. Ultimately, it’s an opportunity to make my good choices and investment count for something beyond me.

My priorities are aligned with those who are against poverty – specifically child poverty. I can do my part by unlocking the talents of Maori youth through mentorship, giving them the space and support they require, and celebrating with them when they shine.

I stand for the Maori of South Taranaki and I seek to build on the pride we have in our history, our voice and our people’s achievements. Ultimately, what is most important to me is my family. This value has been passed down from my mum and dad. My goal is that Joshua will be proud to be my son.

In all my leadership roles I use the opportunity to pass these values on – this

32 | management.co.nz | JULY 2012

includes within my whanau, my work and my wider community in general. I don’t want these values to stop with me.

I try to live every day to be the best father and husband I can while lifting my personal development, achievements and understanding in the business world. Leadership begins at home and a strong family provides stability and support to be able to give more of yourself to your community and your people. I stand against poverty and child abuse because they have personally affected me and, unfortunately, it has got worse for those who are less fortunate in NZ. While my family is lucky to have three square meals every day and a warm healthy home, my wife and I will never forget the early days when we struggled to put food on the table or keep a roof over our heads.

Intergenerational leadership can be improved by reducing the finger pointing that exists. For example, some older generations claim younger people are self-righteous, disrespectful and unwilling to work hard. Some younger

generations are apathetic because they claim older people have created a terrible economic and environmental future for them and their children to inherit.

However, I have found that in the main older generations want to be good stewards of what they are responsible for and they intend to leave a better world for future generations. And, in general, younger people want to step up and take more responsibility but they would prefer to be supported through the process by learning from the older generations’ experience.

I believe we, as a society, would benefit collectively if our values among business, government and society were aligned with how we treat our most vulnerable – those in poverty and the children affected by this. Right now the links are weak and we require better leadership with heart to bring the synergies of each sector together. Government needs to be more than a popularity contest, business needs to be more than just profit generation and society needs us to take more responsibility for each other.

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MARK HERRING

B

orn and raised in Auckland, I studied at the University of Auckland and then worked as an investment analyst for two years before heading overseas. Although travelling independently for one year, I also spent long stretches with my brother and close friends, moving across the Middle East, Europe and Africa. After spending the next year helping to build a chili farm in Mozambique, I am now back in New Zealand and working at Leadership NZ. Although not all-consuming, sport – and particularly competitive swimming – has played a significant role in my life.

All four of my immediate family have swum competitively, and I represented NZ at the Beijing Olympics. More importantly, now, I see how swimming has shaped my connections to those around me.

Intergenerational leadership is not just leadership in the conventional sense.

It is a two-way flow of communication across generations that inspires people to think and act in ways that they wouldn’t otherwise.

It is essentially another name for effective, meaningful, and positive connections and relationships across the generations. This not only builds understanding and trust, but creates a forum, or avenue, for ideas and communication to flow between the generations. By connecting and sharing these different perspectives, people are engaged in society, encouraged to think differently about things and other people, and new ideas and action arise.

Connections – with people, society and spiritually – are important to me.

Growing up, we are told that we are the most important thing: our education, our career, our achievements, our financial security. All of these are important, and because my generation have never had a real crisis to live through, we have been able to solely focus on ourselves.

Now we are finding that connections are what we should be focusing on, because

34 | management.co.nz | JULY 2012

of two things: (1) the GFC has meant that there are tougher times, and we need help from those around us, and (2) life isn’t fulfilling if it’s only about getting what you want materially.

Family, friends and even strangers are what get you through the tough times and make the good times great.

My personal values and priorities are around being different through hard work, thinking creatively, looking for (and making) opportunities for growth, and authentic communication and connection. Achievement and recognition are also very important, but they come as a result of these values/priorities. I feel that authentic communication should be emphasised, as I have experienced (through personal and employment relationships) the difference that comes from people being true to themselves, and communicating authentically. This is now one of my top criteria when selecting people to work with (and sometimes even socialise with) – that they are real with themselves, and with others.

I stand for doing and thinking things because I have thought about them, understand them, and believe in them. Not because someone else has told me to do or think something.

I don’t have a linear career path

(Olympic swimmer > investment banker > traveller > third world chili farmer > marketing guru for not-for-profit organisation). Rather than following the path laid out by those who want me to be something (where there is significant sacrifice of time, values, enjoyment etc as you “do your time”), I see my path as an active, self-led journey of me making myself, with every step filling the criteria of: (a) challenging work that stretches me, (b) for a cause that I believe in, (c) with and for people that I like/admire/ respect, (d) and that gives me skills and experience that will aid me in further career progression.

Open, honest, and constructive communication is key for society. We don’t all have to agree on everything – it is from diversity and conflicting opinion that innovation and growth are born.

We need a forum for these conflicting opinions to be aired and understood by as many people as possible. This means ways to communicate across generations, cultures, geographies, and all other demographic and social divisions. In this way, New Zealanders can retain their own personal identity while also understanding what makes up their nation, and from this, building a more coherent national identity and vision for the future.

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YING KONG

I

was born in Malaysia and bred in Aotearoa, New Zealand. My family migrated here when I was three years old. I’m now 27 and living in west Auckland. Currently, I’m the marketing and social media strategist at Mind Warriors International (MWI). I mentor a 15 year old girl at Henderson High as part of the YWCA Future Leaders Program. Having recently returned from the Ship for World Youth (SWY), I’m now part of the SWY NZ Alumni association executive team as the vice president of communications. In my spare time I play poker, am learning te reo Maori, play hockey, am an avid blogger, and am incredibly active on Facebook and Twitter.

Coming from a Gen Y perspective I can’t understand what all the fuss is about. It would seem obvious that when the old and young collide there would be a generation gap. Their different social and economic upbringings would lead to different generations communicating in vastly different ways, each with their unique perspective on work ethics and with a unique set of needs, values and beliefs. The issue isn’t around the age difference, nor is it around ethnicity or gender. The conversation should be around the individual.

In the end, leadership comes down to each individual, and their awareness and ability to understand and manage people who come from a different value set. I have worked in situations where baby boomers, Gen X and Gen Y have interacted positively. However, I also know plenty of Gen Ys who are unable to collaborate in work situations. Conflict exists when leaders and team members hold steadfast to what they believe to be the absolute right way to interact and are unwilling to compromise or be flexible in their thinking.

Older generations need to open their minds and understand the perspective from Gen Y. Spend some time, talk to us and value us as individuals. Previous generations were told to leave their bag-

36 | management.co.nz | JULY 2012

gage at the door; we don’t like being compartmentalised like this. It is important for us to be able to bring our personality into the workplace. If you know who we are as individuals and you value what we can offer it will make a big difference to the way we contribute to your company.

Relationships and collaboration are important to us and if you give us the opportunity to speak up we will tell you honestly and constructively what we think. We want to be heard and if you value our skills and input we will constantly think of ways to innovate and improve things within the organisation.

Personal and professional development is important to us. If you take an interest in developing our career, as well as us as individuals, the law of reciprocity will kick in and we will try our hardest to pay back your investment in us.

Gen Ys want to live to work, not work to live. Work culture is highly important and we want to be able to combine play and entertainment with our work. Allow us to express our individuality in the workplace. If we’re having fun we’ll work smarter and it will increase our loyalty to the company. If we like you (manager/ organisation) and the product that we work for we’ll tell our friends, tweet and facebook about it.

Integrity is high on our value list and you should practise what you preach. We tend to take it personally if you claim to run an organisation a specific way but

behind the scenes it is a completely different story. This is demotivating, misaligns our values and decreases our loyalty to the company. We will also tell our friends, facebook and tweet about this experience.

As you can tell, we like transparency.

Having ticked two minority boxes all my life, it is only natural that the top issues I am most passionate about would include the empowerment of young females and young Asians living in New Zealand. The need for social equity is high on my list of values.

While New Zealand has a long history of promoting women’s equality, somehow gender disparity still exists here. I am passionate about engaging in conversations and initiatives that empower women and work towards the day where we will be proud to say the glass ceiling no longer exists in New Zealand.

Then there’s the question of New Zealand identity. We have a blurry and confusing understanding of who each individual is within the context of New Zealand society: especially when the conversation is expanded from a bicultural framework to a multicultural one.

As human beings we only have a finite time on this earth and I believe we should make the most of it. Life is too short to be unhappy. Why work for a company that doesn’t make you happy? Why live life if you aren’t experiencing it? I’d love to live in a world that laughed more often: hence I laugh a lot. M

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It’s already helping drive the Christchurch recovery – but can New Zealand’s construction/engineering sector shuck off its historic volatility to provide the building blocks for wider economic growth?

Vicki Jayne tries to nail the vital role of leadership in this sector.

P

otential is a word that hangs over the construction sector like a loaded crane boom. Leaky homes, the Christchurch rebuild and the urgent need to stretch Auckland’s housing all point to significant growth ahead. But will a bust follow?

Volatility plagues an industry that has been badly exposed to the GFC fallout – both in terms of confidence and available capital. And, as a PricewaterhouseCoopers report prepared last year for the Construction Strategy Group points out, the sector “suffers boom-bust cycles far stronger than those experienced by other sectors usually associated with fluctuating fortunes”.

The same report also highlights the

38 | management.co.nz | JULY 2012

potential for construction to significantly lift domestic economic performance – and “lead the country out of its current unemployment malaise”. That’s because this sector of New Zealand’s economy has historically been a great job creator – accounting for one in 12 New Zealand jobs and – in the past decade – contributing one in seven new jobs.

There are already positive signs this

is starting to happen. Christchurch recruitment firms recently reported such high demand for construction-related skills that some interviewees were being snapped up within 48 hours. Job openings in Canterbury are rising faster than anywhere else in the country and the National Bank’s regional trends survey revealed the region is now New Zealand’s fastest-growing.

Stories of NZ enterprise success This is the fourth article in a major eight-part NZ Management series: Stories of NZ enterprise success. Leading New Zealand business journalists Vicki Jayne and Nick Grant conduct a sector-by-sector review of the underlying drivers of success in key parts of New Zealand’s economy. Next month: the finance sector.

Photo: thinkstockphotos.com

g Buildin a future

ENTERPRISE SUCCESS

And all that well before the earthquake losing those skills across the Tasman.”

by Christchurch earthquakes and doesn’t rebuild gets seriously underway – probResidential construction has become need to be distracted by restructure. ably sometime in 2013. a tough environment in which to work.

Meanwhile, data on those industry It’s a lift in fortunes that the industry is Builders heading to Australia are not just leaders who have featured for successive eagerly anticipating after global financial going for the money. Some are escaping years in the Deloitte/Management magawoes last year pushed domestic residential what they see as unfair fallout from the zine Top 200 Awards shows that public housing approvals to their lowest levels in leaky homes debacle. With central and spending and geographic spread have 46 years and saw capital expenditure slow local authorities sidestepping responsi- helped cushion the impact of downturn worldwide as confidence ebbed. bility for inadequate building standards, on bottom lines. Fletcher Building was Caution still rules, according to Beca frustrated homeowners have instead number two on last year’s listings with Group’s recently appointed CEO Greg targeted builders. annual revenue of nearly $7.5 billion.

Lowe.

Being made scapegoats for wider Over the past decade, the company “Our business is spread across New systemic failure is proving a burden too has more than tripled its earnings as it Zealand, Australia and Southeast Asia far for some of the country’s traditional shucked off the 1990s’ blues to romp up and in all those markets we’ve seen a small-scale home builders. In the face of the rankings from eighth place, posting slowdown in capital expenditure.” insurance hikes as well as the threat of successive yearly gains in both revenue The growing uncertainty around Eu- retrospective compensation claims, many and profit. Despite tough economic ropean financial difficulties isn’t helping are opting to either leave the industry or times, the company was able to report and while governments in Australia and head offshore. a half-year revenue (to December 2011) New Zealand have continued infrastrucAt an administrative level, the indus- of $4.5 billion. ture investment, they are now less able to try is also in flux. The Department of From an employee base of around commit further capital, he notes.

Building and Housing (DBH) is being 7400 in 2001, the company now has a Government spending has certainly folded into the new business-focused payroll of 20,000 across diverse sectors of helped keep the local industry afloat, “super Ministry” that also encompasses the building industry spread around the according to Graham Darlow, CEO of the Ministries of Economic Develop- world. Activities range from providing Fletcher Building’s construction division. ment plus Science and Innovation as interior solutions for China’s KFC outlets, “Government has done a good job well as the Department of Labour. An- to building New Zealand’s largest sportkeeping the work flowing. So expenditure nounced with no prior consultation ing stadium and newest prison. Following on infrastructure in areas like roading, with the industry in March, it shocked its purchase of Australia-based Crane last health and education has been an absolute some who believe the DBH is already year, the company now derives the bulk of saviour. If the Government hadn’t construggling with a workload expanded its revenue (48 percent) from Australia. tinued to spend, this industry would be on its knees.”

Darlow says industry volatility makes it difficult to hang on to New Zealand has a “unique opportunity with its green branding to be a world leader skilled personnel. However, the in that space,” says Beca CEO Greg Lowe. It’s a space his company has already situation is better than in staked a claim to, offering a range of environmental services and earning the early 1990s when the sustainability accolades both offshore and at home (it was overall winner in the industry hit bottom a large business category of last year’s Sustainable 60 Awards). few years after the 1987 Sustainability is a very important part of developing the built environment in sharemarket crash – and today’s world, says Lowe – and it’s an increasingly marketable skillset. stayed there.

“You do see general demand for those services in most cities because eve“There was almost no ryone is under the same pressure in terms of trying to reduce carbon footprints, activity at all for probenergy and water demand. The chairman of our Singapore operations is a ably five to six years after member of the World Green Building Council so we take our place in trying to that and the industry lost lead this discussion… a lot of talent and capabil“I don’t know that we have yet worked out how to leverage the New ity then. So from the late Zealand branding behind that. There is general interest worldwide around sus’90s to 2010, we have done a tainable development and design. It would be good if NZ Inc could start to think lot of capability building and about how it could take its green branding and develop its design solutions in a made big investments in plant, way that reflected the kind of society New Zealand is – then take that to the world.” equipment and training…

The danger is that we are now Beca CEO Greg Lowe.

Green leadership

JULY 2012 management.co.nz | 39

Quantifying Christchurch The financial costs of the quakes are estimated to be around $24 billion – a big chunk of which will be spent in the construction sector as rebuilding the city gets seriously underway in the next year.

The massive impact on New Zealand’s economy is quantified in a report prepared

by PricewaterhouseCoopers for the Construction Strategy Group. Noting that the industry contributed $7.6 billion to GDP in 2010, it estimates the rebuild will add more than half that again in direct costs ($4.1 billion). When flow-on impacts are taken into account, the construction component of the rebuild could, it says, stimulate around $15.8 billion of GDP across all sectors around the country.

The challenge is finding ways to harness the anticipated surge in activity – whether in skills development or developing more innovative procurement processes. Canterbury could become a pilot for changes benefiting the industry as a whole.

On the downside is the risk that this “greatest of all booms will be followed by the greatest of all busts”. Finding ways to smooth out the impacts will be vital for the industry’s future health.

The whole notion of geographic boundaries is becoming increasingly irrelevant for some New Zealand-based companies. Born in New Zealand back in 1918, Beca expanded into Australia 40 years ago and is now one of the largest employee-owned engineering and consultancy and services groups in Asia Pacific. Revenues of nearly $433 million pushed the company to a ranking of 78 on last year’s Top 200.

Beca was declared the Deloitte/Management magazine Top 200 “Company of the Year” for 2010. It followed that up last year by earning the accolade of being this country’s “most reputable organisation” in NZ Management’s nationwide survey – conducted in conjunction with international consultancy Hay Group.

40 | management.co.nz | JULY 2012

CEO Greg Lowe agrees with the notion that those who talk about “going to Asia” are only extending the colonial myth.

“We are part of Asia,” he avers.

“Beca has spent more than 40 years developing an export services business that is not constrained to New Zealand borders and as we become a more global economy, I think it’s important for us to think more about clients and client needs than about geography and where people start their day.”

Lowe moved into the top job earlier this year after nearly 15 years with Beca working throughout Asia and heading its operations in China before being appointed Australia managing director. He says his early career in the New Zealand Navy taught him the power of teamwork and informed his leadership style.

“A lot of people think the military is about hierarchy and authority but it’s not at all. It’s all about developing and training people well, and giving them empowerment so that when they are in places a long way from home, they make good decisions.

“I very much believe in that. And Beca is now nearly 3000 people spread over 12 countries. That is not something you can control – it is something you have to guide and give empowerment to.”

The role of leadership, he says, is to clearly articulate strategic direction for the business, and then ensure everyone understands their part in achieving it.

There is no underestimating the ability of well-formed, well-directed teams to achieve great results – and it’s important

to respect everyone in the team no matter what their role, says Lowe.

A similar philosophy – leadership based on respect and collaboration – has helped drive changes in the industry.

Fletcher’s Graham Darlow says the infighting that once plagued New Zealand’s construction sector is becoming a thing of the past – an evolution in which he’s proud to have played a role.

Projects that have benefited from this approach range from the America’s Cup Village to Te Papa and Grafton Gully.

Darlow, who describes his leadership style as “inclusive”, now chairs the alliance board for the new Waterview Tunnel project and played a major role in forming the Christchurch recovery infrastructure alliance.

It makes for better outcomes, he says.

“When you look at New Zealand over the past 20 years, nearly every major project has been delivered within budget and within construction time and to the quality specified – so we’ve grown up a helluva lot.”

He’d now like to see greater collaboration between central and local authorities when it comes to setting consistent performance standards in the industry. Health and safety standards at the smaller-scale residential end of the scale don’t measure up to those met on major engineering or vertical construction projects, he notes. Also, environmental performance standards vary between territorial authorities and often lack both clarity and consistency.

“I think the Environment Protection

ENTERPRISE SUCCESS

Authority has done a reasonable job with projects of national significance in terms of consenting, but the applications and conditions and environmental standards need a nationwide look to get consistency across the country.”

Clarity is important from the outset of a project so companies know what parameters they are working to when planning and pricing, says Darlow.

At a wider regional level, Lowe suggests firms in the construction sector need to be agile in supporting existing clients to help them get better value from their assets and “being there for them in developing new assets”. And he believes New Zealand is in a good position to respond to wider regional needs – given its high skill base and reasonably attractive currency.

“It means exporting services is quite a viable thing to be doing.”

That said, he sees the Christchurch rebuild as critical to local industry health.

“The New Zealand construction

industry needs to show leadership and commitment to the regeneration of Christchurch because it’s an important part of our national identity and economic base.”

Darlow agrees. “The whole industry has to gear up and respond to service the people of Christchurch very, very well.

There is a big partnership role to be played between the agencies that are responsible for Christchurch and the private sector – those that are going to rebuild the city.”

He believes construction has a big role to play in revving up the whole economy.

“Construction is a great producer of economic activity and wealth. That’s because we are not only employing a lot of people, we’re using a lot of building products created in New Zealand. We also provide an economic benefit in the things we are building – whether it’s a factory or piece of infrastructure. So there is an enormous wealth benefit provided by the construction industry.” M

Building blocks New Zealand’s construction sector is the country’s fifth largest, directly employing 157,000 fulltime equivalents with a further 42,000 in related services. It contributes around five percent to gross domestic product.

A statistical overview of the sector (2000-2008) showed it to be the third largest by business count with some 50,665 businesses (more than 10 percent of all New Zealand enterprises).

However, nearly two-thirds of these are one-man bands and their numbers will have dropped since 2008.

Volatility in the residential sub-sector has seen employment swing between 12,000 and 32,000 during the past decade.

Vicki Jayne, a former editor of NZ Management, is a freelance business journalist. vjayne@xtra.co.nz

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JULY 2012 management.co.nz | 41

FACE TO FACE

Mark Solomon

A leadership model whose time has come Leader amongst leaders; strength with humility; pulls no punches – all epithets attaching to Mark Solomon, chair of Ma¯ori economic powerhouse, Nga¯i Tahu.

Although softly spoken, there’s no mistaking the passion for his people – his iwi and all Ma¯ori – or his determination to create the best possible conditions for iwi success. And now he’s being shoulder-tapped for leadership roles beyond Ma¯oridom.

He talks to NZ Management's publisher Toni Myers.

42 | management.co.nz | JULY 2012

FACE TO FACE

T

he idea of giving away their valuable IP is anathema to most commercial organisations. But that’s exactly what Mark Solomon, Kaiwhakahaere (chairman) of Te Ru¯nanga o Nga¯i Tahu, did.

Nga¯i Tahu, along with Tainui, is a topperforming iwi authority – it received its Crown settlement of $170 million in 1998, and has now grown its total assets to $730 million.

Such is his determination to facilitate iwi and Ma¯ori success that Solomon opens his doors – and the ru¯ nanga’s operating manuals – to tribes that want to check out the Nga¯i Tahu model. Many years ago now, in the early days of Nga¯i Tahu Holdings Corporation (the commercial arm of the iwi authority) he surprised a manager by essentially giving away the delegated authorities manual –‘had he any idea what that cost?’ With

the ream or two of paper, about $15 to $20, he said. “Mark, that cost the organisation $120,000!” Unfazed, he told the Corporation to “Get used to this. I’m going to do it for every tribe that walks in this door.” Today Holdings Corporation is right behind this approach.

The first time was for Ngapuhi chairman Sonny Tau. Solomon had photocopied authorities manuals, office procedure manuals and whatever he had in a document form. “I said to Sonny, ‘Basically mate, this is our structure. I’ve printed all this off for you to take home; use what you want, put aside what you don’t want.

But if you come up with a better model, come back to me.’”

Solomon challenged the Corporation: “Look at it from this perspective: if I could get 10 of the 57 tribes to work with us in business, does that cover the cost of your intellectual property? And the CE at the time just looked at me and said, ‘Never thought of it like that. Give it away to whoever you like.’”

He believes in acting on the values of the organisation: “One of those values is manaakitanga (hospitality) and another is whanaungatanga (kinship).

“It’s a different paradigm – the Ma¯ori paradigm. Some iwi do not as yet have the resources behind them to set up like we have.”

The success of Nga¯i Tahu’s operating model owes a lot to Solomon’s focus on two key factors: an overriding focus on the people and a commitment to distributing funds. He’s a fan of the late US professor and hero of the post-war Japanese manufacturing revolution, W Edwards Deming, who Solomon quotes: “The man at the top is no more important than the man at the bottom.”

Solomon believes that if, at the first sign of a downturn, a company drops staff it will find all the skilled people gone when it needs to ramp up again.

“Dropping people should be the last thing that you do. Do you throw your children out when times are tough? It’s the same thing. No longer are there ‘jobs for life’ but if values are important then practise what is preached.

“It’s people first, second and always.

“And look what tends to happen with the cutbacks in the public sector? Consulting costs go through the roof.”

Looking to identify common elements in long-term successful businesses, Nga¯i Tahu researched companies that had lasted for more than 100 years; what were the common factors? “They commonly distributed four to 6.5 percent of the net asset value per annum so that is what we aim for; last year on an operating net surplus of $37.28 million, we distributed $22.60 million with the rest held for reinvestment.”

In the 12-year history, to 1 June 2011 of the iwi authority, it had distributed $227.9 million; $56.9 million more than the total settlement.

“And it’s done with a debt ratio of around 20 percent. With the earthquake and rebuild debt levels will go up in the short term but the objective will be to bring them down again within a couple of years.”

Solomon does acknowledge that there is some growing comprehension in both the business sector and across New Zealand’s communities in general of the size and potential of Ma¯ori economic activity.

He was recently invited to join the board of green growth campaign Pure Advantage alongside corporate luminaries such as Sir Stephen Tindall and Joan Withers.

But you sense a lingering frustration with a lack of real awareness of Ma¯ori business on the part of the corporate sector.

Solomon was invited to Auckland in November 2010, to meet with the Committee for Auckland. On arriving he discovered other Ma¯ori leaders were also invited, and there was a big banner up on the wall: ‘Are iwi ready to invest?’ They were welcomed by Sir Ron Carter of Beca who told them that after they had introduced themselves there would be a panel discussion on the government’s proposed public private partnership framework.

“When he welcomed us Sir Ron said that we needed to know that all the banks in the country were in the room and 40 of the top companies on the New Zealand stock exchange.”

JULY 2012 management.co.nz | 43

FACE TO FACE

Mark Solomon with a beautiful pounamu and photo of tribal leader Matiaha Tiramorehu who began the Nga¯i Tahu claim settlement process in 1849.

Tuku Morgan (Tainui) spoke first, about what Tainui had in 1840 (including ships trading with Australia); and what they had after the land wars – which was basically nothing – and here they were today with about $650 million under management.

“I got up next and said, ‘To be honest, when I walked in and saw your banner, I considered walking straight back out.

Because I think the question on the banner is back to front. The question is not are iwi ready to invest, the question is: are you ready to invest with iwi? Because the reality is for the last 150 years the tribes have been invisible to you. If you do want to work with us we’re values-based.’ And I explained our values and said, ‘But to be blunt if your values don’t match ours we don’t want to work with you. If they do, then welcome; let’s have the talks.’”

Solomon highlights the assets of that time of some of the Ma¯ori authorities represented in the room: Nga¯ i Tahu $730 million; Tainui about $650 million; Naida Glavish of Nga¯i Whatua was there and collectively Ngati Whatua was worth about $500 million.

“The last speaker was Ngahihi o te ra 44 | management.co.nz | JULY 2012

Bidois. He was sitting in the front row and when he stood and turned around he had a full face moko. You literally saw some in the room take a step backwards. He said who he was; that his hapu was in a joint venture with Mighty River Power; that the venture was worth over $400 million.”

The four of us standing in front of the banks were representing about $2.3 billion. You could see the shock from some in the room once we explained.”

Solomon sees huge opportunities for Ma¯ori and iwi to achieve even more by working cooperatively rather than independently. He started the Iwi Chairs Forum in 2005 as a response to that year’s General Election.

“In 2004 we had the forced passing of the Foreshore and Seabed legislation and in the 2005 election year National was running a ‘Kiwi not iwi’ campaign.

We had Don Brash calling for the abolition of the Ma¯ori seats and Labour only just won. I asked myself, if the Crown was to extinguish the Treaty like they had Ma¯ori’s rights to the foreshore and seabed with the stroke of a pen in Parliament, what have iwi got left? And my answer was quite simple: ourselves.”

Solomon went to see Dame Te Ataarangikahu, the Ma¯ori Queen, and put his view that every tribe in the country was trying to do the same thing. “We were all trying to build our capital base; we were all trying to look after the social and cultural needs of our people; and we were all fighting to defend the natural resources within our respective tribal areas.

If we’re all doing the same thing, why are we all doing it in isolation?

“I put to Dame Te Ata the idea of inviting 30 to 35 iwi chairmen to my marae in Kaikoura to discuss a collaborative approach and she agreed to support me.

I sent out 30 invitations and 35 iwi chairmen turned up. And we got an agreement at that hui that we would meet four times a year. The meetings were to be held on the marae and the rationale for that was that the home people of each marae could listen in and see what we’re doing, so you demystify it; that the host iwi is always the chair and that every iwi

pays an equal share of the costs.

“Some have a capital base and some don’t but if we all pay an equal share it’s pretty cheap to come to a hui like that.

We meet four times a year to discuss the macro issues that affect all of us. We’re not a decision-making body; we set it up for information transfer so we can all make informed decisions. Out of that process came the iwi leaders’ forums and they are issue-specific.”

Solomon is chair of the Iwi Leaders’ Group for Iwi Collective, which is looking at ways in which iwi can get together to explore options for collective iwi investment.

He cites an example of potential for iwi to benefit from collaboration. “Nga¯i Tahu on an annual basis writes off a set percentage of our annual catch entitlement. We write it off either because the volumes aren’t big enough to be commercially fished or because they are species that most New Zealanders know nothing about and so there’s really no market for them.

“For Nga¯i Tahu to invest in R&D to value add to those species costs us an arm and a leg. But if the 57 tribes that are involved in fishing were to do it together – because we all have the same issues – it would create economies of scale. So just in one simple area like that we could do R&D work together that could value add to those species at a fraction of the cost to do individually.”

He sees other opportunities for collaboration around the Resource Management Act (RMA) and Public Private Partnerships (PPP).

“I’m on two tribal boards in the Taranaki region; it seems that every tribe in Taranaki has been looking at setting up its own natural resource unit. Why not amalgamate and have one company that deals with all RMA issues. Use your collective for economies of scale. We’ve got huge opportunities – ones that most pakeha companies would never look at.” M In a future issue we will be publishing the second part of NZ Management’s interview with Mark Solomon, focusing on how he is developing Nga¯i Tahu’s most valuable resource; its young people.

WHAT DOES IT TAKE TO BE A

TOP 200 GREAT?

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year’s 23rd Deloitte/Management magazine Top 200 November 2012.

VEHICLE LEASING

Turbo-charged

savings

Why fleet leasing makes sense Smaller, more fuel-efficient, well spec’d and less flashy… our fleets of company vehicles are changing for the better. Vivienne McLean checks out the fleet-leasing business.

A

fter quite savage rationalisation of vehicle fleets during the global financial crisis (GFC), leasing companies report business has stabilised over the past two years, and this year there are even signs of a modest upturn.

“Normally one of the first targets for a CEO or a financial controller is how they can make their fleet run more efficiently.

Certainly through 2009 and 2010 there was a big focus on cost reduction in businesses,” says Mitchel Booth, general manager of GE Custom Fleet. “However, we are seeing car sales up this year, a signal that perhaps there’s a bit of confidence 46 | management.co.nz | JULY 2012

returning to the economy. Companies are putting on new sales people and new employees or they are new businesses starting up, and they require company cars.”

Nigel Bell-Booth, sales manager for Orix, says during the GFC some businesses chose to go to fleet ownership, while others, particularly in the small business area, chose either to keep existing vehicles longer than usual, then purchase them, or to rationalise their fleet policy quite strictly.

“It really depends on the individual business and how they’re tracking. A lot of our traditional clients have continued to lease – it’s a very effective use of com-

pany funds in terms of running a motor vehicle fleet.”

However, Alan Roberts, general manager of Fleet Smart, believes companies are moving back to vehicle ownership because of freed up capital, low lending rates from banks to assist cash flow, and pending changes to the financial reporting regulations whereby leasing of any type or value will need to be listed on the balance sheet as a liability.

The vast majority of vehicle leases are fully maintained operating leases. As Booth points out, under such agreements companies know what their costs are going to be every month, don’t have to

VEHICLE LEASING

worry about maintenance, depreciation or disposal, and the fixed monthly price provides cover for virtually all the likely risks, combining value, surety of cost and peace of mind as well. However, where a leased vehicle was once just that and no more, vehicle leasing companies are now looking to add real value to the package.

‘Whole-of-life cost’ is the catch cry.

“Most companies now use a more sophisticated model in terms of picking their vehicles. They’re looking at the total operating cost for their vehicle, incorporating the lease rate, maintenance (which is normally incorporated in the lease rate), estimated fuel costs over the course of the lease, and FBT as a tool to help them decide on the type of vehicle,” says Bell-Booth.

Larger leasing companies can often pass on the benefits of bulk buying discounts and service relationships.

Barry Nicholson, director of sales for Fleet Partners, says what’s often overlooked is the amount of time, especially in mid-sized and larger fleets, that it takes to administer a vehicle fleet inhouse, processing all the invoices that come through, from the servicing, the tyre suppliers, the insurers, the relief rental cars and others.

“In the ’90s the relationship was just a lease rental. Now it’s morphed into ‘add value to my business by recommending better utilisation or reducing costs’,” he says. “Whole-of-life cost is not just about taking the cheapest rental, but drilling

down to cents per kilometre, fuel usage, the emissions a vehicle gives out, what the maintenance is like, do they service every 10 or 15,000km, what tyres they use, which vehicle holds its value better than others – all that kind of thing is taken into account when we’re devising fleet policies to deliver greater efficiencies.”

It seems most companies are now pretty much resigned to the cost of petrol, but there’s no doubt that rising fuel costs have had a major impact on fleet composition.

“In 2008/09 the price for 91 octane reached approximately $2.20 a litre and the majority of companies looked to reduce operating expenses and staff costs to offset this,” says Roberts. “Another effect of the fuel pricing at the time saw the market flooded with early lease terminations and the selling off of six and eight cylinder vehicles in favour of smaller four cylinder vehicles. However, we haven’t seen this reaction or anything near it in 2011/12. It could be that the majority of companies have cut operating expenses and staff costs to the bone and there are fewer companies operating six and eight cylinder vehicles, but even so it appears companies and consumers are now somewhat conditioned to fuel pricing at $2.20 per litre.”

Nigel Bell-Booth says large vehicles like the Falcons and Commodores have largely disappeared from the fleet pool.

“There are a few companies that still use those vehicles but they’ve become

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management or discretionary vehicles.

The vast majority of ‘tools of trade’ fleets, for sales reps and the like, have gone into mid-size and even small vehicles as a costcutting measure.”

Bell-Booth says even small vehicles today are comfortable and well spec’d, offering features that would only have been found on larger vehicles 20 years ago. Features such as air conditioning, ABS, multi-function displays, iPod connectivity and Bluetooth are now pretty much standard in a well priced package, and advanced engine technology sees four-cylinder cars now delivering six-cylinder power with greater fuel economies. A lot of companies are taking advantage of that trend to make smarter vehicle choices.

“Particularly during the tightening economy, companies were very aware of how they were perceived by their clients and out in the community. Driving something large that used a lot of fuel just wasn’t right so they used the GFC as a chance to put their sales reps into something that would fit the company image a little better.”

As larger vehicles became less attractive due to fuel price increases, they have suffered a very significant downgrade in terms of their second-hand vehicle value.

With companies looking for the same usability in a package that costs less to buy and to run, mid-sized and small vehicles have become far more popular as secondhand vehicles, and residual values have

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JULY 2012 management.co.nz | 47

VEHICLE LEASING

strengthened as a result, changing the way they are viewed from a leasing perspective. Today’s mid-sized, mid two litre vehicles give all the comfort, versatility, size and cargo-carrying capacity of a large vehicle but with a reasonable sized engine that gives much better fuel economy and at a considerably better lease rate.

There has also been some belt tightening at senior executive level in terms of high-end lease vehicles, but this depends on the size and type of company, and how well it’s performing.

Geoff Grisdale, sales and marketing manager Euro Rate Leasing, says a lot of those leasing “aspirational vehicles” are self employed. In larger companies, having executives driving around in Audis isn’t necessarily the best signal to be sending to the rest of the company when times are tough. While top-end executives have moved into top-end SUVs, most leasing companies report some belt tightening across the board, particularly where staff have lost jobs.

“This is where a lot of senior managers have pulled the belt in and said if it’s good enough for you, it’s good enough for me,” says Nicholson.

With today’s focus on smarter asset management, GPS has the potential to add real value to fleet operators.

“There are two reasons people go for GPS technology,” says Nigel Bell-Booth.

“One is the big brother approach where they’re looking to monitor their workforce, which doesn’t enhance relationships

between the owner or manager and staff.

The other way to look at GPS is in terms of management efficiencies.

“From an exceptions reporting point of view GPS is very helpful – it can tell you how many times a month a certain vehicle has gone above the speed limit or how many times the vehicle has been stationary for more than 60 minutes during working hours, so you can identify where there are deficiencies in the way staff are driving their vehicles or how they’re conducting their business. However, you’ve got to balance that against the ongoing costs of running a GPS system across the fleet.”

Mitchel Booth says GE provides intensive reporting for its customers, using fleet data and analytics to benchmark how a fleet is performing against like fleets.

When a vehicle is not performing as well as others in the same fleet the company even offers driver training to reduce waste.

“We have performance and cost targets for saving customers money, for example by better driver performance, or by saving tyres and windscreens. We’re [always] looking for ways of working with customers to improve their overall management, whether that’s about making sure drivers are using the most direct route to do the job required, or whether the car is sitting idle for a long time. Sometimes it might be better to look at moving to a car pool option as opposed to an individual vehicle. It’s all about using data to manage the overall fleet more efficiently.”

BMW’s Ed Finn says safety, fuel efficiency and green credentials are some of the key features fleet managers are looking for. Awareness of environmental impacts now comes through consistently as an issue in fleet purchase decisions.

“We’re consistently getting questions around what can we do to manage emissions, and how to minimise environmental outputs. I think it’s a trend that’s going to increase,” says Booth. He says with today’s technologically advanced engines there has been a corresponding improvement in fuel efficiency and CO2 output, and this is now a real decision factor in fleet purchases.

“We’re also seeing a move to diesel, and also to hybrid and electric vehicles... not a lot yet, probably because of the price premium, but over time it will happen.”

Plug-in hybrids are a hot topic, says Alan Roberts, but he believes the small size of the vehicle market in Australia and New Zealand means it will be some time before we see critical mass for this technology in the region.

“The improvement in efficiency and safety for both petrol and diesel vehicles and their cost effectiveness will hamper the uptake of hybrids or plug-in hybrids.

EVs (electric vehicles) will get more airtime during 2012/13, but the infrastructure to support such options does not exist yet. So we wait.” M Vivienne McLean is a freelance business writer.

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48 | management.co.nz | JULY 2012

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M

EXECUTIVE HEALTH PETER TYNAN

Starting from scratch

W

TRY BEFORE YOU BUY For many people, the purchase of exercise equipment or a gym membership is a way of showing commitment to their exercise goal. But as a quick visit to Trade Me will prove, it can take trial and error to find out what regime or exercise suits best.

It’s really important to consider whether your chosen activity is convenient, fits your

lifestyle and budget, and rather crucially, is one you want to get out of bed and do.

Borrowing or hiring equipment and free trials are all options to avoid this potentially expensive process of discovery.

In the workplace, “taster” sessions are a good way to gauge general enthusiasm for an activity and its practicality.

NO SWEAT “No pain no gain” seems to be a particularly sticky and unhelpful exercise myth. Pain, nausea, dizziness and other symptoms are signals it’s time to stop and seek medical advice.

To achieve health benefits, physical activity doesn’t need to involve copious sweating, being shouted at by a personal trainer, or expensive equipment. The Government’s recommended minimum for adult physical activity is 30 minutes of moderate exercise on most days (moderate being a level where you can still carry on a conversation) with some vigorous (puffing hard) activity thrown in if you are looking to improve your health.

Moderate intensity activities like walking or yoga can easily fit into a lunchtime – and won’t result in a lengthy shower queue afterwards.

ASK AN EXPERT Depending on what you want to do, starting off with a session or two with a qualified instructor or trainer can help you to get the most out of your effort

and avoid injury. They can be honest and objective about what will work for you and what to expect, can tailor the exercises to your specific needs, and ensure you are not aggravating muscles or joints.

Seeking advice on what works – and what doesn’t – is also hugely worthwhile for any workplace wanting to get the most out of an inhouse or sponsored fitness activity. Corporate wellness providers can assess your team’s requirements and advise on what initiatives might be of most benefit.

MAKING IT FUN Exercise shouldn’t be a slog or an inconvenience. If you’re going to make something a lifetime habit, you might as well enjoy it – even if it’s simply the satisfaction of completing a workout.

Teaming up with colleagues or friends of a similar fitness level is a great way to encourage commitment and make the time pass quickly. It’s more difficult to turn the alarm off, or decide today is too hot/ cold/windy/busy if you know someone is waiting for you – especially if it’s the boss. 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

50 | management.co.nz | JULY 2012

Photo: thinkstockphotos.com

e all know that physical exercise needs to be a lifelong habit.

However, for one reason or another, life might get in the way – an accident or medical condition, family or work commitments, or simply a gradual slip into a sedentary lifestyle.

For those who have not exercised for a significant amount of time, or are returning to exercise after serious illness or an injury, a planned and considered approach is needed. The resulting discomfort and soreness from working too hard too soon is unlikely to leave anyone itching to come back for more and could even pose a health risk.

For people who have been sedentary or ill, it’s important to seek advice from a GP or specialist before starting any programme or new exercise regime.

They will be able to check on any health issues that may pose a risk factor, and recommend a safe plan of action. The following hints are useful for workplaces and for individuals who are ready to get moving – slowly of course.

EXECS ON THE MOVE

Fletcher Building has named Mark Adamson as it next chief executive. Jonathan Ling will step down as chief executive at the end of September after six years in charge. Adamson currently heads Fletcher Building’s Laminates and Panels division.

Air New Zealand chief executive officer Rob Fyfe will hand over the reins to Christopher Luxon this December. Luxon is presently group general manager international airlines at Air NZ, following president and CEO positions at Unilever in North America, Asia and Australia.

ANZ NZ has appointed Tessa Price as CEO for UDC Finance, replacing Chris Cowell, who has been CEO since 2009, and who is retiring after 25 years with ANZ, and 37 years in the finance industry. Price has 14 years’ experience working in financial institutions in New Zealand and Australia.

Deloitte has two new partners in its national audit team: Dunedin-based Mike Hawken and Dave Shadwell in Wellington. Both have particular expertise in financial services and insurance. Their appointments increase the number of Deloitte’s audit partners to 17.

The University of Otago has appointed marketing researcher Professor Sylvie Chetty as its next professor of

entrepreneurship and director of its Centre for Entrepreneurship. She is currently a professor of marketing at Massey University’s Albany campus and a research associate at Uppsala University in Sweden.

Specialist Central Otago wine producer Amisfield Wine Company has appointed Craig Erasmus as its chief executive officer. Erasmus has spent the past seven years working in Marlborough for Wither Hills, Vavasour and Foley Family Wines, filling roles ranging from cellar hand through to chief operating officer.

Phil Hibbert has been appointed to head up the New Zealand operations for speciality insurance and assistance provider Allianz Global Assistance. Previous experience includes 15 years in the insurance industry working for industry giants such as GE Finance and IAG. Clive Stiff has been appointed as the new chairman and senior vice president of Unilever Australia and New Zealand.

He replaces Sebastian Lazell, who led the Unilever business over a four-year period.

Stiff has 25 years’ experience in the FMCG industry. He joins Unilever from Goodman Fielder Sydney.

PwC has two new partners. Michelle Redington, now part of the Auckland tax team, specialises in providing international tax, cross-border structuring and mergers and acquisitions tax advice. Hamiora Bowkett has been appointed to the

M

Wellington advisory practice where he will draw on his background in public policy and public economics.

Adobe Systems Incorporated has announced three new Auckland-based appointments. Richard Hooper joins as the NZ business development manager; Earl Tipene as a solutions consultant; and Owen Harris as a senior web experience management consultant for the Asia Pacific region, based in Auckland.

Therese Walsh, chief operating officer for last year’s Rugby World Cup, has been appointed head of New Zealand for the International Cricket Council Cricket World Cup 2015, which will be jointly hosted

by NZ and Australia. Walsh has been a director of NZ Cricket since 2011.

Misti Landtroop replaces James Murphy as country general manager of Pitney Bowes New Zealand.

Landtroop joins after a 10year career with Microsoft in the USA and NZ. Murphy has been promoted to managing director of Pitney Bowes’ Australian division.

Partners Life, a NZ-owned life insurance company, has appointed Sean Kam to the new role of chief financial officer. Previous roles include 10 years as COO of investment bank ABN AMRO NZ, and most recently CFO of Hearrtland New Zealand.

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JULY 2012

Vol 10 No 3

Dysfunctional boards: 57 Today’s greatest business risk 6 go-to’s for 58 aspiring directors Strategies for 60 turbulent times

Maureen Pugh Mining for more women in local body governance p54

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COVERSTORY

Maureen Pugh Mining for more women in local body governance

Westland District Council’s Mayor Maureen Pugh wants more women on local body boards.

And playing round with quotas for women on boards and other macro level policies won’t do the trick. “Women have to do this for themselves,” she says. “It’s important that we encourage more women to participate in local politics and seek leadership positions.”

Pugh came to the job the hard way. She didn’t have any tertiary qualifications, but like many women “I had a great deal of life experience and have never stopped learning”, she says.

She got into local body governance through her involvement with school governance. The Tomorrow’s Schools programme introduced her to the hands-on reality of school board of trustee activities. “It was a fantastic training ground and I still encourage parents to get involved with school boards for the same reason. Entering local government was not on my radar but when the opportunity presented itself I took it. “When life delivers opportunities we should jump [at them],” she says.

Pugh talked with The Director about why New Zealand needs more women around its local government board tables and the particular capabilities they bring to community leadership.

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THE DIRECTOR | JULY 2012

Why do more women need to join local body boards?

More women under the age of 50 hold tertiary qualifications than men, yet not a lot more than 10 percent of board members on the Top 100 listed companies on the New Zealand stock market are women. I am not suggesting that women should be appointed to boards simply because they are women, in fact I would find that extremely patronising.

But women should be given equal opportunity to compete for positions based solely on their ability to perform the task. Otherwise New Zealand is not getting the best out of the skills of half of its population. In that respect, local government is like a business.

What do women bring to the board table?

We think differently from men. Our perspectives on issues come from a different set of life experiences and values. Women are more likely to find compromise when confronted with a perceived impasse.

So why is it difficult to attract women into local body governance?

I wish I knew. Perhaps, in part, it goes back to some evolutionary markers when men were out being hunters/gatherers and women stayed in the cave looking after the offspring and dealing to the food. Times have changed. The role of men has changed and so too must the role of women.

What have you personally done to try and solve the problem?

Offering myself as an example is my contribution to solving the problem. It is gratifying to have women want to have a go at becoming elected representatives. I believe our increasing involvement will make a huge difference.

Does having less women around the table make a difference to your ability to perform as a mayor?

Absolutely not. I have one other woman on Council this term. Previously I was the only woman amongst 10 men. But apart from the odd “fluffing of feathers” by one or two roosters, gender has nothing to do with [the board’s] performance. Performance is based on individual enthusiasm, commitment and ability to do the job, and do it well. There can be lazy people in any team, but that has nothing to do with gender and it applies to all boards.

Are the differences in the way men and women approach governance attitudinal or competency based?

Women are more conciliatory and focused on finding solutions than on winning.

We need more of this style of leadership.

Anyone who can manage a house, budget, children, a husband (and usually pets), neighbours, a school and the wider family network is a multi-skilled, smart and valuable contributor to any community.

Women should value their skills and step up to represent communities at a local government level. If it’s fear that prevents women from taking that leap, all I can say is “feel the fear and do it anyway”. We are different from men; we think differently and respond differently. That difference should be celebrated and brought into the governance of communities and businesses.

Do men see themselves as more capable or are they simply more available?

This is probably linked to my response about cave men! In Westland we hold our meetings during the day so that our southern councillors can travel to and from the

meeting in one day. With a three-and-a-half hour drive each way, a night meeting is out of the question. If individuals are full-time employed it is almost impossible for them to attend day meetings. That makes being a councillor in Westland more accessible to the self-employed, retired or those with a supplementary income.

Are men more politically or commercially motivated to serve on council boards?

Historically, the more mammoths men slew the more respect they earned in Bedrock.

It’s a big generalisation, but some men seem to collect directorships like trophies and end up not being capable of doing justice to any. Some have the most awesome business acumen and, as with any group of people, there is then the politics. You need a tough hide to work through that sometimes. It can take quite some effort to understand the players’ motivations. Understanding individual team members makes understanding their thought processes easier. I wouldn’t say men are any better at any of this. We are all very capable. Some just need the chance to prove themselves.

Why is good local body governance so important?

Local government has more direct influence in communities than central government.

Local government is responsible for the way our towns look and function. We can inspire or destroy communities. We are at the coalface of our communities with direct accountability. And individually we are much more accessible.

What are you trying to accomplish for Westland?

Westland’s population is too small to continue JULY 2012 | THE DIRECTOR | 55

COVERSTORY

to absorb the ongoing costs imposed by central government. It is up to us as councillors to find other ways of supplementing our income so that we don’’t impose those increasing costs on our ratepayers. Our goal is to become a world-class tourist destination by 2030 – with all that implies. Our challenge is to do things in a smarter way. Sometimes that means stepping outside what has become normal practice. Watch this space.

Are you making progress?

Our council has set up a group of companies with high-performing directors – of the 10, two are women – who are charged with commercially making the best of our assets. We are now starting to get some real runs on the board. Our contracting company is partnering with our property company to develop a new residential development and industrial park. Our airport

company has taken over management of our Hokitika and Franz Josef sites and now returns a modest dividend where it was once subsidised by ratepayers to the tune of $150,000 a year.

Our new property company is already starting to deliver a return simply by commercialising the opportunities within our property portfolio: land-locked unformed legal road, boundary adjustments, and rationalising property are the first priorities in delivering greater returns to council, and therefore our community. This property company is also driving projects where a bureaucratic organisation, like a council, would have struggled. These projects will achieve long-term benefits that may not be immediately obvious.

Do you see more women coming through in other regions?

Unfortunately not.

What have you done in Westland to change things?

Obviously not enough. I’ve approached several great women in our community but local government is not for them… yet.

Are they making a difference?

Every individual makes a difference, simply by being there, regardless of gender.

But local government is open to everyone and I’m living proof of that. It is difficult to put yourself up in front of your community and ask them to approve of you. But it is so worth it. You can make a difference and be part of a great team. Some people think that getting and staying on council is all about conflict and competition, but I would dearly love someone who cares as much as I do about my community to let me mentor them into my job.

Why boards need more women

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oves last month to fast track more women on to public listed company boards are welcome, if long overdue. The evidence supporting more aggressive strategies to elect more women onto more boards is everywhere.

The so-called 25 percent Group launched on June 13 wants to more than double the number of women on listed boards from 10 to 25 percent.

The move, if successful, will be in stark contrast to the behaviour of Britain’s Conservative government which, despite pledges to the contrary by Prime Minister David Cameron, has dropped its proposed “golden skirt” policy whereby it would introduce quotas to increase the number of female directors on company boards.

Tory ministers decided to “stand up for business” rather than for ladies, and opted to strip out “burdensome business regulation” and that included any proposed regulations which might speed up the process by which more women might get their feet under the

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THE DIRECTOR | JULY 2012

board table. The logic of having more female directors because it is better for business has, it seems, completely eluded Tory ministers.

Meanwhile the Italian government, even without what would surely have been enthusiastic support from former Prime Minister Silvio Berlusconi, has enacted legislation requiring all listed and state-owned Italian companies to have women comprise a third of all board members by 2015. Only six percent of Italian directors are women compared with 14 percent in the European Union and 16 percent in the United States.

An increasing body of research conducted by a growing portfolio of fairly august research organisations shows conclusively that having more women at the top, on boards and as senior executives, delivers better organisational performance.

Apart from the fact women represent at least 50 percent of the customers and other stakeholder communities in society and the marketplace, women directors apparently deal with risk more effectively. That’s

pretty important in both management and strategic capabilities in today’s world.

They also focus better on long-term priorities than do competitive, self-focused and egocentric men.

Some recently released US research also shows a strong link between the presence of women on boards and better corporate reputations. Because of that, and other factors, an increasing number of rating agencies and investment funds use the extent of gender diversity on a board as an investment criteria.

Women are probably good for business and organisations of every kind. These sudden efforts to reverse New Zealand’s previous reluctance to turn more directorships over to women is encouraging even if, as one board chairwoman suggested, “the problem [of getting more women onto our biggest boards] is not about competency.

It is about the reluctance of New Zealand boards to embrace diversity of thinking and perspective.”

Dysfunctional boards: today’s greatest business risk

W

hen it comes to advising clients undertaking board fee reviews, public relations experts may be as valuable as we, the remuneration consultants, are.

Dysfunctional boards pose potentially greater risks to New Zealand companies than natural disasters.

New Zealand-born and now Londonbased reinsurance expert Judith Hanratty told a Chief Financial Officers summit in Auckland recently that, when it comes to risk management strategies, companies should take note of some research recently conducted by Britain’s Cass Business School.

The study examined 18 detailed cases of major corporate crises over the past decade which had even more drastic effects on the entities involved than any natural disaster. “Some of the firms were destroyed in their entirety,” said Hanratty.

The high profile corporate crises happened between 1999 and 2009 and included AIG, Arthur Andersen, BP, Cadbury Schweppes, Enron, Firestone, Northern Rock and Société Générale. In seven cases the company involved collapsed. In 16 cases the companies and/or executives were fined. In 11 cases the chairman or CEO lost their job and in four cases executives went to jail. In nearly every case the company lost capitalisation, its share price fell and its reputation and brand were seriously damaged.

The study detailed 100 specific risk lessons. These were distilled into seven key risk areas inherent to all organisations.

The risk areas are beyond the reach of insurance and mainly beyond the reach of traditional risk analysis and currently used management techniques. “But,” warned Hanratty, “they are ignored at an organisation’s peril.”

The seven key risk areas identified were: • Board skills and non-executive directors ability to control risk – director skill and competency limitations and the inability of non-executive directors to effectively monitor and control the executive arm of the business.

• Board risk blindness – by which boards fail to focus on important risks, including threats to reputation and the licence

to operate. Boards fail to set and control the company’s risk appetite. There is also a failure to appreciate risks presented by complexity and its ability to cause and exacerbate events.

• Board failure to lead on ethos and culture – risk created by inadequate board ethos and culture leadership. US and UK governance models are particularly considered “not fit for purpose”.

• Defective communication – risk that comes from defective internal information flows.

• Risks from organisational and business complexity and change – including risks

that come from acquisitions.

• Risks from incentives – includes risk created by the effects on behaviour from both explicit or implicit incentives.

• Risks from internal glass ceilings – come from an inability of risk management and internal audit teams to report on problems in upper levels of the organisation’s hierarchy.

“These risks can result in disasters even greater than the natural catastrophes compensated for through insurance systems,” said Hanratty.

“This [state of affairs] will remain unchanged unless boards recognise the need to deal with the risks and employ people with the competencies and vision to help them do so.”

Cass Business School’s visiting professor in Risk Management, Alan Punter told a commercial risk seminar in Europe recently that the study showed boards were not in control of their businesses, did not understand the fatal flaw in their business models or did not stand up to dominant CEOs. “The leaders lacked the skills necessary to exercise oversight over the business,” he said. And non-executive directors were too often “NEDs, or noneffective directors”.

Punter said to prevent such crises happening again, risk professionals needed to be able, and feel confident, to report on risks that may not be (or perceived to be) within their area of responsibility – particularly in relation to the activities and behaviour of their leaders.

“Risk professionals must feel able to report and discuss what they find right up to board level,” he said. “There needs to be a rethink from the board down about how to capture emerging risks related to the company’s strategy, culture and behaviour.”

JULY 2012 | THE DIRECTOR | 57

DIVERSITY IN GOVERNANCE

6

go-to’s

for aspiring directors and trustees

The call for greater diversity in governance can’t be satisfied without more aspiring directors and trustees stepping up. But as Sina Wendt Moore points out, candidates aren’t always sure how to go about it.

D

iversity in governance is a hot topic. There is growing recognition that diversity at the board table can have a positive impact on an organisation’s performance.

In my view, we need to build boards that are diverse, connected and passionate; that lead with integrity, purpose and creativity.

Strong governance requires people that bring unique lenses and mindsets to building robust and strong enterprises.

On the other hand, I’m increasingly asked by aspiring directors and people seeking governance roles how to go about developing a career in governance? And conversely, chairs and boards interested in diversifying the talent around their board tables ask how they can identify and recruit skilled and talented people from a more diverse pool of experienced individuals from across society to take up governance roles?

I’m personally committed to helping New Zealand build a new generation of authentic and ethical leaders and increasing diversity of representation on our boards. So here are my top six go-to’s to help individuals kick-start or develop a governance career.

My suggestions are based on my own experience, research, networks and connections and belief that there are some fundamental things aspiring directors need to do if they are serious about seeking governance roles.

• Be an active architect of your governance career Don’t just put your name on a database somewhere and hope to get

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THE DIRECTOR | JULY 2012

‘discovered’ or have roles find you.

• Self-assessment Do you know what boards are out there? Have you thought about the types of organisations or boards you want to be part of? Do they align with your values, goals, interests? Have you done an assessment of your own skills and what you can bring to a board?

• Learn about governance Do you understand what governance is? Are you ready for the change in leadership required and collective decision-making process that occurs around a board table?

• Get some real-life experience If you have never been on a board then look for opportunities to contribute your skills to community, social-profit organisations, non government organisations (NGO), or small to medium enterprise boards.

• Network and connect with organisations and people who are interested in and focused on building governance capability through which you can learn about governance from experienced directors. Find mentors and sponsors who will assist you with your governance aspirations.

There are several key initiatives, organisations, resources and networks out there focused on growing the governance pipeline and building a more diverse pool of potential directors and trustees.

1

Springboard NZ (www.springboardnz. org) focuses on encouraging and developing the next generation of New Zealand’s

directors and trustees. Join the Springboard Linked In Group at http://www.linkedin.com/ groups/SpringBoard-NZ-1833003/about Springboard members are aged 45 years or under, and have experience as a director, trustee or board appointee of a company, trust or not for profit, and reside in New Zealand.

On Board, Springboard’s practical governance training programme, is held four times a year, and tailored to cater for beginners through to intermediate-and-above levels of experience.

2

appoint better boards (www.appointbetter boards.co.nz) is designed for those looking for a governance role or for organisations seeking directors and trustees. Check out the website to register as a potential director – registration is free.

Appoint’s pool of 892 registered directors and trustees are: 47% female, 48% under 45, 19% non NZ European and have a total 6606 years of governance experience. (Statistics as at 31/5/2012.)

3

The Ministry of Women’s Affairs’ Women on Boards website (www.mwa. govt.nz/women-on-boards) has advice on boards in Aotearoa, including: – Information about the different types of boards.

– A governance map.

– Tips on how to get into governance roles, including real stories from experienced women directors.

ONBOARD

– A self-assessment tool that helps individuals identify their strengths and experiences.

– How to create a governance CV. – A nominations service to register with and, when ready, get on the database!

4

Women on Boards NZ (www.wob.org.nz). WOBNZ, according to CEO Lesley White, aims to be the nationwide group advocating for increasing the numbers of women on boards of directors. It uses social media to provide tools and network contacts to empower women directors to fulfil board roles at all levels. Its focus is on developing the leadership skills of professional women to position them for future governance roles.

WOBNZ has a Linked In group: www.linkedin.com/groups/Women-onBoards-NZ-4174358?trk=myg_ugrp_ovr.

5

EEO Trust (www.eeotrust.org.nz) advocates for the benefits of diversity in business and promotes greater board diversity.

The Trust’s “A Place At The Table” – a partnership between the New Zealand Human Rights Commission and the EEO Trust – is a long-term project which aims to boost the numbers of women and others in governance positions. The website provides excellent resources, articles, links to forums and workshops (http://www.eeotrust.org.nz/a_place_at_the_table/index.cfm).

6

Institute of Directors (www.iod.org.nz). Joining the IOD and/or doing its governance programmes can, for those just starting out, be costly and a bit over the top. The programmes are skewed to the corporate and commercial sector.

The IOD has a useful website (www.iod.org.nz/FirstBoardsFirstDirectors/ FirstDirectors.aspx) which anyone can access. It gives good information about directorships, boards, good governance principles and best practice.

The IOD also runs a one-day Not For Profit Governance Essentials course (see www.iod.org.nz/DirectorDevelopment).

For more experienced trustees and board members considering moving from the not-for-profit and NGO sectors into larger public sector boards, and commercial/corporate roles, IOD membership is useful. The institute’s breakfasts and lunches provide networking opportunities and the professional development programmes and workshops are excellent for those with the budget.

The Principles of Best Practice for New Zealand Directors and The Four Pillars of Effective Board Governance documents cover four fundamental areas relating to corporate governance: determination of purpose, an effective governance culture, holding to account, and effective compliance. The IOD also provides a practical guide to creating a governance CV. Members can upload their CV onto the IOD database and get access to advertised NFP director roles. To bone up on what it means to be a director or trustee read the following two books: The Complete Guide to Good Governance in Organisations and Companies written by Doug Matheson, an experienced and long serving New Zealand director, and/or his shorter handbook, Great Governance: How the Best Boards Work. They are invaluable and I refer to them constantly (see www.management.co.nz or http://tinyurl.com/84kgyzb).

Aspiring directors or trustees serious about networking and connecting should get on Linked In at www.linkedin.com. All of the organisations listed above have active groups on LinkedIn that will assist you to learn, connect and contribute to the governance conversation.

Sina Wendt Moore is the Director of OLA Consulting specialising in leadership, mentoring and strategic governance. http://nz.linkedin.com/in/sinamoore; skypename: sinamoore

John Judge has been appointed chairman of the ANZ National Bank. He replaced Sir Dryden Spring who stepped down last month. And while on the subject of banking industry directorships, Jane Freeman, Pumpkin Patch chair and Delegat’s Group board member, has been appointed to the ASB board. Two other new ASB directors were appointed at the same time: Rob Jesudason who is Group Head of Strategy for the bank’s parent company, the Commonwealth Bank of Australia, and Michael Coomer, a global financial services and IT specialist. The new ASB appointments followed the departure of Ian Narev to his new job as CEO of ASB’s parent company, and Solid Energy CEO Don Elder who stepped down after seven years on the ASB board.

Departed NZX CEO Mark Weldon is steadily picking up directorships including one to the board of governance software maker Diligent.

Diligent, which is reportedly poised to enter the US, European and Asian markets, thinks Weldon’s experience will be useful to the company as it expands the business offshore.

And Auckland-based Family Law Results thinks it has delivered a governance first by setting up an advisory board for a legal firm. Advisory boards are, says the specialist family law firm, becoming increasingly popular with small to medium enterprises as an alternative to more traditional boards of directors. They are less expensive, less formal and more in tune with what SMEs need and can afford, say the little league legal eagles.

Palmerston North-based commercialisation centre BCC has appointed former Labour Cabinet Minister and now Massey University Vice Chancellor Steve Maharey, and company director Vicki Stewart, to the board of the eight-year-old company. BCC owner, the Bio Commerce Centre Trust, represents the key research, business, local government and iwi stakeholders and appoints a skills-based board to govern the enterprise.

Richard Collyer has been appointed a director of the New Zealand office of global strategic communications partnership Kreab Gavin Anderson. Collyer previously led the communications and public relations for the multi-billion-dollar spending Queensland Reconstruction Authority.

Auckland-based director Gary Sturgess (pictured) has been re-elected chairman by the board of the New Zealand Institute of Management. His new deputy chair is Dan Coward, the Canterbury Area Commander of the New Zealand Fire Service, currently seconded to the Christchurch earthquake recovery organisation, CERA. Coward was a finalist in the 2009 NZIM/Eagle Technology Young Executive of the Year Top 200 Award.

JULY 2012 | THE DIRECTOR |

59

Strategies for turbulent times

By Iain McCormick

B

ad news travels fast in turbulent times.

And as London’s Financial Times newspaper wrote recently, today’s nervous investors are especially quick off the mark.

Examples of quick-fire investor reactions, from Facebook at the extreme to Mainfreight’s 9.2 percent share price slump earlier this year, are everywhere. The Mainfreight market reaction showed that even highly regarded companies don’t need to do much wrong to lose market credibility.

So what can boards do to develop turbulence-proof strategies? Author Michael Cusumano uses his book Staying Power: Six Enduring Principles for Managing Strategy and Innovation in an Uncertain World, to argue that organisations often place too much emphasis on efficiency and insufficient on flexibility and agility. Boards can, he says, help reduce the impact of turbulence by ensuring a balance between short-term efficiency and profitability and longer-term flexibility and agility.

Organisations should pursue their company goals while quickly adapting to changes in market demand, competition and technology. Firms should also exploit product or process innovation and new business opportunities. Cusumano also argues that, rather than requiring a trade-off, agile systems can reinforce efficiency and quality and facilitate innovation.

Organisational agility requires change to become institutionalised – a daily occurrence – according to authors Mike Woodcock and Dave Francis in their book Developing Agile Organisations: Theory and Interventions.

Boards should require management to adapt frequently, especially to new or unpredicted challenges. Directors should demand that turbulence in the external environment is matched by an equal flexibility in systems and processes.

Woodcock and Francis identify seven key practices essential to organisational agility.

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THE DIRECTOR | JULY 2012

Perceptive decisiveness Agile boards must make decisive decisions that commit the business to moving fast. These decisions may require ‘judgement calls’ because the available information and foresights into likely decision consequences are both incomplete.

Two-brained problem solving Many decisions must be based on logic that is enriched by intuition and emotion. Woodcock and Francis call this ‘two-brained’ problem solving. It combines both rational and intuitive approaches.

Diversity & teaming Agility requires diverse board membership. Diversity provides the range of views that can lead to intuitive foresight. Agile boards choose members to ensure a series of combinations: industry experience with radical thinking; compliance with strategy; pull with push marketing; capability building with profitability.

Strategy retreats allow directors to gel as a team and think through multiple scenarios and agile responses. Today’s board members typically belong to multiple groups. They must have the skills to quickly construct and destruct multiple teams.

Leading change Agile boards champion change. This requires a range of distinct skills for leading both in periods of incremental change and transformational change. In times of incremental change the board acts as a catalyst, avoiding complacency and encouraging management to find a myriad of ways to make progressive improvements.

In times of turbulence the agile board needs to exercise visioning, creative planning, and championing culture change.

Partnering Agile boards build strategic alliances with suppliers, contractors, customers and other stakeholders. Partnering works best when responsibility is equally shared.

Alliance contracting is working well in New

Zealand’s large-scale infrastructure developments. Boards must be able to critically assess potential partners and provide vision, support and leadership.

Intrapreneuring Agile boards need to hire chief executives who can generate teams of business builders and champions of new innovative products and services. Agile boards promote innovation management, building businesses, advocacy and smart risk assessment. Innovation must be a widely held organisational capability that draws on the experience of operational and central services functions.

Dynamic learning & unlearning Directors need open, nimble minds that are not tied to old habits, practices and ways. Boards must work closely with management and learn the lessons that come from turbulent times. New skills must be developed and old skills unlearned. Director evaluation plays a critical role in this area. Directors need frequent critical but constructive feedback on their contribution to the board and the organisation. They need to have a clear idea of where and how they add value. Agile companies need to learn differently – the authors call it ‘dynamic learning’.

It is not just about acquiring new knowledge and skills but about simultaneous unlearning.

Agility is essential in a turbulent market environment. Building agile enterprises requires board leadership. Boards comprising diverse membership need to think and act decisively, using both rational and intuitive skills. They should form and re-form effective governance teams quickly, champion change, foster alliances and partnering, embrace innovation and dynamically learn and unlearn.

It’s an exciting governance challenge.

Iain McCormick PhD heads DirectorEvaluation.com – www. directorevaluation.com and runs the Sport NZ Governance Evaluation service.

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