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APRIL 2012 $7.10 INCL GST


APRIL 2012


Tait’s Frank Owen: The value of failing intelligently p42 + Travelling roadshow: Stay sharp and thrive p48 + NZIM’s Focus on Management p55

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a e 20 F om t e C un e o

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Big picture: new ideas


e’re launching a major new series in this issue. It’s an eight-part sector-by-sector review of the underlying drivers of success in key parts of New Zealand’s economy. It comes underpinned by insights from years of Deloitte/Management magazine Top 200 Awards data and is pulled together by one of NZ’s leading business writers Vicki Jayne. She kicks off with a biggie: the energy sector which, poised over decisions on public vs private ownership and fossil fuels vs renewables, plays a pivotal role in our economy. (See her story on page 24). Next in the series Vicki will be looking at manufacturing, which has undergone a transformation not entirely of its choosing as lower wages have sucked jobs offshore. Many of these, of course, have gone to China, which is now facing its own demands for higher wages in a slower economy. I’ve got Anita Chan’s book Walmart in China in my towering pile of books at the moment. Any piece of work that looks at what happens when the world’s largest company collides with the world’s biggest country is going to provide an extreme example. From what I’ve read so far of Chan’s book, it is also likely to provide some fascinating insights into who adapts what to meet the needs, views and agendas of others. Despite – or more likely because of, such macro-changes – both our energy and our manufacturing sectors provide a rich source of remarkable stories of transformation as New Zealand companies learn to find their foothold in this very different world. I live in a state of perennial amazement over the Kiwi knack of finding some curious new niche in which to specialise and New Zealanders’ dedication to untangling knotty problems. Last month’s Go Global conference in Auckland A MEDIAWEB MAGAZINE

pumped out a stream of inspiring stories. My current favourite is SIMCRO CEO Will Rouse’s story of how his company developed a multimillion-dollar sheepdrenching system for Novartis after one of his guys worked out it needed the same mechanical orientation as a beer bottle. At the same event, Natural History NZ MD Michael Stedman talked about how he tries to live out nature’s big lesson that things become extinct if they can’t adapt. All that looking at wildlife over the years has clearly helped Stedman see business through nature’s lens. So now, when good people join, leave and rejoin the company he likens an organisation’s perennial search for talent to an estuary where nutrients ebb and flow on the tide. There’s comfort in that thought. There’s also a smidgeon of comfort to be derived from the idea that, finally, the complex issue of our nation’s low productivity is being taken more seriously. In the final of his three-part series on productivity, this month Reg Birchfield looks at how we measure the productivity of nations and suggests there may be better ways to do it. (See page 32.) Reg’s articles in NZ Management are increasingly generating debate. His regular leadership columns are particularly popular. (His latest is on page 20.) I reckon Reg is developing his own personal following of admirers. This, of course, gives me lots of scope to tease him about it, and watch as he squirms with modesty and tries to bat aside such a wild and preposterous notion. I guess that’s one of the perks of my job. Long may such benefits continue.

PUBLISHER Toni Myers MANAGING EDITOR Ruth Le Pla CONTRIBUTORS Reg Birchfield, Bob Edlin, Colin James, Vicki Jayne, Russell Little, Paul Robinson, David Ross, Keith Stewart, Dan Walker ADVERTISING MANAGERS Rod Myers, 09-372 6444, 027-484 8046, Trish Day, 027-561 6556, DESIGNER Jennifer Adams COPY & WEB EDITOR Gill Prentice PRODUCTION MANAGER Fran Marshall NEW SUBSCRIPTIONS SUBSCRIPTION ENQUIRIES

Phone 09-529 3000, Fax 09-529 3001 PO Box 5544, Wellesley Street, Auckland 1141

NZ MANAGEMENT magazine is independently owned by Mediaweb Limited and is published 11 times a year. It is the officially recognised magazine of the New Zealand Institute of Management Incorporated. Editorial material does not necessarily reflect the views of NZIM. Copyright © 2012: Mediaweb Limited. All material appearing in NZ MANAGEMENT is copyright and cannot be reproduced without prior permission of the publisher. Editorial contributions are welcomed. Letters to the editor are also welcomed, but pen names are not acceptable. NZ MANAGEMENT is printed by PMP. Subscriptions: One-year NZ subscription (11 issues) $78.15 (GST incl). Overseas (airmail only): Australia $NZ130; rest of the world $NZ250. Enquiries: Mediaweb Limited, PO Box 5544, Wellesley Street, Auckland 1141, New Zealand. Phone: 09-529 3000, Fax 09-529 3001, New Zealand Institute of Management enquiries to: NZIM Inc, Box 67, Wellington; Northern, Box 6600, Epsom; Central, Box 11781, Wellington; Southern, Box 13044, Christchurch.

Vol 59 No 3 • ISSN 1174-5339 (Print), 1179-3910 (Online)

Ruth Le Pla, Managing Editor APRIL 2012

| | 1

New series: Stories of NZ enterprise success NZ Management presents a major new series. Starting in this issue, leading New Zealand business journalist Vicki Jayne conducts an eight-part sector-by-sector review of the underlying drivers of success in key parts of New Zealand’s economy.


Power Plays Who wins in the NZ energy game? Fossil fuels vs renewables, public vs private ownership; as New Zealand’s three state owned energy generation companies prepare for their star turn on the asset shopping block, Vicki Jayne sheds light on the energy sector’s pivotal role in our economy.

Nga Awa Purua Geothermal Power Station - Source: Mighty River Power

contents 1



INBOX: News and views

12 FOCUS: IncrediblEdge summit, Fairfax Media/AdMedia Agency of the Year Awards 14 AS I SEE IT: Russell Little 15 MANAGERS ABROAD: David Ross


16 NZIM: Management’s new world Reg Birchfield 52 EXECS ON THE MOVE 53 EXECUTIVE DEVELOPMENT OPINION 18 POLITICS: Winston: a foregone conclusion? Colin James 19 ECONOMICS: Tax: Key’s elephant in the room Bob Edlin 20 LEADERSHIP: Paradoxical leaders Reg Birchfield 21 THOUGHT LEADER: Dr Seuss’ lessons for my son Dan Walker 22 BOOKCASE: Great by choice; The map of meaning Reg Birchfield ADVICE 54 TOP TIPS: How to go psychometric Paul Robinson

APRIL 2012 • Vol 59 No 3

features 32 Productivity Series: Part 3 Better ways to measure NZ’s productivity

What’s measured can be managed. But what if the measures are wrong? Reg Birchfield reviews the metrics used to track New Zealand’s productive performance and economic wellbeing.


38 Leadership: Vulnerable leaders

Leaders who show their soft underbelly command far more trust than those who refuse to countenance alternatives. Ruth Le Pla finds out why humility equals greatness when it comes to leading others.

42 Face to Face: Frank Owen – On failing intelligently

Iconic Christchurch company Tait Communications recently launched its new brand without that ‘radio’ word in it. Ruth Le Pla talks with its MD Frank Owen about legacies, the significance of new thinking and why failing intelligently is good for business.


48 Executive Travel: Travelling roadshow

Keith Stewart checks out how to stay sharp and survive international travel.

55 NZIM’s Focus On Management

21st century skills – relating across cultures and nationalities; Member comment from Jody Kelly; Regional news; Upcoming management courses. 42 21





Photo: Jan-Michael David


Bronwen Evans.

GO THAI Thailand’s ‘sufficiency economy’ philosophy may provide guidelines for survival in a low- or no-growth economy, according to Bronwen Evans. A former Radio New Zealand economics correspondent and now entrepreneur in Thailand, Evans says the country’s King Bhumibol developed the idea of a sufficiency economy after the 1997 Asian financial crisis. Speaking at the IncrediblEdge conference in Auckland recently, Evans said the principle now forms part of the country’s public policy and has been adopted by many in Thailand’s private sector. Rather than focusing specifically on a goal, a sufficiency economy homes in on human behaviour with the underlying ideas of moderation, reasonableness, and adequate immunity against unforeseen events and crises. “You could say this is Thailand’s version of the gross national happiness index in Bhutan,” says Evans. “Given that Thailand is a Buddhist country, the philosophy naturally draws on principles of Buddhism, such as following the ‘middle path’ and avoiding extremes – of either selfdeprivation or excessive consumption. It can apply at every level of society – from the individual, to the family, business and the nation.” Evans says a sufficiency economy centres around people “rather than stuff” and includes ideal characteristics to emulate. “We should aim to possess a broad knowledge, be thoughtful, careful and ethical in our behaviour. We should act with honesty, integrity, diligence and self-control. Through following this path, we can become resilient and can experience balance and harmony in our lives.” An integral part of the philosophy is that people aim for independence in their daily lives. “We should not be wasteful but take just enough of our earnings or production to sustain ourselves,” says Evans. “The rest we should divide up – give away some, save some, and sell some.” Evans says it is interesting to note that in Thailand in 1997 and Greece in 2012, a large number of people still owned their own land in the villages. “When crisis struck, many people in both countries left the cities to go back to the countryside where they were able to live simply and cheaply,” she says. “This sufficiency provided them with a lifebelt in times of trouble. “Even big and successful companies can subscribe to the Thai concept of sufficiency. As a form of human ecology it focuses on values, quality of life, sustainability and intergenerational skill development.” M

4 | | APRIL 2012

Bureaucracy and innovation make for uneasy bedfellows, as Agnesa Secerkadic knows only too well. The head of the communications unit for the United Nations in Bosnia and Herzegovina, Secerkadic told delegates at the recent IncrediblEdge summit in Auckland that she sees change happening everywhere, even within the confines of large “lastcentury” organisations such as the UN. New Zealand’s former Prime Minister Helen Clark, she says, has been both strategic and open-minded about such change in her role as head of the United Nations Development Programme: a testament, perhaps, to New Zealanders’ abilities to “be courageous and take responsibility”. Even so, Secerkadic sees much more scope for the UN to evolve both its infrastructure and philosophies in step with wider societal changes outside of its four walls. The Web 1.0 world it inhabits, she notes, is transmogrifying into a Web 2.0 existence: from static to live, from publish to interact, inform to engage,

Agnesa Secerkadic.

and link to tag. Organisations must no longer sell but socialise. They can no longer control but can collaborate. In practical terms, this means organisations such as the United Nations could best shift their focus from fronting up with “the solution” to providing a platform for multiple solutions depending on each unique set of circumstances and needs. “Solutions in the past were donor- rather than needs-driven,” she says. “And that is now changing.” Secerkadic sees a need for large organisations to switch from messages to dialogue and engagement. From an ad-hoc approach to strategic, systematic, evidence-based and longer-term thinking. And from individual behaviour to collective social change. Social media, she says, provides even large organisations with opportunities to reconnect, invent new platforms and identify leads. M


Photo: Copyright, Peter Drucker Institute.


Peter Drucker.

Steve Woz here Apple Computer co-founder Steve Wozniak comes to New Zealand next month to deliver his seminar, The Apple story: Disruptive innovation, inspiration and entrepreneurial wizardry. He’s holding one session on May 21 at Auckland’s Viaduct Event Centre. More details from: M Photo: Michael Bulbenko

The Peter Drucker Society Europe (PDSE) has launched the “3rd Global Peter Drucker Challenge”. The essay contest for young managers, entrepreneurs and students aims to raise young people’s awareness of the works and ideas of Peter Drucker and promote a management philosophy that puts the human being in its centre. The authors of the top two essays will win a cash prize of €1000 each and be flown to Vienna, where they are invited to participate in the “Global Peter Drucker Forum 2012” on November 15-16 this year. In addition, up to 40 authors of high quality essays will get free access to the high profile management conference. This year’s essay contest has the overarching theme “Reinventing work, reinventing organization”. The theme is closely tied to the life and work of Peter F Drucker who died in 2005. In the 1940s, Drucker was invited by General Motors to systematically study the inner workings of the then biggest corporation in the world. In the process, he “invented” the discipline of management. In the decades that followed, Drucker anticipated and observed the manifold changes that work and the organisation of work went through. He charted the rise of the knowledge worker, the emergence of the entrepreneurial society, and the increasing need to “manage oneself”. He described these in detail in books like Landmarks of Tomorrow (1959), The Age of Discontinuity (1969), Innovation and Entrepreneurship (1985), Management Challenges for the 21st Century (1999), and Managing in the Next Society (2002). The Drucker Challenge essay contest invites students, junior managers, and entrepreneurs from around the world to follow in Peter Drucker’s footsteps. Their task is to draft a picture of how the organisation of work will look in the future and what a working life would have to look like in order for it to bring value to themselves and to others. Winners will be chosen by an international jury headed by Lynda Gratton, professor of management practice at London Business School. Essays, which must be between 1500 and 3000 words long, are due by 30 June. • For more information on the Peter Drucker Challenge: • For more information on the “Global Peter Drucker Forum” and this year’s conference theme “Capitalism 2.0”: M


Steve Wozniak.

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APRIL 2012

| | 5



Katherine Percy.

HIDDEN GAPS: BIG COSTS Literacy gaps amongst managers and supervisors are costing Kiwi businesses dearly and more needs to be done to meet this group’s needs, according to leading adult literacy and human resources experts. New Zealand research suggests that many managers and supervisors have literacy skill shortfalls that restrict their ability to be effective leaders and communicators. Yet this group experiences high literacy and numeracy demands in the course of their work. Around half of New Zealand’s workforce has gaps that can make it difficult to complete everyday work tasks. Human Resources Institute of NZ (HRINZ) research and education manager Brenda Tweedy says she is regularly dismayed at the poor literacy skills she sees at all levels of management – even among chief executives. “Business productivity and quality output relies upon this group having strong literacy, numeracy, leadership and communication skills but the reality is that many struggle to do even the basics,” she says. “It’s a hidden issue, whereby managers with literacy and numeracy gaps are shielded by others within the organisation, resulting in constraints to the business’ ability to improve productivity.” Katherine Percy, chief executive of adult literacy, numeracy and communication support provider Workbase, says supervisors and managers are often hired or promoted on their technical ability and it is assumed that they have all the language, communication and leadership skills that they need. Percy adds that many employers are unaware they may be able to get subsidy support via the Tertiary Education Commission’s Workplace Literacy Fund. M

Manage your Taxi Spend with Innovation and Technology 6 | | APRIL 2012

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Gone fishing

Keeli McCarthy.

IncrediblOpportunity Wise Management Services graphic designer Keeli McCarthy won our prize ticket giveaway to the inaugural IncrediblEdge summit. Held in Auckland last month, the summit brought together thought leaders and change makers from a diverse range of fields. McCarthy says that as an artist and designer, the most interesting aspect of IncrediblEdge was seeing people who are balancing both established and emergent technologies in their work. “A common thread throughout many of the presentations was how we can embrace the physical, hand-done approaches while still flourishing in a digital world,” she says. “It was interesting speaking one-on-one with fellow attendees and discussing how people in many different disciplines – artists, researchers and social activists – are negotiating their own personal transitions into increasingly digital mediums.” For more on the summit see: • IncrediblEdge speaker, and former Radio NZ economics correspondent, Bronwen Evan’s take on Thailand’s sufficiency economy philosophy. (“Go Thai” on page 4 of this issue.) • Agnesa Secerkadic’s take on bureaucracy and innovation from her viewpoint as head of the communications unit for the United Nations in Bosnia and Herzegovina. (“Citizen voice” on page 4 of this issue.) • Who’s who photos of the event. (“Focus” page 12.) M

Business decision makers are more likely to go boating and fishing than New Zealand adults as a whole. A Horizon Research survey of the sports and activities that Kiwis regularly watch and take part in shows that rugby is the most watched sport with 66.8 percent of adults saying they either turn up, or tune in, to games. Among business decision makers this falls to 60.1 percent. Rugby, however, is still the sport that business decision makers most watch. Among all adults, rugby league ranks second as most watched sport, with 47.2 percent. However, the number of decision makers watching this sport also falls below the national figure, at 38 percent. Decision makers, however, are more likely to take part in fishing and boating than the national adult population. Fishing is the top-rated sport for participation nationally with 23.5 percent. This rises to 26.9 percent among decision makers.




A. Participate



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C. Neither






A. Participate



B. Watch



C. Neither



Source: Horizon Research September, 2011. 1645 respondents including 301 business decision makers (business managers, executives, proprietors, self-employed, professionals and senior government officials). Maximum margin of error +/- 2.4%. On the web:

APRIL 2012

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More than a nice to have Organisations need to build their reputation from a solid foundation, says Hay Group New Zealand general manager Jacqui Millar. And 15 years of Hay Group research pinpoints exactly what works.


he qualities that signal strong performance and business success are universally understood – strong financial results, market share, revenue growth, and brand preference or recognition through awards and accolades. Yet the contributing factors that create and uphold an organisation’s reputation are less black and white. There is no assurance that financial success automatically translates into a good reputation. In fact Hay Group research has shown that financial performance is a threshold requirement – it is not considered sufficient to garner respect, even in today’s volatile environment. Being a reputable company is more than just a ‘nice to have’. It is increasingly important for creating the conditions for success; a clear differentiator of financial performance and a strong predictor of future organisational performance. It helps to attract and keep the talented leaders who play a crucial role in steering the company’s performance. Hay Group conducts research on corporate reputation, globally with Fortune Magazine, in Australia with AFR BOSS Magazine, and in New Zealand with NZ Management magazine. Through this research over the past 15 years, we have identified the key drivers of corporate reputation. At its essence, reputation is borne out of authenticity and honesty across the range of an organisation’s activities. We have all seen, through traditional and social media, organisations struggle with a crisis, and whether this crisis stems from external circumstances or internal actions of the organisation, these one-off events can affect the organisation’s reputation. However, an organisation’s reputation is built over time by a range of factors. It is essential to build a strong enduring reputation by ‘doing the right things’ – not just saying the right things or projecting a certain image – in all of an Jacqui Millar. organisation’s activities.

Hay Group’s research has shown there are some key ingredients that are common across organisations with great reputations. Clear direction Organisations must have a clear and compelling strategy, and a clear line of sight as to how that strategy will be achieved. Leaders are accountable for communicating and delivering that strategy both within the organisation and with the organisation’s stakeholders, and in reputable organisations they do this better than others. Strong leadership Having effective leadership is critical. Hay Group research shows the most reputable organisations have credible leadership, and also have active strategies and plans to select the right leaders, grow leadership capability, develop effective reward strategies for leaders and create the right environments for leaders to thrive. Enabling culture Hay Group has also found that companies with great reputations create the best culture for their people to deliver on the strategy. By concentrating on enabling their people to deliver to customers through an ongoing focus on refining their operating model, and through effective engagement measurement and programmes, reputable companies have a highly motivated workforce that is much more likely to give the discretionary effort that is so important for an organisation’s success. Maintaining a reputation, means consistently doing these things well. M The next Hay Group/NZ Management survey to find NZ’s Most Reputable Organisations launches in May. If you would like to participate in this survey please send your email address to quoting MRO in the subject field.

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Precision crafted from machined aluminium and lightweight carbon fibre for incredible durability and a superior experience. A stunning 13” edge-to-edge display designed for brilliant visuals in a more compact form. Ultrabook™ inspired by Intel – powered by the Intel® Core™ i5 processor. Offer valid until 31st May 2012. *Dell’s terms and conditions: Apply to all sales and are available on request or at “Terms and Conditions of Sale” located at the bottom of our homepage at Goods by delivery only: The goods advertised above are delivered direct by Dell New Zealand Limited BN 425354. Mistakes: Dell reserves the right to decline orders arising from inadvertent pricing or other errors. Product performance: We often quote speeds and other performance data (such as printer speed or processor speeds). Please note that these quotes are only for comparative purposes and your actual speed or other performance can vary with a host of factors, including the other equipment or telephone line used. Genuine Windows® 7: Microsoft® and Windows® are trademarks of the Microsoft group of companies. Trademarks: Intel, the Intel Logo, Intel Inside, Ultrabook, Intel Core, and Core Inside are trademarks of Intel Corporation in the U.S. and/or other countries. Other trademarks and trade names may be used in this advertisement to refer to either the entity claiming the marks and names or their product. Dell Inc. disclaims any proprietary interest in these trademarks and names. All rights reserved. Further information: For more important information about our products and services go to Copyright: © 2012 Dell Inc. All rights reserved.



Madly talented We’re delving in to what it takes to be one of New Zealand’s own madmen – aka ad wizards – in next month’s issue of NZ Management. More to the point, we’ll be checking out what it takes to lead some of the best creative juice factories in the land. In the meantime, here are the shout-out highlights from the 2102 Fairfax Media/AdMedia Agency of the Year Awards where DDB knocked the gongs off the shelf like there’s no tomorrow in front of a sell-out crowd. The Communications Agencies Association of NZ (CAANZ to its friends) officially partnered with the event for the first time and a trio of nousy judges got to make the hard decisions: Brian Blake (managing director, DB Breweries);

10 | | APRIL 2012

Roger MacDonnell (former Colenso BBDO chairman); and Ross Goldsack (former Y&R executive chairman). So… those results: Supreme Agency of the Year DDB Group Advertising Agency of the Year Finalists: DDB Group, DraftFCB Winner: DDB Group

Sandy Moore, DDB Group.

Specialist Agency of the Year Finalists: Catch!Media, Fuse Network, justONE Runners-up: Catch!Media, Fuse Network Winner: justONE

CEO of the Year Finalists: Bryan Crawford (DraftFCB), Sandy Moore (DDB Group) Winner: Sandy Moore (DDB Group)

Media Agency of the Year Finalists: OMD, Spark PHD, Total Media Runner-up: Spark PHD Winner: OMD

Rookie of the Year Finalists: Vicky Anderson (OMD), Lucy Cole (DraftFCB), Jenny Zhao (Total Media), Scott Milat (DDB) Winner: Scott Milat (DDB)

The Wildcard Award Winners: Shine, Special Group NZ Post AdMedia Advertising Hall of Fame 2012 Inductee: Tony Williams See who’s who photos of the awards on page 13 of this issue. For even more photos:

2011’s agle E NZIM/ logy Young Techno ve of the ExecuƟ mish a Year H h (Pacic t McBea ters) with a o c il o (Eagle C Eagle Corallie logy) and Techno urgess (NZIM t Gary S Inc). d le an aluab a�ng v a een par�cip nd o has b ta 2011 leaders als ssessmen rs in in d e r a g h a t n e w o u h t m yo d in from ear A ape the Y eople - fro n involve and learn helped sh gs I f o e e p v k e e in r c � v b h o � a t u e s c nta hav Exe mal w ple who h about the chieve me fa oung s who y nor the Y I’ve met so nd leader ck from m many peo and think ore I can a in d e by ala step ba op much m ce involv raged me st erien ew Ze Being while exp senior N en great to en encou has made bout how e a o h wort Awards, t s It has be s I have b e process pira�onal h s s in the w proce d industrie Overall t e to be a ilcoaters ie m g o n interv nt roles a nd thinkin couraged , Pacic C r e n differ perience a s well as e l Manage a my ex chieved, a th, Gener a a have ish McBe – Ham

Will you be

New Zealand’s

gle Technology

Young Executive of the Year

Are you 35 years of age or younger as at 31 December 2012, and a New Zealand citizen? Have you been employed by your organisation for more than 6 months, and hold a middle or senior management position?


Now in its 17th year, the Young Executive of the Year was established by NZIM and NZ Management magazine to recognise standout individuals who are prepared to go beyond perceived limitations and strive for personal and organisational excellence. Regional winners – Southern, Central and Northern – are announced at New Zealand Institute of Management functions in July. The three regional winners then become finalists for the NZIM / Eagle Technology Young Executive of the Year Award, announced in Auckland on November 29.

Entry details, including the prize package, may be found at: or top200/youngexec.asp Contact Nardine Sleeman at NZIM on 0-4-495 8300,




Photos: Jan-Michael David





5 IncrediblEdge Summit 1 Agnesa Secerkadic (United Nations) 2 Bronwen Evans (FaaSai Resort & Spa) 3 Cleo Barnett (self-employed creative), Maxi Quy (independent) and Angela Roper (Ziera). 4 Laura Townend (Kristin Senior School), Wayne Sinclair (bear and forensics mascot), Margaret Lewis (The Big Idea) and Elisabeth Vaneveld (The Big Idea). 5 Qiujing Wong (Borderless) and Minnie Baragwanath (Be.Accessible) 6 Barbara Holloway (K Road Business Association), Gregar Kregar (independent artist) and Ross Stevens (Victoria University). 7 Jessica Sanderson (TVNZ), Lorri Lennon (Centre for Leadership Communication) and Lucy Sanderson-Gammon (Luminous Consulting). 8 Kristin Middle School VEX Robotics. 9 Ngaire Evans (independent), Marina Bagley (Eco Cleaning Company), Mary Evans (Heron’s Flight), Jill Walker (The Travelling Tuataras), Bronwen Evans (FaaSai Resort & Spa) and Gwynn Hoskins (architect).


AdMedia/Fairfax Media Agency of the Year Awards (in association with CAANZ) 7


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1 Ross Goldsack (most recently Y&R Advertising), Margie Gilbride (media consultant). 2 Ben Goodale (justONE) and Jeneal Rohrback (Marsden Inch). 3 Rebecca Jelavich (Kinetic One to One), Vicki Anderson and Maree Reinink (OMD). 4 Lou Kivell, Ben Goodale (justONE), Jackie Shaw (NZ Post), Drew Ayers, Amy Morrison (justONE). 5 Nicole Jones (Mediaworks TV), Chrissy Payne (OMD), Michelle Cole and Ashleigh Martin (Mediaworks TV). 6 Maggie Lewis (Sydney Film Co) and Graeme Walker. 7 Paul Head (CAANZ), Sandy Moore, Marty O’Halloran, Paul McHugh and Patrick Hancock (DDB Group). 8 Nikita Jivykh, Rochelle Bibby, Annabelle Wilkinson, Erin Jakubans and Jonny Ray (OMD). 9 Amanda Roberts, Ashley McClain, Tara Cowan, Rochelle Bibby, Erin Jakubans (OMD) and Anjana Mani (Fuse Network). 10 Arch MacDonnell and Lucien Law (Shine). 11 Jeneal Rohrback (Marsden Inch), Lisa Traill (CAANZ) and Helen Ballie-Strongi (Marsden Inch). 12 Steph McDonald (CAANZ) and Lucy Bullock (DraftFCB). 13 Abbi Hopkinson, Virginia Bashford and Tom Hewlett (justONE). • See also Inbox “Madly talented”, pg 10, for a record of the award winners.






5 4





10 11



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One of the Leadership NZ Trust’s 2011 alumni, Russell Little is now six months into his role as its CEO. What are New Zealand’s major challenges for 2012? The big four sustainability challenges stand out for me. 1) Our environment – as a nation we need to be heartfelt in facing up to the environmental sustainability challenge. The land is finite in her capacity to sustain yet our focus continues to be on how to extract and produce more. 2) Our society – New Zealand has a culture of ambivalence toward income inequality. We hold stewardship responsibility for passing on a good quality of life to the next generation. Yet we run the risk of depriving them of this. 3) Our culture– our nation’s progress in honouring the spirit of Tiriti o Waitangi is tainted by ethnocentrism. While the Treaty speaks in the language of intergenerational sustainability we still choose to interpret it from a perspective of colonial entitlement. 4) Our economy – at a national level we need to walk our own number-8-wire talk. Today we are one of the OECD’s least innovative nations. This needs to change before our forefathers’ legacy for ingenuity and innovation is lost. How well prepared are Kiwi business leaders to face these challenges? The innovator and early adopter business leaders are well placed to take on the sustainability challenges. Their attitude of abundance, possibility and tenacity is making a real difference in all sectors of society – commercial, government and civil. The counter to this optimism is that we have not yet reached the tipping point for the majority to make the vision of a sustainable nation a reality. What more could we do as a country to thrive in the current global economic climate? We need to face up to the reality that what we value today may not be right from a global sustainability perspective. I doubt future generations will judge our current predisposition to consumerism, individualism and ethnocentrism as the right values for our time. To thrive in the current global economic climate we must lead the world in being authentically sustainable. M

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Now managing director of Fonterra Brands Malaysia, David Ross has spent 14 years working in Asia. What prompted you to seek work out of New Zealand? About 15 years ago, I was inspired by the then head of our Asian consumer branded business. He talked about the opportunity for value-added dairy nutrition in Asia and the nutrition-based functional marketing Fonterra was employing to build this business. I could see how my technical background could be adapted to this business and I was excited by the potential to build Fonterra’s retail brands in this growing region against significant competition. I initially envisioned trying it for three years to gain the experience but became hooked on the adrenalin of doubledigit growth opportunities in Asia and stayed. I’m proud to be part of building what is now a really significant New Zealandowned branded business in this important future market. How are your experiences overseas shaping your understanding of New Zealand? Many Asians understand the concept that the uncrowded and largely unpolluted environment we have in New Zealand, relative to most parts of the world, is naturally conducive to producing high-quality, safe food and beverage products. So we have a great starting position on many other food-producing nations. But it’s only a starting point. We still have to be smart in our marketing and business development at an individual product level. If we do this right, I believe New Zealand is well placed to be a leading supplier of high-quality branded protein-based food products to Asia. It’s our future. How can offshore Kiwis contribute to New Zealand? I’ve become active in the Malaysia New Zealand Chamber of Commerce and that plays a role in connecting Kiwis here with each other and with potential business partners. As New Zealand’s leading company here, we also work collaboratively with the embassy and New Zealand Trade and Enterprise on New Zealand promotions and events where food is involved. Many Kiwis who work in Asia return to New Zealand eventually, so there will be an ever-increasing group who know how to operate in Asian markets. That’s got to be useful to New Zealand companies who are starting on their journey of understanding selling to Asia. M David Ross is a member of Kea, New Zealand’s global talent community.

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Management’s new world

Management is on the brink of revolution, say some experts. Reg Birchfield looks at what’s driving new ideas on managing.


ast month the Australian Institute of Management (AIM) picked up on a globally innovative Kiwi idea. It’s an idea spawned by its trans-Tasman cousin, the New Zealand Institute of Management. AIM announced the results of its first foray into using NZIM’s Management Capability Index (MCI) to measure the performance of Australian managers nationwide. In so doing, it joined management institutes in India, Singapore and Malaysia, which already use the index to calibrate the capability of their managers. The index is the brainchild of former NZIM National president and now governance writer and consultant Doug Matheson. It’s designed to record how top level managers – ideally chief executives – perform in 10 key categories that impact the operations and profit of their organisations. For the record, Australian managers scored marginally better overall than their Kiwi counterparts. But the important message wrapped in this news is that Australia, like an increasing number of countries, is using the index to get a better handle on the status of its country’s management capability. As AIM’s national president Jim Walker said in the foreword to the findings report: “How well we manage and lead our businesses is vital to maintaining our

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competitiveness both on the domestic and international stage.” Global competition, economic uncertainty, organisational complexity and a host of other dramatic changes are collectively fuelling a welter of global research and intense re-thinking about the future of management practice. Management looks set to experience its most significant shake up since the end of the Great Depression 80 years ago. Then, as now, everyone started questioning the validity of managers’ unbridled and exploitative control of corporations and companies. The world at large held management responsible for the financial collapse and its ensuing recessionary repercussion. Now fast forward to 2012. “We all know our organisations are pretty much crap when it comes to change,” author and discipline guru Gary Hamel recently told London’s Financial Times newspaper. “They were never built to change. They were built for stability, to eke out a little more efficiency and a little more productivity year by year by year.” Management, he said, is on the cusp of a revolution. The world is “going to see a greater revolution in how companies are run and managed over the next decade than we’ve seen over the past 100 years”. Other management thinkers and writers are saying similar things. The pressures underpinning the plethora of

new thoughts about management are obvious. Companies at large are facing economic, social, competitive, regulatory and technological challenges that now demand organisational leaders to come up with answers and, more often than not, hitherto untested solutions. Hamel thinks social media, for example, are subverting traditional management and, as a consequence, the hierarchy of management will be “inverted”. New connectivity tools aggregate human wisdom in previously unimaginable ways. And so versions of what happened in Egypt and Tunisia are “happening in every company”, he says. Research conducted by Britain’s Ashbridge Business School and Europe’s International Business Leaders Forum suggests senior executives increasingly need new competencies, many of which don’t “feature in traditional management education and leadership development experiences”. A 2008 global leaders’ study conducted by Ashbridge and the European Academy of Business in Society (EABS), found three distinct clusters of knowledge and skills that the vast majority of senior executives surveyed agreed they needed to help them cope with today’s fast changing global marketplace. The missing skills are based around context, complexity and connectedness.

There is also, according to the research, a significant performance gap between the importance the surveyed executives place on gaining these skills and the effectiveness with which they believe programmes to deliver them are being developed and provided by the companies they work for, by business schools and by professional management and leadership organisations. The responding executives said they need to understand today’s changing business context, which includes the business risks and opportunities of social, political, cultural and environmental trends. They also need the skills to lead in the face of complexity and ambiguity. There is, they said, often little certainty and agreement about the nature of, and the responses required to deal with, today’s more complex issues and the trends they represent. And finally, executives want what the research analysts called “connectedness” knowledge and skills to help them understand all the “actors” now strutting the stage in the wider political landscape. They want to know how to engage with and build effective relationships with new kinds of external partners such as regulators, competitors, NGOs or local communities. “Helping managers grapple with these issues provides an important opportunity for us,” says Kevin Gaunt, NZIM Inc’s chief executive. “So too does the practical learning approach which is unquestionably NZIM’s strong point.” Nitin Nohria, the dean of Harvard Business School, reportedly thinks business leadership is at a “tipping point”. Managers and leaders should adopt a new leadership philosophy and demonstrate moral humility. They should start by admitting that they lack knowledge, which indeed they do. A frank admission that they do not know much about how to build a sustainable system for business and society would make them more effective. Ken Starkey, a professor at Nottingham University Business School, thinks business schools generally should “shift their centres of gravity away from

economics, finance and dreams of individual fortune” and teach future leaders to “reflect and critique”. He wrote recently in Britain’s The Economist magazine that “if we are to create a new business model out of the chaos of crisis to which business schools contributed, we will need to take a long hard look at how leadership is taught in our schools. Business as usual is no longer an option.” “Managers and organisational leaders face a raft of new and challenging issues,” says Gaunt. “It is our job to research and keep abreast of international best practice and trends and to tell our members about them and also deliver programmes based on them. “As the Ashbridge and EABS study shows, managers want practical, experience-based support to help them acquire the skills they need to deal with and exploit today’s increasingly complex management problems and opportunities. It is precisely because NZIM takes this approach to its role that we came up with the MCI. We take real life and proven management experiences and turn them into applicable and relevant solutions. We will do more of this kind of forward-focused work with our clients over the next few years. “And now that we are talking the same language through the MCI, we will be working more closely with AIM and sharing our management development experiences. These may be testing times for managers but they are also exciting times. There is a new sense of urgency about the need to better understand management’s evolving role and to help managers and organisational leaders be more effective. “As today’s best known management thinker and researcher, Jim Collins, points out in his latest book, Great by Choice, by asking why some companies thrive in uncertainty and chaos when others don’t, he discovered the principles that can help managers build truly great enterprises. It’s our job to help New Zealand managers and leaders effectively deploy those principles and any others they need to succeed.” M Reg Birchfield FNZIM is a writer on leadership, governance & management.

LEADERS BUILDING LEADERS Our aim is to build management capability through Research, Learning, and Recognition. Our focus is to: • Research leading management trends and practice and promote a constantly developing model of best management capability for New Zealand. • Enable managers and aspiring managers to participate in learning programmes, mentoring, and events that provide the information and experience they need to develop their capability. • To identify leading management role models and provide awards that recognise the career and educational achievements of managers. NATIONAL BOARD GARY STURGESS LIFE FNZIM (CHAIRMAN) LYNDA CARROLL AFNZIM DAN COWARD AFNZIM MOHS MICHAEL WEUSTEN FNZIM JOHN SANDFORD FNZIM ASH DIXON MNZIM JOANNE O’CONNOR MNZIM MARK WOODARD AFNZIM NZIM INC CHAIRMAN: GARY STURGESS LIFE FNZIM DEPUTY CHAIR: LYNDA CARROLL AFNZIM PO BOX 67, WELLINGTON 6140 PH 0-4-473 0470, FAX 0-4-473 0479 EMAIL NATIONAL_OFFICE@NZIM.CO.NZ WEBSITE: WWW.NZIM.CO.NZ CEO: KEVIN GAUNT FNZIM, FAIM PO BOX 6600, WELLESLEY ST, AUCKLAND 1141 PH 0-9-303 9100, FAX 0-9-303 9109 EMAIL KEVIN_GAUNT@NZIMNORTHERN.CO.NZ NORTHERN REGION REGIONAL DIRECTOR: JOHN SANDFORD FNZIM REGIONAL CONTACT: TAIT GRINDLEY PO BOX 6600, WELLESLEY ST, AUCKLAND 1141 PH 0-9-303 9100, FAX 0-9-303 9109 EMAIL ENQUIRIES@NZIMNORTHERN.CO.NZ WEBSITE WWW.NZIMNORTHERN.CO.NZ CENTRAL REGION REGIONAL DIRECTOR: LYNDA CARROLL AFNZIM REGIONAL CONTACT: STACEY COULTHARD PO BOX 11781, WELLINGTON 6142 PH 0-4-495 8300, FAX 0-4-495 8301 EMAIL ENQUIRIES@NZIMCENTRAL.CO.NZ WEBSITE WWW.NZIMCENTRAL.CO.NZ SOUTHERN REGION REGIONAL DIRECTOR: MICHAEL WEUSTEN FNZIM REGIONAL 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


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Winston: a foregone conclusion?


ne route to paralysis in decisionmaking and action is to assume a foregone conclusion. Climate change apostles make this mistake when they say apocalypse is imminent. Most people then shrug, figuring nothing they do will stave off doom. Sports teams make the mistake by relaxing when a long way ahead or thinking the other side inferior, then getting a shock. It was a foregone conclusion the All Blacks would eat France in the rugby world cup final – they scratched a one-point win. Good managers know the effect. Mediocre, arrogant or timid ones can get blindsided. Take political management. Last year Labour thought public distaste for partial sales of state-owned enterprises was so strong it would skewer National. Wrong. National runs a risk in its conclusion that in 2014 taxing income from capital gain will skewer Labour. The foregone-conclusion effect is one of the conundrums in MMP, now being officially reviewed by the Electoral Commission in line with the legislation for last year’s referendum, which recorded a lukewarm status quo decision. The conundrum is not an MMP peculiarity. It was there under the FPP (first-past-the-post) system. MMP’s contribution is to magnify it. From the mid-1950s to the early 1980s growing numbers defected from the National-Labour club, mostly to the Social Credit Political League. At a certain point, the foregone-conclusion effect took hold in some electorates. In early 1978 this translated into a by-election win for Social Credit leader Bruce Beetham in safely National rural Rangitikei. Labour had no show of winning. Its supporters transferred in droves to Beetham. Defectors

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from National took him over the line. Labour at this time also looked a loser nationally. This spread to some other safe National electorates, pushing the Labour vote down, sometimes into third place, and delivering two more seats to Social Credit at the peak. Then when the relative strengths of the two big old parties reversed from the early 1980s, National’s vote in a number of safe Labour electorates bled heavily to Social Credit, though not enough for Social Credit to win the seats. Anger at the two main parties in 1990 and 1993 delivered seats to Jim Anderton and Sandra Lee on the left, and Winston Peters and Tau Henare on the right before MMP changed the rules in 1996 to give voters different options. The foregone-conclusion effect then hibernated until 2002, when it roared back. With strongwoman Helen Clark at her peak, a Labour win over a weakened and indifferently-led National seemed a foregone conclusion. But many voters didn’t want one-party government. Labour’s support fell 10 points between opinion poll readings a month out and the actual vote. More dramatically, National supporters poured into United Future and New Zealand First hoping they might shackle Clark. National got 21 percent of the party vote. (Its “real” vote was probably the 31 percent electorate vote.) In 2011 National’s re-election was a foregone conclusion. But its support dropped nine points from September polls to the election. And Labour’s party vote fell to 27 percent. (Its “real” – electorate – vote was 35 percent.) Is this a phase before voters are fully accustomed to MMP and vote their actual party preference, as in established proportional-vote countries? The Electoral Commission

Winston Peters.

won’t answer that. Its review deals with mechanics, not atmospherics. Meantime National and Labour must live with last year’s foregone-conclusion effect which (compounded by John Key’s poor political management in the campaign) delivered Winston Peters back to Parliament. Peters might well turn the key in the 2014 election: if he clears five percent then he will likely decide who governs (probably National); if he doesn’t, that would boost the wasted vote, reducing the vote-share needed for a majority (and lifting National’s third-term prospects). It’s not exactly what Key ordered. But the foregone-conclusion effect can catch out even able managers, as Clark found long before Key. M Colin James is New Zealand’s leading political commentator and NZ Management’s regular political columnist.



Tax: Key’s elephant in the room


Tax has not been a taboo topic for political discussion in this country. But the Key Government, having reduced income taxes when it lifted GST, is determined not to raise them again. Nor will it entertain the idea of a special levy to deal with the particular challenge of rebuilding Christchurch. Yet the financial statements for the first seven months of the Government’s financial year (to 31 January) show a deficit resulting from too little revenue rather than too much spending. Finance Minister Bill English highlighted that reality when asked about the Government’s financial position the same day as the financial statements were published. He said: “They show core Crown tax revenue was $946 million below the pre-election update. Total revenue was $1.4 billion lower, offset by lower core Crown expenses of $1.2 billion. This has led to the operating balance before gains and losses being about $470 million below forecast. These numbers include recognising the expenses of the severe earthquake in Christchurch on 23 December.” The Government had to follow the same processes as many households, businesses and other organisations, English argued. Through the tougher times the Government had been running up debt. As the economy picked up and the outlook improved, it must tighten up, to save more – as New Zealand households were doing – and to start repaying that debt. Among other things, this required the public service to change the way it delivers services over the next few years. A particular challenge would be “to keep delivering good public services, and improving them, at the same time as spending the same, or less, money”. This presaged yet another assault on departmental budgets.


lashing public expenditure isn’t the only way to balance the budget, British political writer Mehdi Hasan told readers of The Guardian earlier this year. We need to talk about tax, too, he argued. He did not pretend to like paying taxes but he recognised how tax revenues civilised a country by funding highquality public services, the welfare state, national defence, much-needed infrastructure projects and so on. Progressive taxation of income kept inequality in check, for good measure, by redistributing from the rich to the rest. There were just two ways to close a fiscal deficit when an economy is operating at full potential, Hasan maintained. One is to cut spending, the other is to raise taxes (the Key Government’s plans to sell shares in state assets have the same revenue-raising effect). Hasan’s beef was with deficit hawks who assume that cutting spending is the preferred route to fiscal balance, rather than raising more revenue via the tax system. Fiscal policy had been reduced “to a sterile debate over public spending” in recent years and “deficit reduction” had become a convenient euphemism for cutting public expenditure. Britain’s deficit had been caused not by rises in public spending, however, but by a collapse in tax revenues triggered by the economic crisis. Poll after poll in Britain showed overwhelming public support for a tax on bankers’ bonuses; a mansion tax on multimillion-pound properties; a windfall levy on the oil and utility companies; a Robin Hood tax on financial transactions; and a one-off wealth tax of 20 percent on the richest 10 percent of households. Political leaders accordingly had to lift their selfimposed taboo on discussing tax, if they were serious about the deficit.

Yet core government services expenditure was $184 million lower than forecast. Under-spending by the Canterbury Earthquake Recovery Authority accounted for around $72 million of that. The rest was explained by “small variances” across a number of departments. In other words, they were spending less than budgeted. English acknowledged the lower tax revenue in the public accounts was “consistent with probably collecting less tax in this financial year than was expected in the pre-election update”. The accounts showed PAYE three percent lower than the pre-election forecast; GST was four percent lower; the corporate tax take was five percent lower. But English steers clear of new revenue-raising measures, other than the one-off sales of shares in a few state companies. M Bob Edlin is a leading economic commentator and NZ Management’s regular economics columnist.

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Paradoxical leaders Con thi ve n

t en g r ers k



nt g e e rs

it ve

D i thi ver nk

Re f l


20 | | APRIL 2012

some very big issues. And even the most promising and competent of them must tool up to cope with what now confronts them. As the NZIM story on page 16 of this issue reports, today’s senior executives feel they are ill equipped to deal with the context, complexity and connectedness issues of their job. The leadership problem is not, however, solved by simply accepting that leaders are built fit for purpose rather than born to the task. It takes a commensurate commitment to their construction and that, it seems, is where things also run foul. It seems that employers aren’t particularly willing to invest sufficiently in relevant skills development programmes. Mainstream business schools aren’t considered up to the job. And professional membership organisations haven’t yet caught up with the new knowledge and skill sets their members say they need. Leadership development is not an elitist thing. It is an across-theorganisation requirement. It’s about building capability at every level. And getting there requires the development of cultures to get the right organisational responses to deal with the urgent challenges of transformational change, of which there is much needed. A European initiated “Developing the Global Leader of Tomorrow” study suggests that everyone from current and aspiring leaders to the human resource and other professionals who facilitate leadership learning and development, should start thinking differently about leadership. They need to know how to build and bolster their leadership ranks. The study suggests employers ask

e tiv


o one is a born leader, according to Manfred Kets de Vries, a most thoughtful management thinker. Some may have a head start in the race to become one but leadership potential is developed. Leaders emerge from a “delicate interplay between nature and nurture”, he says. Good leaders are paradoxical characters who are “comfortable dealing with paradoxes”. The best candidates are both active and reflective, introverted and extroverted, both convergent and divergent thinkers, equipped with both IQ and EQ. They must think both atomistically and holistically for both the short and long term. Individuals who balance these contradictions have the right stuff and, therefore, the potential to become good leaders. That is the good news. Our inventory of leaders is perilously low and, with the right development programmes, maybe we can stock up. But therein resides the rub. What kinds of programmes, delivered how and by whom, and addressing what issues? New Zealand enterprise does not, according to both existing research and anecdotal evidence, make much effort to build learning organisations. And unfortunately tomorrow’s leaders have a lot to learn, particularly about some of the “soft” skills now required to effectively do the leadership job. This shortcoming in organisational practice is not uniquely Kiwi. Confronted by the demands, disruptions and difficulties of leading change, it’s easier to focus on processes rather than people. Some recent global research shows that this less-than-relevant approach to leading and dealing with change is still internationally commonplace. Leaders of even the world’s largest enterprises are today struggling with

themselves four key questions: • What kind of people are they looking for? • What qualities should they value? • What are the most effective learning methods and ways of developing thinking? • Are things broadly right in the organisation? Whatever the approach taken, leadership development should today be a strategic priority. Leaders can be found and fostered at every level of an enterprise. Leaders at the very top are, however, vital to the process. They need to see the organisational need that goes beyond themselves, not that Kets de Vries is against a little narcissism in a leader. However they are developed, there is one distinguishing factor that Kets de Vries believes makes the difference between the mediocre and the great leader. That, he says, is the creation of meaning. When it comes down to it, people are searching for meaning. The authors of the Map of Meaning, reviewed on page 22 of this issue will find that reassuring. M Reg Birchfield is a writer on leadership, governance & management.




Dr Seuss’ lessons for my son


very night before bedtime my son Joshua curls up next to me and we read Dr Seuss books on my iPad. We go through stories about the Grinch who stole Christmas, the Lorax, Horton the elephant and his favourite cat in the hat. I have to admit I like reading those books too. The good doctor’s succinct and simple messages can teach us adults a thing or two about leadership. Some would say the wisdom of Dr Seuss is even more pertinent today than last century. The best lessons on leadership are in Dr Seuss’ final book before his death Oh, the places you’ll go. “You have brains in your head. You have feet in your shoes. You can steer yourself any direction you choose. You’re on your own. And you know what you know. And YOU are the guy who’ll decide where to go.”

“Oh! The places you’ll go! You’ll be on your way up! You’ll be seeing great sights! You’ll join the high fliers who soar to high heights… And will you succeed? Yes! You will indeed! (98 and ¾ percent guaranteed).” We Kiwis have a lot going for us. We rank among the happiest in the OECD and are known around the world as very friendly. I believe this is driven by our familial roots, inclusive culture and nonchalant “she’ll be right” outlook. Yet Kiwis, in general, lack a strong consistent attitude of success across many sectors of New Zealand. Australians generally have that winning attitude. They are also Dan Walker and son Joshua. the largest international owners of New Zealand’s know what it means. To me, authenticity is a continuous journey but it starts with being comfortable that your “you” is good enough to be a leader in whatever role you may have. As I ponder the increasingly complex businesses, land and assets. I know you world that Joshua will grow up in, don’t want to hear it but… while we he brings me the iPad. He’s ready need to be Kiwi, we also need to be to go through some more e-books more Australian in our approach. before bed. We start reading about a persistent Sam trying to sell his green “Today you are you. That is truer than eggs and ham. Dr Seuss’ leadership true! There is no one alive who is more lessons can act as an enduring and you’er than you.” worthy guide for our children as they forge a bright future for New Zealand. There’s power in being present, selfThey can also help us as adults strive to reflective and authentic in how you lead. leave the right legacy for them. Long Knowing where you come from, your live Seuss. M strengths and weaknesses, and having an absolute belief in where you are Dan Walker is an alumnus of Leadership NZ’s 2011 going helps you achieve this. The word programme and was named Young Maori Leader “authentic” is thrown around too much at last year’s Aotearoa Maori Business Leader in leadership circles. Few people really Awards.

Authenticity is a continuous journey... New Zealand requires more leaders who set long-term goals and actively go about achieving them with conviction if we are to lift ourselves out of the bottom quartile of the OECD. It’s great to see the NZ Business Council for Sustainable Development has a Vision 2050 and that iwi are also setting longterm 50-year plans as they prepare for intergenerational wealth production. It would be fantastic if our government could conceptualise a 50-year vision to which we could all aspire. We can only be strong if all sectors of our society work harmoniously as equals, with the Government as glue, to achieve a brighter future for our children.

APRIL 2012

| | 21




By Jim Collins & Morten T Hansen • Random House • RRP $60.00

The value of Jim Collins, and his co-authors too, is that he asks such damned good questions and then researches the life out of them. And so it is with his latest management must-read – Great by Choice. Gone before, for those who heavens know how may have missed them, are Built to Last, Good to Great and How the Mighty Fall – all of which feed a steady stream of invaluable findings into his prodigious store of fascinating, factual and illuminating business reading. Great by Choice is up with the best of Collins’ earlier works. The man obviously drives a mean, mind-bending and highly-tuned analytical research machine. This time he proves to his own demanding satisfaction that leadership and management discipline,


By Marjolein Lips-Wiersma and Lani Morris • Greenleaf Publishing • RRP $45

The search for meaning in life in general, and work in particular, can be arduous. So, a map to that particular destination is an excellent idea. Two New Zealanders have collectively spent almost two decades exploring and charting this difficult terrain and co-authored something that is both profound and promising. The Map of Meaning: A guide to sustaining our humanity in the world of work is thoughtful and exhaustively researched. It offers a model for what the authors call holistic development. It’s like a map, but “not as static”. They have drawn it because, as they put it, “organizational life has become so intensely directed towards a single economic goal that many 22 | | APRIL 2012

more than any other organisational commitment, deliver success. Collins asked why some companies thrive in uncertainty and even chaos while others don’t. After nine years of researching, he and Hansen found the answer in a small cluster of enterprises that they call their 10X companies – so named because they outperform their industry average by at least 10 times. Having identified the carefully culled study group the authors asked the next most critical question: what made them different? The answers are in every case surprising and often counterintuitive. Their findings exploded firmly entrenched myths including the idea that great enterprises with 10X success rates have a lot more good luck. Like every other business they had both good and bad luck. The difference occurred in what they did with the luck they had. Greatness, it seems, comes from consistency rather than innovation. Control

and discipline in the face of inevitable and constant change are what matter. As is always the case with Collins’ books, the case studies bring the text to life and deliver the lessons from which readers can draw their own management advice. The book effectively builds on Collins’ earlier work, taking it further and deeper. The findings, he says, increased his understanding of what it takes to “survive, navigate and prevail” in what he expects to become an increasingly unpredictable and complex world. “We are much better prepared for what we cannot possibly predict,” he writes. Collins’ writing isn’t really about business. It is about the principles that distinguish great organisations from good ones. Some leaders and managers might convince themselves that they don’t indeed need to be great. Being good at what they do will be good enough. The phrase rings familiar with a long-held Kiwi belief. In a globalised world, however, it might not be sufficient to underpin a survival strategy. This is a great, and not just a good, read. – Reg Birchfield

practices have become dehumanizing”. In this context, they argue, a “simple map of meaning is essential”. Life for too many in the world is still wretched. For them, finding meaning beyond the search for a meal is too difficult for the likes of us to comprehend. But if, as the World Bank reports, significantly more of the world’s population is being lifted out of poverty and maybe into work, their hierarchy of needs will change too – and so a better understanding of words like meaningful and meaningless becomes increasingly universal. This book is written for those who are already fortunate enough to want a better understanding of how they might align their “deeper” life purposes with their daily actions. And chief executives, for

example, smart enough to understand the value of creating a more meaningful work environment will pick up valuable pointers. It’s a book for managers and leaders who know that opportunities can be created and problems solved “by going deeper, not by doing more”, say the authors. The search for meaning in life and work is a journey just too “overwhelming” for many to contemplate. So we opt for not paying it much mind. Here is a researched, though not inaccessible, work that takes another tack and offers a constructive alternative to just accepting life’s work-aday lot without question. The book’s not available in bookshops because distributors don’t like to handle anything a bit specialised. Get it on Amazon, or from the publisher, – Reg Birchfield

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Fossil fuels vs renewables, public vs private ownership; as New Zealand’s three stateowned energy generation companies prepare for their star turn on the asset shopping block, Vicki Jayne sheds light on the energy sector’s pivotal role in our economy. Mighty River Power’s Nga Awa Purua Geothermal Power Station


New series: Stories of NZ enterprise success NZ Management presents a major new series: Stories of NZ enterprise success. Starting in this issue, leading New Zealand business journalist Vicki Jayne conducts an eight-part sector-by-sector review of the underlying drivers of success in key parts of New Zealand’s economy. She delves into the data gleaned from the past 10 years of the Deloitte/ Management magazine Top 200 Awards to highlight significant trends and achievements. And she talks with market observers and key industry insiders to gain their perspective on what to expect in the next 10 years. Sector-by-sector, she examines which ones will continue to hold promise, which ones are failing, and why. For some sectors, success is being driven by the impact of leadership and governance. Others benefit from specific ownership structures, government policies, or the role and contribution of technology. Each sector carries learnings for others around export potential, talent and rewards, sustainability or profitability. What lessons can sector leaders gain from each other? • Energy • Manufacturing • The primary sector • Construction/engineering

• Finance • Retail/wholesale • Food & beverage • Tourism & entertainment


rom the tip of its wind-powered turbines to the bottom of its deepest offshore well, New Zealand’s energy sector functions as the beating heart of New Zealand’s economy. And from power plant to petrol pump it is also at the forefront of this country’s challenging navigation through one of the global economy’s greatest ever transitions – to a low-carbon future. How it fares is central to how the whole economy will cope. Will innovation rule? Can New Zealand leverage its expertise in clean technology (eg, geothermal generation) into export dollars? Can we wean ourselves away from our love affair with fossil-fuelled transport? And what will be the impact of the planned sell-off of powerhouses such as Meridian, Mighty River and Genesis? This country’s energy sector could be seen as a game of two halves: power generation/distribution/retail and fuel (oil, gas, coal etc) extraction/processing/retail. The former, generally moving in sync with New Zealand’s economic activity, is responding to the push toward renewables by steadily diversifying its generation base and improving transmission infrastructure with a focus on supply security and downstream energy efficiency. APRIL 2012 | 25


The latter is in a period of expansion, responding to offshore demand for oil/gas reserves and balancing on the pointy end of the often heated economic development/environmental protection debate. New Zealand’s fairly extensive fossil-fuel resources represent an attractive investment, the current political/economic

TrustPower’s Highbank hydro scheme, Canterbury.

Trust-centred and values-based Lean, green, values-based and customer-centric Tauranga-based TrustPower does a pretty good job of living up to its name. New Zealand’s fifth largest electricity retailer has connectivity at its core – staying close to its 220,000-strong customer base, developing generation capacity that is scaled to regional needs and maintaining a cohesive corporate culture. CEO Vince Hawksworth rates the company’s people policies as a strength it is rightly proud of. “It comes from having a business that is values-based. So we have what we call our PRIIDE values – passion, respect, integrity, innovation,

TrustPower chief executive Vince Hawksworth.

delivery and empowerment. These are fundamental to what we say and what we do. For example, the way we talk about integrity is that we do what we say and say what we do. “Then that all reflects in the way we work as a team – we’re non-hierarchical, have a very flat structure and live on very few sites so we see and talk to each other a lot. And that creates what I think is really important in any organisation – it is not about the plans you publish but the conversations you have. Those conversations within the organisation make the organisation.” TrustPower also puts a lot of development work into its emerging talent and consequently enjoys high talent retention, says Hawksworth. “People feel they can make a difference at TrustPower. We are not over-resourced and sometimes we think we’re leaner than is good for us but it means everyone gets to have a go.” It seems to work. TrustPower has earned international recognition for its leadership ethos (Top Companies for Leaders in Asia Pacific, 2009), achieved top rating in the 2010 Consumer Survey, and was only just pipped at the post by Z-Energy for Top Energy Company of the Year in Deloitte’s 2011 Energy Awards. The company has been a solid sharemarket performer since listing in 1994 and current market capitalisation places TrustPower in the top five New Zealand companies listed on the NZX. Hawksworth puts

26 | | APRIL 2012

this down to the “economically rational” way the company decides to undertake projects. “It has to stand up. We don’t blur the lines between wholesale and retail in that sense. And we also value every customer we’ve got but don’t think about customer numbers as the way you measure the success of retail business. It is about the service customers get and about the economic returns for our shareholders. “That contrasts markedly with some of our competitors who have made sub-optimal project decisions and count customers before they count returns.” As to the challenges that lie ahead? Well, there’s the ever-shifting demand-supply equation that at present means there are a few “great projects” waiting in the wings until economic signals suggest it could be time to bring them on stream. TrustPower’s generation capacity is presently spread across 36 smallto medium-sized hydro stations located throughout New Zealand and generally close to customer bases that extend from the Far North to Invercargill. Its $2 billion plus asset base also includes two New Zealand windfarms – Tararua near Palmerston North is internationally recognised as a top performer – and another recently completed in South Australia. Multimillion-dollar projects in-waiting include another three windfarms as well as new hydro capacity, mainly in the South Island. Ramping up investment inevitably depends on an uptick in New Zealand’s economic outlook – but building South Island capacity is also impacted by the way the HVDC transmission line between North and South Islands is charged out, says Hawksworth. “Basically, it penalises South Island projects and there is a risk that if it is not addressed, over time South Island consumers will end up paying higher prices because generation won’t be developed. I’d certainly like to see that issue addressed.” He’d also like to see some calming of the regulatory waters. “There’s been a lot of change in this industry over a number of years – most recently the asset swaps between Genesis and Meridian, virtual asset swaps between other SOEs and the introduction of the Electricity Authority who have moved the regulatory work programme on at a reasonable pace.” While the changes are generally good news, they now need time to be bedded in and tested in the market, he suggests. “To start revisiting the whole framework of transmission price allocation, for example, is trying to fix something that isn’t broke. It would be useful now to see how these [regulatory] levers play out over time and under the various different market scenarios that can occur.”


climate favours exploiting it and, as Energy Minister Phil Heatley told the recent Downstream energy conference, it represents a healthy income stream (royalties and taxes plus extra jobs) that can be fed back into our aspirations for health, education and social spending. As to scoping New Zealand’s overall energy sector contribution to our economy, Deloitte/Management magazine’s own Top 200 company figures help shed some light. Just a sampling of those that regularly appear amongst this country’s top 50 revenue earners demonstrates solid and consistent performance. There are good reasons why markets favour utility investment – they are generally profitable and make good returns on assets. Since 2001, for instance, Meridian Energy has largely listed amongst this country’s top 15 revenue earners lifting its contribution from $776 million in 2001 to $2.05 billion in 2011. In terms of profits, it has ranked as high as second placing (in 2006), overall totting up total profits (across 11 annual reporting periods) in excess of $2.5 billion. Add to that the contributions of other top energy players such as Contact, Genesis, Mighty River, Vector, TrustPower and Transpower and you are talking total annual revenue contributions that in 2011 measured nearly $11 billion (and returned post-tax profits of around $800,000 million). To put just that sampling of the larger energy companies into context – the total revenue of last year’s Top 200 companies – across all sectors – was $152 billion. And that’s only a fraction of the total energy market. Start adding in the fortunes of the petroleum, gas, refining and fossil fuel suppliers – including another SOE potentially up for grabs, Solid Energy – and you’re talking a substantial chunk of New Zealand’s economy. The energy sector also offers good employment opportunities. Our indicative sampling above collectively employed some 5500 people in 2011 and, unlike some sectors, their wages are apparently rising. Website Seek earlier this year noted that a

Not being attached to the national grid now has more upside – thanks to an award-winning piece of innovation from Powerco. BASEPOWER – a locally-developed modular system that comes with a back-up generator, energy storage and clever energy management system that hooks into renewable energy sources like solar, wind or water – means remote users get all the benefits of reliable power without the cost of traditional transmission. The low-maintenance unit could be between 20 to 40 percent cheaper than line and pole options, is compact, easily installed – and possibly more reliable than traditional power supplies. BASEPOWER was established last year and has already earned a Deloitte Energy Excellence Award for innovation. (

Photo: Powerco

Innovation: Small is beautiful

APRIL 2012 | 27

Hon Phil Heatley, Minister for Energy and Resources.

jump in salaries offered in the mining, resource and energy sectors underpinned a five percent national increase in the average pay packet offered by employers using the site over the past year. Seek noted that those sectors not only boosted the country’s highest average annual salary but there has been a marked increase in available roles in the industry over 2011. Which possibly highlights the reality that this is a sector relatively impervious to the recessionary pressures affecting some parts of the economy – though energy use is a good indicator both of activity and of underlying structural shifts in our economy. Improvements in New Zealand energy intensity (the amount of energy it takes to produce a unit of GDP) tell a story not just of growth or efficiency but change. “Over the past couple of decades our economy has moved to become far

more commercially focused, rather than industrial,” explains Bryan Field, acting manager energy information and modelling for the Ministry of Economic Development. “The commercial sector is far less energy intensive than the industrial sector, which had a large impact on energy intensity. In our reference scenario we see the historical rate of energy intensity improvement continue out past 2030.” Energy intensity is just one aspect of the MED-produced Energy Outlook 2011 which sees renewable energy sources providing around 50 percent of this country’s primary energy supply by 2030, a modest one percent per-annum growth in consumer energy demand over the next decade, a +25 percent increase in electricity demand by 2030 (but associated emissions seven percent lower than in 2010), a transport fleet remaining reliant on oil (with electrics and biofuels comprising just two percent of transport energy demand in 2030), and a one percent lift in wholesale electricity prices above inflation rates to support investment in new generation. Field cites major challenges facing the sector as: • Dealing with climate change (including what other countries decide to do). • Half of our energy sector greenhouse gas emissions are from transport. Reducing transport emissions will be key to New Zealand’s response to climate change. • Meeting the Government’s target of 90 percent renewable electricity by 2025. The Strategy, he says, paints a similar picture. All nations are striving to improve energy security, reduce pressure on the environment, and reduce greenhouse gas (GHG) emissions. These will increasingly be factored into world markets; oil prices will rise and become more volatile while renewables become an ever bigger part of the mix.

Innovation: Smaller is revolutionary Imagine being able to generate solar power from your roof just by spraying on paint that has embedded solar cells. This is just one of many energy sector applications that could soon be a reality thanks to major advances in the science of tiny things or nanotechnology. A recent Deloitte report, “Energy & Resources Predictions 2012”, includes a section on the many ways nanotechnology could revolutionise energy transmission and use, lighting (hybrid LEDs), transportation (diesel additives that improve combustion), renewable energy (facilitating generation of electricity directly from solar, wind and geothermal resources) and energy storage. Some economists are now predicting a US$1 trillion market for nanotech products over the next decade.


28 | | APRIL 2012


Like it or not, asset sales are a-coming and three of our most successful power generators will shortly be up for grabs – though the Government plans to retain a majority (51 percent) shareholding. The idea is that these sales will knock a big chunk off our national debt – though how big a chunk remains uncertain – and/or provide the dosh we need to improve health, welfare and education outcomes. Those who argue against the sales reckon selling off the family silver is at best a short-term solution that didn’t do much for your average Kiwi punter when it was tried back in the 1990s – though it did make a few individuals very wealthy. There is also some concern about greater foreign control over the country’s vital assets. And doesn’t the Government risk flatlining some useful cash cows? A recent report from accounting firm Ernst & Young found that the SOEs marked for partial sale – such as Mighty River – actually generate returns well in excess of the Government’s cost of owning them – outperforming most similar private sector companies. So why sell? Apart from a needed injection of funds into government coffers, the yay-sayers believe the injection of fresh capital will help generate stronger growth. As well, the introduction of market disciplines will improve performance and give the companies a stronger focus on shareholder returns. And by hanging onto half, the Government retains some modicum of both control and income. Mighty Power has been picked as a good first candidate because the company is highly regarded in the market and boasts strong management/governance structures. It also has good potential for expansion given its expertise in geothermal generation – widely regarded as a clean, abundant and reliable source of renewable energy. The company’s investments in this area – both at home and offshore – are already reaping dividends in terms of strengthened earnings capacity and what the company has described as a “step-change in profitability”. Geothermal has now displaced coal and gas generation in New Zealand’s wholesale market – and science reveals room for exponential growth. If the technology for deeper drilling were developed it would allow access to resources that, scientists claim, would not only satisfy all of New Zealand present electricity but could also supply the country’s needs for 100 years.


Asset sales: Pros and cons

Changes ahead also include technology advances – in energy production and electricity systems as well as energy management in buildings, industry and transport. It’s an exciting world. Advances like smart metering are already allowing power suppliers to offer mass market customers individual solutions to their energy needs. Technology also promises smarter grids – possibly ones that can monitor and repair themselves, more accurate demand forecasting, and more reliable service. Rob Jager, chair of Shell Companies in New Zealand.


The way ahead When the Government released its Energy Strategy 2011-2021 last year, it pinpointed two global energy challenges: energy security and responding to climate change. The strategy focuses on four equal priorities: diverse resource development; environmental responsibility; achieving efficient use of energy; and promoting energy security and affordability. It also notes that it is in the country’s interests to use its portfolio of energy resources to “maximise economic opportunities in a way that is environmentally responsible”. So go geothermal and slow oil? Well, no, it’s not that simple. Yes, we have extensive renewable opportunities – and are already ahead of the game in that we get 74 percent of our power needs from hydro, wind and geothermal generation. But for the next few decades the world and New Zealand will still need oil, gas and coal, the strategy document avers. And we have untapped resources that could see us become a net exporter of oil by 2030. Local power companies are already well down the diversity track with windfarms popping up like mushrooms, another major geothermal resource brought on stream, and options like wave power, biofuels and even porker poo under exploration or development. The other major side of the coin is stumping up energy efficiency – through programmes to ensure our homes are warm, dry and energy efficient, our transport system (a major GHG component in our economy), and businesses become more energy efficient and energy consumers more savvy about making good choices. The Government’s target is to continue to achieve a rate of energy intensity improvement of 1.3 percent per annum.

Innovation ranges from micro-generation options such as BASEPOWER (see box story “Innovation: Small is beautiful”) to the promise of widespread efficiency gains from new fields such as nanotechnology (see box story “Innovation: Smaller is revolutionary”). The energy sector has also been at the sharp end of shifts in New Zealand economic policy – undergoing major periods of deregulation and ownership restructuring firstly under reforming governments of the 1980s/1990s which resulted in two of the “big five” power companies Contact and TrustPower being spun off into public ownership. With the political pendulum again swinging away from state ownership of assets, another sales agenda has been compiled with Mighty River first on a list that also includes Meridian and Genesis – a decision not without its critics (see box story “Asset sales: Pros and cons”).

30 | | APRIL 2012

Genesis Energy’s Hau Nui Windfarm in southern Wairarapa.

This is against a global picture of increasing deregulation and retail competition. In the brave new world of energy, those holding the reins of power have to know how to manipulate complex financial levers and be as savvy with market-speak, hedging, futures trading and customer churn – as they are with utility-speak and engineering algorithms. While power companies wrestle with supply-demand equations (a high-level panel debate at the recent Downstream conference suggests they are reasonably sanguine that market mechanisms are better equipped to ensure supply security – despite imminent decommissioning of at least one of Huntly’s coal-fired back-up plants), the oil-gas part of the sector has to assure a wary public that development can go hand in hand with environmental protection. What is the future for oil exploration when high profile New Zealanders like Lucy Lawless start highlighting its inherent anomalies? Why court the risk of further environmental pollution by digging up more of the stuff that has caused our current global environment crisis? How can we justify either the short-term or long-term risk? In answer to those critics who question the need for oil or natural gas in New Zealand, Rob Jager, chair of Shell Companies in New Zealand responds that demand is still growing. “According to our research, by 2050, the global demand for energy is expected to have doubled or even tripled, with all the sources of energy combined struggling to meet the demand. Natural gas is the cleanest burning fossil fuel and relatively abundant. “Part of Shell’s contribution to the global energy challenge will be to continue to deliver cleaner burning natural gas using innovative technology while at the same time protecting the environment in which we operate. We estimate more than half of Shell’s production globally this year, will come from this source.” Jager says New Zealand is a great place to search for


By 2050, the global demand for energy is expected to have doubled or even tripled... hydrocarbons and a stable place to do business and that the industry is in a buoyant phase – tempered by public scrutiny and regulatory change. “We are constantly assessing new exploration opportunities and are keen to contribute building further to industry revenues of about $3 billion annually and adding to some 4000 sector-related jobs.” Increased public scrutiny is a challenge, but the company regards safety and environment protection as highest priorities. “Our operating philosophy is Goal Zero, which demands that people are not harmed while we go about our business and the environment is protected. Our focus on Goal Zero means that we have developed robust systems and processes, and have achieved a good track record over the decades.”

He says the company is “diligent, comprehensive and rigorous” in its quest for continuous improvement and operational excellence and takes into account New Zealanders’ deep affinity with, and pride in, our environment. “Economic development does not preclude environmental protection and it would be bad for business to behave as if it did.” Shell supports introduction of the Exclusive Economic Zone and Continental Shelf (Environmental Effects) Bill which would provide a framework for managing the effects of economic activity beyond 12 nautical miles and would remove a lot of uncertainty over what and how the environmental effects of economic development will be treated. It also welcomes the business certainty provided by the Emissions Trading Scheme, says Jager. Another challenge the energy industry faces, adds Jager, is around a potential skills shortage. “In Australia we have a neighbour with a booming industry of its own. We need to respond to this by investing in training and development. We need to be ‘growing our own timber’ so to speak.” M Vicki Jayne, a former editor of NZ Management, is a freelance business journalist.

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APRIL 2012 | 31


Better ways to measure

NZ’s productivity What’s measured can be managed. But what if the measures are wrong? Reg Birchfield reviews the metrics used to track New Zealand’s productive performance and economic wellbeing.

Illustration by Frazer Williamson

32 | | APRIL 2012

Exclusive series This is Reg Birchfield’s third and final article in his series on productivity. To reread the first two articles go to


o lesser person than Reserve Bank governor Alan Bollard recently questioned the measure of New Zealand’s economic performance. The nation’s economy might, he said, be bigger than we think and the income gap between us and Australia smaller. He added the bank was looking at differences in how the two nations measured their respective gross domestic products (GDPs). And that is the point. Fact or fiction often rests in what and how things are measured. Are they relevant and are they real, given the prevailing context? New Zealand sticks to fairly traditional GDP-based productivity measures. But the onslaught of previously unimagined scenarios is reshaping our world and almost certainly undermining the value and relevance of some GDP metrics. Economic opinion is swinging toward factoring in more environmental and other social measures. The question, therefore, is whether New Zealand is up with the play. The world’s most pressing problem is the “so-called real economy”, according to America’s Nobel economist Joseph Stiglitz. “The real economy has been in a state of wrenching transition for decades, and its dislocations have never been squarely faced,” he wrote in a recent issue of Vanity Fair magazine. “A crisis of the real economy lies behind the Long Slump, just as it lay behind the Great Depression.”

Stiglitz’ comments are embedded in the work he did as chairman of the Commission on the Measurement of Economic Performance and Social Progress set up by French President Nicholas Sarkozy in 2009. The Commission set out to identify GDP’s limitations as an economic performance and social progress indicator and to assess the feasibility of alternative measurement tools. “What we measure affects what we do; and if our measures are flawed, decisions may be distorted,” the report said, and then added: “GDP is an inadequate metric to gauge wellbeing over time particularly in its economic, environmental and social dimensions, some aspects of which are often referred to as sustainability.” WELLBEING Politicians and policymakers push for greater productivity on the basis that it drives growth and enhances individual and national wellbeing. The need to get a better fix on relevant productivity measures is important and will grow along with increasing social, environmental and other population growth pressures. The days of single-minded economic measures are probably numbered but it’s difficult to know by how much. Departing New Zealand Institute director Rick Boven is suspicious of New Zealand’s existing productivity measures. They do not, for example, take account of what he considers important

changes in New Zealand’s environmental balance sheet. Driving productivity per capita up in the short term can have long-term negative impacts, such as the depletion of environmental resources. GDP measures both good and bad activities. GDP will, for example, increase if more people go to hospital or buy inefficient cars. Measures like these can create odd incentives in the behaviour of policymakers. For reasons like this, Boven thinks GDP suffers some serious measurement deficiencies. And current productivity measures don’t record the effects of participation changes. For example, the last Labour government reduced the number of unemployed by diverting more marginally employed people into lower wage jobs. “We reduced productivity by doing that,” says Boven. “But while the action was a drag on the productivity per capita measure, that didn’t mean it was necessarily a bad thing to do. The result could have been that the productivity of existing employees went up and the productivity of the new employees – while lower than the productivity of existing employees – also went up. The aggregate measure, however, went down.” DISTORTIONS Analysts must, therefore, dig through and disentangle the figures in order to understand the implications of shifts at the margin, particularly when individuals APRIL 2012 | 33


o report o c card a d of e New Zealand's mental ellbe A social,n economic, and environmental wellbeing October 2011 Grade

34 | | APRIL 2012

11th of 34

80 8 years

82 4



12th of 34

6 5%



25th of 34

Gini value 0 33

0 31


23rd equal of 33

1 3 per 100,000



20th of 33

11 2 per 100,000



22nd of 34



Household wealth


24th of 34

17 7% GNS rate


Labour productivity


24th of 34

$49 per hour


Innovation and business sophistication


21st of 34

4 3 index value


Educational achievement


5th of 34

524 mean PISA score


Agricultural land per capita


3rd of 34

2 7 Ha


Water quality


Not ava lable

0 99mg/L nitrate

1 00

CO2 concentration in the atmosphere


Not applicable

392 ppm


CO2e emissions per capita


26th of 30

16 8 t

13 6

Invasive species


Not applicable

$3 3b cost

Reduced annual cost


GDP per capita

2015 Target



enter or exit the workforce. Boven thinks understanding distortions like this is important because economic benefits can sometimes flow from what, on the face of it, are lower productivity measures. There are, as Boven points out, other well-established measures of economic performance such as the Genuine Progress Indicator (GPI). It is a favoured measure of green economics and sustainability. It attempts to measure whether growth, based on increased production of goods and expanded services, actually delivers national wellbeing. Shamubeel Eaqub, principal economist at the Institute of Economic Research (NZIER), isn’t “overly concerned about measurement issues”. He acknowledges Bollard’s speech but thinks it’s “something for the statisticians to work out. There are clearly differences in wages and the ability to save, which is the true measure of productivity differences,” he adds. He also thinks Statistics New Zealand’s improved analysis will provide a better understanding of the economy. New Zealand should be more concerned about scale than statistics, says Eaqub. “Many of our small firms don’t go on and become bigger. International evidence suggests larger firms are more

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NZ Institute director Rick Boven.


Life expectancy

Income inequality

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From the New Zealand Institute


Your voice


Net migration of citizens


C Effort graded B

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15,000 productive. This may be a constraint on our growth and productive potential. We are also geographically fragmented, which means distance is an issue both within New Zealand and the rest of the world. These are the things we are thinking about.” Britain’s The Economist magazine recently highlighted some compelling research out of Europe that suggests companies with more than 250 employees are more productive than “micro” firms employing fewer than 10 employees. Unfortunately, more than 80

percent of Kiwi enterprises fall into this latter category. The magazine also suggested that in a healthy economy “entrepreneurs with ideas can easily start companies, the best of which grow fast and the worst of which are quickly swept aside. Size doesn’t matter. Growth does,” it concluded. Growth, then, is the measure of economic success. Productivity is the key to delivering it. Australia’s Grattan Institute said in a report on Australia’s Productivity Challenge last year that


Wellbeing and wealth

OECD Better Life index (10=best) and GDP per person, 2009* 9 Sweden New Zealand



Denmark Switz. Finland Neth. Iceland Britain Austria Ireland Belgium France Germany


Better Life index


Slovenia Spain


Japan Israel

Czech Republic South Korea

Poland Slovakia



Norway United States

Italy Greece

Portugal Estonia



Mexico 3

The Productivity Commission’s Paul Conway.


Turkey 10


20 25 30 GDP per person at purchasing-power parity, $’000

Source: OECD

“higher productivity and faster productivity growth provide the most sustainable means of delivering ongoing improvements in standards of living and the quality of life”. It didn’t, however, think the “goal of attaining faster productivity growth should override all other economic and social objectives”. SCORECARD Boven agrees. He wrote in the NZahead scorecard produced by the New Zealand Institute last year that “single measures [such as GDP per capita] are really important, but they can’t tell the whole story. New Zealanders need to understand the whole story if we’re going to be able to identify linkages, set priorities and make good choices.” The report used 16 social, economic and environmental measures to compare New Zealand’s performance against those of other OECD countries. With seven “D” grades, three “Bs” and not one “A” grade, the report suggests New Zealand “needs to try harder”. (See NZahead report card on opposite page.) No one has leapt



*Or latest available year

to champion the Institute’s report approach, but, says Boven, it stirred interest in alternative ways of thinking about the state of the nation – particularly among some younger politicians. And that, of course, is where change rubs against political reality. Parliament’s rookies, fired by a desire to change and accomplish things, occasionally embrace targets and new metrics. More seasoned politicians, however, keep their heads below the parapet. They avoid measurement because they can’t always control the outcomes. So where does this Government, or at least its newly-created Productivity Commission, sit on the measures issue? Paul Conway, its director of research and analysis, says the principal objective is to understand how productivity can improve the wellbeing of all New Zealanders. “And measures of wellbeing are still highly correlated with measures of GDP and income per capita,” he says. According to commission chair Murray Sherwin, both the New Zealand and Australian treasuries have developed

some “useful wellbeing frameworks”. In August last year he told NZIER members that he wanted to understand why at least one OECD measure showed New Zealanders enjoying a higher level of wellbeing than “our [per capita] income implies we should”. OUTLIER New Zealand is a global outlier when it comes to measuring the relationship between wellbeing and per capita GDP and income. “We seem to be fat, smart, poor and contented,” he said, admitting that he stole the line from Wellington’s Dominion Post newspaper. New Zealand’s income and wellbeing paradox is spotlighted by OECD surveys. (See graph “Wellbeing and wealth”.) We are measurably poorer but relatively happy. Wellbeing and contentedness do, of course, mean different things to different people. Attempts to measure these concepts are “rightly” a growth area in economics, says Sherwin. Making sense of the disconnect between income and wellbeing is important. The commission is concerned that, in time, New Zealand will snap back into line and our sense of wellbeing will align more with what we earn. “The challenge,” says Conway, “is to ensure that happens APRIL 2012 | 35


via an increase in GDP per capita rather than a fall in our wellbeing.” Whatever the underlying causes of New Zealand’s apparent complacency premium, and however we decide to measure it, at the heart of the issues rests a very poor productivity performance. And according to America’s other Nobel economist Paul Krugman, “a country’s ability to improve its standard of living over time depends almost entirely on its ability to raise its output per worker”. Productivity is the mechanism through which societies progress, says Sherwin. “New Zealand’s slide from being one of the most prosperous countries in the world towards the tail end of OECD countries is indicative of just how weak our productivity performance has

Napalm or poetry? Productivity might be “nearly everything” in an economy but, the Gross National Product (as GDP was then called) on which its measurement was based, did not go nearly far enough for United States senator and subsequently assassinated presidential candidate Robert Kennedy. He said, back in 1968, that: “The Gross National Product includes air pollution and ambulances to clear our highways of carnage. It counts special locks for our doors and jails for the people who break them… It grows with the production of napalm and missiles and nuclear warheads… And if the GNP includes all this, there is much that it does not comprehend… It does not allow for the health of our families, the quality of their education, or the joy of their play. It is indifferent to the decency of our factories and the safety of our streets alike. It does not include the beauty of our poetry, or the strength of our marriages, the intelligence of our public debate or the integrity of our public officials… The Gross National Product measures neither our wit nor our courage, neither our wisdom nor our learning, neither our compassion nor our devotion to our country. It measures everything, in short, except that which makes life worthwhile.”

Regulatory regimes are a key part of the productivity toolbox. been. To put that slide down the international rankings into stark focus, we now work as long as Americans, but for each hour of our labour we create only as much value as the Greeks or the Slovaks.” The commission is focused on understanding all the forces that deliver productivity. In so doing it aims to build the case for more regulatory reform and the best practice policies needed to deliver it. New Zealand got a significant productivity lift from its world-leading but radical political reforms of the 1980s and early ’90s. The economic step change they delivered has since disappeared, along with the appetite of some segments of the public for more. But, as Sherwin explains, “regulatory regimes are a key part of the productivity toolbox”. In his opinion, New Zealand must approach regulatory reform as a dynamic process and “continually work to improve the way markets, and their supporting institutions and infrastructure, function for wider social benefit”. There’s obviously much more to solving New Zealand’s productivity 36 | | APRIL 2012

problem than enhancing the regulatory environment. Some of the other critical influences identified by the commission include: • The quality of our human capital – people, their education, skills and experience base, attitudes and effectiveness in the workplace; • Businesses – the quality of their management and leadership, their strategies, risk management and workplace arrangements; • Innovation systems and the capacity to develop, acquire and apply new technologies; • The quality and extent of physical capital, including infrastructure and commercial or industrial capital; • The state of our capital markets – including access to finance, saving behaviour, our choices as investors and transparency of mechanisms that facilitate the movement of resources to their best use; • The tax system; • Our basic institutional settings such as the protection of property rights, rule of law, and a political system that facilitates

coherent decision-making in line with public expectations; • The public sector and its performance – as advisors, regulators and service providers; and • Wider macroeconomic policy setting including monetary policy, fiscal policy and related effects through interest rates and exchange rates. In this mix, the toughest ask could be to get business leaders, managers and directors to behave differently. New Zealand’s decidedly poor labour productivity performance is largely a leadership issue. Scale and geographic isolation are obviously critical productivity inhibitors but, as Sherwin points out, our isolation from world markets “didn’t stop us reaching the top of the international per capita income ladder a century ago when, on the face of it, the tyranny of distance should have been even more of an obstacle”. Management and governance are key labour performance determinants. And past evidence suggests New Zealand business leaders find it difficult to commit to world-class management and governance practices. M Reg Birchfield is a writer on leadership, governance & management. Illustration by Frazer Williamson.

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Vulnerable leaders

Leaders who show their soft underbelly command far more trust than those who refuse to countenance alternatives. Ruth Le Pla finds out why humility equals greatness when it comes to leading others.


ynne Miller flashes pictures of well-known leaders onto a screen and asks her audience how vulnerable they think these people are. It’s maybe not a typical question about figures such as Air New Zealand CEO Rob Fyfe, broadcaster Paul Henry, Prime Minister John Key, or former All Black winger – and spokes-

38 | | APRIL 2012


person on depression – John Kirwan. For Miller, it’s a quick-fire exercise in checking once again her hypothesis that vulnerability and humility are the most powerful leadership traits of all. For when she asks her audience which people they’d most like to be led by, without question they pick the ‘vulnerable’ ones. John Kirwan, not surpris-

ingly, comes out as the most vulnerable person and people tell Miller they would “definitely” want to be led by him. “There’s a very clear correlation between leaders who demonstrate high levels of vulnerability and the ones who people want to be led by,” Miller says. Rob Fyfe also scored highly on both his vulnerability quotient and his


reputation as a good leader. “He was in tears over the Perpignan tragedy,” says Miller. “You can’t get much more vulnerable than that. And when he’s had to make cuts he’s gone to his people and said, ‘I don’t have the answers. I don’t know. But I need you to work with me to find the answers.’ That’s been him demonstrating his vulnerability and look at what he’s been able to achieve.” In a tellingly similar vein, John Key’s ranking fluctuates depending on which incident springs to mind. “When he was criticised for using an air force helicopter to get to and from Hamilton for the V8 races, he put up his hand, said he’d got it wrong, and offered to pay back the money,” says Miller. “He

was demonstrating his vulnerability. On the other hand, when he didn’t back down over the teapot tapes incident he probably lost a bit of kudos. “When he admitted he’d got it wrong, did people want to be led by him? Yes. But when he was being bullheaded and taking the teapot incident to the police, did people want to be led by him? No.” Miller, who is head of sales force effectiveness at Yellow Pages Group, presented her ideas on the paradox of the vulnerable leader at a Liquid Learning Leadership Psychology Conference in Auckland recently. Trust, she says, is fundamental to developing high-quality human relationships. And being vulnerable both

significantly raises trust and has widereaching positive impacts. She reckons there’s still a significant gap before leadership capability in New Zealand can be considered world class. In order for this gap to close, she believes we need to start holding leaders to account for their behaviours and rewarding them for building high-trust relationships. “What makes a good leader great?” she asks. “It’s basically trust… From a management perspective it’s reasonably easy to get the capability and the results but the thing that really shifts the dial – particularly on the authenticity of a person – is the integrity and intent piece: it’s the ‘how’ rather than the ‘what’. “My observation is that individuals

Plugging gaps Once an organisation has worked out its people are key to its success, you’d think it would be relatively simple to slot the right people in the right job. Yes, and no, according to Richard Tremain who, as head of organisational development at NZ Post Group, works at the business end of developing a long, long pipeline of good people for the organisation. NZ Post Group lives and breathes the idea that experience is a critical mechanism for developing its people’s capability. So it goes out of its way to make sure those it has shoulder-tapped for future leadership roles can notch up the necessary experiences along the way. Among other initiatives, the group runs its up-and-coming and existing leaders through development centres which flush out the missing links in their past experiences. The cool part is that NZ Post will then help plug these gaps. Tremain talks of one promising leader who hadn’t racked up enough experience managing large groups of people: which NZ Post defines as more than 50. Next time a big job came up, he was considered for the role and ended up heading a team of some 2000. Gap plugged. Still, Tremain says one of the biggest challenges is encouraging managers and leadership teams to consciously match individuals with experiences as a development initiative. The sticking point, he says, is that organisations typically reward short-term performance while leadership development is a longer term game. “So there’s immediately a challenge or a conflict there. You need individuals to subsume their own individual short-term objectives for the greater long-term good. “And if you’re looking to develop individual leaders through experience, another challenge is understanding where those experiences

Richard Tremain.

exist within the organisation, understanding what experiences an individual needs in order to develop as a leader and then matching the two.” Tremain says it’s important that managers think about upcoming opportunities that can be leveraged to develop their people. They then need to have the courage to match someone into a role, experience or secondment as a development opportunity. “People often want to appoint someone who can hit the ground running and who will deliver straight away. As a leadership team you need to have a degree of tolerance that it will take an individual some time to get up to full productivity. And the organisation needs to be supporting that person as they learn these new and relevant skills.”

APRIL 2012 | 39


a seven-point scale,” she says. How an individual did their job was as important as what they did. Employees at all levels were measured on both aspects, which fed through to decisions on salaries and bonuses. Miller says when she first applied for a job with Lion Nathan in New Zealand she surprised interviewers by being both aware of, and comfortable with, the idea of behavioural measurement. “Until we start holding leaders to account for their ‘how’, as well as their ‘what’ and make the weighting equal we are unlikely to see the dial shift on levels of authenticity and trust,” says Miller. “From a process perspective, few

maximising these relationships. These are the people who make the whole greater than the sum of the parts.” According to Miller, back in 2007 Dr Lester Levy and Mark Bentley had nailed to the mast just how poor New Zealand’s collective leadership capacity was. Dr Lester Levy – adjunct professor of leadership at The University of Auckland Business School and chief executive at Excelerator – and Mark Bentley – then Excelerator’s general manager – published a paper, “More ‘right’ than ‘real’: The shape of authentic leadership in New Zealand”. The key findings, says Miller, made for gloomy reading.

We need to start rewarding leaders for building high-trust relationships. Lynne Miller.

and companies spend far too much time incentivising and rewarding what people do but until they give equal weight to how they do it, these people are probably never going to be world class from a leadership perspective.” Miller says it’s simple to both identify and measure the ‘how’. “Behaviour is very easy to spot,” she says. “If you can see it or hear it, it’s a behaviour.” Despite this, she has a sense that New Zealand companies are quite a long way behind the UK, Europe and the US in setting up systematic measurement systems around leadership behaviour. “I’ve been researching which companies assess behaviour in New Zealand and the only ones I’ve come across so far are Vodafone, Lion Nathan and Pernod Ricard.” Miller herself spent over six years working for Pfizer in the UK where an inhouse behavioural dictionary spelt out what desired behaviours should look like. “They literally had a grid which plotted your ‘what’ and your ‘how’ on 40 | | APRIL 2012

– Lynne Miller mechanisms are used in New Zealand for actually incentivising leaders to demonstrate constructive behaviours. Many of our leaders are still not held to account for how they behave.” According to Miller, it’s quite easy to track that constructive behaviours and cultures have a significant positive impact on total returns. “Behaviour breeds behaviour. Constructive behaviours by senior leaders encourage others to be constructive. When you have a constructive workplace, you tend to have higher levels of engagement. And then you tend to have higher levels of performance and productivity, and the companies tend to be doing better than their competitors. “Without high levels of trust at an individual leader level, you have nothing. No amount of MBAs or corporate perks can compensate for a lack of trust. “In the business context, high-performing leaders are the ones who have highly constructive and trusting relationships with those around them and are able to achieve great things through

“Leaders appear to have a strong need to be right, coupled with a distorted sense of self and an unwillingness to change,” she says, quoting from the report. “New Zealand leaders’ strengths were mostly focused on the ‘what’,” says Miller. Their top-scoring attributes were an ability to make values-based and/or difficult decisions, say what they mean and use data analysis for making decisions. Yet when it came to how leaders were going about their jobs, they scored poorly. Their worst attributes were their inability to admit mistakes or seek feedback. They had poor self-awareness about their capabilities and were not good at seeking challenging opinions. Since then, Miller believes, we’ve gone backwards. When she was preparing her conference presentation, Miller spoke with senior-level executive recruiters Sequel Partners’ Mark Ashcroft and Chris Johnson from Kerridge & Partners. How, she wanted to know, has the capability of senior leaders and managers


Boot camp For Emma Rutherford, leadership at Vodafone is all about bringing together the power of brand and culture. As head of organisational development and change, she helps Vodafone’s leaders live and breathe the edgy culture and brand experience that form the bedrock of Vodafone’s strategy. Communicate the vision consistently and often enough, reckons Vodafone, and you’ll attract the staff and customers that believe what you believe. Rutherford told delegates at a recent Liquid Learning Leadership Psychology Conference in Auckland that organisations must be clear on why they exist. “Making a profit is not enough. That’s a byproduct. What is our purpose, mission and reason for being passionate?” she asked. “People don’t buy what you make, they buy why you do it.” People at the top of an organisation are responsible for keeping the ‘why’ clear, says Rutherford. Those in the middle are responsible for figuring out how to advance the ‘why’ and those at the ‘what’ level are responsible for delivering the tangible goods – the products and services. “Vodafone’s ‘why’ is to drive the most admired culture in New Zealand,” she says. It likes its leaders to be able to tell stories and paint a vision for others. And it’s not afraid to use challenging tactics, at times, to get its message across. Last year’s boot camp – where leaders could get insights “and identify and commit to one specific improvement outcome” – came complete with the symbolism of squads and platoons. Rutherford says one of its most controversial aspects was how late attendees were handled. “As in many workplaces, turning up slightly late to meetings and leaving halfway through was common and tolerated. As a symbol of a group making an aligned effort to achieve cultural change we dealt with latecomers in a unique way. The doors were locked on the hour and latecomers taken to a different room while the group decided how the situation would be handled.” Sometimes the solution was as simple as requiring an apology to the group. “There was some discussion about this being done in an authentic way,” says Rutherford. “There was also discussion about what the consequences were to the group of someone being late.” Some people simply said they had missed the latecomer’s perspective or input. Others said they felt disrespected when someone didn’t front up on time. “The group agreed consequences if it happened

changed in the five years since Levy and Bentley wrote their paper? “My question was, given that the environment, including technology, has changed so much, to what extent has leadership in New Zealand changed

Emma Rutherford.

again,” says Rutherford. Did some people struggle with this? Feel punished or exposed? “The vast majority of people saw it for what it was and they knew it was about culture change but it is quite confronting and there was a minority that had to get through that,” says Rutherford. “We explored the concept with each group… How it would be painful until a habit was established and how all must agree so that those who broke cultural norms were aware of the consequences. “We received a lot of feedback on the experiment. Some found it painful. But the vast majority appreciated the analogy and were able to link this back to the change in culture and leadership needed at Vodafone.” In any case, as a mechanism for behavioural change, it works. On the first day, six people were late. On the second day, every single person whipped through that door on time.

as quickly in response? “Both of them came back saying the GFC has caused most New Zealand leaders to go backwards not forwards. Look at the dichotomy of trust and fear: more people are now fearful for their

roles, of budget cuts and of getting it wrong. They’ve become far more risk averse than ever before. They’re scared to stick their neck out, make a mistake or try something different in case they blot their copybook.” M APRIL 2012 | 41

Frank Owen On failing

intelligently Iconic Christchurch company Tait Communications recently launched its new brand without that ‘radio’ word in it. Ruth Le Pla talks with its MD Frank Owen about legacies, the significance of new thinking and why failing intelligently is good for business.


n engineer’s curiosity still beats at the heart of Frank Owen. Tait Communications’ managing director has come a long way from his early days in Bromley, south London. Or ‘sarf’ London, as he repeats, laying on thick the local accent. He’s keen to share his understanding that testing ideas and “failing intelligently” are good, if not great, for business. In his early London days, Owen studied electronic engineering at Queen Mary College. The subject, he says, was always 42 | | APRIL 2012

in his blood. “That’s possibly because engineering was interesting technically so it appeals to my sense of curiosity. But it’s also because engineers make stuff happen.” Since then, he’s been busy making stuff happen in a multitude of different ways. As an electronics engineer, he worked for Philips in the UK, France, the Netherlands and Austria. He moved to the US, initially with leading electronics company Raychem, then on to Tyco, where he had responsibility for a power

components division with a staff of over 4000 spread around the world. From there, Owen shifted to Christchurch as CEO of design and manufacturing company GPC. When some three years ago he made his most recent move to Tait, he took over an iconic 900-person Kiwi company, and the legacy of the much-admired Sir Angus Tait who had founded a local company back in 1969 with just 12 staff, and what was to prove to be a lifelong love affair with mobile communications.


Owen says he’s been very fortunate in being able to contribute in his career to making stuff happen “whether that be technically early on, later within markets, and now through businesses”. As Tait’s MD, he sees his role as contributing through other people. “At some point, you move on to leveraging. I’m a great believer in helping other people become the best they can be in whatever line of work they choose, because through that you’re able to harness their full force and have a greater impact, and that shows through in terms of competitive success in the market place.” For Owen, business – like engineering in many ways – is about being curious and willing to innovate. It’s about recognising that not everything will be successful. Increasingly, it’s about making a commensurate investment that quickly trials an idea in the customer’s domain. It’s about accepting and understanding the need to sometimes fail intelligently, as he puts it. To Owen’s mind, that’s about more than learning from mistakes. “It’s also about being courageous and bold.” In Tait’s world that means rapid prototyping – quickly sitting ideas on the

From the inside out: reinventing an icon To Frank Owen, change is a fascinating and rigorous challenge. So when the managing director wanted to rethink and rebrand Christchurch’s iconic Tait Radio Communications he knew he had to look deep into the company before shouting out to the world about its new direction. Tait’s new strategy could not simply be conveyed by a Powerpoint presentation. Owen believed the company had to involve and immerse every single one of its 900 people in the new thinking. So back in July 2010, Owen rolled out a ‘fairground’ where each person got to experience the new direction of the company. “We circulated all of our people – from the janitorial services right through to finance director – through it, so they could experience the new direction and what it means,” he says. The fairground went global, running in Brisbane, Houston, Texas, and Huntingdon in the UK. “We’re a very global company,” says Owen, “yet one of our advantages is we don’t have a lot of legacy-related structures globally that we have to undo in order to redo them.”

Tait gave floor space to a number of evangelists within the organisation to tell their story. They spoke with their colleagues about what it means to create world-class customer delivery, the difference between offering solutions and offering a product, and the practicalities of increasing the company’s development scale through partnership. “We’re very used to developing our ideas and products here in New Zealand and then taking them out to the world,” says Owen. “But the world is far more interconnected now. So we wanted to link things together and take the best of breed to build something that’s crafted to the particular customer-intimate solution that we’re trying to solve. “Two years ago we wanted to really think about what would make a difference… Our biggest challenge was that, historically, our brand and reputation had been carried by an inanimate object. Our products were designed and manufactured on the other side of the world to our customers. “Now and into the future, our brand and reputation is carried by every touchpoint that we have with the customer during the design, deployment and support-related phases. That’s a very different mindset.”

APRIL 2012 | 43


Two pluses & a minus When it comes to leading other people, Tait Communications managing director Frank Owen says he’s learnt a lot from being on the receiving end of other leaders’ actions. “Whether they be positive or negative, you seek to learn from these experiences and try to model good leadership behaviour from them,” he says.

table in front of the customer – and being comfortable that these early notions may be very left field, very far away from a finished idea. “Not everything will fly,” says Owen. “You need to be bold and then move on to the next thing if one is not appropriate. You haven’t bet the farm.” The concept, he says, can carry wider significance for New Zealand as a whole. “We often talk about how, as a nation, we come up with great products or ideas but we’re not good at commercialising them. We need to peel that concept back a bit to understand it. What we mean is that customers aren’t actually buying what we’ve thought of or done. And that’s not a surprise if the idea or product isn’t well-tuned to their need: whether that be a latent or a true need.” For Owen, the key to business success today is to invite and enable customers to co-craft their product. “Then you know you’ve got something that will sell, be useful and add value to the customer.” It all comes back to the importance of interconnectedness, he says. Great 44 | | APRIL 2012

I learnt a great deal from working with one Raychem general manager who had a high level of integrity and was very straightforward. He taught me the principle of clarity over certainty. When you’re in a leadership role it’s very important that you’re comfortable in an uncertain world. The critical thing is to provide clarity in any given situation. When I worked at Philips, the then MD of communications systems empowered me to do what I thought was right. He provided guidance but fundamentally allowed me to make and correct my own mistakes, and achieve an outcome. You can’t ask for more than that. Working for some poor bosses over the years has helped me clarify what not to do. I’ve learnt to try not to micromanage, reach too deep down into an organisation or be directive in a way that disempowers others. People are not going to feel valued and understood if I do those things.

business is about leveraging the linkages that we have as individuals and organisations. All of which suggests it’s time for Kiwis to ditch the drama around failure. “New Zealanders’ expectations, typically, can be a bit staid,” says Owen. “If something doesn’t work, there’s a stigma associated with it which is far from the case at all.” Owen concedes he may have picked up on some of the freshness and optimism that is often characteristic of American thinking. He counters, however, that

while he thoroughly enjoyed seeing the world through American eyes while in the US, many expat Kiwis find top spots on the senior management teams of very big global companies. “The reason for that is Kiwis have this ‘get it done’ attitude. There’s experience that comes from being in New Zealand where you develop confidence quickly. It’s a very open environment where you can be yourself and then go out on to the world stage. So you get well-rounded personality characteristics


in people who come from New Zealand.” Owen tapped big-time into such Kiwi thinking, and a lot of co-creation, when spearheading Tait’s recent rebranding which, significantly, dropped the longhallowed ‘radio’ word from the company name. Announcing the change at the tail end of January this year, chief marketing officer James Kyd said radio remains a core element of Tait’s offerings, “but our solutions today include much more than just radios… Our customers turn to us for the complete communications system, sourced, deployed, supported and managed in a fully integrated way, demonstrating an intimate understanding of their needs.” Morphing Tait Radio Communications into Tait Communications was “reflective of the broader space that Tait is now engaging with its global customers”. Owen had joined the company at a time when the idea of shifting its approach had already been well seeded by outdoing MD Michael Crick and his team. And he’s concerned to note such efforts, and any achievements, are more a reflection of the team than of himself as an individual. “I came into an environment where the restriction of the boulder was already removed. “But which direction we were going to roll the boulder and how we were going to get there, that was all to play for.” It was, he says, a fantastic opportunity. “It’s not through accident that you get successful radio communications companies coming out of small isolated countries with small populations and small infrastructure. That’s how Nokia in Finland, Ericsson in Sweden and even Motorola in the Midwest US came about. It’s a case of needs must. “Tait is now entering its 43rd year,” he points out. “We’d reached a point of inflection where the company needed to ensure it would have another successful 40 years and the important point was to compete on the basis of something that was going to continue to be sustainable and allow us to grow.

“The most important part of our strategy is being intimate with our customers in some very targeted markets such as public safety and utilities… We’re moving the company from being the provider of a better box, to a provider of service solutions.” Those services, he says, “keep communities safe and keep the lights on”. Like much of the New Zealand economy, Tait’s transition into a servicesfocused entity has set it on a long journey of change. As with many mature and successful companies, there’s a lot at stake. From its small beginnings, the company now spreads its tentacles across 150 countries. Recent projects have seen Tait hi-tech digital mobile radios help back up military police fighting organised crime in Brazil. Over in the UK, Nottingham City Transport is using a Tait voice and data system to keep passengers informed, and provide voice and data communication between its 340 buses and controlroom staff. In the US, Tait technology provides 24/7 reliable communication in extreme winters for electricity utility company Black Hills Power. So when contemplating any change of direction, Owen says he knew he had to get it right. Tait spent many months looking internally before attempting to signal any rebranding to the wider external world. (See box story “From the inside out: reinventing an icon”.) Owen says he’s a great believer in the idea of “involving and immersing” and that he expects and encourages innovation to run throughout the company: not just technical stuff but also innovation around the business model. Besides the new name, one clear outcome is the creation of an incubator which will provide a more formal structure to innovation within the company. A team has been percolating away on the concept for months. Now, Owen jokes, it’s “in the incubator period of being an innovation incubator”. Tait plans to pump close to $1 million into its incubator over the next one to three years and is already looking at assigning about 10 of its engineers to

dedicated work in the centre. Realistically, the first ideas off the rank are likely to be technical innovations but Owen says his “vision over time is that it will become much more customer-centric”. He defines innovation as a combination of invention and insight. “Innovation may mean doing something different or novel, and insight implies we’ve some kind of understanding of what’s important to the customer either now or in the future.” Owen’s ready acceptance of the benefits of allowing others to push the boundaries and learn as they go may, perhaps, be informed from early personal experiences of being given the scope at work to make and fix his own mistakes. (See box story “Two pluses & a minus”.) At the wider organisational level, Owen is mindful of Tait’s role as a longstanding large Christchurch business. When its own premises survived unscathed last year’s earthquakes, Tait’s sense of being part of the Christchurch business eco-system saw the company throw open its doors to other companies in need of help. At one time the company had people from 12 other organisations – including CTV, The University of Canterbury, HSBC and Deloitte – sheltering in its premises. It’s all a far cry for the once-London lad who first set foot on New Zealand soil through happenstance on a short-term project for Philips back in the early ’90s. The week before his first visit to New Zealand, Owen had hiked to the top of Victoria Peak in Hong Kong and realised there were skyscrapers as far as the eye could see. He flew direct to New Zealand, arrived in Wellington at night, plunged into work and only came up for air at the weekend. Curious to check out the landscape, he went up the hills at the back of Wellington. “I was expecting to see skyscrapers everywhere,” says Owen. “Instead I saw green countryside. It was a very special moment for me and probably the one that seeded the idea of coming back here one day.” M APRIL 2012 | 45

The inaugural Premier

Taste of New Zealand


The Premier Award is the highest achievable Taste of New Zealand Award (TONZA) and recognises only the finest expression of regional cuisine in the country.

Chef Jonny Schwass & Restaurant Schwass Pre-quakes Ferry Road, Phillipstown, Christchurch Post-quakes on the road and in a box SERIOUSLY SEASONAL – SERIOUSLY LOCAL By John Clarke

Chef Jonny Schwass works his GOR:LLA

Schwass in a Box – interactive dining.

Jonny Schwass opened the doors of Restaurant Schwass on 28 September 2007 a day he will always remember as the first event the restaurant managed was to cater for his wedding. Restaurant Schwass became a major success in a short span of time. It went on to receive local, national and international recognition and was a three-time finalist in Cuisine Restaurant of the Year. The restaurant was destroyed in the earthquake in Christchurch on February 22 2011. On losing his restaurant, Chef Schwass worked with the Farmy Army but focused most of his energy and talent on raising funds and awareness for multiple charities within Christchurch. He and his team also began doing dinners in the homes of the people who used to come to the restaurant. This became popular as Christchurch people became comfortable with staying in to dine out. Post earthquake there has been a battle to find a new location and a struggle to get appropriate insurance. “By appropriate I mean some form of cover that would work for our business model; to date we are still waiting,” says Schwass. However the minor glitch of losing a restaurant and the trials of relocating and reinsuring have not stopped Chef Schwass bringing food and beverage that is a fine expression of the local products to discerning Canterbury diners with two new ventures – ‘Schwass in a Box’ and ‘GOR:LLA’. Schwass in a Box The location is a furniture and kitchen warehouse in Sydenham, an area hit hard by the earthquakes in Christchurch. The space is a one-off design by the German company Gaggenau and the concept is simple – interactive social dining. The idea is for 10

Post quake – Restaurant Schwass relocated and reinvented.

GOR:LLA – Local foods with flavour for jaded palates.

guests to share a table as a social food and wine experience. The food is a showcase of the moment, the Canterbury region and the season and is a true taste of the land Schwass loves. The ingredients change each week, but the menu format always remains the same with one bite to begin, three snack courses, three savoury courses, one cheese course and two puddings to finish. Dietary requirements are welcomed and adjusted accordingly with appropriate notice. This is not a dine-and-dash eatery and requires a commitment of three hours and $150 per person. At Schwass in a Box you provide the wine, but it will be served in Riedel wine-specific glassware. GOR:LLA good:simple:local Gorilla is the new kid on the block, with an old-fashioned approach, and it slips effortlessly in amongst the successful hospitality businesses located in Ferrymead. Gorilla leaves little to the imagination, has nothing to hide and offers good food, good booze and good service. Gorilla has simple tastes that reflect its environment and likes to

hunt locally and collect the good things from the region. Gorilla provides soulful satisfaction to good people from 11am to 11pm and makes no excuses for the confidence it has in its ability to deliver. This is the type of place you want to hang out in, a local joint with a fun and relaxed flavour. Gorilla appeals to a mixed crowd of grown-ups who like to be looked after and surrounded by the kind of good people who have a hankering for better flavoured beer and wine. Smart minds with jaded palates looking to share some good food, lovingly prepared by people that care. What to expect: practical prices; skilled and conversant service; craft beer; regional wines; a lively atmosphere with good music; locally grown food with flavour; shared/joint/mutual plates; all day eating and drinking. What not to expect: culinary charades or pretence of any kind; bland tasting homogenised beer; supermarket trolley wine selection; mixed drinks, built drinks or cocktail pretension; big screen TVs or even small screens; a quiet, romantic table by the window; formality, ritual, ceremony or decorum; bookings. Jonny Schwass’ no-nonsense approach to cooking has made him a big hit in the world of cuisine, overseas and at home. The uniqueness of his cooking comes from his firm belief in well chosen ingredients and simply prepared food. Each year Jonny Schwass hosts (with the support of the greater hospitality community) The City Mission Sunday Lunch. To date he has helped raise $250,000 for the mission. For his continued work within the community Jonny was named Cuisine Magazine ‘Restaurant Personality of the Year 2011’.


Travelling roadshow

Keith Stewart checks out how to stay sharp and survive international travel.


or most New Zealand organisations, business success depends on long-distance international travel to develop and maintain market links and to plug into the international networks that keep commerce flowing. Flying off to exotic destinations may be the stuff of dreams for many, but as most who travel for business will confirm, there is more stress than glamour in jetting here and there. Even the shortest trips suck up seven hours of precious time. Then there is the challenge of operating in a foreign environment, even if it is just the other end of this country, spending nights away from home, family and a familiar business environment. As your future business success is

48 | | APRIL 2012

dependent on the key contacts, meetings and deals that are the reason for travel, strategies to maximise your executive performance while travelling are extremely important: although perhaps not as much as they were when travel was by steamship and rail, or even in the early golden age of airlines, when Comets and 707s ground their way towards merchant destinations in Europe and North America. Quartz Reef Vineyard’s marketing manager Simon Beck has been catching planes for business since he was part of the Kiwifruit Marketing Board’s incursions into Asian markets from Thailand to Japan. In those early days, marketing trips demanded a portable office that was in itself a feat of organisation, and travel lacked many of the

refinements we now take for granted. “Looking back on paper tickets, tiresome airport processing and cramped seating, the improvement in travel conditions is vast,” Beck says. “Today with electronic ticketing, high-speed check-in processes and quieter, roomier aircraft, the actual flying is relatively no-fuss. The only problem modern business travellers face regularly is airport security, and that is impossible to plan for as you never know what any airport will do at any given time. Some are better than others, but security


Top tips for savvy business travellers


checks before boarding can take anything from 20 minutes to two hours.” This, he says, is where getting access to decent business lounge facilities makes a huge difference to ease of travel. It’s the only place where air travel has become more difficult in recent years. “Large airports are always a risk because they are handling so much traffic,” says Beck, “but Asia is generally better in the business lounge stakes than other places and the United States is the worst. “If you really want to experience the

The unexpected can happen to the best of us – which is why a little preparation can save a whole lot of hassle if things don’t go to plan. • Buy travel insurance as soon as you have paid for your travel. It can take just a few minutes online. To be covered under your policy, events that may derail your travel plans need to be “unexpected” when they occur. You are unlikely to be covered for catastrophic events like flooding, volcanic ash clouds, and severe weather after they have occurred, even if you didn’t know about them when you bought your policy. • If you want cover for any medical conditions or symptoms that you currently have, be sure to disclose these during the application process. The cost of medical treatment overseas can be astronomical. For example, in 2010, Southern Cross Travel Insurance paid over $1 million for one medical claim. If your illness is related to a non-disclosed pre-existing condition, or even symptoms of an underlying condition that has not yet been diagnosed, you may not be covered. However, many insurers offer cover for “controlled” conditions that meet certain criteria, or give you an option to pay an extra premium to have the condition covered. • Take photocopies of your passport, travel documents and credit cards to leave with someone you trust at home or work. Have these scanned and keep them on file in your personal email account for quick access when overseas. • Make a note of your bank and mobile phone helplines in case you need to cancel missing cards or a stolen phone; your GP’s phone number in case you need specialist medical attention; and your travel insurer’s emergency assistance line. Also leave these numbers with someone you trust at home or work. • Take enough medication to cover you in case of delays. Keep it in your carry-on luggage in the event baggage goes missing and, if required, carry a doctor’s letter supporting your need for the medicine being carried. • Register your travel details with to ensure consular staff are aware of your presence should genuine disaster strike. Source: Southern Cross Health Society

APRIL 2012 | 49


ultimate business lounge experience, try to get into Virgin’s lounge at Heathrow. Snooker tables, champagne bars, the works. You feel as if you’re in a James Bond movie,” he says. Beck’s experience is telling, as somebody who has regularly travelled as an employee of a large company, and now on behalf of a small operator with a strong export focus. Corporate employees tend to fit

than Australian east coast destinations. We all travel with insurance company ID cards that we can use if we are ever in any trouble, either health wise or other problems. And our hotels are always part of a corporate deal that is prearranged. “I am very well looked after with regard to travel,” he says. “Frankly it mostly takes care of itself.” If he does have any input, Skellern

Travel is a job extension, not an option. Learn to enjoy it. into a well-established, coordinated travel programme that is clearly defined by company policy covering all possible risks to executive health and consequent performance. Travellers from smaller companies are more closely linked to budgetary constraints and have to do much of the organising themselves. As Heinz-Wattie NZ marketing director Tim Skellern says, “I just do what I’m told. It’s company policy, for example, that we travel business class on long haul, which means anything other

tries to avoid travelling north via the United States, preferring to head to Europe through Asia whenever possible. “If I can I always try to avoid the States, and Los Angeles is a particularly uncomfortable hole of a place to pass through or stop over in,” he says. He is also particular about making sure his personal banking facilities are in place so that they can be accessed while he is away. “It’s essential to have your banking connections running smoothly. There is nothing worse than having your card

Tim Skellern.

rejected when you are in a foreign city, just because your bank did not know you were out of the country.” Another of the key personal details that ensures he is prepared for his travel, Skellern makes sure he has everything in place to maintain contact with home office and home via his iPhone. One of

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Your perfect travel companion.


his most recent discoveries is the power of Skype from his mobile to keep him in close contact with his family: a system that is both cheaper and easier than other options. These may be small things in the generally complex nature of international travel, but small things can make a big difference to how you perform. They can also have an influence on your attitude when you’re at the sharp end of your company’s operations, potentially destroying your professional demeanour when you need it to be at its best. It is also of value to step outside the travel culture that is typified by chain hotels, and Skellern says on long trips it is good to get away from your regular accommodation and stay somewhere “... outside the sanitised corporate work mindset: somewhere friendly and local”. Beck concurs, but for a different reason. “It is important not to get caught

up in the hotel-restaurant-jetset lifestyle while you are travelling,” he says. “You have to have your own character and identity when you are presenting overseas and too much corporate hotel culture can dilute your Kiwi-ness. Who you are is always a big part of your business success,” he advises. It is often a good call to check out online hotel deals, via sites such as Wotif. com, which usually deliver better deals for smaller business travellers than they can do with the chains, and often in more homely, local hotels that help you relax. A friendly place at the end of the day is one of many survival techniques for the wily business traveller. After years of trekking across the globe, Beck says that stamina is one thing that business travellers should beware of. Just because you can keep going for the long haul, doesn’t mean you should. “I try never to be away from home for more than two weekends,” he says.

“I find my productivity declines in the third week, so it is better management of your travel to plan two, two-week trips rather than one of four weeks. “I also plan not to waste time on actual travel by doubling back. Your destinations should be progressive, so that at the end the next step is home. And I travel so that I arrive in the evening, so that I sleep before I get into business at the start of a new day in a new place. “And, wherever you can, take advantage of sleeping or totally relaxing in flight. If you are not ready for your meeting when you get on the plane, last minute preparation is unlikely to help as much as a good rest will.” Skellern agrees, “Travel is a job extension, not an option. Learn to enjoy it, and when you have a chance to sit back, relax and be pampered, then take it.” M Keith Stewart is Mediaweb’s writer at large.

Healthy travels Good health is a business travel essential, says Southern Cross Health Society chief executive Peter Tynan. In today’s economic climate, overseas business travel is not entered into lightly. Travellers’ schedules are jam-packed to get the most from the time, cost and planning involved – and there’s not a lot of downtime. What this means is that business travellers need to be in the best possible health. A very simple first step is to schedule in an annual flu vaccination. Travelling with a mild cold is not ideal, but possible. Travelling with influenza isn’t. The flu – which can affect up to 20% of the population every year – can be debilitating, and can

knock someone around for several weeks. Good all-round health is also essential to manage the demands of travel. Annual executive health checks are a great way to ensure health problems are identified early and suitably addressed before they escalate. On the road, tiredness and unfamiliar surroundings can make travellers more susceptible to illness. The simplest way to avoid bugs is good hand hygiene. A small bottle of hand sanitiser (less than 100ml to clear airport security) should be your new best friend – apply often, especially when travel-

ling frequently through airports, hotels, in taxis and other public places. And just because you’re away from home, it doesn’t mean you need to take a holiday from healthy choices. Good quality sleep, a quick break in the fresh air, healthy food choices and limiting alcohol will help maintain your energy levels and alertness.

APRIL 2012 | 51



Patrick Wilson, promoted from his role as director of operations, is the first Kiwi in 21 years to be appointed managing director of McDonald’s New Zealand. Wilson brings with him 27 years’ of experience at McDonald’s, having started as a crew person when he was 18. Outgoing managing director Mark Hawthorne has been appointed vice president, regional manager responsible for NZ, the Pacific Islands, South Africa and the Middle East. New Zealand software firm Hindin Solutions has appointed Neil Fletcher as chief executive officer. He was most recently with smart energy metering firm Arc Innovations, as both chief technology officer and general manager of technology services and prior to Arc, spent many years working internationally in product development at Motorola, Lucent Technologies and Tait Electronics. Andrew West, a former chief executive of AgResearch and the Institute of Geological & Nuclear Sciences and current adjunct professor of AgriBusiness at the University of Waikato, has been appointed as the new vice-chancellor of New Zealand’s specialist land-based university, Lincoln

University. Outoging vice-chancellor professor Roger Field has retired from the role with effect from April 2012. IRL has appointed professor Juliet Gerrard, as its second industry and outreach fellow. The fellowships, initially for a five-year term, have been established as part of IRL’s drive to strengthen links between research institutes and high-value manufacturing organisations. Professor Gerard, who runs the Biomolecular Interaction Centre at the University of Canterbury, has worked for Crop and Food Research and conducted research for Fonterra. She is a principal investigator at the MacDiarmid Institute and Riddet Institute and has been on a number of editorial boards for scientific journals. IT business solutions provider Intergen has appointed Martin Gale to head up the company’s South Island team as southern regional manager. He replaces Tim Mole who has been appointed to lead Intergen’s business intelligence team. Gale has previously held positions with Fujitsu, SBS Bank in Invercargill and Meridian Energy. Christchurch law firm manager Alan Pollard has been appointed to the position of CEO, Pipfruit New Zealand. Pollard has until recently been president of the Canterbury Employers Chamber of Commerce.

Process mapping software company Promapp Solutions has extended its business development team by appointing Lindsey Bradfield as business development manager – Australia. Bradfield has had various marketing roles including segment manager for the consumer channel at Southern Cross Health Society and marketing specialist at Lumley General Insurance. Leading Heinz Wattie’s through the next phase of its growth is Michael Gibson, who has been appointed managing director. A qualified chartered accountant, Gibson has been with the Wattie’s businesses for over 22 years, initially joining Wattie’s Frozen Foods. He was appointed chief operating officer in April 2010 from his position as finance director. Nigel Comer, regional CEO for HJ Heinz in Japan, Australia and New Zealand, has relinquished the role of MD Heinz Wattie’s The latest in a roll out of new strategic positions within EMC Australia and NZ is the appointment of Dan Kieran as national manager of mid-tier storage. A 20-year veteran of the IT industry, Kieran joins EMC after 13 years at Sun/Oracle in Canada and more recently Australia where he was senior director of storage sales for ANZ.

Plan, Do, Sustain – The Essence of Change Management The use of project-based approaches in a change environment is seen as crucial for sustainable success. For bold ideas, a compelling track record and pragmatic advice, contact us today.

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How to go psychometric


sychometric assessments are increasingly becoming a standard part of the recruitment process as they can help accurately identify and select employees with favourable traits, who are competent and have a good cultural fit.



Psychometric assessments should be used in conjunction with other recruitment techniques such as reviewing CVs and conducting interviews. It’s important they make up part of the recruitment process, as they enable you to find out different aspects of a candidate through varying methods. You may believe a candidate is a good cultural fit when you meet them, and discover through an assessment they can also solve problems, influence others, adapt well and cope with challenges. These kinds of results can’t be measured purely by traditional recruitment techniques.


Pick the right time

Conduct all psychometric assessments after the first interview. This provides you with information to analyse and discuss in the second interview and will help you determine whether the candidate will be right for the position or not.



Once you have conducted the first interview, let the candidate know they will be taking a psychometric assessment as the next step. It’s best practice to keep potential employees well informed and comfortable with each step in the recruitment process. Provide them with sample questions and background information about psychometric assessments so they know what to expect.


Think of others

It’s important to make the right choice for your team. Psychometric assessments can identify ‘red flags’ relating to a candidate’s personality and potential performance. They can also benchmark what makes a successful employee, and this can be useful for future hires for your business. Psychometric assessments can save you time, money and stress by helping you select the right candidate, so it’s wise to use this tool for every new hire.


Pick the right tool

Ensure the assessment tool is right for your organisation’s industry and analyses the right characteristics as well as producing indepth reports which

Paul Robinson.

are meaningful. Tests that are robust, reliable and have valid predictors of performance are the best.


Give feedback

Providing feedback whether a candidate is successful or not is important, and it also protects your organisation’s reputation. Many employers don’t give feedback as it comes at an extra cost. Entitle the candidate to feedback and they will feel like they were looked after during the interview process. M

Paul Robinson is director of specialist recruitment and HR services provider Randstad New Zealand.

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ISSN 1177-5815



21st century skills – relating across cultures and nationalities W

e no longer need to leave New Zealand to find ourselves managing a multicultural team or working with international customers. Demographic shifts and globalisation have led to greater cultural diversity in New Zealand work environments and our customer/client base, and the ever-changing face of New Zealand’s population and the effects of globalisation are hard to ignore. New Zealand’s bicultural history reaches back more than 150 years. However, according to a 2010 Ministry of Social Development report, by 2016 46% of 18-24 year olds in New Zealand will be of Maori, Pacific or Asian descent. In other words, in just four years’ time, almost half of the new entrants into New Zealand’s workforce will be from diverse cultural backgrounds, that differ in important respects from traditional ‘European’ values and perspectives. This trend of increasing cultural and ethnic diversity in New Zealand will continue, driven by natural birth rates and push-pull migration factors, not least in Asia. WHAT IS CULTURE? Culture, in a generic form, can be described as a shared set of values of a group of people reflected in a shared set of – learned – behaviours and norms. Not only countries have cultures, but organisations, professional groups, different generations, etc. Culture shapes our perception of the world and of others – what we regard as ‘normal’, and conversely, what we regard as not acceptable. It affects the way we interpret, respond to, and sometimes judge other people and situations, and the way we communicate. With these demographic and economic shifts, it is now important to equip ourselves with the mindset and skills to effectively manage people who may have a very different way of doing and seeing things. This has become essential for our effectiveness, productivity and success today and into the 21st century. Whether you are looking to hire in the domestic labour market, are managing culturally diverse staff, looking to export or do business overseas, or whether you are a New Zealand business looking to attract foreign capital, the challenge is the same: cultural diversity is

increasing, and there is no one dominant culture or way of doing business anymore. WHAT’S IN IT FOR MY BUSINESS? New Zealand business has the opportunity to turn cultural diversity and difference to its advantage. The potential returns? Increased competitiveness and global connectivity, greater productivity, reduced turnover and enhanced capacity for innovation. In short, it’s good for the bottom line. Our existing cultural diversity also offers New Zealand a unique chance to tap into an equally diverse customer base. We all enjoy ‘being ourselves’ and dealing with people who literally and figuratively speak our language. The same is true for connecting with overseas markets and opportunities, or using local staff of different ethnicities as cultural mentors to learn about values and business practices of their native cultures. WHAT CAN I DO? Tapping into the rich benefits of cultural diversity doesn’t have to become a big, resource intense project. Every manager can start doing some things right away that will help shape their organisational culture. In my view there are four basic requirements or competencies: 1. An openness to other ways of doing things. 2. Awareness of your own cultural assumptions. 3. Skills to relate to others. 4. An ability to synergise diverse approaches to produce something that is greater than the sum of its parts. An open mind allows us to be curious, to be receptive to new ideas, to build relationships with people very different from us, and to learn about unfamiliar cultures. Self-awareness is about becoming aware of one’s own “cultural baggage”: our assumptions, our preferred way of communicating, as well as an awareness about how our preferred way of doing things may be perceived by others. Learning to relate to others with different cultural backgrounds is a process. To some this comes naturally – others may have to make a conscious effort. Some of the “techniques” my clients have found helpful in learning to relate include: • Suspend judgement – Be mindful of your

Irene Öhler

own reactions to others: observe what behaviour is hard for you to accept, or totally different to what you expect. Resist the urge to judge others quickly or make assumptions. These decisions can be costly. • Active listening – a key management skill, in unfamiliar situations this becomes even more critical. It involves not only listening to the words said, but the context: who says what to whom and where? What body language can you observe? It also involves checking our understanding regularly to avoid misunderstandings or unmet expectations. • Flexibility – with respect to our own range of styles as well as allowing others to communicate in a range of ways. • Storytelling – Providing people with the opportunity to tell their stories is a powerful tool. Equally, provide others with the opportunity to learn more about yourself by telling your story. We can draw on Maori tradition on this way to engage, connect and share our world and experiences with others. • Coaching and mentoring – Cultural mentoring is the process of helping others with cultural adaptation and integration. A mentor shares insights to the benefit of the individual mentee as well as the organisation. Lastly, and often most challenging, there is the ability of a team leader or manager to reconcile differences to find creative, new solutions. This is the zone where innovation emerges. WHAT ARE YOU GOING TO DO? I’d be interested to hear. Visit my blog: http:// and post your feedback. – Irene Öhler is the director and founder of iglobal coaching ltd, a consultancy that enables clients to build and maintain successful crosscultural business relationships. Focus on Management

Taking the next step – advanced training and facilitation skills

Staff announcements C N

ZIM Northern has made two key staff appointments to join our growing Aucklandbased team. Both positions are significant customer-facing roles and the pair joins a well established team who are committed to delivering exceptional management programmes, customer-centred learning solutions and providing a great participant experience.

Kieran Bird

KIERAN BIRD, BUSINESS DEVELOPMENT SPECIALIST Tracey Kieran joins NZIM Northern with Alenepi a wealth of local and international business development experience. A consistent theme has run through his travels and professional experience, working with organisations to achieve key goals – to grow their financial bottom line, identify specific training needs and focus on designing learning frameworks for companies looking to build leadership capability. Kieran is a natural relationship builder and actively seeks out partnerships and new business opportunities. He has worked successfully in the UK, Canada and the USA and prior to returning to Auckland spent the previous 12 months in the Wellington region as a career counsellor for a global HR consultancy. Kieran is also the author of PersonaPR: The End of the Cold Call Era and has been a professional keynote speaker and trainer. He hopes to incorporate all of his experience in working with the NZIM Northern team and taking the full NZIM suite of products and services to an enthusiastic and growing North Island market. TRACEY ALENEPI, BUSINESS DEVELOPMENT SUPPORT MANAGER Tracey recently joined NZIM Northern as the business development support manager after three and half years of full-time studies completing her Bachelor of Business (Marketing) from Unitec. It was there that she discovered and honed her love of marketing and developed her interest in helping New Zealand businesses with their training needs. Prior to her study Tracey was employed at Southern Cross Healthcare for over four years as a customer service agent where she worked her way into a team leader role. Tracey is an efficient administrator and expert communicator and is passionate about learning new things and working with people at all levels.

Focus on Management

Una Ryan

oupled with ever-increasing organisational pressures, there has been an increase in the expectations placed on the internal facilitation and training capability of companies across New Zealand. Effectively meeting these demands is about developing your internal capability so you can confidently deliver outcomes-based training matched to the needs of your organisation. With this in mind, a brand new programme has been developed by accomplished training facilitator Una Ryan in partnership with NZIM Northern. The Advanced Training and Facilitation Skills programme is a natural follow on to the Train the Trainer programme and also for participants who have completed the National Certificate in Adult Education. It will also suit individuals who have been in organisational development and learning and development roles and wish to further develop their capability to increase their effectiveness within their business. By the end of the four-day programme you will gain: • A deeper understanding of what a ‘learning organisation’ is and how that relates to your organisation. • More understanding and skill around how to participate strategically in your organisation. • More confidence and skill in being proactive and having conversations that influence key people in your organisation, especially around change, learning and unlearning. • A deeper understanding of the latest brain and emotional intelligence research and how that impacts in the training and facilitation environment. • Greater awareness and clarity around power dynamics and the skills to manage yourself and others when you’re faced with these situations. • Practice in a variety of the advanced skills of facilitation and in a peer support structure to support your ongoing development beyond the programme. For a full brief on the delivery format of this new NZIM course, please contact the team to discuss. Registrations are open for the April programme – contact the NZIM Northern team on 0800 800 NZIM or at

NZIM Northern launches new social media for business programmes A

key initiative for NZIM Inc in 2012 is to introduce programmes that are relevant to the changing environment of the New Zealand business market. Just as NZIM Northern is evolving, so too is the need to up-skill in the use of technology in business and learn how organisations are reaching audiences in the ultra fast-moving cyber world. Understanding the immediate impact that a successful social media strategy can have on your business can be the make or break of releasing that new product, getting the message to a new and broader target market, or simply keeping your brand red hot and in front of prospective customers or business partners. NZIM Northern is excited to be working with Linda Coles, international social media speaker, trainer, author and consultant, on bringing a suite of new social media

programmes to life. Programmes are delivered in a short, easy to absorb format that will allow you take away key strategies to build or increase your online profile and net presence. Get connected by attending one or all of these great short programmes at NZIM Northern (Auckland) or NZIM Central (Wellington): • Introduction to Social Media Marketing (2 hours) • LinkedIn: Growing Business Connections (2 hours) • Facebook for Business (3 hours) • Social Media: Mastering the ‘Big Four’ (4 hours) Now’s the time to get that social media strategy in action or pick up some tips to help you be more confident in the world’s fastest growing marketing mainstream. Contact the NZIM Northern team on 0800 800 NZIM or see programmes in detail at

Congratulations to our 2011 graduates Diploma in Frontline Management N

Graduation class


e ended 2011 celebrating the outstanding accomplishments of 15 graduates. The team that graduated with a Diploma in Project Management under Dr Jim Young’s Robyn Pere and her family coaching did so by completing four in-depth assignments, each one specific to their job needs. (That’s one of the great attributes of this NZIM programme – it is practical and the skills learnt can be implemented in your workplace immediately.) It wasn’t easy for any of them but they persevered and met the challenges head on. In the time that Robyn Pere took to graduate with the Diploma in Frontline Management she worked full-time for the Te Rau Puawai Ma¯ori Mental Health Workforce Development Programme at Massey University. Robyn was raising nine children and two grandchildren, all of whom lived under the same roof. She is also a Rongoa¯ Ma¯ori practitioner (Ma¯ori herbal medicines) and an Access Bars Practitioner. Tragically, Robyn also lost her husband in a car fire. So it’s something of an understatement to say it wasn’t all plan sailing! But the achievement was worth it, says Robyn.

“I was always in contact with Barbara Morris (my facilitator) and she with me. I was about to give up and flag it all as I had a heap of competing deadlines but I realised this one was the only deadline for me – the others were for other people. I had not given anything to me in a long time and that is what got me through.” The Diploma in Frontline Management consists of 12 assignments plus an in-depth project and reflective journals. Although the workload is not for the faint of heart, each participant embraced the challenge and despite many obstacles every one of them graduated and proudly accepted their diplomas at our graduation. So to all our future 2012 graduates, we hope this year is one that challenges you to find new, practical solutions to old issues, to think outside the box, to push your limits and to succeed!

ZIM Central is taking final registrations for its 2012 NZIM Diploma in Frontline Management starting this month. This year is going to be a great year to take on work-based professional development which will result in a nationally recognised qualification. Registrations for the Diploma in Frontline Management at NZIM are filling fast – so it’s time to act! The NZIM Diploma in Frontline Management is designed for people in full-time employment, who want to study with like-minded people striving for career success as managers or future leaders within their organisations. With only two days’ face-to-face classroom time per month, studying with NZIM makes your goals achievable whilst making an immediate impact in your working environment. ‘Learn while you earn’ and be developed by commercially experienced facilitators that give you the practical skills to use straight away. The NZIM team is here to support you in your learning and will be available throughout your learning journey to ensure your success.

Dates: Induction day starts April 11. For more information check out or call us 0800 373 700.



n recent months NZIM Central has had the privilege of having Stacey Coulthard down from our Auckland office filling the role of acting GM of business development. Stacey came to us with vast experience in recruitment and management and has injected energy and vitality into the office environment. She is excited about setting the groundwork to move NZIM Central forward. At the moment, Stacey is successfully juggling her existing responsibilities in her business development role up in Auckland with rebuilding the NZIM Central Business Development team in Wellington. One of the biggest assets that NZIM has are its facilitators. To partner with Stacey in this transition she has contracted Willem Knibbeler. Willem has been part of NZIM for 15 years and is one of our lead facilitators in our Diploma in Management (Advanced). He also runs key short courses such as Emotional Intelligence. If you are interested in professional development opportunities for your workplace in the Central region please contact Stacey or Willem on 0800 373 700. Focus on Management

Mentoring within your organisation T

he events of 22 February 2011 in Christchurch have launched NZIM Southern on a new pathway and journey that will strengthen its position and relevance in the adult education and learning and development market. The business has been refreshed. The rate of change over the last six months was accelerated by the Christchurch earthquakes, which provided a platform from which courageous, challenging but necessary and timely decisions were made by the Southern Board and management. NZIM Southern has launched a new development workshop in 2012. Our new mentoring workshop is part of our public programme and is also available to your organisation as a customised solution to build capability, retention and productivity. Mentoring programmes assist the development of employees by exposing them to senior employees that have gained sector relevant experience. This enables the employee to perform more effectively and provides the employee with a framework to develop their own career path within the organisation. The benefits to the organisation are varied depending on the approach taken to the programme, however all three parties gain from this relationship: mentor, mentee and the organisation. • Synergy Mentoring gives employees, both mentors and mentees, the opportunity to have a greater connection to the company’s overarching strategic plan. Employees who hold a connection to the big picture are habitually more productive than peers who only focus on their own tasks. Mentor-mentee teams accomplish more because both parties focus on finding positive solutions to every situation by fostering a win/win partnership. • Employee satisfaction Offering your employees the opportunity to participate in a mentoring programme can provide an exciting career development opportunity in this competitive market. Mentored employees will often have a higher job satisfaction which leads to increased productivity and reduced turnover. • Employee retention Many studies have shown that employees leave managers, not the organisation. Mentoring provides employees with the ability to share their views in a nonconfrontational environment, thus ensuring they remain in the workplace for longer and produce better results. • Career growth/Succession planning Growing your employees into more senior positions is an effective way to reduce hiring and induction costs and keep employees continually Focus on Management


he team at NZIM Southern has settled well and is enjoying new office facilities located at 303 Blenheim Road. The new look reflects a refreshed image and a new approach to the market. Being displaced from Management House on Madras Street as a result of the 22 February earthquakes initially caused much inconvenience and uncertainty. However, it quickly eventuated that this displacement provided NZIM Southern with a real opportunity for organisational renewal. The Southern membership has a strong affiliation to Management House and it has been a strategic asset of NZIM Southern over the years. There is still much uncertainty in terms of the future of this property and final reports and decisions are still awaited.

Delivery of 4QL to Nga ¯i Tahu D

uring February, a Four Quadrant Leadership (4QL) refresher course and 4QL Stage I was delivered by Wilfred Jarvis on behalf of NZIM Southern to members from the senior teams of Te Ru ¯nanga o Nga¯i Tahu, Nga¯i Tahu Holdings and Nga¯i Tahu Property. Four Quadrant Leadership provides the foundation knowledge for establishing a values-based and consistent approach to professional leadership. It explores the many factors that determine

how managers can become more effective leaders. NZIM Southern was pleased to partner with Justine Whitaker (group general manager – people and performance) and Rachel Hewett (HR advisor – development) to coordinate the delivery of this programme for Nga¯i Tahu. In summing up Justine said: “This was an invaluable opportunity to explore a leadership model that aligns with and reinforces Nga¯i Tahu values... this is a rarity!”

Left to right: Justine Whitaker, Wilfred Jarvis, Joseph Thomas.

stimulated. Mentoring is an effective mechanism for developing employees to fill key roles as part of your organisation’s succession plan. • Knowledge management and retention For many organisations, the knowledge retained in key individuals is the most valuable part of the organisation. When these key individuals leave, this valuable information leaves with them – unless your organisation has an effective mentoring programme that allows and encourages these key employees to share their

knowledge and skills with other employees. NZIM Southern is excited to provide your organisation with the perfect platform on which to build a mentoring programme. Total customisation will ensure your company culture stays at the forefront of the mentor-mentee partnership and we will provide you with the resources required to establish an effective programme. Speak with a NZIM Southern Learning and Development consultant to learn more.



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

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



Start National Certificate in Business – L3 Start National Certificate in Business – L4 Start NZIM Diploma in Frontline Management – L5 2-3 Project Risk Management 3 Manage Effective Workplace Relationships (DFM) 3-4 Operations Management (DMA) 4-5 Needs Analysis & Programme Design 5 Facebook for Business with Linda Coles 11-13 Essential Skills (Team Leader 1) 11-13 Project Management Fundamentals 16-17 Strategic Management (DMA) 16-17 Sales Management 17 Effective Time Management 18-19 Dealing with Difficult Behaviours 18-19 Business Finance (DMA) 20 Introduction to Microsoft Project 20 Lean Six Sigma – Yellow Belt 23-24 Interpersonal Communication Skills 23-24 Advanced Training and Facilitation Skills (Part 1) 26 Social Media: Mastering the Big 4 with Linda Coles 30/4-1/5 Advanced Training and Facilitation Skills (Part 2) MAY Start National Certificate in Business – L3 Start National Certificate in Adult Education and Training – L4 Start NZIM Diploma in Supply Chain Management – L6 2-3 Developing a High Performing Team 3 Conducting Effective Meetings 7-8 Recruitment Frameworks for Success (HR1) 9-10 Problem Solving & Decision Making 9-11 Accounting for Non-Accountants 10 Emotional Intelligence 14-15 Change Management (DMA) 14-15 Developing Influencing & Motivating Skills 16 Speed and Power Reading 17-18 Management Through the Lens of Gender 21-22 Corporate Storytelling with Wade Jackson 22-23 Introduction to Supply Chain Management 28-30 Building Effective Teams (Team Leader 2) 28-29 Consultative Sales Skills 28-29 Project Management Advanced 30 Effective Business Writing 31-1/6 Interpersonal Communication Skills 31-1/6 Train the Trainer (Part 1)


Start National Certificate in Business – L3 Start NZIM Diploma in Construction & Engineering – Level 6 7-8 Train the Trainer (Part 2) 7-8 Assertiveness Skills

2-3 2-4 4-5 11 11 11 12 12-13 12-13 16 17 18 19 19-20 23-24 23-24 27

30 30-1/5


Recruitment Frameworks for Success Project Management Sales Management DFM Project Day Diploma in Frontline Management (starts) Customer Service Skills Manage Personal Work Priorities & Professional Development Operational Management (Dip in Mgt Advanced) Marketing, Planning & Control Memory and Mind Mapping Peer to Peer Mentoring Skills Cullen Law Series – Managing Poor Performers What part of me don’t you get? – Myers Briggs Workshop Problem Solving and Decision Making Facilitation Skills Dealing with Difficult Behaviours Diploma in Management Advanced Presentation Day Managing Your Time Workplace Communications (Cert in Mgt)

3 Project Risk Management 4 Lean Six Sigma – Yellow Belt 7 NZIM Diploma in Management Advanced (starts) 7 Diploma in Management Advanced Induction Day 7-8 Managing Small Projects (Cert in Mgt) 7-8 Business Ethics (Dip in Mgt Advanced) 8-9 Communications (Dip in Mgt Advanced) 9 Social Media-Big 4 Overview 10 Manage Effective Workplace Relationships (DFM Modular) 11 TetraMap – The Nature of Behaviour 14-15 Human Resource Management (Dip in Mgt Advanced) 14-15 Interpersonal Communication Skills 16-18 Leadership, Motivation and Team Building 17-30 Introduction to Management 21 Training Needs Analysis (NCAET Paper) 21-22 Developing Influencing and Motivation Skills 22 Programme Design (NCAET Paper) 23-25 Team Leader Skills – Build Effective Teams (Cert in Business) 24-25 Negotiation Skills 28-29 Think on Your Feet® 28-29 Introduction to Marketing (Cert in Mgt) 31-1/6 Strategic Thinking Tools


4-5 Applied Management (Dip Mgt Advanced) 5-6 Change Management (Dip in Mgt Advanced)


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


10-12 Team Leader – Building Effective Teams C 13 Courageous Conversations C 13 Thrive on Stress C 16-17 Emotional Intelligence C 16-17 Building Relationship Versatility (New) D 18 Delivering Great Customer Care I 18 How to Handle Difficult Customers I 19 How to Manage your Manager & your Office I 23-24 Counsellor Salesperson C 26-27 Accounting for Non Accountants Stage 1 C 26-27 Workplace Law C 30 Governance in Practice D 30/4-1/5 Introduction to Marketing C 30/4-2/5 Team Leader – The Essential Skills C


1 2 3 3 3 4 8 9 9-11 10-11 12-19

14-15 15-16 17 21-23 21-23 22 24 24-25 28 29

Business Ethics (New) I Employee Engagement (New) I Business Ethics C The Aging Workforce – Challenges + Options (New) I The Generation Challenge I Mentoring in the Workplace C Courageous Conversations D Effective Use of Time C Four Quadrant Leadership D Coaching for Performance C Experience Significant Challenges and Opportunities (ESCO) Personal Discovery C Practical Project Management C HR for Non HR People C Persuasive business writing C Four Quadrant Leadership C ABCs of Win-Win Relationships C Effective Use of Time D Interpersonal Communication C Strategic Planning C Audit Training D Project Management for Administrators C How to Manage + Lead Successfully I Assertive Behaviour Strategies C

29-30 30-31 JUNE 5-6 Leading Change in Challenging Times C 5-7 Team Leader – Understanding New Zealand Employment Law C 10-22 Advanced Management Programme (first segment) C 11 Problem Solving + Decision Making D 11 Problem Solving and Decision Making C 11-12 Operations Management (Dip in Mgt Advanced) (New) D 12-13 Project Management D 13-15 Four Quadrant Leadership with Wilf Jarvis C 14 Project Risk Management (New) D 15 Report + Proposal Writing D 18-20 Four Quadrant Leadership Stage 2 with Wilf Jarvis C

Focus on Management

LEADERS BUILDING LEADERS Our aim is to build management capability through Research, Learning, and Recognition. OUR FOCUS IS TO: • Research leading management trends and practice and promote a constantly developing model of best management capability for New Zealand. • Enable managers and aspiring managers to participate in learning programmes, mentoring, and events that provide the information and experience they need to develop their capability. • Identify leading management role models and provide awards that recognise the career and educational achievements of managers. NATIONAL BOARD Gary Sturgess Life FNZIM (Chairman) Lynda Carroll AFNZIM Mark Woodard AFNZIM Michael Weusten FNZIM Dan Coward AFNZIM John Sandford FNZIM Joanne O’Connor MNZIM Ash Dixon MNZIM NZIM Inc Chairman: Gary Sturgess Life FNZIM Deputy Chair: Lynda Carroll AFNZIM PO Box 67, Wellington 6140 Ph 0-4-473 0470, Fax 0-4-473 0479 Email nz Website: www CEO: Kevin Gaunt FNZIM, FAIM PO Box 6600, Wellesley St, Auckland 1141 Ph 0-9-303 9100, Fax 0-9-303 9109 Email Northern Region Regional Director: John Sandford FNZIM Regional Contact: Tait Grindley PO Box 6600, Wellesley St, Auckland 1141 Ph 0-9-303 9100, Fax 0-9-303 9109 Email Website Central Region Regional Director: Lynda Carroll AFNZIM Regional Contact: Stacey Coulthard PO Box 11781, Wellington 6142 Ph 0-4-495 8300, Fax 0-4-495 8301 Email Website Southern Region Regional Director: Michael Weusten FNZIM Regional CEO: Joseph Thomas AFNZIM PO Box 13044, Christchurch 8141 Ph 0-3-379 2302, Fax 0-3-357 8003 Email nz Website


Jody Kelly ANZIM C

hange can be scary, but I’ve always embraced it. I started off in the hospitality industry, then did a degree in veterinary nursing. I moved to Melbourne and worked with vet students in the specialist department of the university for about three years. When one of the specialists set up his own multidisciplinary practice, I helped him get it up and running. I realised that what I actually enjoyed was managing the set-up process and I wanted to go down that avenue. So I worked for a construction company for two years, and when I came home to New Zealand three years ago I joined Diadem, where I’m now a project manager. Diadem is a design and project management company specialising in implementing brands into the built environment. Our core business is managing national and global roll-out programmes, such as the rebrand of the ANZ Bank across 32 countries. As well as the industrial design process we put together and manage procurement strategies, running tenders, engaging and managing manufacturing and installation contractors, quality controls and assurance checks. Diadem also specialises in ‘wayfinding’ and ‘wayshowing’, which are terms we use in relation to designing navigational systems and journey planning through urban spaces and public precincts where there are layers of information competing for the user’s attention. That’s the area I’m more involved with at the moment. At Diadem, I started thinking about studying. I talked to Massey about a Bachelor in Construction, and to other institutes in Auckland and around New Zealand. One of my colleagues had heard of the NZIM’s Diploma in Project Management and the National Diploma in Project Management and said they were apparently really good – quite expensive, he said, but good. I had a look on the website, got the info pack. What they were offering was more the direction I was looking for and the time

frame was perfect. It was hard work, but that was what I wanted – something I could work really hard at and get a qualification in a relatively short time. There weren’t that many places specialising in a project management qualification, rather than construction management. I’ve always been organised and like systems and processes, but I really wanted to see if I was doing it right, which areas I could improve and to get more confidence in what I was doing. After the first two days I knew I was on the right course, you just got such a lot out of it. Classes weren’t big; there was lots of interaction, with your peers as well as the tutor. You’re working with different people from different industries and you just get so much from them too, working together as a team. Project management skills don’t just take you down the construction road because whatever your job, everything you do is a project. If companies realised this more, a project management qualification would be huge. It can be used right across the board and puts people into so many career paths. Projects are always changing and clients will always want change – that’s just the way it is. I always try to look at things positively and optimistically. Always be open to change and try and embrace it – people get so bogged down and frustrated but if you can accept it that helps the process, makes things easier and you don’t get so stressed – and the client recognises that as well.

NZIM Diploma in Health and Safety Management 17-30 June (Residential) NZQA Approved Level 6 Diploma Qualification (Dip.HSM)

“Developed for New Zealand markets and based on global Health and Safety and quality management practices” This unique programme is designed for businesses and individuals who manage Health and Safety procedures and are looking to build practical frameworks for use on the job.

Book today – Limited spaces available! Contact Tait Grindley for more information at or phone 09 303 9101



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NZ Management April 2012  

NZ Management April 2012

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